8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 22, 2005

HOLLYWOOD MEDIA CORP.

(Exact Name of Registrant as Specified in its Charter)

Florida	1-14332	65-0385686
(State or Other Jurisdiction	(Commission File Number)	(I.R.S. Employer
of Incorporation)		Identification No.)

2255 Glades Road, Suite 221A, Boca Raton, Florida		33431
(Address of Principal Executive Office)	(Zip Code)

Registrant’s telephone number, including area code (561) 998-8000

Not Applicable

(Former Name or Former Address, If Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Ex 10.1 Agreement for Sale & Purchase of UK Theatres Online Limited

Ex 10.2 Agreement for Sale & Purchase Cinemasonline Limited

Ex 10.3 Note Purchase Agreement

Ex 99.1 Press Release

SECTION 1 — REGISTRANT’S BUSINESS AND OPERATIONS

Item 1.01 Entry into a Material Definitive Agreement.

Stock Purchase Agreements for Acquisition of CinemasOnline

     On November 22, 2005, the registrant, Hollywood Media Corp. (“Hollywood Media”), through its newly formed, indirect wholly-owned subsidiary Cinemasource UK Limited (the “Buyer”), entered into definitive stock purchase agreements with the stockholders of each of Cinemasonline Limited, UK Theatres Online Limited, WWW.CO.UK Limited and Spring Leisure Limited (collectively, “CinemasOnline”) for the Buyer’s acquisition of all of the outstanding capital stock of CinemasOnline. These acquisitions were completed and closed on November 23, 2005. CinemasOnline is a group of leading advertising sales and data services companies based in the U.K. focused primarily on selling internet advertising on cinema and live theatre websites in the U.K. and Ireland.

     The aggregate purchase price paid by Hollywood Media for CinemasOnline was $3,450,000 in cash, of which $107,314 was paid into an escrow account as potential additional consideration that may become due to the sellers upon certain advertising contracts generating revenue. The purchase price was funded from the proceeds of Hollywood Media’s sale of the notes described below.

     The foregoing description of the stock purchase agreements does not purport to be complete and is qualified in its entirety by reference to the following documents filed as exhibits to this Form 8-K report: (i) Agreement for the Sale and Purchase of UK Theatres Online Limited and other companies, dated November 22, 2005, by and among Cinemasource UK Limited, Jeffrey Spector and the other shareholders party thereto, filed as Exhibit 10.1 hereto; and (ii) Agreement for the Sale and Purchase of Cinemasonline Limited, dated November 22, 2005, by and between Mitchell Clifford Cartwright and Cinemasource UK Limited, filed as Exhibit 10.2 hereto.

Note Purchase Agreement and Issuance of $7,000,000 Principal Amount of Hollywood Media’s Senior Unsecured Notes due November 23, 2006

     On November 23, 2005, Hollywood Media completed the closing of its Note Purchase Agreement dated November 22, 2005 with a group of institutional lenders (collectively, the “Purchasers”) providing for (i) Hollywood Media’s issuance and sale to the Purchasers of $7,000,000 in aggregate principal amount of Hollywood Media’s senior unsecured, non-convertible notes due November 23, 2006 (the “Notes”), with interest at the rate of eight percent per annum payable quarterly in arrears, and (ii) the issuance by Hollywood Media to the Purchasers of five-year warrants to purchase an aggregate of 700,000 shares of Hollywood Media’s common stock at an exercise price of $4.29 per share, which is equal to the volume-weighted average of the Nasdaq market price of Hollywood Media’s common stock for the five trading days preceding the date of the agreement. The warrant exercise price could increase by specified amounts under certain conditions in the event of a “Change of Control” of Hollywood Media (as defined). The aggregate purchase price paid by the Purchasers to Hollywood Media for the Notes and Warrants was $7,000,000 in cash.

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     Under the terms of the Notes, Hollywood Media has the right in its sole discretion to extend the maturity of the Notes up to six months in exchange for the delivery to the Purchasers of additional five-year warrants to purchase an aggregate of 100,000 shares of Hollywood Media’s common stock at an exercise price per share with respect to such 100,000 shares equal to the lesser of (i) the average volume weighted average price of Hollywood Media’s common stock (“VWAP”) for the twenty trading days immediately preceding November 23, 2006 or (ii) $4.29.

     Under the terms of the Notes, Hollywood Media has the option in its sole discretion to redeem the principal of the Notes in cash or (if no uncured event of default exists) shares of its common stock. The Purchasers do not have the right to convert the Notes into shares of common stock or require payment of the Notes in shares of common stock. If Hollywood Media elects to pay principal in shares of its common stock, the shares would be valued at 95% of the VWAP for the twenty trading days immediately preceding the business day prior to payment. Prepayment of the principal can be made, in whole or in part, at any time or from time to time. If prepayment or redemption is made prior to the one-year anniversary of the issuance of the Notes, then Hollywood Media shall pay an additional amount in cash equal to the interest that such prepaid or redeemed principal amount would have earned from the date of such prepayment or redemption to the one-year anniversary date, provided that this additional payment is not required in the event of a prepayment resulting from a Change of Control of Hollywood Media.

     Pursuant to a registration rights agreement with the Purchasers, Hollywood Media has agreed to file a registration statement under the Securities Act of 1933 within forty-five days after the closing covering resales from time to time of shares that may be issued pursuant to exercise of the warrants. In addition, upon the issuance of any extension warrants, Hollywood Media has agreed to file or amend a registration statement within forty-five days of the issuance of such extension warrants to cover resales of shares that may be issued upon exercise of the extension warrants.

     Hollywood Media received net cash proceeds of approximately $6.6 million after deducting the estimated expenses in connection with the offering of Notes, including the placement agent’s fee, legal fees and various other expenses. In addition to funding the acquisition of CinemasOnline, the net proceeds of the sale of the Notes are intended to be used for additional potential strategic acquisitions and other general corporate purposes.

     The foregoing description of the note purchase agreement and related transactions does not purport to be complete and is qualified in its entirety by reference to the Note Purchase Agreement, dated as of November 22, 2005, by and among Hollywood Media and each of the Purchasers, including the forms of Notes and warrants issued to the Purchasers and the form of registration rights agreement, filed as Exhibit 10.3 to this Form 8-K report.

     The consummation of the Note Purchase Agreement and the issuance of Notes and warrants thereunder were conducted as a private placement made to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933.

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SECTION 2 — FINANCIAL INFORMATION

Item 2.01 Completion of Acquisition or Disposition of Assets.

     The information regarding Hollywood Media’s acquisition of CinemasOnline under the following caption set forth in Item 1.01 above is incorporated by reference: “Stock Purchase Agreements for Acquisition of CinemasOnline.”

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

     The information regarding Hollywood Media’s issuance of Notes and warrants under the following caption set forth in Item 1.01 above is incorporated by reference: “Note Purchase Agreement and Issuance of $7,000,000 Principal Amount of Hollywood Media’s Senior Unsecured Notes due November 23, 2006.”

SECTION 3 — SECURITIES AND TRADING MARKETS

Item 3.02 Unregistered Sales of Equity Securities.

     The information regarding Hollywood Media’s issuance of Notes and warrants under the following caption set forth in Item 1.01 above is incorporated by reference: “Note Purchase Agreement and Issuance of $7,000,000 Principal Amount of Hollywood Media’s Senior Unsecured Notes due November 23, 2006.”

     The securities described above were issued without registration under the Securities Act of 1933 by reason of the exemption from registration afforded by the provisions of Section 4 (2) thereof and/or Regulation D thereunder, based upon investment representations to Hollywood Media relating thereto.

SECTION 8 — OTHER EVENTS

Item 8.01 Other Events.

     On November 28, 2005, Hollywood Media issued a press release announcing the acquisition of CinemasOnline and the sale of the Notes, which is furnished herewith as Exhibit 99.1 hereto.

     The information in this Item 8.01 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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SECTION 9 — FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

10.1	Agreement for the Sale and Purchase of UK Theatres Online Limited and other companies, dated November 22, 2005, by and among Cinemasource UK Limited, Jeffrey Spector and the other shareholders party thereto.
10.2	Agreement for the Sale and Purchase of Cinemasonline Limited, dated November 22, 2005, by and between Mitchell Clifford Cartwright and Cinemasource UK Limited, filed as Exhibit 10.2 hereto.
10.3	Note Purchase Agreement, dated as of November 22, 2005, by and among Hollywood Media and each of the Purchasers, including the forms of Notes and warrants issued to the Purchasers and the form of registration rights agreement.
99.1	Press Release of Hollywood Media Corp. dated November 28, 2005 (“Hollywood Media Announces Acquisition of U.K. Based CinemasOnline to Expand its Data and Internet Ad Sales Divisions into Europe”).

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HOLLYWOOD MEDIA CORP.
By:	/s/ Mitchell Rubenstein
	Mitchell Rubenstein
	Chief Executive Officer

Date: November 28, 2005

EX-10.1

EXHIBIT 10.1

DATED          22          November          2005

(1) JEFFREY SPECTOR AND OTHERS

— and —

(2) CINEMASOURCE UK LIMITED

AGREEMENT
for the sale and purchase of
UK THEATRES ONLINE LIMITED and other Companies

100 Fetter Lane
London EC4A 1BN

Tel: 020-7242 1011      • Fax: 020-7894 6550

Beachcroft Wansbroughs

THIS AGREEMENT is made the 22nd day of November 2005

BETWEEN:

(1)	THE PERSONS whose names and addresses are set out in Schedule 1 (the “Sellers”); and
(2)	CINEMASOURCE UK LIMITED, a company incorporated in the United Kingdom whose registered office is at 100 Fetter Lane, London EC4A 1BN, United Kingdom (the “Buyer”).

IT IS AGREED as follows:-

1. INTERPRETATION

1.1 In this agreement:-

“A Shares”	means the ordinary A Shares of £0.01 each in the capital of the Company;
“B Shares”	means the ordinary B Shares of £0.01 each in the capital of the Company;
“C Shares”	means the ordinary C Shares of £0.01 each in the capital of the Company;
“Accounts”	means the statutory accounts of the Company and, with respect to the Tax Covenant only, Cinemasonline Limited for the year ended on the Balance Sheet Date;
“Act”	means the Companies Act 1985;
“Balance Sheet Date”	means 31 March 2005;
“Business Day”	means a day (other than a Saturday) on which clearing banks in the City of London are open for the transaction of normal sterling banking business;
“Buyer’s Group”	means the Buyer, any subsidiary of the Buyer, any holding company of the Buyer and any subsidiary of any holding company of the Buyer, from time to time;
“Buyer’s Solicitors”	means Beachcroft Wansbroughs of 100 Fetter Lane, London EC4A 1BN;
the “Cartwright Parties”	means Mitchell Clifford Cartwright and any member of his immediate family and any trust of which he or they or any of them are beneficiaries or potential beneficiaries and any company controlled by any of them;
“Cinemasonline Purchase Agreement”	means the agreement for the sale and purchase of Cinemasonline Limited entered into as of today’s date between the Seller named therein and the Buyer;
“Claim”	means a claim by the Buyer for breach of a Warranty under this agreement or the Cinemasonline Purchase Agreement or the Tax covenant by the Sellers or the Warrantors;

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“Company”	means UK Theatres Online Limited (Company Number 3850910) details of which are set out in Schedule 2;
“Completion”	means completion of the sale and purchase of the Shares in accordance with this agreement;
“Completion Date”	means the day after today’s date;
“Confidential Information”	means all information not publicly known and which is known to the Sellers and which is used in and relates to the Company’s business, its customers or financial or other affairs, including, without limitation, information relating to:-
	(a)	the marketing of products or services including, without limitation, customer names and lists and other details of customers, financial information, sales targets, sales statistics, market share statistics, prices, market research reports and surveys, and advertising or other promotional materials; or
	(b)	future projects, business development or planning, commercial relationships and negotiations
	existing in whatever form;
“Consideration”	means the consideration payable on Completion for the purchase of the Shares as set out in Clause 3;
“Disclosed”	means fairly disclosed by the Sellers or the Warrantors, as applicable, to the Buyer in the Disclosure Letter and Second Disclosure Letter (if any) and Disclosure Bundle in sufficient detail to enable the Buyer to make a reasonable assessment of the matter disclosed;
“Disclosure Bundle”	means the two identical bundles of documents the outside covers of each of which have been signed for identification by on or behalf of the Sellers and the Buyer;
“Disclosure Letter”	means the letter in the agreed form (together with the Disclosure Bundle) from the Sellers to the Buyer executed and delivered to the Buyer immediately prior to the execution of this agreement;
“Encumbrance”	means any encumbrance or security interest of any kind whatsoever including without limitation a mortgage, charge, pledge, lien, hypothecation, restriction, right to acquire, right of pre-emption, option, conversion right, third party right or interest, right of set-off or counterclaim, equities, trust arrangement or any other type of preferential agreement (such as a retention of title arrangement) having similar effect or any other rights exercisable by or claims by third parties;

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“Escrow Account”	A joint account to be held by the Sellers’ Solicitors and the Buyer’s Solicitors into which the Escrow Sum will be paid by the Buyer’s Solicitors to be held and dealt with in accordance with the terms of the Escrow Letter;
“Escrow Letter”	means a letter addressed to the Buyer and Jeffrey Spector by the Sellers’ Solicitors and the Buyer’s Solicitors in relation to the Escrow Account:
“Escrow Sum”	means the sum of $107,314;
“ICTA”	means the Income and Corporation Taxes Act 1988;
“Indebtedness”	means any (in each case calculated in accordance with UK generally accepted accounting principles):
	(a)	indebtedness of the Company for borrowed money, purchase money indebtedness (other than the Overpayments and accounts payable in the ordinary course including those listed as such in the Indebtedness schedule contained at section 5.2 of the Disclosure Letter) or capitalised lease obligations;
	(b)	guarantees given by the Company;
	(c)	unpaid taxes that are due or payable by the Company on or prior to Completion or accrued tax liabilities of the Company (excluding VAT on uncollected debtors and save as has arisen in the ordinary course of business including without limitation corporation tax); and
	(d)	interest expense accrued but unpaid on any of such obligations;
“Independent Accountant”	means an independent chartered accountant or an independent firm of chartered accountants to be agreed upon by the Sellers and the Buyer or (in default of agreement within 10 Business Days) to be selected at the instance of any of them by the President for the time being of the Institute of Chartered Accountants in England and Wales;
“Intellectual Property”	means any and all:-
	(a)	patents, trade marks, service marks, domain names, registered designs, utility models, applications for and the right to make applications for any of such rights, inventions, Know-How, Confidential Information, unregistered trade marks and service marks, trade and business names, copyrights, (including rights in computer software and in websites) unregistered design rights and other rights in designs and rights in databases;
	(b)	rights under licences, consents, orders, statutes or otherwise in respect of any rights of

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		the nature specified in paragraph (a) and above; and
	(c)	rights of the same or similar effect or nature as or to those in paragraphs (b) and (c) above
	in each case in any jurisdiction;
“Intellectual Property Rights”	means all Intellectual Property used, or required to be used, by the Company in, or in connection with its business and/or legally or beneficially owned by the Company;
“Know-How”	means all information not publicly known which is owned by the Company and/or used or required to be used by the Company in or in connection with its business existing in any form (including, but not limited to that comprised in or derived from data, specifications, formulae, experience, drawings, manuals, component, lists, instructions, designs and circuit diagrams, brochures, catalogues and other descriptions) and relating to:
	(a)	The provision of any services;
	(b)	the installation, maintenance or use of equipment or processes; or
	(c)	the rectification, repair, service or maintenance of produces or other equipment;
“Licence”	means a licence, permit, certificate, consent, approval, filing of notification, reports and assessments, registrations or authorisation required by law for the operation of the Company’s business, its ownership, use, possession or occupation of any asset or the performance of this agreement;
“Management Accounts”	means the management accounts of the Company for the 3 month period ended on 30 June 2005 attached to the Disclosure Letter;
“Management Accounts Date”	means 30 June 2005;
“Overpayments”	means payments made to the Company, Spring Leisure Limited and WWW.CO.UK Limited by parties to advertising contracts which have not been yet been invoiced and which are referred to in the schedule of overpayments contained at 6.2 in the Disclosure letter;
“Property”	means 34-36 Orchard Road, St Anne’s On Sea, Lancashire registered at HM Land Registry under number LA430396;
“Second Disclosure Letter”	means the second disclosure letter(s) (if any) written by the Warrantors and delivered to the Buyer in accordance with clause 5.6;

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“Sellers’ Solicitors”	means Wacks Caller Solicitors, Steam Packet House, 76 Cross Street, Manchester M2 4JU;
“Shares”	means:-
	(A)      in the case of UK Theatres Online Limited the fully paid issued ordinary:
	(a)      3,600,000 A shares of £0.01 each;
	(b)      1,300,000 B shares of £0.01 each; and
	(c)      100,000 C shares of £0.01 each;
	in the capital of the Company comprising the whole of the issued share capital of the Company at the date hereof;
	(B)      in the case of WWW.CO.UK Limited the fully paid issued ordinary:-
	(a)      7,574 A Ordinary Shares of £0.01 each; and
	(b)      2,426 B Ordinary Shares of £0.01 each
	comprising the whole of the issued share capital of WWW.CO.UK Limited at the date hereof;
	in the case of capital of Spring Leisure Limited the 700 fully paid issued A Ordinary Shares of £1 each and 300 fully paid issued B Ordinary Shares of £1 each comprising the whole of the issued share capital of Spring Leisure Limited at the date hereof;
“Showtimes”	means Showtimes.com, Inc., a Delaware corporation;
“Taxation”	has the meaning given in Schedule 4 (Tax Covenant);
“Taxation Authority”	has the meaning given in Schedule 4 (Tax Covenant);
“Tax Covenant”	means the covenant set out in Schedule 4;
“Taxation Statute”	means any statute, enactment, law or regulation providing for the imposition of Taxation;
“Tax Warranties”	means the Warranties contained in paragraph 18 of Schedule 3;
“TCGA”	means the Taxation of Chargeable Gains Act 1992;
“Term Sheet”	means that certain Term Sheet, dated as of July 18, 2005, by and between Showtimes, the Company, Cinemasonline Limited and the shareholders of the Company and Cinemasonline Limited party thereto, as amended by that certain Amendment to Term Sheet, dated as of October 11, 2005;
“VAT”	means, in the United Kingdom, value added tax and

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	elsewhere, any equivalent tax;
“VATA”	means the Value Added Tax Act 1994;
“Warranties”	means the warranties contained in Clause 5 and Schedule 3 of this agreement and Clause 5 and Schedule 1 of the Cinemasonline Purchase Agreement and references to a “Warranty” shall be construed accordingly; and
“Warrantors”	means the following Sellers: Geneva Cartwright, Mitchell Cartwright, Janette Erskine, Malcolm Johnson Elaine Spector and Jeffrey Spector

1.2 In this agreement, reference to:-

1.2.1	a clause or Schedule is a reference to a clause of or schedule to this agreement;
1.2.2	a document “in the agreed form” is a reference to a document in the form approved by or on behalf of the Buyer and the Sellers;
1.2.3	a statutory provision includes a reference to that provision as modified, replaced, amended and/or re-enacted from time to time and any prior or subsequent subordinate legislation made under it and, where the context so requires, references to an Article of the EC Treaty shall include a reference to the equivalent Article in the EC Treaty prior to its re-numbering by the Treaty of Amsterdam;
1.2.4	“costs” includes a reference to costs, charges and expenses of every description;
1.2.5	a “person” includes a reference to an individual, partnership, unincorporated association or body corporate wherever incorporated or situate and includes a reference to that person’s legal personal representatives and successors;
1.2.6	a “subsidiary”, “holding company” and “body corporate” has the respective meaning set out in sections 736 and 740 of the Act;
1.2.7	a “company” has the meaning set out in section 735 of the Act;
1.2.8	a “subsidiary undertaking” or a “parent undertaking” has the meaning set out in sections 258 and 259 of the Act;
1.2.9	a “group undertaking” has the meaning set out in section 259 of the Act and “Group Company” shall mean any company in the Group of the Company; and
1.2.10	a “connected person” is a reference to a person connected with another within the meaning of section 839 of ICTA.
1.2.11	the “Company” is where the context permits, a reference to the Company and the following companies:

WWW.CO.UK Limited      (04285425); and

Spring Leisure Limited      (05102050).

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1.3	The Schedules form part of this agreement and shall be interpreted and construed as though they were set out in this agreement.
1.4	The headings to the clauses, Schedules and paragraphs of the Schedules are for convenience only and shall not affect the interpretation or construction of this agreement.
1.5	In construing this agreement, the ejusdem generis principle shall not apply and general words are not to be given a restrictive meaning because they are followed by particular examples intended to be embraced by the general words.
1.6	Unless otherwise stated to the contrary in any particular case, any statement which refers to the knowledge or knowledge and belief of the Warrantors or is expressed to be “so far as the Warrantors are aware” or any similar expression shall be deemed to include an additional statement that it has been made after due and careful enquiry of employees and officers of the Company.
1.7	Any agreement, warranty, indemnity, covenant or undertaking on the part of two or more persons shall, except where the contrary is stated, be deemed to be given or made by such persons severally.

2. SALE AND PURCHASE OF THE SHARES

2.1	The Sellers agree to sell or procure to be sold with full title guarantee and the Buyer agrees to buy, the whole of the legal and beneficial interest in the Shares with all rights attached or accruing to them at the date of Completion.
2.2	The Sellers covenant to the Buyer that the Buyer will on Completion be entitled to exercise all rights attached or accruing to the Shares.
2.3	The completion of this agreement is conditional upon the simultaneous completion of the purchase of Cinemasonline Limited in accordance with the Cinemasonline Purchase Agreement.

3. CONSIDERATION

3.1	The price for the Shares is the Consideration plus the additional consideration if any payable in accordance with the provisions of clause 3.3.
3.2	The Consideration is the sum of US$1,608,286, which will be apportioned as follows:- UK Theatres Online Limited US$955,071; WWW.CO.UK Limited US$400,503; and Spring Leisure Limited US$252,712, and which will be paid in cash which shall be paid to the Sellers in the amounts set against their respective names in Schedule 1 and which shall be satisfied at Completion by

3.2.1	a credit of the $70,000 paid by Showtimes under the Term Sheet,
3.2.2	the electronic transfer of US$1,538,286 to the Buyer’s Solicitors’ U.S. Dollar Client Account at Coutts Bank, 440 The Strand, London WC2R 0QS, Account No 15537140, IBAN GB07COUT18009115537140, SWIFT Code COUT GB 22

and the Buyer shall not be concerned as to the apportionment of any of the cash amounts detailed in this clause 3.2 as between the Sellers.

3.3 Additional consideration will be payable for the share capital of the Company in the sum of up to £62,552 (or such other sterling amount which is equivalent to the Escrow

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Sum upon the date of the transfer of such sum into the Escrow Account) which will be calculated as set out in Schedule 6.

3.4	The additional consideration referred to in clause 3.3 shall when calculated be paid to the Sellers within seven days of it being calculated by means of the Buyer’s Solicitors and the Sellers’ Solicitors releasing from the Escrow Account the additional consideration which is payable as determined under the provisions of Schedule 6 which sum shall be divided amongst the Sellers as directed by Jeffrey Spector and which payment shall be a sufficient discharge of the obligation of the Buyer to pay such additional consideration to the Sellers.
3.5	To the extent that there is any residue left in the Escrow Account after the payment of all sums due under clause 3.3 it shall be returned to the Buyer (with all interest earned on such residue) in accordance with the terms of the Escrow Letter.
3.6	The Buyer will and will procure insofar as it can that the Company will co-operate in good faith with the Sellers in order to seek to maximise the additional consideration payable under this clause and the Buyer acknowledges that such efforts may result in an increase in the profits of the Company without any corresponding receipt of cash since the relevant monies have already been received by the Company and the Buyer acknowledge that there may in consequence be an adverse effect on cash flow due to the consequential Taxation arising from the conversion of Overpayments into sales.

4. COMPLETION

4.1	Completion shall, subject to the provisions of Clause 5.5, take place at the offices of the Buyer’s Solicitors in London on the Completion Date when all the matters referred to in Clauses 4.2 to 4.4 shall be effected.
4.2	At Completion the Sellers shall deliver to the Buyer:-

4.2.1	duly executed transfers of the Shares to the Buyer in the agreed form together with the share certificates for all of the Shares (or an express indemnity in a form satisfactory to the Buyer in the case of any missing certificate) and the share certificates in respect of the Company’s shareholdings in each one of WWW.CO.UK Limited and Spring Leisure Limited;
4.2.2	executed power(s) of attorney in favour of the Buyer in the agreed form, and such duly executed waivers or consents as may be required, to give a good title to the Shares to the Buyer and to enable the Buyer be registered as the holder of the Shares and, pending registration, to exercise all voting and other rights attaching to the Shares;
4.2.3	service agreements in the agreed form duly signed by each of the Jeffrey Spector and Janette Erskine;
4.2.4	all the financial and accounting books and records of the Company;
4.2.5	the statutory books of the Company (duly written up to date as at immediately prior to Completion) and Certificates of Incorporation and Certificate of Incorporation on Change of Name;
4.2.6	board resolutions of the Company in the agreed form relating to the matters specified in Clause 4.3;
4.2.7	a surrender and release in the agreed form of the existing lease of the Property executed by the Company and the relevant landlord;

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4.2.8	a lease of the Property in the agreed form duly executed by the Company and the relevant landlord;
4.2.9	written resignations by Elaine Spector, Paul Erskine and Beverly Esposito of their respective employment with the Company in a form satisfactory to Buyer; and
4.2.10	a copy of the Escrow Letter executed by Jeffrey Spector and the Sellers’ Solicitors.

4.3 At Completion the Sellers shall procure that a board meeting of the Company is held at which the directors:-

4.3.1	approve the registration of the transfers in respect of the Shares referred to in Clause 4.2.1 (subject only to due stamping);
4.3.2	revoke all existing authorities to bankers regarding the operation of the Company’s bank accounts and give relevant authorities in favour of the persons nominated by the Buyer to operate such accounts;
4.3.3	change the Company’s accounting reference date to 31 December; and
4.3.4	approve and execute on behalf of the Company a service agreement with each of Jeffrey Spector and Janette Erskine in the agreed form.

4.4 At Completion the Buyer shall:-

4.4.1	pay or procure the payment of or the transfer of into the Escrow Account (as appropriate) the Consideration and the Escrow Sum as set out in Clauses 3.2 and 3.3 by procuring that the Buyer’s Solicitors shall provide an undertaking in the agreed form to the Sellers’ Solicitors and shall effect the electronic transfers referred to therein;
4.4.2	deliver to the Sellers a copy of a resolution of the Buyer’s board of directors (or an authorised committee of that board) authorising the execution and completion of this agreement and the incidental matters referred to herein; and
4.4.3	a copy of the Escrow Letter executed by the Buyer and the Buyer’s Solicitors.

5. WARRANTIES AND TAX COVENANT

5.1

Each Seller warrants to the Buyer that in relation to himself and the Shares specified against his name in Schedule 1 only, each Warranty contained in paragraphs 1.1, 1.3, 2.1 and 2.2 is true and accurate in all material respects as at the date of this agreement. The Warrantors, in addition to the Warranties they have given as Sellers, warrant to the Buyer in the terms of the Warranties such Warranties being given by Janette Erskine and Malcolm Johnson severally and by Elaine Spector, Jeffrey Spector, Mitchell Cartwright and Geneva Cartwright jointly and severally.

5.2

The Warranties are subject only to:-

5.2.1	any matter which is Disclosed in the Disclosure Letter and Disclosure Bundle and the Second Disclosure Letter;
5.2.2	any matter or thing done or omitted to be done prior to Completion at the written request, or with the written approval of, the Buyer; and

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5.2.3 the provisions of Clause 6.

5.3	Each of the parties acknowledges that the Buyer is entering into this agreement in reliance upon the Warranties. Save as provided in Clause 5.2, no information of which the Buyer or any member of the Buyer’s Group has constructive or imputed knowledge shall prejudice any Claim being made by the Buyer under any of the Warranties nor shall it affect the amount recoverable under any such Claim and neither the rights and remedies of the Buyer nor any of the Sellers’ liability in respect of the Warranties shall be affected by any investigation made by or on behalf of the Buyer into the Company.
5.4	Each of the Warranties shall be interpreted as a separate and independent Warranty so that the Buyer shall have a separate Claim and right of action in respect of every breach of each Warranty.
5.5	The provisions of Schedule 4 shall apply with respect to the matters contained or referred to therein.
5.6	In the period from today’s date until the time that Completion actually takes place the Warrantors shall be entitled to deliver to the Buyer one or more further disclosure letters in which the Warrantors may disclose to the Buyer any further information which shall not have been contained in the Disclosure Letter or the Disclosure Bundle but which is in any way necessary, in the Warrantors’ opinion to qualify the statements contained in the Warranties or the Tax Covenant.
5.7	The parties agree that if a Second Disclosure Letter is delivered to the Buyer then no Claim shall lie against the Warrantors whether before or after Completion in relation to the matter(s) Disclosed in the Second Disclosure Letter but the Buyer may rescind this agreement at any time prior to (but not after) Completion in which case no party shall have any action against any of the others arising from the negotiation of and entry into this agreement and each party shall be responsible for and bear its own costs in relation thereto.
5.8	Jeffrey Spector, Elaine Spector and Janette Erskine jointly and severally undertake to indemnify and keep indemnified the Company from all losses, costs, claims and expenses of whatsoever nature (including for the avoidance of doubt all legal and professional fees) resulting from termination of the employment of Elaine Spector, Paul Erskine and Beverly Esposito.

6. LIMITATION ON SELLERS’ LIABILITY

6.1 Subject to Clause 5.2, the Sellers’ liability under the Warranties shall be limited as follows:-

6.1.1	no Claim shall be made by the Buyer unless the aggregate amount of all Claims under this agreement and the Cinemasonline Purchase Agreement (including all previous Claims whether or not satisfied) shall equal or exceed £50,000 in which case the whole amount shall be capable of being claimed and not merely the excess, provided that Claims for breaches of Warranties under Clause 5.2 or Clause 5.4 of Schedule 3 shall not be subject to this limitation;
6.1.2	the liability of Janette Erskine and Malcolm Johnson in respect of all the Warranties (and in respect also of Claims under the Tax Covenant) is limited to the cash paid to each by way of Consideration;
6.1.3	the liability of Mitchell Cartwright and Geneva Cartwright in respect of all the Warranties (and in respect also of Claims under the Tax Covenant)

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under this agreement and the Cinemasonline Purchase Agreement is limited to the cash paid to each by way of Consideration under this agreement and any consideration received by either of them pursuant to the Cinemasonline Purchase Agreement less any amount advanced (whether by way of loan or gift) out of such proceeds to any of the Cartwright Parties if and only if the recipient of such proceeds agrees in writing to assume the liabilities of Mitchell Cartwright or Geneva Cartwright, as applicable, in respect of the Warranties and any Claims under the Tax Covenant, limited to the amount of such proceeds received;

6.1.4	no Claim for breach of the Warranties other than the Tax Warranties shall be made unless the Claim has been notified in writing to the Warrantors in reasonable detail before the second anniversary of Completion;
6.1.5	no Claim for breach of the Tax Warranties shall be made unless the Claim has been notified in writing to the Warrantors in reasonable detail before the seventh anniversary of Completion;
6.1.6	subject to clause 6.1.7, the aggregate liability of all the Warrantors in respect of all the Warranties and the Tax Covenant under this agreement and the Cinemasonline Purchase Agreement is limited to the Consideration received by them under this agreement and any consideration received by any of them pursuant to the Cinemasonline Purchase Agreement;
6.1.7	the aggregate liability of Jeffrey Spector and Elaine Spector in respect of (a) the Warranties shall be limited to the total Consideration paid by Buyer under this agreement and the total consideration paid by Buyer under the Cinemasonline Purchase Agreement and (b) the Tax Covenant shall be without limitation; and
6.1.8	no Claim shall lie in relation to up to £125,104 of Overpayments.

6.2 The Sellers shall not be liable under the Warranties to the extent that a Claim arises or is increased:-

6.2.1

wholly or partly from an act or omission compelled by law;

6.2.2

wholly or partly as a result of the passing or coming into force of or any change in any enactment, law, regulation, directive, requirement or any practice of any government, government department or agency or regulatory body (including extra-statutory concessions of the Inland Revenue) after the date hereof whether or not having retrospective effect or any change in the way in which the business of the Company, Spring Leisure Limited or WWW.CO.UK Limited is altered after Completion.

6.3	None of the limitations contained in Clause 5.2 or Clause 6 apply in relation to any Claim arising from any fraud, intent or wilful misstatement on the part of the Sellers in relation to the entry into this agreement.
6.4	The Buyer shall not be entitled to recover damages in respect of any Claim for breach of any of the Warranties or the Tax Covenant or otherwise obtain reimbursement or restitution more than once in respect of any one breach of Warranty or the Tax Covenant or indemnity Claim arising out of or in connection with the same circumstances.
6.5	The Warrantors shall not be liable under the Warranties in respect of any Claim:

(a) to the extent that recovery is made by the Buyer or any member of the Buyer’s Group under any policy of insurance or to the extent that recovery

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would have been capable of being made under any policy of insurance had the Buyer or any member of the Buyer’s Group effected policies of insurance on similar terms to those effected by or for the benefit of the Company which are in force as at the date of this agreement; or

(b) to the extent that the Buyer or any member of the Buyer’s Group or those deriving title from the Buyer have already obtained reimbursement or restitution in respect of such Claim from any third party.

6.6

If the Warrantors pay to the Buyer an amount in respect of any Claim under the Warranties and the Buyer or any member of the Buyer’s Group subsequently recovers from a third party (including, without limitation, any insurer or any tax authority) a sum which is referable to that Claim, the Buyer shall repay to the Warrantors so much of the amount originally paid by the Warrantors as does not exceed the sum recovered from the third party after deduction of all reasonable costs and expenses of recovery.

6.7

The Warrantors shall not be liable under the Warranties or the Tax Covenant in respect of any Claim:

(a)	which is based upon a liability which, at the time such Claim is notified to the Warrantors is contingent only or otherwise not capable of being quantified unless and until such liability ceases to be contingent or becomes capable of being quantified. Subject to such Claim being notified to the Warrantors within the time limits specified in clause 6.1, the time limit for issuing and serving proceedings for the purposes of clause 6.1 shall begin on the date on which such liability ceases to be contingent or becomes capable of being quantified;
(b)	to the extent that the matter giving rise to the Claim falls to be done in implementing the terms of this agreement or any document or agreement to be entered into pursuant to this agreement;
(c)	to the extent that results from any change in the way in which the business of the Company, Spring Leisure Limited or WWW.CO.UK Limited is altered after Completion save in relation to which it deals with Overpayments or as required under law in the United Kingdom (provided that even if the change made concerning Overpayments is deemed necessary under the law, the Sellers shall have no liability in respect of the first £125,104 of Overpayments)

6.8

The Buyer shall (and shall procure that the Company shall) take all reasonable steps to mitigate any loss, liability or damage which is likely to give rise to a Claim under the Warranties, and the Tax Covenant including (without limitation) steps to prevent any contingent liability becoming an actual liability. Nothing in this agreement shall relieve the Buyer of any common law or other duty to mitigate any loss, liability or damage suffered or incurred by it.

6.9

If any Claim is made against the Buyer or any member of the Buyer’s Group by any third party which is likely to in turn lead to a Claim by the Buyer against the Warrantors under the Warranties then the Buyer shall:

(a)	give notice of such Claim to the Warrantors as soon as reasonably practicable after the Buyer becomes aware of it;
(b)	keep the Warrantors promptly and fully informed as to the progress of any such Claim;
(c)	subject to the Buyer and the relevant member of the Buyer’s Group being entitled to employ its own legal advisers and being indemnified and secured to

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its reasonable satisfaction by the Warrantors against all liabilities, costs, expenses, damages and losses (including, without limitation, the reasonable and proper costs of its legal advisers) suffered or incurred in connection with any such Claim, take, and shall procure that each member of the Buyer’s Group shall take, all reasonable steps so as to recover or minimise or resolve such liability or dispute and, upon request by the Warrantors, permit the Warrantors to take sole conduct of such actions as the Warrantors deem appropriate in connection with such Claim, in the name of the Buyer or the relevant member of the Buyer’s Group;

(d)	comply with all reasonable requests of the Warrantors in relation to such Claim including (without limitation) giving the Warrantors access to premises, personnel, documents and records for the purpose of investigating the matters giving rise to such Claim; and
(e)	not (and shall procure that no member of the Buyer’s Group shall) accept or pay or compromise any such liability or Claim without the prior written consent of the Warrantors (such consent not to be unreasonably withheld or delayed);

PROVIDED THAT nothing in this clause 6.9 shall require the Buyer or any member of the Buyer’s Group to take or refrain from taking any action which it reasonably considers would materially and adversely affect the goodwill or bona fide commercial interests of the Buyer’s Group.

6.10	If any amount is paid by the Warrantors under the Warranties or the Tax Covenant, the amount of such payment shall be deemed to constitute a reduction in the consideration payable under this agreement.
6.11	No Claim shall be admissible and the Warrantors shall not be liable in respect thereof to the extent that:

6.11.1	the liability arises as a result of or is otherwise attributable wholly to any voluntary act, transaction or omission of the Company or any member of the Buyer’s Group or their respective directors, employees or agents on or after Completion; or
6.11.2	the liability comprises penalties, charges or interest arising directly or indirectly from any act, transaction or omission of any member of the Buyer’s Group or the Company after Completion; or
6.11.3	such Claim is wholly attributable to any voluntary act, omission, transaction or arrangement carried out at the request of or with the consent of any member of the Buyer’s Group or their respective directors, employees or agents before Completion.

7. PROTECTION OF GOODWILL

7.1 Each of the Sellers undertakes to the Buyer that unless he or she has obtained the prior written consent of the Buyer or another member of the Buyer’s Group or their respective directors, employees or agents or save as would be inconsistent with their obligations under the service agreements:-

7.1.1 (in the case only of the Sellers whose names are not marked with an asterisk in Schedule 1 only) for a period of 24 months from Completion he will not knowingly, for the purpose of any business supplying products or services similar to or capable of being used in substitution for any product

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or service supplied by the Company, canvass, solicit or endeavour to entice away from the Company any person who has been a customer of the Company or has purchased or agreed or offered to purchase goods from the Company or has employed its services or who has been canvassed by the Company (otherwise than by general advertising) with a view to becoming a customer of the Company; and

7.1.2

for a period of 24 months from Completion he will not solicit or endeavour to entice away from the Company, employ or offer employment to any employee of the Company who is at the date of this agreement and/or at Completion an Employee nor do any act or thing likely to have the effect of causing any Employee to terminate his employment with the Company whether or not such employee would thereby breach his contract of employment; and

7.1.3

he will not at any time in connection with any business carried on by him or otherwise howsoever use directly or indirectly or authorise any person to use directly or indirectly any of the Intellectual Property rights including the names or words “WWW.CO.UK”, “Spring”, “Cinemasonline”, “UK Theatres Online” or any other trading name used by the Buyers’ Group or any names or words similar to or likely to be confused with them or use any distinctive mark, style or logo used by the Company or any mark, style or logo similar to or likely to be confused with them in any manner which is likely to or may result in confusion between or other association with the business, goods, services or other activities of the Company including by using the name “UK Theatres Online “ as part of a corporate name, trade name or otherwise.

7.2 Nothing in Clause 7.1 shall prevent the Sellers from:-

7.2.1	owning not more than three per cent of any class of the issued share capital of a company which is dealt in on a recognised investment exchange (as defined in the Financial Services and Markets Act 2000); or
7.2.2	being engaged, concerned or interested in any business in which he is engaged, concerned or interested at the date hereof.

7.3	The Sellers have taken independent legal advice and acknowledge that they consider the undertakings contained in Clause 7.1 reasonable for the proper protection of the business of the Company and further acknowledge that damages would not be an adequate remedy for breach of such undertakings.
7.4	Each of the undertakings contained in Clause 7.1 is separate and severable and shall be construed on that basis. In the event that any of such undertakings is found to be void but would be valid if some part of it were deleted or if the period or extent of it were reduced such undertaking shall apply with such modification as may be necessary to make it valid and effective.

8. CONFIDENTIAL INFORMATION AND KNOW-HOW

8.1 Each of the Sellers undertakes before and after Completion but subject to Clause 8.2 that he shall:-

8.1.1 not make use of or disclose to any person Confidential Information, Know-How or Intellectual Property belonging to and/or used by the Company up to Completion; and

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8.1.2 take all reasonable steps to prevent the use or disclosure of any such Confidential Information, Know-How or Intellectual Property belonging to and/or used by the Company.

8.2 Clause 8.1 does not apply to:-

8.2.1	the use or disclosure of Confidential Information required to be used or disclosed by law provided that the relevant Seller gives the Buyer prior notice of such disclosure or in the course of the employment of any Seller by the Company or the Buyer or another member of the Buyer’s Group or as required by the terms of any other contract or agreement to which the Buyer or another member of the Buyer’s Group or the Company is a party;
8.2.2	the disclosure of Confidential Information, Know-How or Intellectual Property to a director, officer or employee of the Buyer or another member of the Buyer’s Group or of the Company whose function requires that he has possession of the Confidential Information Know-How or Intellectual Property Rights;
8.2.3	disclosure of Confidential Information to an adviser for the purpose of advising the Sellers but only on terms that Clause 8.1 applies to use or disclosure by the adviser; or
8.2.4	Confidential Information which becomes publicly known except as a result of any one or more of the Sellers’ breach of Clause 8.1.

9. ANNOUNCEMENTS

9.1	Subject to Clause 9.2 the Sellers shall not make or send before or after Completion any announcement, communication or circular relating to the subject matter of this agreement unless such party has first obtained the other party’s written consent to the form and text of such announcement, such consent not to be unreasonably withheld.
9.2	Subject to Clause 9.3, Clause 9.1 does not apply to an announcement, communication or circular:-

9.2.1	required by law or by a Recognised Investment Exchange (as defined by the Financial Services and Markets Act 2000) or by any governmental authority, in which event the party required to make or send such announcement, communication or circular shall, where practicable, first consult with the other party as to the content of such announcement;
9.2.2	made or sent by the Buyer or another member of the Buyer’s Group after Completion to the Company’s customers, clients or suppliers advising them of the change of control of the Company; or
9.2.3	sent by the Buyer or another member of the Buyer’s Group to the Sellers’ Solicitors and/or its officers, directors, employees, equity holders, shareholders and professional advisers (“the Authorised Disclosees”) if the Sellers’ Solicitors and any Authorised Disclosee agrees to be bound by confidentiality provisions substantially the same as those contained in Clause 9.

9.3 In the event either party is required by law, applicable regulation or judicial process to disclose any information relating to this agreement, such party agrees to:-

9.3.1 promptly notify the other party of the existence, terms and circumstances surrounding such requirement;

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9.3.2

consult with the other party on the advisability of taking legally available steps to resist or narrow such request; and

9.3.3

if disclosure of such information is required, exercise its reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such information. If such order or assurance is not obtained, the party required to disclose such information shall be permitted to disclose only the portion of such information that it is advised by opinion of counsel is required to be disclosed.

10. NOTICES

10.1

Any notice or other communication pursuant to, or in connection with, this agreement shall be in writing and delivered personally, or sent by first class pre-paid recorded delivery post (air mail if overseas), to the Buyer at the address specified on page 1 above (or such address as may be notified in writing by the Buyer from time to time) with a copy to Hollywood Media Corp., 2255 Glades Road, Suite 221 – A, Boca Raton, Fl 33431 USA (Attention: Legal Department), and to each Seller at the address of the Sellers’ Solicitors (Ref KP).

10.2

Subject to Clause 10.3, any notice or other communication shall be deemed to have been served:-

10.2.1	if delivered personally, when left at the address referred to in Clause 10.1;
10.2.2	if sent by pre-paid recorded delivery post (other than air mail), two days after posting it; or
10.2.3	if sent by air mail, six days after posting it.

10.3 If a notice is given or deemed given at a time or on a date which is not a Business Day, it shall be deemed to have been given on the next Business Day.

11. ENTIRE AGREEMENT

11.1 This agreement and the Disclosure Letter and the Disclosure Bundle and (if appropriate the Second Disclosure Letter) sets out the entire agreement and understanding between the parties in respect of the sale and purchase of the Shares. This agreement supersedes and extinguishes the heads of agreement which shall cease to have any further force or effect. It is agreed that:-

11.1.1	the Buyer has not entered into this agreement in reliance upon any representation, warranty or undertaking of any other party (including, for the avoidance of doubt, any correspondence between any of the Sellers and any of their representatives on the one hand and the Buyer, any other member of the Buyer’s Group and any of their representatives on the other hand) which is not expressly set out or referred to in this agreement or the Disclosure Letter;
11.1.2	no party shall have any remedy in respect of any misrepresentation or any untrue statement made by any other party which is not contained in this agreement or the Disclosure Letter nor for any breach of warranty which is not contained in this agreement or the Disclosure Letter;
11.1.3	this clause shall not exclude any liability for, or remedy in respect of fraud or fraudulent misrepresentation.

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11.2 No variation of this agreement shall be effective unless made in writing and signed by or on behalf of the Buyer and Jeffrey Spector who may make binding and effective the variations on behalf of the other Sellers.

12. FURTHER ASSURANCE

12.1	Each of the Sellers undertakes to provide the Buyer before or after Completion with all documents as he or she has in his or her possession or under his or her control relating to the business and affairs of the Company and for this purpose each of the Sellers shall give the Buyer and any persons authorised by the Buyer reasonable access to all such documents, and the Buyer may, at its cost, copy any such documents.
12.2	Jeffrey Spector shall, as soon as reasonably practicable and in any event within seven days of Completion, cause Clifford House (2002) Limited to (a) apply to the Land Registry for removal of the Lease dated 24th November 2003 under title number LAN5327 and noted in the Schedule of Notices of Leases of title number LA430396, and (b) promptly deal with the requirements of the Land Registry in connection with such application including without limitation the submission of SDLT returns the payment of any SDLT (where due) and the payment of all Land Registry fees and shall procure the closure of title number LAN5327.
12.3	Each of the Sellers shall:-

12.3.1

at his own cost at any time before and after Completion execute or procure the execution of such documents in a form satisfactory to the Buyer as the Buyer considers reasonably necessary for the purpose of vesting the Shares in the Buyer; and

12.3.2

for a period not exceeding three years from the date of this agreement give to the Buyer such assistance as the Buyer may reasonably require in connection with any dispute or threatened dispute directly or indirectly relating to the Intellectual Property, Know-How and/or the Confidential Information, subject to the Buyer first indemnifying each Seller against any costs hereby incurred by him in such reasonable manner as the Sellers shall reasonably request.

13. INVALIDITY

If any provision of this agreement is held to be unenforceable or illegal, in whole or in part, such provision or part shall to that extent be deemed not to form part of this agreement but the enforceability of the remainder of this agreement shall remain unaffected.

14. EFFECT OF COMPLETION

This agreement and in particular the Warranties in so far as any of its provisions remain to be, or are capable of being, performed or observed, shall remain in full force and effect after Completion.

15. WAIVER

15.1

The failure by the Buyer to exercise or delay in exercising any right or remedy under this agreement shall not constitute a waiver of the right or remedy or a waiver of any other rights or remedies the Buyer may otherwise have and no single or partial exercise of any right or remedy under this agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.

15.2

The Buyer’s rights and remedies contained in this agreement are in addition to, and not exclusive of, any other rights or remedies available at law.

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16. COSTS

The Buyer and the Sellers shall pay their own costs in relation to the negotiation, preparation, execution and implementation of this agreement and of each document referred to in this agreement.

17. ASSIGNMENT

17.1

The Sellers agree that the benefits of this agreement and any documents referred to in it or executed at Completion (including any causes of action arising in connection with any of them) are given to the Buyer for itself and its successors in title and the Buyer and its successors in title may not without the consent of any one or more of the Sellers, such consent not to be unreasonably withheld or delayed, assign the benefits of this agreement.

17.2

Notwithstanding the provisions of Clause 17.1 above, the Buyer may assign the benefits of this agreement to any member of the Buyer’s Group. PROVIDED THAT upon the assignee ceasing to be a member of the Buyer’s Group such benefits shall cease to apply unless they shall have previously been re-assigned to another member of the Buyer’s Group.

18. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

A person who is not a party to this agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this agreement provided that this does not affect any right or remedy of the third party which exists or is available apart from that Act. No party may declare itself as a trustee of the rights under this agreement for the benefit of any third party save as expressly provided in this agreement.

19. LIMITATION OF TIME

In the event of any Claim being made against any one or more of the Warrantors under the Tax Covenant or in the event of any Claim for breach of the provisions of clause 2, none of the Warrantors shall plead against such Claim the provisions of the Limitation Act 1980 or any other statute or rule of law relating to limitation of time in which an action can be brought or Claim made, provided that this Clause 19 is without prejudice to any express provision of this agreement regarding time limits for notifying or making Claims.

20. COUNTERPARTS

This agreement may be executed in any number of counterparts and by each of the parties on separate counterparts (by fax or otherwise) each of which when executed and delivered shall be deemed to be an original, but all the counterparts together shall constitute one and the same agreement.

21. LAW AND JURISDICTION

21.1

This agreement shall be governed by the jurisdiction of the courts of England and Wales and construed and governed in accordance with the laws of England

21.2

Any and all disputes, controversies or claims arising out of, relating to or in connection with this agreement, including any question regarding its existence, validity, scope or termination, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator (“the Arbitrator”) appointed in accordance with such Rules. The arbitration shall be conducted in the English language in Geneva, Switzerland. Judgment on any award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. Each party shall bear its own costs and expense of such arbitration. The parties shall maintain strict confidentiality with respect to all aspects of the arbitration and shall not disclose the fact, conduct or

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outcome of the arbitration to any non parties or non participants without the prior written consent of each party to the arbitration, except to the extent required by law, applicable regulation or judicial process or to the extent necessary to recognise, confirm or enforce the final award in the arbitration. In the event either party is required by law, applicable regulation or judicial process to disclose any information relating to the arbitration, such party agrees to comply with the provisions set forth in Clause 9.3 above as if applicable to the arbitration.

SIGNED by or on behalf of the parties on the date which first appears in this agreement.

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SCHEDULE 1

Sellers’ Names, Addresses, Shareholdings and Consideration

(1)	(2)	(3)
Names and Addresses of Sellers	Number of Shares	Consideration (US$)
UK THEATRES
Jeffrey Spector	250,000 A Shares		47,754
255 Clifton Drive South
St Annes
RY8 1HW
Mitchell Clifford Michael Cartwright	1,300,000 A Shares and		253,094
16 Clipper Island	25,000 C Shares
Sandyport
Nassau
Bahamas
Janette Erskine	790,625 A Shares		151,021
294 Newton Drive
Blackpool
Lancashire
FY3 8PZ
Malcolm Johnson *	290,625 A Shares and		103,267
121 Blackpool Road	250,000 B Shares
Lytham St Annes
FY8 4AA
David Brown *	50,000 C Shares		9,551
9 Dawson Road
Lytham St Annes
FY8 3AJ
Sam Drury *	25,000 B Shares and		6,367
45 Kilnhouse Lane	8,333 C Shares
Lytham St Annes
FY8 3AB
Wayne Harwood *	8,334 C Shares		1,592
1 Ashley Crescent
Sidmouth
Devon
EX10 9UE

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Terry Hennigan *	8,333 C Shares	1,592
168 Staining Road
Lancashire
FY3 0BB
Phillip Holmes *	50,000 B Shares	9,551
18 Welburn Walk
Thorton Cleveleys
FY5 5QA
Lonecroft plc *	200,000 B Shares	38,203
26-27 Ribblesdale Place
Preston
PR1 3NA
Gillian Power	50,000 B Shares	9,551
37 Cheddar Avenue
Blackpool
FY4 2LQ
Steven Richardson *	25,000 B Shares	4,775
8 Hawthorne Road
Thornton Cleveleys
FY5 5DH
Jeffrey Tennant	50,000 B Shares	9,551
6 Ulverston Crescent
Lytham St Annes
FY8 3RZ
Bradley White *	500,000 B Shares	95,507
6 Fieldway
Lytham St Annes
FY8 3BL
Elaine Patrice Spector	150,000 B Shares	28,652
255 Clifton Drive South
Lytham St Annes
FY8 1HW
Geneva Cartwright	968,750 A Shares	185,045
16 Clipper Island
Sandport
Nassau
Bahamas

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WWW.CO.UK LIMITED
Janette Erskine	1000 A Shares	59,661
294 Newton Drive
Blackpool
Lancashire
FY3 8PZ
David Brown *	300 B Shares	17,898
9 Dawson Road
Lytham St Annes
FY8 3AJ
Sam Drury *	50 B Shares	2,983
45 Kilnhouse Lane
Lytham St Annes
FY8 3AB
Phillip Holmes *	100 B Shares	5,966
18 Welburn Walk
Thornton Cleveleys
FY5 5QA
Clifford House *	501 B Shares	29,890
34-36 Orchard Road
Lytham St Annes
FY8 1PF
Lonecroft plc *	100 B Shares	5,966
26-27 Ribblesdale Place
Preston
PR1 3NA
Mitchell Clifford Michael Cartwright	1643 A Shares and
16 Clipper Island	50 B Shares	101,006
Sandyport
Nassau
Bahamas
Gillian Power	100 B Shares	5,966
37 Cheddar Avenue
Blackpool
FY4 2LQ
Jeffrey Spector	1644 A Shares	98,082
255 Clifton Drive South
Lytham St Annes
FY8 1HW

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Jeffrey Tennant	125 B Shares	7,458
6 Ulverston Crescent
Lytham St Annes
FY8 3RZ
Bradley White *	1000 B Shares	59,661
6 Fieldway
Lytham St Annes
FY8 3BL
Elaine Patrice Spector	100 B Shares	5,966
255 Clifton Drive South
St Annes-on-Sea
Lancashire
FY8 1HW
UK Theatres Online Limited	3287 A Shares	NIL
34-36 Orchard Road
Lytham St Annes
Lancashire
FY8 1PF
SPRING LEISURE LIMITED
Janette Erskine	174 A Shares	45,804
294 Newton Drive
Blackpool
Lancashire
FY3 8PZ
David Brown *	100 B Shares	26,324
9 Dawson Road
Lytham St Annes
FY8 3AJ
Malcolm Johnson *	10 B Shares	2,632
121 Blackpool Road
Lytham St Annes
FY8 4AA
Mitchell Clifford Michael Cartwright	476 A Shares	125,303
16 Clipper Island
Sandyport
Nassau
Bahamas
Jeffrey Spector	25 A Shares	6,581
255 Clifton Drive South
Lytham St Annes
FY8 1HW

Beachcroft Wansbroughs

Elaine Patrice Spector	25 A Shares		6,581
255 Clifton Drive South
Lytham St Annes
FY8 1HW
Julian Latham *	100 B Shares		26,324
89 Forest Drive
Lytham St Annes
Lancashire
FY8 4PS
David Bryan Williams *	25 B Shares		6,581
29 Holgate
Blackpool
Lancashire
FY4 5BG
Jeanette Naylor )	25 B Shares		6,581
UK Theatres On Line Limited	40 B Shares	NIL
34-36 Orchard Road
Lytham St Annes
Lancashire
FY48 1PF

Beachcroft Wansbroughs

SCHEDULE 2

Part 1

UK Theatres Online Limited

1.	Registered number:	03850910
2.	Previous company names:	None
3.	Registered office:	34-36 Orchard Road, Lytham St. Annes, Lancashire, FY8 1PF
4.	Date and place of incorporation:	30/09/1999 – United Kingdom
5.	Authorised share capital:	£50,000 divided into 3,600,000 Ordinary A Shares of £0.01 each, 1,300,000 Ordinary B Shares of £0.01 each, 100,000 Ordinary C Shares of £0.01 each
6.	Issued share capital:	3,600,000 Ordinary A Shares of £0.01 each, 1,300,000 Ordinary B Shares of £0.01 each and 100,000 Ordinary C Shares of £0.01 each
7.	Shareholders:
	Shareholders	No of shares
	Janette Erskine	790,625 A Shares
	David Brown	50,000 C Shares
	Sam Drury	8,333 C Shares
	Sam Drury	25,000 B Shares
	Wayne Harwood	8334 C Shares
	Terry Hennigan	8333 C Shares
	Phillip Holmes	50,000 B Shares
	Malcolm Johnson	250,000 B Shares
	Malcolm Johnson	290,625 A Shares
	Lonecroft plc	200,000 B Shares
	Mitchell Clifford Michael Cartwright	1,300,000 A Shares
	Mitchell Clifford Michael Cartwright	25,000 C Shares
	Gillian Power	50,000 B Shares
	Steven Richardson	25,000 B Shares

Beachcroft Wansbroughs

	Jeffrey Spector	250,000 A Shares
	Jeffrey Tennant	50,000 B Shares
	Bradley White	500,000 B Shares
	Elaine Patrice Spector	150,000 B Shares
	Geneva Cartwright	968,750 A Shares
8.	Loan capital:	Nil
	Directors:
9.	Name	Address
	Janette Louise Erskine	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	Jeffrey Spector	255 Clifton Drive South, St Annes On Sea, Lancashire, FY8 1HW
10.	Secretary
	Janette Louise Erskine	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
11.	Accounting reference date:	31 March
12.	Charges:	None

Beachcroft Wansbroughs

Part 2

WWW.CO.UK Limited

1.	Registered number:	04285425
2.	Previous company names:	Tropictravel Limited
3.	Registered office:	34-36 Orchard Road, Lytham St. Annes, Lancashire, FY8 1PF
4.	Date and place of incorporation:	11/09/2001 – United Kingdom
5.	Authorised share capital:	£1,000 divided into 90,000 Ordinary Shares of £0.01 each, 7,574 A Ordinary Shares of £0.01 each, 2,426 B Ordinary Shares of £0.01 each
6.	Issued share capital:	7,574 A Ordinary Shares of £0.01 each, 2,426 B Ordinary Shares of £0.01 each
7.	Shareholders:
	Shareholders	No of shares
	Janette Erskine	1000 A Shares
	David Brown	300 B Shares
	Sam Drury	50 B Shares
	Phillip Holmes	100 B Shares
	Clifford House	501 B Shares
	Lonecroft plc	100 B Shares
	Mitchell Clifford Michael Cartwright	1643 A Shares
	Mitchell Clifford Michael Cartwright	50 B Shares
		100 B Shares
	Gillian Power	1644 A Shares
	Jeffrey Spector	125 B Shares
	Jeffrey Tennant	1000 B Shares
	Bradley White	100 B Shares
	Elaine Patrice Spector	3287 A Shares
	UK Theatres Online Limited
8.	Loan capital:	Nil

Beachcroft Wansbroughs

9.	Directors:
	Name	Address
	Jeffrey Spector	255 Clifton Drive South, St Annes On Sea, Lancashire, FY8 1HW
10.	Secretary
	Janette Louise Erskine	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
11.	Accounting reference date:	31 March
12.	Charges:	None

Beachcroft Wansbroughs

Part 3

Spring Leisure Limited

1.	Registered number:	05102050
2.	Previous company names:	None
3.	Registered office:	34-36 Orchard Road, Lytham St. Annes, Lancashire, FY8 1PF
4.	Date and place of incorporation:	14/04/2004 – United Kingdom
5.	Authorised share capital:	£1,000 divided into 1,000 Ordinary Shares of £1.00 each
6.	Issued share capital:	700 Ordinary A Shares of £1.00 each, 300 Ordinary B Shares of £1.00 each
7.	Shareholders:
	Shareholders	No of shares
	Janette Erskine	174 A Shares
	David Brown	100 B Shares
	Malcolm Johnson	10 B Shares
	Mitchell Clifford Michael Cartwright	476 A Shares
	Jeffrey Spector	25 A Shares
	Elaine Patrice Spector	25 A Shares
	Julian Latham	100 B Shares
	David Bryan Williams	25 B Shares
	Jeanette Naylor	25 B Shares
	UK Theatres On Line Limited	40 B Shares
8.	Loan capital:	Nil
9.	Directors:
	Name	Address
	Janette Louise Erskine	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	Jeffrey Spector	255 Clifton Drive South, St Annes On Sea, Lancashire, FY8 1HW
10.	Secretary

Beachcroft Wansbroughs

	Janette Louise Erskine	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
11.	Accounting reference date:	31 March
12.	Charges:	None

Beachcroft Wansbroughs

SCHEDULE 3

Warranties

1.	SHARE CAPITAL, SUBSIDIARIES AND JOINT VENTURES
	Ownership of Shares

1.1	Each Seller is the legal and beneficial owner of, and is entitled to sell with full title guarantee on the terms of this agreement without the consent of any third party, the number of Shares set out opposite his name in Schedule 1 free from Encumbrances.
1.2	The Shares constitute the whole of the Company’s allotted and issued share capital and are fully paid or credited as fully paid.
1.3	There is no Encumbrance on, over or affecting any of unissued shares, debentures or other securities of the Company and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue, allotment, conversion, redemption, sale or transfer of any shares, debentures or other securities of the Company.

Joint Ventures

1.4 The Company is not, and has not agreed to become a member of any partnership or other unincorporated association, joint venture, or consortium (other than a recognised trade association) or other profit or income sharing arrangement.

Branch

1.5 The Company does not have any branch, agency or place of business outside the United Kingdom and does not use its letterhead, books or vehicles or otherwise carry on its business under any name other than its corporate name.

2.	CAPACITY
	Authority

2.1	Each Seller has the necessary power and authority and has taken all necessary action to enter into and perform this agreement and each of the documents to be executed at or before Completion in accordance with this agreement which will, when executed, become binding and enforceable obligations of the Sellers.
2.2	The Sellers will not, by virtue of entering into or performing any of his duties under this agreement or any other agreement made or to be made between the Sellers and the Buyer, be in breach of any express or implied terms of any contract or of any other obligation binding upon him.

Effect of sale

2.3 The execution or the performance of this agreement or any document to be executed at or before Completion in accordance with this agreement will not so far as the Warrantors are aware:-

2.3.1 result in a breach of, conflict with, or give rise to an event of default under, any agreement or arrangement to which the Company is party or by which the Company is bound;

Beachcroft Wansbroughs

2.3.2	relieve any other party to an agreement or arrangement with the Company of its obligations or enable it to terminate the agreement or arrangement;
2.3.3	result in a breach of a Licence, an undertaking to, or order of, any court or governmental agency or regulatory body; or
2.3.4	result in the Company losing the benefit of a Licence.

2.4 The Company has the necessary power and authority to operate its business as conducted at the date of this agreement.

3.	INFORMATION, RECORDS AND DOCUMENTS
	Written Information and Material Disclosure

3.1	The information contained in Schedule 2 of this agreement is true and accurate in all respects and not misleading.
3.2	There is attached to the Disclosure Letter a true, complete and accurate copy of the:

3.2.1	Management Accounts; and
3.2.2	Information which is sufficient to enable the Buyer to know how much money is and will become due and payable to the Company by its customers from time to time under all advertising agreements which exist as at 11 November 2005 a copy of which is on a CD-ROM which has been initialled by the Buyer and Jeffrey Spector and is attached to the Disclosure Letter.

Storage of records

3.3 The Company does not have any of its records, systems, or data recorded or operated or otherwise wholly or partly dependent on, or held by, any means (including any electronic, mechanical or photographic process whether computerised or not) which (including all means of access to it and from it) are not under the exclusive ownership and direct control of the Company.

Possession of Documents

3.4 All title deeds relating to the assets of the Company and an executed copy of all agreements to which the Company is a party or by which it is bound and the original copies of all other documents which are owned by, or which ought to be in the possession of, the Company, are in the possession or under the control of the Company.

4.	MANAGEMENT ACCOUNTS AND STATUTORY ACCOUNTS AND RECORDS
	Accuracy of the Management Accounts

4.1 The Management Accounts have been prepared with due care and attention (without the benefit of an audit) and fairly represent the state of the Company’s affairs and of its assets and liabilities as at, and of the profits and losses of the Company for the financial period ended on, the Management Accounts Date and have been prepared using practices and policies consistent with those utilised in the preparation of Management Accounts during the previous three years. The deferred revenue and accounts receivable calculations included in the Management Accounts have in all material respects been prepared in accordance with UK generally accepted accounting principles save that no provision is made for corporation tax.

Beachcroft Wansbroughs

Books and Records

4.2 The Company’s accounts, books, ledgers, financial and other records are in its possession or under its control, up-to-date and contain a materially accurate record of all matters required to be entered in them by the Act, accounting practice and other relevant legislation.

Events since the Management Accounts Date

4.3 Since the Management Accounts Date:-

4.3.1	the business of the Company has been carried on in the ordinary and usual course and in the same manner (including nature and scope) as in the financial period ended on the Management Accounts Date so as to maintain the business as a going concern;
4.3.2	no share or loan capital of the Company has been, or agreed to be, issued, allotted, redeemed, purchased or repaid by the Company;
4.3.3	no debt has been subordinated, written down or written off, factored or assigned, and the Company has not agreed to do any of the foregoing;
4.3.4	no capital expenditure has been, or agreed to be, incurred and no commitments of a capital nature have been, or agreed to be, entered into exceeding £5,000 in total by the Company;
4.3.5	no resolution of the shareholders of the Company has been passed;
4.3.6	the Company has not experienced any material deterioration in its financial position or turnover or suffered any diminution of its assets by the wrongful act of any person and the value of its net assets is not materially less than the value of its net assets at the Management Accounts Date and the Company has not had its business, profitability or prospects materially and adversely affected by the loss of any important customer or source of supply or by any abnormal factor not affecting similar businesses to a like extent and so far as the Warrantors are aware (but without having made any enquiry of third parties except Employees) there are no facts which are likely to give rise to any such effects. For the purpose of this clause “material” shall mean by a factor of 10% or more;
4.3.7	the Company has not acquired or disposed of or agreed to acquire or dispose of any assets or assumed or incurred or agreed to assume or incur any material liabilities (actual or contingent) otherwise than in the ordinary course of business;
4.3.8	the Company has not declared, made or paid any dividend, bonus or other distributions of capital or income (whether a qualifying distributions or otherwise) and (excluding fluctuations in overdrawn current accounts with bankers) no loan or loan capital of the Company has been repaid in whole or in part or has become due or is liable to be declared due by reason of either service of a notice or lapse of time or otherwise howsoever;
4.3.9	the Company has not carried out or entered into any transaction and no other event has occurred in consequence of which (whether alone or together with any one or more transactions or events occurring before, on or after the date of this agreement) any liability of the Company to Taxation has arisen or will arise (or would have arisen or would or might arise but for the availability of any relief, allowance, deduction or credit) other than corporation tax on the actual income (not chargeable gains or deemed income) of the Company

Beachcroft Wansbroughs

arising from transactions entered into in the ordinary course of business, income tax under the PAYE system and national insurance and social security contributions in respect of persons employed by it since the Management Accounts Date and VAT in respect of taxable supplies made by it in the ordinary course of business since the Management Accounts Date;

4.3.10	the Company has not borrowed or raised any money or taken any financial facility (except such short term borrowings from bankers as are within the amount of any overdraft facility which was available to the Company at the Management Accounts Date) or since the Management Accounts Date renegotiated or received any notice from any banker that such banker wishes to renegotiate any overdraft facility available to the Company at the Management Accounts Date;
4.3.11	the Company has not made any change to its accounting reference date and no accounting period of the Company has ended since the Management Accounts Date
4.3.12	the Company has not made a payment or incurred an obligation to make a payment which will not be deductible in computing trading profits for the purposes of corporation tax or as a management expense of the Company; and
4.3.13	the Company (including any class of its members) has not passed any resolution whether in general meeting or otherwise.

4.4	The Accounts have been prepared in accordance with the Companies Acts and with accounting standards, policies, principles and practices generally accepted in the UK and in accordance with the law of that jurisdiction.
4.5	The Accounts have been audited by an auditor or firm of accountants qualified to act as auditors in the UK and the auditors’ report(s) required to be annexed to the Accounts is unqualified.
4.6	The Accounts show a true and fair view of the commitments and financial position and affairs of the Company as at the Balance Sheet Date and of the profit and loss of the Company for the financial year ended on that date.
4.7	The Accounts contain either provision adequate to cover, or full particulars in notes of, all Taxation and other liabilities (whether quantified, contingent, disputed or otherwise) of the Company as at the Balance Sheet Date.
4.8	The Accounts have been filed and laid before the Company in general meeting in accordance with the requirements of the Companies Acts.
4.9	The Accounts have been prepared on a basis consistent with the audited accounts of, as the case may be, the Company for the two prior accounting periods without any change in accounting policies used.

5.	FINANCE
	Bank Borrowing

5.1 The Company is not the beneficiary of any loan facilities from its bankers.

Repayment of borrowings

Beachcroft Wansbroughs

5.2 Full details of all the Company’s Indebtedness as at 11 November 2005 set out in the Disclosure Letter, and all of such Indebtedness shall be satisfied in full on or prior to Completion

Bank Statement

5.3 A statement produced from www.yorkshirebank.co.uk as to the credit or debit balances of the Company’s bank accounts as at a date not more than one Business Day before the date of this agreement has been supplied to the Buyer and the Company has no other bank or deposit account (whether in credit or overdrawn) which is omitted from such statement and all payments out of, and receipts in, such accounts since the date of such statement are Disclosed in the Disclosure Letter.

Related Party Transactions

5.4 Full details of all Indebtedness of any officer, director or employee of the Company in favour of the Company are set out in the Disclosure Letter, and all of such Indebtedness shall be satisfied in full on or prior to Completion. In addition, the purchases by certain of the Sellers from the Company of the investments referred to in the Disclosure Letter will be completed on or prior to Completion.

Creation of charges

5.5 The Company has not created, or agreed to create, any Encumbrance or given, or agreed to give, any guarantee, suretyship, indemnity or similar encumbrance or agreement for the postponement of debt or (except in the ordinary course of business) for lien or set-off.

Accounts

5.6 There is contained in the Disclosure Bundle a true, complete and accurate copy of the Accounts.

6.	ASSETS
	Title

6.1 All assets included in the Management Accounts and all assets owned or used by the Company are:-

6.1.1	legally and beneficially owned by the Company free from any Encumbrance;
6.1.2	in the possession or under the exclusive control of the Company;
6.1.3	situated in the United Kingdom; and
6.1.4	where subject to a requirement for a Licence, are duly licensed or registered in the sole name of the Company.

6.2 The Company has not received any sum, property or benefit, the payment or transfer of which is liable to be avoided, or which is liable to be recovered from it under any rule of law and does not hold any sum, property or right as trustee or constructive trustee.

Asset registers

Beachcroft Wansbroughs

6.3	The Disclosure Bundle includes a reasonably accurate list of all plant, equipment and vehicles and computer hardware and software owned by the Company.
6.4	So far as the Warrantors are aware all plasma screens owned by the Company are in a good and safe condition and in reasonable working order, fair wear and tear excepted.

Maintenance

6.5 Maintenance contracts are in full force and effect in respect of all assets of the Company which the Company is obliged to maintain or repair under any hire purchase, leasing, rental, insurance or other agreement.

Assets sufficient for business

6.6 The assets owned or used by the Company comprise all the assets which in the reasonable opinion of the Warrantors are reasonably necessary for the continuation of the business of the Company as currently carried on.

Leased assets

6.7 The Company is not is a party to or liable under a lease or hire, hire purchase, credit sale or conditional sale, agreement.

Trade Debtors

6.7.1

Save in accordance with the general provision usually made by the Company, none of the debts which are shown in the Management Accounts, or which have arisen subsequently have been released such that the debtor has paid less than the full amount of his debt and so far as the Warrantors are aware 92% of such debts will in the normal course of collection realise their full value as included in the Management Accounts or books of the Company.

6.7.2

No single debtor, taken together with any connected person of that debtor, owes to the Company an amount or amounts in aggregate greater than ten per cent of the total of all debts owing to the Company.

6.8 No single debtor, taken together with any connected person of that debtor as at 30 September 2005 owes to the Company an amount or amounts in aggregate greater than ten per cent of the total of all debts owing to the Company.

Product Liability

6.9	The Company has not received notice of any claim which remains outstanding alleging any defect in, or lack of fitness for purpose of, any goods supplied by the Company, nor so far as the Warrantors are aware are there any circumstances which could give rise to any such claim.
6.10	The Company has not given any guarantee or warranty or made any representation in respect of goods or services supplied or contracted to be supplied by it save for any warranty or guarantee implied by law and (save as aforesaid) has not accepted any obligation which could give rise to any liability after any such goods or services have been supplied by it.

Beachcroft Wansbroughs

7.	INSURANCE
	Policies

7.1	The Company is party to no policies of insurance other than those listed in the Disclosure Letter.
7.2	The Company has insurance in respect of all risks which a reasonable and prudent owner of the business carried on by the Company in the ordinary course would have.

Claims

7.3 Since incorporation, no claims have been made by the Company on its insurers nor so far as the Warrantors are aware, have any circumstances arisen which may give rise to any claim, which (in either case) could, so far as, the Warrantors are aware, have the effect of causing future premiums to be higher than would otherwise be the case.

8.	CONTRACTS
	General

8.1	Each of the contracts with advertisers is in one of the various formats as contained in the Disclosure Bundle.
8.2	There is not outstanding any guarantee, indemnity or suretyship given by or for the benefit of the Company.
8.3	There are no contracts which are both material and unusual whether as capital commitments or otherwise which are currently binding upon the Company, nor so far as the Warrantors are aware is the Company a party to any contract which contains any onerous provision which is outside the ordinary course of business and no expenses or liabilities of a material amount have been incurred before the date of this agreement by the Company otherwise than for the purpose of the Company’s business.
8.4	The Company is not a party to or subject to any agreement, transaction, obligation, commitment, understanding, arrangement or liability which:

8.4.1	cannot readily be fulfilled or performed by the Company on time and without undue or unusual expenditure of money and effort;
8.4.2	involves or is likely to involve obligations, restrictions, expenditures or receipts not in the ordinary course of business and requiring an aggregate consideration payable by the Company in excess of £5,000;
8.4.3	involves or is likely to involve the supply of goods or services by or to the Company the aggregate sales value of which will represent in excess of five per cent of the turnover of the Company for the year ended on the Management Accounts Date;
8.4.4	a contract for services (other than contracts for services provided to the Company in the ordinary course of business which are freely terminable by the Company without penalty on less than 30 days’ notice), including any professional services contracts.
8.4.5	requires the Company to pay any commission, finder’s fee, royalty or the like; or

Beachcroft Wansbroughs

8.4.6 is in any way otherwise than in the ordinary and proper course of the Company’s business.

Breach of Contract

8.5 So far as the Warrantors are aware there are no circumstances likely to give rise to a default by the Company or by the other parties under any revenue generating contract such that the consequences of any such default to the Company (including any refunds or other damages payable by the Company), when aggregated with the uncollected debt referenced in Clause 6.7.1, would cause the warranty given by the Warrantors in Clause 6.7.1 to be false as of the date hereof.

Creditors

8.6 The Disclosure Letter includes an accurate and complete list of all creditors of the Company as at 11 November 2005. The Company has paid all its creditors within the credit periods normally applied by the Company to such creditors (and no earlier) and no debt owing by the Company has been due for more than 6 weeks.

Customers and suppliers

8.7	During the two months preceding the date of this agreement there has been no substantial change in the basis or terms on which any person (including any supplier) is prepared to enter into contracts or do business with the Company and so far as the Warrantors are aware no such change is likely.
8.8	No person who is, or who has during the last six months been, a media host of the Company has ceased, or has threatened or indicated to the Company an intention to terminate its site contract with the Company.
8.9	So far as the Warrantors are aware having made no enquiry the decisions of customers and suppliers to continue to do business with the Company will not be prejudicially affected by the execution or completion of this agreement or a document to be executed at or before Completion in accordance with its terms.

9. INSIDER CONTRACTS

9.1 The Company has not since incorporation been a party to any material agreement or arrangement (whether legally enforceable or not):-

9.1.1	which is or was not of an entirely arm’s length nature; and
9.1.2	in which any Seller or any connected person of any of them is or was directly or indirectly interested.

9.2	None of the Company’s assets (including the benefit of any licences or agreements) have been acquired for a consideration otherwise than for its market value at the date of such acquisition.
9.3	There are no debts (whether or not due for payment and including contingent liabilities) or unfulfilled obligations (present or future, actual or contingent) owing between the Company and any Seller or any director or former director of the Company or any connected person of any of them.
9.4	So far as the Warrantors are aware there is no claim or circumstance which may give rise to a claim against the Company by any director or former director of the Company or any connected person of any of them on any account whatsoever.

Other interests of the Warrantors

Beachcroft Wansbroughs

9.5 None of the Warrantors nor any connected person of any of the Warrantors have a direct or indirect interest in any person (other than the Company or Cinemasonline Limited) or any intellectual property rights which is or is likely to be or become, competitive with the business of the Company as the beneficial owner of any class of securities of any company listed on a recognised investment exchange (as defined in the Financial Services and Markets Act 2000) and in respect of which each Warrantor or such person is beneficially interested in less than three per cent of all the issued securities of that class).

10.	LITIGATION
	Proceedings

10.1	The Company is not currently engaged in any civil, criminal, administrative or arbitration claim, proceedings or enquiries and has not previously been engaged in any material civil, criminal administrative or arbitration claim proceedings or enquiries and, so far as the Warrantors are aware, there are no such actions, suits, proceedings, claims or enquiries pending or threatened by or against the Company or any director of the Company or any person for whose acts or defaults the Company may be vicariously liable and, so far as the Warrantors are aware, there is no matter or fact in existence which might give rise to the same.
10.2	The Company has not given any undertaking to any court or to any third party arising out of any legal proceedings and the Company is not subject to any outstanding injunction, order, judgment, decree or arbitral award of any court, tribunal arbitrator, governmental agency or other regulatory body.
10.3	Neither the Company nor any Employee, officer, agent or former officer, agent or employee of the Company has been convicted of any offence in relation to the Company, and no Employee or officer has, so far as the Warrantors are aware, been convicted of any offence which reflects upon his suitability to hold his position or upon the reputation of the Company.

11.	LEGAL MATTERS
	Compliance with law

11.1

The Company has conducted its business in accordance with its memorandum and articles of association, all applicable law and regulations of any jurisdiction in which it carries on business and there has been no violation of, or default with respect to, any order or judgement of any court, tribunal, governmental agency or regulatory authority in any jurisdiction which has, or could have, an adverse effect on the assets or business of the Company.

11.2

Due compliance has been made with the provisions of the Act and other legal requirements in connection with the formation of the Company, the allotment and issue and purchase of its shares and the conduct of its business and no notice or allegation has been received that any of the foregoing is incorrect or should be rectified.

Investigations

11.3 There is and has been no governmental, regulatory or other investigation, enquiry or disciplinary action regarding the Company of which the Company has received notice and none is pending or threatened and to the best of the Warrantors’ knowledge, information and belief, there are no circumstances which could give rise to such an investigation, enquiry or action.

Licences

Beachcroft Wansbroughs

11.4 The Company does not require Licences for the proper carrying on of its business.

Documents filed

11.5 All returns, particulars, resolutions and other documents required to be delivered to the Registrar of Companies by the Company have been properly prepared and delivered.

Memorandum and Articles of Association

11.6 The copy of the memorandum and articles of association of the Company contained in the statutory books delivered by the Warrantors under Clause 4 is true, complete, accurate and up-to-date and includes copies of all resolutions or agreements required by law to be annexed to it and each register and minute book required to be kept by the Act has been properly kept, is up-to-date and contains a true, accurate and complete record of the matters which should be dealt with in those books and no notice or allegation that any of them is incorrect or should be rectified has been received.

Powers of Attorney

11.7 The Company has not given any power of attorney which remains in effect nor has it given any other similar authority which is still outstanding (other than authority for an Employee to enter into routine trading contracts in the usual course of their duties).

12. INSOLVENCY

12.1 In relation to the Company:-

12.1.1	no resolution has been passed (and no meeting has been convened, and no written resolution has been circulated with a view to any resolution), no petition has been presented and no order has been made for administration or winding up or for the appointment of a receiver or provisional liquidator;
12.1.2	no procedure has been commenced, by the Registrar of Companies or any other person, with a view to striking off under section 652 of the Act;
12.1.3	no receiver has been appointed, no Encumbrance has been enforced, and no floating charge has crystallised on or over any of its assets, and no event has occurred or will occur by virtue of the execution and performance of this agreement which would cause, or entitle any person to cause, any of these things to happen;
12.1.4	it has not stopped paying its creditors, is not insolvent, and is not unable to pay its debts for the purposes of section 123 of the Insolvency Act 1986;
12.1.5	there is no unsatisfied judgement or order of any court or tribunal, or award of any arbitrator, against it;
12.1.6	no distress, execution or other process has been levied against any of its assets;
12.1.7	no meeting of its creditors, or any class of them, has been held or summoned, no proposal has been made for a moratorium, composition or arrangement in relation to any of its debts, or for a voluntary arrangement under Part 1 of the Insolvency Act 1986; and
12.1.8	no event analogous to any of the above has occurred in any jurisdiction.

Beachcroft Wansbroughs

12.2 In relation to each Seller:-

12.2.1	no petition has been presented and no order made for his or her bankruptcy or for the appointment of a receiver over any of his or her assets;
12.2.2	no Encumbrance has been enforced and no distress, execution or other process has been levied, on or over any of the Shares held by him or her; and
12.2.3	no event analogous to any of the above has occurred in any jurisdiction.

13. INTELLECTUAL PROPERTY

13.1

The Company owns or is entitled to use (whether by agreement with Cinemasonline Limited or otherwise) all Intellectual Property Rights necessary for the operation of, exploitation by or use by the business of the Company and, so far as the Warrantors are aware, nothing has been done or omitted to be done by which any Intellectual Property Right may cease to be valid and (so far as applicable) is enforceable.

13.2

Each of those of the Intellectual Property Rights referred to in Warranty 13.1 which have been created by or for the Company and Cinemasonline is:-

13.2.1	valid, subsisting and enforceable and, so far as the Warrantors are aware, nothing has been done or omitted to be done by which it may cease to be valid and enforceable;
13.2.2	solely legally and beneficially owned by, and validly granted to, the Company free from any lien, licence, encumbrance, restriction on use or disclosure obligation;
13.2.3	used exclusively by the Company; and
13.2.4	not, and so far as the Warrantors are aware, will not be, the subject of a claim, opposition, challenge or attack from a person including, without limitation, an employee of the Company as to title, subsistence, validity, enforceability, entitlement or pursuant to sections 40 and 41 of the Patents Act 1977 or otherwise.

13.3	All Confidential Information has been kept secret and (save as required in the ordinary course of business) not been disclosed to third parties.
13.4	There is and has been no civil, criminal, arbitration, administrative or other proceeding or dispute in any jurisdiction concerning any of the Intellectual Property Rights referred to in Warranty 13.1 and so far as the Warrantors are aware, no civil, criminal, arbitration, administrative or other proceedings concerning any of the Intellectual Property Rights is pending or threatened. So far as the Warrantors are aware (but without having made any enquiry) no matter exists which might give rise to a proceeding of that type.
13.5	The Company does not use on its letterhead, books, vehicles or products or otherwise carry on its business under any name other than its corporate name.

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14. INFORMATION TECHNOLOGY

For the purposes of the following Warranties in this paragraph 14 “Computers” and “Computer Systems” includes all hardware, firmware, peripherals, communication links, storage media, networking equipment and other equipment used in conjunction therewith together with all computer software and all related object and source codes and databases.

14.1 So far as the Warrantors are aware the Computers and Computer Systems owned by the Company or used by or on behalf of the Company:-

14.1.1	are in reasonable operating order and are overall fulfilling the purposes for which they were acquired or established in a reasonably efficient manner without material failures, downtime or errors;
14.1.2	have adequate capacity for the Company’s present needs and (taking into account the extent to which the Computer Systems are expandable) needs for the next six months;
14.1.3	have security, back-up systems, duplication, hardware and software support and maintenance (including emergency cover) and reasonably trained personnel to ensure:-

14.1.3.1	that breaches of security, errors and breakdowns are kept to a minimum;
14.1.3.2	that no material disruption will be caused to the business of the Company or any material part thereof in the event of a breach of security, error or breakdown;
14.1.3.3	that in the event of any fault no more than one day’s data would be lost;
14.1.3.4	that the availability, confidentiality and integrity of data held or transmitted by the computer systems used by the Company are preserved;

14.1.4 would not (so far as the Warrantors are aware) be likely to be in need of replacement or material upgrading if the Company continued to be owned by the Sellers and continued to be operated as it is currently operated on as cost effective basis as it is currently operated within six months after Completion.

14.2	All Computers and Computer Systems, used in the business of the Company are owned and operated by and under the sole control of the Company, are not shared with or used by or on behalf of any other person and there are in existence no agreements or arrangements entitling any other person to share or to have access to or use of such Computers or Computer Systems, or any of them.
14.3	All software used on or stored or resident in the Computers or Computer Systems owned by the Company or used by or on behalf of the Company:-

14.3.1	is lawfully held and used and so far as the Warrantors are aware does not infringe the copyright or other Intellectual Property of any person, and all copies held have been lawfully made;
14.3.2	as to the copyright therein:-

14.3.2.1 in the case of standard packaged software purchased outright, is licensed to the Company on an express or implied licence which does not require the Company to make any further payments, is not

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terminable without the consent of the Company and which imposes no material restrictions (save as to copying) on the use or transfer of the software; and

14.3.2.2 in the case of all other software, is validly licensed to the Company on the terms of a written licence (a true and complete copy of which has been given to the Buyer at Completion) which requires payment by the Company of a fixed annual licence fee at a rate not exceeding that paid in the financial year ended on the Balance Sheet Date but (save for reasonable fees for software support) requires the Company to make no further or other payment, is not terminable (save for failure to pay the licence fee) without the consent of the Company and imposes no material restrictions (save as to copying) on the use or transfer of the software.

14.4	The Company either owns or is validly licensed in perpetuity (other than in the event of breach or insolvency) to use the software currently used in its business; all sums due under any such licences have been paid; and no action will be necessary to enable it to continue to use such software to the same extent and in the same manner as it has been used prior to the date of this agreement. The terms of all software licences (other than licences for standard packaged software) have been disclosed in the Disclosure Letter and the Company has not breached the terms of any such licence and no notices of breach or termination have been served on the Company in respect of any such licence.
14.5	No software owned by or licensed to the Company is used by or licensed or sub-licensed by the Company to any other person.
14.6	All records and data of or relating to the business of the Company stored by electronic means are capable of ready access through the present Computer Systems of the Company.
14.7	The Company is the sole owner of the domain names listed as owned by it in the Disclosure Letter together with the websites which may be accessed at these domain names (the “Websites”) including the goodwill, copyright and other Intellectual Property in the Websites.

15. DATA PROTECTION

15.1	The Company has obtained and maintained in force all registrations/notifications necessary or appropriate under the Data Protection Act 1984 (as amended) (“DPA 1984”) and the Data Protection Act 1998 (“DPA 1998”) in relation to its business including, without limitation, each registration relating to the obtaining, holding, processing, transfer and disclosure of personal data effected by the Company (including, without limitation, to the Buyer).
15.2	The Company has at all times materially complied with all relevant provisions of the DPA 1984 and the DPA 1998 including the eight Data Protection Principles.
15.3	The Company has not received any notice, letter or complaint alleging a breach by it of the provisions of the DPA 1984 or the DPA 1998 nor has it received any notice from the Data Protection Commissioner.

16. EMPLOYEES

16.1 Details of material employment terms of all Employees and directors of the Company are set out in the Disclosure Bundle.

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16.2	Save as set out in the Disclosure Bundle the Company has no other Employees or directors.
16.3	The Company has not offered or agreed to increase the remuneration of, or altered or sought to alter any of the terms and conditions of employment of, any Employee or directors save as agreed with the Buyer’s Group.
16.4	There is no liability, outstanding or contingent or anticipated, to any present or former Employee or director other than remuneration accrued for the current wage or salary period or for reimbursement of normal business expenses and no present or former Employee or director has any claim, outstanding or contingent or anticipated, against the Company or right to be indemnified by the Company arising out of an act or omission in the course of his office or employment or in relation to the termination of that office or employment on or before the date of this agreement and the Warrantors are not aware of any facts that might give rise to the same.
16.5	The Company has not since its incorporation been a party to any relevant transfer as defined in the Transfer of Undertakings (Protection of Employment) Regulations 1981 nor has the Company failed to comply with any duty to inform and consult any appropriate representative under the said Regulations.
16.6	The Company has in relation to each of its present and former Employees and directors:-

16.6.1

complied with all obligations imposed on it and all orders and awards made under, all statutes, statutory instruments, European Community law, regulations, orders, collective agreements, customs and practices relevant to the relations between it and its Employees and directors or any trade union or the terms and conditions of employment or working conditions of its Employees and directors (including, without prejudice to the generality of the foregoing, health and safety at work and sex or race discrimination) and complied with any recommendations made by the Advisory Conciliation and Arbitration Service or the Equal Opportunities Commission and with any arbitration awards and declarations; and

16.6.2

maintained adequate personnel records which are now up to date, complete and accurate in all material respects.

17. PENSION MATTERS

17.1	The Company is not and never has been a party to any agreement or arrangement for the provision of any relevant benefits (as defined in section 612(1) of ICTA, with the omission of the exception in that definition) for any person.
17.2	The Company is not and never has an obligation to contribute to any personal pension scheme (as defined in section 630 of ICTA) in respect of any Employee or former employee.

18.	TAX MATTERS
	General

18.1 Notices and returns

All returns, computations, notices and registrations of the Company for the purposes of Taxation have been made on a proper basis and are correct and so far as the Warrantors are aware none of them is expected to be the subject of any material dispute with any Taxation Authority. All information supplied by the Company for the

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purposes of Taxation was when supplied and so far as the Warrantors are aware remains complete and accurate in all material respects.

18.2 Payment of Tax due / penalties and interest

18.2.1	All Taxation which the Company is liable to pay prior to Completion has been so paid prior to Completion (insofar as such Taxation ought to have been paid).
18.2.2	The Company has not within the period of three years ending on the date of this agreement paid or become liable to pay any material penalty, fine, surcharge or interest on or with reference to Tax.

18.3 Compliance with Tax collection obligations

18.3.1	All income tax and national insurance or social security contributions deductible and payable under the PAYE system and/or any other Taxation Statute have, so far as is required to be deducted, been deducted from payments made or treated as made by the Company and all such amounts due to be paid to HM Revenue and Customs prior to the date of this agreement have been so paid.
18.3.2	The Company does not currently engage, and has not within the last three years engaged, any person whom it has treated as self-employed but who may be deemed by an English Court of law to be an employee of it.

18.4 Investigations and Disputes

18.4.1	The Company has not within the last 3 years been subject to any visit, audit, investigation, discovery or access order by any Taxation Authority other than routine visits and routine audits and no notice has been received by the Company from any Taxation Authority indicating that it intends to investigate any of the Taxation affairs of the Company.
18.4.2	Within the last four years there has been no material dispute or difference between the Company and any Taxation Authority.

18.5 Anti-avoidance provisions

The Company has not within the last six years entered into or been a party to any scheme or arrangement of which the main purpose, or one of the main purposes, was the avoidance of a liability to Taxation.

18.6 Records and Acquisition Costs

18.6.1 If each of the capital assets of the Company was disposed of on the date hereof for a consideration equal to the book value of that asset in, or adopted for the purposes of, the Accounts or, in the case of assets acquired since the Balance Sheet Date, equal to the consideration given upon its acquisition, so far as the Warrantors are aware no liability to corporation tax on chargeable gains would arise (and for the purpose of determining the liability there shall be disregarded any relief and allowances available to the Company other than amounts falling to be deducted under section 38, TCGA).

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18.6.2 The Company holds sufficient records to determine the tax consequence which would arise on any disposal or realisation of any asset owned at the Balance Sheet Date or acquired since that date but prior to Completion.

18.7 Reconstructions etc

18.7.1 The Company, has at no time within the last six years:-

18.7.1.1	been engaged in or been a party to any of the transactions set out in sections 213 to 218 inclusive, ICTA 1988 nor has it made or received a chargeable payment as defined in section 218(1), ICTA 1988;or
18.7.1.2	been a party to or involved in any transaction falling within (or which would but for section 137 TCGA 1992 have fallen within) any of sections 126-139 of that Act (reorganisations, share exchanges and reconstructions).

18.8 Change in the nature of trade

Within the period of three years ending with the date of this agreement there has been no major change in the nature or conduct of any trade or business (as defined in sections 768 and 768B ICTA 1988) carried on by the Company.

18.9 Transfer pricing

The Company is not and has not within the last three years been a party to any transaction or arrangement which may cause the Company’s Taxation Liability for any purpose to be calculated in accordance with Schedule 28AA, ICTA 1988 or the transfer pricing provisions of any foreign jurisdiction or double tax convention.

18.10 Groups

The Company is not and has never been a member of a group of companies for any tax purpose including but not limited to being a member of any VAT group.

18.11 Value Added Tax

The Company is a taxable person duly registered for the purposes of VAT and all supplies made by the Company in the course of its trade are taxable supplies.

18.12 Stamp duty and Stamp Duty Land Tax

18.12.1

All documents (other than those which have ceased to have any legal effect) to which the Company is a party as at Completion and which are (or would be if in the United Kingdom) stampable have been duly stamped.

18.12.2

The Disclosure Letter sets out full and accurate details of any chargeable interest (as defined under section 48, Finance Act 2003) acquired or held by the Company before Completion in respect of which the Sellers are aware or ought reasonably to be aware that an additional land transaction return will be required to be filed with a Taxation Authority and/or a payment of stamp duty land tax made on or after Completion

19.	PROPERTY MATTERS
	Title

Beachcroft Wansbroughs

19.1	The Company owns no freehold land or premises and does not occupy land or premises under a licence.
19.2	The Property comprises the only property owned, occupied or otherwise used by the Company and they are all occupied solely by the Company.
19.3	If the Property is occupied or otherwise used by the Company in connection with its business, it is occupied or used by right of ownership or under lease or licence the terms of which permit that occupation or use.
19.4	The Company is the legal and beneficial owner of the Property.
19.5	The information contained in Schedule 5 is complete and accurate.
19.6	If the Lease is compulsorily registrable at Land Registry it is registered at Land Registry and all easements and other rights granted by the Lease have where necessary been registered or noted at Land Registry so as to bind the reversion to the Lease or any other servient land.

Encumbrances

19.7	The Property is free from mortgages, debentures, charges, rent charges, liens or other encumbrances or matters of an onerous nature which would affect its value.
19.8	The Property is not subject to outgoings other than business rates, water rates and insurance premiums and rent and service charges.
19.9	The Property is free of restrictive covenants, stipulations, easements, profits à prendre, wayleaves, licences, grants, restrictions, overriding interests or other similar rights vested in third parties or any agreement to create, or claim by any person to be entitled to, any of the foregoing.
19.10	If any disclosure is made in the Disclosure Letter qualifying any of paragraphs 19.9, 19.10 and 19.11 above, all obligations and liabilities imposed by or arising in relation to any matter so disclosed have been performed and discharged and no payments in respect of them are outstanding.
19.11	The Property is not subject to options or rights of pre-emption.

Planning Matters

19.12	The use of the Property is the permitted use for the purposes of the Planning Acts, as defined in section 336 Town and Country Planning Act 1990 (“Planning Acts”).
19.13	With respect to the development of the Property, planning permission has been obtained or is deemed to have been granted for the purposes of the Planning Acts, no permission has been suspended or called in and no application for planning permission is awaiting decision.
19.14	Building regulation consents have been obtained with respect to all development alterations and improvements to the Property.
19.15	The Company has complied and is complying with:

19.15.1 planning permissions, orders, regulations, consents and bye-laws applicable to the Property;

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19.15.2	all agreements under section 52 Town and Country Planning Act 1971 and all planning obligations under section 106 of the Town and Country Planning Act 1990 made with respect to the Property; and
19.15.3	all agreements made under section 38 Highways Act 1980 with respect to the Property.

19.16	The Property is not listed as being of special historic or architectural importance or located in a conservation area.
19.17	All claims and liabilities (contingent or otherwise) under the Planning Acts or other legislation in relation to the Property have been discharged.

Statutory Obligations

19.18	The Company has complied and is complying with applicable statutory and bye-law requirements with respect to the Property.
19.19	There is no unperformed obligation with respect to the Property performance of which is necessary to comply with the requirements (whether formal or informal) of a competent authority exercising statutory or delegated powers.
19.20	No licences are required in relation to the Property.

Adverse Orders

19.21	There are no compulsory purchase notices, orders or resolutions affecting the Property and there are no circumstances which might lead to any being made.
19.22	There are no closing demolition or clearance orders, enforcement notices or stop notices affecting the Property and there are no circumstances which might lead to any being made.
19.23	There is no outstanding notice, order, demand, resolution, proposal, complaint or requirement issued or made, or intended to be issued or made, by any local or other competent authority or body concerning compulsory acquisition, clearance, demolition or closing, the carrying out of any work (including any work required by reason of the fact that the Property is a listed building), the modification of any planning permission, the discontinuance of any use, the imposition of any building or improvement line, any breach of or non-compliance with building and fire regulations or any other matter which would adversely affect the value of the Property.
19.24	There is no requirement relating to the Property or its use which although not registered in the Register of Local Land Charges is capable of registration in that Register.
19.25	There is no receipt of compensation as a result of any refusal of any application for planning permission or the imposition of any restriction in relation to any planning permission, listed building consent or conservation area consent relating to the Property.

Condition of the Property

19.26	The buildings and other structures on or comprising the Property is in good and substantial repair and condition and fit for the purposes for which they are used.
19.27	None of the buildings or structures on the Property:

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19.27.1	has been affected by structural damage or electrical defects or by timber infestation or disease; or
19.27.2	contains in its fabric high alumina cement, blue asbestos, calcium chloride accelerator, wood wool slabs used as permanent shuttering or other deleterious material.

19.28	The Property is not located in an area or subject to circumstances particularly susceptible to flooding or is affected by mining activity.
19.29	There are no disputes with neighbouring owners with respect to boundary walls and fences relating to the Property or with respect to easements or rights over or means of access to the Property.
19.30	The principal means of access to the Property is over roads which have been taken over by the local or other highway authority and which are maintainable at the public expense, and no means of access to the Property is shared with another person or subject to rights of determination by another person.
19.31	The Property is not subject to rights of common.
19.32	The Property enjoys the main services of water, drainage, electricity and gas.
19.33	None of the facilities necessary for the enjoyment or use of the Property for its current use is enjoyed on terms entitling any person to terminate or curtail its use.

Insurance

19.34 The Property is insured in its full reinstatement values for not less than three years’ loss of rent and against third party and public liabilities to an adequate extent.

Leasehold Property

19.35	The Company has paid the rent and observed and performed the covenants on the part of the tenant and the conditions contained in the Lease and the last demand for rent (or receipt if issued) in relation to the Lease was unqualified.
19.36	The Lease is in full force.
19.37	The licences, consents and approvals required from the landlords and any superior landlords under the Lease have been obtained and the covenants on the part of the tenant contained in those licences, consents and approvals have been duly performed.
19.38	There are no rent reviews in progress under the Lease.
19.39	No obligation necessary to comply with a notice given by or other requirement of the landlord under the Lease is outstanding and unperformed.
19.40	There is no obligation to reinstate the Property by removing or dismantling an alteration made to it by the Company or a predecessor in title.
19.41	The Company has not entered into an agreement with the landlord of the Property specifying circumstances in which it would be reasonable for the landlord to withhold its consent to an assignment in accordance with section 19(1A) Landlord and Tenant Act 1927.

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19.42	The Company has no contingent liability (as original or previous tenant or as guarantor) in respect of any lease granted prior to 1 January 1996 or following an excluded assignment as defined in the Landlord and Tenant (Covenants) Act 1995.
19.43	The Company has not surrendered the lease of any leasehold property to the reversioner without first investigating the reversioner’s title and without receiving from the reversioner an absolute release from the tenant’s covenants in the relevant lease and from all liability arising under that lease.
19.44	The Company has not assigned any leasehold property of which it was the original tenant and in respect of which it entered into a covenant with the landlord to observe and perform the tenant’s covenants under that lease without receiving a full and effective indemnity in respect of its liability under that lease.

20. ENVIRONMENTAL MATTERS

“Environment”

means all and any of the following media, being land, water and air (wherever situate) and includes all human or plant or animal life and living organisms

“Environmental Laws”

means all or any applicable law, whether past, present or future, including common law, statute, statutory instrument, regulation, codes of practice or guidance, European law, directives, regulations, decisions of the European Court and any by-law, order, notice, demand, decree, injunction, resolution or judgment of any competent authority which has as a purpose or effect the prevention of harm to the Environment.

Environmental proceedings and nuisances

20.1 There is no civil, criminal or administrative action, claim, complaint, notice, caution, correspondence, investigation or other proceedings or suit being taken or made, pending or threatened in connection with the activities of the Company at any time or any asset owned occupied or used by the Company nor any act or omission of the Company giving rise or likely to give rise in the future to any such action, claim or complaint notice, caution, correspondence, investigation, proceedings or suit or any such liability or any other liabilities under any Environmental Laws.

Beachcroft Wansbroughs

SCHEDULE 4

Tax Covenant

1. INTERPRETATION

     1.1 In this Schedule :

“Claim”	means a claim, assessment, notice, demand, or letter or other document issued by or on behalf of a Taxation Authority from where it appears that the Company or Cinemasonline Limited is or may be liable or is sought to be made liable to make or has made a payment to the Taxation Authority or is or may be or has been denied or sought to be denied a Relief or that a Relief is or may be or has been utilised as an offset;
“Event”	means an event, act, transaction or omission, including without limitation, a receipt or accrual of value, income or gains, distribution and the entering into and completion of the agreement or the Cinemasonline Purchase Agreement and includes any Event (as so defined) which is deemed to occur for the purpose of any Tax);
“Event occurring on or before Completion”	includes any combination of events only the first or some of which take place on or before Completion but (if so) only to the extent that such transactions before Completion are outside the ordinary course of business of the Company and the successive transactions effected after Completion are inside or outside the ordinary course of the business of the Company as carried out at Completion excluding those acts performed by the Company voluntarily after Completion;
“Overprovision”	Overprovision means the amount by which any provision in the Accounts relating to tax is overstated, applying the accounting policies, principles and practices adopted in relation to the preparation of the Accounts (and ignoring the effect of any change in law made or action taken by the Buyer or the Company after Completion, or any Relief arising after Completion);
“Relief”	means any loss, relief, allowance, exemption, set-off, deduction, right to repayment or credit or other relief of a similar nature granted by or available in relation to Tax pursuant to any legislation or otherwise;
“Saving”	means the reduction or elimination of any liability of the Company to make any actual payment of tax in respect of which the Warrantors would not have

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	been liable under Clauses 2.1 or 2.2, by the use of any Relief arising wholly as result of a Tax Liability in respect of which the Warrantors have made a payment under Clauses 2.1 or 2.2 of this Tax Covenant;
“Tax or Taxation”	means any and all forms of taxes, levies, imposts, contributions, duties and charges in the nature of taxation and all withholdings or deductions in respect thereof of whatever nature whenever imposed whether of the United Kingdom or elsewhere (including, for the avoidance of doubt, National Insurance contribution liabilities in the United Kingdom and corresponding obligations elsewhere) and whether directly or primarily chargeable against, recoverable from or attributable to the Company, Cinemasonline Limited or any other person including all fines, penalties, charges and interest relating to the same (but excluding any charges, interest, penalties or fines arising after Completion by reason of any failure by the Buyer or the Company or Cinemasonline Limited after Completion to pay to the relevant Taxation Authority any amount in respect of a Tax Liability paid by the Warrantors to the Buyer under this Tax Covenant).
“Taxation Authority”	means any body or person anywhere in the world having the duty or power to assess levy collect or receive tax.
“Tax Liability”	includes any Tax liability satisfied before the date of this Tax Covenant and any liability as a representative or for which the Company or Cinemasonline Limited is not primarily accountable or for which it has a right of recourse against another person;

1.2	Unless the context otherwise requires, words and expressions defined in the agreement have the same meanings in this Tax Covenant as in the agreement.
1.3	Unless the context otherwise requires, in this Schedule, references to “Clause” shall mean a Clause of this Schedule.
1.4	The Warrantors’ obligations contained in this Tax Covenant are joint and several.

2. THE WARRANTORS’ OBLIGATIONS

2.1 Subject to Clause 2.3 the Warrantors shall pay to the Buyer an amount equal to the amount of the Company’s or Cinemasonline Limited’s Tax Liability which the Company or Cinemasonline Limited is obliged to pay to a Taxation Authority:

2.1.1	which arises in consequence of an Event occurring on or before Completion;
2.1.2	which would not have arisen but for the loss, reduction, modification or cancellation of some Relief in consequence of an Event occurring on or before Completion where and insofar as that Relief has been shown as an

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asset in the Accounts or has been taken into account in computing (and reducing) a provision (for deferred Tax or otherwise) which appears in the Accounts ; or

2.1.3	which would have arisen in consequence of an Event occurring on or before Completion and which is not payable in consequence of the utilisation or set-off of some Relief where the Relief arises in respect of an Event occurring after Completion;
2.1.4	arising in consequence of an Event occurring:

2.1.4.1	after Completion and for which the Company or Cinemasonline Limited is liable solely as a result of having at any time before Completion been a member of a group for any tax purpose; or
2.1.4.2	at any time and for which the Company or Cinemasonline Limited is liable solely as a result of having at any time before Completion been controlled or treated for any Tax purpose as controlled by any person or persons.

2.2	The Warrantors shall pay to the Buyer an amount equal to the amount of any liability of the Company, Cinemasonline Limited or the Buyer for reasonable costs properly incurred by the Company, Cinemasonline Limited or the Buyer in connection with any matter falling within Clause 2.1 for which the Warrantors are liable under this Tax Covenant.
2.3	Clauses 2.1 and 2.2 do not apply to a liability to the extent that:

2.3.1	a provision or reserve in respect of the liability is made in the Accounts or the Management Accounts, or payments thereof is taken into account in the Accounts or the Management Accounts;
2.3.2	the liability arises as a result of a provision or reserve for the liability made in the Accounts or the Management Accounts being insufficient in consequence of an increase in Tax rates or change in (or published interpretation by a Taxation Authority of) law announced after the date of the agreement whether or not with retrospective effect;
2.3.3	the liability arises in consequence of an Event which has occurred since the Balance Sheet Date in the Company’s or Cinemasonline Limited’s ordinary course of business; or
2.3.4	the Buyer has recovered damages under the Warranties in respect of the same liability;
2.3.5	the liability is attributable to the Company or Cinemasonline Limited ceasing to be entitled to the small Company’s rate of corporation tax;
2.3.6	it has been made good or otherwise compensated for at no expense to the Buyer, the Company or Cinemasonline Limited;
2.3.7	it would not have arisen but for a change after Completion in the accounting policies, bases or practices upon which the Company or Cinemasonline Limited values its assets (other than a change made in order to comply with generally accepted accounting principles) or a change to the date to which it makes up its accounts;

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2.3.8 it would not have arisen but for a voluntary act or transaction carried out by the Buyer, the Company or Cinemasonline Limited after Completion otherwise than in the ordinary course of business, which the Buyer was aware or ought reasonably to have been aware could give rise to a claim unless such act or transaction was carried out:-

2.3.8.1	pursuant to an obligation of the Company or Cinemasonline Limited incurred prior to Completion;
2.3.8.2	in compliance with any law, regulation or request of any Taxation Authority;
2.3.8.3	at the written request of the Warrantors;

2.3.9 the liability in question arises or is increased as a result of the failure by the Company or Cinemasonline Limited after Completion to make any claim, election, surrender or disclaimer or to give any notice or consent or to do any other thing, the making, giving, or doing of which was permitted by law and which is taken into account;

2.3.9.1	in computing and so reducing any provision which appears in the Accounts (or eliminating any provision which would otherwise have appeared in the Accounts); or
2.3.9.2	in computing any right to repayment of Tax which appears in the Accounts;

2.3.10 the liability in question arises or is increased as a result of the withdrawal or amendment by the Company or Cinemasonline Limited after Completion of any such claim, election, surrender, disclaimer, notice or consent made by the Company or Cinemasonline Limited prior to Completion unless such act or transaction was carried out:-

2.3.10.1	in compliance with any law, regulation or request of any Taxation Authority; or
2.3.10.2	at the written request of the Warrantors;

2.3.11	it is in respect of stamp duty or stamp duty reserve tax payable on the transfer or agreement to transfer the Shares pursuant to the agreement;
2.3.12	it arises or is increased as a consequence of the failure of the Buyer to comply with or procure the compliance of the Company with their respective obligations under paragraphs 4 (Appeals and Conduct of Claims), 6 (Recovery from Third Parties) and 9 (Buyer’s Covenant);
2.3.13	the liability relates to corporation tax payable by UK Theatres Online Limited in consequence of an Event occurring on or before Completion during the period covered by the Accounts subject to a maximum sum of £16,323 ; or
2.3.14	there is available to the Company or Cinemasonline Limited any Relief, other than a Relief which arises as a result of an Event which occurs on or after Completion , which is or can be offset against the Tax Liability in question (and so that the Company or Cinemasonline Limited shall take all necessary steps to claim the benefit of any such Relief) or

Beachcroft Wansbroughs

2.3.15 the liability in any way relates to the conversion of up to £125,104 of Overpayments which currently exist into sales.

2.4 Without limitation, none of the following is regarded for the purposes of Clause 2.3.3 as an Event which has occurred in the Company’s ordinary course of business:

2.4.1	an Event giving rise to a liability under Part XVII of ICTA 1988 (tax avoidance);
2.4.2	a distribution within the meaning of ICTA 1988;
2.4.3	any transaction or deemed transaction which is treated for any Tax purpose as taking place for a consideration other than the actual consideration (if any) or in respect of which an adjustment fails to be made for any Tax purpose in the Company’s or Cinemasonline Limited’s position by reason of the fact that its terms differ from those (if any) which would have been made between independent persons; or
2.4.4	an Event which results in the Company or Cinemasonline Limited being accountable for Tax in a representative capacity or for which it is not primarily accountable or for which it has a right of recourse against another person, such person not being a member of the Buyer’s tax group; or
2.4.5	an Event which results in the Company or Cinemasonline Limited’s failure to deduct or account for Tax or pay Tax when due;
2.4.6	a disposal of capital assets; and
2.4.7	an Event giving rise to a liability within Section 419 of ICTA 1988.

2.5

Except in any cases involving fraud or negligent conduct no claim or claims shall be made by the Buyer under this Tax Covenant unless notice of such claim shall have been given to the Warrantors in writing specifying (in reasonable detail) the matter which gives rise to the claim, prior to the seventh anniversary of Completion and any such claim (if not previously satisfied, withdrawn or settled) shall be deemed to have been withdrawn and waived by the Buyer unless legal proceedings in respect thereof have been commenced (by being both issued and served on the Warrantors) within 6 months of the notification of such claim to the Warrantors under this Clause.

2.6

Clauses 6.1.2, 6.1.3, 6.1.6 and 6.8 of the agreement shall take effect as if set out in full here in this Schedule.

3. PAYMENTS: SUPPLEMENTARY

3.1	Insofar as payments under Clause 2 are less than the Consideration actually paid, they shall constitute a repayment of and reduction in the Consideration.
3.2	All payments made by any of the Warrantors under this Tax Covenant shall be made gross, and free of any counterclaim or set-off other than as required by law.
3.3	If a payment made by a Warrantor under Clause 2 will be or has been subject to Tax, that Warrantor shall on demand from the Buyer pay the Buyer the amount (after taking into account Tax payable in respect of the amount) that will ensure that the Buyer receives and retains a net sum equal to the sum it would have received had the payment not been subject to Tax provided that if any payment is initially made on the basis that the amount due is not taxable in the hands of the Buyer and it is

Beachcroft Wansbroughs

subsequently determined that it is, or vice versa, such adjustments shall be made between the Buyer and that Warrantor as may be required.

4. APPEALS AND CONDUCT OF CLAIMS

4.1 If, and only if, the Company, Cinemasonline Limited or the Buyer receives a Claim relating to a Tax Liability as mentioned in Clause 2.1:

4.1.1

the Buyer shall as soon as reasonably practicable (and in any event not less than fifteen Business Days prior to the expiry of any time for appeal) give notice or procure that notice is given of the Claim to the Warrantors setting out reasonable particulars of the Claim but notice is not a condition precedent to the Warrantors’ liability under this Tax Covenant; and

4.1.2

subject to Clauses 4.3 and 4.4, the Buyer shall, and shall ensure that the Company and Cinemasonline Limited will, take any action the Warrantors may reasonably request to avoid, dispute, resist or compromise the Claim if the Warrantors have first agreed (to the Buyer’s reasonable satisfaction) to indemnify the Buyer, the Company and Cinemasonline Limited against the Tax, and any additional Tax and costs which the Buyer, the Company or Cinemasonline Limited may reasonably and properly incur in connection with the taking of such action.

4.2 The Warrantors’ rights under Clause 4.1.2 cease if the Warrantors (a) fail to request the Buyer or the Company to take any action under paragraph 4.1.2 within 15 Business Days of the date of notice of the Claim being given by the Buyer or the Company or (b) the Warrantors fail to indemnify the Buyer or the Company to the Buyer’s reasonable satisfaction within a period of time (commencing with the date of the notice given to the Warrantors) that is reasonable, having regard to the nature of the Claim and the existence of any time limit in relation to avoiding, disputing, defending, resisting, appealing or compromising such Claim, and which period shall not in any event exceed a period of 15 Business Days or (c) if any of the Warrantors:

4.2.1	takes action, or other steps are taken or legal proceedings are started for his bankruptcy; or
4.2.2	is unable to pay his debts as they fall due, starts negotiations with a creditor with a view to the general readjustment or rescheduling of his indebtedness or makes a general assignment for the benefit of, or a composition with, his creditors.

4.3	The Buyer is not obliged to take, or cause to be taken, any action pursuant to Clause 4.1.2 which involves
	actually fighting a dispute before the first appellate body (excluding the Taxation Authority which has made the Claim, the Special Commissioners, the General Commissioners and the VAT and Duties Tribunal) in the jurisdiction concerning unless the Warrantors shall have produced to the Buyer (if the Tax is a United Kingdom tax or arises within the United Kingdom) the opinion of tax counsel of not less than 7 years’ call, or (otherwise) the opinion of an expert of similar standing (and in each case appointed by agreement between the Buyer and the Warrantor or (if they do not agree) upon the application by either party to the President for the time being of the Law Society, whose determination shall be final), that such action is reasonable.
4.4	Clause 4.1.2 does not apply, or shall cease to apply, if the Warrantors or, (if before Completion), the Company or Cinemasonline Limited:

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4.4.1	appear, in the reasonable opinion of the Company’s auditors to have sought to evade the Tax Liability in question or
4.4.2	appear, in the reasonable opinion of the Company’s auditors, to have acted fraudulently, or fraudulently omitted to act, in relation to that Tax Liability, whether before or after the making of any Claim.

4.5	The action which the Warrantors may request under Clause 4.1.2 above shall include the Company or Cinemasonline Limited applying to postpone (so far as legally possible) the payment of any Tax.
4.6	Following receipt of any instructions as referred to in Clause 4.1.2 above, the Buyer shall procure that a Claim is not settled or otherwise compromised without the Warrantors’ prior written consent, such consent not to be unreasonably withheld or delayed.
4.7	Subject to the Buyer complying with its obligations under and the provisions of this Clause 4, any sum bona fide paid by the Company or Cinemasonline Limited in discharge or settlement of the relevant liability or purported liability, or any figures bona fide agreed or not contested by the Company or Cinemasonline Limited which determine what any relevant liability or purported liability is or would have been, shall be conclusively presumed to constitute the relevant liability for the purposes of Clause 2.
4.8	If, on or before the seventh anniversary of Completion, the auditors for the time being of the Company or Cinemasonline Limited certify (at the request and expense of the Warrantors) that any provision for Tax in the Accounts has proved to be an Overprovision:

4.8.1	the amount of any Overprovision will first be set-off against any payment then due from the Warrantors under this Tax Covenant; and to the extent that there is an excess, a refund will be made to the Warrantors of any previous payment or payments made by the Warrantors under this Tax Covenant (and not previous refunded under this Tax Covenant) up to the amount of such excess; and
4.8.2	to the extent that such excess as referred to in 4.7.1 above is not exhausted, the remainder of that excess will be carried forward and set-off against any future payment or payments which become due from the Warrantors under this Tax Covenant.

5. DATE FOR PAYMENT AND INTEREST

5.1	If a Tax Liability arises under Clauses 2.1.1 or 2.1.4 the Warrantors shall pay to the Buyer the relevant amount in cleared funds on or before the fifth Business Day before the date on which the Tax is payable or, if later, ten Business Days following the date on which the Buyer notifies the Warrantors of their liability to make such payment.
5.2	If a liability arises under Clause 2.1.2, 2.1.3, 2.2, or 3.3 the Buyer shall notify the Warrantors of the amount payable.
5.3	If the Warrantors (acting reasonably) so requests within 14 days starting on the day after delivery of that notice, the Buyer shall ensure that (at the Warrantors’ cost) the Buyer’s auditors (acting as experts and not as arbitrators) confirm whether or not the amount referred to in Clause 5.2 is in their reasonable opinion accurate, and to the extent that is not, determine the amount payable. This confirmation or determination shall (except for manifest error) be conclusive and binding on the Warrantors.

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5.4 The Warrantors shall pay the amount referred to in Clause 5.2 (or if lower, the amount determined in Clause 5.3) to the Buyer in cleared funds:

5.4.1	in the case of a liability under Clause 2.1.2 or 2.1.3, on or before the second Business Day before the date on which the Tax would have been payable;
5.4.2	otherwise, on or before the fifth Business Day either after the date of the notice or (if later) after the date the amount payable is determined pursuant to Clause 5.3.

5.5 If any sum due and payable by the Warrantors under this Tax Covenant is not paid on the due date in accordance with the provisions of this Tax Covenant, the Warrantors shall in addition to that sum pay interest to the Buyer from the date for payment of the sum to and including the day of actual payment of the sum (or the next Business Day if the day of actual payment is not a Business Day). The interest accrues from day to day (before and after judgment) at the rate of 3% per year above the base rate of the Barclays Bank plc (or if there is no base rate, at a similar rate reasonably selected by the Buyer) and is compounded quarterly.

6. RECOVERY FROM THIRD PARTIES

6.1 If:

6.1.1	the Company, Cinemasonline Limited or the Buyer is entitled to recover from another person (including, without limitation, any Taxation Authority) a sum falling within Clauses 2.1 or 2.2; and
6.1.2	the Warrantors have first agreed (to the Buyer’s reasonable satisfaction) to indemnify the Buyer, the Company and Cinemasonline Limited against all costs which the Buyer, the Company or Cinemasonline Limited may reasonably and properly incur in connection with the taking of the following action;

then the Buyer shall procure that the Warrantors are promptly notified of such entitlement and, the Buyer shall and shall ensure that the Company or Cinemasonline Limited will take any action reasonably requested by the Warrantors to enforce recovery against the other person.

6.2	The Buyer need not take any action which the Buyer, the Company or Cinemasonline Limited reasonably considers (acting in good faith having taken account of the reasonable requests of the Warrantor) is likely to have a material adverse effect on the future liability to tax of it, the Company or Cinemasonline Limited.
6.3	The Buyer shall account to the Warrantors for the lesser of:

6.3.1	the sum recovered (including any related interest or related repayment supplement paid by the other person), net of any Tax on the sum and that interest or repayment supplement (save to the extent that any such amount has already been made good by the Warrantors under Clause 2.1); and
6.3.2	the amount paid by the Warrantors under Clause 2.1 or 2.2 in respect of that matter.

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7. INFORMATION, RETURNS ETC.

The Sellers shall on written request provide as much information as they possibly can which the Company, Cinemasonline Limited or the Buyer shall reasonably request to enable the Company or Cinemasonline Limited to draw up its Tax returns, compute its Tax Liability or respond to any request or demand from any Taxation Authority relating to the Company or Cinemasonline Limited’s current or previous accounting periods. The Buyer shall procure that the Company or Cinemasonline Limited affords such access to its books, accounts and records as is necessary and reasonable to enable the Warrantors or their duly authorised agents to provide the information reasonably requested of them.

The Buyer shall have the conduct of submitting to, and agreeing with the Tax Authorities, the Tax computations of the Company or Cinemasonline Limited for the accounting period ending on the Balance Sheet Date (the “Last Accounting Period”) to the extent that the same have not been submitted at Completion.

The Sellers shall prepare the Tax Computations and returns for the Last Accounting Period and submit them to the Buyers for review as soon as reasonably practicable. The Buyer shall following their review deliver to the Sellers copies of all the Tax computations and returns and all related documents and correspondence relating to the Last Accounting Period which it intends to submit to the Tax Authorities before submission to the Tax Authorities. If the Sellers do not comment on the Tax computations, returns, documents or correspondence within 21 days starting on the date of their receipt, they are deemed to have approved them.

The Buyer shall take account of all the Sellers’ reasonable comments concerning the Tax computations, returns, documents or correspondence.

The Sellers and the Buyer shall deliver to each other copies of all correspondence sent to, or received from, a Tax Authority relating to the Tax computations and returns relating to the Last Accounting Period, delivery to be effected promptly on despatch, or as the case may be, receipt.

The Buyer shall ensure that the Company and Cinemasonline Limited will, before submission of a computation, document or correspondence to a Tax Authority relating to a Tax liability of the Company or Cinemasonline Limited which arises in respect of the accounting period starting on the day after the Balance Sheet Date and which may give rise to a claim under this Tax Covenant or under the agreement for breach of the Tax Warranties, consult with the Sellers and make any alterations, amendments or additions to the computation, document or correspondence as the Sellers may reasonably require.

8. SAVINGS

8.1 If (at the Warrantors’ request and expense) the auditors of the Company for the time being determine that the Company or Cinemasonline Limited has obtained a Saving, the Buyer will as soon as reasonably practicable thereafter repay to the Warrantors the lesser of:

8.1.1	the amount of the Saving (as determined by the auditors) less any reasonable costs properly incurred by the Company, Cinemasonline Limited or the Buyer; and
8.1.2	the amount paid by the Warrantors under Clause 2 in respect of the Tax Liability which gave rise to the Saving less any part of that amount previously repaid to the Warrantors under any provision of this Tax Covenant or otherwise.

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9. BUYER’S COVENANT

9.1 The Buyer shall pay to the Sellers an amount equal to any Company Tax Liability which the Sellers are obliged to pay to a Taxation Authority relating to any of the following events occurring or deemed to occur after Completion:

9.1.1	the Company, Cinemasonline Limited or any member of the Buyer’s tax group failing to pay any amount of Tax to which it is liable to the extent that such Tax Liability arises in circumstances where the Buyer would not have been entitled to make a claim against the Warrantors under Clause 2 of this Tax Covenant had such Tax Liability been paid by the Company, Cinemasonline Limited or the relevant member of the Buyer’s tax group.
9.1.2	the making by the Company, Cinemasonline Limited or any member of the Buyer’s tax group of any payment or deemed payment which is treated as a chargeable payment for the purposes of section 214 ICTA where the Company, Cinemasonline Limited or the relevant member of the Buyer’s tax group was aware or ought reasonably to have been aware that such payment would give rise to such Tax Liability;
9.1.3	the Company, Cinemasonline Limited or any member of the Buyer’s tax group ceasing to be resident in the United Kingdom or such other country as that relevant company resides for Taxation purposes.

9.2	Any payment made by the Buyer under paragraph 9.1 above shall be made on or before the fifth Business Day before the last day on which the relevant payment of Taxation is due to be made to the relevant Taxation Authority.
9.3	The Buyer shall pay to the Sellers an amount equal to all costs and expenses reasonably and properly incurred by the Sellers in connection with such Tax Liability as described in Clause 9.1 above or any action taken under this Clause 9.

Beachcroft Wansbroughs

SCHEDULE 5

The Property

The Lease

Leasehold Properties with unregistered titles

Present lessee (owner)	UK Theatres Online Limited
Date of lease	Today’s date
Parties	Clifford House 2002 Limited (1) and UK Theatres Online Limited (2)
Term	3 years (break on 12 months’ notice)
Current rental	£32,400 per annum
Short description	Basement, 1st and 2nd Floor, 34/36 Orchard Road, St. Anne’s on Sea, Lancashire
Use	Offices within A2 and/or B1 usage

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SCHEDULE 6

The Buyer will in good faith co-operate and will procure that the Company and Spring Leisure Limited and www.co.uk Limited will also co-operate in good faith with Jeffrey Spector so as to identify together all Overpayments made to them prior to Completion and which remain treated as such as at the date of Completion and to take such steps as can reasonably be taken at no significant cost to them (other than consequential Taxation) to ensure that such Overpayments are converted into sales within 12 months after Completion.

An amount equal to the “net of value added tax” element of any sum which was previously treated as an Overpayment but has prior to the first anniversary of Completion been converted into a sale during the year after completion shall become payable to the Sellers as additional consideration pursuant to clause 3.3 and such sums shall as soon as determined be payable to the Sellers from the Escrow Account in accordance with the terms of the Escrow Letter.

The Buyer and Jeffrey Spector shall use their respective best endeavours to agree the amount payable as soon as practicable after 28 February 2006 and upon agreement such sum as has been agreed to be payable shall be paid by means of a release from the Escrow Account.

A second payment will be made as soon as practicable after 28 February 2007 to take account of all further conversions into sales prior to the first anniversary of Completion.

Beachcroft Wansbroughs

SIGNATURE PAGES

SIGNED (but not delivered until the date hereof) as a		)
Deed on behalf of CINEMASOURCE UK LIMITED		)	/s/ Mitchell Rubenstein
in the presence of:-		)	(Signature)
			22 November 2005
WITNESS:			(Date)
Signature:	/s/ James Moakley
Name:	James Moakley
Address:	Hollywood Media Corp.
	2255 Glades Road, Suite 221A
	Boca Raton, FL 33431
Occupation:	Attorney
(PLEASE COMPLETE IN CAPITALS)

SIGNED (but not delivered until the date hereof) as a		)
Deed by JEFFREY SPECTOR in the presence of:-		)	/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by JANETTE ERSKINE in the presence of:-		)	/s/ Janette Erskine
			(Signature)
WITNESS:
Signature:	/s/ S. Aldred
Name:	S. Aldred		(Date)
Address:	182 Kirkstone Drive
	Thornton Cleveleys
	FY5 1QJ
Occupation:	Credit Control
(PLEASE COMPLETE IN CAPITALS)

Beachcroft Wansbroughs

SIGNED (but not delivered until the date hereof) as a		)
Deed by MALCOLM JOHNSON in the presence of:-		)	/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by MITCHELL CLIFFORD MICHAEL		)	/s/ Kevin Philbin
CARTWRIGHT in the presence of:-		)	(Signature)
WITNESS:
Signature:	/s/ Jeffrey Spector		(Date)
Name:	Jeffrey Spector
Address:	255 Clifton Drive South
	Latham, St. Anne’s, Lancashire
	England, FY8 1HW
Occupation:	Director
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by DAVID BROWN in the presence of:-		)	/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

			Beachcroft Wansbroughs
SIGNED (but not delivered until the date hereof) as a		)
Deed by SAM DRURY in the presence of:-		)
			/s/ Jeffrey Spector   (Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by WAYNE HARWOOD in the presence of:-		)
			/s/ Jeffrey Spector   (Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by TERRY HENNIGAN in the presence of:-		)
			/s/ Jeffrey Spector   (Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

			Beachcroft Wansbroughs
SIGNED (but not delivered until the date hereof) as a		)
Deed by PHILLIP HOLMES in the presence of:-		)
			/s/ Jeffrey Spector   (Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed on behalf of LONECROFT PLC in the		)
presence of:-		)	/s/ Kevin Philbin   (Signature)
WITNESS:
Signature:	/s/ Jeffrey Spector		(Date)
Name:	Jeffrey Spector
Address:	255 Clifton Drive South
	Latham, St. Anne’s, Lancashire
	England, FY8 1HW
Occupation:	Director
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by GILLIAN POWER in the presence of:-		)
			/s/ Jeffrey Spector   (Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

			Beachcroft Wansbroughs
SIGNED (but not delivered until the date hereof) as a		)
Deed by STEVEN RICHARDSON in the presence of:-		)
			/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

SIGNED (but not delivered until the date hereof) as a		)
Deed by JEFFREY TENNANT in the presence of:-		)
			/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

SIGNED (but not delivered until the date hereof) as a)		)
Deed by BRADLEY WHITE in the presence of:-		)
			/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

			Beachcroft Wansbroughs
SIGNED (but not delivered until the date hereof) as a		)
Deed by ELAINE PATRICE SPECTOR in the presence of:-		)
			/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

SIGNED (but not delivered until the date hereof) as a		)
Deed by GENEVA CARTWRIGHT in the presence of:-		)
			/s/ Kevin Philbin
			(Signature)
WITNESS:
Signature:	/s/ Jeffrey Spector		(Date)
Name:	Jeffrey Spector
Address:	255 Clifton Drive South
	Latham, St. Anne’s, Lancashire
	England, FY8 1HW
Occupation:	Director
(PLEASE COMPLETE IN CAPITALS)

SIGNED (but not delivered until the date hereof) as a		)
Deed by CLIFFORD HOUSE in the presence of:-		)
			/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Jeffrey Spector		(Date)
Name:	Jeffrey Spector
Address:	255 Clifton Drive South
	Latham, St. Anne’s, Lancashire
	England, FY8 1HW
Occupation:	Director
(PLEASE COMPLETE IN CAPITALS)

Beachcroft Wansbroughs

SIGNED (but not delivered until the date hereof) as a		)
Deed on behalf of UK THEATRES ONLINE		)	/s/ Jeffrey Spector
LIMITED in the presence of:-		)	(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by JULIAN LATHAM in the presence of:-		)	/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed by JEANETTE TAYLOR in the presence of:-		)	/s/ Jeffrey Spector
			(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin
Name:	Kevin Philbin		(Date)
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

Beachcroft Wansbroughs

SIGNED (but not delivered until the date hereof) as a		)
Deed by DAVID BRYAN WILLIAMS in the presence		)	/s/ Jeffrey Spector
of:-		)	(Signature)
WITNESS:
Signature:	/s/ Kevin Philbin		(Date)
Name:	Kevin Philbin
Address:	76 Cross Street
	Manchester
	M2 4JU
Occupation:	Solicitor
(PLEASE COMPLETE IN CAPITALS)

EX-10.2

EXHIBIT 10.2

DATED 22 November 2005

(1) MITCHELL CLIFFORD CARTWRIGHT

— and —

(2) CINEMASOURCE UK LIMITED

AGREEMENT
for the sale and purchase of
CINEMASONLINE LIMITED

THIS AGREEMENT is made the 22^nd day of November 2005

BETWEEN:

(1)	MITCHELL CLIFFORD CARTWRIGHT of 16 Clipper Island, Sandyport, Nassau, Bahamas (the “Seller”); and
(2)	CINEMASOURCE UK LIMITED a company incorporated in the United Kingdom whose registered office is 100 Fetter Lane, London EC4A 1BN, United Kingdom (the “Buyer”).

IT IS AGREED as follows:-

1. INTERPRETATION

1.1 In this agreement:-

“Accounts”	means the statutory accounts of the Company for the year ended on the Balance Sheet Date;
“Act”	means the Companies Act 1985;
“Balance Sheet Date”	means 31 March 2005;
“Business Day”	means a day (other than a Saturday) on which clearing banks in the City of London are open for the transaction of normal sterling banking business;
“Buyer’s Group”	means the Buyer, any subsidiary of the Buyer, any holding company of the Buyer and any subsidiary of any holding company of the Buyer, from time to time;
“Buyer’s Solicitors”	means Beachcroft Wansbroughs of 100 Fetter Lane, London EC4A 1BN;
“UK Purchase Agreement”	means the agreement for the sale and purchase of the entire issued share capital of the Licensees entered into as of today’s date between the sellers named therein and the Buyer;
“Claim”	means a claim made by the Buyer against the Seller under the provisions of this agreement;
“Company”	means Cinemasonline Limited (Company Number 5161573) details of which are set out in Schedule 1;
“Completion”	means completion of the sale and purchase of the Shares in accordance with this agreement;
“Completion Date”	means the day after today’s date;
“Confidential Information”	means all information not publicly known and which is known to the Seller and which is used in and relates to the Company’s business, its customers or financial or other affairs, including, without limitation, information relating to:-
	(a)	the marketing of products or services including, without limitation, customer names

		and lists and other details of customers, financial information, sales targets, sales statistics, market share statistics, prices, market research reports and surveys, and advertising or other promotional materials; or
	(b)	future projects, business development or planning, commercial relationships and negotiations
	existing in whatever form;
“Consideration”	means the consideration payable on Completion for the purchase of the Shares as set out in Clause 3;
“Encumbrance”	means any encumbrance or security interest of any kind whatsoever including without limitation a mortgage, charge, pledge, lien, hypothecation, restriction, right to acquire, right of pre-emption, option, conversion right, third party right or interest, right of set-off or counterclaim, equities, trust arrangement or any other type of preferential agreement (such as a retention of title arrangement) having similar effect or any other rights exercisable by or claims by third parties;
“Intellectual Property”	means any and all:-
	(a)	patents, trade marks, service marks, domain names, registered designs, utility models, applications for and the right to make applications for any of such rights, inventions, Know-How, Confidential Information, unregistered trade marks and service marks, trade and business names, copyrights, (including rights in computer software and in websites) unregistered design rights and other rights in designs and rights in databases;
	(b)	rights under licences, consents, orders, statutes or otherwise in respect of any rights of the nature specified in paragraph (a) and above; and
	(c)	rights of the same or similar effect or nature as or to those in paragraphs (b) and (c) above in each case in any jurisdiction;
“Intellectual Property Rights”	means all Intellectual Property licenced to the Licencees by the Company and used by them in, or in connection with its business and/or legally or beneficially owned by the Company;
“Know-How”	means all information not publicly known which is owned by the Company and/or used or required to be used by the Company in or in connection with its business existing in any form (including, but not limited to that comprised in or derived from data,

	specifications, formulae, experience, drawings, manuals, component, lists, instructions, designs and circuit diagrams, brochures, catalogues and other descriptions) and relating to:
	(a)	the provision of any services;
	(b)	the installation, maintenance or use of equipment or processes; or
	(c)	the rectification, repair, service or maintenance of produces or other equipment;
“Licencees”	Means any or all of UK Theatres Online Limited (No.3850910), Spring Leisure Limited (No. 05102050) and WWW.CO.UK Limited (No. 04285425);
“Sellers’ Solicitors”	means Wacks Caller Solicitors, Steam Packet House, 76 Cross Street, Manchester M2 4JU;
“Shares”	means 1,000 ordinary shares of £1 each in the capital of the Company constituting its entire issued and to be issued share capital as at the date hereof.

1.2 In this agreement, reference to:-

1.2.1	a clause or Schedule is a reference to a clause of or schedule to this agreement;
1.2.2	a document “in the agreed form” is a reference to a document in the form approved by or on behalf of the Buyer and the Seller;
1.2.3	a statutory provision includes a reference to that provision as modified, replaced, amended and/or re-enacted from time to time and any prior or subsequent subordinate legislation made under it and, where the context so requires, references to an Article of the EC Treaty shall include a reference to the equivalent Article in the EC Treaty prior to its re-numbering by the Treaty of Amsterdam;
1.2.4	“costs” includes a reference to costs, charges and expenses of every description;
1.2.5	a “person” includes a reference to an individual, partnership, unincorporated association or body corporate wherever incorporated or situate and includes a reference to that person’s legal personal representatives and successors;
1.2.6	a “subsidiary”, “holding company” and “body corporate” has the respective meaning set out in sections 736 and 740 of the Act;
1.2.7	a “company” has the meaning set out in section 735 of the Act; and
1.2.8	a “subsidiary undertaking” or a “parent undertaking” has the meaning set out in sections 258 and 259 of the Act.

1.3 The Schedules form part of this agreement and shall be interpreted and construed as though they were set out in this agreement.

1.4	The headings to the clauses, Schedules and paragraphs of the Schedules are for convenience only and shall not affect the interpretation or construction of this agreement.
1.5	In construing this agreement, the ejusdem generis principle shall not apply and general words are not to be given a restrictive meaning because they are followed by particular examples intended to be embraced by the general words.
1.6	Unless otherwise stated to the contrary in any particular case, any statement which refers to the knowledge or knowledge and belief of the Seller or is expressed to be “so far as the Seller is aware” or any similar expression shall be deemed to include an additional statement that it has been made after due and careful enquiry of employees and officers of the Company or the Licencees.
1.7	Any agreement, warranty, indemnity, covenant or undertaking on the part of two or more persons shall, except where the contrary is stated, be deemed to be given or made by such persons severally.

2. SALE AND PURCHASE OF THE SHARES

2.1	The Seller agrees to sell or procure to be sold with full title guarantee and the Buyer agrees to buy, the whole of the legal and beneficial interest in the Shares with all rights attached or accruing to them at the date of Completion.
2.2	The Seller covenants to the Buyer that the Buyer will on Completion be entitled to exercise all rights attached or accruing to the Shares.
2.3	The completion of this agreement is conditional upon the simultaneous completion of the purchase of the UK Purchase Agreement.

3. CONSIDERATION

3.1	The price for the Shares is the Consideration.
3.2	The Consideration is the sum of US$1,734,400 which will be paid in cash to the Seller and which shall be satisfied at Completion by the electronic transfer of US$1,734,400 to the Buyer’s Solicitors’ U.S. Dollar Client Account at Coutts Bank, 440 The Strand, London WC2R 0QS, Account No 15537140, IBAN GB07COUT18009115537140, SWIFT Code COUT GB 22.

4. COMPLETION

4.1	Completion shall, subject to the provisions of Clause 5.5, take place at the offices of the Buyer’s Solicitors in London on the Completion Date when all the matters referred to in Clauses 4.2 to 4.4 shall be effected.
4.2	At Completion the Seller shall deliver to the Buyer:-

4.2.1	duly executed transfers of the Shares to the Buyer in the agreed form together with the share certificates for all of the Shares (or an express indemnity in a form satisfactory to the Buyer in the case of any missing certificate;
4.2.2	board resolutions of the Company in the agreed form relating to the matters specified in Clause 4.3;
4.2.3	executed power(s) of attorney in favour of the Buyer in the agreed form, and such duly executed waivers or consents as may be required, to give a good title to the Shares to the Buyer and to enable the Buyer be registered

	as the holder of the Shares and, pending registration, to exercise all voting and other rights attaching to the Shares;
4.2.4	all the financial and accounting books and records of the Company; and
4.2.5	the statutory books of the Company (duly written up to date as at immediately prior to Completion) and Certificates of Incorporation and Certificate of Incorporation on Change of Name.

4.3 At Completion the Seller shall procure that a board meeting of the Company is held at which the directors:-

4.3.1	approve the registration of the transfers in respect of the Shares referred to in Clause 4.2.1 (subject only to due stamping);
4.3.2	revoke all existing authorities to bankers regarding the operation of the Company’s bank accounts and give relevant authorities in favour of the persons nominated by the Buyer to operate such accounts; and
4.3.3	change the Company’s accounting reference date to 31 December.

4.4 At Completion the Buyer shall:-

4.4.1	pay the Consideration set out in Clause 3 by procuring that the Buyer’s Solicitors shall provide an undertaking in the agreed form to the Seller’s Solicitors and shall effect the electronic transfer referred to therein; and
4.4.2	deliver to the Seller a copy of a resolution of the Buyer’s board of directors (or an authorised committee of that board) authorising the execution and completion of this agreement and the incidental matters referred to herein.

5. WARRANTIES

5.1	The Seller warrants to the Buyer that each warranty contained in Schedule 2 is true and accurate in all material respects as at the date of this agreement.
5.2	Each of the parties acknowledges that the Buyer is entering into this agreement in reliance upon the warranties contained in Schedule 2 (the “Warranties”). Save as provided in Clause 6, no information of which the Buyer or any member of the Buyer’s Group has constructive or imputed knowledge shall prejudice any claim being made by the Buyer under any of the Warranties nor shall it affect the amount recoverable under any such claim and neither the rights and remedies of the Buyer nor the Seller’s liability in respect of the Warranties shall be affected by any investigation made by or on behalf of the Buyer into the Company.
5.3	Each of the Warranties shall be interpreted as a separate and independent Warranty so that the Buyer shall have a separate claim and right of action in respect of every breach of each Warranty.

6.	LIMITATION ON SELLER’S LIABILITY
	The Seller’s liability under the Warranties shall be limited as set forth in Clause 6 of the UK Purchase Agreement.
7.	CONFIDENTIAL INFORMATION AND KNOW-HOW

7.1 The Seller undertakes before and after Completion but subject to Clause 7.2 that he shall:-

7.1.1	not make use of or disclose to any person Confidential Information, Know-How or Intellectual Property belonging to and/or used by the Company up to Completion; and
7.1.2	take all reasonable steps to prevent the use or disclosure of any such Confidential Information, Know-How or Intellectual Property belonging to and/or used by the Company.

7.2 Clause 7.1 does not apply to:-

7.2.1	the use or disclosure of Confidential Information required to be used or disclosed by law provided that the Seller gives the Buyer prior notice of such disclosure or in the course of the employment of Seller by the Company or the Buyer or another member of the Buyer’s Group or as required by the terms of any other contract or agreement to which the Buyer or another member of the Buyer’s Group or the Company is a party;
7.2.2	the disclosure of Confidential Information, Know-How or Intellectual Property to a director, officer or employee of the Buyer or another member of the Buyer’s Group or of the Company whose function requires that he has possession of the Confidential Information Know-How or Intellectual Property Rights;
7.2.3	disclosure of Confidential Information to an adviser for the purpose of advising the Seller but only on terms that Clause 7.1 applies to use or disclosure by the adviser; or
7.2.4	Confidential Information which becomes publicly known except as a result of the Seller’s breach of Clause 7.1.

8. ANNOUNCEMENTS

8.1	Subject to Clause 8.2 the Seller shall not make or send before or after Completion any announcement, communication or circular relating to the subject matter of this agreement unless such party has first obtained the other party’s written consent to the form and text of such announcement, such consent not to be unreasonably withheld.
8.2	Subject to Clause 8.3, Clause 8.1 does not apply to an announcement, communication or circular:-

8.2.1	required by law or by a Recognised Investment Exchange (as defined by the Financial Services and Markets Act 2000) or by any governmental authority, in which event the party required to make or send such announcement, communication or circular shall, where practicable, first consult with the other party as to the content of such announcement;
8.2.2	made or sent by the Buyer or another member of the Buyer’s Group after Completion to the Company’s customers, clients or suppliers advising them of the change of control of the Company; or
8.2.3	sent by the Buyer or another member of the Buyer’s Group to the Seller’s Solicitors and/or its officers, directors, employees, equity holders, shareholders and professional advisers (“the Authorised Disclosees”) if the Seller’s Solicitors and any Authorised Disclosee agrees to be bound by confidentiality provisions substantially the same as those contained in Clause 8.

8.3 In the event either party is required by law, applicable regulation or judicial process to disclose any information relating to this agreement, such party agrees to:-

8.3.1	promptly notify the other party of the existence, terms and circumstances surrounding such requirement;
8.3.2	consult with the other party on the advisability of taking legally available steps to resist or narrow such request; and
8.3.3	if disclosure of such information is required, exercise its reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such information. If such order or assurance is not obtained, the party required to disclose such information shall be permitted to disclose only the portion of such information that it is advised by opinion of counsel is required to be disclosed.

9. NOTICES

9.1

Any notice or other communication pursuant to, or in connection with, this agreement shall be in writing and delivered personally, or sent by first class pre-paid recorded delivery post (air mail if overseas), to the Buyer at the address specified on page 1 above (or such address as may be notified in writing by the Buyer from time to time) with a copy to Hollywood Media Corp., 2255 Glades Road, Suite 221A, Boca Raton, Fl 33431 USA (Attention: Legal Department), and to each Seller at the address of the Seller’s Solicitors (Ref KP).

9.2

Subject to Clause 8.3, any notice or other communication shall be deemed to have been served:-

9.2.1	if delivered personally, when left at the address referred to in Clause 9.1;
9.2.2	if sent by pre-paid recorded delivery post (other than air mail), two days after posting it; or
9.2.3	if sent by air mail, six days after posting it.

9.3 If a notice is given or deemed given at a time or on a date which is not a Business Day, it shall be deemed to have been given on the next Business Day.

10. ENTIRE AGREEMENT

10.1 This agreement sets out the entire agreement and understanding between the parties in respect of the sale and purchase of the Shares. It is agreed that:-

10.1.1	the Buyer has not entered into this agreement in reliance upon any representation, warranty or undertaking of any other party which is not expressly set out or referred to in this agreement;
10.1.2	neither party shall have any remedy in respect of any misrepresentation or any untrue statement made by the other party which is not contained in this agreement nor for any breach of warranty which is not contained in this agreement;
10.1.3	this clause shall not exclude any liability for, or remedy in respect of fraud or fraudulent misrepresentation.

10.2 No variation of this agreement shall be effective unless made in writing and signed by or on behalf of both of the parties.

11. FURTHER ASSURANCE

11.1	The Seller undertakes to provide the Buyer before or after Completion with all documents as he has in his possession or under his control relating to the business and affairs of the Company and for this purpose the Seller shall give the Buyer and any persons authorised by the Buyer reasonable access to all such documents, and the Buyer may, at its cost, copy any such documents.
11.2	The Seller shall:-

11.2.1

at his own cost at any time before and after Completion execute or procure the execution of such documents in a form satisfactory to the Buyer as the Buyer considers reasonably necessary for the purpose of vesting the Shares in the Buyer; and

11.2.2

for a period not exceeding three years from the date of this agreement give to the Buyer such assistance as the Buyer may reasonably require in connection with any dispute or threatened dispute directly or indirectly relating to the Intellectual Property, Know-How and/or the Confidential Information, subject to the Buyer first indemnifying the Seller against any costs hereby incurred by him in such reasonable manner as the Seller shall reasonably request.

12.	INVALIDITY
	If any provision of this agreement is held to be unenforceable or illegal, in whole or in part, such provision or part shall to that extent be deemed not to form part of this agreement but the enforceability of the remainder of this agreement shall remain unaffected.
13.	EFFECT OF COMPLETION
	This agreement and in particular the Warranties in so far as any of its provisions remain to be, or are capable of being, performed or observed, shall remain in full force and effect after Completion.
14.	WAIVER

14.1

The failure by the Buyer to exercise or delay in exercising any right or remedy under this agreement shall not constitute a waiver of the right or remedy or a waiver of any other rights or remedies the Buyer may otherwise have and no single or partial exercise of any right or remedy under this agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.

14.2

The Buyer’s rights and remedies contained in this agreement are in addition to, and not exclusive of, any other rights or remedies available at law.

15.	COSTS
	The Buyer and the Seller shall pay their own costs in relation to the negotiation, preparation, execution and implementation of this agreement and of each document referred to in this agreement.
16.	ASSIGNMENT

16.1 The Seller agrees that the benefits of this agreement and any documents referred to in it or executed at Completion (including any causes of action arising in connection with any of them) are given to the Buyer for itself and its successors in title and the Buyer and its successors in title may not without the consent of the Seller, such

	consent not to be unreasonably withheld or delayed, assign the benefits of this agreement.
16.2	Notwithstanding the provisions of Clause 16.1 above, the Buyer may assign the benefits of this agreement to any member of the Buyer’s Group. PROVIDED THAT upon the assignee ceasing to be a member of the Buyer’s Group such benefits shall cease to apply unless they shall have previously been re-assigned to another member of the Buyer’s Group.

17.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
	A person who is not a party to this agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this agreement provided that this does not affect any right or remedy of the third party which exists or is available apart from that Act. No party may declare itself as a trustee of the rights under this agreement for the benefit of any third party save as expressly provided in this agreement.
18.	LIMITATION OF TIME
	In the event of any claim being made under this agreement the parties shall not plead against such claim the provisions of the Limitation Act 1980 or any other statute or rule of law relating to limitation of time in which an action can be brought or claim made, provided that this Clause 18 is without prejudice to any express provision of this agreement regarding time limits for notifying or making claims.
19.	COUNTERPARTS
	This agreement may be executed in any number of counterparts and by each of the parties on separate counterparts (by fax or otherwise) each of which when executed and delivered shall be deemed to be an original, but all the counterparts together shall constitute one and the same agreement.
20.	LAW AND JURISDICTION

20.1

This agreement shall be governed by the jurisdiction of the courts of England and Wales and construed and governed in accordance with the laws of England

20.2

Any and all disputes, controversies or claims arising out of, relating to or in connection with this agreement including any question regarding its existence, validity, scope or termination, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator (“the Arbitrator”) appointed in accordance with such Rules. The arbitration shall be conducted in the English language in Geneva, Switzerland. Judgment on any award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. Each party shall bear its own costs and expense of such arbitration. The parties shall maintain strict confidentiality with respect to all aspects of the arbitration and shall not disclose the fact, conduct or outcome of the arbitration to any non parties or non participants without the prior written consent of each party to the arbitration, except to the extent required by law, applicable regulation or judicial process or to the extent necessary to recognise, confirm or enforce the final award in the arbitration. In the event either party is required by law, applicable regulation or judicial process to disclose any information relating to the arbitration, such party agrees to comply with the provisions set forth in Clause 8.3 above as if applicable to the arbitration.

SIGNED by or on behalf of the parties on the date which first appears in this agreement.

SCHEDULE 1

Details of the Company

1.	Registered number:	5161573
2.	Previous company names:	None
3.	Registered office:	36 Orchard Road, Lytham St Annes, Lancashire FY81PF
4.	Date and place of incorporation:	23 June 2004, Cardiff
5.	Authorised share capital:	£1000 made up of 1000 ordinary shares of £1 each
6.	Issued share capital:	£1000 made up of 1000 ordinary shares of £1 each
7.	Shareholders	The Seller

SCHEDULE 2

Warranties

1.	SHARE CAPITAL, SUBSIDIARIES AND JOINT VENTURES
	Ownership of Shares

1.1	The Seller is the legal and beneficial owner of, and is entitled to sell with full title guarantee on the terms of this agreement without the consent of any third party, the Shares free from Encumbrances.
1.2	The Shares constitute the whole of the Company’s allotted and issued share capital and are fully paid or credited as fully paid.
1.3	There is no Encumbrance on, over or affecting any of unissued shares, debentures or other securities of the Company and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue, allotment, conversion, redemption, sale or transfer of any shares, debentures or other securities of the Company.
Joint Ventures
1.4	The Company is not, and has not agreed to become a member of any partnership or other unincorporated association, joint venture, or consortium (other than a recognised trade association) or other profit or income sharing arrangement.
Branch
1.5	The Company does not have any branch, agency or place of business outside the United Kingdom and does not use its letterhead, books or vehicles or otherwise carry on its business under any name other than its corporate name.

2.	CAPACITY
	Authority

2.1	The Seller has the necessary power and authority and has taken all necessary action to enter into and perform this agreement and each of the documents to be executed at or before Completion in accordance with this agreement which will, when executed, become binding and enforceable obligations of the Seller.
2.2	The Seller will not, by virtue of entering into or performing any of his duties under this agreement or any other agreement made or to be made between the Seller and the Buyer, be in breach of any express or implied terms of any contract or of any other obligation binding upon him.

3. INFORMATION ON COMPANY

3.1 The information contained in Schedule 1 of this agreement is true and accurate in all respects and not misleading.

4. STATUTORY ACCOUNTS AND RECORDS

4.1	The Company’s accounts, books, ledgers, financial and other records are in its possession or under its control, up-to-date and contain a materially accurate record of all matters required to be entered in them by the Act, accounting practice and other relevant legislation.
4.2	The Accounts have been prepared in accordance with the Companies Acts and with accounting standards, policies, principles and practices generally accepted in the UK and in accordance with the law of that jurisdiction.
4.3	The Accounts have been audited by an auditor or firm of accountants qualified to act as auditors in the UK and the auditors’ report(s) required to be annexed to the Accounts is unqualified.
4.4	The Accounts show a true and fair view of the commitments and financial position and affairs of the Company as at the Balance Sheet Date and of the profit and loss of the Company for the financial year ended on that date.
4.5	The Accounts contain either provision adequate to cover, or full particulars in notes of, all Taxation and other liabilities (whether quantified, contingent, disputed or otherwise) of the Company as at the Balance Sheet Date.
4.6	The Accounts have been filed and laid before the Company in general meeting in accordance with the requirements of the Companies Acts.
4.7	The Accounts have been prepared on a basis consistent with the audited accounts of, as the case may be, the Company for the two prior accounting periods without any change in accounting policies used.

5. ASSETS AND LIABILITIES

5.1	The Company is not the beneficiary of any loan facilities from any bankers.
5.2	The Company has not created, or agreed to create, any Encumbrance or given, or agreed to give, any guarantee, suretyship, indemnity or similar encumbrance or agreement for the postponement of debt or (except in the ordinary course of business) for lien or set-off.
5.3	The Company is not a party to or subject to any agreement, transaction, obligation, commitment, understanding, arrangement or liability.
5.4	The Company has no assets save for the substantial Intellectual Property Rights which have been created for it by the Seller and Clientserv Limited and which are licenced by it to the Licensees on a basis which is royalty free until 31 December 2005 and terminable on 30 days notice thereafter. The Seller and Clientserv Limited have no subsisting rights or interests in such Intellectual Property Rights.
5.5	Each of the Intellectual Property Rights which have been created by or for the Company (including that created by Clientserv Limited) is:-

5.5.1	valid, subsisting and enforceable and, so far as the Seller is aware, nothing has been done or omitted to be done by which it may cease to be valid and enforceable;
5.5.2	solely legally and beneficially owned by, and validly granted to, the Company free from any lien, licence, encumbrance, restriction on use or disclosure obligation;
5.5.3	used exclusively by the Company and the Licencees; and

5.5.4 not, and so far as the Seller is aware, will not be, the subject of a claim, opposition, challenge or attack from a person including, without limitation, an employee of the Company as to title, subsistence, validity, enforceability, entitlement or pursuant to sections 40 and 41 of the Patents Act 1977 or otherwise.

5.6	All Confidential Information has been kept secret and (save as required in the ordinary course of business) not been disclosed to third parties.
5.7	There is and has been no civil, criminal, arbitration, administrative or other proceeding or dispute in any jurisdiction concerning any of the Intellectual Property Rights and so far as Vendor is aware, no civil, criminal, arbitration, administrative or other proceedings concerning any of the Intellectual Property Rights is pending or threatened. So far as the Vendor is aware (but without having made any enquiry) no matter exists which might give rise to a proceeding of that type.
5.8	The Company has no liabilities or obligations of any kind to any third party of any kind whatsoever, whether past or present and whether actual or contingent.

SIGNATURE PAGE

SIGNED (but not delivered until the date hereof) as a		)
Deed by MITCHELL CLIFFORD MICHAEL		)	/s/ Kevin Philbin as attorney
CARTWRIGHT in the presence of:-		)	(Signature)
WITNESS:
Signature:	/s/ Jeffrey Spector		(Date)
Name:	Jeffrey Spector
Address:	255 Clifton Drive South
	Latham, St. Anne’s, Lancashire
	England, FY8 1HW
Occupation:	Director
(PLEASE COMPLETE IN CAPITALS)
SIGNED (but not delivered until the date hereof) as a		)
Deed on behalf of CINEMASOURCE UK LIMITED		)	/s/ Mitchell Rubenstein
in the presence of:-		)	(Signature)
WITNESS:			22 November 2005
Signature:	/s/ James Moakley		(Date)
Name:	James Moakley
Address:	Hollywood Media Corp.
	2255 Glades Road, Suite 221A
	Boca Raton, FL 33431
Occupation:	Attorney
(PLEASE COMPLETE IN CAPITALS)

EX-10.3

EXHIBIT 10.3

EXECUTION VERSION

NOTE PURCHASE AGREEMENT

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

     WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires to sell and issue to the Purchasers, and the Purchasers wish to purchase from the Company (i) an aggregate of seven million dollars ($7,000,000.00) in principal amount of the Company’s Senior Notes in the form attached hereto as Exhibit A (the “Notes”) and (ii) warrants to purchase an aggregate of 700,000 shares of common stock, par value $0.01, of the Company (the “Common Stock”) in the form attached hereto as Exhibit B, and, if the Company exercises its right under the Notes to extend the maturity date thereof, warrants to purchase up to an additional 100,000 shares of Common Stock issued pursuant to the terms and conditions of the Notes (the “Warrants”).

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

     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows:

ARTICLE I.
DEFINITIONS

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

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

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

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

          “Closing” means the closing of the purchase and sale of the Notes and Warrants pursuant to Section 2.3.

          “Closing Date” means the date of the Closing.

          “Commission” means the Securities and Exchange Commission.

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

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

          “Company Counsel” means Foley & Lardner LLP.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          “Subsidiary” means any subsidiary of the Company that is required to be listed in Schedule 3.1(a).

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

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

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

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

ARTICLE II.
PURCHASE AND SALE OF NOTES AND WARRANTS

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

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

          2.3 The Closing.

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

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

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

          2.4 Closing Deliveries.

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

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

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

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

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

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

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

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

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

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

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

          (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

          (b) Organization and Qualification. Each of the Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and each Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate, reasonably be expected to result in (i) an adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

          (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents, to issue the Notes and the Warrants, and, if applicable, the Common Shares and the Redemption Shares, and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions

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contemplated thereby, including the issuance of the Notes and Warrants and, if applicable, the Common Shares and the Redemption Shares, have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith, other than in connection with the Required Approvals. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

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

          (e) Filings, Consents and Approvals. Except for Required Approvals disclosed in Schedule 3.1(e), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filings required in accordance with Section 4.5, (ii) those that have been made or obtained prior to the date of this Agreement, (iii) application(s) to each applicable Trading Market for the listing of the Common Shares (and, if applicable, the Redemption Shares) for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, and including Schedule 3.1(e), the “Required Approvals”).

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

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

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          (h) SEC Reports; Financial Statements. The Company has filed all reports and proxy statements required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twenty-four months preceding the date hereof (or such shorter period as the Company was required by law to file such reports) (the foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the Disclosure Schedules, the “Disclosure Materials”) on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and such financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) applied on a consistent basis during the periods involved (except as may be otherwise specified in such financial statements or the notes thereto, or in the case of unaudited financial statements, to the extent they may exclude footnotes or may be condensed or summary footnotes or statements), and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the Exchange Act.

          (i) Material Changes. Except as disclosed in Schedule 3.1(i), since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in the Disclosure Materials, (i) there has been no event, occurrence or development known to the Company that, individually or in the aggregate, has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, and (C) other liabilities that would not, individually or in the aggregate, have a Material Adverse Effect, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate of the Company, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.

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          (j) Litigation. Except as disclosed in Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents, the Common Shares, or the Redemption Shares or (ii) except as set forth in the SEC Reports, could, if there were an unfavorable decision, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Except as set forth in the SEC Reports, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There is not pending, and to the knowledge of the Company, there is not contemplated, any investigation by the Commission of the Company or any current or former director or officer of the Company.

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

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

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

          (n) Title to Assets. Except as disclosed in the Disclosure Materials or Schedule 3.1(n), the Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens, except for Liens as do

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not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

          (o) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person other than matters previously resolved or as would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in the SEC Reports, all such Intellectual Property Rights are enforceable and do not violate or infringe the Intellectual Property Rights of others in any respect that would reasonably be expected to result in a Material Adverse Effect and, to the knowledge of the Company, there is no material existing infringement by another Person of any of the Intellectual Property Rights.

          (p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are believed by the Company to be prudent in the businesses in which the Company and the Subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost, other than general insurance price increases.

          (q) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports or Schedule 3.1(q) none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary required to be disclosed in the SEC Reports (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

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

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

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

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

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

          (v) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Notes, the Warrants, and the Common Shares to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of the Trading Market on which the Common Stock is currently listed or quoted.

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

          (x) Solvency. Based on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (i) the Company’s cash and fair saleable value of its assets (including the goodwill of the Company and any business acquired by the Company) exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature during the current fiscal year and 2006; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year and 2006 as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof (including the proceeds from the sale of the Notes, the Warrants, and the Common Shares hereunder); and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets in an orderly liquidation, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

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

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

          (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate or, if such Purchaser is not a

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

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

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

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          (d) Accredited Investor Status. At the time such Purchaser was offered the Notes and the Warrants, it was, and at the date hereof it is, and on each date on which any Common Shares or Redemption Shares are issued, it will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

          (e) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the purchase of the Notes, the Warrants, and, if applicable, the Common Shares and the Redemption Shares, and has so evaluated the merits and risks of such purchase. Such Purchaser is able to bear the economic risk of the purchase of the Notes, the Warrants, and, if applicable, the Common Shares and the Redemption Shares, and, at the present time, is able to afford a complete loss of such investment.

          (f) General Solicitation. Such Purchaser is not purchasing the Notes, the Warrants, or, if applicable, the Common Shares and the Redemption Shares, as a result of any advertisement, article, notice or other communication regarding the Notes, the Warrants, or, if applicable, the Common Shares and the Redemption Shares, published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

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

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

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

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

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

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

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

          4.1 Legends.

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

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

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

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

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

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

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

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

          4.4 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, for the purpose of effecting the exercise of the Warrants, a sufficient number of shares of Common Stock, free of preemptive rights or similar rights, to effect the exercise of all of the Warrants.

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

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

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

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

ARTICLE V.
CONDITIONS PRECEDENT

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

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

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

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

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

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

          (ii) a Material Adverse Effect.

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

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

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

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

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

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

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

ARTICLE VI.
MISCELLANEOUS

          6.1 Fees and Expenses. Each Purchaser and the Company shall pay its own respective fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties payable on the Company’s issuance of the Notes and the Warrants at Closing.

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

          6.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any

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Trading Day, (c) the Trading Day following the date of mailing, if sent and delivered by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

If to the Company:	Hollywood Media Corp.
	2255 Glades Rd.
	Suite 221A
	Boca Raton, FL 33431
	Attn: Chief Accounting Officer (copy to legal department)
With a copy to:	Steven Vazquez
	Foley & Lardner LLP
	100 North Tampa Street
	Suite 2700
	Tampa, FL 33602
If to a Purchaser:	To the address set forth under such Purchaser’s name on the signature pages hereof;

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

          6.4 Amendments; Waivers. Any provision of this Agreement may be waived or amended by a written instrument signed by the Company and the Purchasers holding a majority of the principal outstanding amount of the Notes; provided that such waiver or amendment shall apply with the same force and effect to all Purchasers. Notwithstanding the foregoing, following the Closing, any provision of this Agreement, a Note, or a Warrant may be amended or waived with the consent of any single Purchaser, Note holder, or Warrant holder (as the case may be), provided that such amendment or waiver shall not affect any other Purchaser, Note holder, or Warrant holder. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

          6.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

          6.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of

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

          6.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

          6.8 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings to resolve any dispute among the parties concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents having rights hereunder) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”), although depositions may be taken in other locations. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

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

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

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

          6.12 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Notes, Warrants, Common Shares, or Redemption Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Document. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Notes, Warrants, Common Shares, or Redemption Shares or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser is represented by its own counsel and is not relying on counsel of any other Purchaser or of any broker or placement agent in connection with this matter.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]

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EXECUTION VERSION

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

HOLLYWOOD MEDIA CORP.
By:	/s/ Mitchell Rubenstein
Name:	Mitchell Rubenstein
Title:	Chairman and Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR PURCHASERS FOLLOW]

EXECUTION VERSION

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

PURCHASER
Bonanza Master Fund Ltd.
By:	/s/ Brian Ladin
	Name: Brian Ladin
	Title: Managing Director
Address for Notice and Residence:
	300 Crescent Court
	Suite 1740
	Dallas, TX 75201
	Phone: 214.615.7090
	Fax:      214.917.4342
	Email: bladin@bonanzacapital.com
$4,000,000 Note
400,000 Warrants

EXECUTION VERSION

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

PURCHASER
JMG Capital Partners, L.P.
By:	/s/ Jonathan Glazer
	Name: Jonathan Glazer
	Title: Member Manager of the GP
Address for Notice and Residence:
	11601 Wilshire Blvd. Suite 2180
	Los Angeles CA 90025

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

PURCHASER
JMG Triton Offshore Fund Ltd.
By:	/s/ Jonathan Glazer
	Name:	Jonathan Glazer
	Title:	Member Manager
Address for Notice and Residence:
Notice:		11601 Wilshire Blvd. Suite 2180
		Los Angeles CA 93025
Residence:		Wickam Camp
		Road Town Tortola
		Kaya Flamboyan 9
		Curacao Netherlands Antilles
		BV1

2

EXECUTION VERSION

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

PURCHASER
WS Opportunity Fund International, Ltd.
By:	WS Ventures Management, L.P.,
	as agent and attorney-in-fact
By:	WSV Management, L.L.C., General Partner
By:	/s/ Patrick Walker
	Patrick Walker, Member
WS Opportunity Fund International, Ltd.
300 Crescent Court, Suite 1111
Dallas, TX 75201
214-756-6073 (telephone)
214-756-6079 (fax)
Attn: Joe Worsham (joe@walksmith.com)

EXECUTION VERSION

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

PURCHASER
WS Opportunity Fund, L.P.
By:	WS Ventures Management, L.P.,
	General Partner
By:	WSV Management, L.L.C., General Partner
By:	/s/ Patrick P. Walker
	Patrick P. Walker, Member
WS Opportunity Fund, L.P.
300 Crescent Court, Suite 1111
Dallas, TX 75201
214-756-6073 (telephone)
214-756-6079 (fax)
Attn: Joe Worsham (joe@walksmith.com)

EXECUTION VERSION

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

PURCHASER
WS Opportunity Fund (QP), L.P.
By:	WS Ventures Management, L.P.,
	General Partner
By:	WSV Management, L.L.C., General Partner
By:	/s/ Patrick P. Walker
	Patrick P. Walker, Member
WS Opportunity Fund (QP), L.P.
300 Crescent Court, Suite 1111
Dallas, TX 75201
214-756-6073 (telephone)
214-756-6079 (fax)
Attn: Joe Worsham (joe@walksmith.com)

EXECUTION VERSION

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

PURCHASER
SRB Greenway Capital, LP
By:	SRB Management, L.P., General Partner
By:	BC Advisors, L.L.C., General Partner
By:	/s/ Steven R. Becker
	Steven R. Becker, Member
SRB Greenway Capital, L.P.
300 Crescent Court, Suite 1111
Dallas, TX 75201
214-756-6073 (telephone)
214-756-6079 (fax)
Attn: Joe Worsham (joe@walksmith.com)

EXECUTION VERSION

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

PURCHASER
SRB Greenway Offshore Operating Fund, L.P.
By:	SRB Management, L.P., General Partner
By:	BC Advisors, L.L.C., General Partner
By:	/s/ Steve Becker
	Steve Becker, Member
SRB Greenway Offshore Operating Fund, L.P.
300 Crescent Court, Suite 1111
Dallas, TX 75201
214-756-6073 (telephone)
214-756-6079 (fax)
Attn: Joe Worsham (joe@walksmith.com)

EXECUTION VERSION

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

PURCHASER
SRB Greenway Capital (QP), L.P.
By:	SRB Management, L.P., General Partner
By:	BC Advisors, L.L.C., General Partner
By:	/s/ Steven R. Becker
	Steven R. Becker, Member
SRB Greenway Capital (QP), L.P.
300 Crescent Court, Suite 1111
Dallas, TX 75201
214-756-6073 (telephone)
214-756-6079 (fax)
Attn: Joe Worsham (joe@walksmith.com)

SCHEDULE I

	Purchase Price and
	Principal Amount of
Purchaser Name	Notes		Number of Warrants
Bonanza Master Fund Ltd.	$	4,000,000.00		400,000
JMG Capital Partners, L.P.	$	1,000,000.00		100,000
JMG Triton Offshore Fund Ltd.	$	1,000,000.00		100,000
WS Opportunity Fund International, Ltd.	$	329,900.00		32,990
WS Opportunity Fund, L.P.	$	239,700.00		23,970
WS Opportunity Fund (QP), L.P.	$	230,400.00		23,040
SRB Greenway Capital, LP	$	24,400		2,440
SRB Greenway Offshore Operating Fund, L.P.	$	12,900.00		1,290
SRB Greenway Capital (QP), L.P.	$	162,700.00		16,270
TOTAL	$	7,000,000.00		700,000

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EXHIBIT A

NOTES

NEITHER THIS SECURITY NOR ANY SECURITIES ISSUED ON REDEMPTION OF THIS SECURITY HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON REDEMPTION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: November 23, 2005

$[7,000,000.00]

8% SENIOR UNSECURED NOTE
DUE November 23, 2006

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     “Trading Day” means a day on which the Common Stock is traded on a Trading Market.

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

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     “Transaction Documents” shall have the meaning set forth in the Purchase Agreement.

     “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders and reasonably acceptable to the Company.

     “Warrants” shall have the meaning set forth in the Purchase Agreement.

Section 2. Interest.

     a) Payment of Interest. The Company shall pay interest to the Holder on the aggregate unredeemed and then outstanding principal amount of this Note at the rate of 8% per annum, payable quarterly on the last business day of March, June, September, and December (as the case may be), beginning on the first such date after the Original Issue Date, on each Redemption Date (as to that principal amount then being redeemed), and on the Maturity Date (except that, if any such date is not a Business Day, then such payment shall be due on the next succeeding Business Day) (each such date, an “Interest Payment Date”), in cash.

     b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year and shall accrue daily commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest shall cease to accrue with respect to any principal amount redeemed, provided that the Company in fact delivers the Redemption Shares within the time period required by Section 4(d)(ii). Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of Notes (the “Note Register”).

     c) Prepayment. The Company may prepay all or any portion of the principal amount of this Note at any time and from time to time. In the event that the Company prepays or redeems all or any portion of the principal amount of this Note prior to the one-year anniversary of the Original Issue Date (not including for this purpose any

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payment made upon acceleration of the due date of such payment as a result of a Change of Control), then the Company shall pay to the Holder, on the date of such prepayment or redemption, in addition to any other amounts due hereunder, an amount in cash equal to the interest that such prepaid or redeemed principal amount would have earned pursuant to Section 2(a) from the date of such prepayment or redemption to the one-year anniversary of the Original Issue Date as if such principal amount been paid or redeemed on the one-year anniversary of the Original Issue Date.

       Section 3. Registration of Transfers and Exchanges.

     a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange.

     b) Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations provided that the transferee makes to the Company the same investment representations made by the original Holder in the Purchase Agreement.

     c) Reliance on Note Register. Prior to due presentment to the Company for transfer of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

       Section 4. Redemption.

     a) Election by the Company. Notwithstanding anything herein to the contrary and subject to the provisions of this Section 4, at any time and from time to time on or before the Maturity Date, the Company may redeem all or any part of the then outstanding principal amount of the Note at 100% of the face amount hereof in newly issued shares of Common Stock having a per share value equal to the Redemption Price (as defined below), by delivering a notice to the Holders in the form attached hereto as Annex A (a “Notice of Redemption”). The Notice of Redemption shall specify the principal amount of this Note to be redeemed and the date on which such redemption is to be effected, which shall not be less than five Trading Days after the date such Notice of Redemption is given (a “Redemption Date”). To effect redemptions hereunder, the Holder shall not be required to physically surrender a Note to the Company unless the entire principal amount of such Note has been so redeemed. Redemptions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable redemption. The Company shall maintain records showing the principal amount redeemed and the date of such redemptions, which records

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shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following redemption of a portion of this Note, the unpaid and unredeemed principal amount of this Note may be less than the amount stated on the face hereof.

     b) Redemption Price. The redemption price shall be equal to (i) the average of the VWAP for each of the twenty (20) Trading Days immediately preceding the Redemption Date (subject to adjustment herein) multiplied by (ii) 95% (the “Redemption Price”).

     c) Redemption Limitations. Notwithstanding anything herein to the contrary, the Company shall be prohibited from redeeming any of the Notes pursuant to Section 4(a) unless (A) the Common Stock is trading on the Trading Market and all of the Redemption Shares to be issued upon such redemption are listed for trading on a Trading Market, (B) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the Redemption Shares to be issued upon such redemption, (C) the issuance of the Redemption Shares plus the shares of Common Stock issuable upon exercise of the outstanding Warrants would not cause the Company to exceed that number of shares of Common Stock that the Company is permitted to issue without breaching the Company’s obligations under the rules or regulations of the Trading Market (except that such limitation shall not apply in the event that the Company obtains the approval of its shareholders as required by the Trading Market or any successor rule or regulation) for issuances of Common Stock in excess of such amount, and (D) a Registration Statement is in effect on the Redemption Date pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of such Redemption Shares.

     d) Mechanics of Redemption

     i. Redemption Shares Issuable Upon Redemption of Principal Amount. The number of shares of Common Stock issuable upon a redemption hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of the Note to be redeemed by (y) the Redemption Price.

     ii. Delivery of Certificate Upon Redemption. Not later than three Trading Days after any Redemption Date, the Company will deliver to the Holder (A) a certificate or certificates representing the Redemption Shares which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement with respect to the Company’s rights plan) representing the number of shares of Common Stock being acquired upon the redemption of Notes and (B) a bank check in the amount of accrued and unpaid interest. The Company shall, if available and if allowed under applicable securities laws, use commercially reasonable efforts to deliver any certificate or certificates required to be delivered by the Company under this Section electronically through the

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Depository Trust Corporation or another established clearing corporation performing similar functions.

     iii. Fractional Shares. Upon a redemption hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the Closing Price at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

     iv. Interest on Amount Redeemed. Upon a redemption hereunder, the Company shall pay to the Holder in cash all accrued and unpaid interest on the principal amount of the Note being redeemed.

       Section 5. Certain Adjustments.

     a) Stock Dividends and Stock Splits. If the Company, at any time during the 20 Trading Day period while the Redemption Price is being calculated: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Note), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the VWAP for each Trading Day during such 20 Trading Day period after such event occurs shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

     b) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

       Section 6. Extension of Maturity Date.

     a) Extension at Election of Company. The Company shall have the right, in its sole discretion, but provided that no uncured Event of Default is then existing, to

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require that the Maturity Date of this Note be extended for a period not to exceed six months from the original Maturity Date, without the action of the Holder or any other person, by delivering written notice thereof to the Holder (an “Extension Notice”), which Extension Notice shall indicate the Maturity Date, as so extended, of this Note. Such Maturity Date, as extended in the Extension Notice, shall be the “Maturity Date” for all purposes under this Note.

     b) Extension Warrants. If the Company delivers an Extension Notice to the Holder, the Company shall, within three Trading Days thereafter, deliver to the Holder the Extension Warrant for such Holder.

       Section 7. Negative Covenants. So long as any portion of this Note is outstanding, the Company will not and will not permit any of its Subsidiaries to directly or indirectly:

     a) enter into, create, incur, assume or suffer to exist any obligation for borrowed money evidenced by notes, bonds, debentures, or similar instruments (“Indebtedness”) that ranks senior or pari passu in terms of payment to the Company’s payment obligations under the Notes, except for the existing Amended and Restated Debenture in the principal amount of $1,000,000 that is due May 22, 2006; or

     b) enter into, create, incur, assume or suffer to exist liens of any kind, on or with respect to any of its or its Subsidiaries property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom other than (i) purchase money liens, (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s, tax, and other similar liens imposed by law or agreement, (iii) other liens granted to vendors or other trade creditors, and (iv) liens in respect of indebtedness that is subordinate to this Note.

       Section 8. Events of Default.

     a) “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

     i. any default in the payment of (A) the principal amount of any Note, or (B) interest on any Note, as and when the same shall become due and payable (whether on a Redemption Date or the Maturity Date or by acceleration or otherwise), which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within five Trading Days;

     ii. the Company shall fail to observe or perform any other material covenant or agreement contained in this Note which failure is not cured, if

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possible to cure, within ten Trading Days after notice of such default sent by the Holder or by any other Holder;

     iii. (A) the Company or any of its Subsidiaries shall commence, or there shall be commenced against the Company or any such Subsidiary, a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any Subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any Subsidiary thereof, which remains undismissed for a period of 90 days; (B) the Company or any Subsidiary thereof is adjudicated by a court of competent jurisdiction insolvent or bankrupt, or any order of relief or other order approving any such case or proceeding is entered; (C) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 90 days; (D) the Company or any Subsidiary thereof makes a general assignment for the benefit of creditors; or (E) the Company or any Subsidiary thereof shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts;

     iv. the Company or any Subsidiary shall default in any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money in an amount exceeding $1,000,000, whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

     v. a final judgment or judgments for the payment of money aggregating in excess of $1,000,000 is rendered against the Company and which judgments are not, within 150 days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 150 days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,000,000 amount set forth above; or

     vi. the consummation of a Change of Control.

     b) Remedies Upon Event of Default. If any Event of Default occurs, the full principal amount of this Note, together with interest owing in respect thereof, to the date

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of acceleration shall become, at the Holder’s election, immediately due and payable in cash only. Commencing ten days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at the rate of 12% per annum, or such lower maximum amount of interest permitted to be charged under applicable law. All Notes for which the unredeemed and then outstanding principal amount of this Note, together with interest owing in respect thereof, shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company. The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder, and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

       Section 9. Miscellaneous.

     a) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Redemption, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, facsimile number (561) 998-2974, Attn: Chief Accounting Officer with a copy to the legal department, or such other address or facsimile number as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

     b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.

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     c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and ownership thereof and customary and reasonable indemnity. Applicants for a new Note under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a new Note is requested as a result of a mutilation of this Note, then the Holder shall deliver such mutilated Note to the Company as a condition precedent to the Company’s obligation to issue the new Note.

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

     e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on

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one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any provision of this Note may be waived or amended by a written instrument signed by the Company and the Holders holding a majority of the principal outstanding amount of the Notes; provided that any such approved waiver or amendment shall apply with the same force and effect to this Note and the Other Notes. Notwithstanding the foregoing, any provision of this Note may be amended or waived with the consent of Holder; provided that such amendment or waiver shall not affect any Other Note or holder thereof.

     f) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

     g) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

     h) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

     i) No Usury. To the extent that it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever intact, now or at anytime hereafter in force, in connection with any claim, action, or proceeding that may be brought by any original Holder in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of

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interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any original Holder with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such original Holder to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the original Holder’s election.

     j) Pro Rata Prepayment, Redemption, and Extension. In the event that the Company (i) prepays this Note pursuant to Section 2(c), (ii) redeems this Notes pursuant to Section 4(a), or (iii) extends the Maturity Date of this Note pursuant to Section 6(a) and issues Extension Warrants pursuant to Section 6(b), the Company shall effect each such prepayment, redemption, and extension on a pro rata basis of all of this Note and the Other Notes based on the outstanding principal amount of each of the Notes on the date of such prepayment, redemption, or extension relative to the aggregate outstanding principal amount of all Notes on such date.

********************

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

HOLLYWOOD MEDIA CORP.
By:
	Name:
	Title:

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ANNEX A

NOTICE OF REDEMPTION

     Hollywood Media Corp., a Florida corporation (the “Company”) hereby elects to redeem principal under the 8% Senior Unsecured Note of the Company, due on November 23, 2006, held by                                         (the “Holder”) into shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than the Holder, the Holder will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the Holder for any redemption, except for such transfer taxes, if any.

     By accepting the shares of Common Stock set forth below, the Holder agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

Redemption calculations:

Date to Effect Redemption:
Principal Amount of Notes to be Redeemed:
Number of shares of Common Stock to be issued:
HOLLYWOOD MEDIA CORP.
By:
	Name:
	Title:

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Schedule 1

REDEMPTION SCHEDULE

               This Redemption Schedule reflects redemptions made under Section 4 of the 8% Senior Unsecured Note of the Company, due on November [___], 2006, issued by Hollywood Media Corp.

Dated:

		Aggregate
		Principal
		Amount
		Remaining
		Subsequent to
		Redemption
Date of Redemption		(or original
(or for first entry,	Amount of	Principal
Original Issue Date)	Redemption	Amount)	Company Attest

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EXHIBIT B

WARRANTS

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES REGULATORS OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE, NOR MAY ANY INTEREST THEREIN BE, OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY, SUBJECT TO CERTAIN EXCEPTIONS, A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, IN FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES IN ACCORDANCE WITH APPLICABLE LAWS.

HOLLYWOOD MEDIA CORP.

COMMON STOCK PURCHASE WARRANT

                Warrant No. [  ] Date of Original Issuance: November 23, 2005

     Hollywood Media Corp., a Florida corporation (together with any entity that shall succeed to or assume the obligations of Hollywood Media Corp. hereunder, the “Company”), hereby certifies that, for value received, [ ] or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of [700,000] shares of common stock, par value $.01 per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to [(i) $4.29 per share for the Warrants issued at Closing and (ii) for the Extension Warrants, the lesser of the (A) 20-day VWAP on the one-year anniversary of the Closing Date and (B) the exercise price of the initial Warrants issued at Closing] $[___] per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and from time to time from and after the date hereof and through and including November 22, 2010 (the “Expiration Date”), and subject to the following terms and conditions:

     1. Definitions. In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein shall have the meanings given to such terms in the Note Purchase Agreement dated November 22, 2005 to which the Company and the original Holder are parties (the “Purchase Agreement”). The term “Common Stock” shall include the Company’s common stock, par value $.01 per share as authorized on the date of the Purchase Agreement and any other securities or property of the Company or of any other person

(corporate or otherwise) which the Holder at any time shall be entitled to receive on the exercise hereof in lieu of or in addition to such common stock, or which at any time shall be issuable in exchange for or in replacement of such common stock.

     2. Holder of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary from the transferee and transferor.

     3. Recording of Transfers. Subject to Section 6, the Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. As a condition to the transfer, the Company may request a legal opinion as contemplated by the legend above and related terms of the Purchase Agreement. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

     4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder in whole or in part at any time and from time to time on or after the date hereof to and including the Expiration Date by delivery to the Company of a duly executed facsimile copy of the Exercise Notice form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company). At 6:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem all or any portion of this Warrant without the prior written consent of the Holder. If at any time (i) this Warrant is exercised after one year from the date of issuance of this Warrant but before the Expiration Date and (ii) during the Trading Day period immediately preceding the holder’s delivery of an Exercise Notice in respect of such exercise, a Registration Statement (as defined in the Registration Rights Agreement) covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the holder of this Warrant also may exercise this Warrant as to any or all of such Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise a reduced number of shares of Common Stock (the “Net Number”) determined according to the following formula (a “Cashless Exercise”):

Net Number = (A x B) - (A x C)   B

B-2

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the VWAP on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

VWAP = For any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price per share of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average price per share of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

There cannot be a Cashless Exercise unless “B” exceeds “C”.

       5. Delivery of Warrant Shares.

          (a) To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant upon exercise unless this Warrant ceases to be further exercisable for additional Warrant Shares. Upon delivery of the Exercise Notice to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which, unless otherwise required by the Purchase Agreement, shall be free of restrictive legends. A “Date of Exercise” means the date on which the Holder shall have delivered to Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) except in the case of a Cashless Exercise, payment in full of the Exercise Price in immediately available funds or federal funds for the number of Warrant Shares so indicated by the Holder to be purchased.

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          (b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise.

          (c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases in a bona fide arm’s length transaction for fair market value (in an open market transaction or otherwise) the number of shares of Common Stock necessary to deliver in satisfaction of a bona fide arm’s length sale for fair market value by the Holder of the Warrant Shares which the Holder was entitled to receive upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the Holder’s total sales price (including brokerage commissions, if any) for the shares of Common Stock so sold and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The Holder shall provide the Company written notice and reasonably detailed documentation indicating the amounts requested by the Holder in respect of the Buy-In.

          (d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon

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cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and ownership thereof and customary and reasonable indemnity. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

          (a) Stock Dividends and Splits, Recapitalizations, Etc. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock or subdivides the outstanding shares of Common Stock into a larger number of shares (by any stock split, recapitalization or otherwise), then in each such case the Exercise Price shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased, and (ii) combines outstanding shares of Common Stock into a smaller number of shares (by reverse stock split, recapitalization, or otherwise), then in each such case the Exercise Price shall be proportionately increased and the number of Warrant Shares shall be proportionately decreased. Any adjustment made pursuant to clauses (i) and (ii) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution or immediately after the effective date of such subdivision or combination (as the case may be). If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

          (b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then in each such case the Exercise Price shall be appropriately adjusted. Any adjustment made pursuant to this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such distribution. If

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any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

          (c) Fundamental Transactions.

               (i) If, at any time while this Warrant is outstanding, (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. Any such successor or surviving entity shall be deemed to be required to comply with the provisions of this paragraph (c) and shall insure that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

               (ii) Notwithstanding subsection (i) above, if on or before the 120^th day following the date of this Warrant the Company enters into a definitive agreement (provided that such agreement can be subject to customary closing conditions, such as receipt of shareholder approval) for a Fundamental Transaction that constitutes a Change of Control (as defined below) and the price per share of Common Stock for purposes of such Change of Control transaction is (A) between $6.00 and $6.99 per share (as adjusted for any stock splits, dividends, or combinations), then the Exercise Price shall be adjusted immediately to be equal to 110% of the Exercise Price in effect immediately before entry into such definitive agreement and (B) at least $7.00 per share (as adjusted for any stock splits, dividends, or combinations), then the Exercise Price shall be adjusted immediately to be equal to 115% of the Exercise Price in effect immediately before entry into such definitive agreement; provided, however that if such

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definitive agreement subsequently is terminated without consummating such of Change of Control transaction, then the Exercise Price as adjusted as a result of entering into such definitive agreement shall be readjusted to the Exercise Price in effect immediately before entry into such definitive agreement.

               (iii) “Change of Control” means any of the following events:

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

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

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

          (d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

          (e) Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100^th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

          (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent. No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such rate; provided, however, that any adjustments which by reason of this Section

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9(f) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

          (g) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least five calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

     10. Payment of Exercise Price. Upon exercise of this Warrant the Holder shall pay the Exercise Price in immediately available funds unless it is a Cashless Exercise in accordance with Section 4 hereof.

     11. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by Bloomberg L.P. (or the successor to its function of reporting share prices) on the date of exercise.

     12. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent and delivered by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to Hollywood Media Corp., 2255 Glades Road, #221A, Boca Raton, Florida 33431. Attn: Chief Accounting Officer with a copy to the legal department, Facsimile No.: (561) 998-2974, or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.

     13. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any

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corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

     14. Miscellaneous.

          (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and the respective successors and assigns of the Holder it being understood that transfers of this Warrant by the Holder are subject to the legend set forth of the face hereof. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.

          (b) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings to resolve any dispute concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”), although depositions may be taken in other locations. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

          (c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

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          (d) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

          (e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against such impairment.

          (f) This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. In connection with an exercise of this Warrant in accordance with the terms hereof, upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of a Cashless Exercise if permitted hereunder), the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

HOLLYWOOD MEDIA CORP.

By:

Name:

Title:

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EXERCISE NOTICE

To Hollywood Media Corp.

     The undersigned hereby irrevocably elects to purchase                                          shares of common stock, par value $.01 per share, of Hollywood Media Corp. (“Common Stock”), pursuant to Warrant No. [ ], originally issued                                         , 2005 (the “Warrant”), and, if not a Cashless Exercise in accordance with Section 4, encloses herewith $                     in cash, federal funds or other immediately available funds, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Exercise Notice relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant.

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

Print Name of Holder:

Signature:

Name:

Title:

HOLDER’S SOCIAL SECURITY OR

TAX IDENTIFICATION NUMBER:

Holder’s Address:

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Warrant Shares Exercise Log

			Number of
	Number of Warrant		Warrant Shares
	Shares Available to be	Number of Warrant Shares	Remaining to
Date	Exercised	Exercised	be Exercised

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FORM OF ASSIGNMENT

     [To be completed and signed only upon transfer of Warrant]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                                              the right represented by the within Warrant to purchase                      shares of Common Stock of Hollywood Media Corp., Inc. to which the within Warrant relates and appoints                                          attorney to transfer said right on the books of the Company with full power of substitution in the premises.

          Dated:                                         ,                     

(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

Address of Transferee

Tax Identification Number or Social Security Number of Transferee

          In the presence of:

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EXHIBIT C

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of November ___, 2005, by and among Hollywood Media Corp., a Florida corporation (the “Company”), and the investors signatory hereto (each an “Investor” and collectively, the “Investors”).

BACKGROUND

     This Agreement is made pursuant to the Note Purchase Agreement, dated as of November 22, 2005, among the Company and the Investors (the “Purchase Agreement”). In connection with the Purchase Agreement, the Company has agreed, upon the terms and subject to the conditions of the Purchase Agreement, (i) to issue and sell on the date hereof to each Investor 8% Senior Unsecured Notes of the Company (the “Notes”), which are redeemable into shares of Common Stock in accordance with the terms of the Notes (the “Redemption Shares”), (ii) to issue and sell on the date hereof to the Investors warrants (the “Warrants”)to purchase an aggregate of 700,000 shares of Common Stock (the “Warrant Shares”), and (iii) if the Company exercises its right under the Notes to extend the maturity date thereof, warrants (the “Extension Warrants”) to purchase up to an additional 100,000 shares of Common Stock issued pursuant to the terms and conditions of the Notes (the “Extension Warrant Shares”).

AGREEMENT

     The Company and the Investors hereby agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1:

          “Advice” shall have the meaning set forth in Section 6(d).

          “Common Stock” means the common stock of the Company, $.01 par value per share.

          “Effective Date” means the date that the Registration Statement filed pursuant to Section 2(a) or 2(b) is first declared effective by the Commission.

          “Effectiveness Date” means (i) the 135^th day following the date of this Agreement with respect to the Warrant Shares and (ii) the 135^th day following the Extension Warrant Issuance Date with respect to the Extension Warrant Shares.

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

          “Event Date” shall have the meaning set forth in Section 2(c).

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

          “Extension Warrant Issuance Date” shall mean the date of the original issuance of the Extension Warrants.

          “Extension Warrants” shall have the meaning set forth in the Background section.

          “Extension Warrant Shares” shall have the meaning set forth in the Background section.

          “Filing Date” means (i) the 45^th day following the date of this Agreement with respect to the Warrant Shares and (ii) the 45^th day following the Extension Warrant Issuance Date with respect to the Extension Warrant Shares.

          “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

          “Indemnified Party” shall have the meaning set forth in Section 5(c).

          “Indemnifying Party” shall have the meaning set forth in Section 5(c).

          “Losses” shall have the meaning set forth in Section 5(a).

          “Notes” shall have the meaning set forth in the Background section.

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

          “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

          “Redemption Shares” shall have the meaning set forth in the Background section.

          “Redemption Shares Issuance Date” shall mean the date of the original issuance of the Redemption Shares.

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          “Registrable Securities” means (i) the Warrant Shares, (ii) from and after the Extension Warrants Issuance Date, the Extension Warrant Shares, (iii) from and after the Redemption Shares Issuance Date, the Redemption Shares, and (iv) any other securities into which the Warrant Shares, the Extension Warrant Shares and the Redemption Shares may be reclassified after the date hereof; provided however, that any shares of Common Stock will cease to be Registrable Securities at such time as they have been sold under a Registration Statement or pursuant to Rule 144, or otherwise or such time as they are eligible to be sold pursuant to Rule 144(k) promulgated under the Securities Act.

          “Registration Period” means the period commencing on any applicable Effectiveness Date and the earliest of (i) the fifth anniversary of such Effectiveness Date, (ii) the date on which the Holders are able to resell all of their respective Registrable Securities without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act, or (iii) the date on which all of the Registrable Securities have been sold by the Investors under a Registration Statement or pursuant to Rule 144.

          “Registration Statement” means the registration statement required to be filed in accordance with Section 2(a) and any additional registration statement(s) required to be filed under Section 2(b), including (in each case) the Prospectus, amendments and supplements to such registration statements or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statements.

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

          “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

          “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

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

          “Selling Shareholder Questionnaire” shall have the meaning set forth in Section 3(j).

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

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

          “Warrants” shall have the meaning set forth in the Background section.

     2. Registration.

          (a) On or prior to the Filing Date for the Warrant Shares, the Company shall use its reasonable best efforts to prepare and file with the Commission a Registration Statement covering the resale of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (unless the Company is not then eligible to register for resale of the Registrable Securities on Form S-3, in which case such registration shall be another appropriate form in accordance herewith) and shall contain (unless otherwise directed by the Holders and except if otherwise required pursuant to comments received from the Commission upon a review of such Registration Statement or pursuant to judicial and SEC interpretations) substantially the “Plan of Distribution” attached hereto as Annex A. The Company shall use its reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as soon as reasonably possible but, in any event, no later than the applicable Effectiveness Date, and shall use its reasonable best efforts to keep the Registration Statement effective under the Securities Act during the balance of the applicable Registration Period.

          (b) In the event the Extension Warrants are issued pursuant to the terms of the Notes, the Company shall use its reasonable best efforts to amend the applicable Registration Statement or file a new Registration Statement (on the short form available therefor, if applicable) so as to cover the resale of the additional Registrable Securities on or prior to the applicable Filing Date. The Company shall use its reasonable best efforts to cause such amendment or such new Registration Statement to become effective as soon as reasonably possible but, in any event, no later than the applicable Effectiveness Date, and shall use its reasonable best efforts to keep such amendment or such new Registration Statement effective under the Securities Act during the balance of the applicable Registration Period.

          (c) Subject to the last sentence of this Section 2(c), if: (i) a Registration Statement under subsection (a) above is not filed on or prior to its Filing Date (or an amendment or a new Registration Statement under subsection (b) above, if required, is not filed on or prior to its Filing Date), or (ii) a Registration Statement under subsection (a) above is not declared effective by the Commission on or prior to its required Effectiveness Date (or an amendment or a new Registration Statement under subsection (b) above, if required, is not declared effective by the Commission on or prior to its required Effectiveness Date), or (iii) after its Effective Date, without regard for the reason thereunder or efforts therefor, such Registration Statement under subsection (a) above or such amendment or new Registration Statement under subsection (b) above ceases for any reason to be effective and available to the Holders as to all Registrable Securities to which it is required to cover at any time prior to the expiration of the Registration Period for more than an aggregate of thirty (30) Trading Days during any 12-month period (which need not be consecutive) (any such failure or breach being referred to as an “Event,” and

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for purposes of clauses (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date which such thirty (30) Trading Day-period is exceeded, being referred to as “Event Date”), then, in addition to any other rights available to the Holders under this Agreement or under applicable law: on the earlier of the last day of each 30-day period after each such Event Date (if the applicable Event shall not have been cured by such date) or on the fifth Trading Day after the applicable Event has been cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to their pro rata portion of $25,000 (i.e., the Holders in the aggregate shall be entitled to receive a penalty totaling $25,000 for each 30-day period); provided that such penalty shall increase to $70,000 for each succeeding 30-day period in the aggregate beginning on the 91^st day after such Event Date. The liquidated damages pursuant to the preceding sentence shall apply and be payable on a pro rata basis for any portion of a 30-day period prior to the cure of an Event and shall cease to accrue (unless earlier ceased) upon expiration of the Registration Period. Notwithstanding anything to the contrary in this Section 2(c), the Company shall not be required to make any payments under this Section 2(c) in the event that (1) the subject Event or Event Date, or the failure to cure such Event or Event Date, is due to the Company’s postponement (and the Company is hereby permitted to postpone) for a maximum of ninety (90) days the filing or the effectiveness of a Registration Statement, by the Company’s furnishing to the Holders a certificate signed by the Chief Executive Officer of the Company stating the Company is in the process of filing a registration statement or proxy statement with respect to an acquisition or disposition and as a result thereof, the registration required by this Agreement could be materially detrimental to the Company, provided, however, that the Company may use this right to postpone such filing or effectiveness only once during any twelve (12) month period, or (2) the subject Event or Event Date, or the failure to cure such Event or Event Date, is due to the Company’s postponement (and the Company is hereby permitted to postpone) of the filing or the effectiveness of a Registration Statement following the announcement by the Company of a Change of Control (as defined in the Notes), provided, however, that if such Change of Control is not consummated, then the Company shall make all payments under this Section 2(c) that would have been required had such Change of Control not been announced and this provision had not applied.

     3. Registration Procedures.

          In connection with the Company’s registration obligations hereunder, the Company shall:

          (a) Not less than three (3) Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall furnish to the Holders copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders (and changes (if any) to correct appropriate information about the Holder). The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than three (3) Trading Days after the Holders have been so furnished copies of such documents.

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          (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for the applicable Registration Period; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement.

          (c) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (ii) through (v) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (i) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any 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.

          (d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

          (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated herein by reference (to the extent requested by such Holder), and all exhibits to the extent requested by such Holder (including those previously furnished) promptly after the filing of such documents with the Commission.

          (f) Comply with Rule 172, promptly advise each Holder at any time the Company has not satisfied the requirements of Rule 172 and promptly deliver to each Holder,

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without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with resales by the Holder of Registrable Securities. Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

          (g) Prior to any public offering of Registrable Securities by a Holder, use its reasonable best efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of all jurisdictions within the United States as any Holder reasonably requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Registration Period and to do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

          (h) If requested by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statements, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.

          (i) Upon the occurrence of any event contemplated by Sections 3(c)(ii) through (v), as promptly as reasonably possible under the circumstances, and in the case of Section 3(c)(v) taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain 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 and that the event that resulted in the suspension of such Prospectus is otherwise cured. If the Company notifies the Holders in accordance with Sections 3(c)(ii) through (v) to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

          (j) Each Holder agrees to furnish to the Company a completed Questionnaire in the form attached to this Agreement as Annex B (a “Selling Shareholder Questionnaire”) not less than five (5) Trading Days prior to the date on which a Registration Statement under this

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Agreement is to be filed or (if earlier) by the end of the fourth Trading Day following the date on which such Holder receives draft materials in accordance with this Section. The Company shall not be required to include the Registrable Securities of a Holder in a Registration Statement and shall not be required to pay any liquidated or other damages under Section 2(c) hereof to such Holder who fails to furnish to the Company a fully completed Selling Shareholder Questionnaire as required by this Section or other information reasonably requested by the Company for compliance with applicable registration and disclosure requirements.

     4. Registration Expenses. All fees and expenses of the Company incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company, whether or not any Registrable Securities are sold pursuant to a Registration Statement, including without limitation all registration, listing, and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company.

     5. Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, investment advisors, partners, members and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”) arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii) through (v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d) and provided such corrected prospectus would have avoided such Losses. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware arising from or in connection with the transactions contemplated by this Agreement.

          (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and

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Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses to the extent arising out of or relating to: (i) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act after being advised by the Company that it has not satisfied the conditions of Rule 172 and that such Holder is, as a consequence, required to deliver a prospectus in connection with any disposition of Registrable Securities and has provided the Holder with a current prospectus to be used in connection with any such dispositions or (ii) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are based upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii) through (v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d) and provided such corrected prospectus would have avoided such Losses. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to participate in, and, to the extent the Indemnifying Party so desires, assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except to the extent that the Indemnifying Party is prejudiced by such failure, including impairment in its ability to defend such action.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (2) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall reasonably believe based upon the advice of counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified

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Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel (one law firm) shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. The Indemnified Party shall cooperate fully with the Indemnifying Party in connection with any negotiation or defense of any such Proceeding by the Indemnifying Party and shall furnish to the Indemnifying Party all information reasonably available to the Indemnified Party that relates to such Proceeding.

          Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party subject to indemnification under Section 5(a) (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with these Sections) shall be paid to the Indemnified Party, as incurred, within ten (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).

          (d) Contribution. In the event that indemnification under Section 5(a) or 5(b) is unavailable to or insufficient to hold harmless an Indemnified Party for any Losses (by reason of unenforceability due to public policy or otherwise), then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities

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subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission or other event under 5(a) or 5(b), as the case may be, to which such contribution applies.

          The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

     6. Miscellaneous.

          (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

          (b) No Piggyback on Registrations. Except as and to the extent specified in Schedule 6(b) hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement other than the Registrable Securities and any shares of Common Stock issued upon redemption of the Notes in accordance with the terms of the Notes, and the Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders.

          (c) Compliance. Each Holder covenants and agrees that (i) it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement; and (ii) it has no present plan, intention or understanding and has made no arrangement to sell the Registrable Securities at any predetermined time or for any predetermined price (other than such Holder’s right to sell the Registrable Securities pursuant to a Registration Statement filed pursuant hereto).

          (d) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as practicable. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

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          (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities then required hereunder to be registered at such time and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities (not already covered by an effective Registration Statement) such holder requests to be registered, subject to customary underwriter cutbacks applicable to holders of registration rights and subject to restrictions in prior registration agreements.

          (f) Amendments and Waivers. No provision of this Agreement may be waived or amended and waivers or consents to departures from the provisions hereof may not be given except in a written instrument signed by the Company and the Holders who hold (or have the right to acquire upon exercise of the Warrants and, if applicable, the Extension Warrants) majority of the shares of Common Stock issued or issuable upon exercise of the Warrants and, if applicable, the Extension Warrants. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of one or more Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.

          (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

          (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder of then-outstanding Registrable Securities. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.

          (i) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding

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obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

          (j) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings to resolve any dispute concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”) although depositions may be taken in other places. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

          (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

          (l) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (m) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

          (n) Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder

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hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. The decision of each Holder to acquire Registrable Securities pursuant to the Transaction Documents has been made independently of any other Holder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder acknowledges that no other Holder has acted as agent for such Holder in connection with making its investment hereunder and that no Holder will be acting as agent of such Holder in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary (but may be permissible) for any other Holder to be joined as an additional party in any Proceeding for such purpose.

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     IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

HOLLYWOOD MEDIA CORP.

By: 

Name:

Title:

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF INVESTORS TO FOLLOW]

SCHEDULE 6(b)

          The items referenced under the caption “Certain Registration Matters” in Schedule 3.1(g) to the Purchase Agreement could result in the Company’s obligation to include securities in a Registration Statement which would not be prohibited under Section 6(b) of this Agreement.

Annex A

Plan of Distribution

          The Selling Stockholders and any of their pledgees, donees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock registered hereunder on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when selling shares:

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

• 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;

• settlement of short sales (other than short sales established prior to the effectiveness of the Registration Statement to which this Prospectus is a part);

• broker-dealers may agree with the Selling Stockholders 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.

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

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

          The Selling Stockholders may from time to time pledge or grant a security interest in some or all of their shares of Common Stock that are covered by this prospectus and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell such shares of Common Stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the

Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

          Upon the Company being notified in writing by a Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of Common Stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of Common Stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a Selling Stockholder that a donee or pledgee intends to sell more than 500 shares of Common Stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.

          The Selling Stockholders also may transfer the shares of Common Stock in other circumstances, in which case the transferees, pledgees or other successors in interest may be the selling beneficial owners for purposes of this prospectus.

          The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares 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 purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has represented and warranted to the Company that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock.

          The Company is required to pay the Company’s fees and expenses incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

          The Selling Stockholders and other persons participating in the distribution of the shares offered under this prospectus are subject to the applicable requirements of Regulation M promulgated under the Exchange Act in connection with sales of the shares.

Annex B

Selling Shareholder Questionnaire

     The undersigned beneficial owner of common stock, par value $0.01 per share (the “Common Stock”), of Hollywood Media Corp., a Florida corporation (the “Company”), (the “Registrable Securities”) understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement, dated as of _______, 2005 (the “Registration Rights Agreement”), among the Company and the Investors named therein. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

     Certain legal consequences arise from being named as a selling shareholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling shareholder in the Registration Statement and the related prospectus.

NOTICE

     The undersigned beneficial owner (the “Selling Shareholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it and listed below in Item 3 (unless otherwise specified under such Item 3) in the Registration Statement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

QUESTIONNAIRE

1. Name.

(a)	Full Legal Name of Selling Shareholder
(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):

2. Address for Notices to Selling Shareholder:

Telephone:

Fax:

Contact Person:

3. Beneficial Ownership of Registrable Securities:

(a) Type and Number of Registrable Securities beneficially owned:

4. Broker-Dealer Status:

(a) Are you a broker-dealer?

Yes      o      No      o

(b) If “yes” to Section 4(a), did you receive your Registrable Securities as compensation for investment banking services to the Company.

Yes     o      No     o

Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

(c) Are you an affiliate of a broker-dealer?

Yes      o      No      o

(d) If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes       o     No       o

Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Shareholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3.

(a) Type and Amount of Other Securities beneficially owned by the Selling Shareholder:

6. Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

     By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

     IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Dated:	Beneficial Owner:
	By:
		Name:
		Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

EX-99.1

Exhibit 99.1

HOLLYWOOD MEDIA ANNOUNCES ACQUISITION OF U.K. BASED CINEMASONLINE

TO EXPAND IN EUROPE ITS INTERNET AD SALES AND DATA BUSINESSES

Acquired Business Expected to Have $5.0 Million in Revenue and

$1.1 Million in Operating Income during the next 12 Months

(Boca Raton, FL — November 28, 2005) – Hollywood Media Corp. (Nasdaq: HOLL), a leading provider of news, information and ticketing covering the entertainment and media industries, today announced that it has acquired U.K. based CinemasOnline, a group of leading advertising sales and data services companies focused primarily on selling internet advertising on cinema and live theatre websites in the U.K. and Ireland, for a cash purchase price of $3.45 million. Hollywood Media estimates that CinemasOnline will have approximately $5.0 million in revenue and $1.1 million in operating income during the next 12 months.

CinemasOnline’s business primarily involves developing and maintaining websites for cinemas and live theatre venues in the U.K. and Ireland. These services are provided in exchange for CinemasOnline retaining the right to sell advertising on the websites. CinemasOnline currently operates websites for over 300 cinemas with over 1200 screens in the U.K., representing approximately 35% of the U.K. cinema market on a per screen basis, and over 60 cinemas in Ireland. CinemasOnline also has agreements with

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over 200 cinemas, live theatre and other entertainment venues to sell advertising on lobby display posters, movie brochure booklets and ticket wallets in these venues.

Mitchell Rubenstein, Hollywood Media’s Chairman and Chief Executive Officer, commented, “The acquisition of CinemasOnline significantly expands our presence in Europe while complementing our existing Internet Ad Sales and Data businesses. In addition, CinemasOnline provides us with an established network for selling advertising on Hollywood.com in Europe. CinemasOnline is also expected to provide Hollywood Media with a platform to accelerate the expansion of its Data and Broadway Ticketing businesses in the U.K. and into the rest of Europe. CinemasOnline’s existing relationships, which include a large base of cinemas and live theater venues, will provide Hollywood Media’s Data business with immediate opportunities to increase sales of its CinemaSource, EventSource and ExhibitorAds services. These relationships will also enhance the ability of our Broadway Ticketing division to expand its ticketing operations in the U.K.”

Mr. Rubenstein continued: “These growth opportunities, combined with the favorable purchase price as measured by a multiple of operating income, make this an ideal acquisition for Hollywood Media.”

In order to finance the acquisition of CinemasOnline, Hollywood Media entered into a note purchase agreement on November 22, 2005 with a group of institutional lenders providing for the sale and purchase of $7.0 million aggregate principal amount of Hollywood Media’s senior unsecured, non-convertible notes, with interest payable at eight percent per annum. The sale of the notes was completed on November 23, 2005. Under terms of the note purchase agreement, Hollywood Media will have the option to pay principal in cash or shares of its common stock. As part of the financing, Hollywood Media issued to the lenders five-year warrants to purchase an aggregate of 700,000 shares of its common stock with an exercise price of $4.29 per share, which is equal to the

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volume weighted average of the Nasdaq market price of Hollywood Media’s common stock for the five trading days preceding the date of the agreement. In addition to funding the acquisition of CinemasOnline, Hollywood Media will use the net proceeds from this financing for additional potential strategic acquisitions and general corporate purposes.

About Hollywood Media Corp.

Hollywood Media Corp. is a leading provider of news, information and ticketing covering the entertainment and media industries. On the strength of its history in developing comprehensive entertainment industry databases, as well as its major strategic partners and unique content, Hollywood Media has launched a network of media businesses. Hollywood Media’s Data Business includes CinemaSource, EventSource, ExhibitorAds and Baseline/StudioSystems. Hollywood Media’s Broadway Ticketing business includes Broadway.com, 1-800-Broadway and Theatre Direct International. These services supply media outlets with specific information on entertainment events, such as movies, live theater and concerts, and sell tickets for Broadway shows. Hollywood Media’s businesses also include an intellectual property business, as well as Hollywood.com and a minority interest in MovieTickets.com. In addition, Hollywood Media owns and operates the cable television network, Hollywood.com Television.

Statements in this press release may be “forward-looking statements” within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties including, but not limited to, the need to manage our growth and integrate new businesses, our ability to realize anticipated revenues and cost efficiencies, our ability to develop strategic relationships, our ability to compete with other media, data and Internet companies, technology risks, the volatility of our stock price, and other risks and factors described in Hollywood

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Media Corp.’s filings with the Securities and Exchange Commission including our Form 10-K for 2004 as amended. Such forward-looking statements speak only as of the date on which they are made.

Contact:

Matthew Hayden

Hayden Communications, Inc.

matt@haydenir.com

858-704-5065