Document:

CERTIFICATE OF DESIGNATION
                                       OF
                           SERIES B-4 PREFERRED STOCK
                                       OF
                          AMERICAN UNITED GLOBAL, INC.

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law

     American United Global,  Inc., a Delaware  corporation (the "Corporation"),
hereby  certifies  that the following  resolutions  were adopted by the Board of
Directors of the Corporation (the "Board of Directors" or the "Board") on August
25, 2003  pursuant to  authority  of the Board as required by Section 151 of the
Delaware General Corporation Law (the "DGCL"):

     Resolved, that pursuant to the authority granted to and vested in the Board
of  Directors  in  accordance   with  the  provisions  of  the   Certificate  of
Incorporation  of the Corporation,  the Board of Directors  hereby  authorizes a
series of the  Corporation's  previously  authorized  preferred stock, par value
$0.01 per share (the "Preferred  Stock"),  and hereby states the designation and
number of shares, and fixes the relative rights, preferences, privileges, powers
and restrictions thereof as follows:

                                    ARTICLE 1
                                   Definitions

The  terms  defined  in  this  Article  whenever  used in  this  Certificate  of
Designation have the following respective meanings:

     1.1 "Affiliate"  has the meaning  ascribed to such term in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended.

     1.2 "Asset Sale" means a sale,  lease,  exchange or other  transfer (in one
transaction  or a series of  transactions)  of all or  substantially  all of the
property,  assets or  business  of the  Corporation  to a Person,  other than an
Affiliate,  in which such property,  assets or business of the  Corporation  are
exchanged for securities or other  consideration  issued, or caused to be issued
by  the  acquiring   Person  or  its  subsidiary  to  the   Corporation  or  its
stockholders.

     1.3 "Automatic Conversion Date" has the meaning set forth in Section 6.2.

     1.4 "Business  Day" means a day other than  Saturday,  Sunday or any day on
which  commercial  banks  located  in the  State of New York are  authorized  or
obligated to close.

     1.5 "Capital  Stock" means the Common Stock,  the  Preferred  Stock and any
other  shares of any other  class or series of  capital  stock,  whether  now or
hereafter authorized and however designated, which have the right to participate
in the  distribution  of earnings  and assets  (upon  dissolution,  liquidation,
winding-up or otherwise) of the Corporation.

     1.6 "Common Stock" means the common stock,  par value $ 0.01 per share,  of
the Corporation.

     1.7  "Conversion  Date"  means any day on which all or any  portion  of the
outstanding shares of Series B-4 Preferred Stock is converted in accordance with
the provisions hereof.

     1.8 "Conversion Notice" means a written notice of conversion  substantially
in the form annexed hereto as Annex I.

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     1.9 "Conversion Rate" has the meaning set forth in Section 6.

     1.10  "Corporation"   means  American  United  Global,   Inc.,  a  Delaware
corporation,  and any  successor  or  resulting  corporation  by way of  merger,
consolidation, sale or exchange of all or substantially all of the Corporation's
assets, or otherwise.

     1.11 "ESOP" means the New York Medical  Employee  Stock  Ownership Plan and
Trust.

     1.12 "ESOP Trustee" shall mean Joseph Albanese,  in such person's  capacity
as trustee of the ESOP.

     1.13 "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
and the rules and  regulations  of the SEC  thereunder,  all as in effect at the
time.

     1.14  "Fundamental  Corporate  Event"  means  an  Asset  Sale  or a Sale of
Control.

     1.15 "Holder"  means any Person to whom the Series B-4  Preferred  Stock is
issued by the Corporation,  or any Person to whom the Series B-4 Preferred Stock
is subsequently transferred in accordance with the provisions hereof.

     1.16 "Issue Date" means the date corresponding with the "Closing Date" that
the  "Share  Exchange"  (as  those  terms  are  defined  in the  Share  Exchange
Agreement) shall be consummated,  pursuant to which the 450,000 shares of Series
A convertible  preferred stock, $.01 par value per share (the "ESOP Shares"), of
NY Medical,  Inc., a New York corporation ("NY Medical") owned by the ESOP shall
be exchanged for the Series B-4 Preferred Stock.

     1.17 "Liquidation Preference" means, with respect to each full share of the
Series B-4 Preferred  Stock,  an amount equal to the sum of (i) the Stated Value
thereof,  plus (ii) any amount in excess of the Stated Value  thereof  which the
Holder of such share of Series B-4 Preferred  Stock would have received had such
Holder  converted  such share of Series B-4  Preferred  Stock into Common  Stock
immediately  prior to the date of liquidation,  dissolution or winding up of the
Corporation.

     1.18  "Person"  means an  individual,  a  corporation,  a  partnership,  an
association,   a  limited  liability   company,   an   unincorporated   business
organization,  a trust or other entity or  organization,  and any  government or
political subdivision or any agency or instrumentality thereof.

     1.19 "Preferred Stock" means the 2,700,000 shares of preferred stock of the
Corporation   authorized   for   issuance   pursuant  to  its   certificate   of
incorporation,  as amended to date, consisting of (a) 1,200,000 shares of Series
A preferred stock, and (b) 1,500,000 shares of Series B Preferred Stock.

     1.20 "Sale of Control" means a transaction or series of transactions, other
than in respect of the Share  Exchange  and the issuance of the shares of Series
B-4 Preferred Stock pursuant to this Certificate of Designations,  in which more
than 50% of the voting  power of the  Corporation  is disposed of to Persons who
are not  Affiliates,  or any other  transaction or series of  transactions  as a
result of which the ability to control the Board of Directors shall be vested in
any Person or "group" (as such term is used in Section  13(d)(3) of the Exchange
Act) who is not Dr. Jonathan  Landow,  Robert M. Rubin,  the Rubin Family Trust,
the  Corporation  or  any  Affiliate  of  any  of  such  Persons,  whether  such
transaction is effected through (a) a tender offer or exchange offer made by any
Person or "group" (as such term is used in Section 13(d)(3) of the Exchange Act)
who is not Dr.  Robert  Landow,  Robert M. Rubin,  the Rubin Family  Trust,  the
Corporation  or an Affiliate of any of such  Persons,  (b) a sale or exchange of
Capital Stock, or (c) a merger, consolidation or like combination.

     1.21 "SEC" means the United States Securities and Exchange Commission.

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     1.22 "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as in effect at the time.

     1.23 "Series B Preferred  Stock" means the shares of Preferred Stock of the
Corporation  consisting of the Series B-1 Preferred Stock,  Series B-2 Preferred
Stock, Series B-3 Preferred Stock and Series B-4 Preferred Stock.

     1.24 "Series B-4 Preferred Stock" has the meaning set forth in Article 2.

     1.25  "Series B-1  Preferred  Stock" means the shares of Series B Preferred
Stock of the Corporation designated as Series B-1 Preferred Stock, or such other
series of Preferred Stock of the Corporation as may be exchanged therefor.

     1.26  "Series B-2  Preferred  Stock" means the shares of Series B Preferred
Stock of the Corporation  designated as Series B-2 Convertible  Preferred Stock,
or such other series of Preferred  Stock of the  Corporation as may be exchanged
therefor.

     1.27  "Series B-3  Preferred  Stock" means the shares of Series B Preferred
Stock of the Corporation  designated as Series B-3 Convertible  Preferred Stock,
or such other series of Preferred  Stock of the  Corporation as may be exchanged
therefor.

     1.28 "Share Exchange  Agreement" means that share exchange  agreement among
the Corporation,  Lifetime Healthcare  Services,  Inc., NY Medical and the ESOP,
dated as of August 31, 2003.

     1.29 "Stated Value" has the meaning set forth in Article 2.

     1.30  "Subsidiary"  means any entity of which securities or other ownership
interests  having  ordinary  voting  power to elect a  majority  of the Board of
Directors or other persons  performing  similar  functions are owned directly or
indirectly by the Corporation.

     All  references  to "cash" or "$" herein mean currency of the United States
of America.

                                    ARTICLE 2
                             Designation and Amount

     This series of Preferred  Stock shall consist of 150,000 shares of Series B
Preferred  Stock and  shall be  designated  Series  B-4  redeemable  convertible
Preferred  Stock (the  "Series B-4  Preferred  Stock").  The stated value of the
Series B-4 Preferred Stock shall be $30.00 per share (the "Stated Value").

                                    ARTICLE 3
                                      Rank

Except for the ESOP Dividend  described in Section (b) of Article 4, which shall
have a priority over all other securities of the  Corporation,  in each case, as
to dividends, distributions of assets upon liquidation,  dissolution, winding-up
or otherwise,  whether  voluntary or involuntary,  or otherwise,  the Series B-4
Preferred Stock shall rank:

     (a) senior and prior to the Common  Stock and any other  class or series of
Capital Stock of the Corporation now or hereafter issued,  except for the Series
B-1 Preferred Stock, the Series B-2 Preferred Stock and the Series B-3 Preferred
Stock;

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     (b) junior to the Series B-1 Preferred Stock; and

     (c) in parity with the Series B-2 Preferred  Stock and Series B-3 Preferred
Stock,  and in parity  with any other  class or series of  Capital  Stock of the
Corporation  hereafter issued,  specifically ranking by its terms in parity with
the Series B-2 Preferred Stock and Series B-3 Preferred Stock.

                                    ARTICLE 4
                                    Dividends

     (a) Fixed Dividend.  The Series B-4 Preferred Stock shall pay a 6.5% annual
cumulative  dividend on the outstanding  Series B-4 Preferred Stock,  payable on
December  31st of each year (the  "Dividend  Date").  Such  annual  dividend  is
payable, at the sole option of the Corporation,  either in cash or in additional
shares of Common Stock of the Corporation (the "Dividend Shares"); such Dividend
Shares to be  determined  as to each  outstanding  share of Series B-4 Preferred
Stock on the Dividend Date, by dividing (a) $1.95 (5% of the $30.00 Stated Value
per share),  by (b) the average of the closing bid prices for the  Corporation's
Common  Stock,  as traded on the OTC Bulletin  Board or any national  securities
exchange for the ten (10) consecutive trading days immediately prior to December
31st in each year.

     (b) ESOP Dividend.  The Corporation shall declare and pay a non-cash annual
dividend on the Series B-4 Preferred Stock to the ESOP (the "ESOP  Dividend") at
the  maximum  rate of $12.00 per share on each  outstanding  share of Series B-4
Preferred Stock;  such annual dividend to be declared  annually and be deemed to
be paid by the  Corporation  through  the  cancellation  by NY Medical of a like
amount of accrued  principal  of, and  accrued  interest  on, the ESOP Note that
shall be then due and owing. In no event shall the annual ESOP Dividend  payable
pursuant to this  paragraph (b) of Article 4 hereof,  or  otherwise,  exceed the
applicable  annual  accrued  amount of principal of and accrued  interest on the
ESOP Note that is due and owing to NY  Medical at the  applicable  date that the
ESOP Dividend shall be declared.  The Corporation shall have the right to cancel
and terminate the ESOP Dividend subject to and in accordance with the provisions
of Section 1.07(b) of the Share Exchange Agreement.

                                    ARTICLE 5
          Liquidation Preference; Share Exchanges, Consolidations, etc.

     Section 5.1 If (i) the  Corporation  shall  commence a voluntary case under
the Federal bankruptcy laws or any other applicable Federal or state bankruptcy,
insolvency  or similar law, or consent to the entry of an order for relief in an
involuntary case under any law or to the appointment of a receiver,  liquidator,
assignee,  custodian, trustee or sequestrator (or other similar official) of the
Corporation or of any  substantial  part of its property,  or make an assignment
for the benefit of its  creditors,  or admit in writing its inability to pay its
debts  generally  as they  become  due,  or if a decree or order  for  relief in
respect of the  Corporation  shall be entered by a court having  jurisdiction in
the premises in an  involuntary  case under the Federal  bankruptcy  laws or any
other  applicable  Federal  or  state  bankruptcy,  insolvency  or  similar  law
resulting in the  appointment of a receiver,  liquidator,  assignee,  custodian,
trustee or sequestrator (or other similar official) of the Corporation or of any
substantial  part of its property,  or ordering the winding up or liquidation of
its affairs,  and any such decree or order shall be unstayed and in effect for a
period of 30  consecutive  days and,  on account of any such event  ("Insolvency
Proceeding") or (ii) if the Corporation shall otherwise  liquidate,  dissolve or
wind up, no  distribution  shall be made to the  holders of any shares of Common
Stock or other shares of Capital Stock of the Corporation  other than Series B-1
Preferred  Stock,  whether now or  hereafter  issued,  upon any such  Insolvency
Proceeding,  liquidation,  dissolution or winding-up,  unless prior thereto, the
Holders of shares of Series  B-4  Preferred  Stock and the Series B-2  Preferred
Stock and  Series B-3  Preferred  Stock,  subject to this  Article 5, shall have
received the Liquidation  Preference with respect to each share, on an equal and
pari-passu basis.

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     Section 5.2 For purposes of this  Certificate of  Designations,  including,
without  limitation,  Article  5  hereof,  the  consummation  of  a  Fundamental
Corporate  Event shall not be deemed,  considered or construed as a liquidation,
dissolution or winding-up of the Corporation.

                                    ARTICLE 6
                    Conversion of Series B-4 Preferred Stock

     Section 6.1 Optional Conversion; Conversion Rate

     At the option of the Holder,  each share of Series B-4 Preferred  Stock may
be converted, at any time and from time to time on or after the Issue Date, into
seven and one-half  (7.5) shares of Common  Stock,  or an aggregate of 1,125,000
shares of Common Stock if all shares of Series B-4 Preferred  shall be converted
into Common Stock.  Such initial  conversion rate shall be adjusted from time to
time as provided in Section 6.5 hereof  (and,  as so  adjusted,  is  hereinafter
referred to as the "Conversion Rate").

     Section 6.2 Automatic Conversion

     (a) In the event that the  average of the  closing  bid price of the Common
Stock  of the  Corporation  (or  any  successor-in-interest  to the  Corporation
resulting from a Fundamental Corporate Event), as traded in the over-the-counter
market  pink  sheets,  on the  NASD  OTC-Bulletin  Board or any  other  national
securities  exchange  (collectively,   an  "Exchange"),   for  any  thirty  (30)
consecutive  Trading Days shall equal or exceed  $4.80 per share,  then upon the
expiration of five (5) Business  Days prior  written  notice to the Holder(s) of
the Series B-4 Preferred (an  "Automatic  Conversion  Date"),  all, and not less
than all,  of the then  issued and  outstanding  shares of Series B-4  Preferred
shall  automatically,  and  without  any  further  action  on  the  part  of the
Corporation  or the  Holder(s),  be converted into shares of Common Stock at the
Conversion Rate then in effect.

     (b) Upon the  occurrence  of such  automatic  conversion  of the Series B-4
Preferred  Stock,  the Holders of Series B-4 Preferred Stock shall surrender the
certificates  representing  such  shares  at  the  office  of  the  Corporation.
Thereupon,  there shall be issued and delivered to such Holder  promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a  certificate  or  certificates  for the number of shares of Common  Stock into
which the shares of Series B-4 Preferred Stock  surrendered  were convertible on
the date on which such automatic conversion occurred.

     Section 6.3 Exercise of Conversion Privilege

     (a)  The  conversion  of the  shares  of  Series  B-4  Preferred  Stock  in
accordance with Section 6.1 above may be exercised,  in whole or in part, by the
Holder by faxing an executed and completed Conversion Notice to the Corporation.
Each date on which a Conversion Notice is faxed to the Corporation in accordance
with the provisions of this Section 6.3 shall  constitute a Conversion Date. The
Corporation  shall  convert  the  Series  B-4  Preferred  Stock  and  issue  the
appropriate  number of shares of Common  Stock to be issued in  connection  with
such optional  conversion,  and all voting and other rights  associated with the
beneficial  ownership of the Common Stock issued at  conversion  shall vest with
the Holder,  effective as of the  Conversion  Date at the time  specified in the
Conversion  Notice.  The  Conversion  Notice  also shall state the name or names
(with  addresses)  of the  Persons  who are to become the  holders of the Common
Stock issuable in connection with such conversion.  The Holder shall deliver the
shares of Series B-4  Preferred  Stock to the  Corporation  by  express  courier
within five Business Days  following the  Conversion  Date.  Upon  surrender for
conversion,  the Series B-4  Preferred  Stock shall be  accompanied  by a proper
assignment  thereof to the  Corporation or be endorsed in blank.  As promptly as
practicable after the receipt of the Conversion Notice as aforesaid,  but in any
event not more than five Business Days after the  Corporation's  receipt of such
Conversion  Notice, the Corporation shall (i) issue the Common Stock issuable at
conversion in accordance  with the  provisions of this Article 6, and (ii) cause
to be mailed for  delivery  to the Holder (x) a  certificate  or  certificate(s)
representing  the  number  of shares  of  Common  Stock to which  the  Holder is
entitled by virtue of such conversion,  (y) cash, as provided in Section 6.4, in
respect of any fraction of a share of Common Stock  issuable at  conversion  and

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(z) if the Corporation chooses to pay accrued and unpaid dividends in cash, cash
in the amount of accrued and unpaid  dividends as of the Conversion  Date.  Such
conversion  shall be  deemed  to have  been  effected  at the time at which  the
Conversion Notice indicates so long as the Series B-4 Preferred Stock shall have
been  surrendered  as aforesaid at such time, and at such time the rights of the
Holder of the Series B-4 Preferred Stock, as such, shall cease and the Person or
Persons in whose  name or names the  Common  Stock  shall be  issuable  shall be
deemed to have  become  the  holder or holders of record of the shares of Common
Stock  represented  thereby and all voting and other rights  associated with the
beneficial ownership of such shares of Common Stock shall at such time vest with
such  Person or Persons.  The  Conversion  Notice  shall  constitute  a contract
between the Holder and the  Corporation,  whereby the Holder  shall be deemed to
subscribe  for the number of shares of Common Stock which it will be entitled to
receive  upon  such  conversion  and,  in  payment  and   satisfaction  of  such
subscription  (and for any cash  adjustment to which it is entitled  pursuant to
Section 6.4),  to surrender  the Series B-4  Preferred  Stock and to release the
Corporation from all liability  thereon other than the obligation to deliver the
certificates  representing  the Common Shares and pay cash in lieu of fractional
shares as set forth in this Section 6.3. No cash payment  aggregating  less than
$1.00 shall be required to be given unless specifically requested by the Holder.

     (b) The Holder  shall be  entitled  to exercise  its  conversion  privilege
notwithstanding the commencement of any case under 11 U.S.C. Section 101 et seq.
(the  "Bankruptcy  Code").  In the event the  Corporation  is a debtor under the
Bankruptcy  Code, the Corporation  hereby waives to the fullest extent permitted
any rights to relief it may have under 11 U.S.C.  Section  362 in respect of the
Holder's  conversion  privilege.  The  Corporation  hereby waives to the fullest
extent permitted any rights to relief it may have under 11 U.S.C. Section 362 in
respect of the  conversion of the Series B-4 Preferred  Stock.  The  Corporation
agrees, without cost or expense to the Holder, to take or consent to any and all
action necessary to effectuate relief under 11 U.S.C. Section 362.

     (c) All shares of Series B-4  Preferred  Stock and all shares of Series B-3
Preferred  Stock shall be  converted  into shares of Common Stock as provided in
Section 6.2 of this Article 6, with an effective date of such  conversion  being
either (i) immediately prior to consummation of any Fundamental Corporate Event,
or (ii) on the  Automatic  Conversion  Date  corresponding  to the date that the
Board of Directors of the  Corporation  shall execute  resolutions  effecting an
automatic  conversion pursuant to Section 6.2 above, as the case may be, and the
record date for the issuance of such Common Stock shall be such effective date.

     Section 6.4 Fractional Shares

     No  fractional  shares of  Common  Stock or scrip  representing  fractional
shares of Common  Stock  shall be  issued  upon  conversion  of the  Series  B-4
Preferred  Stock.  Instead  of any  fractional  shares  of  Common  Stock  which
otherwise would be issuable upon  conversion of the Series B-4 Preferred  Stock,
the  Corporation  shall pay a cash  adjustment in respect of such fraction in an
amount  equal to the same  fraction  multiplied  by the closing bid price of the
Common Shares on the last trading day before the Conversion Date.

     Section 6.5 Adjustments to Conversion Rate

     If, prior to the date on which all shares of Series B-4 Preferred Stock are
converted, the Corporation shall (i) pay a dividend in shares of Common Stock or
Options of  Convertible  Securities or make a  distribution  in shares of Common
Stock or Options of  Convertible  Securities,  (ii)  subdivide  its  outstanding
Common Stock,  (iii) combine its outstanding  Common Stock into a smaller number
of shares of Common Stock or (iv) issue by  reclassification of its Common Stock
other  securities  of the  Corporation,  the  Conversion  Rate in  effect on the
opening of business on the record date for determining  stockholders entitled to
participate in such transaction  shall thereupon be adjusted,  or, if necessary,
the right to convert shall be amended,  such that the number of shares of Common
Stock  receivable  upon  conversion of the shares of Series B-4 Preferred  Stock
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive,  upon the  conversion of such shares of Series B-4 Preferred  Stock,
the kind and  number  of  shares  of  Common  Stock or other  securities  of the
Corporation  which it would have owned or would  have been  entitled  to receive
after the  happening  of any of the  events  described  above had the Series B-4
Preferred Stock been converted  immediately prior to the happening of such event
or any record date with respect  thereto.  Any adjustment  made pursuant to this
Section 6.5 shall become effective  immediately after the effective date of such
event and such  adjustment  shall be retroactive to the record date, if any, for
such event.  No adjustment with respect to any ordinary cash dividends (made out
of current earnings) on shares of Common Stock shall be made.

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     In each case of an  adjustment  of the  Conversion  Rate for the  number of
shares of Common Stock  issuable  upon  conversion  of the Series B-4  Preferred
Stock,  the  Corporation,  at its  expense,  shall  compute such  adjustment  or
readjustment in accordance with the provisions  hereof and prepare a certificate
showing such adjustment,  and shall mail such certificate,  by first class mail,
postage prepaid,  to each registered Holder of Series B-4 Preferred Stock at the
Holder's address as shown in the Corporation's  books. The certificate shall set
forth such  adjustment or  readjustment,  showing in detail the facts upon which
such adjustment or readjustment is based.

                                    ARTICLE 7
                                  Voting Rights

     Section 7.1 General Voting Rights

     Except as otherwise  provided  herein or as required by law, the Series B-4
Preferred  Stock shall be voted  equally with the shares of Common Stock and not
as a separate class, at any annual or special meeting of the stockholders of the
Corporation,  and may act by written  consent  in the same  manner as the Common
Stock, in either case upon the following basis:  each Holder of shares of Series
B-4 Preferred  Stock shall be entitled to such number of votes as shall be equal
to the whole number of shares of Common Stock into which such Holder's aggregate
number of shares of Series B-4  Preferred  Stock are  convertible  (pursuant  to
Article 6 hereof)  immediately  after the close of  business  on the record date
fixed for such meeting or the effective date of such written consent.

     Section 7.2 Notice

     The  Corporation  shall provide each Holder of Series B-4  Preferred  Stock
with prior  notification of any meeting of the  stockholders  (and copies of all
proxy materials and other information sent to shareholders). In the event of any
taking by the  Corporation  of a record of its  stockholders  for the purpose of
determining  stockholders who are entitled to receive payment of any dividend or
other  distribution,  any right to subscribe for,  purchase or otherwise acquire
(including by way of merger, consolidation or recapitalization) any share of any
class or any other securities or property, or to receive any other right, or for
the purpose of determining  stockholders  who are entitled to vote in connection
with any  proposed  liquidation,  dissolution,  winding up or  otherwise  of the
Corporation, the Corporation shall mail a notice thereof to each Holder at least
30 days  prior to the  date on which  any  such  record  is to be taken  for the
purpose of such dividend,  distribution,  right or other event,  together with a
brief   statement   regarding  the  amount  and  character  of  such   dividend,
distribution, right or other event to the extent known at such time.

     Section 7.3 Separate Class Voting Rights

     To the extent that under the DGCL the vote of the Holders of the Series B-4
Preferred  Stock,  voting  separately as a class, is applicable,  is required to
authorize a given action of the Corporation,  the affirmative vote or consent of
the  Holders  of at least a  majority  of the  outstanding  shares of Series B-4
Preferred Stock  represented at a duly held meeting at which a quorum is present
or by  written  consent of a majority  of the  outstanding  shares of Series B-4
Preferred  Stock  (except as  otherwise  may be  required  under the DGCL) shall
constitute the approval of such action by the class.

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                                    ARTICLE 8
                                   Redemption

     Section 8.1 Optional  Redemption.  At any time commencing  thirty (30) days
from the Issue Date, the Corporation  shall have the right (but not obligation),
upon thirty (30) days prior  written  notice  given to all holders of Series B-4
Preferred  (the  "Optional  Redemption  Notice")  to redeem  for cash all or any
portion of the shares of Series B  Preferred  Stock,  at a  redemption  price of
$30.00 per share; provided,  that any Holder shall have the right at any time or
from time to time prior to the date fixed for redemption (the "Redemption Date")
to convert all or any portion of the Series B-4  Preferred  into Common Stock in
accordance with the provisions of this Certificate .

     Section 8.2 Mandatory Redemption.

     (a) At any time  commencing on or after  January 1, 2010,  any Holder(s) of
the Series B-4 Preferred shall have the right (but not  obligation),  by written
notice (the  "Mandatory  Redemption  Notice") to cause the Corporation to redeem
for cash are or any  portion  of this  share of Series  B-4  Preferred  Stock by
paying to the  Holders  of such  shares of Series B-4  Preferred,  for each full
share of Series B Preferred Stock to be redeemed, an amount out of funds legally
therefore which shall be equal to $30.00 (the "Original  Redemption Price"). The
Corporation shall pay to the Holder submitting a Mandatory Redemption Notice the
full Original  Redemption Price by not later than ninety (90) days following the
date of the Mandatory  Redemption  Notice (the "Mandatory  Redemption  Period").
Holders of Series B-4 Preferred  shall have the right to rescind their Mandatory
Redemption Notice at any time during the Mandatory Redemption Period.

     (b) Each  Holder of Series B-4  Preferred  whose  share are to be  redeemed
pursuant to this Article 8 shall deliver to the Corporation,  against receipt of
the applicable  Redemption  Payment,  all of such holder's  shares of Series B-4
Preferred to be redeemed,  duly endorsed in blank for transfer or accompanied by
a duly executed stock power with the signature of the record owner guaranteed by
a bank or member firm of the New York Stock Exchange.

     (c) From and after the applicable  Redemption Date, unless there shall have
been a default in payment of the applicable  Redemption Price, all rights of the
holders of shares of Series  B-4  Preferred  designated  for  redemption  in the
applicable  Redemption  Notice as holders of Series B-4  Preferred  (except  the
right to  receive  the  applicable  Redemption  Payment  without  interest  upon
surrender of their certificate or certificates) shall cease with respect to such
shares,  and such shares shall not thereafter be transferred on the books of the
Corporation or be deemed to be outstanding  for any purpose  whatsoever.  If the
funds of the  Corporation  legally  available for redemption of shares of Series
B-4 Preferred on any applicable  Redemption Date are  insufficient to redeem the
total number of shares of Series B-4 Preferred to be redeemed on such date those
funds which are legally  available  will be used to redeem the maximum  possible
number of such  shares  ratably  among the Holders of such shares to be redeemed
based upon their  holdings  of Series  B-4  Preferred.  The shares of Series B-4
Preferred not redeemed shall remain  outstanding  and entitled to all the rights
and preferences provided herein. At any time thereafter when additional funds of
the Corporation are legally available for the redemption of shares of Series B-4
Preferred,  such funds will promptly be used to redeem the balance of the shares
which the  Corporation  has become obliged to redeem on any Redemption  Date but
which it has not redeemed.

                                    ARTICLE 9
                                  Miscellaneous

     Section 9.1 Loss, Theft, Destruction of Preferred Stock

     Upon  receipt of  evidence  satisfactory  to the  Corporation  of the loss,
theft, destruction or mutilation of shares of Series B-4 Preferred Stock and, in
the case of any such loss,  theft or  destruction,  upon  receipt  of  indemnity
reasonably  satisfactory  to the  Corporation,  or,  in  the  case  of any  such
mutilation,  upon surrender and  cancellation of the Series B-4 Preferred Stock,
the Corporation  shall make,  issue and deliver,  in lieu of such lost,  stolen,
destroyed  or  mutilated  shares of Series B-4  Preferred  Stock,  new shares of
Series B-4 Preferred  Stock of like tenor.  The Series B-4 Preferred Stock shall
be held and owned upon the express condition that the provisions of this Section
8.1 are exclusive with respect to the replacement of mutilated,  destroyed, lost
or stolen  shares of Series B-4 Preferred  Stock and shall  preclude any and all
other  rights  and  remedies  notwithstanding  any law or  statute  existing  or
hereafter  enacted to the contrary with respect to the replacement of negotiable
instruments or other securities without the surrender thereof.

                                       8
<PAGE>

     Section 9.2 Whom Deemed Absolute Owner

     The  Corporation may deem the Person in whose name the Series B-4 Preferred
Stock shall be registered  upon the registry books of the Corporation to be, and
may treat it as, the absolute  owner of the Series B-4  Preferred  Stock for the
purpose of receiving payment of dividends on the Series B-4 Preferred Stock, for
the conversion of the Series B-4 Preferred Stock and for all other purposes, and
the  Corporation  shall not be affected by any notice to the contrary.  All such
payments  and such  conversion  shall be valid  and  effectual  to  satisfy  and
discharge the liability upon the Series B-4 Preferred Stock to the extent of the
sum or sums so paid or the conversion so made.

     Section 9.3 Register

     The Corporation  shall keep at its principal office a register in which the
Corporation  shall  provide  for the  registration  of the Series B-4  Preferred
Stock.  Upon any transfer of the Series B-4 Preferred  Stock in accordance  with
the  provisions  hereof,  the  Corporation  shall  register such transfer on the
register of Series B-4 Preferred Stock.

     Section 9.4 Withholding

     To the extent  required by  applicable  law, the  Corporation  may withhold
amounts for or on account of any taxes  imposed or levied by or on behalf of any
taxing authority in the United States having  jurisdiction  over the Corporation
from any payments made pursuant to the Series B-4 Preferred Stock.

     Section 9.5 Headings

     The  headings  of  the  Articles  and  Sections  of  this   Certificate  of
Designation  are inserted for  convenience  only and do not constitute a part of
this Certificate of Designation.

     Section 9.6 Severability

     If any provision of this  Certificate of  Designation,  or the  application
thereof   to  any  person  or  entity  or  any   circumstance,   is  invalid  or
unenforceable,  (i) a suitable  and  equitable  provision  shall be  substituted
therefor  in order to carry  out,  so far as may be valid and  enforceable,  the
intent and  purpose of such  invalid or  unenforceable  provision,  and (ii) the
remainder  of  this  Certificate  of  Designation  and the  application  of such
provision to other persons,  entities or circumstances  shall not be affected by
such   invalidity   or   unenforceability,   nor  shall   such   invalidity   or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

               [the balance of this page intentionally left blank]

                                       9
<PAGE>

In Witness  Whereof,  the Corporation has caused this Certificate of Designation
to be signed by its duly authorized officer on August 31, 2003.

                                         AMERICAN UNITED GLOBAL, INC.

                                         By:      /s/ Robert M. Rubin
                                                  --------------------
                                         Name:    Robert M. Rubin,  President

<PAGE>

                                     ANNEX I

                            FORM OF CONVERSION NOTICE

To:      American United Global, Inc.
         [ADDRESS]
         [ADDRESS]

     The undersigned owner of this Series B-4 Redeemable  Convertible  Preferred
Stock (the "Series B-4 Preferred Stock") issued by American United Global,  Inc.
(the  "Corporation")   hereby  irrevocably   exercises  its  option  to  convert
__________  shares of the Series B-4  Preferred  Stock into shares of the common
stock,  par value  $0.01 per  share  ("Common  Stock"),  of the  Corporation  in
accordance  with the terms of the  Certificate of  Designation.  The undersigned
hereby  instructs the  Corporation to convert the number of shares of the Series
B-4  Preferred  Stock  specified  above into  Shares of Common  Stock  Issued at
Conversion in accordance  with the provisions of Article 6 of the Certificate of
Designation.  The  undersigned  directs  that  the  Common  Stock  issuable  and
certificates  therefor deliverable upon conversion and the recertificated Series
B-4  Preferred  Stock,  if any, not being  surrendered  for  conversion  hereby,
together with any check in payment for fractional Common Stock, be issued in the
name of and  delivered  to the  undersigned  unless  a  different  name has been
indicated  below.  All  capitalized  terms used and not defined  herein have the
respective meanings assigned to them in the Certificate of Designation.  So long
as the Series B-4 Preferred  Stock shall have been  surrendered  for  conversion
hereby, the conversion  pursuant hereto shall be deemed to have been effected at
the  date  and  time  specified  below,  and at  such  time  the  rights  of the
undersigned  as a Holder of the Series B-4  Preferred  Stock shall cease and the
Person or Persons in whose name or names the Common Stock  Issued at  Conversion
shall be issuable shall be deemed to have become the holder or holders of record
of the  Common  Shares  represented  thereby  and all  voting  and other  rights
associated  with the  beneficial  ownership of such Common  Shares shall at such
time vest with such Person or Persons.

Date and time: _____________________________

__________________________________________
Signature

Please print name and address (including zip code number):

__________________________________________

__________________________________________

__________________________________________<PAGE>

                                                                    EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement") is dated as of
August 28, 2003, among Loudeye Corp., a Delaware corporation (the "Company"),
and the purchasers identified on the signature pages hereto (each a "Purchaser"
and collectively the "Purchasers"); and

      WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below), and Rule
506 promulgated thereunder, the Company desires to issue and sell to the
Purchasers, and each Purchaser, severally and not jointly, desires to purchase
from the Company in the aggregate, up to $15,000,000 of Common Stock and
Warrants to purchase shares of Common Stock.

      NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   DEFINITIONS

      Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings
indicated in this Section 1.1:

            "Action" shall have the meaning ascribed to such term in Section
      3.1(j).

            "Affiliate" means any Person that, directly or indirectly through
      one or more intermediaries, controls or is controlled by or is under
      common control with a Person as such terms are used in and construed under
      Rule 144. With respect to a Purchaser, any investment fund or managed
      account that is managed on a discretionary basis by the same investment
      manager as such Purchaser will be deemed to be an Affiliate of such
      Purchaser.

            "Business Day" means any day except Saturday, Sunday and any day
      which shall be a federal legal holiday or a day on which banking
      institutions in the State of New York are authorized or required by law or
      other governmental action to close.

            "Closing" means the closing of the purchase and sale of the Common
      Stock and Warrants pursuant to Section 2.1.

            "Closing Date" means the date of the Closing, which shall be the
      date hereof.
<PAGE>
            "Closing Price" means on any particular date (a) the last reported
      closing bid price per share of Common Stock on such date on the Trading
      Market (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the
      last reported closing bid price for regular session trading on such day),
      or (b) if there is no such price on such date, then the closing bid price
      on the Trading Market on the date nearest preceding such date (as reported
      by Bloomberg L.P. at 4:15 PM (New York time) as the closing bid price for
      regular session trading on such day), or (c) if the Common Stock is not
      then listed or quoted on the Trading Market and if prices for the Common
      Stock are then reported in the "pink sheets" published by the National
      Quotation Bureau Incorporated (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid
      price per share of the Common Stock so reported, or (d) if the shares of
      Common Stock are not then publicly traded the fair market value of a share
      of Common Stock as determined by an appraiser selected in good faith by
      the Purchasers of a majority in interest of the Shares then outstanding.

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means the common stock of the Company, $0.001 par
      value per share, and any securities into which such common shares may
      hereafter be reclassified.

            "Common Stock Equivalents" means any securities of the Company or
      the Subsidiaries which would entitle the holder thereof to acquire at any
      time Common Stock, including without limitation, any debt, preferred
      stock, rights, options, warrants or other instrument that is at any time
      convertible into or exchangeable for, or otherwise entitles the holder
      thereof to receive, Common Stock.

            "Company Counsel" means Procopio, Cory, Hargreaves & Savitch LLP.

            "Disclosure Schedules" means the Disclosure Schedules concurrently
      delivered herewith.

            "Effective Date" means the date that the Registration Statement is
      first declared effective by the Commission.

            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            "FW" means Feldman Weinstein LLP with offices located at 420
      Lexington Avenue, New York, New York 10170-0002.

            "Intellectual Property Rights" shall have the meaning ascribed to
      such term in Section 3.1(o).

            "Liens" means a lien, charge, security interest, encumbrance, right
      of first refusal or other restriction.
<PAGE>
            "Material Adverse Effect" shall have the meaning ascribed to such
      term in Section 3.1(b).

            "Material Permits" shall have the meaning ascribed to such term in
      Section 3.1(m).

            "Per Share Purchase Price" equals $1.55, subject to adjustment for
      reverse and forward stock splits, stock dividends, stock combinations and
      other similar transactions of the Common Stock that occur after the date
      of this Agreement.

            "Person" means an individual or corporation, partnership, trust,
      incorporated or unincorporated association, joint venture, limited
      liability company, joint stock company, government (or an agency or
      subdivision thereof) or other entity of any kind.

            "Registration Statement" means a registration statement meeting the
      requirements set forth in the Registration Rights Agreement and covering
      the resale by the Purchasers of the Shares and the Warrant Shares.

            "Registration Rights Agreement" means the Registration Rights
      Agreement, dated as of the date of this Agreement, among the Company and
      each Purchaser, in the form of Exhibit B hereto.

            "Rule 144" means Rule 144 promulgated by the Commission pursuant to
      the Securities Act, as such Rule may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same effect as such Rule.

            "SEC Reports" shall have the meaning ascribed to such term in
      Section 3.1(h).

            "Securities" means the Shares, the Warrants and the Warrant Shares.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Shares" means the shares of Common Stock issued or issuable to each
      Purchaser pursuant to this Agreement.

            "Subscription Amount" means, as to each Purchaser, the amounts set
      forth below such Purchaser's signature block on the signature page hereto,
      in United States dollars and in immediately available funds.

            "Subsidiary" shall have the meaning ascribed to such term in Section
      3.1(a).

            "Trading Day" means (i) a day on which the Common Stock is traded on
      a Trading Market, or (ii) if the Common Stock is not listed on a Trading
      Market, a day on which the Common Stock is traded on the over-the-counter
      market, as reported by the OTC Bulletin Board, or (iii) if the Common
      Stock is not quoted on the OTC Bulletin Board, a day on which the Common
      Stock is quoted in the over-the-counter market as reported by the National
      Quotation Bureau Incorporated (or any similar organization or
<PAGE>
      agency succeeding to its functions of reporting prices); provided, that in
      the event that the Common Stock is not listed or quoted as set forth in
      (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

            "Trading Market" means the following markets or exchanges on which
      the Common Stock is listed or quoted for trading on the date in question:
      the American Stock Exchange, the New York Stock Exchange, the Nasdaq
      National Market or the Nasdaq SmallCap Market.

            "Transaction Documents" means this Agreement, the Registration
      Rights Agreement, the Warrant and any other documents or agreements
      executed in connection with the transactions contemplated hereunder.

            "VWAP" means, for any date, the price determined by the first of the
      following clauses that applies: (a) if the Common Stock is then listed or
      quoted on a Trading Market, the daily volume weighted average price of the
      Common Stock for such date (or the nearest preceding date) on the primary
      Trading Market on which the Common Stock is then listed or quoted as
      reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30
      a.m. ET to 4:02 p.m. Eastern Time) using the VAP function; (b) if the
      Common Stock is not then listed or quoted on a Trading Market and if
      prices for the Common Stock are then quoted on the OTC Bulletin Board, the
      volume weighted average price of the Common Stock for such date (or the
      nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock
      is not then listed or quoted on the OTC Bulletin Board and if prices for
      the Common Stock are then reported in the "Pink Sheets" published by the
      National Quotation Bureau Incorporated (or a similar organization or
      agency succeeding to its functions of reporting prices), the most recent
      bid price per share of the Common Stock so reported; or (d) in all other
      cases, the fair market value of a share of Common Stock as determined by a
      nationally recognized-independent appraiser selected in good faith by
      Purchasers holding a majority of the principal amount of Shares then
      outstanding.

            "Warrants" means the Common Stock Purchase Warrants, in the form of
      Exhibit C, issuable to the Purchasers at the Closing, which warrants shall
      be exercisable beginning on the 6 month anniversary after the Closing Date
      and have an exercise price equal to $2.00, subject to adjustment therein,
      and a term of exercise of 3 years.

            "Warrant Shares" means the shares of Common Stock issuable upon
      exercise of the Warrants.

                                PURCHASE AND SALE

      Closing. At the Closing, the Purchasers shall purchase, severally and not
jointly, and the Company shall issue and sell, in the aggregate, up to
$15,000,000 of Common Stock and Warrants to purchase shares of Common Stock on
the Closing Date. Each Purchaser shall purchase from the Company, and the
Company shall issue and sell to each Purchaser, a number
<PAGE>
of Shares equal to such Purchaser's Subscription Amount divided by the Per Share
Purchase Price, together with the Warrants, on the Closing Date. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of FW, or such other location as the parties shall mutually
agree.

         Closing Conditions.

                  At the Closing the Company shall deliver or cause to be
            delivered to each Purchaser (unless otherwise indicated below):

                        this Agreement duly executed by the Company;

                        within 3 Trading Days of the Closing Date, a certificate
                  evidencing a number of Shares equal to such Purchaser's
                  Subscription Amount divided by the Per Share Purchase Price,
                  registered in the name of such Purchaser;

                        within 3 Trading Days of the Closing Date, a Warrant,
                  registered in the name of such Purchaser, pursuant to which
                  such Purchaser shall have the right to acquire up to the
                  number of shares of Common Stock equal to 10% of the Shares to
                  be issued to such Purchaser at such Closing;

                        the Registration Rights Agreement duly executed by the
                  Company; and

                        a legal opinion of Company Counsel, in the form of
                  Exhibit A attached hereto.

                  At the Closing each Purchaser shall deliver or cause to be
            delivered to the Company the following:

                        this Agreement duly executed by such Purchaser;

                        such Purchaser's Subscription Amount as to such Closing
                  by wire transfer to the account of the Company; and

                        the Registration Rights Agreement duly executed by such
                  Purchaser.

                  All representations and warranties of the Company and the
            Purchasers contained herein shall remain true and correct as of the
            Closing Date.

                  As of the Closing Date, there shall have been no Material
            Adverse Effect with respect to the Company since the date hereof.

                  From the date hereof to the Closing Date, trading in the
            Common Stock shall not have been suspended by the Commission (except
            for any suspension of trading of limited duration agreed to by the
            Company, which suspension shall be terminated prior to the Closing),
            and, at any time prior to the Closing Date, trading in securities
            generally as reported by Bloomberg Financial Markets shall not have
            been suspended or limited, or minimum prices shall not have been
            established on securities whose trades are reported
<PAGE>
            by such service, or on any Trading Market, nor shall a banking
            moratorium have been declared either by the United States or New
            York State authorities.

                         REPRESENTATIONS AND WARRANTIES

      Representations and Warranties of the Company. Except as set forth under
the corresponding section of the Disclosure Schedules herewith or in the SEC
Reports, the Company hereby makes the following representations and warranties
as of the date hereof to each Purchaser:

            Subsidiaries. The Company has no direct or indirect subsidiaries.
      The Company owns, directly or indirectly, all of the capital stock of its
      Subsidiaries free and clear of any lien, charge, security interest,
      encumbrance, right of first refusal or other restriction (collectively,
      "Liens"), and all the issued and outstanding shares of capital stock of
      each Subsidiary are validly issued and are fully paid, non-assessable and
      free of preemptive and similar rights. If the Company has no subsidiaries,
      then references in the Transaction Documents to the Subsidiaries will be
      disregarded.

            Organization and Qualification. Each of the Company and the
      Subsidiaries is an entity duly incorporated or otherwise organized,
      validly existing and in good standing under the laws of the jurisdiction
      of its incorporation or organization (as applicable), with the requisite
      corporate power and authority to own and use its properties and assets and
      to carry on its business as currently conducted. Neither the Company nor
      any Subsidiary is in violation of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational
      or charter documents. Each of the Company and the Subsidiaries is duly
      qualified to conduct business and is in good standing as a foreign
      corporation or other entity in each jurisdiction in which the nature of
      the business conducted or property owned by it makes such qualification
      necessary, except where the failure to be so qualified or in good
      standing, as the case may be, would not have or reasonably be expected to
      result in (i) a material adverse effect on the legality, validity or
      enforceability of any Transaction Document, (ii) a material adverse effect
      on the results of operations, assets, business or financial condition of
      the Company and the Subsidiaries, taken as a whole, or (iii) a material
      adverse effect on the Company's ability to perform in any material respect
      on a timely basis its obligations under any Transaction Document (any of
      (i), (ii) or (iii), a "Material Adverse Effect").

            Authorization; Enforcement. The Company has the requisite corporate
      power and authority to enter into and to consummate the transactions
      contemplated by each of the Transaction Documents and otherwise to carry
      out its obligations thereunder. The execution and delivery of each of the
      Transaction Documents by the Company and the consummation by it of the
      transactions contemplated thereby have been duly authorized by all
      necessary action on the part of the Company and no further action is
      required by the Company in connection therewith. Each Transaction Document
      has been (or upon delivery will have been) duly executed by the Company
      and, when delivered in accordance with the terms hereof, will constitute
      the valid and binding obligation of the Company enforceable against the
      Company in accordance with its terms except (i) as
<PAGE>
      limited by applicable bankruptcy, insolvency, reorganization, moratorium
      and other laws of general application affecting enforcement of creditors'
      rights generally and (ii) as limited by laws relating to the availability
      of specific performance, injunctive relief or other equitable remedies,
      and (iii) with respect to the indemnification provisions set forth in the
      Registration Rights Agreement, as limited by public policy.

            No Conflicts. The execution, delivery and performance of the
      Transaction Documents by the Company and the consummation by the Company
      of the transactions contemplated thereby do not and will not (i) conflict
      with or violate any provision of the Company's or any Subsidiary's
      certificate or articles of incorporation, bylaws or other organizational
      or charter documents, or (ii) conflict with, or constitute a default (or
      an event that with notice or lapse of time or both would become a default)
      under, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or
      both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company or Subsidiary debt or otherwise) or other
      understanding to which the Company or any Subsidiary is a party or by
      which any property or asset of the Company or any Subsidiary is bound or
      affected, or (iii) result in a violation of any law, rule, regulation,
      order, judgment, injunction, decree or other restriction of any court or
      governmental authority as currently in effect to which the Company or a
      Subsidiary is subject (including federal and state securities laws and
      regulations), or by which any property or asset of the Company or a
      Subsidiary is bound or affected; except in the case of each of clauses
      (ii) and (iii), such as would not have or reasonably be expected to result
      in a Material Adverse Effect.

            Filings, Consents and Approvals. The Company is not required to
      obtain any consent, waiver, authorization or order of, give any notice to,
      or make any filing or registration with, any court or other federal,
      state, local or other governmental authority or other Person in connection
      with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (a) the filing with the Commission of
      the Registration Statement, the application(s) to each Trading Market for
      the listing of the Shares and Warrant Shares for trading thereon in the
      time and manner required thereby, and applicable Blue Sky filings, and (b)
      such as have already been obtained or such exemptive filings as are
      required to be made under applicable securities laws.

            Issuance of the Securities. The Securities are duly authorized and,
      when issued and paid for in accordance with the Transaction Documents,
      will be duly and validly issued, fully paid and nonassessable, free and
      clear of all Liens. The Company has reserved from its duly authorized
      capital stock the maximum number of shares of Common Stock issuable
      pursuant to this Agreement and the Warrants.

            Capitalization. The capitalization of the Company is as described in
      the Company's most recent periodic report filed with the Commission. The
      Company has not issued any capital stock since such filing other than
      pursuant to the exercise of employee stock options under the Company's
      stock option plans, the issuance of shares of Common Stock to employees
      pursuant to the Company's employee stock purchase plan and pursuant to the
      conversion or exercise of Common Stock Equivalents outstanding on the date
      hereof. No Person has any right of first refusal, preemptive right,
<PAGE>
      right of participation, or any similar right to participate in the
      transactions contemplated by the Transaction Documents. Except as a result
      of the purchase and sale of the Securities and except for employee stock
      options under the Company's stock option plans, there are no outstanding
      options, warrants, script rights to subscribe to, calls or commitments of
      any character whatsoever relating to, or securities, rights or obligations
      convertible into or exchangeable for, or giving any Person any right to
      subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common
      Stock, or securities or rights convertible or exchangeable into shares of
      Common Stock. The issue and sale of the Securities will not obligate the
      Company to issue shares of Common Stock or other securities to any Person
      (other than the Purchasers) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or
      reset price under such securities.

            SEC Reports; Financial Statements. The Company has filed all reports
      required to be filed by it under the Securities Act and the Exchange Act,
      including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the
      two years preceding the date hereof (or such shorter period as the Company
      was required by law to file such material) (the foregoing materials,
      including the exhibits thereto and the financial statements therein,are
      collectively referred to herein as the "SEC Reports", and are incorporated
      herein by reference) on a timely basis or has received a valid extension
      of such time of filing and has filed any such SEC Reports prior to the
      expiration of any such extension. The SEC Reports incorporated by
      reference herein include without limitation the Form 10-K for the fiscal
      year ended December 31, 2002, including the audited financial statements
      included therein, and the Form 10-Q for the quarter ended June 30, 2003,
      including the unaudited interim financial statements included therein. As
      of their respective dates, the SEC Reports complied in all material
      respects with the requirements of the Securities Act and the Exchange Act
      and the rules and regulations of the Commission promulgated thereunder, as
      applicable, and none of the SEC Reports, when filed, contained any untrue
      statement of a material fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in light of the circumstances under which they were made, not misleading.
      The financial statements of the Company included in the SEC Reports comply
      in all material respects with applicable accounting requirements and the
      rules and regulations of the Commission with respect thereto as in effect
      at the time of filing. Such financial statements have been prepared in
      accordance with generally accepted accounting principles applied on a
      consistent basis during the periods involved ("GAAP"), except as may be
      otherwise specified in such financial statements or the notes thereto and
      except that unaudited financial statements may not contain all footnotes
      required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of
      and for the dates thereof and the results of operations and cash flows for
      the periods then ended, subject, in the case of unaudited statements, to
      normal year-end audit adjustments.

            Material Changes. Since the date of the latest audited financial
      statements included within the SEC Reports, (i) there has been no event,
      occurrence or development that has had or that could reasonably be
      expected to result in a Material Adverse Effect, (ii) the Company has not
      incurred any liabilities (contingent or otherwise) other than (A)
<PAGE>
      trade payables and accrued expenses incurred in the ordinary course of
      business consistent with past practice and (B) liabilities not required to
      be reflected in the Company's financial statements pursuant to GAAP or
      required to be disclosed in filings made with the Commission, (iii) the
      Company has not altered its method of accounting, (iv) the Company has not
      declared or made any dividend or distribution of cash or other property to
      its stockholders or purchased, redeemed or made any agreements to purchase
      or redeem any shares of its capital stock and (v) the Company has not
      issued any equity securities to any officer, director or Affiliate, except
      pursuant to existing Company stock option plans. The Company does not have
      pending before the Commission any request for confidential treatment of
      information.

            Litigation. There is no action, suit, inquiry, notice of violation,
      proceeding or investigation pending or, to the knowledge of the Company,
      threatened against or affecting the Company, any Subsidiary or any of
      their respective properties before or by any court, arbitrator,
      governmental or administrative agency or regulatory authority (federal,
      state, county, local or foreign) (collectively, an "Action") which (i)
      adversely affects or challenges the legality, validity or enforceability
      of any of the Transaction Documents or the Securities or (ii) could, if
      there were an unfavorable decision, have or reasonably be expected to
      result in a Material Adverse Effect. Neither the Company nor any
      Subsidiary, nor any director or officer thereof, is or has been the
      subject of any Action involving a claim of violation of or liability under
      federal or state securities laws or a claim of breach of fiduciary duty.
      There has not been, and to the knowledge of the Company, there is not
      pending or contemplated, any investigation by the Commission involving the
      Company or any current or former director or officer of the Company. The
      Commission has not issued any stop order or other order suspending the
      effectiveness of any registration statement filed by the Company or any
      Subsidiary under the Exchange Act or the Securities Act.

            Labor Relations. No material labor dispute exists or, to the
      knowledge of the Company, is imminent with respect to any of the employees
      of the Company which could reasonably be expected to result in a Material
      Adverse Effect.

            Compliance. Neither the Company nor any Subsidiary (i) is in default
      under or in violation of (and no event has occurred that has not been
      waived that, with notice or lapse of time or both, would result in a
      default by the Company or any Subsidiary under), nor has the Company or
      any Subsidiary received notice of a claim that it is in default under or
      that it is in violation of, any indenture, loan or credit agreement or any
      other agreement or instrument to which it is a party or by which it or any
      of its properties is bound (whether or not such default or violation has
      been waived), (ii) is in violation of any order of any court, arbitrator
      or governmental body, or (iii) is or has been in violation of any statute,
      rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws applicable to its
      business, except in the case of clauses (i), (ii) and (iii) as would not
      have or reasonably be expected to result in a Material Adverse Effect.

            Regulatory Permits. The Company and the Subsidiaries possess all
      certificates, authorizations and permits issued by the appropriate
      federal, state, local or foreign
<PAGE>
      regulatory authorities necessary to conduct their respective businesses as
      described in the SEC Reports, except where the failure to possess such
      permits would not have or reasonably be expected to result in a Material
      Adverse Effect ("Material Permits"), and neither the Company nor any
      Subsidiary has received any notice of proceedings relating to the
      revocation or modification of any Material Permit.

            Title to Assets. The Company and the Subsidiaries have good and
      marketable title in fee simple to all real property owned by them that is
      material to the business of the Company and the Subsidiaries, taken as a
      whole, and good and marketable title in all personal property owned by
      them that is material to the business of the Company and the Subsidiaries,
      taken as a whole, in each case free and clear of all Liens, except for
      Liens as do not materially affect the value of such property and do not
      materially interfere with the use made and proposed to be made of such
      property by the Company and the Subsidiaries and Liens for the payment of
      federal, state or other taxes, the payment of which is neither delinquent
      nor subject to penalties. Any real property and facilities held under
      lease by the Company and the Subsidiaries are held by them under valid,
      subsisting and enforceable leases with which the Company and the
      Subsidiaries are in material compliance.

            Patents and Trademarks. To the knowledge of the Company and each
      Subsidiary, the Company and the Subsidiaries have, or have rights to use,
      all patents, patent applications, trademarks, trademark applications,
      service marks, trade names, copyrights, licenses and other similar rights
      that are necessary or material for use in connection with their respective
      businesses as described in the SEC Reports and which the failure to so
      have could have or reasonably be expected to result in a Material Adverse
      Effect (collectively, the "Intellectual Property Rights"). Neither the
      Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary
      violates or infringes upon the rights of any Person. To the knowledge of
      the Company, all such Intellectual Property Rights are enforceable.

            Insurance. The Company and the Subsidiaries are insured by insurers
      of recognized financial responsibility against such losses and risks and
      in such amounts as are prudent and customary in the businesses in which
      the Company and the Subsidiaries are engaged. Neither the Company nor any
      Subsidiary has any knowledge that it will not be able to renew its
      existing insurance coverage as and when such coverage expires or to obtain
      similar coverage from similar insurers as may be necessary to continue its
      business without a significant increase in cost.

            Transactions With Affiliates and Employees. None of the officers or
      directors of the Company and, to the knowledge of the Company, none of the
      employees of the Company is presently a party to any transaction with the
      Company or any Subsidiary (other than for services as employees, officers
      and directors), including any contract, agreement or other arrangement
      providing for the furnishing of services to or by, providing for rental of
      real or personal property to or from, or otherwise requiring payments to
      or from any officer, director or such employee or, to the knowledge of the
      Company, any entity in which any officer, director, or any such employee
      has a substantial interest or is an officer, director, trustee or partner,
      in each case in excess of
<PAGE>
      $60,000 other than (a) for payment of salary or consulting fees for
      services rendered, (b) reimbursement for expenses incurred on behalf of
      the Company and (c) for other employee benefits, including stock option
      agreements under any stock option plan of the Company.

            Internal Accounting Controls. The Company and each of its
      subsidiaries maintains a system of internal accounting controls sufficient
      to provide reasonable assurance that (i) transactions are executed in
      accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability,
      (iii) access to assets is permitted only in accordance with management's
      general or specific authorization, and (iv) the recorded accountability
      for assets is compared with the existing assets at reasonable intervals
      and appropriate action is taken with respect to any differences. The
      Company has established disclosure controls and procedures (as defined in
      Exchange Act Rules 13a-15(e) and 15d-15(e) for the Company and designed
      such disclosure controls and procedures to ensure that material
      information relating to the Company, including its subsidiaries, is made
      known to the certifying officers by others within those entities,
      particularly during the period in which the Company's Form 10-K or 10-Q,
      as the case may be, is being prepared. The Company's certifying officers
      have evaluated the effectiveness of the Company's controls and procedures
      as of the end of the period covered by the most recently filed Form 10-Q
      (such date, the "Evaluation Date"). The Company presented in its most
      recently filed Form 10-Q the conclusions of the certifying officers about
      the effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date. Since the Evaluation Date, there
      have been no significant changes in the Company's internal controls (as
      such term is defined in Exchange Act Rules 13a-15(f)) that has affected,
      or is reasonably likely to materially affect, the Company's internal
      controls over financial reporting.

            Certain Fees. No brokerage or finder's fees or commissions are or
      will be payable by the Company to any broker, financial advisor or
      consultant, finder, placement agent, investment banker, bank or other
      Person with respect to the transactions contemplated by this Agreement.
      The Purchasers shall have no obligation with respect to any fees or with
      respect to any claims made by or on behalf of other Persons for fees of a
      type contemplated in this Section that may be due under any agreement or
      arrangement entered into by the Company in connection with the
      transactions contemplated by this Agreement.

            Private Placement. Assuming the accuracy of the Purchasers
      representations and warranties set forth in Section 3.2, no registration
      under the Securities Act is required for the offer and sale of the
      Securities by the Company to the Purchasers as contemplated hereby. The
      issuance and sale of the Securities hereunder does not contravene the
      rules and regulations of the Trading Market.

            Investment Company. The Company is not, and is not an Affiliate of,
      an "investment company" within the meaning of the Investment Company Act
      of 1940, as amended.
<PAGE>
            Registration Rights. No Person has any right to cause the Company to
      effect the registration under the Securities Act of any securities of the
      Company.

            Form S-3 Eligibility. Subject to the Company's continued listing on
      The Nasdaq Stock Market, the Company is eligible to register the resale of
      its Common Stock by the Purchasers under Form S-3 promulgated under the
      Securities Act.

            Listing and Maintenance Requirements. The Company has not, in the 12
      months preceding the date hereof, received notice from any Trading Market
      on which the Common Stock is or has been listed or quoted to the effect
      that the Company is not in compliance with the listing or maintenance
      requirements of such Trading Market. The Company is, and has no reason to
      believe that it will not in the foreseeable future continue to be, in
      compliance with all such listing and maintenance requirements.

            Application of Takeover Protections. The Company and its Board of
      Directors have taken all necessary action, if any, in order to render
      inapplicable any control share acquisition, business combination, poison
      pill (including any distribution under a rights agreement) or other
      similar anti-takeover provision under the Company's Certificate of
      Incorporation (or similar charter documents) or the laws of its state of
      incorporation that is or could become applicable to the Purchasers as a
      result of the Purchasers and the Company fulfilling their obligations or
      exercising their rights under the Transaction Documents, including without
      limitation the Company's issuance of the Securities and the Purchasers'
      ownership of the Securities.

            Disclosure. The Company confirms that, neither the Company nor any
      other Person acting on its behalf has provided any of the Purchasers or
      their agents or counsel with any information that constitutes or might
      constitute material, non-public information. The Company understands and
      confirms that the Purchasers will rely on the foregoing representations
      and covenants in effecting transactions in securities of the Company. None
      of the disclosures provided to the Purchasers regarding the Company and
      its business set forth in the SEC Documents, this Agreement, including the
      Disclosure Schedules, or any other Transaction Document, contain any
      untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading.

            No Integrated Offering. Neither the Company, nor any of its
      affiliates, nor any Person acting on its or their behalf has, directly or
      indirectly, made any offers or sales of any security or solicited any
      offers to buy any security, under circumstances that would cause this
      offering of the Securities to be integrated with prior offerings by the
      Company for purposes of the Securities Act or any applicable shareholder
      approval provisions, including, without limitation, under the rules and
      regulations of any exchange or automated quotation system on which any of
      the securities of the Company are listed or designated.

            Solvency. Based on the financial condition of the Company giving
      effect to the closing of the transactions contemplated herein, (i) the
      Company's fair saleable value of its assets exceeds the amount that will
      be required to be paid on or in respect of the Company's existing debts
      and other liabilities (including known contingent liabilities) as
<PAGE>
      they mature; (ii) the Company's assets do not constitute unreasonably
      small capital to carry on its business for the current fiscal year as now
      conducted and as proposed to be conducted including its capital needs
      taking into account the particular capital requirements of the business
      conducted by the Company, and projected capital requirements and capital
      availability thereof, and including the anticipated proceeds of the sale
      of the Securities; and (iii) the current cash flow of the Company,
      together with the proceeds the Company would receive, were it to liquidate
      all of its assets, after taking into account all anticipated uses of the
      cash, would be sufficient to pay all amounts on or in respect of its debt
      when such amounts are required to be paid. The Company does not intend to
      incur debts beyond its ability to pay such debts as they mature (taking
      into account the timing and amounts of cash to be payable on or in respect
      of its debt).

      Representations and Warranties of the Purchasers. Each Purchaser hereby,
for itself and for no other Purchaser, represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows:

            Organization; Authority. Such Purchaser is an entity duly organized,
      validly existing and in good standing under the laws of the jurisdiction
      of its organization with full right, corporate or partnership power and
      authority to enter into and to consummate the transactions contemplated by
      the Transaction Documents and otherwise to carry out its obligations
      thereunder. The execution, delivery and performance by such Purchaser of
      the transactions contemplated by this Agreement has been duly authorized
      by all necessary corporate or similar action on the part of such
      Purchaser. Each Transaction Document to which it is a party has been duly
      executed by such Purchaser, and when delivered by such Purchaser in
      accordance with the terms hereof, will constitute the valid and legally
      binding obligation of such Purchaser, enforceable against it in accordance
      with its terms.

            Investment Intent. Such Purchaser understands that the Securities
      are "restricted securities" and have not been registered under the
      Securities Act or any applicable state securities law and is acquiring the
      Securities as principal for its own account for investment purposes only
      and not with a view to or for distributing or reselling such Securities or
      any part thereof, has no present intention of distributing any of such
      Securities and has no arrangement or understanding with any other persons
      regarding the distribution of such Securities (this representation and
      warranty not limiting such Purchaser's right to sell the Securities
      pursuant to the Registration Statement or otherwise in compliance with
      applicable federal and state securities laws). Such Purchaser is acquiring
      the Securities hereunder in the ordinary course of its business. Such
      Purchaser does not have any agreement or understanding, directly or
      indirectly, with any Person to distribute any of the Securities.

            Purchaser Status. At the time such Purchaser was offered the
      Securities, it was, and at the date hereof it is an "accredited investor"
      as defined in Rule 501(a) under the Securities Act. Such Purchaser is not
      required to be registered as a broker-dealer under Section 15 of the
      Exchange Act.
<PAGE>
            Experience of such Purchaser. Such Purchaser, either alone or
      together with its representatives, has such knowledge, sophistication and
      experience in business and financial matters so as to be capable of
      evaluating the merits and risks of the prospective investment in the
      Securities, and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of
      such investment.

            General Solicitation. Such Purchaser is not purchasing the
      Securities as a result of any advertisement, article, notice or other
      communication regarding the Securities published in any newspaper,
      magazine or similar media or broadcast over television or radio or
      presented at any seminar or any other general solicitation or general
      advertisement.

            Residence. If such Purchaser is an individual, then such Purchaser
      resides in the state or province identified in the address of such
      Purchaser set forth on the signature page hereto; if such Purchaser is a
      partnership, corporation, limited liability company or other entity, then
      the office or offices of such Purchaser in which its investment decision
      was made is located at the address or addresses of such Purchaser set
      forth on the signature pages hereto.

            No Prior Short Selling. At no time during the 30 days prior to the
      date hereof has such Purchaser engaged in or effected, in any manner
      whatsoever, directly or indirectly, in any "short sale" (as such term is
      defined in Rule 3b-3 of the Exchange Act) of the Common Stock (a "Short
      Sale").

            Beneficial Ownership. At the Closing Date, such Purchaser does not
      beneficially own in excess of 4.99% of the number of shares of Common
      Stock of the Company outstanding, determined in accordance with Rule 13d-3
      of the Exchange Act.

      The Company acknowledges and agrees that each Purchaser does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                         OTHER AGREEMENTS OF THE PARTIES

      Transfer Restrictions.

            The Securities may only be disposed of in compliance with state and
      federal securities laws. In connection with any transfer of Securities
      other than pursuant to an effective registration statement, to the
      Company, to an Affiliate of a Purchaser or in connection with a pledge as
      contemplated in Section 4.1(b), the Company may require the transferor
      thereof to provide to the Company an opinion of counsel selected by the
      transferor, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not
      require registration of such transferred Securities under the Securities
      Act. As a condition of transfer, any such transferee shall
<PAGE>
      agree in writing to be bound by the terms of this Agreement and shall have
      the rights of a Purchaser under this Agreement and the Registration Rights
      Agreement.

            The Purchasers agree to the imprinting, so long as is required by
      this Section 4.1(b), of a legend on any of the Securities in the following
      form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER.

            The Company acknowledges and agrees that a Purchaser may from time
      to time pledge pursuant to a bona fide margin agreement with a registered
      broker-dealer and, if required under the terms of such arrangement, such
      Purchaser may transfer pledged Securities to the pledgees. Such a pledge
      would not be subject to approval of the Company and no legal opinion of
      legal counsel of the pledgee or pledgor shall be required in connection
      therewith. Further, no notice shall be required of such pledge. At the
      appropriate Purchaser's expense, the Company will execute and deliver such
      reasonable documentation as a pledgee of Securities may reasonably request
      in connection with a pledge or transfer of the Securities, including the
      preparation and filing of any required prospectus supplement under Rule
      424(b)(3) under the Securities Act or
<PAGE>
      other applicable provision of the Securities Act to appropriately amend
      the list of Selling Stockholders thereunder.

            Certificates evidencing the Shares and Warrant Shares shall not
      contain any legend (including the legend set forth in Section 4.1(b)), (i)
      while a registration statement (including the Registration Statement)
      covering the resale of such security is effective under the Securities
      Act, or (ii) following any sale of such Shares or Warrant Shares pursuant
      to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for
      sale under Rule 144(k), or (iv) if such legend is not required under
      applicable requirements of the Securities Act (including judicial
      interpretations and pronouncements issued by the Staff of the Commission).
      The Company shall cause its counsel to issue a legal opinion to the
      Company's transfer agent promptly after the Effective Date if required by
      the Company's transfer agent to effect the removal of the legend
      hereunder. If all or any portion of a Warrant is exercised at a time when
      there is an effective registration statement to cover the resale of the
      Warrant Shares, such Warrant Shares shall be issued free of all legends.
      The Company agrees that following the Effective Date or at such time as
      such legend is no longer required under this Section 4.1(c), it will, no
      later than five Trading Days following the delivery by a Purchaser to the
      Company or the Company's transfer agent of a certificate representing
      Shares or Warrant Shares, as the case may be, issued with a restrictive
      legend ("Share Delivery Date"), deliver or cause to be delivered to such
      Purchaser a certificate representing such Securities that is free from all
      restrictive and other legends. The Company may not make any notation on
      its records or give instructions to any transfer agent of the Company that
      enlarge the restrictions on transfer set forth in this Section.

            In addition to such Purchaser's other available remedies, the
      Company shall pay to a Purchaser, in cash, as liquidated damages and not
      as a penalty, for each $1,000 of Shares or Warrant Shares (based on the
      Closing Price of the Common Stock on the date such Securities are
      submitted to the Company's transfer agent) subject to Section 4.1(c), $5
      per Trading Day (increasing to $10 per Trading Day five (5) Trading Days
      after such damages have begun to accrue) for each Trading Day after the
      applicable Share Delivery Date until such certificate is delivered.
      Nothing herein shall limit such Purchaser's right to pursue actual damages
      for the Company's failure to deliver certificates representing any
      Securities as required by the Transaction Documents, and such Purchaser
      shall have the right to pursue all remedies available to it at law or in
      equity including, without limitation, a decree of specific performance
      and/or injunctive relief.

            Each Purchaser severally and not jointly agrees that the removal of
      the restrictive legend from certificates representing Securities as set
      forth in this Section 4.1 is predicated upon the Company's reliance that
      the Purchaser will sell any Securities pursuant to either the registration
      requirements of the Securities Act, including any applicable prospectus
      delivery requirements, or an exemption therefrom.

      Furnishing of Information. As long as any Purchaser owns Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the
<PAGE>
Exchange Act. Upon the request of any such holder of Securities, the Company
shall deliver to such holder a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long as
any Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.

      Integration. The Company shall not sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers or that would be integrated
with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market such that the transaction contemplated hereby
would violate any such rules or regulations.

      [RESERVED]

      Securities Laws Disclosure; Publicity. The Company shall, within one (1)
Trading Day following the date hereof, issue a press release or file a Current
Report on Form 8-K, in each case reasonably acceptable to each Purchaser
disclosing the transactions contemplated hereby and make such other filings and
notices in the manner and time required by the Commission. The Company and each
Purchaser shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing,
the Company shall not publicly disclose the name of any Purchaser, or include
the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser,
except (i) as required by federal securities law in connection with the
registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).

      Shareholders Rights Plan. No claim will be made or enforced by the Company
or any other Person that any Purchaser is an "Acquiring Person" under any
shareholders rights plan or similar plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving
<PAGE>
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers.

      Non-Public Information. The Company covenants and agrees that neither it
nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

      Use of Proceeds. Except as set forth on Schedule 4.8 attached hereto, the
Company shall use the net proceeds from the sale of the Securities hereunder for
working capital purposes and not for the satisfaction of any portion of the
Company's debt (other than payment of trade payables, capital lease obligations
and accrued expenses in the ordinary course of the Company's business and prior
practices), or to redeem any Company equity or equity-equivalent securities or
to settle any outstanding litigation.

      Indemnification of Purchasers. The Company will indemnify and hold the
Purchasers and their directors, officers, shareholders, partners, employees and
agents (each, a "Purchaser Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to: (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents; or (b) any cause of action,
suit or claim brought or made against such Purchaser Party and arising solely
out of or solely resulting from the execution, delivery, performance or
enforcement of this Agreement or any of the other Transaction Documents and
without causation by any other activity, obligation, condition or liability
pertaining to such Purchaser. The Company will reimburse such Purchaser for its
reasonable legal and other expenses (including the cost of any investigation,
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred. Notwithstanding the foregoing, such
indemnity (other than as to an indemnity called for under the Registration
Rights Agreement) shall not exceed, in the aggregate, the Subscription Amount of
such Purchaser together with its reasonable attorneys' fees and costs of
investigation subject to indemnification above. Except as set forth above, the
mechanics and procedures with respect to the rights and obligations under this
Section 4.9 will be the same as those set forth in the Registration Rights
Agreement.

      Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and Warrant Shares pursuant to the Warrants.

      Listing of Common Stock. The Company hereby agrees to use commercially
reasonable efforts to maintain the listing of the Common Stock on the Trading
Market, and as soon as reasonably practicable following the Closing (but not
later than the earlier of the Effective Date and the first anniversary of the
Closing Date) to list the applicable Shares and Warrant Shares on the Trading
Market. The Company further agrees, if the Company applies to have the Common
<PAGE>
Stock traded on any other Trading Market, it will include in such application
the Shares and Warrant Shares, and will take such other action as is necessary
or desirable in the opinion of the Purchasers to cause the Shares and the
Warrant Shares to be listed on such other Trading Market as promptly as
possible. The Company will take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in
all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the Trading Market.

      Subsequent Equity Sales. From the date hereof until 45 days after the
Effective Date, neither the Company nor any Subsidiary shall issue additional
shares of Common Stock or Common Stock Equivalents. Notwithstanding anything to
the contrary herein, this Section 4.12 shall not apply to the following (a) the
granting of options to employees, officers and directors of the Company pursuant
to any stock option plan duly adopted by a majority of the non-employee members
of the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose, or (b) the
exercise of any security issued by the Company in connection with the offer and
sale of the Company's securities pursuant to this Agreement, or (c) the exercise
of or conversion of any convertible securities, options or warrants issued and
outstanding on the date hereof, provided such securities have not been amended
since the date hereof, or (d) acquisitions or strategic investments, the primary
purpose of which is not to raise capital.

      Certain Trading Restrictions.

            Restrictions. So long as a Purchaser continues to hold any
      Securities acquired hereunder, such Purchaser shall not, nor will it
      knowingly through its Affiliates, engage in any Short Sales, except on
      those days (each a "Permitted Day") on which the aggregate short position
      with respect to the Common Stock of such Purchaser prior to giving effect
      to any Short Sales by such Purchaser on such Permitted Day does not exceed
      such Purchaser's Permitted Share Position (as defined below) on such
      Permitted Day; provided, however, that a Purchaser will only be entitled
      to engage in transactions that constitute Short Sales on a Permitted Day
      to the extent that following such transaction, the aggregate short
      position with respect to the Common Stock of such Purchaser does not
      exceed such Purchaser's Permitted Share Position. For purposes of this
      Section 4.13, a Purchaser's "Permitted Share Position" means, with respect
      to any date of determination, the number of shares of Common Stock owned
      by such Purchaser (including Shares) plus the maximum number of Warrants
      Shares then issuable (including as to portions of the Warrants not yet
      exercised and without regard to any exercise caps or other exercise
      restrictions applicable to the Warrants) to such Purchaser.

            Other Transactions Permitted. Subject to Section 4.13(a) and
      applicable securities laws, the Company acknowledges and agrees that
      nothing in this Section 4.13 or elsewhere in any Transaction Document
      prohibits any Purchaser from, and each Purchaser is permitted to, engage,
      directly or indirectly, in hedging transactions involving the Securities
      and the Common Stock (including, without limitation, by way of Short
      Sales, purchases and sales of options, swap transactions and synthetic
      transactions) at any time.
<PAGE>
                                  MISCELLANEOUS

      Fees and Expenses. The Company agrees to pay $25,000 to Bonanza Master
Fund Ltd. ("Bonanza") for its legal and due diligence fees and expenses incurred
in connection with the investigation and negotiation of the transaction and the
preparation and negotiation of the Transaction Documents ($10,000 of which has
already been received). Accordingly, in lieu of the foregoing payments, the
Company, on the Closing Date, will direct that the aggregate amount that Bonanza
is to pay for the Shares and Warrants at the Closing, be reduced by $15,000
(less any amounts delivered to Bonanza Prior to the Closing Date in partial
satisfaction of the aforementioned fee). Except as otherwise set forth in this
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities.

      Entire Agreement. The Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

      5.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages attached hereto prior to 6:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number on the signature pages attached hereto on a day that is not a
Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c)
the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto, or
such other address as may be designated in writing hereafter, in the same
manner, by such Person.

      Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and Purchasers holding, or obligated to purchase, at least two
thirds of the Shares or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
<PAGE>
      Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

      Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser. Any Purchaser may assign
any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Purchasers".

      No Third-Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Section 4.9.

      Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
New York for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by delivering a copy thereof
via overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
<PAGE>
      Survival. The representations and warranties herein shall survive the
Closing for a period of one year.

      Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

      Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

      Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.

      Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.

      Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall, to the
extent permissible under applicable law, be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.

      Independent Nature of Purchasers' Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the
<PAGE>
obligations of any other Purchaser under any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Document. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through FW. FW
does not represent all of the Purchasers in this transaction but only Bonanza.
The Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.

                            (Signature Page Follows)
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

LOUDEYE CORP.                                         Address for Notice:

By:
     ------------------------------------
     Name:                                            Attn:
     Title:                                           Tel:
                                                      Fax:
With copy to (which shall not constitute notice):

                           [SIGNATURE PAGE CONTINUES]
<PAGE>
                          [PURCHASER'S SIGNATURE PAGE]

BONANZA MASTER FUND LTD.                             Address for Notice:

                                                     8235 Douglas, Suite 423
                                                     Dallas, TX 75205
                                                     P: 214.615.7090
By:                                                  F: 214.987.4342
    -----------------------------------------        Attn: Brian Ladin
    Name:
    Title:

Subscription Amount:  $

With a copy to:

Feldman Weinstein LLP
420 Lexington Avenue
New York, New York 10170-0002
Tel:  (212) 931-8704
Fax:  (212) 410-4741
Attn: Robert F. Charron

                           [SIGNATURE PAGE CONTINUES]
<PAGE>
                          [PURCHASER'S SIGNATURE PAGE]

[PURCHASER]

By:
    --------------------------
    Name:
    Title:

Subscription Amount:  $

Address for Notice:

Tax ID Number:

                           [SIGNATURE PAGE CONTINUES]

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