EX 10.3 NOTE PURCHASE AGREEMENT

EXHIBIT 10.3

EXECUTION VERSION

NOTE PURCHASE AGREEMENT

     This Note Purchase Agreement (this “Agreement” ) is dated as of November 22, 2005, among Hollywood Media Corp., a Florida corporation (the “Company” ), and each purchaser identified on the signature pages hereto (each, a “Purchaser” and collectively, the “Purchasers” ).

     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 sell and issue to the Purchasers, and the Purchasers wish to purchase from the Company (i) an aggregate of seven million dollars ($7,000,000.00) in principal amount of the Company’s Senior Notes in the form attached hereto as Exhibit A (the “ Notes ”) and (ii) warrants to purchase an aggregate of 700,000 shares of common stock, par value $0.01, of the Company (the “ Common Stock ”) in the form attached hereto as Exhibit B , and, if the Company exercises its right under the Notes to extend the maturity date thereof, warrants to purchase up to an additional 100,000 shares of Common Stock issued pursuant to the terms and conditions of the Notes (the “ Warrants ”).

     WHEREAS, at Closing, the Company and the Purchasers are entering into a Registration Rights Agreement in the form attached hereto as Exhibit C (the “ Registration Rights Agreement ”).

     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 the Purchasers agree as follows:

ARTICLE I.
DEFINITIONS

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

           “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 Notes and Warrants pursuant to Section 2.3.

           “Closing Date” means the date of the Closing.

           “Commission” means the Securities and Exchange Commission.

           “Common Shares” means the shares of Common Stock issued upon exercise of the Warrants.

           “Common Stock” shall have the meaning ascribed to such term in the Recitals.

           “Company Counsel” means Foley & Lardner LLP.

          “ Disclosure Materials ” shall have the meaning ascribed to such term in Section 3.1(h).

          “ Disclosure Schedules ” means the Disclosure Schedules of the Company delivered concurrently herewith as referenced in Article III hereof.

           “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

          “ GAAP ” shall have the meaning ascribed to such term in Section 3.1(h).

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

           “Lien” means any lien, charge, encumbrance, security interest, right of first refusal, preemptive right or other restriction of any kind.

          “ Material Adverse Effect ” shall have the meaning assigned to such term in Section 3.1(b).

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

          “ Notes ” shall have the meaning ascribed to such term in the Recitals.

           “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.

           “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

           “Redemption Shares” means the shares of Common Stock issued upon the Company’s redemption of the Notes pursuant to the terms of the Notes.

          “ Registration Rights Agreement ” shall have the meaning ascribed to such term in the Recitals.

          “ Required Approvals ” shall have the meaning ascribed to such term in Section 3.1(e).

           “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 Act” means the Securities Act of 1933, as amended.

          “ Short Sales ” shall include all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

           “Subsidiary” means any subsidiary of the Company that is required to be listed in Schedule 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 in the over-the-counter market is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or 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) or (ii) hereof, then Trading Day shall mean a Business Day.

           “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

           “Transaction Documents” means this Agreement, the Notes, the Warrants and any other documents or agreements executed in connection with the transactions contemplated hereunder.

          “ Warrants ” shall have the meaning ascribed to such term in the Recitals.

ARTICLE II.
PURCHASE AND SALE OF NOTES AND WARRANTS

          2.1 Issuance of Notes and Warrants. Upon the following terms and conditions, the Company shall issue and sell to each Purchaser, and each Purchaser, severally and not jointly, shall purchase from the Company, the principal amount of Notes and Warrants for the number of Common Shares indicated next to the Purchaser’s name on Schedule I hereto.

          2.2 Purchase Price. The purchase price for the Notes and Warrants to be acquired by each Purchaser (the “ Purchase Price ”) shall be the Purchase Price set forth next to such Purchaser’s name on Schedule I .

          2.3 The Closing .

          (a)  Timing. Subject to the fulfillment or waiver of the conditions set forth in Article V hereof, the purchase and sale of the Notes and Warrants shall take place at a closing (the “ Closing ”), on or about the date hereof or such other date as the Purchasers and the Company may agree upon (the “ Closing Date ”).

          (b)  Location. The Closing shall take place at the offices of the Company on the Closing Date or at such other location or time as the parties may agree.

          (c)  Form of Payment and Closing. On the Closing Date, the Company shall deliver to the Purchasers all of the Notes and Warrants purchased hereunder, each registered in the name of each such Purchaser. On the Closing Date, the Purchasers shall deliver by wire transfer in payment of the aggregate Purchase Price hereunder an aggregate of seven million dollars ($7,000,000.00) to an account designated in writing by the Company, with each Purchaser responsible for its respective portion of the Purchase Price as stated on Schedule I. In addition, each party shall deliver all documents, instruments and writings required to be delivered by such party pursuant to this Agreement at or prior to the Closing.

          2.4 Closing Deliveries .

          (a)  Deliveries by the Company. At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the following:

          (i) a Note in the name of the Purchaser in the amount indicated next to the Purchaser’s name on Schedule I hereto;

          (ii) a Warrant registered in the name of such Purchaser to purchase the number of shares of Common Stock indicated next to such Purchaser’s name on Schedule I hereto;

          (iii) the Registration Rights Agreement executed by the Company; and

          (iv) the legal opinion of Company Counsel addressed to the Purchaser.

          (b)  Deliveries by the Purchaser. At the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following:

          (i) The Purchase Price amount indicated next to the Purchaser’s name on Schedule I hereto, in United States dollars and in

immediately available funds, by wire transfer to an account designated in writing by the Company for such purpose; and

          (ii) the Registration Rights Agreement executed by such Purchaser.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

          3.1 Representations and Warranties of the Company . Except as set forth under the corresponding section of the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof, the Company hereby makes the following representations and warranties to each Purchaser:

          (a)  Subsidiaries . The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a) . Except as disclosed in Schedule 3.1(a) , the Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and all 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 to subscribe for or purchase securities.

          (b)  Organization and Qualification . Each of the Company and each Subsidiary 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 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 each Subsidiary 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, could not, individually or in the aggregate, reasonably be expected to result in (i) an adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect” ) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

          (c)  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, to issue the Notes and the Warrants, and, if applicable, the Common Shares and the Redemption Shares, 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, including the issuance of the Notes and Warrants and, if applicable, the Common Shares and the Redemption Shares, 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, other than in connection with the Required Approvals. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

          (d)  No Conflicts . The execution, delivery and performance of the Transaction Documents by the Company, the issuance of the Notes, the Warrants, and, if applicable, the Common Shares and the Redemption Shares, and the consummation by the Company of the other 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, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, 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) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority 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 could not reasonably be expected to result in a Material Adverse Effect.

          (e)  Filings, Consents and Approvals . Except for Required Approvals disclosed in Schedule 3.1(e) , 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 (i) the filings required in accordance with Section 4.5, (ii) those that have been made or obtained prior to the date of this Agreement, (iii) application(s) to each applicable Trading Market for the listing of the Common Shares (and, if applicable, the Redemption Shares) for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, and including Schedule 3.1(e), the “ Required Approvals ”).

          (f)  Issuance of Common Shares and Redemption Shares . Upon issuance in accordance with this Agreement (and with respect to the Common Shares, the terms of the Warrants, including the payment of the exercise price set forth in the Warrants) (and with respect to the Redemption Shares, upon redemption of the Notes by the Company pursuant to the terms of the Notes), the Common Shares and the Redemption Shares, as the case may be, will be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof. The issuance of the Common Shares upon exercise of the Warrants and, if applicable, the issuance of the Redemption Shares upon redemption of the Notes by the Company pursuant to the terms of the Notes, is not subject to any preemptive or similar rights to subscribe for or purchase securities. The Company has reserved from its duly authorized capital stock all of the issuable Common Shares and the Redemption Shares.

          (g)  Capitalization . The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of Common Stock reserved for issuance under the Company’s various option and incentive plans, is set forth in Schedule 3.1(g) . Except as set forth in Schedule 3.1(g) , no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the sale and issuance of the Notes, the Warrants, and the Common Shares and the Redemption Shares, if any, and except as disclosed in the SEC Reports or Schedule 3.1(g) , there are no outstanding options, warrants, scrip, 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. Except as set forth in Schedule 3.1(g) , the issue and sale of the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares, will not, immediately or with the passage of time, 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. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares. Except as disclosed in the Disclosure Materials, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders, except as would not have a Material Adverse Effect.

          (h)  SEC Reports; Financial Statements . The Company has filed all reports and proxy statements required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twenty-four months preceding the date hereof (or such shorter period as the Company was required by law to file such reports) (the foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the Disclosure Schedules, the “Disclosure Materials” ) on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. 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, 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 and such financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ( “GAAP” ) applied on a consistent basis during the periods involved (except as may be otherwise specified in such financial statements or the notes thereto, or in the case of unaudited financial statements, to the extent they may exclude footnotes or may be condensed or summary footnotes or statements), 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. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the Exchange Act.

          (i)  Material Changes . Except as disclosed in Schedule 3.1(i ), since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in the Disclosure Materials, (i) there has been no event, occurrence or development known to the Company that, individually or in the aggregate, 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) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, (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, and (C) other liabilities that would not, individually or in the aggregate, have a Material Adverse Effect, (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 of the Company, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.

          (j)  Litigation . Except as disclosed in Schedule 3.1(j) , 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, the Common Shares, or the Redemption Shares or (ii) except as set forth in the SEC Reports, could, if there were an unfavorable decision, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Except as set forth in the SEC Reports, 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 is not pending, and to the knowledge of the Company, there is not contemplated, any investigation by the Commission of the Company or any current or former director or officer of the Company.

          (k)  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.

          (l)  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 as to each of the foregoing clauses (i), (ii) and (iii) as could not have a Material Adverse Effect.

          (m)  Regulatory Permits . The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not, individually or in the aggregate, 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.

          (n)  Title to Assets . Except as disclosed in the Disclosure Materials or Schedule 3.1(n) , the Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, 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. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

          (o)  Patents and Trademarks . 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, individually or in the aggregate, 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 other than matters previously resolved or as would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in the SEC Reports, all such Intellectual Property Rights are enforceable and do not violate or infringe the Intellectual Property Rights of others in any respect that would reasonably be expected to result in a Material Adverse Effect and, to the knowledge of the Company, there is no material existing infringement by another Person of any of the Intellectual Property Rights.

          (p)  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 believed by the Company to be prudent in the businesses in which the Company and the Subsidiaries are engaged. The Company has no reason to believe 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, other than general insurance price increases.

          (q)  Transactions With Affiliates and Employees . Except as set forth in the SEC Reports or Schedule 3.1(q) 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 required to be disclosed in the SEC Reports (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.

          (r)  Certain Registration Matters . Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2(c)-(g), no registration under the Securities Act is required for the offer and issuance of the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares, by the Company to the

Purchasers under the Transaction Documents. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Notes, the Warrants, the Common Shares, or, if applicable, the Redemption Shares, by any form of general solicitation or general advertising. The Company has offered the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares, for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

          (s)  Listing and Maintenance Requirements . The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as specified in the SEC Reports or Schedule 3.1 (s) , the Company has not, in the two years preceding the date hereof, received notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements for continued listing of the Common Stock on the Trading Market, including the Eligibility Rules thereunder. The issuance and sale of the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares, under the Transaction Documents does not contravene the rules and regulations of the Trading Market on which the Common Stock is currently listed or quoted, and no approval of the shareholders of the Company thereunder is required for the Company to issue and deliver to the Purchasers the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares contemplated by Transaction Documents.

          (t)  Investment Company . The Company is not, and is not an Affiliate of, and immediately after receipt of payment of the Purchase Price, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

          (u)  Disclosure. The Company confirms that neither it nor, to its knowledge, any Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that the Company believes constitutes material, non-public information other than information given on a confidential basis, which will be disclosed pursuant to Section 4.5 or was disclosed in the Company’s Form 10-Q for the quarter ended September 30, 2005.

          (v)  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 Notes, the Warrants, and the Common Shares 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 the Trading Market on which the Common Stock is currently listed or quoted.

          (w)  Acknowledgment Regarding Purchasers’ Purchase of Notes, Warrants, Common Shares, and Redemption Shares. The Company acknowledges that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

          (x)  Solvency . Based on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (i) the Company’s cash and fair saleable value of its assets (including the goodwill of the Company and any business acquired by the Company) 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 they mature during the current fiscal year and 2006; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year and 2006 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 (including the proceeds from the sale of the Notes, the Warrants, and the Common Shares hereunder); 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 in an orderly liquidation, 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).

          (y)  Seniority . As of the Closing Date, no Indebtedness (as defined in the Notes) or equity of the Company is senior to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise.

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

          (a)  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 the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable 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, if such Purchaser is not a

corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. Each of this Agreement and other Transaction Documents signed by Purchaser have been duly executed by such Purchaser, and constitute or, when delivered by such Purchaser in accordance with the terms hereof, will constitute, the valid and binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

          (b)  No Conflicts . The execution, delivery and performance of this Agreement and other Transaction Documents by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the certificate of incorporation, by-laws or other documents of organization of the Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Purchaser is bound, or (iii) result in a violation of any law, rule, regulation or decree applicable to the Purchaser.

          (c)  Investment Intent. The Purchaser is purchasing the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares for its own account and not with a view to distribution in violation of any securities laws. The Purchaser has been advised and understands that neither the Notes, the Warrants, the Common Shares issuable upon exercise of the Warrants, nor, if applicable the Redemption Shares issuable upon redemption of the Notes by the Company pursuant to the terms of the Notes have been registered under the 1933 Act or under the “blue sky” laws of any jurisdiction and may be resold only if registered pursuant to the provisions of the 1933 Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law. The Purchaser has been advised and understands that the Company, in issuing the Notes, the Warrants, and, if applicable, the Common Shares and the Redemption Shares, is relying upon, among other things, the representations and warranties of the Purchaser contained in this Section 3.2 in concluding that such issuance is a “private offering” and is exempt from the registration provisions of the 1933 Act. Subject to the provisions of this section, nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold the Notes, the Warrants, the Common Shares, or the Redemption Shares for any period of time. Such Purchaser is acquiring the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares hereunder in the ordinary course of its business. Such Purchaser (i) does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Notes, the Warrants, the Common Shares, or, if applicable, the Redemption Shares and (ii) has no present plan, intention or understanding and has made no arrangement to sell any Common Stock at any predetermined time or for any predetermined price.

          (d)  Accredited Investor Status . At the time such Purchaser was offered the Notes and the Warrants, it was, and at the date hereof it is, and on each date on which any Common Shares or Redemption Shares are issued, it will be, 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.

          (e)  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 purchase of the Notes, the Warrants, and, if applicable, the Common Shares and the Redemption Shares, and has so evaluated the merits and risks of such purchase. Such Purchaser is able to bear the economic risk of the purchase of the Notes, the Warrants, and, if applicable, the Common Shares and the Redemption Shares, and, at the present time, is able to afford a complete loss of such investment.

          (f)  General Solicitation . Such Purchaser is not purchasing the Notes, the Warrants, or, if applicable, the Common Shares and the Redemption Shares, as a result of any advertisement, article, notice or other communication regarding the Notes, the Warrants, or, if applicable, the Common Shares and the Redemption Shares, 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.

          (g)  Access to Information . Such Purchaser acknowledges that it has reviewed the Disclosure Materials and has been afforded the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offer and sale of the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares. Such Purchaser is sophisticated and has prior experience with purchases comparable to the Notes, the Warrants, the Common Shares, and, if applicable, the Redemption Shares. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.

          (h)  Independent Investment Decision . Such Purchaser has independently evaluated the merits of its decision to purchase the Notes, the Warrants, the Common Shares, and/or the Redemption Shares pursuant to this Agreement, such decision has been independently made by such Purchaser and such Purchaser confirms that it has only relied on the advice of its own business and/or legal counsel and not on the advice of any other Purchaser’s business and/or legal counsel in making such decision.

          (i)  Certain Trading Activities . Such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales involving the Company’s securities) since the time

that such Purchaser was first contacted by the Company, Roth Capital Partners, LLC or any other Person regarding an investment in the Company. Such Purchaser covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed by the Company. Such Purchaser has maintained, and covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to Section 4.5 such Purchaser will maintain, the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction) and any information other than the terms of this transaction that the Company provided to Purchaser on a confidential basis. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Notes, the Warrants, the Common Shares, and/or the Redemption Shares covered by this Agreement.

          (j)  No Group . Other than Affiliates of such Purchaser who are also Purchasers under this Agreement, such Purchaser is not under common control with or acting in concert with any other Purchaser and is not part of a “group.” No Purchaser, together with its Affiliates, will, following the Closing of the transactions contemplated hereby, beneficially own more than 10% of the voting power of the Company’s then-outstanding capital stock.

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 Agreement.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

          4.1 Legends .

          (a) The Notes and Warrants (and any shares of the Company’s capital stock issued upon exercise of the Warrants or pursuant to the Notes) may only be disposed of in compliance with state and federal securities laws, and in connection with any transfer thereof (other than pursuant to an effective registration statement, to the Company, to an Affiliate of an Investor who qualifies as an accredited investor under Regulation D under the Securities Act of 1933, or in connection with a pledge of Shares as contemplated in Section 4.1(b)), the Company may require the transferor thereof to provide to the Company an opinion of counsel (the form and substance of which, and the counsel providing such opinion, shall be reasonably satisfactory to the Company) to the effect that such transfer does not require registration under the Securities Act and any applicable state securities laws.

          (b) The Notes and Warrants (and certificates representing shares of the Company’s capital stock issued upon exercise of the Warrants or pursuant to the Notes) will contain a legend in substantially the following form, until such time as they are not required under Section 4.1(c):

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 SECURED BY SUCH SECURITIES.

          The Company acknowledges and agrees that a Purchaser may from time to time pledge or grant a security interest in some or all of the shares of the Company’s capital stock issued upon exercise of the Warrants or pursuant to the Notes pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement or account, such Purchaser may transfer such pledged or secured securities to the pledgees or secured parties (a “Permitted Pledgee” ) if such transfer is made in compliance with applicable legal requirements. Such a pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the Permitted Pledgee or pledgor shall be required in connection with the pledge, but such legal opinion may be required in connection with a subsequent transfer following default by the Permitted Pledgee.

          (c) Certificates evidencing shares of the Company’s capital stock issued upon exercise of the Warrants or pursuant to the Notes shall not contain any legend other than the rights plan legend (including the legend set forth in Section 4.1(b)): (i) following a sale of such Shares pursuant to Rule 144, (ii) while such securities are eligible for sale under Rule 144(k), or (iii) if such securities are sold in a registered resale under the 1933 Act. Following such time as restrictive legends are not required to be placed on certificates representing such shares, the Company will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing such shares containing a restrictive legend, deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from such restrictive and other legends that are not required by law, but excluding a legend regarding the Company’s rights plan. When the Company is required to cause unlegended certificates to replace previously issued legended certificates, if unlegended certificates are not delivered to a Purchaser within three (3) Trading Days of submission by that Purchaser of legended certificate(s) to the transfer agent for the Common Stock (or to the

Company, in the case of the Warrants), the Company shall be liable to the purchaser for liquidated damages in an amount equal to 1.0% of the aggregate purchase price attributable to the securities evidenced by such certificate(s) for each thirty (30) day period (or portion thereof) beyond such three (3) Trading Days that the unlegended certificates have not been so delivered.

          4.2 Listing of Common Stock . The Company hereby agrees to use commercially reasonable efforts to maintain the listing of its Common Stock on the Trading Market on which the Common Stock is currently listed or quoted, and as soon as reasonably practicable following the Closing (with respect to the Common Shares) or upon redemption of the Notes (with respect to the Redemption Shares) to list all of the Common Shares or Redemption Shares, as the case may be, on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application the Common Shares (and, if applicable, the Redemption Shares), and will take such other action as is necessary or desirable in the opinion of the Purchasers to cause all of the Common Shares (and, if applicable, the Redemption Shares) to be listed on such other Trading Market as promptly as possible. The Company will take all action reasonably necessary to comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such Trading Market. This Section 4.2 shall not apply after five (5) years or if the Company ceases to have a publicly traded class of securities as a result of an acquisition.

          4.3 Use of Proceeds. The Company shall use the net proceeds from the sale of the Notes and the Warrants hereunder and payment of the exercise price of the Warrants for working capital or other general corporate purposes (which may include, without limitation, acquisitions).

          4.4 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, for the purpose of effecting the exercise of the Warrants, a sufficient number of shares of Common Stock, free of preemptive rights or similar rights, to effect the exercise of all of the Warrants.

          4.5 Securities Laws Disclosure; Publicity . By 8:30 a.m. (New York time) on the Trading Day following the Closing Date (provided, that if the Closing Date is November 23, 2005, then by 8:30 a.m. (New York time) on November 28, 2005), the Company shall issue a press release disclosing the transactions contemplated hereby and file a Current Report on Form 8-K within one Trading Day thereafter disclosing the material terms of the transactions contemplated hereby. In addition, the Company will make such other filings and notices in the manner and time required by the Commission and the Trading Market on which the Common Stock is listed or quoted.

          4.6 Shareholder Rights Plan. No Purchaser will become an “Acquiring Person” under any shareholders rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, and no Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of acquiring the Notes and the Warrants at Closing.

          4.7 Indemnification . The Company shall indemnify and hold harmless each Purchaser and its respective directors, officers, shareholders, partners, members, employees and agents harmless from any and all losses, liabilities, obligations, damages, costs and expenses,

including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees that any such indemnified party may suffer or incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document.

ARTICLE V.
CONDITIONS PRECEDENT

          5.1 Conditions Precedent to the Obligations of the Purchaser to Purchase . The obligation of each Purchaser to acquire and pay for the Notes and the Warrants at the Closing is subject to the satisfaction or waiver by such Purchaser, at or before the Closing, of each of the conditions set forth below. These conditions are for the Purchaser’s benefit and may be waived by the Purchaser at any time in its sole discretion.

          (a)  Representations and Warranties . The representations and warranties of the Company contained herein shall be true and correct as of the date when made and as of the Closing as though made on and as of such date.

          (b)  Performance . The Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing and shall have delivered or cause to be delivered the items set forth in Section 2.4(a).

          (c)  No Injunction . No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents. The Trading Market shall not have objected or indicated that it may object to the consummation of any of the transactions contemplated by this Agreement.

          (d)  Adverse Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would be expected to have or result in:

          (i) an adverse effect on the legality, validity or enforceability of any Transaction Document, or

          (ii) a Material Adverse Effect.

          (e)  No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not have been suspended by the Commission or any Trading Market (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material information regarding the Company) at any time since the date of execution of this Agreement, and the Common Stock shall have been at all times since such date listed for trading on a Trading Market.

          (f)  Timing. The Closing shall have occurred no later than November 23, 2005.

          5.2 Conditions Precedent to the Obligation of the Company to Sell . The obligation of the Company to issue and/or sell the Notes and the Warrants to the Purchasers at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

          (a)  Representations and Warranties . The representations and warranties of each Purchaser contained herein shall be true and correct as of the date when made and as of the Closing Date as though made on and as of such date.

          (b)  Performance . Each Purchaser shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing and shall have delivered or cause to be delivered the items set forth in Section 2.4(b), including payment of the Purchase Price set forth on Schedule I to the Company as provided herein.

          (c)  No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

          (d)  Timing. The Closing shall have occurred no later than November 23, 2005.

ARTICLE VI.
MISCELLANEOUS

          6.1 Fees and Expenses . Each Purchaser and the Company shall pay its own respective 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 the Transaction Documents. The Company shall pay all stamp and other taxes and duties payable on the Company’s issuance of the Notes and the Warrants at Closing.

          6.2 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.

          6.3 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 in this Section 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 specified in this Section 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 and delivered 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 follows:

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

          6.4 Amendments; Waivers . Any provision of this Agreement may be waived or amended by a written instrument signed by the Company and the Purchasers holding a majority of the principal outstanding amount of the Notes; provided that such waiver or amendment shall apply with the same force and effect to all Purchasers. Notwithstanding the foregoing, following the Closing, any provision of this Agreement, a Note, or a Warrant may be amended or waived with the consent of any single Purchaser, Note holder, or Warrant holder (as the case may be), provided that such amendment or waiver shall not affect any other Purchaser, Note holder, or Warrant holder. 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.

          6.5 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. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

          6.6 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 of the Purchasers. Any Purchaser may assign any or all of its rights under this Agreement to any assignee of the Purchaser’s Notes or Warrants; provided that such transferee or assignee agrees in writing to be bound, with respect to the transferred or assigned Notes, Warrants, Common Shares, or Redemption Shares by the provisions hereof that apply to the “Purchasers” and makes the representations set forth in Section 3.2 hereof.

          6.7 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.

          6.8 Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement 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 Proceedings to resolve any dispute among the parties 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, employees or agents having rights hereunder) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “ New York Courts ”), although depositions may be taken in other locations. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or 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 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 a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

          6.9 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.

          6.10 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.

          6.11 Replacement of Notes, the Warrants, the Common Shares, and Redemption Shares . If any certificate or instrument evidencing any of the Notes, the Warrants, the Common Shares, or the Redemption Shares 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 Notes, Warrants, Common Shares, or Redemption Shares. If a replacement certificate or instrument evidencing any Notes, Warrants, Common Shares, or Redemption Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

          6.12 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 obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Notes, Warrants, Common Shares, or Redemption Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser. 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 acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Notes, Warrants, Common Shares, or Redemption Shares or enforcing its rights under the Transaction Documents. 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 is represented by its own counsel and is not relying on counsel of any other Purchaser or of any broker or placement agent in connection with this matter.

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EXECUTION VERSION

     IN WITNESS WHEREOF, the parties hereto have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

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SIGNATURE PAGES FOR PURCHASERS FOLLOW]

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

EXECUTION VERSION

     IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be duly executed by their respective authorized signatories as of the date first written above.

SCHEDULE I

EXHIBIT A

NOTES

NEITHER THIS SECURITY NOR ANY SECURITIES ISSUED ON REDEMPTION OF THIS SECURITY HAS 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON REDEMPTION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: November 23, 2005

$[7 ,000,000.00 ]

8% SENIOR UNSECURED NOTE
DUE November 23, 2006

     THIS 8% SENIOR UNSECURED NOTE (the “ Note ”) is one of a series of duly authorized and issued 8% Senior Unsecured Notes of Hollywood Media Corp., a Florida corporation, having a principal place of business at 2255 Glades Rd., Suite 221A, Boca Raton, FL 33431 (the “ Company ”) due November [___], 2006 (collectively, the “ Notes ” and such other Notes, the “ Other Notes ”) issued pursuant to the Purchase Agreement (as defined below).

     FOR VALUE RECEIVED, the Company promises to pay to [                                          ] or its registered assigns (the “ Holder ”), or shall have paid pursuant to the terms hereunder, the principal sum of $[ 7,000,000.00 ] by November 23, 2006, or such later date as the Notes are permitted to be repaid pursuant to Section 6 hereunder (the “ Maturity Date ”), and to pay interest to the Holder on the aggregate unredeemed and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

      Section 1 . Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note: (a) capitalized terms not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms shall have the following meanings:

     “ Alternate Consideration ” shall have the meaning set forth in Section 5(d).

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

     “ Change of Control ” means any of the following events:

     (i) the consolidation, merger, or other business combination (including, without limitation, a reorganization or recapitalization) of the Company with or into another Person (other than (A) any such transaction in which holders of the Company’s voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company);

     (ii) the sale or transfer of all or substantially all of the Company’s assets; or

     (iii) a purchase, tender, or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common Stock.

     “ Common Stock ” means the common stock, par value $0.01 per share, of the Company and stock of any other class into which such shares may hereafter have been reclassified or changed.

     “ Event of Default ” shall have the meaning set forth in Section 8.

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ Extension Notice ” shall have the meaning set forth in Section 6(a).

     “ Extension Warrants ” means warrants in the form of the Warrants (i) to purchase ______shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock) [which will be 100,000 multiplied by a fraction, (A) the numerator of which is the principal amount of Notes purchased by the Holder pursuant to the Purchase Agreement and (B) the denominator of which is $7,000,000], (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to the lesser of (A) the average of the VWAP for each of the twenty (20) trading days immediately before the one-year anniversary of the Original Issue Date or (B) the exercise price for the Warrants (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.

     “ Indebtedness ” shall have the meaning set forth in Section 7(a).

     “ Interest Payment Date ” shall have the meaning set forth in Section 2(a).

     “ New York Courts ” shall have the meaning set forth in Section 9(d).

     “ Note Register ” shall have the meaning set forth in Section 2(c).

     “ Notice of Redemption ” shall have the meaning set forth in Section 4(a).

     “ Original Issue Date ” shall mean the date of the first issuance of the Note regardless of the number of transfers of any Note and regardless of the number of instruments which may be issued to evidence such Note.

     “ Person ” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

     “ Purchase Agreement ” means the Note Purchase Agreement, dated as of November 22, 2005 to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms.

     “ Redemption Date ” shall have the meaning set forth in Section 4(a).

     “ Redemption Price ” shall have the meaning set forth in Section 4(b).

     “ Redemption Shares ” means the shares of Common Stock issuable upon redemption of Notes pursuant to Section 4(a).

     “ Registration Statement ” means a registration statement covering the resale of the Redemption Shares and naming the Holder as a “selling stockholder” thereunder.

     “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

     “ Subsidiary ” shall have the meaning given to such term in the Purchase Agreement.