S-3

As filed with the Securities and Exchange Commission on May 2, 2006

File No. 333- _________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

21ST CENTURY HOLDING COMPANY

(Exact name of Registrant as specified in its charter)

Florida	65-0248866
(State or other jurisdiction of  incorporation or organization)	(I.R.S. Employer Identification No.)

3661 West Oakland Park Blvd, Suite 300, Lauderdale Lakes, FL 33311

(954) 581-9993

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

Edward J. Lawson

Chief Executive Officer

21st Century Holding Company

3661 West Oakland Park Blvd., Suite 300

Lauderdale Lakes, FL 33311

(954) 581-9993

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Laura M. Holm

Berger Singerman

350 East Las Olas Boulevard, Suite 1000

Fort Lauderdale, Florida 33301

Telephone: (954) 713-7518

Telecopier: (954) 523-2872

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement becomes effective.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to Be Registered	Amount to be Registered (1)	Proposed Maximum Offering Price  per Unit (2)	Proposed Maximum Aggregate  Offering Price	Amount of Registration Fee
Common Stock, $.01 par value	107,116 shares	$18.02	$1,930,230	$227.19

(1) Also includes, pursuant to Rule 416 under the Securities Act of 1933, an indeterminant number of shares and warrants that may be issued, offered or sold to prevent dilution resulting from stock splits, stock dividends, or similar transactions.

(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, MAY 2, 2006

PROSPECTUS

107,116 SHARES OF COMMON STOCK

21ST CENTURY HOLDING COMPANY

We are registering for resale an aggregate of 107,116 shares of common stock of 21^st Century Holding Company that have been issued to the shareholders named in this Prospectus and their transferees (“selling shareholders”). We originally issued these shares to these shareholders on April 30, 2006 as payment of principal and interest due on both our 6% senior subordinated notes due July 31, 2006 and our 6% senior subordinated notes due September 30, 2007. We will not receive any proceeds from the sale of the common stock.

Our common stock is traded on the Nasdaq National Market under the symbol “TCHC.” On April 28, 2006, the last reported sale price of the common stock on the Nasdaq National Market was $18.40 per share. The shares of common stock may be sold from time to time by the selling shareholders in one or more transactions at fixed prices, at market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. The selling shareholders and any broker-dealer who may participate in the sale of the shares may use this prospectus. See "Plan of Distribution."

An investment in our common stock involves risks. See the section entitled “Risk Factor” section beginning on page 3 of this prospectus.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is May _____, 2006.

TABLE OF CONTENTS

	PAGE
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
THE COMPANY	2
RISK FACTORS	2
USE OF PROCEEDS	14
SELLING SHAREHOLDERS	14
PLAN OF DISTRIBUTION	16
LEGAL MATTERS	18
EXPERTS	18
WHERE YOU CAN FIND MORE INFORMATION	18
INFORMATION INCORPORATED BY REFERENCE	19
SEC POSITION OF INDEMNIFICATION OF DIRECTORS AND OFFICERS	20

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus. No dealer, salesperson or other person is authorized to give any information that is not contained in this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy these shares in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date of this prospectus, regardless of the time of the delivery of this prospectus or any sale of these shares.

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This prospectus and the documents and information incorporated by reference in this prospectus include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include the information concerning our possible or assumed future operating results, business strategies, financing plans, competitive position, industry environment, the anticipated impact on our business and financial results of recent and future acquisitions, the effects of competition, our ability to produce new products in a cost-effective manner and estimates relating to our industry. Forward-looking statements may be identified by the use of words like “believes,” “intends,” “expects,” “may,” “will,” “should” or “anticipates,” or the negative equivalents of those words or comparable terminology, and by discussions of strategies that involve risks and uncertainties.

Actual results may differ materially from those expressed or implied by forward-looking statements for a number of reasons, including those appearing elsewhere in this prospectus under the heading “Risk Factors.” In addition, we base forward-looking statements on assumptions about future events, which may not prove to be accurate. In light of these risks, uncertainties and assumptions, you should be aware that the forward-looking events described in this prospectus and the documents incorporated by reference in this prospectus may not occur.

THE COMPANY

We are an insurance holding company, which, through our subsidiaries and our contractual relationships with our independent agents and general agents, control substantially all aspects of the insurance underwriting, distribution and claims process. We are authorized to underwrite personal automobile insurance, commercial general liability insurance, homeowners’ property and casualty insurance and mobile home property and casualty insurance in various states with various lines of authority through our wholly owned subsidiaries, Federated National Insurance Company (“Federated National”) and American Vehicle Insurance Company (“American Vehicle”).

Federated National is authorized to underwrite personal automobile insurance, homeowners’ property and casualty insurance and mobile home property and casualty insurance in Florida as an admitted carrier. American Vehicle is authorized to underwrite personal and commercial automobile insurance and commercial general liability insurance in Florida as an admitted carrier. In addition, American Vehicle is authorized to underwrite commercial general liability insurance in Georgia, Kentucky, South Carolina and Virginia as a surplus lines carrier and in Texas, Louisiana and Alabama as an admitted carrier.

During the year ended December 31, 2005, 63.4%, 17.3 %, 18.9 % and 0.4 % of the premiums we underwrote were for homeowners’ property and casualty insurance, non-standard personal automobile insurance, commercial general liability insurance, and mobile home property and casualty insurance, respectively. During the year ended December 31, 2004, 62.0%, 24.1%, 12.4 % and 1.5% of the premiums we underwrote were for homeowners’ property and casualty insurance, personal automobile insurance, commercial general liability insurance, and mobile home property and casualty insurance, respectively.

Our executive offices are located at 3661 West Oakland Park Boulevard, Suite 300, Lauderdale Lakes, Florida and our telephone number is (954) 581-9993.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should consider the following factors carefully before deciding to purchase shares of our common stock. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.

You should also review our disclosure under the heading “Special Note on Forward-Looking Information” for additional risks and uncertainties that could cause our actual results to differ materially from those anticipated.

Risks Related to Our Business

The State of Florida, where our headquarters and a substantial portion of our policies are located, has experienced nine hurricanes since August 2004 through October 2005 and they have affected our operating results.

2

We write insurance policies that cover automobile owners, homeowners' and business owners for losses that result from, among other things, catastrophes. Catastrophic losses can be caused by hurricanes, tropical storms, tornadoes, wind, hail, fires, riots and explosions, and their incidence and severity are inherently unpredictable. The extent of losses from a catastrophe is a function of two factors: the total amount of the insurance company's exposure in the area affected by the event and the severity of the event. Our policyholders are currently concentrated in South and Central Florida, which is especially subject to adverse weather conditions such as hurricanes and tropical storms.

During the past two years, the State of Florida has experienced nine hurricanes. One of our subsidiaries, Federated National, incurred significant losses relative to its homeowners’ and mobile homeowners’ insurance lines of business in connection with these catastrophic weather events. The table below illustrates the magnitude of each storm both gross and net of our reinsurance arrangements.

Hurricane	Estimated Claim Count		Gross Losses		Reinsurance Recoveries		Net Losses
			(Dollars in Millions)
Charley (August 13, 2004)		2,565	$	59	$	49	$	10
Frances (September 3, 2004)		3,805		50		40		10
Ivan (September 14, 2004)		1,065		21		--		21
Jeanne (September 25, 2004)		1,548		13		--		13
Arlene (June 7, 2005)		--		--		--		--
Dennis (July 10, 2005)		322		3		--		3
Katrina (August 25, 2005)		2,076		15		12		3
Rita (September 20, 2005)		24		--		--		--
Wilma (October 24, 2005)		10,039		138		135		3
Total Loss Estimate		21,444	$	299.3	$	236.3	$	63.0

For the 2005-2006 hurricane season, the Company retains the first $3.0 million of loss and LAE with maximum coverage afforded from the combined policies in effect totaling approximately $194.8 million and the cost to the Company for this coverage was approximately $26 million. In contrast, for the 2004-2005 hurricane season the Company retained the first $10 million of loss and LAE with maximum coverage afforded from the combined policies totaling approximately $200.0 and the cost to the Company for this coverage was approximately $14 million.

Although we follow the industry practice of reinsuring a portion of our risks, our costs of obtaining reinsurance have increased and we may not be able to successfully alleviate risk through reinsurance arrangements.

We have a reinsurance structure that is a combination of private reinsurance and the FHCF. Our reinsurance structure is comprised of several reinsurance companies with varying levels of participation providing coverage for loss and LAE at pre-established minimum and maximum amounts. Losses incurred in connection with a catastrophic event below the minimum and above the maximum are the responsibility of Federated National.

As a result of the hurricanes experienced in Florida over the past two years, we continue to review, and may determine to modify, our reinsurance structure.

3

Although the occurrence of hurricanes hitting Florida has increased during the past two years, some weather analysts believe that we have entered a period of greater hurricane activity while others suggest a diminished expectation for the near future. To address this risk, we are exploring alternatives to reduce our exposure to these types of storms. Although these measures may increase operating expenses, management believes that they will assist us in protecting long-term profitability, although there can be no assurances that will be the case.

The insolvency of our primary reinsurer or any of our other current or future reinsurers, or their inability otherwise to pay claims, would increase the claims that we must pay, thereby significantly harming our results of operations. In addition, prevailing market conditions have limited the availability and increased the cost of reinsurance, which may have the effect of increased costs and reduced profitability.

We may experience financial exposure from climate change.

Our financial exposure from climate change is most notably associated with losses in connection with the occurrence of hurricanes striking Florida. We mitigate the risk of financial exposure from climate change by restrictive underwriting criteria, sensitivity to geographic concentrations and reinsurance.

Restrictive underwriting criteria can include, but are not limited to, higher premiums, higher deductibles and more specifically excluded policy risks such as fences and screened in enclosures. New technological advances in computer generated geographical mapping afford us an enhanced perspective as to geographic concentrations of policyholders and proximity to flood prone areas. Our amount of maximum reinsurance coverage is determined by subjecting our homeowner and mobile homeowner exposures to statistical forecasting models that are designed to quantify a catastrophic event in terms of the frequency of a storm occurring once in every “n” years. Our reinsurance coverage contemplated a catastrophic event occurring once every 100 years. Our amount of losses retained (our deductible) in connection with a catastrophic event is determined by market capacity, pricing conditions and surplus preservation.

Our loss reserves may be inadequate to cover our actual liability for losses, causing our results of operations to be adversely affected.

We maintain reserves to cover our estimated ultimate liabilities for loss and LAE. These reserves are estimates based on historical data and statistical projections of what we believe the settlement and administration of claims will cost based on facts and circumstances then known to us. Actual loss and LAE reserves, however, may vary significantly from our estimates.

Factors that affect unpaid loss and LAE include the estimates made on a claim-by-claim basis known as “case reserves” coupled with bulk estimates known as “incurred by not reported.” Periodic estimates by management of the ultimate costs required to settle all claim files are based on our analysis of historical data and estimations of the impact of numerous factors such as (i) per claim information; (ii) company and industry historical loss experience; (iii) legislative enactments, judicial decisions, legal developments in the awarding of damages, and changes in political attitudes; and (iv) trends in general economic conditions, including the effects of inflation. Management revises its estimates based on the results of its analysis. This process assumes that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for estimating the ultimate settlement of all claims. There is no precise method for subsequently evaluating the impact of any specific factor on the adequacy of the reserves, because the eventual redundancy or deficiency is affected by multiple factors.

4

Because of the uncertainties that surround estimated loss reserves, we cannot be certain that our reserves will be adequate to cover our actual losses. If our reserves for unpaid losses and LAE are less than actual losses and LAE, we will be required to increase our reserves with a corresponding reduction in our net income in the period in which the deficiency is identified. Future loss experience substantially in excess of our reserves for unpaid losses and LAE could substantially harm our results of operations and financial condition.

The failure of any of the loss limitation methods we employ could have a material adverse effect on our financial condition or our results of operations.

Various provisions of our policies, such as limitations or exclusions from coverage which have been negotiated to limit our risks, may not be enforceable in the manner we intend. At the present time we employ a variety of endorsements to our policies that limit exposure to known risks, including but not limited to exclusions relating totypes of vehicles we insure, specific artisan activities and homes in close proximity to the coast line.

In addition, the policies we issue contain conditions requiring the prompt reporting of claims to us and our right to decline coverage in the event of a violation of that condition. While our insurance product exclusions and limitations reduce the loss exposure to us and help eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void an exclusion or legislation could be enacted modifying or barring the use of such endorsements and limitations in a way that would adversely effect our loss experience, which could have a material adverse effect on our financial condition or results of operations.

The effects of emerging claim and coverage issues on our business are uncertain.

As industry practices and legal, judicial, social and other conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these changes may not become apparent until some time after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued.

Our failure to pay claims accurately could adversely affect our business, financial results and capital requirements.

We must accurately evaluate and pay claims that are made under our policies. Many factors affect our ability to pay claims accurately, including the training and experience of our claims representatives, the culture of our claims organization and the effectiveness of our management, our ability to develop or select and implement appropriate procedures and systems to support our claims functions and other factors. Our failure to pay claims accurately could lead to material litigation, undermine our reputation in the marketplace, impair our image and negatively affect our financial results.

5

In addition, if we do not train new claims adjusting employees effectively or if we lose a significant number of experienced claims adjusting employees, our claims department’s ability to handle an increasing workload as we grow could be adversely affected. In addition to potentially requiring that growth be slowed in the affected markets, we could suffer decreased quality of claims work, which in turn could lower our operating margins.

If we are unable to continue our growth because our capital must be used to pay greater than anticipated claims, our financial results may suffer.

We have grown rapidly over the last few years. Our future growth will depend on our ability to expand the types of insurance products we offer and the geographic markets in which we do business both balanced by the business risks we chose to assume and cede. We believe that our company is sufficiently capitalized to operate our business as it now exists and as we currently plan to expand it. Our existing sources of funds include possible sales of our investment securities, our revolving loan from Flatiron and our earnings from operations and investments. Unexpected catastrophic events in our market areas, such as the hurricanes experienced in Florida, have resulted and will result in greater claims losses than anticipated, which could require us to limit or halt our growth while we redeploy our capital to pay these unanticipated claims unless we are able to raise additional capital or increase our earnings in our other divisions.

We may require additional capital in the future which may not be available or only available on unfavorable terms.

Our future capital requirements depend on many factors, including our ability to write new business successfully and to establish premium rates and reserves at levels sufficient to cover losses. To the extent that our present capital is insufficient to meet future operating requirements and/or cover losses, we may need to raise additional funds through financings or curtail our growth. Based on our current operating plan, we believe current capital together with our anticipated retained earnings, will support our operations without the need to raise additional capital. However, we cannot provide any assurance in that regard, since many factors will affect our capital needs and their amount and timing, including our growth and profitability, our claims experience, and the availability of reinsurance, as well as possible acquisition opportunities, market disruptions and other unforeseeable developments. If we had to raise additional capital, equity or debt financing may not be available at all or may be available only on terms that are not favorable to us. In the case of equity financings, dilution to our stockholders could result, and in any case such securities may have rights, preferences and privileges that are senior to those of the shares offered hereby. If we cannot obtain adequate capital on favorable terms or at all, our business, financial condition or results of operations could be materially adversely affected.

6

We are subject to significant government regulation, which can limit our growth and increase our expenses, thereby reducing our earnings.

We are subject to laws and regulations in Florida, our state of domicile, and in Georgia, Louisiana, Kentucky, South Carolina, Virginia, Alabama and Texas, states in which we have been authorized to do business, and will be subject to the laws of any other state in which we conduct business in the future. These laws and regulations cover all aspects of our business and are generally designed to protect the interests of insurance policyholders. For example, these laws and regulations relate to licensing requirements, authorized lines of business, capital surplus requirements, allowable rates and forms, investment parameters, underwriting limitations, restrictions on transactions with affiliates, dividend limitations, changes in control, market conduct, and limitations on premium financing service charges. The cost to monitor and comply with these laws and regulations adds significantly to our cost of doing business. Further, if we do not comply with the laws and regulations applicable to us, we may be subject to sanctions or monetary penalties by the applicable insurance regulator.

Our insurance companies are subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action.

Our insurance companies are subject to risk-based capital standards and other minimum capital and surplus requirements imposed under applicable state laws, including the laws of their state of domicile, Florida. The risk-based capital standards, based upon the Risk-Based Capital Model Act adopted by the National Association of Insurance Commissioners“(NAIC”) require our insurance companies to report their results of risk-based capital calculations to state departments of insurance and the NAIC. These risk-based capital standards provide for different levels of regulatory attention depending upon the ratio of an insurance company’s total adjusted capital, as calculated in accordance with NAIC guidelines, to its authorized control level risk-based capital. Authorized control level risk-based capital is the number determined by applying the NAIC’s risk-based capital formula, which measures the minimum amount of capital that an insurance company needs to support its overall business operations.

Any failure by one of our insurance companies to meet the applicable risk-based capital or minimum statutory capital requirements imposed by the laws of Florida or other states where we do business could subject it to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or liquidation. In 2005, Federated National, statutory surplus did not exceed company action levels established by the NAIC. Federated National’s results require us to submit a plan containing corrective actions. Federated National has not yet submitted its plan for corrective action yet, however we will submit a plan during the second quarter of 2006.

Any changes in existing risk-based capital requirements or minimum statutory capital requirements may require us to increase our statutory capital levels, which we may be unable to do.

7

Our revenues and operating performance may fluctuate with business cycles in the property and casualty insurance industry.

Historically, the financial performance of the property and casualty insurance industry has tended to fluctuate in cyclical patterns characterized by periods of significant competition in pricing and underwriting terms and conditions, which is known as a "soft" insurance market, followed by periods of lessened competition and increasing premium rates, which is known as a "hard" insurance market. Although an individual insurance company's financial performance is dependent on its own specific business characteristics, the profitability of most property and casualty insurance companies tends to follow this cyclical market pattern, with profitability generally increasing in hard markets and decreasing in soft markets. At present, we are beginning to experience a soft market in our automobile and commercial general liability sectors while a hard market persists in our property sector. We cannot predict, however, how long these market conditions will persist. We do not compete entirely on price or targeted market share. Our ability to compete is governed by our ability to assess and price an insurance product with an acceptable risk for obtaining profit.

We may not obtain the necessary regulatory approvals to expand the types of insurance products we offer or the states in which we operate.

We currently have applications pending in California and Missouri to underwrite and sell commercial general liability insurance.The insurance regulators in these states may request additional information, add conditions to the license that we find unacceptable, or deny our application. This would delay or prevent us from operating in that state. If we want to operate in any additional states, we must file similar applications for licenses, which we may not be successful in obtaining.

We requested that A.M. Best cease rating our insurance subsidiaries. As a result, we may be unable to write or renew desirable insurance policies or obtain adequate reinsurance, which would limit or halt our growth and harm our business.

Third-party rating agencies assess and rate the ability of insurers to pay their claims. These financial strength ratings are used by the insurance industry to assess the financial strength and quality of insurers. These ratings are based on criteria established by the rating agencies and reflect evaluations of each insurer's profitability, debt and cash levels, customer base, adequacy and soundness of reinsurance, quality and estimated market value of assets, adequacy of reserves, and management. Ratings are based upon factors of concern to agents, reinsurers and policyholders and are not directed toward the protection of investors, such as purchasers of our common stock.

In August 2004, A.M. Best Company notified us that Federated National and American Vehicle were being placed under review with negative implications. In 2003 A.M. Best had assigned Federated National a B rating ("Fair," which is the seventh of 14 rating categories) and American Vehicle a B+ rating ("Very Good," which is the sixth of 14 rating categories). In connection with this review, we requested that A.M. Best cease its ratings of these subsidiaries “NR-4 Not rated, company’s request”. The withdrawal of our ratings could limit or prevent us from writing or renewing desirable insurance policies, from obtaining adequate reinsurance, or from borrowing on our line of credit.

8

We rely on independent agents to write our insurance policies, and if we are not able to attract and retain independent agents, our revenues would be negatively affected.

We currently market and distribute Federated National's, American Vehicle's and third-party insurers' products and our other services through contractual relationships with a network of approximately 1,500 independent agents and a selected number of general agents. Our independent agents are our primary source for our automobile and property insurance policies. Many of our competitors also rely on independent agents. As a result, we must compete with other insurers for independent agents' business. Our competitors may offer a greater variety of insurance products, lower premiums for insurance coverage, or higher commissions to their agents. If our products, pricing and commissions do not remain competitive, we may find it more difficult to attract business from independent agents to sell our products. A material reduction in the amount of our products that independent agents sell would negatively affect our revenues.

We rely on our information technology and telecommunications systems, and the failure of these systems could disrupt our operations.

Our business is highly dependent upon the successful and uninterrupted functioning of our current information technology and telecommunications systems. We rely on these systems to process new and renewal business, provide customer service, make claims payments and facilitate collections and cancellations, as well as to perform actuarial and other analytical functions necessary for pricing and product development. As a result, the failure of these systems could interrupt our operations and adversely affect our financial results.

Nonstandard automobile insurance historically has a higher frequency of claims than standard automobile insurance, thereby increasing our potential for loss exposure beyond what we would be likely to experience if we offered only standard automobile insurance.

Nonstandard automobile insurance is provided to insureds that are unable to obtain preferred or standard insurance coverage because of their payment histories, driving records, age, vehicle types, or prior claims histories. This type of automobile insurance historically has a higher frequency of claims than does preferred or standard automobile insurance policies, although the average dollar amount of the claims is usually smaller under nonstandard insurance policies. As a result, we are exposed to the possibility of increased loss exposure and higher claims experience than would be the case if we offered only standard automobile insurance.

Florida's personal injury protection insurance statute contains provisions that favor claimants, causing us to experience a higher frequency of claims than might otherwise be the case if we operated only outside of Florida.

Florida's personal injury protection insurance statute limits an insurer's ability to deny benefits for medical treatment that is unrelated to the accident, that is unnecessary, or that is fraudulent. In addition, the statute allows claimants to obtain awards for attorney's fees. Although this statute has been amended several times in recent years, primarily to address concerns over fraud, the Florida legislature has been only marginally successful in implementing effective mechanisms that allow insurers to combat fraud and other abuses. We believe that this statute contributes to a higher frequency of claims under nonstandard automobile insurance policies in Florida, as compared to claims under standard automobile insurance policies in Florida and nonstandard and standard automobile insurance polices in other states. Although we believe that we have successfully offset these higher costs with premium increases, because of competition, we may not be able to do so with as much success in the future.

9

Our success depends on our ability to accurately price the risks we underwrite.

The results of our operations and the financial condition of our insurance companies depend on our ability to underwrite and set premium rates accurately for a wide variety of risks. Rate adequacy is necessary to generate sufficient premiums to pay losses, LAE and underwriting expenses and to earn a profit. In order to price our products accurately, we must collect and properly analyze a substantial amount of data; develop, test and apply appropriate rating formulas; closely monitor and timely recognize changes in trends; and project both severity and frequency of losses with reasonable accuracy. Our ability to undertake these efforts successfully, and as a result price our products accurately, is subject to a number of risks and uncertainties, some of which are outside our control, including:

·   the availability of sufficient reliable data and our ability to properly analyze available data;

·   the uncertainties that inherently characterize estimates and assumptions;

·   our selection and application of appropriate rating and pricing techniques; and

·   changes in legal standards, claim settlement practices, medical care expenses and restoration costs.

Consequently, we could under-price risks, which would negatively affect our profit margins, or we could overprice risks, which could reduce our sales volume and competitiveness. In either event, the profitability of our insurance companies could be materially and adversely affected.

Current operating resources are necessary to develop future new insurance products

We currently intend to expand our product offerings by underwriting additional insurance products and programs, and marketing them through our distribution network. Expansion of our product offerings will result in increases in expenses due to additional costs incurred in actuarial rate justifications, software and personnel. Offering additional insurance products may also require regulatory approval, further increasing our costs. There can be no assurance that we will be successful bringing new insurance products to our marketplace.

Our business strategy is to avoid competition based on price to the extent possible. This strategy, however, may result in the loss of business in the short term

Comparable companies which compete with us in the homeowners’ market include Allstate Insurance Company, State Farm Insurance Company, Florida Family Insurance Company, Florida Select Insurance Company, Atlantic Preferred Insurance Company and Vanguard Insurance Company.

Comparable companies which compete with us in the general liability insurance market include Century Surety Insurance Company, Atlantic Casualty Insurance Company, Colony Insurance Company and Burlington/First Financial Insurance Companies.

10

Although our pricing of our automobile insurance products is inevitably influenced to some degree by that of our competitors, we believe that it is generally not in our best interest to compete solely on price, choosing instead to compete on the basis of underwriting criteria, our distribution network, and our superior service to our agents and insureds. With respect to automobile insurance in Florida, we compete with more than 100 companies, which underwrite personal automobile insurance. Comparable companies which compete with us in the personal automobile insurance market include Affirmative Insurance Holdings, Inc., which recently acquired our non-standard automobile agency business in Florida, U.S. Security Insurance Company, United Automobile Insurance Company, Direct General Insurance Company and Security National Insurance Company, as well as major insurers such as Progressive Casualty Insurance Company.

Competition could have a material adverse effect on our business, results of operations and financial condition. If we do not meet the prices offered by our competitors, we may lose business in the short term, which could also result in reduced revenues.

Our investment portfolio may suffer reduced returns or losses, which would significantly reduce our earnings.

As do other insurance companies, we depend on income from our investment portfolio for a substantial portion of our earnings. During the time that normally elapses between the receipt of insurance premiums and any payment of insurance claims, we invest the funds received, together with our other available capital, primarily in fixed-maturity investments and equity securities, in order to generate investment income.

Our investment portfolio contains interest rate sensitive instruments, such as bonds, which may be adversely affected by changes in interest rates. A significant increase in interest rates could have a material adverse effect on our financial condition or results of operations. Generally, bond prices decrease as interest rates rise. Changes in interest rates could also have an adverse effect on our investment income and results of operations. For example, if interest rates decline, investment of new premiums received and funds reinvested will earn less than expected.

Our president and chief executive officer is key to the strategic direction of our company. If we were to lose this service our business could be harmed.

We depend, and will continue to depend, on the services of our founder and principal shareholder, Edward J. Lawson, who is also our president, chairman of the board and chief executive officer. We have entered into an employment agreement with him and we maintain $3 million key man life insurance on the life of Mr. Lawson. Nevertheless, because of Mr. Lawson's role and involvement in developing and implementing our current business strategy, his loss of service could substantially harm our business.

Our success also will depend in part upon our ability to attract and retain qualified executive officers, experienced underwriting talent and other skilled employees who are knowledgeable about our business. We rely substantially upon the services of our executive management team. Although we are not aware of any planned departures or retirements, if we were to lose the services of members of our management team, our business could be adversely affected. We believe we have been successful in attracting and retaining key personnel throughout our history. We have employment agreements with James G. Jennings III, our Treasurer and Chief Financial Officer, and other members of our executive management team. We also maintain a $1 million key man life insurance policy on the life of Mr. Jennings.

11

Risks Related to an Investment in Our Shares

The trading of our warrants may negatively affect the trading prices of our common stock if investors purchase and exercise the warrants to facilitate other trading strategies, such as short selling.

Our warrants currently trade on the NASDAQ National Market under the symbols "TCHCW" and “TCHCZ.” Each of the TCHCW warrants entitles the holders to purchase three quarters of one share of our common stock at an exercise price per whole share of $12.744 after giving effect to the September 2004 three-for-two stock split. Each of the TCHCZ warrants entitles the holders to purchase one share of our common stock at an exercise price per share of $12.750. Investors may purchase and exercise warrants to facilitate trading strategies such as short selling, which involves the sale of securities not yet owned by the seller. In a short sale, the seller must either purchase or borrow the security in order to complete the sale. If shares of our common stock received upon the exercise of warrants are used to complete short sales, this may have the effect of reducing the trading price of our common stock.

Our largest shareholders currently control approximately 15% of the voting power of our outstanding common stock, which could discourage potential acquirers and prevent changes in management.

Edward J. Lawson and Michele V. Lawson beneficially own approximately 15% of our outstanding common stock. As our largest shareholders, the Lawson’s have significant influence over the outcome of any shareholder vote. This voting power may discourage takeover attempts, changes in our officers and directors or other changes in our corporate governance that other shareholders may desire.

We have authorized but unissued preferred stock, which could affect rights of holders of common stock.

Our articles of incorporation authorize the issuance of preferred stock with designations, rights and preferences determined from time to time by our board of directors. Accordingly, our board of directors is empowered, without shareholder approval, to issue preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of common stock. In addition, the preferred stock could be issued as a method of discouraging a takeover attempt. Although we do not intend to issue any preferred stock at this time, we may do so in the future.

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Our articles of incorporation, bylaws and Florida law may discourage takeover attempts and may result in entrenchment of management.

Our articles of incorporation and bylaws contain provisions that may discourage takeover attempts and may result in entrenchment of management.

● Our board of directors is elected in classes, with only two or three of the directors elected each year. As a result, shareholders would not be able to change the membership of the board in its entirety in any one year. Shareholders would also be unable to bring about, through the election of a new board of directors, changes in our officers.

● Our articles of incorporation prohibit shareholders from acting by written consent, meaning that shareholders will be required to conduct a meeting in order to vote on any proposals or take any action.

● Our bylaws require at least 60 days' notice if a shareholder desires to submit a proposal for a shareholder vote or to nominate a person for election to our board of directors.

In addition, Florida has enacted legislation that may deter or frustrate takeovers of Florida corporations, such as our company.

● The Florida Control Share Act provides that shares acquired in a "control share acquisition" will not have voting rights unless the voting rights are approved by a majority of the corporation's disinterested shareholders. A "control share acquisition" is an acquisition, in whatever form, of voting power in any of the following ranges: (a) at least 20% but less than 33-1/3% of all voting power, (b) at least 33-1/3% but less than a majority of all voting power; or (c) a majority or more of all voting power.

● The Florida Affiliated Transactions Act requires supermajority approval by disinterested shareholders of certain specified transactions between a public corporation and holders of more than 10% of the outstanding voting shares of the corporation (or their affiliates).

As a holding company, we depend on the earnings of our subsidiaries and their ability to pay management fees and dividends to the holding company as the primary source of our income.

We are an insurance holding company whose primary assets are the stock of our subsidiaries. Our operations, and our ability to service our debt, are limited by the earnings of our subsidiaries and their payment of their earnings to us in the form of management fees, dividends, loans, advances or the reimbursement of expenses. These payments can be made only when our subsidiaries have adequate earnings. In addition, dividend payments made to us by our insurance subsidiaries are restricted by Florida law governing the insurance industry. Generally, Florida law limits the dividends payable by insurance companies under complicated formulas based on the subsidiary's available capital and earnings.

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No dividends were declared or paid by our insurance subsidiaries in 2005, 2004 or 2003. Under these laws, neither Federated National nor American Vehicle may not be permitted to pay dividends to 21st Century in 2006. Whether our subsidiaries will be able to pay dividends in 2006 depends on the results of their operations and their expected needs for capital. We do not anticipate that our subsidiaries will begin to pay dividends to the parent company during 2006.

USE OF PROCEEDS

We will not receive any proceeds from the resale of the common stock by the selling shareholders.

SELLING SHAREHOLDERS

The following tables show certain information as of the date of this prospectus regarding the number of shares of common stock owned by the selling shareholders and that are included for sale in this prospectus. The table assumes that all shares offered for sale in the prospectus are sold.

No selling shareholder has been within the last three years, or is currently, affiliated with us.

	Ownership of Common Stock Before Offering (1)			Number Offered	Ownership of Common Stock After Offering(1)
Selling Securityholder	Number	Percent		By Selling Shareholder	Number	Percent
Corsair Capital Partners, LP (2)	54,133	*		3,545	50,588	*
Corsair Capital Partners 100, LP (2)	2,098	*		137	1,961	*
Corsair Capital Partners Investors, LTD (2)	6,714	*		439	6,275	*
Cranshire Capital, LP (2)	85,927	1.15	%	5,496	80,431	1.08	%
Hillson Partners Limited Partnership	266,708	3.49	%	5,496	261,212	3.42	%
Iroquois Capital LP (2)	83,927	1.13	%	5,496	78,431	1.05	%
Omicron Master Trust	125,445	1.68	%	13,553	111,892	1.49	%
OTAPE Investments LLC (1)	20,899	*		1,281	19,618	*
Newport Alternative Income Fund	512	*		512	0	*
SilverCreek II Limited	1,434	*		1,434	0	*
SilverCreek Limited Partnership	3,176	*		3,176	0	*
Whitebox Convertible Arbitrage Partners, LP	233,011	3.08	%	41,566	191,445	2.53	%
Whitebox Hedged High Yield Partners, LP	10,245	*		10,245	0	*
Whitebox Intermarket Partners, LP	33,882	*		4,122	29,760	*
Pandora Select Partners, LP	55,749	*		10,618	45,131	*

_________________________

* Less than 1%.

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(1) Includes 19,618 shares underlying warrants held by the selling shareholder, OTAPE Investments LLC, (each of which is exercisable for .75 shares of common stock).

(2) Includes shares underlying warrants held by the selling shareholders (each of which is exercisable for one share of common stock) as follows: Iroquois Capital, LP, 78,431 shares; Cranshire Capital, LP, 78,431 shares; Corsair Capital Partners, LP, 50,588 shares; Corsair Capital Partners 100, LP, 1,961 shares; and Corsair Capital Partners Investors, LTD, 6,275 shares.

The selling shareholders listed above have provided us with additional information regarding the individuals or entities that exercise control over the selling shareholder. The proceeds of any sale of shares pursuant to this prospectus will be for the benefit of the individuals that control the selling entity. The following is a list of the selling shareholders and the entities that may exercise the right to vote or dispose of the shares owned by each selling shareholder:

Jay Petschek, serves as the managing member of Corsair Capital Advisors, LLC, the general partner of Cosair Capital Partners, LP, Cosair Capital Partners 100, LP and Cosair Capital Investors, Ltd. Mr. Petschek exercises sole voting and dispositive power over these securities.

Mitchell P. Kopin, is the President of Downsview Capital, Inc., the General Partner of Cranshire Capital, L.P. Mr. Kopin has sole voting and dispositive power over the securities held by Cranshire Capital, LP.

Daniel Abramowitz, is the President of Hillson Financial Management, Inc., the general partner of Hillson Partners Limited Partnership. Mr. Abramowitz has sole voting and dispositive power over the securities held by Hillson Partners Limited Partnership.

Joshua Silverman is a partner of Iroquois Capital, LP. Mr. Silverman has sole and voting and dispositive power over the securities held by Iroquois Capital, LP.

Omicron Capital, L.P., a Delaware limited partnership ("Omicron Capital"), serves as investment manager to Omicron Master Trust, a trust formed under the laws of Bermuda ("Omicron"); Omicron Capital, Inc., a Delaware corporation ("OCI"), serves as general partner of Omicron Capital; and Winchester Global Trust Company Limited ("Winchester") serves as the trustee of Omicron. By reason of such relationships, Omicron Capital and OCI may be deemed to share dispositive power over the shares of our common stock owned by Omicron, and Winchester may be deemed to share voting and dispositive power over the shares of our common stock owned by Omicron. Omicron Capital, OCI and Winchester disclaim beneficial ownership of such shares of our common stock. Omicron Capital has delegated authority from the board of directors of Winchester regarding the portfolio management decisions with respect to the shares of common stock owned by Omicron and, as of December 30, 2005, Mr. Olivier H. Morali and Mr. Bruce T. Bernstein, officers of OCI, have delegated authority from the board of directors of OCI regarding the portfolio management decisions with respect to the shares of common stock owned by Omicron. By reason of such delegated authority, Messrs. Morali and Bernstein may be deemed to share dispositive power over the shares of our common stock owned by Omicron. Messrs. Morali and Bernstein disclaim beneficial ownership of such shares of our common stock and neither of such persons has any legal right to maintain such delegated authority. No other person has sole or shared voting or dispositive power with respect to the shares of our common stock being offered by Omicron, as those terms are used for purposes under Regulation 13D-G of the Securities Exchange Act of 1934, as amended. Omicron and Winchester are not "affiliates" of one another, as that term is used for purposes of the Securities Exchange Act of 1934, as amended, or of any other person named in this prospectus as a Selling Securityholder. No person or "group" (as that term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended, or the SEC's Regulation 13D-G) controls Omicron and Winchester.

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OTAPE Investments, LLC is managed by TOA. Ira M. Leventhal, a U.S. citizen, may be deemed to have dispositive power with regard to the shares beneficially owned by OTAPE Investments, LLC. Mr. Leventhal disclaims beneficial ownership of those shares.

Each of Newport Alternative Income Fund, SilverCreek II Limited and SilverCreek Limited Partnership is managed by SilverCreek Management Inc. Louis Morwick and Bryn Joynt are the managing members of Silver Creek Management Inc. and have sole voting and dispositive power over the shares owned by each of the entities.

Mr. Andrew Redleaf is the managing member of the general partner for Whitebox Convertible Arbitrage Partners, LP; Whitebox Intermarket Partners, LP, and Pandora Select Partners, LP and exercises sole voting and dispositive power over the securities held by each of these entities.

PLAN OF DISTRIBUTION

The selling shareholders and any pledges, donees, transferees or other successors in interest of the selling shareholders (collectively, all shall be referred to as the “selling shareholders”) may, from time to time, sell any or all of their shares on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be in one or more transactions at fixed prices, at varying prices determined at the time of sale, at prevailing market prices at the time of sale or at negotiated prices. The selling shareholders may use any one or more of the following methods when selling shares:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• short sales;

• broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;

• a combination of any such methods of sale; and

• any other method permitted pursuant to applicable law.

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The selling shareholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.

We will not receive any of the proceeds from the sale by the selling shareholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

Broker-dealers engaged by the selling shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling shareholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

Any profits on the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a selling shareholder. The selling shareholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act.

The selling shareholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 supplementing or amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.

The selling shareholders also may transfer and donate the shares of common stock in other circumstances, in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 supplementing or amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.

There can be no assurance that any selling shareholder will sell any or all of the shares of common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part.

The selling shareholders and any broker-dealers or agents that are involved in selling the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

We are required to pay all fees and expenses incident to the registration of the shares of common stock. We have agreed to indemnify the selling shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

The selling shareholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by any selling stockholder. If we are notified by any selling shareholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus. If the selling shareholders use this prospectus for any sale of the shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act unless an exemption therefrom is available.

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The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of our common stock and activities of the Selling Shareholders.

LEGAL MATTERS

The validity of the issuance of the shares offered by this prospectus will be passed upon by Berger Singerman, P.A., Fort Lauderdale, Florida.

EXPERTS

The financial statements of 21st Century Holding Company for the years ended December 31, 2005 and December 31, 2004, incorporated by reference in this prospectus, have been audited by De Meo, Young, McGrath, independent certified public accountants, to the extent and for the periods set forth in their report incorporated herein by reference, and are incorporated herein in reliance upon such reports given upon the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-3 with the SEC under the Securities Act to register the securities offered by means of this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information identified in the registration statement. For further information about us and the securities offered by means of this prospectus, we refer you to the registration statement and the exhibits filed as a part of the registration statement. Statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, we refer you to the copy of the contract or document that has been filed.

We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934. In accordance with those requirements, we file annual, quarterly and special reports, proxy statements and other information with the SEC. You can read and copy any document we file at the SEC's public reference rooms at the following location: 100 F Street, N.E., Washington, D.C., 20549.

You can request copies of these documents upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms and the procedure for obtaining copies.

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The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The documents that we file with the SEC, including the registration statement, are available to investors on this web site. You can log onto the SEC's web site at http://www.sec.gov.

INFORMATION INCORPORATED BY REFERENCE

The SEC allows us to "incorporate by reference" the information that we file with it, which means that we can disclose important information to you by referring to those documents. As a result, you may need to review other documents filed by us with the SEC to obtain more information. The information contained in the documents we incorporate by reference is considered a part of this prospectus. Additionally, because information concerning us, whether contained in this prospectus or in a document incorporated by reference, will be amended or superseded by more current information contained in later filed documents, the information that we file with the SEC after the date of this prospectus will update and supersede older information contained in, or incorporated by reference into, this prospectus.

We incorporate by reference into this prospectus all the documents listed below:

● Our Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 30, 2006;

● Our Current Report on Form 8-K filed with the SEC on April 19, 2006;

● Our definitive proxy statement for our 2006 Annual Meeting of Shareholders filed with the SEC on April 17, 2006;

● The description of our common stock contained in our registration statement on Form 8-A filed with the SEC on October 28, 1998, as this description may be updated in any amendment to the Form 8-A.

In addition to the documents listed above, we incorporate by reference into this prospectus all documents that we file with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and until all of the securities being offered by means of this prospectus have been sold or the registration statement which we have filed with the SEC relating to the securities ceases to be effective; provided, however, that unless otherwise stated, nothing contained herein shall be deemed to incorporate by reference into this prospectus information furnished to, but not filed with, the SEC.

We will deliver at no cost a copy of any document incorporated by reference into this prospectus but not delivered with this prospectus to anyone who receives this prospectus. Exhibits filed with the documents that are incorporated by reference into this prospectus will be delivered only if the exhibits have been specifically incorporated by reference. Requests for any of these documents may be made in writing or orally and should be directed to:

Corporate Secretary, 21^st Century Holding Company, 3661 West Oakland Park Blvd. Suite 300, Lauderdale Lakes, FL 33311.

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SEC POSITION ON INDEMNIFICATION OF DIRECTORS AND OFFICERS

The SEC is of the opinion that indemnification of directors, officers and controlling persons for liabilities arising under the Securities Act is against public policy and is, therefore, unenforceable.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The Registrant estimates that its expenses in connection with this registration statement will be as follows:

SEC registration fee	$	$250.00
Accounting fees and expenses		5,000.00
Legal fees and expenses		10,000.00
Miscellaneous		1,750.00
Total	$	$17,000.00

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has authority under Section 607.0850 of the Florida Business Corporation Act to indemnify its directors and officers to the extent provided for in such law. The Registrant's Amended and Restated Articles of Incorporation provide that the Registrant may insure, shall indemnify and shall advance expenses on behalf of its officers and directors to the fullest extent not prohibited by law. The Registrant is also a party to indemnification agreements with each of its directors and officers.

ITEM 16. EXHIBITS.

4.1	Unit Purchase Agreement dated July 31, 2003 between the Company and the purchasers of the 6% Senior Subordinated Notes*
4.2	Amendment to Unit Purchase Agreement and Registration Rights Agreement dated October 15, 2003 between the Company and the Purchasers of the 6% Senior Subordinated Notes *
4.3	Form of 6% Senior Subordinated Note due July 31, 2006*
4.4	Form of Redeemable Warrant dated July 31, 2003*
4.5	Registration Rights Agreement dated July 31, 2003 between the Company and the purchase of the 6% Senior Subordinated Notes*
4.6	Unit Purchase Agreement dated September 30, 2004 between the Company and the Purchasers of the 6% Senior Subordinated Notes due September 30, 2007*
4.7	Form of 6% Senior Subordinated Note due September 30, 2007*
4.8	Form of Redeemable Warrant dated September 30, 2004*
4.9	Registration Rights Agreement dated September 30, 2004 between the Company and the Purchases of the 6% Senior Subordinated Notes*
5.1	Opinion of Berger Singerman, P.A.*
23.1	Consent of Berger Singerman, P.A. (contained in Exhibit 5.1)*
23.2	Consent of De Meo, Young, McGrath*
24.1	Power of Attorney*

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ITEM 17. UNDERTAKINGS.

(1) The undersigned Registrant hereby undertakes:

(i) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(ii) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(iii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

provided, however, that Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i) If the Registrant is relying on Rule 430B:

(A) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

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(ii) If the Registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lauderdale Lakes, State of Florida on this 2nd day of May, 2006.

21ST CENTURY HOLDING COMPANY
By:	:/s/ Edward J. Lawson
	Edward J. Lawson,
	Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Edward J. Lawson and James Gordon Jennings, III, or any one of them, as his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person any and all amendments (including post-effective amendments) to this Registration Statement, and any registration statement relating to the offering hereunder pursuant to Rule 462 under the Securities Act of 1933 and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, to the Registration Statement has been signed by the following persons in the capacities and on the date indicated.

SIGNATURES	TITLE	DATE
/s/ Edward J. Lawson Edward J. Lawson	Chairman of the Board of Directors, Chief Executive OfficerAnd President (Principal Executive Officer)	May 2, 2006
/s/ James Gordon Jennings, III James Gordon Jennings, III	Chief Financial Officer (Principal Financial and Accounting Officer)	May 2, 2006
/s/ Bruce Simberg Bruce Simberg	Director	May 2, 2006
/s/ Carl Dorf Carl Dorf	Director	May 2, 2006
/s/ Charles B. Hart, Jr. Charles B. Hart, Jr.	Director	May 2, 2006
/s/ Peter J. Prygelski Peter J. Prygelski	Director	May 2, 2006
/s/ Richard W. Wilcox, Jr. Richard W. Wilcox, Jr.	Director	May 2, 2006
/s/ Michael H. Braun Michael H. Braun	Director	May 2, 2006

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EXHIBIT INDEX

4.1	Unit Purchase Agreement dated July 31, 2003 between the Company and the purchasers of the 6% Senior Subordinated Notes
4.2	Amendment to Unit Purchase Agreement and Registration Rights Agreement dated October 15, 2003 between the Company and the Purchasers of the 6% Senior Subordinated Notes
4.3	Form of 6% Senior Subordinated Note due July 31, 2006
4.4	Form of Redeemable Warrant dated July 31, 2003
4.5	Registration Rights Agreement dated July 31, 2003 between the Company and the purchase of the 6% Senior Subordinated Notes
4.6	Unit Purchase Agreement dated September 30, 2004 between the Company and the Purchasers of the 6% Senior Subordinated Notes due September 30, 2007
4.7	Form of 6% Senior Subordinated Note due September 30, 2007
4.8	Form of Redeemable Warrant dated September 30, 2004
4.9	Registration Rights Agreement dated September 30, 2004 between the Company and the Purchases of the 6% Senior Subordinated Notes
5.1	Opinion of Berger Singerman, P.A.
23.1	Consent of Berger Singerman, P.A. (contained in Exhibit 5.1)
23.2	Consent of De Meo, Young, McGrath
24.1	Power of Attorney

EX-4.1

  

Exhibit 4.1

21^st CENTURY HOLDING COMPANY

4161 N.W. 5^TH STREET

PLANTATION, FL 33317

UNIT PURCHASE AGREEMENT

TO THE PURCHASERS LISTED IN

THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

21^st Century Holding Company, a Florida corporation (the “Company”), agrees with the Purchasers listed in the attached Schedule A (the “Purchasers”) to this Unit Purchase Agreement (this “Agreement”) as follows:

SECTION 1.  CERTAIN DEFINITIONS.

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of equity interests.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Business Day” means any day other than a Saturday, a Sunday or a day on which the Nasdaq National Market (“Nasdaq”) is required or authorized to be closed.

“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

“Capital Lease Obligation” means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person.

“Change of Control” is defined in Section 7.2(h).

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“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

“Confidential Information” is defined in Section 20.

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Eligible Subsidiary” means each of the Company’s Subsidiaries, except such Subsidiaries which are regulated by the Florida Department of Financial Service or successor entity.

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

“Fair Market Value” means, at any time and with respect to any property, the sale value of such property that would be realized in an arm's-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell), as reasonably determined in the good faith opinion of the Company's board of directors.

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.

“Guarantor” shall mean those certain Eligible Subsidiaries of the Company which shall be a party to a Subsidiary Guarantee.

“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:  (a) to purchase such Indebtedness or obligation or any property constituting security therefor primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof.

In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor, provided that the amount of such Indebtedness outstanding for purposes of this Agreement shall not be exceed the maximum amount of Indebtedness that is the subject of such Guaranty.

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“Holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 14.1.

“Indebtedness”means, with respect to any Person, without duplication, (a) all liabilities of such Person for borrowed money (including overdrafts) or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities, (b) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (c) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business, (d) all Capitalized Lease Obligations of such Person, (e) all Indebtedness referred to in (but not excluded from) the preceding clauses of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness (the amount of such obligation being deemed to be the lesser of the Fair Market Value of such property or asset or the amount of the obligation so secured), and (f) all guarantees by such Person of Indebtedness referred to in this definition of any other Person.

“Interest Shares” is defined in Section 9.

“Investments” shall mean all investments, in cash or by delivery of property made, directly or indirectly in any Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise.

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person.

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement, the Notes and the Warrants, or (c) the validity or enforceability of this Agreement, the Notes or the Warrants.

“Notes” is defined in Section 2.

“Offering Document” is defined in Section 6.3.

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“Permitted Indebtedness”means any of the following:

(a) Indebtedness of the Company or its Subsidiary outstanding as of the date hereof;

(b) Indebtedness of the Company pursuant to the Notes issued at Closing or of any Subsidiary pursuant to the Subsidiary Guarantee;

(c) Indebtedness of the Company owing to any Subsidiary; provided that any Indebtedness of the Company owing to any such Subsidiary is unsecured and is subordinated in right of payment from and after such time as the Notes shall become due and payable to the payment and performance of the Company’s obligations under the Notes; provided further that any disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to the Company or another Subsidiary) shall be deemed to be an incurrence of such Indebtedness by the Company not permitted by this clause (c);

(d) Indebtedness of a Subsidiary owing to the Company or to another Subsidiary; provided that any such Indebtedness of any Subsidiary is subordinated in right of payment to the Guaranty of such Subsidiary; provided further that any disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to the Company or a Subsidiary) shall be deemed to be an incurrence of such Indebtedness by such Subsidiary not permitted by this clause (d);

(e) Indebtedness of the Company or any Subsidiary in respect of purchase money obligations, Capitalized Lease Obligations of the Company or any Subsidiary and Subordinated Indebtedness of the Company or any Subsidiary in an aggregate amount which does not exceed $5 million at any one time outstanding;

(f) Indebtedness of the Company or any Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of capital stock of Subsidiaries;

(g) Indebtedness of the Company or any Subsidiary represented by (x) letters of credit for the account of the Company or any Subsidiary or (y) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, which letters of credit or other obligations, as the case may be, are intended to provide security for workers’ compensation claims, payment obligations in connection with self-insurance or other similar requirements in the ordinary course of business; and

(h) Any renewals, extensions, substitutions, refinancings or replacements (each, for purposes of this clause, a “refinancing”) of any Indebtedness, referred to herein, including any successive refinancings, so long as (i) any such new Indebtedness shall be in a principal amount that does not exceed the principal amount (or, if such Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) so refinanced, plus the lesser of the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined as necessary to accomplish such refinancing, (ii) in the case of any refinancing by the Company of Subordinated Indebtedness, such new Indebtedness is made pari passu with or subordinate to the Notes at least to the same extent as the Indebtedness being refinanced, and (iii) in the case of any refinancing by any Subsidiary of Subordinated Indebtedness, such new Indebtedness is made pari passu with or subordinate to the Guaranty of such Guarantor at least to the same extent as the Indebtedness being refinanced.

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“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.

“Prepayment Shares” is defined in Section 7.2(d).

“Principal Shares” is defined in Section 7.1.

“Property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

“Purchasers” means the purchasers of the Units named in Schedule A hereto.

“Required Holders” means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

“Responsible Officer” means any officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

“Sale and Leaseback Transaction” means any transaction or series of related transactions pursuant to which the Company or a Subsidiary sells or transfers any property or asset in connection with the leasing of such property or asset to the seller or transferor.

“SEC” means the Securities and Exchange Commission.

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

“Senior Indebtedness” means the principal of, premium, if any, and interest on all other Indebtedness of the Company (other than the Notes), whether outstanding on the date of Closing or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Notes.  Notwithstanding the foregoing, “Senior Indebtedness” shall not include (i) Indebtedness evidenced by the Notes, (ii) Indebtedness of the Company that is expressly subordinated in right of payment to any Senior Indebtedness of the Company or the Notes, (iii) Indebtedness of the Company that by operation of law is subordinate to any general unsecured obligations of the Company, (iv) Indebtedness of the Company to the extent incurred in violation of any covenant of this Agreement, (v) any liability for federal, state or local taxes or other taxes, owed or owing by the Company, (vi) Indebtedness for goods, materials or services purchased in the ordinary course of business or Indebtedness consisting of trade account payables or other current liabilities (other than the current portion of long-term Indebtedness which would constitute Senior Indebtedness but for the operation of this clause (vi)), (vii) amounts owed by the Company for compensation to employees or for services rendered to the Company, (viii) Indebtedness of the Company to any Subsidiary or any other Affiliate of the Company or any such Affiliate’s Subsidiaries, (ix) amounts owing under leases and (x) Indebtedness which when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code is without recourse to the Company or any Subsidiary.

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“Subordinated Indebtedness” means, as of the date of any determination thereof, all unsecured Indebtedness of the Company which shall contain or have applicable thereto subordination provisions providing for the subordination thereof to other the Indebtedness of the Company (including, without limitation, the Notes).

“Subsidiary” means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

“Subsidiary Guarantee” is defined in Section 3.2.

“Transaction Shares” means collectively, the Principal Shares, the Interest Shares, the Prepayment Shares and the Warrant Shares.

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

SECTION 2.  AUTHORIZATION OF UNITS.

3.1Units.  Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 4, such number of Units specified opposite such Purchaser's name in Schedule A at the aggregate Subscription Price.  The obligations of each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no obligation and no liability to any Person for the performance or nonperformance by any other Purchaser hereunder.

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3.2Subsidiary Guarantee.  The payment by the Company of all amounts due with respect to the Notes and the performance by the Company of its obligations under this Agreement will be unconditionally guaranteed by all Eligible Subsidiaries of the Company (the “Guarantors”) under the subsidiary guarantee (the “Subsidiary Guarantee”) which shall be in substantially the form attached hereto as Exhibit C.

SECTION 4.  CLOSING.

The sale and purchase of the Units to be purchased by each Purchaser shall occur at 10:00 am Miami time, at a closing (the “Closing”) on August 5, 2003 or on such other Business Day as may be agreed upon by the Company and the Purchasers.  At the Closing, the Company will deliver to J. Giordano Securities, LLC, as agent for each Purchaser, the Units to be purchased by such Purchaser dated the date of the Closing and registered in such Purchaser's name, against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the Subscription Price therefor by wire transfer of immediately available funds for the account of the Company to account number 9660323321, account name 21^st Century Holding Company Operating, at Union Planters Bank, ABA Number 067008414.  If at the Closing the Company shall fail to tender such Units to any Purchaser as provided above in this Section 4, such Purchaser shall, at such Purchaser's election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

SECTION 5.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:

5.1Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of Florida with full power and authority to own, lease, license and use its properties and assets and to carry out the businesses in which it is engaged in.  The Company is duly qualified to transact the business in which it is engaged and is in good standing as a foreign corporation in every jurisdiction in which its ownership, leasing, licensing or use of property or assets or the conduct of its business make such qualification necessary, except where the failure to be so qualified would not individually or in the aggregate have a Material Adverse Effect.

5.2Power and Authorization.  The Company has all requisite power and authority to (i) execute, deliver and perform its obligations under this Agreement; and (ii) to issue and sell the Units.  All necessary corporate proceedings of the Company have been duly taken to authorize the execution, delivery, and performance of this Agreement.  This Agreement has been duly authorized by the Company and, when executed and delivered by the Company, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification, contribution or exculpation provision may be limited under applicable federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

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5.3Public Disclosure.  The Company has filed with the SEC a registration statement on Form S-3 (the “Form S-3”), which is currently being reviewed by the SEC.  In connection with the review of the Form S-3, the SEC is also reviewing the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 (the “Form 10-K”) and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (the “Form 10-Q”).  As a result, the Company’s Form 10-K and Form 10-Q may be amended subsequent to the date hereof in response to comments received from the SEC.  Notwithstanding the foregoing, as of their respective filing dates, none of the Company’s filings with the SEC (the “Public Filings”) contained any untrue statement of a material fact or omitted any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading, except to the extent such filings have been prior to the date hereof corrected, updated or superseded by a document subsequently filed with the SEC.

SECTION 6.  REPRESENTATIONS OF THE PURCHASER.

Each Purchaser hereby represents and warrants to, and agrees with, the Company as follows:

6.1It is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

6.2If a natural person, the Purchaser is: a bona fide resident of the state contained in the address set forth on Schedule A as the Purchaser’s home address; at least 21 years of age; and legally competent to execute this Agreement.  If an entity, the Purchaser is duly authorized to execute this Agreement and this Agreement constitutes the legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms.

6.3The Purchaser is familiar with the Company’s business, plans and financial condition, the terms of the offering of the Units (the “Offering”), and any other matters relating to the Offering; the Purchaser has received all materials that have been requested by the Purchaser; the Purchaser has had a reasonable opportunity to ask questions of the Company and its representatives; and the Company has answered all inquiries that the Purchaser or the Purchaser’s representatives have put to it.  The Purchaser has had access to all additional non-confidential information necessary to verify the accuracy of the information set forth in this Agreement and any other materials furnished herewith, and has taken all the steps necessary to evaluate the merits and risks of an investment as proposed hereunder.  Without limiting the foregoing, the Purchaser acknowledges that it has reviewed certain information regarding the Company, its business and the terms of this Offering, including but limited to, the information contained in the Offering Document dated July 22, 2003 (the “Offering Document”).  The Purchaser acknowledges it has been advised by the Company that the SEC is reviewing the Company’s Public Filings, including the Form 10-K, and as a result the Company’s Public Filings may be amended.

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6.4The Purchaser has such knowledge and experience in finance, securities, investments and other business matters so as to be able to protect the interests of the Purchaser in connection with this transaction, and the Purchaser’s investment in the Company hereunder is not material when compared to the Purchaser’s total financial capacity.

6.5The Purchaser understands the various risks of an investment in the Company as proposed herein, including without limitation those set forth in the Offering Document and in the Public Filings, and can afford to bear such risks, including, without limitation, the risks of losing the entire investment.

6.6The Purchaser acknowledges that no market for the Units currently exists and none may develop in the future and that the Purchaser may find it impossible to liquidate the investment at a time when it may be desirable to do so, or at any other time.

6.7The Purchaser has been advised by the Company that the Units have not been registered under the Securities Act, that the Securities will be issued on the basis of the statutory exemption provided by Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under exemptions under certain state securities laws, that this transaction has not been reviewed by, passed on or submitted to any federal or state agency or self-regulatory organization where an exemption is being relied upon, and that the Company’s reliance thereon is based in part upon the representations made by the Purchaser in this Agreement.  The Purchaser acknowledges that the Purchaser has been informed by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of the Units.  In particular, the Purchaser agrees that the Company shall not be required to give any effect to sale, assignment or transfer, unless (i) the sale, assignment or transfer of such Units is registered under the Securities Act, it being understood that the Units are not currently registered for sale and that the Company has no obligation or intention to so register the Securities except as set forth herein, or (ii) such Units are sold, assigned or transferred in accordance with all the requirements and limitations of Rule 144 under the Securities Act, or (iii) such sale, assignment or transfer is otherwise exempt from registration under the Securities Act.  The Purchaser further understands that an opinion of counsel and other documents may be required to transfer the Units.  The Purchaser acknowledges that the Units shall be subject to stop transfer orders and the certificate or certificates evidencing any Units shall bear the following or a substantially similar legend or such other legend as may appear on the forms of Units and such other legends as may be required by state blue sky laws:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE OR FOREIGN SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE OR FOREIGN SECURITIES LAWS.”

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6.8The Purchaser will acquire the Units for the Purchaser’s own account (or for the joint account of the Purchaser and the Purchaser’s spouse either in joint tenancy, tenancy by the entirety or tenancy in common) for investment and not with a view to the sale or distribution thereof or the granting of any participation therein, and has no present intention of distributing or selling to others any of such interest or granting any participation therein.

6.9Neither the Company nor any of the officers, directors, shareholders, partners, employees or agents of either, or any other Persons, whether expressly or by implication, have represented, guaranteed or warranted that,

(a)The Company or the Purchaser will realize any given percentage of profits and/or amount or type of consideration, profit or loss as a result of the Company’s activities or the Purchaser’s investment in the Company; or

(b)the past performance or experience of the management of the Company, or of any other person, will in any way indicate the predictable results of the ownership of the Units or of the Company’s activities.

6.10No oral or written representations have been made other than as stated in this Agreement, the Offering Document, and the Executive Summary dated June 2003 (the “Executive Summary”), and the Purchaser has not relied on any oral or written representation from the Company other than as set forth in this Agreement and the Offering Document in making its investment decision.  The Purchaser hereby acknowledges that the information and representations set forth in this Agreement and the Offering Document supersede all prior information and representations provided to the Purchaser in connection with the Offering, including without limitation those set forth in the Executive Summary.

6.11The Purchaser is not purchasing for the Units as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting.

6.12The Purchaser is not relying on the Company with respect to the tax and other economic considerations of an investment.

6.13The Purchaser understands that the net proceeds from the Offering (after deduction for expenses of the Offering) will be used in all material respects for the purposes set forth in the Offering Document.

6.14The Purchaser acknowledges that the representations, warranties and agreements made by the Purchaser herein shall survive the execution and delivery of this Agreement and the purchase of the Units.

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6.15Blue Sky matters:

THE UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.  THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OTHER FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

6.16The Purchaser agrees to use its reasonable best efforts to make all warranties and representations required by the securities laws of Purchaser’s jurisdiction of domicile necessary to enable the Company to issue the Transaction Shares in compliance with such securities laws.

6.17The Purchaser acknowledges that as a result of its investment hereunder it may become subject to the reporting requirements of Sections 13 and 16 of the Exchange Act.  In the event that Purchaser becomes subject to the reporting requirements of Sections 13 and 16, Purchaser agrees to file a Schedule 13-D and a Form 3 no later than 10 days from the Closing and to keep current such filings in accordance with the requirements of Sections 13 and 16.

6.18The Purchaser has consulted his own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Units and has not relied on the Company, its officers, directors or professional advisors for advice as to such consequences.

SECTION 7.  PAYMENT OF THE NOTES.

7.1Required Payments.  The principal amount of the Notes shall be due and payable in equal quarterly installments commencing on October 31, 2003 with the last installment due on July 31, 2006 (the “Maturity Date”).  Each principal payment shall be paid in United States dollars or, to the extent legally permitted, in shares of Common Stock (the “Principal Shares”), at the Company’s option; provided, however, that the Company may only elect to make principal payments in Principal Shares if at the time of the payment an effective registration statement covering the issuance of the Principal Shares shall be available to the Company; and provided further, that the Company shall make principal payments in Principal Shares only to the extent provided in Section 12 hereof.  If such principal payment is paid in Principal Shares, then the number of Principal Shares to be issued on account of the principal payment shall be equal to the amount of the principal payment due divided by 95% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg Financial Markets (“Bloomberg”) for the 20 consecutive trading days prior to the date of the principal payment.  In the event the Company elects to pay the principal amount due in Principal Shares it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced above.

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7.2Change in Control.

(a)Notice of Change in Control or Control Event.  The Company will, within 15 Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control or Control Event (subject in the case of any Control Event to contractual limitations on disclosure and disclosure limitations imposed by applicable securities laws), give written notice of such Change in Control or Control Event to each holder of Notes unless notice in respect of such Change in Control (or the Change in Control contemplated by such Control Event) shall have been given pursuant to this Section 7.2. If a Change in Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in of this Section 7.2 and shall be accompanied by the certificate described in this Section 7.2.

(b)Offer to Prepay Notes.  The offer to prepay Notes contemplated by this Section 7.2(b) shall be an offer to prepay, in accordance with and subject to this Section 7.2, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”).  If such Proposed Prepayment Date is in connection with an offer contemplated by this Section 7.2, such date shall be not less than 30 days and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 30th day after the date of such offer).

(c)Acceptance.  A holder of Notes may accept the offer to prepay made pursuant to this Section 7.2 by causing a notice of such acceptance to be delivered to the Company at least 15 days prior to the Proposed Prepayment Date.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 7.2 shall be deemed to constitute a rejection of such offer by such holder.

(d)Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 7.2 shall be at 101% of the then-outstanding principal amount of such Notes together with interest on such Notes accrued to the date of prepayment (the “Change in Control Prepayment”).  The prepayment shall be made on the Proposed Prepayment Date except as provided in Section 7.2(e).  The Company may pay the Change in Control Prepayment in United States dollars or in shares of Common Stock (the “Prepayment Shares”), at the Company’s option; provided, however, that the Company may only elect to pay the Change in Control Prepayment in Prepayment Shares if at the time of payment an effective registration statement covering the issuance of the Prepayment Shares shall be available to the Company; and provided further, that the Company shall pay the Change in Control Prepayment in Prepayment Shares only to the extent provided in Section 12 hereof.  If the Change in Control Prepayment is paid in Prepayment Shares, then the number of Prepayment Shares to be issued on account of the prepayment shall be equal to the amount of the Change in Control Prepayment divided by 95% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg for the 20 consecutive trading days prior to the date of the Proposed Prepayment Date.  In the event the Company elects to pay the Change in Control Prepayment in Prepayment Shares, it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced above.

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(e)Deferral Pending Change in Control.  The obligation of the Company to prepay Notes pursuant to the offer required by this Section 7.2 is subject to the occurrence of the Change in Control in respect of which such offer and acceptance shall have been made.  In the event that such Change in Control does not occur on the Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until, and shall be made on the date on which, such Change in Control occurs.  The Company shall keep each holder of Notes reasonably and timely informed of (i) any such deferral of the date of prepayment, (ii) the date on which such Change in Control and the prepayment are expected to occur, and (iii) any determination by the Company that efforts to effect such Change in Control have ceased or been abandoned (in which case the offers and acceptances made pursuant to this Section 7.2 in respect of such Change in Control shall be deemed rescinded).

(f)Content of Offer.  Each offer to prepay the Notes pursuant to this Section 7.2 shall, specify:

(i)    the Proposed Prepayment Date;

(ii)    that such offer is made pursuant to this Section 7.2;

(iii)    the principal amount of each Note offered to be prepaid;

(iv)    the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date;

(v)    that the conditions of this Section 7.2 have been fulfilled; and

(vi)    in reasonable detail, the nature and date or proposed date of the Change in Control.

(g)“Change in Control” Defined.  “Change in Control” means each and every issue, sale or other disposition of shares of stock of the Company which results in any person (as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act) (herein, an “Acquiring Person”) becoming the “beneficial owners” (as such term is used in Rule 13d-3 under the Exchange Act as in effect on the date of the Closing), directly or indirectly, of more than 50% (by total voting power) of the issued and outstanding capital stock of the Company which is entitled to vote in the election of the members of the Company's board of directors.

(h)“Control Event” Defined.  “Control Event” means:

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(i)the execution by the Company or any of its Subsidiaries or Affiliates of any agreement or letter of intent with respect to any proposed transaction or event or series of transactions or events which, individually or in the aggregate, may reasonably be expected to result in a Change in Control, or

(ii)the execution of any written agreement which, when fully performed by the parties thereto, would result in a Change in Control.

SECTION 8.  SUBORDINATION OF NOTES AND GUARANTY.

8.1Notes Subordinate to Senior Indebtedness.  The Company covenants and agrees, and each Purchaser of a Note, by its acceptance thereof, likewise covenants and agrees, for the benefit of the holders, from time to time, of Senior Indebtedness that, to the extent and in the manner hereinafter set forth in this Section, the Indebtedness represented by the Notes and the payment of the principal of (and premium, if any) and interest on each and all of the Notes are hereby expressly made subordinate and subject in right of payment as provided in this Section to the prior payment in full in cash or cash equivalents or in any other form acceptable to each holder of Senior Indebtedness, of all Senior Indebtedness; provided, however, that the Notes, the Indebtedness represented thereby and the payment of the principal of (and premium, if any) and interest on the Notes in all respects shall rank equally with, or prior to, all existing and future senior subordinated indebtedness (including, without limitation, Indebtedness) of the Company that is subordinated to Senior Indebtedness.

8.2Subordination of Guaranty.  The Guaranty issued by any Guarantor will be unsecured senior subordinated obligations of such Guarantor, ranking pari passu with all other existing and future senior subordinated indebtedness of such Guarantor, if any.  The Indebtedness evidenced by such Subsidiary Guarantee will be subordinated on the same basis as the guaranty of any Senior Indebtedness of such Guarantor as the Notes are subordinated to Senior Indebtedness.

SECTION 9.  PAYMENT OF INTEREST.

9.1The principal amount of the Notes outstanding shall bear interest at the rate of 6% per annum beginning on the date of issuance.  Interest shall be payable quarterly beginning on October 31, 2003.  Each interest payment shall be paid in United States dollars or, to the extent legally permitted, in shares of Common Stock (the “Interest Shares”), at the Company’s option; provided, however, that the Company may only elect to make interest payments in Interest Shares if at the time of payment an effective registration statement covering the issuance of the Interest Shares shall be available to the Company; and provided further, that the Company shall make interest payments in Interest Shares only to the extent provided in Section 12 hereof.  If such interest payment is paid in Interest Shares, then the number of Interest Shares to be issued on account of the interest payment shall be equal to the amount of the interest payment due divided by 95% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg for the 20 consecutive trading days prior to the date of the interest payment.  In the event the Company elects to pay the interest amount due in Interest Shares it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced above.

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SECTION 10.  NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

10.1Limitation on Liens.  The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise), any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits except:

(a)Liens for taxes, assessments or other governmental charges which are not yet due and payable;

(b)Liens incidental to the conduct of business or the ownership of properties and assets (including landlords', carriers', warehousemen's, mechanics', materialmen's and other similar Liens) and Liens to secure the performance of bids, tenders, leases, or trade contracts, or to secure statutory obligations (including obligations under workers compensation, unemployment insurance and other social security legislation), surety or appeal bonds or other Liens incurred in the ordinary course of business and not in connection with the borrowing of money;

(c)leases or subleases entered into by the Company or its Subsidiaries as either lessors or sublessors, easements, rights-of-way, restrictions and other similar charges or encumbrances (including zoning restrictions), in each case incidental to the ownership of property or assets or the ordinary conduct of the business of the Company or any of its Subsidiaries, provided that such Liens do not, in the aggregate, detract from the value of such property in any material way;

(d)Liens incidental to minor survey exceptions and similar Liens, provided that such Liens do not, in the aggregate, materially detract from the value of such property;

(e)Liens on property or assets of Subsidiaries securing Indebtedness owing to the Company or to another Subsidiary;

(f)Liens existing on the date of Closing which secure outstanding Indebtedness of the Company and its Subsidiaries;

(g)any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Indebtedness secured thereby shall have been assumed; and

(h)any extensions, renewals or replacements of any Lien permitted by the preceding subparagraphs of this Section 10.1, provided that (i) no additional property shall be encumbered by such Liens, (ii) the unpaid principal amount of the Indebtedness secured thereby shall not be increased prior to or on or after the date of any extension, renewal or replacement, (iii) the weighted average life to maturity of the Indebtedness secured by such Liens shall not be reduced, and (iv) at such time and immediately after giving effect thereto, no Default or Event of Default would exist.

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10.2Merger, Consolidation.  The Company will not, and will not permit any Subsidiary to, consolidate with or be a party to a merger with any other Person; provided, however, that:

(a)any Subsidiary may merge or consolidate with or into the Company, so long as in any merger or consolidation involving the Company, the Company shall be the surviving entity;

(b)any Subsidiary may merge or consolidate with or into any other Person if either (x) the Subsidiary shall be the surviving entity, or (y) if the Subsidiary is not the surviving entity, such transaction is permitted by Section 10.3; and

(c)the Company may consolidate or merge with any other Person if (i) either (x) the Company shall be the surviving entity, or (y) if the surviving entity is other than the Company, such entity expressly assumes, by written agreement satisfactory in scope and form to the Required Holders, all obligations of the Company under the Notes, the Warrants and this Agreement, and (ii) at the time of such consolidation or merger and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing.

10.3Sales of Assets.  The Company will not, and will not permit any Subsidiary to, sell, lease or otherwise dispose of substantially all of the assets of the Company and its Subsidiaries unless the consideration received by the Company or such Subsidiary for such sale is not less than the Fair Market Value of the assets sold (as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution).

10.4Transactions with Affiliates.  The Company will not, and will not permit any Subsidiary to enter into, directly or indirectly, any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate.

10.5Limitation on Indebtedness. The Company will not, and will not permit any Subsidiary to, create, issue, assume, guarantee or in any manner become directly or indirectly liable for the payment of, or otherwise incur (collectively, “incur”), any Indebtedness (including any Acquired Indebtedness), other than Permitted Indebtedness.

10.6Limitation on Restricted Payments.

(a)The Company will not, and will not permit any Subsidiary to, directly or indirectly:

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(i)declare or pay any dividend on, or make any distribution to holders of, any shares of the Common Stock of the Company or any Subsidiary (other than the declaration or payment of dividends or distributions to the extent declared or paid to the Company or any Subsidiary or in accordance with the Company’s current dividend payment policy);

(ii)purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any shares of Common Stock of the Company or any Affiliate of the Company (other than Common Stock of any Subsidiary) or any options, warrants or other rights to acquire such shares of Common Stock; or

(iii)make any principal payment on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Subordinated Indebtedness of the Company or any Subsidiary.

10.7Limitation on Sale and Leaseback Transactions. The Company shall not, and shall not permit any Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction with respect to any property or assets (whether now owned or hereafter acquired), unless (i) the sale or transfer of such property or assets to be leased is treated as a sale of assets and the Company complies with Section 10.3, and (ii) the Company or such Subsidiary would be permitted to incur Indebtedness under Section 10.5 in the amount of the Capitalized Lease Obligations incurred in respect of such Sale and Leaseback Transaction.

SECTION 11.  EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a)the Company defaults in the payment of any principal on any Note for more than 10 Business Days after the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b)the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable, whether at a date fixed for payment or by declaration or otherwise; or

(c)the Company defaults in the performance of or compliance with any Material terms contained herein and such default is not remedied within 30 days after receipt of written notice from the Required Holders of such default; or

(d)any representation or warranty made in writing by or on behalf of the Company or any Guarantor or by any officer of the Company or any Guarantor in this Agreement, any or in any writing furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any Material respect on the date as of which made; or

(e)the Company defaults in the payment of any principal or interest on any Indebtedness of the Company, in any case in an amount in excess of $1,000,000, which default continues for more than the applicable cure period, if any, and/or is not waived in writing by the other party thereto;

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(f)the Company or any Guarantor (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

(g)a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of the Guarantors, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of the Guarantors, or any such petition shall be filed against the Company or any of the Guarantors and such petition shall not be dismissed within 60 days.

SECTION 12.  LIMITATION ON ISSUANCE OF COMMON STOCK.

Notwithstanding anything to the contrary contained herein or in the Offering Document, the Company shall not:

(a)(i) Issue any of the Transaction Shares, or (ii) adjust the number of Warrant Shares in accordance with the terms of the Warrants, if such issuance or adjustment would, either individually or together with other one or more other issuances or adjustments, cause the issuance of shares of Common Stock to exceed the number of shares that the Company could then issue in compliance with Section 4350(i) of the rules and regulations of Nasdaq (the “Nasdaq Rules”) or any successor rule or regulation.  Under Section 4350(i) of the Nasdaq Rules, a company may not issue shares, and may not issue securities convertible into shares, where the shares issued could in the aggregate equal 20% or more of the voting power of the shares outstanding, without obtaining shareholder approval.  The foregoing limitation shall only apply until such time as the Company obtains the requisite approval of its shareholders for the issuance of the Transaction Shares, as required by Section 4350(i) of the Nasdaq Rules or any successor rule or regulation.  The Company covenants and agrees that it shall include a proposal for the approval of the issuance of the Transaction Shares in the Company’s proxy statement for its 2004 annual meeting of shareholders, which the Company currently anticipates shall take place in June 2004.  If, due to the foregoing limitation,  the Company cannot adjust the Warrant Shares as provided  in  Section 8.3 of the Warrant, then, subject to NASD approval, the Company agrees that the exercise price thereof shall be reduced to equal the Issuance Price(s) of the shares of Common Stock that triggered the adjustment pursuant to Section 8.3 of the Warrant.

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(b)Issue any of the Transaction Shares, if such issuance would violate the securities laws of the jurisdiction in which any Purchaser receiving such shares is located.

SECTION 13.  REMEDIES ON DEFAULT, ETC.

13.1Acceleration.

(a)If an Event of Default with respect to the Company described in Section 11 has occurred, all the Notes then outstanding may at any time thereafter at the Holder’s option, by notice or notices to the Company, be declared immediately due and payable.

Upon any Note becoming due and payable under this Section 13.1, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (i) all accrued and unpaid interest thereon shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.

13.2Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 13.1, the Required Holders at the time outstanding may proceed to protect and enforce the rights of the holders by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

13.3Rescission.  At any time after any Notes have been declared due and payable pursuant to Section 13.1, the holders of not less than 50% in principal amount of the Notes, taken individually, then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes and, all principal if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 18, and (c) no judgment or  decree has been entered for the payment of any monies due pursuant hereto or to any Notes.  No rescission and annulment under this Section 13.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

13.4No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies.  No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  The Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, the reasonable attorneys' fees, expenses and disbursements for the holders.

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SECTION 14.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

14.1Registration of Notes.  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.

14.2Transfer and Exchange of Notes.  Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver not more than five Business Days following surrender of such Note, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of the Note originally issued hereunder.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.

14.3Replacement of Notes.  Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note, and

(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b)in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver not more than five Business Days following satisfaction of such conditions, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

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SECTION 15.  PAYMENTS ON NOTES.

The Company will pay all sums becoming due on the Notes for principal, and interest by the method and at the address specified for such purpose for such Purchaser on Schedule A hereto or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 19.  Prior to any sale or other disposition of any Note held by any Purchaser, such Person will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 14.2.

SECTION 16.REGISTRATION RIGHTS.

The Purchasers have entered into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to grant Purchasers certainregistration rights with respect to the resale of the Transaction Shares and the Warrants.

SECTION 17.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE  AGREEMENT.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the related Units, the purchase or transfer by any Purchaser of any such Units or portion thereof or interest therein and may be relied upon by any subsequent holder of any such Units, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder of any such Units.  This Agreement, the Subsidiary Guarantee, the Notes, the Warrants, and the Registration Rights Agreement embody the entire agreement and understanding between the Purchasers and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 18.  AMENDMENT AND WAIVER.

18.1Requirements.

(a)This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the holders of Notes holding more than 50% in aggregate principal amount of the Notes at the time outstanding, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, or 6hereof or the corresponding provision of any Supplement, or any defined term (as it is used in any such Section or such corresponding provision of any Supplement), will be effective as to any holder of Notes unless consented to by such holder of Notes in writing, and (b) no such amendment or waiver may, without the written consent of all of the holders of Notes at the time outstanding affected thereby, (i) subject to the provisions of Section 10 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest on the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 7, 10, 11.1, 14 or 16.

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18.2Solicitation of Holders of Notes.

(a)Solicitation.  The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof, or of the Notes.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 18 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

(b)Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

18.3Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 18 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

18.4Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 19. NOTICES.

All notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:

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(i)if to a Purchaser, to such Purchaser at the address specified for such communications in Schedule A to this Agreement, or at such other address as such Purchaser shall have specified to the Company in writing pursuant to this Section 19, or

(ii)if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Chief Financial Officer, with a copy to the General Counsel, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 19 will be deemed given only when actually received.

SECTION 20.  CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser's behalf, or (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (w)(i) such Purchaser's directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by such Purchaser's Notes), (ii) such Purchaser's financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, or (iii) any other holder of any Note (x) to effect compliance with any law, Rule, regulation or order applicable to such Purchaser, (y) in response to any subpoena or other legal process, provided that, to the extent permitted by law, each holder will use reasonable efforts to notify the Company of any request to disclose Confidential Information requested pursuant to any subpoena or other legal process, provided further that the failure to notify the Company of any such request shall not result in any liability to such holder, or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser's Notes and this Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

23

SECTION 21.  MISCELLANEOUS.

21.1Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

21.2Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.

21.3Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

21.4Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

21.5Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

21.6Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Florida excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

21.7Legal Rate of Interest.  Regardless of any provision contained in this Agreement or in any Guaranty, the rate of interest borne by the Notes shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged or received under any applicable law; any interest in excess of that maximum amount shall be credited on the principal of the Notes or, if that has been paid, refunded.  On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the Notes or, if the principal of the Notes has been paid, refunded.  In determining whether or not the interest paid or payable, under any specific contingency, exceeds the maximum amount of nonusurious interest, the Company and holders of the Notes shall, to the maximum extent permitted under applicable law, (a) characterize any nonprincipal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof, and (c) spread the total amount of interest throughout the entire contemplated term of the Notes.

24

21.8Submission to Process.  THE COMPANY AND THE PURCHASERS HEREBY AGREE THAT ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH RESPECT TO THIS AGREEMENT, OR THE NOTES SHALL BE BROUGHT IN THE COURTS OF THE STATE OF FLORIDA OR (TO THE EXTENT THEY HAVE SUBJECT MATTER JURISDICTION) OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF FLORIDA AS THE HOLDERS OF 51% IN PRINCIPAL AMOUNT OF THE NOTES MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, THE COMPANY ACCEPTS AND CONSENTS, FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY THE COMPANY AND THE HOLDERS OF 51% IN PRINCIPAL AMOUNT OF THE NOTES IN WRITING.  THE COMPANY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS.

21.9Waivers.  THE COMPANY WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH EACH HOLDER OF NOTES HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY SECURITY DOCUMENT OR THE NOTES; (B) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON-PAYMENT, INTENT TO ACCELERATE, ACCELERATION, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL DOCUMENTS, INSTRUMENTS, AND GUARANTIES AT ANY TIME HELD BY THE HOLDERS OF NOTES (OR ANY AGENT THEREFOR) ON WHICH THE COMPANY MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER THE HOLDERS OF NOTES MAY DO IN THIS REGARD; AND (C) NOTICE OF ACCEPTANCE HEREOF.  THE COMPANY ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO THE HOLDERS' ENTERING INTO THIS AGREEMENT AND THAT THE HOLDERS ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS WITH THE COMPANY.  THE COMPANY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A TRIAL BY THE COURT.

21.10Exculpation. Each party to this Agreement acknowledges that Brown Raysman Millstein Felder & Steiner LLP represented J. Giordano Securities, LLC in the transactions contemplated by this Agreement and has not represented either the Company or any Purchaser in connection with such transaction.

25

The execution hereof by the Purchasers shall constitute a contract among the Company and the Purchasers for the uses and purposes hereinabove set forth.  

Very truly yours,
21st CENTURY HOLDING COMPANY
By
	Richard A. Widdicombe,
	Chief Executive Officer

26

Accepted as of the first date written above.

PURCHASER:

By       

Name: 

Title:  

27

EXHIBIT A

FORM OF NOTE

A

21^ST CENTURY HOLDING COMPANY

6% SENIOR SUBORDINATED NOTE DUE ______________, 2006

No.  [______]

[Date]

$[__________]

FOR VALUE RECEIVED, the undersigned, 21^ST CENTURY HOLDING COMPANY (herein called the “Company”), a corporation organized and existing under the laws of the State of Florida , hereby promises to pay to [_____________________] or registered assigns, the principal sum of [______________] DOLLARS with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6% per annum from the date hereof, payable quarterly beginning on ________________, 2003.

This Note is one of a series of Senior Subordinated Notes (herein called the “Notes”) issued pursuant to the Unit Purchase Agreement, dated as of ________________, 2003 (as from time to time amended, supplemented or modified, the “Unit Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Unit Purchase Agreement and (ii) to have made the representations set forth in Section 6 of the Unit Purchase Agreement.

Payments of principal of and interest on this Note are to be made, at the Company’s option, in lawful money of the United States of America or, in whole or in part, by the issuance to the holder hereof of Interest Shares, as defined in and in accordance with the Unit Purchase Agreement.

This Note is a registered Note and, as provided in the Unit Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

The Company will make required prepayments of principal on the dates and in the amounts specified in the Unit Purchase Agreement.  This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Unit Purchase Agreement, but not otherwise.

If an Event of Default, as defined in the Unit Purchase Agreement, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price and with the effect provided in the Unit Purchase Agreement.

A-1

Pursuant to the Subsidiary Guarantee dated as of _____________, 2003 (the “Subsidiary Guarantee”), certain subsidiaries of the Company have absolutely and unconditionally guaranteed payment in full of the principal of, and interest on this Note and the performance by the Company of all of its obligations contained in the Unit Purchase Agreement all as more fully set forth in said Subsidiary Guarantee.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder hereof shall be governed by, the law of the State of Florida, excluding the choice-of-law principles of such state that would require the application of the laws of a jurisdiction other than such state.

21^ST CENTURY HOLDING COMPANY

By:     _____________________________

Name: _____________________________

Title:   _____________________________

A-2

EXHIBIT B

FORM OF WARRANT

B

EXHIBIT C

FORM OF SUBSIDIARY GUARANTEE

C

SCHEDULE A

PURCHASERS

EX-4.2

EXHIBIT 4.2

AMENDMENT

TO

UNIT PURCHASE AGREEMENT

AND

REGISTRATION RIGHTS AGREEMENT

THIS AMENDMENT TO UNIT PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT (the “Amendment”) is dated effective as of October 15, 2003 by and among 21^st Century Holding Company, a Florida corporation (the “Company”), J. Giordano Securities, LLC (the “Placement Agent”), and the holders of the Company’s 6% Senior Subordinated Notes due July 31, 2006 (the “Notes”) as set forth on Schedule A hereto (collectively, the “Investors”).

RECITALS:

A.  The Company and the Investors entered into that certain Unit Purchase Agreement dated July 31, 2003 (the “Unit Purchase Agreement”) pursuant to which the Investors purchased the Notes and, in connection therewith, the Company, the Placement Agent and the Investors also entered into a Registration Rights Agreement of even date therewith (the “Registration Rights Agreement”).

B.  The parties now desire to modify and amend certain rights and obligations of the parties under the Unit Purchase Agreement and the Registration Rights Agreement.

AGREEMENT:

NOW, THEREFORE, in consideration of the terms and conditions hereof, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.  Capitalized Terms.  Capitalized terms used but not defined in this Amendment shall have the meanings as set forth in the Unit Purchase Agreement and the Registration Rights Agreement, as applicable.

2.  Amendments to Unit Purchase Agreement.  

(a)  Section 7.1 of the Unit Purchase Agreement is hereby amended and restated in its entirety as follows:

“7.1 Required Payments.

(a) Principal. The principal amount of the Notes shall be due and payable in equal quarterly installments commencing on October 31, 2003 with the last installment due on July 31, 2006 (the date due of each quarterly installment is referred to herein as a “Quarterly Payment Date” and the last Quarterly Payment Date on July 31, 2006 is referred to as the “Maturity Date”).  Each principal payment shall be paid in United States dollars or, to the extent legally permitted, in shares of Common Stock (the “Principal Shares”), at the Company’s option; provided, however, that the Company shall make principal payments in Principal Shares only to the extent provided in Section 12 hereof.  If such principal payment is paid in Principal Shares, then the number of Principal Shares to be issued on account of the principal payment shall be equal to (i) the amount of the principal payment due divided by (ii) 95% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg Financial Markets (“Bloomberg”) for the 20 consecutive trading days prior to the Quarterly Payment Date (the “Calculation Price”).  In the event the Company elects to pay the principal amount due in Principal Shares, (a) it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced above, (b) it shall issue the applicable Principal Shares on the Quarterly Payment Date, and (c) it shall file a registration statement covering resale of the applicable Principal Shares (the “Registration Statement”) no later than two Business Days following the Quarterly Payment Date.

1

(b)  Compensatory Payment. If a principal payment is made in Principal Shares and the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg for the three Business Day period ending on (and including) the date of effectiveness (the “Effective Date”) of the applicable Registration Statement (the “Post-Issuance Average Price”) is less than the Calculation Price, then the Company shall pay to each holder of the Notes an amount equal to (i) the difference between the Calculation Price and the Post-Issuance Average Price, multiplied by (ii) the number of Principal Shares issued on the applicable Quarterly Payment Date.  Such amount shall be paid to each holder of the Notes in cash not later than 10 Business Days following the Effective Date of the applicable Registration Statement.”

(b)  Section 9.1 of the Unit Purchase Agreement is hereby amended and restated in its entirety as follows:

“9.1  Required Payments.

(a)  Interest.  The principal amount of the Notes outstanding shall bear interest at the rate of 6% per annum beginning on the date of issuance.  Interest shall be payable quarterly beginning on October 31, 2003.  Each interest payment shall be paid in United States dollars or, to the extent legally permitted, in shares of Common Stock (the “Interest Shares”), at the Company’s option; provided, however, that the Company shall make interest payments in Interest Shares only to the extent provided in Section 12 hereof.  If such interest payment is paid in Interest Shares, then the number of Interest Shares to be issued on account of the interest payment shall be equal to (i) the amount of the interest payment due divided by (ii) the Calculation Price.  In the event the Company elects to pay the interest amount due in Interest Shares, (a) it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced in Section 7.1 above, (b) it shall issue the applicable Interest Shares on the Quarterly Payment Date, and (c) it shall file the Registration Statement covering resale of the applicable Interest Shares no later than two Business Days following the Quarterly Payment Date.

2

(b)  Compensatory Payment. If an interest payment is made in Interest Shares and the Post-Issuance Average Price of the applicable Interest Shares is less than the Calculation Price, then the Company shall pay to each holder of the Notes an amount equal to (i) the difference between the Calculation Price and the Post-Issuance Average Price, multiplied by (ii) the number of Interest Shares issued on the applicable Quarterly Payment Date.  Such amount shall be paid to each holder of the Notes in cash not later than 10 Business Days following the Effective Date of the applicable Registration Statement.”

3.  Amendments to Registration Rights Agreement.

(a)  Section 4(a) of the Registration Rights Agreement shall be amended and restated in its entirety as follows:

“(a) The parties acknowledge that as of the date of this Amendment, the Company has filed a Registration Statement on Form S-3 covering the resale of the Warrants and the Warrant Shares and a Registration Statement on Form S-1 relating to the Principal Shares and Interest Shares.  The parties agree that on or before the date specified in clause (c) of Sections 7.1 and 9.1 of the Unit Purchase Agreement, as amended, the Company will file an amendment to its Registration Statement on Form S-1 to cover the resale of the Principal Shares and Interest Shares to be issued by the Company in payment of the October 31, 2003 quarterly payment due on the Notes, and that thereafter, the Company shall file in subsequent quarters such additional registration statements (individually, a “Registration Statement,” and collectively, the “Registration Statements”) as provided in Sections 7.1 and 9.1 of the Unit Purchase Agreement.  No later than five Trading Days prior to the anticipated effective date of each such Registration Statement, the Company shall provide copies of same to the Holders or their counsel, and shall provide the Holders with copies of any comment letters received from the Commission with respect thereto within five Trading Days of receipt thereof.

“The Company shall use diligent best efforts to cause each Registration Statement to become effective within 60 days from the date of filing thereof.  Each such Registration Statement shall include all of the Registrable Securities then issued and not covered by a previously filed Registration Statement, to the extent permitted by the rules and interpretations of the Commission as then in effect, and shall include appropriate language regarding reliance upon Rule 416 to the extent permitted by the Commission.  The Company will notify the Holders and its transfer agent of the effectiveness of a Registration Statement within five Trading Days of such event.”

3

(b)  Section 4(c) of the Registration Rights Agreement shall be amended by deleting the third sentence thereof.

4.  Governing Law.  This Amendment shall be interpreted in accordance with the laws of the State of Florida.

5.  Effect of Amendment.  Except as expressly set forth herein, the Unit Purchase Agreement and Registration Rights Agreement shall remain unmodified and in full force and effect pursuant to their respective terms and conditions.

6.  Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[SIGNATURES ON FOLLOWING PAGE]

4

The parties have caused this Amendment to be executed and delivered on behalf of each such party, effective as of the date set forth above.

COMPANY:
21st CENTURY HOLDING COMPANY, a Florida corporation
By:	//s// Edward J. Lawson
	Name: Edward J. Lawson
	Title:  Chairman

PLACEMENT AGENT:
J. GIORDANO SECURITIES, LLC, a _____________ limited liability company*
By:	//s// James Giordano
	Name:James Giordano
	Title: President

*Only as to Registration Rights Agreement
INVESTOR:
	Pandora Select Partners, LP
	(Printed Name of Investor)
By:	//s// Andrew Redleaf
	Name:Andrew Redleaf
	Title: Managing Member

5

INVESTOR:
	Whitebox Hedged High Yield Partners, LP
	(Printed Name of Investor)
By:	//s// Andrew Redleaf
	Name: Andrew Redleaf
	Title:Managing Member

INVESTOR:
	Whitebox Convertible Arbitrage Partners, LP
	(Printed Name of Investor)
By:	//s// Andrew Redleaf
	Name: Andrew Redleaf
	Title:Managing Member

INVESTOR:
	SilverCreek Limited Partnership
	(Printed Name of Investor)
By:	//s// Bryn Joynt
	Name: Bryn Joynt
	Title:VP of Manager

INVESTOR:
	Newport Alternative Income Fund
	(Printed Name of Investor)
By:	//s// Bryn Joynt
	Name: Bryn Joynt
	Title:VP of Manager

6

INVESTOR:
	SilverCreek II Limited
	(Printed Name of Investor)
By:	//s// Bryn Joynt
	Name: Bryn Joynt
	Title:VP of Manager

INVESTOR:
	Coastal Convertibles LTD
	(Printed Name of Investor)
By:	//s// J. Lurie
	Name: J. Lurie
	Title:Director / Member

INVESTOR:
	Coastal Convertibles LTD
	(Printed Name of Investor)
By:	//s// Richard Cayne
	Name: Richard Cayne
	Title:Director / Member

INVESTOR:
	OTAPE Investments LLC
	(Printed Name of Investor)
By:	//s// Richard Cayne
	Name: Richard Cayne
	Title:General Counsel

INVESTOR:
	Omicron Master Trust
	(Printed Name of Investor)
By:	//s// Bruce Bernstein
	Name: Bruce Bernstein
	Title:Managing Member

7

Schedule A

Manager	Purchaser (LEGAL NAME TO BE PUT NOTE)	Number of Units
Whitebox Advisors	Pandora Select Partners, LP Whitebox Hedged High Yield Partners, LP Whitebox Convertible Arbitrage Partners, LP	1,000 2,000 2,000
SilverCreek	SilverCreek Limited Partnership Newport Alternative Income Fund SilverCreek II Limited	620 100 280
Tradewinds	Coastal Convertibles LTD	750
OTA	OTAPE Investments LLC	250
Omicron	Omicron Master Trust	500

A-1

EX-4.3

EXHIBIT 4.3

21ST CENTURY HOLDING COMPANY

6% SENIOR SUBORDINATED NOTE DUE JULY 31, 2006

No. ______

July 31, 2003

$__________

FOR VALUE RECEIVED, the undersigned, 21ST CENTURY HOLDING COMPANY (herein called the "Company"), a corporation organized and existing under the laws of the State of Florida , hereby promises to pay to [_____________________] or registered assigns, the principal sum of [______________] DOLLARS with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6% per annum from the date hereof, payable quarterly beginning on October 31, 2003.

This Note is one of a series of Senior Subordinated Notes (herein called the "Notes") issued pursuant to the Unit Purchase Agreement, dated as of July 31, 2003 (as from time to time amended, supplemented or modified, the "Unit Purchase Agreement"), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Unit Purchase Agreement and (ii) to have made the representations set forth in Section 6 of the Unit Purchase Agreement.

Payments of principal of and interest on this Note are to be made, at the Company's option, in lawful money of the United States of America or, in whole or in part, by the issuance to the holder hereof of Interest Shares, as defined in and in accordance with the Unit Purchase Agreement.

This Note is a registered Note and, as provided in the Unit Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

The Company will make required prepayments of principal on the dates and in the amounts specified in the Unit Purchase Agreement. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Unit Purchase Agreement, but not otherwise.

If an Event of Default, as defined in the Unit Purchase Agreement, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price and with the effect provided in the Unit Purchase Agreement.

Pursuant to the Subsidiary Guarantee dated as of July 31, 2003 (the "Subsidiary Guarantee"), certain subsidiaries of the Company have absolutely and unconditionally guaranteed payment in full of the principal of, and interest on this Note and the performance by the Company of all of its obligations contained in the Unit Purchase Agreement all as more fully set forth in said Subsidiary Guarantee.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder hereof shall be governed by, the law of the State of Florida, excluding the choice-of-law principles of such state that would require the application of the laws of a jurisdiction other than such state.

21ST CENTURY HOLDING COMPANY
By:
	Richard A. Widdicombe, CEO

EX-4.4

EXHIBT 4.4

21ST CENTURY HOLDING COMPANY

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED HEREBY ARE RESTRICTED AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, ACCEPTABLE TO THE COMPANY, IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

Dated as of _________, 2003 No. W-

21ST CENTURY HOLDING COMPANY

(INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA)

REDEEMABLE WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

FOR VALUE RECEIVED, 21st Century Holding Company, a Florida corporation (the "Company"), hereby certifies that ______________________, his (her/its) successors and assigns (the "Holder"), is the owner of such number of warrants (the "Warrants") as set forth in Section 1 hereof. Each Warrant initially entitles the Holder, subject to the provisions hereof, to purchase from the Company at any time and from time to time on and after the date hereof until 5:00 p.m. Florida local time on the Expiration Date (as described in Section 3 herein), one-half fully paid and non-assessable share of Common Stock (as defined below) at the Exercise Price per share of Common Stock (as described in

Section 2 herein) on the terms and conditions hereinafter set forth.

The term "Common Stock" means the Common Stock, par value $0.01 per share, of the Company as constituted on the date hereof (the "Base Date"). The number of shares of Common Stock to be received upon the exercise of this warrant certificate may be adjusted from time to time as hereinafter set forth. The shares of Common Stock deliverable upon such exercise, and as adjusted from time to time, are hereinafter referred to as "Warrant Shares." The term "Other Securities" means any other equity or debt securities that may be issued by the Company in addition thereto or in substitution for the Warrant Shares. The term "Company" means and includes the corporation named above as well as any immediate successor corporation resulting from a reorganization.

Upon receipt by the Company of documentation reasonably satisfactory to it of the loss, theft, destruction or mutilation of this warrant certificate, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this warrant certificate, if mutilated, the Company shall execute and deliver a new warrant certificate of like tenor and date. Any such new warrant certificate executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this warrant certificate so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.

The Holder agrees with the Company that this warrant certificate is issued, and all the rights hereunder shall be held subject to, all of the conditions, limitations and provisions set forth herein.

1. NUMBER OF WARRANTS. The Holder is the owner of a number of warrants equal to two times the quotient of the aggregate principal amount of the 6% Senior Subordinated Notes the Holder has purchased pursuant to the terms of the Unit Purchase Agreement (as hereinafter defined) and the Exercise Price.

2. EXERCISE PRICE. The Exercise Price shall equal 115% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg Financial Markets ("Bloomberg") for the 60 consecutive trading days after the date of the Closing as set forth in the Unit Purchase Agreement; provided, however, that in no event shall the Exercise Price be greater than $25.00 per share nor lower than $15.00 per share. No later than 15 business days after the expiration date of the 60-day period set forth above, the Company shall mail a notice to the Holder, first class, postage prepaid, at such Holder's latest address as shall appear on the records of the Company or the Company's Warrant Agent (as hereinafter defined), if any, setting forth the Exercise Price and the number of Warrants determined in accordance with Sections 1 and 2 hereof.

3. EXERCISE OF WARRANT. This warrant certificate may be exercised in whole or in part, at any time, or from time to time during the period commencing on the date hereof and expiring three years after the date hereof (the "Expiration Date"). The Warrants must be exercised so as to purchase one full Warrant Share.

4. NOTICE OF EXERCISE. Exercise of the Warrants shall be effected in any such case by presentation and surrender of this warrant certificate to the Company at its principal office, at the office of its stock transfer agent or any other warrant agent designated by the Company (the "Warrant Agent") if any, with the Warrant Exercise Form, a form of which is attached hereto as Exhibit A, duly executed and accompanied by payment (either in cash or by certified or official bank check, payable to the order of the Company) of the Exercise Price for the number of Warrant Shares specified in such form and instruments of transfer, if appropriate, duly executed by the Holder or its duly authorized attorney. If this warrant certificate should be exercised in part only, the Company shall, upon surrender of this warrant certificate for cancellation, execute and deliver a new warrant certificate evidencing the rights of the Holder thereof to purchase the balance of the Warrant Shares purchasable hereunder. Upon receipt by the Company of this warrant certificate, together with the Exercise Price, at its office, or by the Warrant Agent at its office, in proper form for exercise, the Holder shall be deemed to be the Holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such shares of Common Stock shall not then be actually delivered to the Holder. The Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on exercise of this warrant certificate, but in no event shall the Company be responsible or liable for income taxes or transfer taxes upon the issuance or transfer of the Warrants or the Warrant Shares.

5. REDEMPTION RIGHTS. The Warrants may be redeemed, in whole or in part, at any time or from time to time, at the Company's sole option, commencing a year from the date hereof at a redemption price of $0.01 per Warrant Shares; provided, however, that before any such call for redemption of the Warrants the weighted-average volume price for the Company's Common Stock quoted on the Nasdaq National Market ("Nasdaq") shall have for 20 consecutive trading days ending not more than 10 days prior to the notice of redemption been in excess of 150% of the Exercise Price, as such may be adjusted from time to time. Redemption of the Warrants may only occur upon 30 days' prior written notice to the Holder, such notice to include certification of the trading price of the Company's Common Stock on Nasdaq as reported by Bloomberg. If the Company exercises its right to redeem the Warrants, in whole or in part, it shall mail a notice of redemption to the Holder, first class, postage prepaid, not later than the 30th day before the date fixed for redemption, at such Holder's last address as shall appear on the records of the Company or the Company's Warrant Agent, if any. Any notice mailed in the manner provided herein shall be conclusively presumed to have been duly given whether or not the Holder receives such notice. The notice of redemption shall specify the redemption price, the date fixed for redemption, the place where the warrant certificate shall be delivered and the redemption price shall be paid, and that the right to exercise the Warrants shall terminate at 5:00 p.m. Florida local time on the business day immediately preceding the date fixed for redemption. The date fixed for the redemption of the Warrants shall be the Redemption Date. Any right to exercise a Warrant shall terminate at 5:00 p.m. Florida local time on the business day immediately preceding the Redemption Date. On and after the Redemption Date, the Holder shall have no further rights except to receive, upon surrender of a certificate evidencing Warrants duly endorsed or accompanied by a written instrument or instruments of redemption in form satisfactory to the Company, the redemption price of $0.01, without interest, per Warrant Shares.

6. RESERVATION OF SHARES. The Company will at all times reserve for issuance and delivery upon exercise of this warrant certificate all shares of Common Stock or other shares of capital stock of the Company (and Other Securities) from time to time receivable upon exercise of this warrant certificate. All such shares (and Other

Securities) shall be duly authorized and, when issued upon such exercise, shall be validly issued, fully paid and non-assessable and free of all preemptive rights.

7. FRACTIONAL SHARES. No fractional shares or script representing fractional shares shall be issued upon the exercise of the Warrants, but the Company shall pay the Holder an amount equal to the fair market value of such fractional share of Common Stock in lieu of each fraction of a share otherwise called for upon any exercise of the Warrants, as determined by the Board of Directors of the Company.

8. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This warrant certificate is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its Warrant Agent, if any, for other warrant certificates of different denominations, entitling the Holder to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this warrant certificate to the Company or at the office of its Warrant Agent, if any, with an appropriate form of assignment duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new warrant certificate in the name of the assignee named in such instrument of assignment and this warrant certificate shall promptly be canceled. This warrant certificate may be divided or combined with other warrant certificates that carry the same rights upon presentation hereof at the office of the Company or at the office of its Warrant Agent, if any, together with a written notice specifying the names and denominations in which new warrant certificates are to be issued and signed by the Holder hereof.

9. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights as a shareholder in the Company, either at law or in equity, and the rights of the Holder are limited to those expressed in this warrant certificate.

10. ANTI-DILUTION PROVISIONS.

10.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any time subdivide its outstanding shares of Common Stock (or Other Securities at the time receivable upon the exercise of the Warrants) by recapitalization, reclassification or split-up thereof, or if the Company shall declare a stock dividend or distribute shares of Common Stock to its shareholders, the number of shares of Common Stock subject to this warrant certificate immediately prior to such subdivision shall be proportionately increased and the Exercise Price shall be proportionately decreased, and if the Company shall at any time combine the outstanding shares of Common Stock by recapitalization, reclassification or combination thereof, the number of shares of Common Stock or Other Securities subject to this warrant certificate immediately prior to such combination shall be proportionately decreased and the Exercise Price shall be proportionately increased. Any such adjustments pursuant to this Section 10.1 shall be effective at the close of business on the effective date of such subdivision or combination or if any adjustment is the result of a stock dividend or distribution then the effective date of such adjustment based thereon shall be the record date therefor.

10.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In the case of a reorganization of the Company after the Base Date, the Holder, upon the exercise thereof as provided in Section 1, at any time after the consummation of such reorganization, shall be entitled to receive, in lieu of the securities and property receivable upon the exercise of this warrant certificate prior to such consummation, the securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this warrant certificate immediately prior thereto; in each such case, the terms of this warrant certificate shall be applicable to the securities or property receivable upon the exercise of this warrant certificate after such consummation.

10.3 ISSUANCES BELOW EXERCISE PRICE. Except in the case of the issuance of Common Stock issued (i) pursuant to any employee benefit plan of the Company now existing or to be implemented in the future, (ii) for consideration other than cash pursuant to a merger, consolidation, acquisition or similar business combination, (iii) in connection with any transaction referred to in, or contemplated by, this Section 10 hereof, (iv) pursuant to any equipment leasing or loan arrangement, or debt financing from a bank or similar financial or lending institution, (v) issued by the Company pursuant

to a registration statement filed under the Securities Act, or (v) issued in connection with strategic transactions involving the Company and other entities, including (a) joint ventures, manufacturing, marketing or distribution arrangements or (b) technology transfer or development arrangements, if the Company at any time while the Warrants are outstanding, shall issue shares of Common Stock at a price per share (an "Issuance Price") less than the Exercise Price (or in the case of an issuance of Common Stock in a private placement at less than 80% of the Exercise Price), then the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Common Stock plus the number of shares of Common Stock which the price paid for such shares of Common Stock would purchase at the Exercise Price, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of shares of Common Stock so issued or issuable. Upon each adjustment of the Exercise Price pursuant to the provisions of this Section 10.2, the number of Warrant Shares issuable upon the exercise of each Warrant shall be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of the Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

10.4 NOTICES OF RECORD DATE, ETC. In case:

(a) the Company shall take a record of the holders of its Common Stock (or Other Securities at the time receivable upon the exercise of the Warrants) for the purpose of entitling them to receive any dividend (other than a cash dividend at the same rate as the rate of the last cash dividend theretofore paid) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities, or to receive any other right; or

(b) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, or any consolidation or merger of the Company with or into another corporation; then, and in each such case, the Company shall mail or cause to be mailed to the Holder at the time outstanding a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation or merger is to take place, and the time, if any, is to be fixed, as to which the holders of record of Common Stock (or such Other Securities at the time receivable upon the exercise of the Warrants) shall be entitled to exchange their shares of Common Stock (or such Other Securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation or merger. Such notice shall be mailed at least 20 days prior to the date therein specified and the Warrants may be exercised prior to said date during the term of the Warrants.

10.5 LIMITATION ON ANTI-DILUTION ADJUSTMENTS. Notwithstanding anything to the contrary contained herein, the Company shall not adjust the number of Warrant Shares as provided in this Section 10, if such adjustment would, either individually or together with one or more other adjustments or together with one or more issuances of Transaction Shares (as defined in the Unit Purchase Agreement dated as of ___________, 2003 (the "Unit Purchase Agreement") among the Company and the Purchasers named therein), cause the issuance of shares of Common Stock to exceed the number of shares that the Company could then issue under Section 4350(i) of the rules and regulations of Nasdaq (the "Nasdaq Rules") or any successor rule or regulation. Under Section 4350(i) of the Nasdaq Rules, a company may not issue shares, and may not issue securities convertible into shares, where the shares issued could in the aggregate equal 20% or more of the voting power of the shares outstanding, without obtaining shareholder approval. The foregoing limitation shall only apply until such time as the Company obtains the requisite approval of its shareholders for the issuance of the Transaction Shares, as required by Section 4350(i) of the Nasdaq Rules or any successor rule or regulation. The Company covenants and agrees that it shall include a proposal for the approval of the issuance of the Transaction Shares in the Company's proxy statement for its 2004 annual meeting of shareholders, which the Company currently anticipates shall take place in June 2004. If, due to the foregoing limitation, the Company cannot adjust the Warrant Shares as provided in Section 10.3 above, then, subject to NASD approval, the Company agrees that the Exercise

Price hereof shall be reduced to equal the Issuance Price(s) of the shares of Common Stock that triggered the adjustment pursuant to Section 10.3.

11. TRANSFER TO COMPLY WITH THE SECURITIES ACT. The Warrants and any Warrant Shares or Other Securities may not be sold, transferred, pledged, hypothecated or otherwise disposed of unless registered under the Securities Act and any applicable state securities laws or pursuant to available exemptions from such registration, provided that the transferor delivers to the Company an opinion of counsel satisfactory to the Company confirming the availability of such exemption.

12. REGISTRATION RIGHTS. The Warrants and the Warrant Shares issuable upon exercise of the Warrants shall be subject to certain registration rights as provided in the registration rights agreement (the "Registration Rights Agreement") among the Company and the initial holders of the Warrants. If the Company fails to comply with the terms of the Registration Rights Agreement, the Exercise Price shall be reduced by 10% for each full period of 30 consecutive days of such non-compliance (and there shall be no pro rata reduction of the Exercise Price if a period of non-compliance is not a full 30-day period).

13. LEGEND. Unless the Warrant Shares or Other Securities have been registered under the Securities Act, upon exercise of any of the Warrants and the issuance of any of the Warrant Shares or Other Securities, all certificates representing such securities shall bear on the face thereof substantially the following legend:

"The securities represented by this certificate have not been

registered under the Securities Act of 1933, as amended (the

"Act"), or under applicable state securities laws and may not

be sold, offered for sale, assigned, transferred or otherwise

disposed of, unless registered pursuant to the provisions of

the Act and any applicable state securities laws or unless an

opinion of counsel to the Company is obtained stating that

such disposition is in compliance with an available exemption

from such registration."

14. NOTICES. All notices required hereunder shall be in writing and shall be deemed given when sent by facsimile, delivered personally or within two days after mailing when mailed by certified or registered mail, return receipt requested, to the Company at its principal office, or to the Holder at the address set forth on the record books of the Company, or at such other address of which the Company or the Holder has been advised by notice hereunder.

15. APPLICABLE LAW. The Warrants are issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of Florida, without giving effect to the choice of law rules thereof.

IN WITNESS WHEREOF, the Company has caused this warrant certificate to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

21ST CENTURY HOLDING COMPANY, a Florida corporation
By:
	Name:_________________________________________________
	Title:__________________________________________________

EXHIBIT A

WARRANT EXERCISE FORM

(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)

To 21st Century Holding Company:

In accordance with the warrant certificate enclosed with this Warrant Exercise Form, the undersigned hereby irrevocably elects to purchase________ shares of Common Stock, $0.01 par value per share ("Common Stock"), of 21^st Century Holding Company and, encloses herewith $__________ in cash, certified or official bank check or checks, which sum represents the aggregate Exercise Price

(as defined in the Warrant) for the number of shares of Common Stock to which this Warrant Exercise Form relates, together with any applicable taxes payable by the undersigned pursuant to the warrant certificate.

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

PLEASE INSERT SOCIAL SECURITY OR

TAX IDENTIFICATION NUMBER

________________________________________________________________________________________________________

(Please print name and address)

If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock that the undersigned is entitled to purchase in accordance with the enclosed warrant certificate, the undersigned requests that a new warrant certificate evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be

issued in the name of and delivered to:

________________________________________________________________________________________________________

(Please print name and address)

________________________________________________________________________________________________________

________________________________________________________________________________________________________

Date: __________________________________	____________________________________  (Print name of holder
	By: ________________________________
	Title  _______________________________
	Title: _______________________________
	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

EX-4.5

EX-4.6

Exhibit 4.6

21ST CENTURY HOLDING COMPANY

3661 WEST OAKLAND PARK BOULEVARD

LAUDERDALE LAKES, FL 33311

UNIT PURCHASE AGREEMENT

TO THE PURCHASERS LISTED IN

THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

21st Century Holding Company, a Florida corporation (the "Company"), agrees with the Purchasers listed in the attached Schedule A (the "Purchasers") to this Unit Purchase Agreement (this "Agreement") as follows:

SECTION 1. CERTAIN DEFINITIONS.

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

"Affiliate" means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of equity interests. As used in this definition, "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Business Day" means any day other than a Saturday, a Sunday or a day on which the Nasdaq National Market ("Nasdaq") is required or authorized to be closed.

"Capital Lease" means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

"Capital Lease Obligation" means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person.

"Change of Control" is defined in Section 7.2(h).

"Code" means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

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"Confidential Information" is defined in Section 20.

"Default" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

"Eligible Subsidiary" means each of the Company's Subsidiaries, except such Subsidiaries which are regulated by the Florida Department of Financial Service or successor entity.

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

"Fair Market Value" means, at any time and with respect to any property, the sale value of such property that would be realized in an arm's-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell), as reasonably determined in the good faith opinion of the Company's board of directors.

"GAAP" means generally accepted accounting principles as in effect from time to time in the United States of America.

"Guarantor" shall mean those certain Eligible Subsidiaries of the Company which shall be a party to a Subsidiary Guarantee.

"Guaranty" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof.

In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor, provided that the amount of such Indebtedness outstanding for purposes of this Agreement shall not be exceed the maximum amount of Indebtedness that is the subject of such Guaranty.

"Holder" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 14.1.

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"Indebtedness" means, with respect to any Person, without duplication, (a) all liabilities of such Person for borrowed money (including overdrafts) or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities, (b) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (c) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business, (d) all Capitalized Lease Obligations of such Person, (e) all Indebtedness referred to in (but not excluded from) the preceding clauses of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness (the amount of such obligation being deemed to be the lesser of the Fair Market Value of such property or asset or the amount of the obligation so secured), and (f) all guarantees by such Person of Indebtedness referred to in this definition of any other Person.

"Interest Shares" is defined in Section 9.

"Investments" shall mean all investments, in cash or by delivery of property made, directly or indirectly in any Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise.

"Lien" means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person.

"Material" means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.

"Material Adverse Effect" means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement, the Notes and the Warrants, or (c) the validity or enforceability of this Agreement, the Notes or the Warrants.

"Notes" is defined in Section 2.

"Offering Document" is defined in Section 6.3.

"Permitted Indebtedness" means any of the following:

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(a) Indebtedness of the Company or its Subsidiary outstanding as of the date hereof;

(b) Indebtedness of the Company pursuant to the Notes issued at Closing or of any Subsidiary pursuant to the Subsidiary Guarantee, and any additional indebtedness in an aggregate amount (including the issuing of the Notes) which does not exceed $15 million at any one time outstanding represented by additional senior subordinated notes issued on a pari passu basis with the Notes and guaranteed by guarantees of one or more of the Subsidiaries on a pari passu basis with the Subsidiary Guarantee.

(c) Indebtedness of the Company owing to any Subsidiary; provided that any Indebtedness of the Company owing to any such Subsidiary is unsecured and is subordinated in right of payment from and after such time as the Notes shall become due and payable to the payment and performance of the Company's obligations under the Notes; provided further that any disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to the Company or another Subsidiary) shall be deemed to be an incurrence of such Indebtedness by the Company not permitted by this clause (c);

(d) Indebtedness of a Subsidiary owing to the Company or to another Subsidiary; provided that any such Indebtedness of any Subsidiary is subordinated in right of payment to the Guaranty of such Subsidiary; provided further that any disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to the Company or a Subsidiary) shall be deemed to be an incurrence of such Indebtedness by such Subsidiary not permitted by this clause (d);

(e) Indebtedness of the Company or any Subsidiary in respect of purchase money obligations, Capitalized Lease Obligations of the Company or any Subsidiary and Subordinated Indebtedness of the Company or any Subsidiary in an aggregate amount which does not exceed $5 million at any one time outstanding;

(f) Indebtedness of the Company or any Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of capital stock of Subsidiaries;

(g) Indebtedness of the Company or any Subsidiary represented by (x) letters of credit for the account of the Company or any Subsidiary or (y) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, which letters of credit or other obligations, as the case may be, are intended to provide security for workers' compensation claims, payment obligations in connection with self-insurance or other similar requirements in the ordinary course of business;

(h) Any renewals, extensions, substitutions, refinancings or replacements (each, for purposes of this clause, a "refinancing") of any Indebtedness, referred to herein, including any successive refinancings, so long as (i) any such new Indebtedness shall be in a principal amount that does not exceed the principal amount (or, if such Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) so refinanced, plus the lesser of the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined as necessary to accomplish such refinancing, (ii) in the case of any refinancing by the Company of Subordinated Indebtedness, such new Indebtedness is made pari passu with or subordinate to the Notes at least to the same extent as the Indebtedness being refinanced, and (iii) in the case of any refinancing by any Subsidiary of Subordinated Indebtedness, such new Indebtedness is made pari passu with or subordinate to the Guaranty of such Guarantor at least to the same extent as the Indebtedness being refinanced; and

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(i) Indebtedness of the Company not otherwise permitted herein incurred in connection with a merger, acquisition, sales of assets or similar business combinations, with the consent of the Holders of 50% of the principal amount of Notes then outstanding.

"Person" means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.

"Prepayment Shares" is defined in Section 7.2(d)

"Principal Shares" is defined in Section 7.1.

"Property" or "properties" means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

"Purchasers" means the purchasers of the Units named in Schedule A hereto.

"Required Holders" means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

"Responsible Officer" means any officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

"Sale and Leaseback Transaction" means any transaction or series of related transactions pursuant to which the Company or a Subsidiary sells or transfers any property or asset in connection with the leasing of such property or asset to the seller or transferor.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended from time to time.

"Senior Indebtedness" means the principal of, premium, if any, and interest on all other Indebtedness of the Company (other than the Notes), whether outstanding on the date of Closing or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Notes. Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Notes, (ii) Indebtedness of the Company that is expressly subordinated in right of payment to any Senior Indebtedness of the Company or the Notes, (iii) Indebtedness of the Company that by operation of law is subordinate to any general unsecured obligations of the Company, (iv) Indebtedness of the Company to the extent incurred in violation of any covenant of this Agreement, (v) any liability for federal, state or local taxes or other taxes, owed or owing by the Company, (vi) Indebtedness for goods, materials or services purchased in the ordinary course of business or Indebtedness consisting of trade account payables or other current liabilities (other than the current portion of long-term Indebtedness which would constitute Senior Indebtedness but for the operation of this clause (vi)), (vii) amounts owed by the Company for compensation to employees or for services rendered to the Company, (viii) Indebtedness of the Company to any Subsidiary or any other Affiliate of the Company or any such Affiliate's Subsidiaries, (ix) amounts owing under leases and (x) Indebtedness which when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code is without recourse to the Company or any Subsidiary.

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"Subordinated Indebtedness" means, as of the date of any determination thereof, all unsecured Indebtedness of the Company which shall contain or have applicable thereto subordination provisions providing for the subordination thereof to other the Indebtedness of the Company (including, without limitation, the Notes).

"Subsidiary" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the Company.

"Subsidiary Guarantee" is defined in Section 3.2.

"Transaction Shares" means collectively, the Principal Shares, the Interest Shares, the Prepayment Shares and the Warrant Shares.

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

SECTION 2.AUTHORIZATION OF UNITS; PRIORITY

2.1 AUTHORIZATION OF UNITS. The Company will authorize the issue and sale of up to 12,500 units (the "Units") at a price (the "Subscription Price") of $1,000 per Unit. Each Unit consists of (i) a $1,000 6% Senior Subordinated Note (the "Note"), and (ii) warrants to purchase shares of the Company's common stock, par value $0.01 per share (the "Common Stock") for an exercise price per share as set forth therein (the "Warrant"). The Note and Warrant shall be substantially in the forms set out in Exhibits A and B, respectively.

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2.2 PRIORITY OF NOTES. The Notes shall rank pari passu in terms of payment and shall be equal in priority to the 6% Senior Subordinated Notes dated July 31, 2003 in the original principal amount of $7,500,000.

SECTION 3.SALE AND PURCHASE OF UNITS.

3.1 UNITS. Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 4, such number of Units specified opposite such Purchaser's name in Schedule A at the aggregate Subscription Price. The obligations of each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no obligation and no liability to any Person for the performance or nonperformance by any other Purchaser hereunder.

3.2 SUBSIDIARY GUARANTEE. The payment by the Company of all amounts due with respect to the Notes and the performance by the Company of its obligations under this Agreement will be unconditionally guaranteed by all Eligible Subsidiaries of the Company (the "Guarantors") under the subsidiary guarantee (the "Subsidiary Guarantee") which shall be in substantially the form attached hereto as Exhibit C.

SECTION 4.CLOSING.

The sale and purchase of the Units to be purchased by each Purchaser shall occur at 10:00 am Miami time, at a closing (the "Closing") on September 29, 2004 or on such other Business Day as may be agreed upon by the Company and the Purchasers. At the Closing, the Company will deliver to J. Giordano Securities, LLC, as agent for each Purchaser, the Units to be purchased by such Purchaser dated the date of the Closing and registered in such Purchaser's name, against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the Subscription Price therefor by wire transfer of immediately available funds for the account of the Company to account number 9660323321, account name 21st Century Holding Company Operating, at Union Planters Bank, ABA Number 067008414. If at the Closing the Company shall fail to tender such Units to any Purchaser as provided above in this Section 4, such Purchaser shall, at such Purchaser's election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

SECTION 5.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:

5.1 ORGANIZATION. The Company is a corporation duly organized, validly existing and in good standing under the laws of Florida with full power and authority to own, lease, license and use its properties and assets and to carry out the businesses in which it is engaged in. The Company is duly qualified to transact the business in which it is engaged and is in good standing as a foreign corporation in every jurisdiction in which its ownership, leasing, licensing or use of property or assets or the conduct of its business make such qualification necessary, except where the failure to be so qualified would not individually or in the aggregate have a Material Adverse Effect.

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5.2 POWER AND AUTHORIZATION. The Company has all requisite power and authority to (i) execute, deliver and perform its obligations under this Agreement; and (ii) to issue and sell the Units. All necessary corporate proceedings of the Company have been duly taken to authorize the execution, delivery, and performance of this Agreement. This Agreement has been duly authorized by the Company and, when executed and delivered by the Company, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting creditors' rights generally; (ii) as enforceability of any indemnification, contribution or exculpation provision may be limited under applicable federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.

5.3 PUBLIC DISCLOSURE. As of their respective filing dates, none of the Company's filings with the SEC (the "Public Filings") contained any untrue statement of a material fact or omitted any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading, except to the extent such filings have been prior to the date hereof corrected, updated or superseded by a document subsequently filed with the SEC.

SECTION 6.REPRESENTATIONS OF THE PURCHASER.

Each Purchaser hereby represents and warrants to, and agrees with, the Company as follows:

6.1 It is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

6.2 If a natural person, the Purchaser is: a bona fide resident of the state contained in the address set forth on Schedule A as the Purchaser's home address; at least 21 years of age; and legally competent to execute this Agreement. If an entity, the Purchaser is duly authorized to execute this Agreement and this Agreement constitutes the legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms.

6.3 The Purchaser is familiar with the Company's business, plans and financial condition, the terms of the offering of the Units (the "Offering"), and any other matters relating to the Offering; the Purchaser has received all materials that have been requested by the Purchaser; the Purchaser has had a reasonable opportunity to ask questions of the Company and its representatives; and the Company has answered all inquiries that the Purchaser or the Purchaser's representatives have put to it. The Purchaser has had access to all additional non-confidential information necessary to verify the accuracy of the information set forth in this Agreement and any other materials furnished herewith, and has taken all the steps necessary to evaluate the merits and risks of an investment as proposed hereunder. Without limiting the foregoing, the Purchaser acknowledges that it has reviewed certain information regarding the Company, its business and the terms of this Offering, including but not limited to, the information contained in the Offering Document dated September , 2004 (the "Offering Document").

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6.4 The Purchaser has such knowledge and experience in finance, securities, investments and other business matters so as to be able to protect the interests of the Purchaser in connection with this transaction, and the Purchaser's investment in the Company hereunder is not material when compared to the Purchaser's total financial capacity.

6.5 The Purchaser understands the various risks of an investment in the Company as proposed herein, including without limitation those set forth in the Offering Document and in the Public Filings, and can afford to bear such risks, including, without limitation, the risks of losing the entire investment.

6.6 The Purchaser acknowledges that no market for the Units currently exists and none may develop in the future and that the Purchaser may find it impossible to liquidate the investment at a time when it may be desirable to do so, or at any other time.

6.7 The Purchaser has been advised by the Company that the Units have not been registered under the Securities Act, that the Securities will be issued on the basis of the statutory exemption provided by Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under exemptions under certain state securities laws, that this transaction has not been reviewed by, passed on or submitted to any federal or state agency or self-regulatory organization where an exemption is being relied upon, and that the Company's reliance thereon is based in part upon the representations made by the Purchaser in this Agreement. The Purchaser acknowledges that the Purchaser has been informed by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of the Units. In particular, the Purchaser agrees that the Company shall not be required to give any effect to sale, assignment or transfer, unless (i) the sale, assignment or transfer of such Units is registered under the Securities Act, it being understood that the Units are not currently registered for sale and that the Company has no obligation or intention to so register the Securities except as set forth herein, or (ii) such Units are sold, assigned or transferred in accordance with all the requirements and limitations of Rule 144 under the Securities Act, or (iii) such sale, assignment or transfer is otherwise exempt from registration under the Securities Act. The Purchaser further understands that an opinion of counsel and other documents may be required to transfer the Units. The Purchaser acknowledges that the Units shall be subject to stop transfer orders and the certificate or certificates evidencing any Units shall bear the following or a substantially similar legend or such other legend as may appear on the forms of Units and such other legends as may be required by state blue sky laws:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR FOREIGN SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE OR FOREIGN SECURITIES LAWS."

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6.8 The Purchaser will acquire the Units for the Purchaser's own account (or for the joint account of the Purchaser and the Purchaser's spouse either in joint tenancy, tenancy by the entirety or tenancy in common) for investment and not with a view to the sale or distribution thereof or the granting of any participation therein, and has no present intention of distributing or selling to others any of such interest or granting any participation therein.

6.9 Neither the Company nor any of the officers, directors, shareholders, partners, employees or agents of either, or any other Persons, whether expressly or by implication, have represented, guaranteed or warranted that,

(a) The Company or the Purchaser will realize any given percentage of profits and/or amount or type of consideration, profit or loss as a result of the Company's activities or the Purchaser's investment in the Company; or

(b) the past performance or experience of the management of the Company, or of any other person, will in any way indicate the predictable results of the ownership of the Units or of the Company's activities.

6.10 No oral or written representations have been made other than as stated in this Agreement, the Offering Document dated September , 2004, and the Purchaser has not relied on any oral or written representation from the Company other than as set forth in this Agreement and the Offering Document in making its investment decision. The Purchaser hereby acknowledges that the information and representations set forth in this Agreement and the Offering Document supersede all prior information and representations provided to the Purchaser in connection with the Offering.

6.11 The Purchaser is not purchasing the Units as a result of or subsequent to any advertisement, press release, public announcement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting.

6.12 The Purchaser is not relying on the Company with respect to the tax and other economic considerations of an investment.

6.13 The Purchaser understands that the net proceeds from the Offering (after deduction for expenses of the Offering) will be used in all material respects for the purposes set forth in the Offering Document.

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6.14 The Purchaser acknowledges that the representations, warranties and agreements made by the Purchaser herein shall survive the execution and delivery of this Agreement and the purchase of the Units.

6.15 Blue Sky matters:

THE UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OTHER FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

6.16 The Purchaser agrees to use its reasonable best efforts to make all warranties and representations required by the securities laws of Purchaser's jurisdiction of domicile necessary to enable the Company to issue the Transaction Shares in compliance with such securities laws.

6.17 The Purchaser acknowledges that as a result of its investment hereunder it may become subject to the reporting requirements of Sections 13 and 16 of the Exchange Act. In the event that Purchaser becomes subject to the reporting requirements of Sections 13 and 16, Purchaser agrees to file a Schedule 13-D and a Form 3 no later than 10 days from the Closing and to keep current such filings in accordance with the requirements of Sections 13 and 16.

6.18 The Purchaser has consulted his own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Units and has not relied on the Company, its officers, directors or professional advisors for advice as to such consequences.

SECTION 7.PAYMENT OF THE NOTES.

7.1 REQUIRED PAYMENTS.

(a) PRINCIPAL. The principal amount of the Notes shall be due and payable in equal quarterly installments commencing on January 31, 2005 with the last installment due on September 29, 2007 (the date due of each quarterly installment is referred to herein as a "Quarterly Payment Date" and the last Quarterly Payment Date on September 29, 2007 is referred to as the "Maturity Date"). Each principal payment shall be paid in United States dollars or, to the extent legally permitted, in shares of Common Stock (the "Principal Shares"), at the Company's option; provided, however, that the Company shall make principal payments in Principal Shares only to the extent provided in Section 12 hereof. If such principal payment is paid in Principal Shares, then the number of Principal Shares to be issued on account of the principal payment shall be equal to (i) the amount of the principal payment due divided by (ii) 95% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg Financial Markets ("Bloomberg") for the 20 consecutive trading days prior to the Quarterly Payment Date (the "Calculation Price"). In the event the Company elects to pay the principal amount due in Principal Shares, (a) it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced above, (b) it shall issue the applicable Principal Shares on the Quarterly Payment Date, and (c) it shall file a registration statement covering resale of the applicable Principal Shares (the "Registration Statement") no later than two Business Days following the Quarterly Payment Date.

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(b) COMPENSATORY PAYMENT. If a principal payment is made in Principal Shares and (i) the date of effectiveness (the "Effective Date") of the applicable Registration Statement is more than 10 Business Days after the relevant Quarterly Payment Date and (ii) the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg for the three Business Day period ending on (and including) the Effective Date (the "Post-Issuance Average Price") is less than the Calculation Price, then the Company shall pay to each holder of the Notes an amount equal to (i) the difference between the Calculation Price and the Post-Issuance Average Price, multiplied by (ii) the number of Principal Shares issued on the applicable Quarterly Payment Date. Such amount shall be paid to each holder of the Notes in cash not later than 10 Business Days following the Effective Date of the applicable Registration Statement."

7.2 CHANGE IN CONTROL.

(a) NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT. The Company will, within 15 Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control or Control Event (subject in the case of any Control Event to contractual limitations on disclosure and disclosure limitations imposed by applicable securities laws), give written notice of such Change in Control or Control Event to each holder of Notes unless notice in respect of such Change in Control (or the Change in Control contemplated by such Control Event) shall have been given pursuant to this Section 7.2. If a Change in Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in of this Section 7.2 and shall be accompanied by the certificate described in this Section 7.2.

(b) OFFER TO PREPAY NOTES. The offer to prepay Notes contemplated by this Section 7.2(b) shall be an offer to prepay, in accordance with and subject to this Section 7.2, all, but not less than all, the Notes held by each holder (in this case only, "holder" in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the "Proposed Prepayment Date"). If such Proposed Prepayment Date is in connection with an offer contemplated by this Section 7.2, such date shall be not less than 30 days and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 30th day after the date of such offer).

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(c) ACCEPTANCE. A holder of Notes may accept the offer to prepay made pursuant to this Section 7.2 by causing a notice of such acceptance to be delivered to the Company at least 15 days prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 7.2 shall be deemed to constitute a rejection of such offer by such holder.

(d) PREPAYMENT. Prepayment of the Notes to be prepaid pursuant to this Section 7.2 shall be at 101% of the then-outstanding principal amount of such Notes together with interest on such Notes accrued to the date of prepayment (the "Change in Control Prepayment"). The prepayment shall be made on the Proposed Prepayment Date except as provided in Section 7.2(e). The Company may pay the Change in Control Prepayment in United States dollars or in shares of Common Stock (the "Prepayment Shares"), at the Company's option. In the event the Company pays the Change in Control Prepayment in Prepayment Shares, it shall prepare and file with the Securities and Exchange Commission, a Registration Statement on Form S-3 covering the resale of the Prepayment Shares within 5 days of the issuance of the Prepayment Shares. The Company shall pay the Change in Control Prepayment in Prepayment Shares only to the extent provided in Section 12 hereof. If the Change in Control Prepayment is paid in Prepayment Shares, then the number of Prepayment Shares to be issued on account of the prepayment shall be equal to the amount of the Change in Control Prepayment divided by 95% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg for the 20 consecutive trading days prior to the date of the Proposed Prepayment Date. In the event the Company elects to pay the Change in Control Prepayment in Prepayment Shares, it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced above.

(e) DEFERRAL PENDING CHANGE IN CONTROL. The obligation of the Company to prepay Notes pursuant to the offer required by this Section 7.2 is subject to the occurrence of the Change in Control in respect of which such offer and acceptance shall have been made. In the event that such Change in Control does not occur on the Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until, and shall be made on the date on which, such Change in Control occurs. The Company shall keep each holder of Notes reasonably and timely informed of (i) any such deferral of the date of prepayment, (ii) the date on which such Change in Control and the prepayment are expected to occur, and (iii) any determination by the Company that efforts to effect such Change in Control have ceased or been abandoned (in which case the offers and acceptances made pursuant to this Section 7.2 in respect of such Change in Control shall be deemed rescinded).

(f) CONTENT OF OFFER. Each offer to prepay the Notes pursuant to this Section 7.2 shall, specify:

(i) the Proposed Prepayment Date;

(ii) that such offer is made pursuant to this Section 7.2;

(iii) the principal amount of each Note offered to be prepaid;

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(iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date;

(v) that the conditions of this Section 7.2 have been fulfilled; and

(vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

(g) "CHANGE IN CONTROL" DEFINED. "Change in Control" means each and every issue, sale or other disposition of shares of stock of the Company which results in any person (as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act) (herein, an "Acquiring Person") becoming the "beneficial owners" (as such term is used in Rule 13d-3 under the Exchange Act as in effect on the date of the Closing), directly or indirectly, of more than 50% (by total voting power) of the issued and outstanding capital stock of the Company which is entitled to vote in the election of the members of the Company's board of directors.

(h) "CONTROL EVENT" DEFINED. "Control Event" means:

(i) the execution by the Company or any of its Subsidiaries or Affiliates of any agreement or letter of intent with respect to any proposed transaction or event or series of transactions or events which, individually or in the aggregate, may reasonably be expected to result in a Change in Control, or

(ii) the execution of any written agreement which, when fully performed by the parties thereto, would result in a Change in Control.

SECTION 8.SUBORDINATION OF NOTES AND GUARANTY.

8.1 NOTES SUBORDINATE TO SENIOR INDEBTEDNESS. The Company covenants and agrees, and each Purchaser of a Note, by its acceptance thereof, likewise covenants and agrees, for the benefit of the holders, from time to time, of Senior Indebtedness that, to the extent and in the manner hereinafter set forth in this Section, the Indebtedness represented by the Notes and the payment of the principal of (and premium, if any) and interest on each and all of the Notes are hereby expressly made subordinate and subject in right of payment as provided in this Section to the prior payment in full in cash or cash equivalents or in any other form acceptable to each holder of Senior Indebtedness, of all Senior Indebtedness; provided, however, that the Notes, the Indebtedness represented thereby and the payment of the principal of (and premium, if any) and interest on the Notes in all respects shall rank equally with, or prior to, all existing and future senior subordinated indebtedness (including, without limitation, Indebtedness) of the Company that is subordinated to Senior Indebtedness.

8.2 SUBORDINATION OF GUARANTY. The Guaranty issued by any Guarantor will be unsecured senior subordinated obligations of such Guarantor, ranking pari passu with all other existing and future senior subordinated indebtedness of such Guarantor, if any. The Indebtedness evidenced by such Subsidiary Guarantee will be subordinated on the same basis as the guaranty of any Senior Indebtedness of such Guarantor as the Notes are subordinated to Senior Indebtedness.

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SECTION 9.PAYMENT OF INTEREST.

9.1 INTEREST. The principal amount of the Notes outstanding shall bear interest at the rate of 6% per annum beginning on the date of issuance. Interest shall be payable quarterly beginning on January 31, 2005. Each interest payment shall be paid in United States dollars or, to the extent legally permitted, in shares of Common Stock (the "Interest Shares"), at the Company's option; provided, however, that the Company shall make interest payments in Interest Shares only to the extent provided in Section 12 hereof. If such interest payment is paid in Interest Shares, then the number of Interest Shares to be issued on account of the interest payment shall be equal to (i) the amount of the interest payment due divided by (ii) the Calculation Price. In the event the Company elects to pay the interest amount due in Interest Shares, (a) it shall notify the Holder of its election no later than 15 days prior to the commencement of the 20 consecutive trading day period referenced in Section 7.1 above, (b) it shall issue the applicable Interest Shares on the Quarterly Payment Date, and (c) it shall file the Registration Statement covering resale of the applicable Interest Shares no later than two Business Days following the Quarterly Payment Date.

9.2 COMPENSATORY PAYMENT. If an interest payment is made in Interest Shares and (i) the Effective Date of the applicable Registration Statement is more than 10 Business Days after the relevant Quarterly Payment Date and (ii) the Post-Issuance Average Price of the applicable Interest Shares is less than the Calculation Price, then the Company shall pay to each holder of the Notes an amount equal to (i) the difference between the Calculation Price and the Post-Issuance Average Price, multiplied by (ii) the number of Interest Shares issued on the applicable Quarterly Payment Date. Such amount shall be paid to each holder of the Notes in cash not later than 10 Business Days following the Effective Date of the applicable Registration Statement."

SECTION 10.NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

10.1 LIMITATION ON LIENS. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise), any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits except:

(a) Liens for taxes, assessments or other governmental charges which are not yet due and payable;

(b) Liens incidental to the conduct of business or the ownership of properties and assets (including landlords', carriers', warehousemen's, mechanics', materialmen's and other similar Liens) and Liens to secure the performance of bids, tenders, leases, or trade contracts, or to secure statutory obligations (including obligations under workers compensation, unemployment insurance and other social security legislation), surety or appeal bonds or other Liens incurred in the ordinary course of business and not in connection with the borrowing of money;

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(c) leases or subleases entered into by the Company or its Subsidiaries as either lessors or sublessors, easements, rights-of-way, restrictions and other similar charges or encumbrances (including zoning restrictions), in each case incidental to the ownership of property or assets or the ordinary conduct of the business of the Company or any of its Subsidiaries, provided that such Liens do not, in the aggregate, detract from the value of such property in any material way;

(d) Liens incidental to minor survey exceptions and similar Liens, provided that such Liens do not, in the aggregate, materially detract from the value of such property;

(e) Liens on property or assets of Subsidiaries securing Indebtedness owing to the Company or to another Subsidiary;

(f) Liens existing on the date of Closing which secure outstanding Indebtedness of the Company and its Subsidiaries;

(g) any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Indebtedness secured thereby shall have been assumed; and

(h) Liens pursuant to indebtedness created in connection with or incidental to a merger, acquisition, purchase of assets or other business combinations.

(i) any extensions, renewals or replacements of any Lien permitted by the preceding subparagraphs of this Section 10.1, provided that (i) no additional property shall be encumbered by such Liens, (ii) the unpaid principal amount of the Indebtedness secured thereby shall not be increased prior to or on or after the date of any extension, renewal or replacement, (iii) the weighted average life to maturity of the Indebtedness secured by such Liens shall not be reduced, and (iv) at such time and immediately after giving effect thereto, no Default or Event of Default would exist.

10.2 MERGER, CONSOLIDATION. The Company will not, and will not permit any

Subsidiary to, consolidate with or be a party to a merger with any other Person; provided, however, that:

(a) any Subsidiary may merge or consolidate with or into the Company, so long as in any merger or consolidation involving the Company, the Company shall be the surviving entity;

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(b) any Subsidiary may merge or consolidate with or into any other Person if either (x) the Subsidiary shall be the surviving entity, or (y) if the Subsidiary is not the surviving entity, such transaction is permitted by Section 10.3; and

(c) the Company may consolidate or merge with any other Person if (i) either (x) the Company shall be the surviving entity, or (y) if the surviving entity is other than the Company, such entity expressly assumes, by written agreement reasonably satisfactory in scope and form to the Required Holders, all obligations of the Company under the Notes, the Warrants and this Agreement, and (ii) at the time of such consolidation or merger and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing.

10.3 SALES OF ASSETS. The Company will not, and will not permit any Subsidiary to, sell, lease or otherwise dispose of substantially all of the assets of the Company and its Subsidiaries unless the consideration received by the Company or such Subsidiary for such sale is not less than the Fair Market Value of the assets sold (as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution).

10.4 TRANSACTIONS WITH AFFILIATES. The Company will not, and will not permit any Subsidiary to enter into, directly or indirectly, any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable

arm's-length transaction with a Person not an Affiliate.

10.5 LIMITATION ON INDEBTEDNESS. The Company will not, and will not permit any Subsidiary to, create, issue, assume, guarantee or in any manner become directly or indirectly liable for the payment of, or otherwise incur (collectively, "incur"), any Indebtedness (including any Acquired Indebtedness), other than Permitted Indebtedness.

10.6 LIMITATION ON RESTRICTED PAYMENTS.

(a) The Company will not, and will not permit any Subsidiary to, directly or indirectly:

(i) declare or pay any dividend on, or make any distribution to holders of, any shares of the Common Stock of the Company or any Subsidiary (other than the declaration or payment of dividends or distributions to the extent declared or paid to the Company or any Subsidiary or in accordance with the Company's dividend payment policy);

(ii) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any shares of Common Stock of the Company or any Affiliate of the Company (other than as authorized by the Board of Directors or Common Stock of any Subsidiary) or any options, warrants or other rights to acquire such shares of Common Stock; or

(iii) make any principal payment on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Subordinated Indebtedness of the Company or any Subsidiary.

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10.7 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Company shall not, and shall not permit any Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction with respect to any property or assets (whether now owned or hereafter acquired), unless (i) the sale or transfer of such property or assets to be leased is treated as a sale of assets and the Company complies with Section 10.3, and (ii) the Company or such Subsidiary would be permitted to incur Indebtedness under Section 10.5 in the amount of the Capitalized Lease Obligations incurred in respect of such Sale and Leaseback Transaction.

SECTION 11.EVENTS OF DEFAULT.

An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing:

(a) the Company defaults in the payment of any principal on any Note for more than 10 Business Days after the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable, whether at a date fixed for payment or by declaration or otherwise; or

(c) the Company defaults in the performance of or compliance with any Material terms contained herein and such default is not remedied within 30 days after receipt of written notice from the Required Holders of such default; or

(d) any representation or warranty made in writing by or on behalf of the Company or any Guarantor or by any officer of the Company or any Guarantor in this Agreement, any or in any writing furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any Material respect on the date as of which made; or

(e) the Company defaults in the payment of any principal or interest on any Indebtedness of the Company, in any case in an amount in excess of $1,000,000, which default continues for more than the applicable cure period, if any, and/or is not waived in writing by the other party thereto;

(f) the Company or any Guarantor (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

(g) a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of the Guarantors, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of the Guarantors, or any such petition shall be filed against the Company or any of the Guarantors and such petition shall not be dismissed within 60 days.

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SECTION 12.LIMITATION ON ISSUANCE OF COMMON STOCK.

Notwithstanding anything to the contrary contained herein or in the Offering Document, the Company shall not:

(a) (i) Issue any of the Transaction Shares, or (ii) adjust the number of Warrant Shares in accordance with the terms of the Warrants, if such issuance or adjustment would, either individually or together with other one or more other issuances or adjustments, cause the issuance of shares of Common Stock to exceed the number of shares that the Company could then issue in compliance with Section 4350(i) of the rules and regulations of Nasdaq (the "Nasdaq Rules") or any successor rule or regulation. Under Section 4350(i) of the Nasdaq Rules, a company may not issue shares, and may not issue securities convertible into shares, where the shares issued could in the aggregate equal 20% or more of the voting power of the shares outstanding, without obtaining shareholder approval. The foregoing limitation shall only apply until such time as the Company obtains the requisite approval of its shareholders for the issuance of the Transaction Shares, as required by Section 4350(i) of the Nasdaq Rules or any successor rule or regulation. The Company covenants and agrees that it shall include a proposal for the approval of the issuance of the Transaction Shares in the Company's proxy statement for its next annual meeting of shareholders. If, due to the foregoing limitation, the Company cannot adjust the Warrant Shares as provided in Section 8.3 of the Warrant, then, subject to NASD approval, the Company agrees that the exercise price thereof shall be reduced to equal the Issuance Price(s) of the shares of Common Stock that triggered the

(b) Issue any of the Transaction Shares, if such issuance would violate the securities laws of the jurisdiction in which any Purchaser receiving such shares is located.

SECTION 13.REMEDIES ON DEFAULT, ETC.

13.1 ACCELERATION.

(a) If an Event of Default with respect to the Company described in Section 11 has occurred, all the Notes then outstanding may at any time thereafter at the Holder's option, by notice or notices to the Company, be declared immediately due and payable.

Upon any Note becoming due and payable under this Section 13.1, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (i) all accrued and unpaid interest thereon shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.

13.2 OTHER REMEDIES. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 13.1, the Required Holders at the time outstanding may proceed to protect and enforce the rights of the holders by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

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13.3 RESCISSION. At any time after any Notes have been declared due and payable pursuant to Section 13.1, the holders of not less than 50% in principal amount of the Notes, taken individually, then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes and, all principal if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 18, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to any Notes. No rescission and annulment under this Section 13.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

13.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. The Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, the reasonable attorneys' fees, expenses and disbursements for the holders.

SECTION 14.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

14.1 REGISTRATION OF NOTES. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.

14.2 TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver not more than five Business Days following surrender of such Note, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of the Note originally issued hereunder. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.

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14.3 REPLACEMENT OF NOTES. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note, and

(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver not more than five Business Days following satisfaction of such conditions, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

SECTION 15.PAYMENTS ON NOTES.

The Company will pay all sums becoming due on the Notes for principal, and interest by the method and at the address specified for such purpose for such Purchaser on Schedule A hereto or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 19. Prior to any sale or other disposition of any Note held by any Purchaser, such Person will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 14.2.

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SECTION 16.REGISTRATION RIGHTS.

The Purchasers have entered into a registration rights agreement (the "Registration Rights Agreement") pursuant to which the Company has agreed to grant Purchasers certain registration rights with respect to the resale of the Transaction Shares and the Warrants.

SECTION 17.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the related Units, the purchase or transfer by any Purchaser of any such Units or portion thereof or interest therein and may be relied upon by any subsequent holder of any such Units, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder of any such Units. This Agreement, the Subsidiary Guarantee, the Notes, the Warrants, and the Registration Rights Agreement embody the entire agreement and understanding between the Purchasers and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 18.AMENDMENT AND WAIVER.

18.1 REQUIREMENTS.

(a) This Agreement and the Notes may be amended, and the observance of any term hereof including subsection (i) of Section 1 hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the holders of Notes holding more than 50% in aggregate principal amount of the Notes at the time outstanding, except that unless otherwise provided herein (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, or 6 hereof or the corresponding provision of any Supplement, or any defined term (as it is used in any such Section or such corresponding provision of any Supplement), will be effective as to any holder of Notes unless consented to by such holder of Notes in writing, and (b) no such amendment or waiver may, without the written consent of all of the holders of Notes at the time outstanding affected thereby, (i) subject to the provisions of Section 10 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest on the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 7, 10, 11.1, 14 or 16.

18.2 SOLICITATION OF HOLDERS OF NOTES.

(a) SOLICITATION. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof, or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 18 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

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(b) PAYMENT. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

18.3 BINDING EFFECT, ETC. Any amendment or waiver consented to as provided in this Section 18 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

18.4 NOTES HELD BY COMPANY, ETC. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 19.NOTICES.

All notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

(i) if to a Purchaser, to such Purchaser at the address specified for such communications in Schedule A to this Agreement, or at such other address as such Purchaser shall have specified to the Company in writing pursuant to this Section 19, or

(ii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Chief Financial Officer, with a copy to the General Counsel, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 19 will be deemed given only when actually received.

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SECTION 20.CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, "Confidential Information" means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser's behalf, or (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (w)(i) such Purchaser's directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by such Purchaser's Notes), (ii) such Purchaser's financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, or (iii) any other holder of any Note (x) to effect compliance with any law, Rule, regulation or order applicable to such Purchaser, (y) in response to any subpoena or other legal process, provided that, to the extent permitted by law, each holder will use reasonable efforts to notify the Company of any request to disclose Confidential Information requested pursuant to any subpoena or other legal process, provided further that the failure to notify the Company of any such request shall not result in any liability to such holder, or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser's Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

SECTION 21.MISCELLANEOUS.

21.1 SUCCESSORS AND ASSIGNS. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

21.2 PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.

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21.3 SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

21.4 CONSTRUCTION. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

21.5 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

21.6 GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Florida excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

21.7 LEGAL RATE OF INTEREST. Regardless of any provision contained in this Agreement or in any Guaranty, the rate of interest borne by the Notes shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged or received under any applicable law; any interest in excess of that maximum amount shall be credited on the principal of the Notes or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the Notes or, if the principal of the Notes has been paid, refunded. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the maximum amount of nonusurious interest, the Company and holders of the Notes shall, to the maximum extent permitted under applicable law, (a) characterize any nonprincipal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof, and (c) spread the total amount of interest throughout the entire contemplated term of the Notes.

21.8 SUBMISSION TO PROCESS. THE COMPANY AND THE PURCHASERS HEREBY AGREE THAT ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH RESPECT TO THIS AGREEMENT, OR THE NOTES SHALL BE BROUGHT IN THE COURTS OF THE STATE OF FLORIDA OR (TO THE EXTENT THEY HAVE SUBJECT MATTER JURISDICTION) OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF FLORIDA AS THE HOLDERS OF 51% IN PRINCIPAL AMOUNT OF THE NOTES MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, THE COMPANY ACCEPTS AND CONSENTS, FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY THE COMPANY AND THE HOLDERS OF 51% IN PRINCIPAL AMOUNT OF THE NOTES IN WRITING. THE COMPANY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS.

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21.9 WAIVERS. THE COMPANY WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH EACH HOLDER OF NOTES HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY SECURITY DOCUMENT OR THE NOTES; (B) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON-PAYMENT, INTENT TO ACCELERATE, ACCELERATION, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL DOCUMENTS, INSTRUMENTS, AND GUARANTIES AT ANY TIME HELD BY THE HOLDERS OF NOTES (OR ANY AGENT THEREFOR) ON WHICH THE COMPANY MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER THE HOLDERS OF NOTES MAY DO IN THIS REGARD; AND (C) NOTICE OF ACCEPTANCE HEREOF. THE COMPANY ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO THE HOLDERS' ENTERING INTO THIS AGREEMENT AND THAT THE HOLDERS ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS WITH THE COMPANY. THE COMPANY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A TRIAL BY THE COURT.

21.10 EXCULPATION. Each party to this Agreement acknowledges that Brown Raysman Millstein Felder & Steiner, LLP represented J. Giordano Securities, LLC in the transactions contemplated by this Agreement and has not represented either the Company or any Purchaser in connection with such transaction.

The execution hereof by the Purchasers shall constitute a contract among the Company and the Purchasers for the uses and purposes hereinabove set forth.

Very truly yours, 21ST CENTURY HOLDING COMPANY
By
	Richard A. Widdicombe, Chief Executive Officer

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Accepted as of the first date written above.

PURCHASER:
By
	Name: _______________________________________________________
	Title:   _______________________________________________________

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EXHIBIT A

FORM OF NOTE

EXHIBIT B

FORM OF WARRANT

EXHIBIT C

FORM OF SUBSIDIARY GUARANTEE

SCHEDULE A

PURCHASERS

EX-4.7

EXHIBIT 4.7

21^ST CENTURY HOLDING COMPANY

6% SENIOR SUBORDINATED NOTE DUE SEPTEMBER 29, 2007

No. __

September, __, 2004

$ ______________

FOR VALUE RECEIVED, the undersigned, 21^STCENTURY HOLDING COMPANY (herein called the “Company”), a corporation organized and existing under the laws of the State of Florida , hereby promises to pay to _____________________ or registered assigns, the principal sum of _____________________ ($________) with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6% per annum from the date hereof, payable quarterly beginning on January 31, 2005.

This Note is one of a series of Senior Subordinated Notes (herein called the “Notes”) issued pursuant to the Unit Purchase Agreement, dated as of September 29, 2004 (as from time to time amended, supplemented or modified, the “Unit Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Unit Purchase Agreement and (ii) to have made the representations set forth in Section 6 of the Unit Purchase Agreement.

This Note shall rank pari passu in terms of payment and shall be equal in priority to the 6% Senior Subordinated Note dated as of July 31, 2003 in the original principal amount of $7,500,000.

Payments of principal of and interest on this Note are to be made, at the Company’s option, inlawful money of the United States of America or, in whole or in part, by the issuance to the holder hereof of Interest Shares, as defined in and in accordance with the Unit Purchase Agreement.

This Note is a registered Note and, as provided in the Unit Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

The Company will make required prepayments of principal on the dates and in the amounts specified in the Unit Purchase Agreement. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Unit Purchase Agreement, but not otherwise.

If an Event of Default, as defined in the Unit Purchase Agreement, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price and with the effect provided in the Unit Purchase Agreement.

Pursuant to the Subsidiary Guarantee dated as of September 29, 2004 (the “Subsidiary Guarantee”), certain subsidiaries of the Company have absolutely and unconditionally guaranteed payment in full of the principal of, and interest on this Note and the performance by the Company of all of its obligations contained in the Unit Purchase Agreement all as more fully set forth in said Subsidiary Guarantee.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder hereof shall be governed by, the law of the State of Florida, excluding the choice-of-law principles of such state that would require the application of the laws of a jurisdiction other than such state.

21ST CENTURY HOLDING COMPANY
By:
	Richard A. Widdicombe,
	Chief Executive Officer

EX-4.8

EXHIBIT 4.8

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED HEREBY ARE RESTRICTED AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, ACCEPTABLE TO THE COMPANY, IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

Dated as of ________________________________, 2004      No. W _______

21ST CENTURY HOLDING COMPANY

(INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA)

REDEEMABLE WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

FOR VALUE RECEIVED, 21st Century Holding Company, a Florida corporation (the "Company"), hereby certifies that _________________________________, its successors and assigns (the "Holder"), is the owner of such number of warrants (the "Warrants") as set forth in Section 1 hereof. Each Warrant initially entitles the Holder, subject to the provisions hereof, to purchase from the Company at any time and from time to time on and after the date hereof until 5:00 p.m. Florida local time on the Expiration Date (as described in Section 3 herein), one fully paid and non-assessable share of Common Stock (as defined below) at the Exercise Price per share of Common Stock (as described in Section 2 herein) on the terms and conditions hereinafter set forth.

The term "Common Stock" means the Common Stock, par value $0.01 per share, of the Company as constituted on the date hereof (the "Base Date"). The number of shares of Common Stock to be received upon the exercise of this warrant certificate may be adjusted from time to time as hereinafter set forth. The shares of Common Stock deliverable upon such exercise, and as adjusted from time to time, are hereinafter referred to as "Warrant Shares." The term "Other Securities" means any other equity or debt securities that may be issued by the Company in addition thereto or in substitution for the Warrant Shares. The term "Company" means and includes the corporation named above as well as any immediate successor corporation resulting from a reorganization.

Upon receipt by the Company of documentation reasonably satisfactory to it of the loss, theft, destruction or mutilation of this warrant certificate, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this warrant certificate, if mutilated, the Company shall execute and deliver a new warrant certificate of like tenor and date. Any such new warrant certificate executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this warrant certificate so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.

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The Holder agrees with the Company that this warrant certificate is issued, and all the rights hereunder shall be held subject to, all of the conditions, limitations and provisions set forth herein.

1. NUMBER OF WARRANTS. The Holder is the owner of a number of warrants equal to the aggregate principal amount of the 6% Senior Subordinated Notes the Holder has purchased pursuant to the terms of the Unit Purchase Agreement (as hereinafter defined) divided by the Exercise Price.

2. EXERCISE PRICE. The Exercise Price shall equal 115% of the weighted-average volume price for the Common Stock on Nasdaq as reported by Bloomberg Financial Markets ("Bloomberg") for the 5 consecutive trading days prior to the date of the Closing as set forth in the Unit Purchase Agreement; provided, however, that in no event shall the Exercise Price be lower than $12.75 per share.

3. EXERCISE OF WARRANT. This warrant certificate may be exercised in whole or in part, at any time, or from time to time during the period commencing on the date hereof and expiring three years after the date hereof (the "Expiration Date"). The Warrants must be exercised so as to purchase one full Warrant Share.

4. NOTICE OF EXERCISE. Exercise of the Warrants shall be effected in any such case by presentation and surrender of this warrant certificate to the Company at its principal office, at the office of its stock transfer agent or any other warrant agent designated by the Company (the "Warrant Agent") if any, with the Warrant Exercise Form, a form of which is attached hereto as Exhibit A, duly executed and accompanied by payment (either in cash or by certified or official bank check, payable to the order of the Company) of the Exercise Price for the number of Warrant Shares specified in such form and instruments of transfer, if appropriate, duly executed by the Holder or its duly authorized attorney. If this warrant certificate should be exercised in part only, the Company shall, upon surrender of this warrant certificate for cancellation, execute and deliver a new warrant certificate evidencing the rights of the Holder thereof to purchase the balance of the Warrant Shares purchasable hereunder. Upon receipt by the Company of this warrant certificate, together with the Exercise Price, at its office, or by the Warrant Agent at its office, in proper form for exercise, the Holder shall be deemed to be the Holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such shares of Common Stock shall not then be actually delivered to the Holder. The Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on exercise of this warrant certificate, but in no event shall the Company be responsible or liable for income taxes or transfer taxes upon the issuance or transfer of the Warrants or the Warrant Shares.

5. REDEMPTION RIGHTS. The Warrants may be redeemed, in whole or in part, at any time or from time to time, at the Company's sole option, commencing a year from the date hereof at a redemption price of $0.01 per Warrant Shares; provided, however, that before any such call for redemption of the Warrants the weighted-average volume price for the Company's Common Stock quoted on the Nasdaq National Market ("Nasdaq") shall have for 20 consecutive trading days ending not more than 10 days prior to the notice of redemption been in excess of 150% of the Exercise Price, as such may be adjusted from time to time. Redemption of the Warrants may only occur upon 30 days' prior written notice to the Holder, such notice to include certification of the trading price of the Company's Common Stock on Nasdaq as reported by Bloomberg. If the Company exercises its right to redeem the Warrants, in whole or in part, it shall mail a notice of redemption to the Holder, first class, postage prepaid, not later than the 30th day before the date fixed for redemption, at such Holder's last address as shall appear on the records of the Company or the Company's Warrant Agent, if any. Any notice mailed in the manner provided herein shall be conclusively presumed to have been duly given whether or not the Holder receives such notice. The notice of redemption shall specify the redemption price, the date fixed for redemption, the place where the warrant certificate shall be delivered and the redemption price shall be paid, and that the right to exercise the Warrants shall terminate at 5:00 p.m. Florida local time on the business day immediately preceding the date fixed for redemption. The date fixed for the redemption of the Warrants shall be the Redemption Date. Any right to exercise a Warrant shall terminate at 5:00 p.m. Florida local time on the business day immediately preceding the Redemption Date. On and after the Redemption Date, the Holder shall have no further rights except to receive, upon surrender of a certificate evidencing Warrants duly endorsed or accompanied by a written instrument or instruments of redemption in form satisfactory to the Company, the redemption price of $0.01, without interest, per Warrant Shares.

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6. RESERVATION OF SHARES. The Company will at all times reserve for issuance and delivery upon exercise of this warrant certificate all shares of Common Stock or other shares of capital stock of the Company (and Other Securities) from time to time receivable upon exercise of this warrant certificate. All such shares (and Other Securities) shall be duly authorized and, when issued upon such exercise, shall be validly issued, fully paid and non-assessable and free of all preemptive rights.

7. FRACTIONAL SHARES. No fractional shares or script representing fractional shares shall be issued upon the exercise of the Warrants, but the Company shall pay the Holder an amount equal to the fair market value of such fractional share of Common Stock in lieu of each fraction of a share otherwise called for upon any exercise of the Warrants, as determined by the Board of Directors of the Company.

8. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This warrant certificate is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its Warrant Agent, if any, for other warrant certificates of different denominations, entitling the Holder to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this warrant certificate to the Company or at the office of its Warrant Agent, if any, with an appropriate form of assignment duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new warrant certificate in the name of the assignee named in such instrument of assignment and this warrant certificate shall promptly be canceled. This warrant certificate may be divided or combined with other warrant certificates that carry the same rights upon presentation hereof at the office of the Company or at the office of its Warrant Agent, if any, together with a written notice specifying the names and denominations in which new warrant certificates are to be issued and signed by the Holder hereof.

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9. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights as a shareholder in the Company, either at law or in equity, and the rights of the Holder are limited to those expressed in this warrant certificate.

10. ANTI-DILUTION PROVISIONS.

10.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any time subdivide its outstanding shares of Common Stock (or Other Securities at the time receivable upon the exercise of the Warrants) by recapitalization, reclassification or split-up thereof, or if the Company shall declare a stock dividend or distribute shares of Common Stock to its shareholders, the number of shares of Common Stock subject to this warrant certificate immediately prior to such subdivision shall be proportionately increased and the Exercise Price shall be proportionately decreased, and if the Company shall at any time combine the outstanding shares of Common Stock by recapitalization, reclassification or combination thereof, the number of shares of Common Stock or Other Securities subject to this warrant certificate immediately prior to such combination shall be proportionately decreased and the Exercise Price shall be proportionately increased. Any such adjustments pursuant to this Section 10.1 shall be effective

at the close of business on the effective date of such subdivision or combination or if any adjustment is the result of a stock dividend or distribution then the effective date of such adjustment based thereon shall be the record date therefor.

10.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In the case of a reorganization of the Company after the Base Date, the Holder, upon the exercise thereof as provided in Section 1, at any time after the consummation of such reorganization, shall be entitled to receive, in lieu of the securities and property receivable upon the exercise of this warrant certificate prior to such consummation, the securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this warrant certificate immediately prior thereto; in each such case, the terms of this warrant certificate shall be applicable to the securities or property receivable upon the exercise of this warrant certificate after such consummation.

10.3 ISSUANCES BELOW EXERCISE PRICE. Except in the case of the issuance of Common Stock issued (i) pursuant to any employee benefit plan of the Company now existing or to be implemented in the future, (ii) for consideration other than cash pursuant to a merger, consolidation, acquisition or similar business combination, (iii) in connection with any transaction referred to in, or contemplated by, this Section 10 hereof, (iv) pursuant to any equipment leasing or loan arrangement, or debt financing from a bank or similar financial or lending institution, (v) issued by the Company pursuant to a registration statement filed under the Securities Act, or (v) issued in connection with strategic transactions involving the Company and other entities, including (a) joint ventures, manufacturing, marketing or distribution arrangements or (b) technology transfer or development arrangements, if the Company at any time while the Warrants are outstanding, shall issue shares of Common Stock at a price per share (an "Issuance Price") less than the Exercise Price (or in the case of an issuance of Common Stock in a private placement at less than 80% of the Exercise Price), then the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Common Stock plus the number of shares of Common Stock which the price paid for such shares of Common Stock would purchase at the Exercise Price, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of shares of Common Stock so issued or issuable. Upon each adjustment of the Exercise Price pursuant to the provisions of this Section 10.2, the number of Warrant Shares issuable upon the exercise of each Warrant shall be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of the Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

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10.4 NOTICES OF RECORD DATE, ETC. In case:

(a) the Company shall take a record of the holders of its Common Stock (or Other Securities at the time receivable upon the exercise of the Warrants) for the purpose of entitling them to receive any dividend (other than a cash dividend at the same rate as the rate of the last cash dividend theretofore paid) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities, or to receive any other right; or

(b) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, or any consolidation or merger of the Company with or into another corporation; then, and in each such case, the Company shall mail or cause to be mailed to the Holder at the time outstanding a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation or merger is to take place, and the time, if any, is to be fixed, as to which the holders of record of Common Stock (or such Other Securities at the time receivable upon the exercise of the Warrants) shall be entitled to exchange their shares of Common Stock (or such Other Securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation or merger. Such notice shall be mailed at least 20 days prior to the date therein specified and the Warrants may be exercised prior to said date during the term of the Warrants.

10.5 LIMITATION ON ANTI-DILUTION ADJUSTMENTS. Notwithstanding anything to the contrary contained herein, the Company shall not adjust the number of Warrant Shares as provided in this Section 10, if such adjustment would, either individually or together with one or more other adjustments or together with one or more issuances of Transaction Shares (as defined in the Unit Purchase Agreement dated as of ___________________, 2004 (the "Unit Purchase Agreement") among the Company and the Purchasers named therein), cause the issuance of shares of Common Stock to exceed the number of shares that the Company could then issue under Section 4350(i) of the rules and regulations of Nasdaq (the "Nasdaq Rules") or any successor rule or regulation. Under Section 4350(i) of the Nasdaq Rules, a company may not issue shares, and may not issue securities convertible into shares, where the shares issued could in the aggregate equal 20% or more of the voting power of the shares outstanding, without obtaining shareholder approval. The foregoing limitation shall only apply until such time as the Company obtains the requisite approval of its shareholders for the issuance of the Transaction Shares, as required by Section 4350(i) of the Nasdaq Rules or any successor rule or regulation. The Company covenants and agrees that it shall include a proposal for the approval of the issuance of the Transaction Shares in the Company's proxy statement for its next regular annual meeting of shareholders. If, due to the foregoing limitation, the Company cannot adjust the Warrant Shares as provided in Section 10.3 above, then, subject to NASD approval, the Company agrees that the Exercise Price hereof shall be reduced to equal the Issuance Price(s) of the shares of Common Stock that triggered the adjustment pursuant to Section 10.3.

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11. TRANSFER TO COMPLY WITH THE SECURITIES ACT. The Warrants and any Warrant Shares or Other Securities may not be sold, transferred, pledged, hypothecated or otherwise disposed of unless registered under the Securities Act and any applicable state securities laws or pursuant to available exemptions from such registration, provided that the transferor delivers to the Company an opinion of counsel satisfactory to the Company confirming the availability of such exemption.

12. REGISTRATION RIGHTS. The Warrants and the Warrant Shares issuable upon exercise of the Warrants shall be subject to certain registration rights as provided in the registration rights agreement (the "Registration Rights Agreement") among the Company and the initial holders of the Warrants. If the Company fails to comply with the terms of the Registration Rights Agreement, the Exercise Price shall be reduced by 10% for each full period of 30 consecutive days of such non-compliance (and there shall be no pro rata reduction of the Exercise Price if a period of non-compliance is not a full 30-day period).

13. LEGEND. Unless the Warrant Shares or Other Securities have been registered under the Securities Act, upon exercise of any of the Warrants and the issuance of any of the Warrant Shares or Other Securities, all certificates representing such securities shall bear on the face thereof substantially the following legend:

"The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or under applicable state securities laws and may not be sold, offered for sale, assigned, transferred or otherwise disposed of, unless registered pursuant to the provisions of the Act and any applicable state securities laws or unless an opinion of counsel to the Company is obtained stating that such disposition is in compliance with an available exemption from such registration."

14. NOTICES. All notices required hereunder shall be in writing and shall be deemed given when sent by facsimile, delivered personally or within two days after mailing when mailed by certified or registered mail, return receipt requested, to the Company at its principal office, or to the Holder at the address set forth on the record books of the Company, or at such other address of which the Company or the Holder has been advised by notice hereunder.

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15. APPLICABLE LAW. The Warrants are issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of Florida, without giving effect to the choice of law rules thereof.

IN WITNESS WHEREOF, the Company has caused this warrant certificate to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

21ST CENTURY HOLDING COMPANY, a Florida corporation
By:
	Richard A. Widdicombe,
	Chief Executive Officer

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EXHIBIT A

WARRANT EXERCISE FORM

(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)

To 21st Century Holding Company:

In accordance with the warrant certificate enclosed with this Warrant Exercise Form, the undersigned hereby irrevocably elects to purchase________ shares of Common Stock, $0.01 par value per share ("Common Stock"), of 21^st Century Holding Company and, encloses herewith $__________ in cash, certified or official bank check or checks, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Warrant Exercise Form relates, together with any applicable taxes payable by the undersigned pursuant to the warrant certificate.

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

 PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER

(Please print name and address)

If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock that the undersigned is entitled to purchase in accordance with the enclosed warrant certificate, the undersigned requests that a new warrant certificate evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:

(Please print name and address)

Dated:______________________     _______________________________________________

(Print name of holder)

By: ____________________________________________

Name: __________________________________________

Title: ___________________________________________

(Signature must conform in all respects

to name of Holder as specified on the

face of the Warrant)

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EX-4.9

EXHIBIT 4.9

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 29, 2004 (the “Agreement”), is entered into by and among 21st Century Holding Company, a Florida corporation (the “Company”), J. Giordano Securities, LLC (the “Placement Agent”), and the Holders (the “Investors”) of the Company’s 6% Senior Subordinated Notes due September ____, 2007 (the “Notes”), and Warrants (the “Warrants”) as set forth on Exhibit A hereto.

WHEREAS, the Company desires to grant to the Investors (and with respect only to the Warrants and Warrant Shares, the Placement Agent) the registration rights set forth herein with respect to the shares of Common Stock issuable upon payment of principal (the “Principal Shares”) and interest (the “Interest Shares”) due on the Notes, and the prepayment of the Notes (the “Prepayment Shares”), shares of Common Stock issuable upon exercise of the Warrants (the "Warrant Shares”), and the Warrants (the Principal Shares, the Interest Shares, the Prepayment Shares, the Warrant Shares and the Warrants collectively and interchangeably, the “Securities”).

NOW, THEREFORE, the parties hereto mutually agree as follows:

1. CERTAIN DEFINITIONS

“Registrable Securities” means any of the Principal Shares, Interest Shares, Prepayment Shares, Warrant Shares or Warrants, until (i) the Registration Statement (as defined below) has been declared effective by the Securities and Exchange Commission (the “Commission”), and all Securities have been disposed of pursuant to the Registration Statement, or (ii) such time as, in the reasonable opinion of counsel to the Company, all Securities may be sold pursuant to Rule 144 (or any similar provision then in effect). In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such adjustment shall be deemed to be made in the definition of “Registrable Securities” as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Agreement.

“Holder” means any Person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 11 hereof.

“Trading Day” means any business day on which the market on which the Common Stock trades is open for business.

“Unit Purchase Agreement” means that certain unit purchase agreement dated as of September 29, 2004 by and among the Company and the Investors, pursuant to which the Company has issued the Notes and the Warrants.

2. RESTRICTIONS ON TRANSFER

Each of the Investors acknowledges and understands that prior to the registration of the Securities as provided herein, the Securities are “restricted securities” as defined in Rule 144. Each of the Investors understands that no disposition or transfer of the Securities may be made by any Investor in the absence of (i) an opinion of counsel to such Investor, in form and substance reasonably satisfactory to the Company, that such transfer may be made without registration under the Securities Act of 1933, as amended (the "Securities Act"), or (ii) such registration.

3. COMPLIANCE WITH REPORTING REQUIREMENTS

With a view to making available to the Holders the benefits of Rule 144 or any other similar rule or regulation of the Commission that may at any time permit the Holder of the Securities to sell securities of the Company to the public pursuant to Rule 144, the Company agrees to:

(a) comply with the provisions of paragraph (c)(1) of Rule 144;

(b) file with the Commission in a timely manner all reports and other documents required to be filed with the Commission pursuant to Section 13 or 15(d) under the Securities Exchange Act of 1934 (the “Exchange Act”) by companies subject to either of such sections, irrespective of whether the Company is then subject to such reporting requirements; and

(c) Upon request by any Holder or the Company’s transfer agent, the Company shall provide an opinion of counsel, which opinion shall be reasonably acceptable to the Holder and/or the Company’s transfer agent, that the such Holder has complied with the applicable conditions of Rule 144 (or any similar provision then in force).

4. REGISTRATION RIGHTS WITH RESPECT TO THE REGISTRABLE SECURITIES

(a) The parties agree that on or before the dates specified in Section 7.1(a) and 9.1(c) of the Unit Purchase Agreement, the Company will file a Registration Statement on Form S-3 to cover the resale of the Principal Shares and Interest Shares to be issued by the Company in payment of the January 31, 2005 quarterly payment due on the Notes, and that thereafter, the Company shall file in subsequent quarters such additional registration statements as provided in Sections 7.1 and 9.1 of the Unit Purchase Agreement. The Company shall file a Registration Statement on Form S-3 on or before October 31, 2004 covering the resale of the Warrants and Warrant Shares. The Company will file a Registration Statement on Form S-3 covering the resale of the Prepayment Shares, if necessary, within 10 business days after issuance of Prepayment Shares. The Registration Statements referred to in this Section 4(a) are sometimes individually referred to as a “Registration Statement” or collectively as “Registration Statements.”

The Company shall use diligent best efforts to cause each Registration Statement to become effective within 120 days from the date of filing thereof. Each such Registration Statement shall include all of the Registrable Securities then issued and not covered by a previously filed Registration Statement, to the extent permitted by the rules and interpretations of the Commission as then in effect, and shall include appropriate language regarding reliance upon Rule 416 to the extent permitted by the Commission. The Company will notify the Holders and its transfer agent of the effectiveness of a Registration Statement within five Trading Days of such event.

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(b) The Company will maintain the Registration Statement or post-effective amendment filed under this Section 4 effective under the Securities Act until the earlier of (i) the date that all of the Registrable Securities have been sold pursuant to such Registration Statement, or (ii) the date the Holders receive an opinion of counsel to the Company, which counsel shall be reasonably acceptable to the Holders, that the Registrable Securities may be sold under the provisions of Rule 144.

(c) All fees, disbursements and out-of-pocket expenses and costs incurred by the Company in connection with the preparation and filing of the Registration Statement under this Section 4 and in complying with applicable securities and blue sky laws (including, without limitation, all attorneys’ fees of the Company) shall be borne by the Company. The Holders shall bear the cost of underwriting and/or brokerage discounts, fees and commissions, if any, applicable to the Registrable Securities being registered. The Company shall qualify any of the Registrable Securities for sale in such states as the Holders reasonably designate and shall furnish indemnification in the manner provided in Section 8 hereof. However, the company shall not be required to qualify in any state which will require an escrow or other restriction relating to the Company and/or the Holders, or which will require the Company to qualify to do business in such state or require the Company to file therein any general consent to service of process. The Company at its expense will supply each of the Holders with copies of the applicable Registration Statement and the prospectus included therein and other related documents in such quantities as may be reasonably requested by any of the Holders.

(d) The Company shall not be required by this Section 4 to include the Registrable Securities in any Registration Statement which is to be filed if, in the opinion of counsel for the Company the proposed offering or other transfer as to which such registration is requested is exempt from applicable federal and state securities laws and would result in all purchasers or transferees obtaining securities which are not “restricted securities,” as defined in Rule 144.

(e) In the event that (i) the Registration Statement is not filed by the Company in a timely manner as set forth in this Section 4; or (ii) such Registration Statement is not declared effective by the Commission as set forth in this Section 4; or (iii) such Registration Statement is not maintained as effective by the Company for the period set forth in Section 4(b) above (each a “Registration Default”), then the exercise price of the Warrants shall be reduced by ten percent (10%) every 30 days thereafter, as liquidated damages and not as a penalty, provided, however, that the such reduction in the Warrant exercise price shall not relieve the Company from its obligations to register the Registrable Securities pursuant to this Section.

(f) If, at any time any Registrable Securities are not at the time covered by any effective Registration Statement, the Company shall determine to register under the Securities Act (including pursuant to a demand of any stockholder of the Company exercising registration rights) any of its shares of the Common Stock (other than in connection with a merger or other business combination transaction or pursuant to Form S-8) it shall send to each Holder written notice of such determination and, if within 20 days after receipt of such notice, such Holder shall so request in writing, the Company shall use its best efforts to include in such registration statement all or any part of the Registrable Securities that such Holders request to be registered. Notwithstanding the foregoing, if in connection with any offering involving an underwriting of the Common Stock to by issued by the Company, the managing underwriter shall impose a limitation on the number of shares of the Common Stock included in any such registration statement because, in such underwriter’s judgment, such limitation is necessary based on market conditions the Company may exclude, to the extent so advised by the underwriters, the Registrable Securities from the underwriting; provided, however, that if the underwriters do not entirely exclude the Registrable Securities from such registration statement, the Company shall be obligated to include in such registration statement, with respect to the requesting Holders, only an amount of Registrable Securities equal to the product of (i) the number of Registrable Securities that remain available for registration after the underwriter’s cutback and (ii) such Holder’s percentage of ownership of all the Registrable Securities then outstanding (on an as-converted basis). If any Holder disapproves of the terms of any underwriting referred to in this paragraph, it may elect to withdraw therefrom by written notice to the Company and the underwriter. No incidental right under this paragraph shall be construed to limit any registration required under the other provisions of this Agreement.

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5. COOPERATION WITH COMPANY

Each Holder will cooperate with the Company in all respects in connection with this Agreement, including timely supplying all information reasonably requested by the Company (which shall include all information regarding such Holder and proposed manner of sale of the Registrable Securities required to be disclosed in any Registration Statement) and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting agreement, if the offering is an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering. Nothing in this Agreement shall obligate the Holder to consent to be named as an underwriter in any Registration Statement. The obligation of the Company to register the Registrable Securities shall be absolute and unconditional as to those Registrable Securities which the Commission will permit to be registered without naming the Holder as underwriter. Any delay or delays caused by a Holder by failure to cooperate as required hereunder shall not constitute a Registration Default as to such Holder.

6. REGISTRATION PROCEDURES

If and whenever the Company is required by any of the provisions of this Agreement to effect the registration of any of the Registrable Securities under the Securities Act, the Company shall (except as otherwise provided in this Agreement), as expeditiously as possible, subject to the Holder’s assistance and cooperation as reasonably required with respect to each Registration Statement:

(a) (i) prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such Registration Stateme nt whenever any of the Holder shall desire to sell or otherwise dispose of the same (including prospectus supplements with respect to the sales of Registrable Securities from time to time in connection with a registration statement pursuant to Rule 415 promulgated under the Securities Act) and (ii) take all lawful action such that each of (A) the Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fa ct required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (B) the prospectus forming part of the Registration Statement, and any amendment or supplement thereto, does not at any time during the Registration Period include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

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(b) (i) prior to the filing with the Commission of any Registration Statement (including any amendments thereto) and the distribution or delivery of any prospectus (including any supplements thereto), provide draft copies thereof to the Holder as required by Section 4(c) and reflect in such documents all such comments as the Holder (and its counsel) reasonably may propose; (ii) furnish to the Holder such numbers of copies of a prospectus including a preliminary prospectus or any amendment or supplement to any prospectus, as applicable, in conformity with the requirements of the Securities Act, and such other documents, as the Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Holder; and (iii) provide to the Holder copies of any comments and communications from the Commission relating to the Registration Statement, if lawful to do so;

(c) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as any of the Holders shall reasonably request (subject to the limitations set forth in Section 4(c) above), and do any and all other acts and things which may be necessary or advisable to enable such Holders to consummate the public sale or other disposition in such jurisdiction of the Registrable Securities owned by such Holders;

(d) list such Registrable Securities on the markets where the Common Stock of the Company is listed as of the effective date of the Registration Statement, if the listing of such Registrable Securities is then permitted under the rules of such markets;

(e) notify the Holders at any time when a prospectus relating thereto covered by the Registration Statement is required to be delivered under the Securities Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and the Company shall prepare and file a curative amendment under Section 6(a) as quickly as reasonably possible and during such period, the Holders shall not make any sales of Registrable Securities pursuant to the Registration Statement;

(f) after becoming aware of such event, notify the Holders who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the Commission of any stop order or other suspension of the effectiveness of the Registration Statement at the earliest possible time and take all lawful action to effect the withdrawal, rescission or removal of such stop order or other suspension;

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(g) cooperate with the Holders to facilitate the timely preparation and delivery of certificates for the Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registrable Securities to be in such denominations or amounts, as the case may be, as the Holders reasonably may request and registered in such names as the Holders may request; and, within five Trading Days after a Registration Statement which includes Registrable Securities is declared effective by the Commission, deliver and cause legal counsel selected by the Company to deliver to the transfer agent for the Registrable Securities (with copies to the Holders) an appropriate instruction and, to the extent necessary, an opinion of such counsel;

(h) take all such other lawful actions reasonably necessary to expedite and facilitate the disposition by the Holders of Registrable Securities in accordance with the intended methods therefor provided in the prospectus which are customary for issuers to perform under the circumstances;

(i) in the event of an underwritten offering, promptly include or incorporate in a prospectus supplement or post-effective amendment to the Registration Statement such information as the managers reasonably agree should be included therein and to which the Company does not reasonably object and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after it is notified of the matters to be included or incorporated in such prospectus supplement or post-effective amendment; and

(j) maintain a transfer age nt and registrar for the Common Stock.

7. LISTING OF WARRANTS

The Company shall use its diligent best efforts to qualify the Warrants for listing on the Nasdaq National Market (“Nasdaq”) within 120 days from the date hereof.

8. INDEMNIFICATION

(a) To the maximum extent permitted by law, the Company agrees to indemnify and hold harmless the Holder, each person, if any, who controls a Holder within the meaning of the Securities Act, and each director, officer, shareholder, employee, agent, representative, accountant or attorney of the foregoing (each of such indemnified parties, a “Distributing Investor”) against any losses, claims, damages or liabilities, joint or several (which shall, for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys’ fees and expenses), to which the Distributing Investor may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, or any related final prospectus or amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any such case to the extent, and only to the extent, that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus or amendment or supplement thereto in reliance upon, and in conformity with, written information furnished to the Company by the Distributing Investor, its counsel, or affiliates, specifically for use in the preparation thereof or (ii) by such Distributing Investor’s failure to deliver to the purchaser a copy of the most recent prospectus (including any amendments or supplements thereto). This indemnity agreement will be in addition to any liability which the Company may otherwise have.

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(b) To the maximum extent permitted by law, each Distributing Investor agrees that it will indemnify and hold harmless the Company, and each officer and director of the Company or person, if any, who controls the Company within the meaning of the Securities Act, against any losses, claims, damages or liabilities (which shall, for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys’ fees and expenses) to which the Company or any such officer, director or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, or any related final prospectus or amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in such Registration Statement, final prospectus or amendment or supplement thereto in reliance upon, and in conformity with, written information furnished to the Company by such Distributing Investor, its counsel or affiliates, specifically for use in the preparation thereof. This indemnity agreement will be in addition to any liability which the Distributing Investor may otherwise have under this Agreement. Notwithstanding anything to the contrary herein, the Distributing Investor shall be liable under this Section 8(b) for only that amount as does not exceed the net proceeds to such Distributing Investor as a result of the sale of Registrable Securities pursuant to the Registration Statement.

(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action against such indemnified party, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party except to the extent the failure of the indemnified party to provide such written notification actually prejudices the ability of the indemnifying party to defend such action. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, assume the defense thereof, subject to the provisions herein stated and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless the indemnifying party shall not pursue the action to its final conclusion. The indemnified parties shall have the right to employ one or more separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the indemnifying party if the indemnifying party has assumed the defense of the action with counsel reasonably satisfactory to the indemnified party unless (i) the employment of such counsel has been specifically authorized in writing by the indemnifying party, or (ii) the named parties to any such action (including any interpleaded parties) include both the indemnified party and the indemnifying party and the indemnified party shall have been advised by its counsel that there may be one or more legal defenses available to the indemnifying party different from or in conflict with any legal defenses which may be available to the indemnified party or any other indemnified party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party, it being understood, however, that the indemnifying party shall, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable only for the reasonable fees and expenses of one separate firm of attorneys for the indemnified party, which firm shall be designated in writing by the indemnified party). No settlement of any action against an indemnified party shall be made without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld so long as such settlement includes a full release of claims against the indemnified party.

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All fees and expenses of the indemnified party (including reasonable costs of defense and investigation in a manner not inconsistent with this Section and all reasonable attorneys’ fees and expenses) shall be paid to the indemnified party, as incurred, within 10 Trading Days of written notice thereof to the indemnifying party; provided, that the indemnifying party may require such indemnified party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such indemnified party is not entitled to indemnification hereunder.

9. CONTRIBUTION

In order to provide for just and equitable contribution under the Securities Act in any case in which (i) the indemnified party makes a claim for indemnification pursuant to Section 8 hereof but is judicially determined (by the entry of a final judgme nt or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that the express provisions of Section 8 hereof provide for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party, then the Company and the applicable Distributing Investor shall contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (which shall, for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys’ fees and expenses), in either such case (after contribution from others) on the basis of relative fault as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the applicable Distributing Investor on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Distributing Investor agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this Section 9 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

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Notwithstanding any other provision of this Section 9, in no event shall (i) any of the Distributing Investors be required to undertake liability to any person under this Section 9 for any amounts in excess of the dollar amount of the proceeds received by such Distributing Investor from the sale of such Distributing Investor’s Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) pursuant to any Registration Statement under which such Registrable Securities are registered under the Securities Act and (ii) any underwriter be required to undertake liability to any person hereunder for any amounts in excess of the aggregate discount, commission or other compensation payable to such underwriter with respect to the Registrable Securities underwritten by it and distributed pursuant to such Registration Statement.

10. NOTICES

Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be effective upon personal delivery, via facsimile (upon receipt of confirmation of error- free transmission and mailing a copy of such confirmation, postage prepaid by certified mail, return receipt requested) or two business days following deposit of such notice with an internationally recognized courier service, with postage prepaid and addressed to each of the other parties thereunto entitled at the following addresses, or at such other addresses as a party may designate by five days advance written notice to each of the other parties hereto.

Company:	21st Century Holding Company 3661 West Oakland Park Boulevard Lauderdale Lakes, FL 33311 Attention: General Counsel Telephone: (954) 581-9993 Facsimile: (954) 316-9201
with a copy to:	Broad and Cassel 201 South Biscayne Boulevard Suite 3000 Miami, Florida 33131 Attention: A. Jeffry Robinson, P.A. Telephone: (305) 373-9414 Facsimile: (305) 995-6402

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Placement Agent:	J. Giordano Securities, LLC 1234 Summer Street 1st Floor Stamford, CT 06905 Attention: President Telephone: (203) 975-1330 Facsimile: (203) 541-8917
Investor:	At the address and facsimile set forth on the signature page hereof

11. ASSIGNMENT

The registration rights granted to any Holder under this Agreement ma y be transferred or assigned provided the transferee is bound by the terms of this Agreement and the Company is given written notice of such transfer or assignment.

12. ADDITIONAL COVENANTS OF THE COMPANY

For so long as it shall be required to maintain the effectiveness of the Registration Statement, it shall file all reports and information required to be filed by it with the Commission in a timely manner and take all such other action so as to maintain such eligibility for the use of the applicable form.

13. CONFLICTING AGREEMENTS

The Company shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holder in this Agreement or otherwise prevents the Company from complying with all of its obligations hereunder.

14. GOVERNING LAW; JURISDICTION

This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida, without regard to its principles of conflict of laws. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any party in the federal courts of Florida or the state courts of the State of Florida, and each of the parties consents to the jurisdiction of such courts and hereby waives, to the maximum extent permitted by law, any objection, including any objections based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions.

15. MISCELLANEOUS

(a) Entire Agreement. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof. This Agreement, together with the Notes, the Warrants, the Subsidiary Guarantee and the Unit Purchase Agreement (collectively, the “Transaction Documents”) including any certificate, schedule, exhibit or other document delivered pursuant to their terms, constitutes the entire agreement among the parties hereto with respect to the subject matters hereof and thereof, and supersedes all prior agreements and understandings, whether written or oral, among the parties with respect to such subject matters.

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(b) Amendments. This Agreement may not be amended except by an instrument in writing signed by the party to be charged with enforcement.

(c) Waiver. No waiver of any provision of this Agreement shall be deemed a waiver of any other provisions or shall a waiver of the performance of a provision in one or more instances be deemed a waiver of future performance thereof.

(d) Construction. This Agreement and each of the Transaction Documents have been entered into freely by each of the parties, following consultation with their respective counsel, and shall be interpreted fairly in accordance with its respective terms, without any construction in favor of or against either party.

(e) Binding Effect of Agreement. This Agreement shall inure to the benefit of, and be binding upon the successors and assigns of each of the parties hereto, including any transferees of the Securities.

(f) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or unenforceability of this Agreement in any other jurisdiction.

(g) Attorneys’ Fees. If any action should arise between the parties hereto to enforce or interpret the provisions of this Agreement, the prevailing party in such action shall be reimbursed for all reasonable expenses incurred in connection with such action, including reasonable attorneys’ fees.

(h) Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of this Agreement.

(i) Counterparts. This Agreement may be signed in one or more counterparts, each of which shall be deemed an original and all of which, when taken together, will be deemed to constitute one and the same agreement.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed, as of the date first written above.

21st CENTURY HOLDING COMPANY

By: ______________________

Name: ____________________

Title: _____________________

J. GIORDANO SECURITIES, LLC

By: ______________________

Name: ____________________

Title: _____________________

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INVESTOR:

_________________________

Name:

_________________________

Address

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EXHIBIT A

Name of Investor Number of Warrants

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EX-5.1

   v041765_ex5-1 -- Converted by SECPublisher 2.1.1.8, created by BCL Technologies Inc., for SEC Filing