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 30, 1998

                         INDIVIDUAL INVESTOR GROUP, INC.
             (Exact name of Registrant as specified in its charter)

          Delaware                    1-10932                   13-3487784
(State or other jurisdiction        (Commission               (I.R.S. Employer
       of incorporation)             File Number)            Identification No.)

               1633 Broadway, 38th Floor, New York, New York 10019
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (212) 843-2777

                         ______________________________


Item 5.  Other Events

     On November 30, 1998,  Registrant  entered into a Stock Purchase  Agreement
with  Great  American  Insurance  Company  and  entered  into a  Stock  Purchase
Agreement  with Great  American Life  Insurance  Company.  Pursuant to each such
Stock  Purchase  Agreement,  the  respective  purchaser  agreed to purchase  and
Registrant  agreed to sell five  thousand  (5,000)  shares of Series A Preferred
Stock of Registrant  (the "Series A Preferred  Stock"),  for a purchase price of
one million  dollars  ($1,000,000).  The Series A Preferred Stock is convertible
into Registrant's Common Stock at a conversion price of $2.12 per share, subject
to  adjustment  for  stock  splits,  recapitalizations  and  the  like;  and any
unconverted  shares will be subject to mandatory  conversion  into  Registrant's
Common Stock on December 31, 2003. The Series A Preferred Stock will be entitled
to receive out of any assets legally available therefore cumulative dividends at
a per share rate of ten percent (10%) of the stated value (i.e.,  twenty dollars
per share)  for each  share of Series A  Preferred  stock,  per  annum,  payable
annually on December  31 of each year,  commencing  December  31,  1999,  or, if
earlier, upon conversion of the shares of Series A Preferred Stock.

     Pursuant  to the  above-described  Stock  Purchase  Agreements,  Registrant
received  an  aggregate  of two  million  dollars  ($2,000,000)  and  issued ten
thousand (10,000) shares of Series A Preferred Stock on December 2, 1998.

Item 7.  Financial Statements and Exhibits

         (a)      Financial statements of businesses acquired.

                  Not applicable.

         (b)      Pro forma financial information.

                  Not applicable.

         (c)      Exhibits.

                    10.1 Stock Purchase  Agreement dated as of November 30, 1998
               between Registrant and Great American Insurance Company.

                    10.2 Stock Purchase  Agreement dated as of November 30, 1998
               between Registrant and Great American Life Insurance Company.


                                    SIGNATURE

     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.


                                            INDIVIDUAL INVESTOR GROUP, INC.


Dated:   December 14, 1998                  By:/s/  Jonathan Steinberg
                                               -------------------------
                                               Jonathan L. Steinberg
                                               Chief Executive Officer



                            STOCK PURCHASE AGREEMENT


     THIS  STOCK  PURCHASE  AGREEMENT,  dated  as  of  November  30,  1998  (the
"Agreement"), is between INDIVIDUAL INVESTOR GROUP, INC., a Delaware corporation
with its principal place of business at 1633 Broadway, 38th Floor, New York, New
York  10019 (the  "Company"),  and GREAT  AMERICAN  INSURANCE  COMPANY,  an Ohio
corporation,  having its  principal  place of  business  at 580  Walnut  Street,
Cincinnati, Ohio 45202 (the "Buyer").

     1. SALE AND ISSUANCE OF PREFERRED STOCK.

          1.1 The Company  shall adopt and file with the  Secretary  of State of
     Delaware  on or before the  Closing (as  defined  below) a  Certificate  of
     Designations,  Preferences, and Other Rights and Qualifications of Series A
     Preferred   Stock  in  the  form   attached   hereto  as   Exhibit  A  (the
     "Certificate").  The  Series  A  Preferred  Stock  will  have  the  rights,
     preferences, privileges and restrictions set forth in the Certificate.

          1.2  Subject to the terms and  conditions  of this  Agreement,  at the
     Closing Buyer agrees to purchase from the Company,  and the Company  agrees
     to sell, issue and deliver to Purchaser,  Five Thousand (5,000) shares (the
     "Shares") of the Company's Series A Preferred  Stock,  $200.00 stated value
     per  share  (the  "Preferred  Stock"),  for a total  purchase  price of One
     Million Dollars  ($1,000,000) or Two Hundred Dollars ($200.00) per share of
     Preferred Stock.

     2. CLOSING.  The closing of the transaction  contemplated by this Agreement
(the  "Closing")  will occur within three (3) business  days after the filing of
the  Certificate  with the Delaware  Secretary  of State,  at the offices of the
Company,  or at such other time, date, or place as shall be mutually agreed upon
by the parties hereto in writing (the "Closing Date").

     3. CLOSING ITEMS.

          3.1  At the  Closing,  the  Company  shall  deliver,  or  cause  to be
     delivered,  the  following  items:  

               3.1.1  certificate(s)  in  Buyer's  name  representing  the  Five
          Thousand (5,000) shares of Preferred Stock that Buyer is purchasing;

               3.1.2 the  Certificate,  certified by the  Delaware  Secretary of
          State;

               3.1.3  resolutions  of the  board  of  directors  of the  Company
          authorizing   the  execution,   delivery  and   consummation  of  this
          Agreement,  the filing of the Certificate,  the issuance of the shares
          of  Preferred  Stock  and  the  other  matters   contemplated  hereby,
          certified  as to their due  adoption  and  continued  validity  by the
          Secretary of the Company;

               3.1.4  opinion  of  Graubard  Mollen  &  Miller,  counsel  to the
          Company, in the form attached hereto as Exhibit 3.1.4; and

               3.1.5  such  other  certificates  and  documentation  as  may  be
          reasonably requested by Buyer.

     3.2 At the Closing,  Purchaser shall deliver, or cause to be delivered, One
Million Dollars ($1,000,000) in immediately available funds.

     4. FURTHER ASSURANCES.  Each party shall execute such additional  documents
and take such other actions as the other party or parties may reasonably request
to  consummate  the  transactions  contemplated  hereby and  otherwise as may be
necessary to effectively carry out the terms and provisions of this Agreement.

     5.  REPRESENTATIONS  AND  COVENANTS  OF THE  COMPANY.  The  Company  hereby
represents and warrants to and covenants with Buyer as follows:

          5.1 Organization.  The Company is duly organized, validly existing and
     in good  standing in the State of Delaware.  The Company has all  requisite
     corporate  power and authority to own, lease and operate its properties and
     to carry on its business as now being  conducted and as presently  proposed
     to be conducted  and to execute,  deliver and perform this  Agreement.  The
     Company is duly licensed, authorized and qualified to do business and is in
     good  standing  in all  jurisdictions  (domestic  or  foreign) in which the
     conduct of its  business  or the  ownership  or  leasing of its  properties
     requires it to be so licensed,  authorized or  qualified,  except where its
     failure  to be so  licensed,  authorized  or  qualified  would  not  have a
     material adverse effect,  singularly or in the aggregate,  on the condition
     (financial  or  otherwise)  of  the  properties,  business,  operations  or
     prospects of the Company.

          5.2 Authority;  Execution and Delivery, Etc. The execution,  delivery,
     and performance of this Agreement has been duly authorized by the Company's
     Board of Directors and no other  corporate  proceedings  on the part of the
     Company or its  stockholders  are  required.  This  Agreement has been duly
     executed and delivered by the Company and constitutes the legal, valid, and
     binding  obligation  of the  Company  enforceable  against  the  Company in
     accordance with its terms,  except as enforcement thereof may be limited by
     bankruptcy,  insolvency,  or similar  laws  affecting  the  enforcement  of
     creditors'  rights  in  general  or  general   principles  of  equity.  The
     Certificate  has been duly  authorized  and upon filing of the  Certificate
     with the Secretary of State of the State of Delaware,  the Preferred  Stock
     will be duly authorized.

          5.3 Financial Condition.  The consolidated financial statements of the
     Company included in the Disclosure Documents (as described in Section 5.11)
     fairly present on a consolidated basis the financial position,  the results
     of  operations,  the  changes  in  financial  position  and the  changes in
     stockholders'  equity  and the  other  information  purported  to be  shown
     therein of the Company and its consolidated  subsidiaries at the respective
     dates and for the respective periods to which they apply and such financial
     statements  have  been  prepared  in  conformity  with  generally  accepted
     accounting   principles,   consistently   applied  throughout  the  periods
     involved,  and all  adjustments  necessary for a fair  presentation  of the
     results for such periods have been made. The  capitalization of the Company
     as of September 30, 1998 is as set forth on Schedule 5.3.1.

          5.4 Validly Issued Shares. The Shares to be issued, sold and delivered
     in accordance  with the terms of this Agreement for the  consideration  set
     out herein,  will,  upon issuance in accordance  with the terms hereof,  be
     duly and validly issued, fully paid and nonassessable, free of restrictions
     on transfer  other than  restrictions  on transfer under this Agreement and
     under  applicable  federal and state  securities  laws. The issuance of the
     Shares to Buyer  pursuant to this Agreement will comply with all applicable
     laws, including federal and state securities laws, and will not violate the
     preemptive rights of any person.  The common stock issuable upon conversion
     of the Shares will be, upon  issuance and delivery in  accordance  with the
     terms  of  the  Certificate,  duly  and  validly  issued,  fully  paid  and
     nonassessable  and free of restrictions on transfer other than restrictions
     on transfer  under this  Agreement and under  applicable  federal and state
     securities  laws.  The issuance of the common stock upon  conversion of the
     Shares will comply with all applicable  laws,  including  federal and state
     securities  laws  (assuming the accuracy of the  representations  set forth
     herein  as of the date of  issuance  of such  common  stock),  and will not
     violate the preemptive rights of any person.

          5.5  Consents.   No  consent,   approval,   qualification,   order  or
     authorization  of, or registration,  declaration or filing with, any court,
     administrative  agency or  commission  or other  governmental  authority or
     instrumentality,  domestic or foreign,  or other third party is required by
     or with  respect  to the  Company  in  connection  with the  execution  and
     delivery  of this  Agreement,  or the  consummation  by the  Company of the
     transactions  contemplated  hereby,  which has not already  been  obtained,
     except for the filing of the  Certificate  with the  Secretary  of State of
     Delaware,  any notices of sale required to be filed with the Securities and
     Exchange  Commission  under the  Securities  Act of 1933,  as amended  (the
     "Securities  Act") or  Securities  Exchange Act of 1934, as amended or with
     the Nasdaq Stock  Market,  or such post closing  filings as may be required
     under  applicable  state  securities laws which will be timely filed within
     the applicable periods therefor.

          5.6 Litigation.  There is no action, suit, proceeding or investigation
     pending or to the  Company's  knowledge  currently  threatened  against the
     Company,  nor does the Company have any actual  knowledge that there is any
     basis for the  foregoing,  except  for those  disclosed  in the  Disclosure
     Documents or in a separate writing to Buyer; those for which there has been
     no  manifestation  by a potential  claimant of an  awareness  of a possible
     claim and for which the Company has not determined that it is probable that
     a claim will be asserted;  and those which, if adversely determined,  would
     not reasonably be expected to have a material adverse effect on the results
     of operations,  financial  condition or business of the Company  ("Material
     Adverse Effect").  The foregoing  includes,  without  limitation,  actions,
     suits,  proceedings or investigations  pending or threatened  involving the
     prior  employment  or  engagement  of  any of the  Company's  employees  or
     consultant,  their use in  connection  with the  Company's  business of any
     information  or  techniques  allegedly  proprietary  to any of their former
     employers or their current  employers/clients (in the case of consultants),
     or their obligations under any agreements with such employers/clients.  The
     Company  is not a party or subject to the  provisions  of any order,  writ,
     injunction,  judgment  or  decree  of any  court or  government  agency  or
     instrumentality.  There is no action, suit,  proceeding or investigation by
     the Company currently pending or that the Company intends to initiate.

          5.7 Compliance with Other Instruments. The Company is not in violation
     or  default  in any  material  respect  of  any  provision  of its  Amended
     Certificate of Incorporation  or bylaws,  or in any material respect of any
     instrument,  judgment,  order,  writ,  decree or  contract to which it is a
     party or by which it is  bound,  or, to the best of its  knowledge,  of any
     provision of any federal or state statute, rule or regulation applicable to
     the Company; except where such violation or default would not reasonably be
     expected to have a Material  Adverse  Effect.  The execution,  delivery and
     performance  of this  Agreement and the  consummation  of the  transactions
     contemplated hereby will not result in any such violation or be in conflict
     with or  constitute,  with or  without  the  passage  of time and giving of
     notice,  either a default under any such provision,  instrument,  judgment,
     order, writ, decree or contract or an event that results in the creation of
     any lien,  charge or  encumbrance  upon any  assets of the  Company  or the
     suspension,  revocation,  impairment,  forfeiture,  or  nonrenewal  of  any
     material  permit,  license,  authorization,  or approval  applicable to the
     Company,  its business or  operations  or any of its assets or  properties,
     except  where  such  violation,  default,  event,  suspension,  revocation,
     impairment,  forfeiture or nonrenewal  would not  reasonably be expected to
     have a Material Adverse Effect.

          5.8  Material  Facts.  The  Company  has  provided  Buyer with all the
     information  reasonably  available  to it  that  Buyer  has  requested  for
     deciding whether to purchase the Shares. The representations and warranties
     by the Company  contained in this  Agreement,  when taken together with the
     Disclosure  Documents and other written  information  furnished to Buyer in
     connection  with this Agreement,  do not contain any untrue  statement of a
     material  fact or omit to state any  material  fact  necessary  to make the
     statements  contained herein or therein,  in light of the  circumstances in
     which they are made, not misleading,  except,  with respect to assumptions,
     projections  and  expressions of opinions or  predictions  contained in the
     documents or written materials furnished by the Company, Company represents
     only that such  assumptions,  projections  and  expressions of opinions and
     predictions  were made in good faith and the Company believes that there is
     a reasonable basis therefor.

          5.9 Compliance  with Laws. To the best  knowledge of the Company,  the
     Company is in  compliance  in all  material  respects  with all  applicable
     statutes,   laws,  ordinances,   rules,   regulations  and  orders  of  any
     governmental  entity,  except where  non-compliance would not reasonably be
     expected  to  have a  Material  Adverse  Effect,  and the  Company  has not
     received any notice or other communication whether oral or written from any
     governmental  entity,  arbitrator  or any other person  regarding  any such
     violation or failure.

          5.10 Subsequent Events. Subsequent to the respective dates as of which
     information  is given in the  Disclosure  Documents,  except  as  described
     therein,  there has not been any material  adverse  change in the condition
     (financial or otherwise), earnings, businesses,  properties or prospects of
     the Company and its subsidiaries,  whether or not arising from transactions
     in the ordinary course of business,  the Company and its subsidiaries  have
     not sustained any material loss or  interference  with their  businesses or
     properties  from  fire,  explosion,  earthquake,  flood or other  calamity,
     whether or not covered by insurance, or from any labor dispute or any court
     or legislative or other governmental action, order or decree, and since the
     date of the latest  balance  sheet  included in the  Disclosure  Documents,
     neither the Company nor any of its  subsidiaries has incurred or undertaken
     any liability or obligation, indirect or contingent, except for liabilities
     or  obligations  incurred or undertaken in the ordinary  course of business
     and except for any such  liabilities or obligations as are reflected in the
     Disclosure Documents.

          5.11 Disclosure.  The Company has provided to Buyer true,  correct and
     complete  copies of its Annual  Report on Form  10-KSB for the fiscal  year
     ended  December 31  1997; its Quarterly Reports on Form 10-Q for the fiscal
     quarters  ended March 31, 1998,  June 30,  1998 and September 30, 1998; and
     its Notice of Annual Meeting of Stockholders  and Proxy Statement  relating
     to its annual meeting of stockholders held on June 17, 1998  (collectively,
     the "Disclosure Documents").

          5.12 Observer Rights.  For so long as Buyer owns at least seventy-five
     percent  (75%) of the Shares being  purchased  hereunder  (adjusted for any
     stock dividends, consolidations or splits with respect to such shares), the
     Company  shall invite a  representative  of Buyer to attend all meetings of
     its board of  directors  in a  nonvoting  observer  capacity  and,  in this
     respect,  shall give such  representative  copies of all notices,  minutes,
     consents, and other materials that it provides to its directors;  provided,
     however,  that such  representative  shall agree to hold in confidence  and
     trust and to act in a fiduciary  manner with respect to all  information so
     provided;  and,  provided  further,  that the Company reserves the right to
     withhold  any  information  and to  exclude  such  representative  from any
     meeting or portion  thereof if access to such  information or attendance at
     such meeting could adversely affect the  attorney-client  privilege between
     the Company and its counsel or would result in  disclosure of trade secrets
     to such  representative or if such Buyer or its  representative is a direct
     competitor of the Company.

     6.  REPRESENTATIONS  OF BUYER.  Buyer hereby represents and warrants to the
Company as follows:

          6.1 Buyer is aware  that its  investment  in the  Company  involves  a
     substantial  degree of risk,  including,  but not limited to the following:
     (i) if the Company  fails to meet the  maintenance  criteria for  continued
     inclusion on the Nasdaq National  Market System ("NMS"),  including but not
     limited to, the requirement  that the Company maintain minimum net tangible
     assets of at least  $4,000,000  and the  requirement  that the  minimum bid
     price of the Common  Stock is at least $1.00,  it may be delisted  from the
     NMS; (ii) the Company has had substantial  operating  losses for the fiscal
     year ended  December 31, 1997 and for the fiscal  quarters  ended March 31,
     1998, June 30, 1998 and September 30, 1998 and expects to continue to incur
     losses in the future;  (iii) the Company will need additional  financing in
     the future to fund  operating  losses  and for  capital  investment  in its
     current and proposed business operations; (iv) the Company's development of
     its internet  products is not currently  generating  sufficient  revenue to
     cover development and operating expenses,  and may not be profitable in the
     future;  (v)  management  and the existing  principal  stockholders  of the
     Company  beneficially  own a substantial  amount of the outstanding  voting
     stock of the Company  and  accordingly  are in a position to  substantially
     influence  the  election  of all  directors  of the Company and the vote on
     matters requiring stockholder approval; and (vi) the Company's success will
     to a significant  extent rely upon the continued  services and abilities of
     Jonathan  Steinberg.  Buyer  acknowledges  and is  aware  that  there is no
     assurance as to the future performance of the Company.

          6.2  Buyer  is  purchasing  the  Shares,  and upon  conversion  of the
     Preferred  Stock will  purchase the  underlying  common stock  ("Underlying
     Common  Stock"),  for its own account for investment and not with a view to
     or in connection with a distribution of the Shares or the Underlying Common
     Stock, nor with any present intention of selling or otherwise  disposing of
     all or any part of the Shares or the  Underlying  Common  Stock,  except as
     contemplated in Section 8 below.  Subject to Section 8 below,  Buyer agrees
     that it must bear the economic risk of its investment because,  among other
     reasons,  the  Shares  and  the  Underlying  Common  Stock  have  not  been
     registered  under the Securities  Act, or under the securities  laws of any
     state and, therefore,  cannot be resold,  pledged,  assigned,  or otherwise
     disposed of unless and until they are  registered  under the Securities Act
     and under  applicable  securities laws of certain  states,  or an exemption
     from such registration is available.

          6.3 Buyer has the  financial  ability to bear the economic risk of its
     investment in the Company (including its complete loss), has adequate means
     for  providing  for its current  needs and has no need for  liquidity  with
     respect to its investment in the Company.

          6.4 Buyer has such  knowledge and experience in financial and business
     matters  as  to be  capable  of  evaluating  the  merits  and  risks  of an
     investment  in the Company and has obtained,  in its  judgment,  sufficient
     information  from the  Company  to  evaluate  the  merits  and  risks of an
     investment in the Company.  Buyer has had full opportunity to ask questions
     and receive  satisfactory  answers concerning all matters pertaining to its
     investment   and  all  such  questions  have  been  answered  to  its  full
     satisfaction.  Buyer  has  been  provided  an  opportunity  to  obtain  any
     additional  information concerning the Company and all other information to
     the extent the Company possesses such information or can acquire it without
     unreasonable  effort or expense.  Buyer has received no  representation  or
     warranty  from the Company with respect to its  investment  in the Company,
     and Buyer has relied solely upon its own investigation in making a decision
     to invest in the Company.

          6.5 Buyer is an  "accredited  investor" as defined in Section 2(15) of
     the Securities Act and in Rule 501 promulgated thereunder.

          6.6 This  Agreement  has been duly executed and delivered by Buyer and
     constitutes the legal,  valid, and binding  obligation of Buyer enforceable
     against Buyer in accordance with its terms,  except as enforcement  thereof
     may be limited by  bankruptcy,  insolvency,  or similar laws  affecting the
     enforcement  of  creditors'  rights in  general or  general  principles  of
     equity.

     7. RESTRICTIONS ON TRANSFER.

     7.1 Restrictions on Transfer. Buyer agrees that it will not sell, transfer,
or otherwise dispose of any of the Shares or any of the Underlying Common Stock,
except pursuant to an effective  registration statement under the Securities Act
or an exemption from the registration requirements of the Securities Act and the
Company has received an opinion of counsel satisfactory to the Company that such
exemption is available.

     7.2 Legend. Each certificate for the Shares and the Underlying Common Stock
shall bear the following legend:

     "THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED
UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
STATE AND MAY BE SOLD OR OTHERWISE  TRANSFERRED  ONLY IF SO  REGISTERED OR IF AN
EXEMPTION FROM SUCH  REGISTRATION  IS AVAILABLE AND THE CORPORATION HAS RECEIVED
AN OPINION OF COUNSEL  SATISFACTORY  TO THE  CORPORATION  THAT SUCH EXEMPTION IS
AVAILABLE."

     8. REGISTRATION RIGHTS.

          8.1 Piggyback Registration.  From the date of this Agreement until the
     second  anniversary of the issuance of the Shares to Buyer,  if the Company
     proposes  to  file  a  registration  statement  under  the  Securities  Act
     ("Registration  Statement") with respect to an offering for its own account
     of any class of security  (other than a registration  statement on Form S-4
     or S-8 or successor  forms thereto or filed in connection  with an exchange
     offer or business  combination  or an offering of securities  solely to the
     Company's existing stockholders),  then the Company shall in each case give
     written  notice of such proposed  filing to Buyer at least thirty (30) days
     before the  anticipated  filing date, and such notice shall offer Buyer the
     opportunity  to register such number of shares of  Underlying  Common Stock
     (and none of the  Shares)  of the  Company as Buyer may  request.  Upon the
     written  request of Buyer made  within  twenty (20) days of receipt of such
     notice,  the Company shall use its best efforts to register the  Underlying
     Common Stock on the Registration  Statement,  provided however, that if, in
     the written opinion of the Company's managing  underwriter or underwriters,
     if any, for such offering,  the inclusion of the  Underlying  Common Stock,
     when added to the securities being registered by the Company or the selling
     stockholder(s),  will exceed the maximum amount of the Company's securities
     which can be  marketed  (i) at a price  reasonably  related  to their  then
     current market value,  or (ii) without  materially and adversely  affecting
     the entire  offering,  the Company shall  nevertheless  register all or any
     portion of the  Underlying  Common Stock  required to be so registered  but
     such  Underlying  Common Stock shall not be sold by Buyer until one hundred
     and eighty (180) days after the  registration  statement  for such offering
     has become  effective  and provided  further that,  if any  securities  are
     registered  for sale on behalf of other  stockholders  in such offering and
     such  stockholders  have not agreed to defer such sale until the expiration
     of such one hundred and eighty (180) day period,  the number of  securities
     to be sold by all  stockholders  in such  public  offering  during such one
     hundred and eighty  (180) period  shall be  apportioned  pro rata among all
     such selling stockholders,  including Buyer,  according to the total amount
     of securities of the Company owned by said selling stockholders,  including
     Buyer.  Buyer  agrees  that  the  Company  may  withdraw  the  Registration
     Statement at any time before it is declared effective by the Securities and
     Exchange Commission.

          8.2 Expenses.  All expenses in connection  with  registrations  of the
     Underlying   Common  Stock  shall  be  borne  by  the  Company  except  for
     underwriting  discounts  and  commissions,  applicable  transfer  taxes and
     expenses of counsel to Buyer, which shall be borne by Buyer.

          8.3  Information  Relating to Buyer.  Buyer agrees that in  connection
     with any  Registration  Statement  which  registers its  Underlying  Common
     Stock,  that it will provide to the Company all information and execute and
     deliver  all  documents,  agreements,  certificates  and other items at its
     expense,  as the Company  and/or its counsel  reasonably  request,  and the
     failure to provide  such  information  or items shall permit the Company to
     exclude the Underlying Common Stock from any Registration Statement, or not
     have declared  effective any  Registration  Statement  filed by the Company
     pursuant to Section 8.1.

          8.4 Indemnification.

               8.4.1  Subject to the  conditions  set forth  below,  the Company
          agrees to indemnify and hold  harmless  Buyer and its  affiliates  and
          each of their officers, directors,  trustees, agents and employees and
          each person, if any, who controls Buyer ("Controlling  Person") within
          the meaning of Section 15 of the  Securities  Act or Section  20(a) of
          the Exchange Act against any and all loss,  liability,  claim,  damage
          and expense whatsoever (including but not limited to any and all legal
          or other expenses reasonably  incurred in investigating,  preparing or
          defending  against any  litigation,  commenced or  threatened,  or any
          claim  whatsoever) to which it may become subject under the Securities
          Act, the Securities  Exchange Act of 1934, as amended ("Exchange Act")
          or any other statute or at common law or otherwise,  arising out of or
          based  upon any untrue  statement  or alleged  untrue  statement  of a
          material fact contained in any Registration Statement in which Buyer's
          securities  shall be  included  or the  omission  or alleged  omission
          therefrom  of a  material  fact  required  to  be  stated  therein  or
          necessary  to  make  the  statements  therein,  in  the  light  of the
          circumstances under which they were made, not misleading,  unless such
          statement or omission was made in reliance upon and in conformity with
          information furnished to the Company with respect to Buyer by Buyer or
          its agents,  in writing,  expressly  for use in any such  Registration
          Statement.  The  Company  agrees  promptly  to  notify  Buyer  of  the
          commencement  of any litigation or proceedings  against the Company or
          any of its officers,  directors or  controlling  persons in connection
          with the issue and sale of the  Underlying  Common Stock in connection
          with any such Registration Statement.

               8.4.2 If any action is brought  against Buyer in respect of which
          indemnity may be sought  against the Company  pursuant to this Section
          8.4,  Buyer  shall  promptly  notify  the  Company  in  writing of the
          institution of such action and the Company shall assume the defense of
          such action,  including the employment and fees of counsel and payment
          of actual  expenses.  Buyer  shall  have the  right to employ  its own
          counsel in any such case,  but the fees and  expenses of such  counsel
          shall be at the  expense of Buyer  unless (i) the  employment  of such
          counsel  shall  have been  authorized  in  writing  by the  Company in
          connection with the defense of such action,  or (ii) the Company shall
          not have  employed  counsel  to have  charge  of the  defense  of such
          action, or (iii) Buyer shall have reasonably  concluded that there may
          be defenses  available to it which are different from or additional to
          those  available  to the Company (in which case the Company  shall not
          have the  right to  direct  the  defense  of such  action on behalf of
          Buyer), in any of which events the reasonable fees and expenses of not
          more than one  additional  firm of attorneys  selected by Buyer and/or
          controlling  person  shall be borne  by the  Company.  Notwithstanding
          anything to the contrary  contained  herein, if Buyer shall assume the
          defense of such action as provided  above,  the Company shall have the
          right to approve  the terms of any  settlement  of such  action  which
          approval shall not be unreasonably withheld.

               8.4.3 Buyer agrees to  indemnify  and hold  harmless  each of the
          Company, its directors, officers and employees and any underwriter (as
          defined  in the  Securities  Act) and each  Controlling  Person of the
          Company,  against  any and all  loss,  liability,  claim,  damage  and
          expense  described  in the  foregoing  indemnity  from the  Company to
          Buyer,  but only with respect to untrue  statements or  omissions,  or
          alleged untrue  statements or omissions  directly relating to Buyer in
          any such registration  statement  furnished to the Company by Buyer or
          its agents,  in writing,  expressly  for use in any such  registration
          statement.  In case any action shall be brought against the Company or
          any  other  person  so  indemnified  based  on any  such  registration
          statement,  and in respect of which  indemnity  may be sought  against
          Buyer,  Buyer shall have the rights and duties  given to the  Company,
          and the Company and each other  person so  indemnified  shall have the
          rights and duties given to Buyer by the provisions of paragraph  8.4.2
          above.

     8.5 Contribution.

          (a) In order to provide for just and equitable  contribution under the
     Securities   Act  in  any  case  in  which  (i)  any  person   entitled  to
     indemnification under Section 8.4 makes claim for indemnification  pursuant
     hereto but it is judicially determined (by the entry of a final judgment or
     decree by a court of competent  jurisdiction  and the expiration of time to
     appeal or the denial of the last right of appeal) that such indemnification
     may not be enforced in such case  notwithstanding the fact that Section 8.4
     provides for  indemnification  in such case, or (ii) contribution under the
     Securities  Act, the Exchange Act, or otherwise may be required on the part
     of any such person in circumstances for which  indemnification  is provided
     under Section 8.4, then, and in each such case, the Company and Buyer shall
     contribute, in proportion to their relative fault, to the aggregate losses,
     liabilities,  claims,  damages and expenses of the nature  contemplated  by
     said indemnity  agreement  incurred by the Company and Buyer,  as incurred;
     provided, that, no person guilty of a fraudulent  misrepresentation (within
     the meaning of Section  11(f) of the  Securities  Act) shall be entitled to
     contribution  from  any  person  who was  not  guilty  of  such  fraudulent
     misrepresentation.

          (b) Within  fifteen days after receipt by any party to this  Agreement
     (or its  representative) of notice of the commencement of any action,  suit
     or  proceeding,  such party will,  if a claim for  contribution  in respect
     thereof is to be made against  another  party (the  "contributing  party"),
     notify the contributing party of the commencement thereof, but the omission
     to so notify the contributing  party will not relieve it from any liability
     which it may have to any other party other than for contribution hereunder.
     In case any such action,  suit or proceeding is brought  against any party,
     and such party notifies a contributing  party or its  representative of the
     commencement  thereof within the aforesaid  fifteen days, the  contributing
     party will be entitled to participate  therein with the notifying party and
     any other  contributing  party similarly  notified.  Any such  contributing
     party shall not be liable to any party seeking  contribution  on account of
     any  settlement of any claim,  action or proceeding  effected by such party
     seeking  contribution on account of any settlement of any claim,  action or
     proceeding effected by such party seeking  contribution without the written
     consent of such contributing party. The contribution  provisions  contained
     in this Section 8 are  intended to  supersede,  to the extent  permitted by
     law, any right to  contribution  under the Securities Act, the Exchange Act
     or otherwise available.

     9. MISCELLANEOUS.

          9.1  Expenses.  Each  party  shall be liable for its own  expenses  in
     connection with the transactions contemplated by this Agreement.

          9.2  Successors  and Assigns.  All  covenants  and  agreements in this
     Agreement  contained by or on behalf of either of the parties  hereto shall
     bind and inure to the benefit of the  respective  successors and assigns of
     the Company and of Buyer, whether so expressed or not.

          9.3  Notices,   Etc.  All   notices,   requests,   demands  and  other
     communications  hereunder  shall be in writing  and shall be  delivered  in
     person or mailed by  certified  or  registered  mail  first-class,  postage
     prepaid:

         If to the Company:                       with a copy to:

         Individual Investor Group, Inc.          Graubard Mollen & Miller
         1633 Broadway, 38th Floor                600 Third Avenue
         New York, New York 10019                 New York, New York  10016
         Attention:  General Counsel              Attn:  Peter M. Ziemba, Esq.

         If to Buyer:                             with a copy to:

         Great American Insurance Company         American Financial Group, Inc.
         580 Walnut Street                        One East Fourth Street
         Cincinnati, Ohio  45202                  Cincinnati, Ohio  45202
         Attention:  Ronald C. Hayes, Esq.        Attn:  Karl J. Grafe, Esq.

     Any such notice,  request, demand or other communication hereunder shall be
deemed to have  been  duly  given or made and to have  become  effective  (i) if
delivered by hand or overnight courier,  at the time of receipt thereof and (ii)
if sent by registered  or certified  first-class  mail,  postage  prepaid,  five
business days thereafter.

     Any party may, by written notice to the other,  change the address to which
notices to such party are to be delivered or mailed.

          9.4 Governing Law. This  Agreement is being  delivered and is intended
     to be  performed  in the  State  of New York and  shall  be  construed  and
     enforced  in  accordance  with,  and the  rights  of the  parties  shall be
     governed by, the law of such State.

          9.5 Entire  Agreement.  This  Agreement,  together  with any  exhibits
     hereto (which exhibits are an integral part hereof), constitutes the entire
     agreement  between the parties with respect to the subject  matter  hereof,
     and  supersedes  all  prior   agreements,   understandings,   negotiations,
     representations  and  proposals,  written  or oral,  with  respect  to such
     subject  matter.  Each  party  represents  that  it is not  relying  on any
     representations,  whether written or oral, not set forth in this Agreement,
     in determining to execute this Agreement.

          9.6 Amendments.  This Agreement may not be changed orally, but only by
     an agreement in writing  signed by the party  against whom  enforcement  is
     sought.

          9.7 Severability.  If any provision of this Agreement is held invalid,
     illegal or unenforceable in any respect (an "Impaired Provision"), (a) such
     Impaired Provision shall be interpreted in such a manner as to preserve, to
     the maximum extent possible,  the intent of the parties,  (b) the validity,
     legality and  enforceability  of the remaining  provisions shall not in any
     way be affected or impaired thereby, and (c) such decision shall not affect
     the validity,  legality or enforceability of such Impaired  Provision under
     other circumstances. The parties agree to negotiate in good faith and agree
     upon  a  provision  to  substitute  for  the  Impaired   Provision  in  the
     circumstances  in which the  Impaired  Provision  is  invalid,  illegal  or
     unenforceable.

          9.8 Negotiation.  The parties  acknowledge that they are entering into
     this  Agreement  after   consulting  with  counsel  and  based  upon  equal
     bargaining  power, with all parties  participating in its preparation.  The
     parties acknowledge and agree that the attorneys for each party have had an
     equal opportunity to participate in the negotiation and preparation of this
     Agreement. The terms of this Agreement shall not be interpreted in favor of
     or  against  any  party  on  account  of the  draftsperson,  but  shall  be
     interpreted solely for the purpose of fairly effectuating the intent of the
     parties hereto.

          9.9  Counterparts  and  Facsimile/Photocopy  Signatures;  Authority of
     Signatories. This Agreement may be executed in counterparts,  and when each
     Party  has  signed  and  delivered  at  least  one such  counterpart,  each
     counterpart  shall be deemed an original,  and,  when taken  together  with
     other signed counterparts,  shall constitute one Agreement,  which shall be
     binding  upon and  effective as to all  parties.  A signature  received via
     facsimile or photocopy  shall be deemed an original for all purposes.  Each
     party  represents  that the person  signing  this  Agreement on the party's
     behalf has been duly authorized to execute this Agreement on behalf of such
     party,  and  all of the  signatories  hereto  signing  in a  representative
     capacity  warrant and represent that they have been duly  authorized by and
     on behalf of their respective principals to execute this Agreement.

          9.10  Headings.  The Article and Section  headings used herein are for
     convenience  only and do not define,  limit or construe the content of such
     sections.  All references in this Agreement to Article and Section  numbers
     refer  to  Articles  and  Sections  of  this  Agreement,  unless  otherwise
     indicated.

     IN WITNESS  WHEREOF,  the parties  have duly  executed and  delivered  this
Agreement as of the date first above written.

                                      INDIVIDUAL INVESTOR GROUP, INC.



                                      By: /s/ Jonathan Steinberg
                                          Jonathan L. Steinberg
                                          Chief Executive Officer

 
                                      GREAT AMERICAN INSURANCE COMPANY



                                      By: /s/ Eve Cutler Rosen
                                          Eve Cutler Rosen
                                          Vice President and Assistant Secretary


                                                                       Exhibit A

                         INDIVIDUAL INVESTOR GROUP, INC.

                    CERTIFICATE OF DESIGNATIONS, PREFERENCES
                     AND OTHER RIGHTS AND QUALIFICATIONS OF
                            SERIES A PREFERRED STOCK
                       __________________________________

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law
                       __________________________________


     INDIVIDUAL INVESTOR GROUP, INC., a corporation organized and existing under
the Business Corporation Law of the State of Delaware ("Corporation"),

     DOES HEREBY CERTIFY:

     FIRST: That, pursuant to authority conferred upon the Board of Directors of
the Corporation  ("Board") by the Certificate of Incorporation,  as amended,  of
said Corporation,  and pursuant to the provisions of Section 151 of the Delaware
General  Corporation Law, said Board duly determined that ten thousand  (10,000)
shares of  Preferred  Stock,  $0.01 par value  per  share,  shall be  designated
"Series A  Preferred  Stock," and to that end the Board  adopted  a  resolution
providing for the designation, preferences and relative, participating, optional
or other rights, and the  qualifications,  limitations and restrictions,  of the
Series A Preferred Stock, which resolution is as follows:

     RESOLVED,  that the Board,  pursuant to the  authority  vested in it by the
provisions of the Certificate of Incorporation,  as amended, of the Corporation,
hereby creates a series of Preferred Stock of the  corporation,  par value $0.01
per share, to be designated as "Series A  Preferred  Stock" and to consist of an
aggregate of ten thousand  (10,000) shares.  The Series A  Preferred Stock shall
have such  designations,  preferences and relative,  participating,  optional or
other rights, and the qualifications, limitations and restrictions as follows:

          1.  Designation  and  Amount.  Ten  thousand  (10,000)  shares  of the
     Preferred  Stock of the  Corporation,  par  value  $0.01 per  share,  shall
     constitute a class of Preferred  Stock  designated  as "Series A  Preferred
     Stock"  ("Series A  Preferred  Stock").  The Series A Preferred Stock shall
     have a stated value of two hundred  dollars  ($200.00)  per share  ("Stated
     Value").

          2.  Redemption  Rights.  The  Series A  Preferred  Stock  shall not be
     subject  to any right of  redemption  by the  Corporation  or by the holder
     thereof.

          3. Dividends.  The holders of shares of Series A Preferred Stock shall
     be  entitled  to receive  out of any  assets  legally  available  therefore
     cumulative  dividends  at the per share  rate of ten  percent  (10%) of the
     Stated  Value (or  twenty  dollars  ($20.00)  per  share) for each share of
     Series A Preferred  Stock,  per annum,  payable annually on December 31, of
     each year,  commencing  December 31, 1999 (each a "Dividend Payment Date"),
     or, if earlier,  upon conversion of the shares of Series A Preferred Stock.
     Dividends  will  accrue  from the date of issue of the  Series A  Preferred
     Stock and thereafter from the most recent date on which a dividend has been
     paid with respect to such share,  or if no dividends  have been paid,  from
     the date of issue,  and  dividends  shall accrue from day to day whether or
     not declared,  based on the actual  number of days elapsed.  If at any time
     accrued  dividends on the Series A Preferred Stock are not paid or declared
     and set aside for payment with respect to all preceding periods, the amount
     of the deficiency  will be paid or declared and set aside for payment,  but
     without  interest  on such  dividend  amount,  before any  distribution  by
     dividend  or  otherwise  will be paid or set apart for any shares of Common
     Stock, $0.01 par value of the Corporation ("Common Stock").

          4. Rights on Liquidation, Dissolution or Winding Up, Etc. In the event
     of any voluntary or involuntary  liquidation,  dissolution or winding up of
     the  Corporation,  as a result  of which  the  assets  of the  Corporation,
     whether from  capital,  surplus or earnings,  shall be  distributed  to the
     stockholders  of the  Corporation  (a  "Liquidation"),  the  holders of the
     Series A  Preferred  Stock shall be  entitled  to  receive,  subject to the
     rights of any  other  class of stock  which  ranks  senior to the  Series A
     Preferred Stock as to the payment of dividends or distribution of assets on
     a Liquidation,  but before any  distribution  is made on any class of stock
     ranking  junior  to the  Series  A  Preferred  Stock as to the  payment  of
     dividends or the  distribution  of assets,  the sum of two hundred  dollars
     ($200.00) per share, plus any arrearages in dividends thereon.

          5. Voting Rights. The holders of Series A Preferred Stock shall not be
     entitled to vote on any matter, except as may be required by law.

          6. Conversion of Series A Preferred Stock.

               (a) Right to Convert.  The holders of  Series A  Preferred  Stock
          shall have the right,  at such  holders'  option,  at any time or from
          time to time, to convert all or any part of such shares into shares of
          Common  Stock at any time on and subject to terms and  conditions  set
          forth in this Paragraph 6.

               (b) Initial Conversion Price; No Fractional Shares. The shares of
          Series A  Preferred  Stock shall be  convertible  at the office of the
          transfer  agent  for the  Series  A  Preferred  Stock  (the  "Transfer
          Agent"),  and at such other  place or places,  if any, as the Board of
          Directors  of the  Corporation  may  designate,  into  fully  paid and
          non-assessable shares (calculated as to each conversion to the nearest
          one-hundredth  (1/100)  of a share) of  Common  Stock.  The  number of
          shares of Common  Stock  issuable  upon  conversion  of each  share of
          Series  A  Preferred  Stock  shall be  equal  to two  hundred  dollars
          ($200.00)  divided  by the  conversion  price in effect at the time of
          conversion   determined  as  hereinafter   provided  (the  "Conversion
          Price").  The  Conversion  Price  shall be  initially  two dollars and
          twelve cents  ($2.12) per share of Common  Stock;  provided,  however,
          that such Conversion Price shall be subject to adjustment from time to
          time in certain  instances  as  hereinafter  provided.  No  fractional
          shares of Common Stock will be issued; and a cash payment will be paid
          in lieu of any  fractional  shares  in an  amount  equal  to the  same
          fraction  of the  last  sale  price of  Common  Stock  (determined  as
          provided  in  Paragraph  6(d)(iv))  at the  close of  business  on the
          business day which immediately precedes the day of conversion.

               (c)  Delivery  of  Certificates.  Before  any holder of shares of
          Series A  Preferred  Stock  shall be entitled to convert the same into
          Common Stock,  he shall  surrender  the  certificate  or  certificates
          therefor,  duly endorsed to the Corporation or in blank, at the office
          of the Transfer Agent or at such other place or places, if any, as the
          Board of Directors of the Corporation  has designated,  and shall give
          written  notice to the  Corporation  at said  office or place  that he
          elects to convey the same and shall state in writing  therein the name
          or names  (with  addresses)  in which he  wishes  the  certificate  or
          certificates for Common Stock to be issued.  The Corporation  will, as
          soon as  practicable  thereafter,  issue and deliver at said office or
          place to such holder of shares of Series A Preferred  Stock, or to his
          nominee or  nominees,  certificates  for the number of full  shares of
          Common Stock to which he shall be entitled as aforesaid, together with
          cash in lieu of any fraction of a share.  Shares of Series A Preferred
          Stock  shall be  deemed  to have  been  converted  as of the  close of
          business on the date of the surrender of such shares for conversion as
          provided above,  and the person or persons  entitled to receive Common
          Stock  issuable upon  conversion  shall be treated for all purposes as
          the record  holder or holders of such Common  Stock as of the close of
          business on such date.

               (d)  Adjustment  of Conversion  Price.  The  Conversion  Price in
          effect at any time shall be subject to adjustment as follows:

                    (i) In case the Corporation  shall (A) declare a dividend on
               its Common stock in shares of its capital  stock,  (B)  subdivide
               its  outstanding   shares  of  Common  Stock,   (C)  combine  its
               outstanding  shares of  Common  Stock  into a  smaller  number of
               shares,  or (D) issue by  reclassification  of its  Common  Stock
               (including  any  such   reclassification  in  connection  with  a
               consolidation   or  merger  in  which  the   Corporation  is  the
               continuing  corporation,  but excluding a change in par value, or
               from par value to no par value, or from no par value to par value
               of Common Stock) any shares of its capital stock,  the Conversion
               Price in effect at the time of the record date for such  dividend
               or of the  effective  date of such  subdivision,  combination  or
               reclassification  shall be  proportionately  adjusted so that the
               holder of any share of Series A Preferred  Stock  surrendered for
               conversion  after such time shall be entitled to receive the kind
               and  amount  of  shares  which he would  have  owned or have been
               entitled to receive  had such share of Series A  Preferred  Stock
               been converted  immediately  prior to such time.  Such adjustment
               shall be made successively  whenever any event listed above shall
               occur.

                    (ii) In case the Corporation  shall issue rights or warrants
               to all holders of its Common  Stock  entitling  them to subscribe
               for or purchase  shares of Common Stock at a price per share less
               than the Current  Market Price (as defined in Paragraph  6(d)(iv)
               below) on the date fixed for the  determination  of  stockholders
               entitled to receive such rights or warrants, the Conversion Price
               shall be reduced by multiplying the Conversion  Price by fraction
               of which the  numerator  shall be the  number of shares of Common
               Stock  outstanding at the close of business on the date fixed for
               such  determination  plus the  number of  shares of Common  Stock
               which the aggregate of the offering  price of the total number of
               shares of Common Stock so offered for  subscription  or purchaser
               would purchase at such Current  Market Price and the  denominator
               shall be the number of shares of Common Stock  outstanding at the
               close of business on the date fixed for such  determination  plus
               the number of shares of Common Stock so offered for  subscription
               or purchase, such reduction to become effective immediately after
               the opening of business on the date  following the date fixed for
               such determination.

                    (iii)  In  case  the  Corporation  shall  distribute  to all
               holders of its Common Stock (including any such distribution made
               in  connection  with a  consolidation  or  merger  in  which  the
               Corporation  is  the  continuing  corporation)  evidences  of its
               indebtedness   or   assets   (excluding    dividends   or   other
               distributions paid out of earned surplus) or subscription  rights
               or warrants  (excluding  those referred to in Paragraph  6(d)(ii)
               above),  the Conversion  Price shall be adjusted so that the same
               shall equal the price  determined by  multiplying  the Conversion
               Price in effect immediately prior to the close of business on the
               date fixed for the  determination  of  stockholders  entitled  to
               receive such  distribution  by a fraction of which the  numerator
               shall be the Current  Market  Price per share of Common  Stock on
               the date fixed for such  determination  less the then fair market
               value  (as   determined   by  the  Board  of   Directors  of  the
               Corporation,   whose   determination   shall  be  conclusive  and
               described in a Board Resolution of the Corporation filed with the
               Transfer  Agent) of the  portion  of the assets or  evidences  of
               indebtedness  so  distributed  applicable  to one share of Common
               Stock and the denominator  shall be such Current Market Price per
               share of  Common  Stock,  such  adjustment  to  become  effective
               immediately prior to the opening of business of the day following
               the date fixed for the determination of stockholders  entitled to
               receive such distribution.

                    (iv) For the  purpose of any  computation  under  Paragraphs
               6(d)(ii) and 6(d)(iii)  above,  the "Current Market Price" on any
               date  shall be deemed  to be the  average  of the  daily  closing
               prices  per share of Common  Stock for  twenty  (20)  consecutive
               business days selected by the Corporation  commencing thirty-five
               (35) business  days before such date.  The closing price for each
               day shall be the last sale price  regular way or, in case no such
               sale takes place on such day,  the average of the closing bid and
               asked  prices  regular  way, in either case on the New York Stock
               Exchange,  or,  if Common  Stock is not  listed  or  admitted  to
               trading on such Exchange,  on the principal  national  securities
               exchange on which  Common  Stock is listed or admitted to trading
               or, if it is not listed or  admitted  to trading on any  national
               securities  exchange,  the  average of the  closing bid and asked
               prices as furnished by any member of the National  Association of
               Securities  Dealers,  Inc.,  selected  from  time  to time by the
               Corporation for that purpose.

                    (v) All calculations under this Paragraph 6 shall be made to
               the nearest cent or the nearest one-hundredth (1/100) of a share,
               as the case may be.

                    (vi)  In  case  of  any   consolidation  or  merger  of  the
               Corporation  with or into any  other  corporation  (other  than a
               consolidation   or  merger  in  which  the   Corporation  is  the
               continuing  corporation),  or in case of any sale or  transfer of
               all or substantially  all of the assets of the  Corporation,  the
               holder of each share of Series A Preferred Stock shall after such
               consolidation, merger, sale or transfer have the right to convert
               such share of Series A  Preferred  Stock into the kind and amount
               of shares of stock and other  securities  and property which such
               holder   would  have  been   entitled   to   receive   upon  such
               consolidation,  merger,  sale,  or  transfer  if he had  held the
               Common Stock issuable upon the conversion of such share of Series
               A  Preferred  Stock  immediately  prior  to  such  consolidation,
               merger, sale or transfer.

                    (vii) In the  event  that at any  time,  as a  result  of an
               adjustment made pursuant to Paragraph  6(d)(i) above,  the holder
               of  any  share  of  Series  A  Preferred  Stock  surrendered  for
               conversation  shall  become  entitled to receive  any  securities
               other than shares of Common Stock,  thereafter the amount of such
               other  securities so receivable  upon  conversion of any share of
               Series A Preferred Stock shall be subject to adjustment from time
               to  time  in a  manner  and on  terms  as  nearly  equivalent  as
               practicable  to the  provisions  with  respect  to  Common  Stock
               contained in Paragraphs  6(d)(i)-6(d)(vi),  inclusive, above, and
               the  provisions of this  Paragraph 6 with respect to Common Stock
               shall apply on like terms to any such other securities.

                    (viii)  No  adjustment  in the  Conversion  Price  shall  be
               required  unless  such  adjustment  would  require a change of at
               least one percent (1%) in such price; provided, however, that any
               adjustments which by reason of this Paragraph  6(d)(viii) are not
               required  to be made  shall be  carried  forward  and taken  into
               account in any subsequent adjustment.

               (e) Certificate as to Adjustments.  Whenever the Conversion Price
          is adjusted as herein provided:

                    (i) the  Corporation  shall  promptly file with the Transfer
               Agent  for the  Series A  Preferred  Stock a  certificate  of the
               treasurer  of  the   Corporation   setting   forth  the  adjusted
               Conversion Price and showing in reasonable  detail the facts upon
               which such  adjustment  is based,  including a  statement  of the
               consideration  received or to be received by the  Corporation for
               any shares of Common  Stock issued or deemed to have been issued;
               and

                    (ii) a notice  stating  that the  Conversion  Price has been
               adjusted and setting  forth the adjusted  Conversion  Price shall
               forthwith be  required,  and as soon as  practicable  after it is
               required,  such additional  notice shall be deemed to be required
               pursuant to this Paragraph 6(e)(ii) as of the opening of business
               on the tenth (10th) business day after such mailing and shall set
               forth  the  Conversion  Price  as  adjusted  at such  opening  of
               business, and upon the mailing of such additional notice no other
               notice need be given of any  adjustment in the  Conversion  Price
               occurring  at or prior to such  opening of business and after the
               time  that the next  preceding  notice  given by  mailing  became
               required.

               (f) Notification of Certain Events. In case:

                    (i) the Corporation  shall authorize the distribution to all
               holders of its Common Stock of evidences of its  indebtedness  or
               assets (other than dividends or other  distributions  paid out of
               earned surplus); or

                    (ii) the  Corporation  shall  authorize  the granting to the
               holders  of its  Common  Stock  of  rights  to  subscribe  for or
               purchase any shares of capital stock of any class or of any other
               rights; or

                    (iii) of any  reclassification of Common Stock (other than a
               subdivision or combination  of its  outstanding  shares of Common
               Stock),   or  of  any   consolidation  or  merger  to  which  the
               Corporation is a party and for which approval of any stockholders
               of the Corporation is required, or of the sale or transfer of all
               or substantially all of the assets of the Corporation; or

                    (iv)   of  the   voluntary   or   involuntary   dissolution,
               liquidation or winding up of the Corporation;

                    then, in each case, the Corporation  shall cause to be filed
               with the Transfer Agent and shall cause to be mailed, first class
               postage  prepaid,  to the  holders  of record of the  outstanding
               shares of Series A Preferred  Stock,  at least ten (10)  calendar
               days prior to the applicable record date hereinafter specified, a
               notice  stating (x) the date on which a record is to be taken for
               the purpose of such  distribution  or rights,  or, if a record is
               not to be taken, the date as of which the holders of Common Stock
               of record to be entitled to such distribution or rights are to be
               determined,  or (y) the  date  on  which  such  reclassification,
               consolidation,  merger, sale, transfer, dissolution,  liquidation
               or winding up is expected to become effective, and the date as of
               which it is expected that holders of Common Stock of record shall
               be entitled to exchange  their  Common  Stock for  securities  or
               other   property   deliverable   upon   such    reclassification,
               consolidation,  merger, sale, transfer, dissolution,  liquidation
               or winding up.

               (g)  Reservation  of Shares.  The  Corporation  will at all times
          reserve,  keep  available  and be  prepared  to  issue,  free from any
          preemptive  rights,  out of its authorized but unissued  Common Stock,
          solely  for the  purpose  of  effecting  conversion  of the  Series  A
          Preferred  Stock,  the full  number of shares  of  Common  Stock  then
          issuable  upon the  conversion of all  outstanding  Series A Preferred
          Stock. The Corporation shall from time to time, in accordance with the
          laws of the  State of  Delaware,  endeavor  to amend its  Articles  of
          Incorporation to increase the authorized amount of its Common Stock if
          at any  time the  authorized  amount  of its  Common  Stock  remaining
          unissued  shall be not  sufficient  to permit  the  conversion  of all
          Series A Preferred Stock.

               (h) Issuance Taxes.  The  Corporation  will pay any and all taxes
          that may be payable in respect of the issue or  delivery  of shares of
          Common  Stock on  conversion  of shares of  Series A  Preferred  Stock
          pursuant hereto.  The Corporation shall not,  however,  be required to
          pay any tax which may be payable in respect of any  transfer  involved
          in the issue or transfer  and  delivery of shares of Common Stock in a
          name other than that in which the share of Series A Preferred Stock so
          converted were registered, and no such issue or delivery shall be made
          unless  and until the  person  requesting  such  issue has paid to the
          Corporation  the  amount  of any  such tax or has  established  to the
          satisfaction of the Corporation that such tax has been paid.

               (j)  Mandatory  Conversion.  If any Series A  Preferred  Stock is
          issued and outstanding on December 31, 2003,  such Series A  Preferred
          Stock,  without any action on the part of the holder thereof,  will be
          automatically  converted  into  Common  Stock  on  that  date  at  the
          Conversion Rate on the above terms.

               (k) Cancellation.  In the event any shares of Series A  Preferred
          Stock shall be  converted  pursuant to this  Paragraph 6  hereof,  the
          shares of Series A Preferred  Stock so converted shall be canceled and
          returned to the status of authorized and unissued  shares of preferred
          stock, without any class designation.

               (l)  Impairment.  The  Corporation  will not, by amendment of its
          Certificate 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  to be  observed  or
          performed hereunder by the Corporation,  but will at all times in good
          faith  assist  in the  carrying  out of all  the  provisions  of  this
          Certificate of Designation for the Series A Preferred Stock and in the
          taking of all such action as may be necessary or  appropriate in order
          to  protect  the  conversion  rights of the  holders  of the  Series A
          Preferred Stock against impairment.

               (m)  Notices.  Any notice to be given to the holders of shares of
          Series A Preferred  Stock shall be deemed  given if  deposited  in the
          United States mail,  postage prepaid,  and addressed to each holder of
          record at his address appearing on the books of this Corporation.

     Such resolution was signed by the Chairman of the Board and Chief Executive
Officer and Secretary of the Corporation.

     IN WITNESS  WHEREOF,  we have executed this Certificate of Designation this
____ day of _______________, 1998.

                               INDIVIDUAL INVESTOR GROUP, INC.


                               By:                                      
                               Jonathan L.  Steinberg,
                               Chairman of the Board and Chief Executive Officer


                               By:                                      
                               Henry Clark, 
                               Secretary


                                  Exhibit 3.1.4

                                November __, 1998


Great American Insurance Company
Great American Life Insurance Company
580 Walnut Street
Cincinnati, Ohio 45202

     Re: Individual Investor Group, Inc.

Gentlemen:

     We have acted as counsel for Individual  Investor  Group,  Inc., a Delaware
corporation  ("Company"),  in connection with the Company's issuance and sale of
5,000  shares of Series A  Preferred  Stock,  par value $.01 per  share,  of the
Company ("Preferred Stock") to each of Great American Insurance Company ("GAIC")
and Great American Life Insurance Company ("GALIC"),  upon the terms and subject
to the conditions set forth in the Stock Purchase Agreement,  dated November 30,
1998  ("Stock  Purchase  Agreement")  between the Company,  GAIC AND GALIC.  All
capitalized  terms not otherwise defined herein shall have the meanings given to
them in the Stock  Purchase  Agreement.  For  purposes of the opinion  expressed
herein, we have examined, among other documents, the following documents:

          (1) executed copies of the Stock Purchase Agreement;

          (2) the Certificate of  Incorporation of the Company as amended by the
     Certificate of Amendment,  which includes the terms of the Preferred  Stock
     ("Certificate");

          (3) the By-laws of the Company; and

          (4) the  Certificate of Good Standing issued by the Secretary of State
     of the State of Delaware for the Company, dated ___________, 1998.


     We have also examined such other documents,  and made such  examinations of
law, as we deem necessary as a basis for the opinions hereafter expressed.  With
respect to such examination,  we have assumed the genuineness of all signatures,
the authenticity and completeness of all documents submitted to us as originals,
the  conformity  to  original  documents  of all  documents  submitted  to us as
photostatic or certified copies of original documents,  and the authenticity and
completeness of those latter documents.  As to all questions of fact material to
this opinion that have not been independently  established,  except as otherwise
stated  herein,  we have relied upon  certificates  and inquiries of appropriate
public officials,  the officers of the Company, and upon the representations and
warranties of the Company set forth in the Stock Purchase Agreement.

     We are members of the Bar of the State of New York and we do not purport to
be experts on, or to express any opinion herein concerning,  any laws other than
the law of the State of New York,  the General  Corporation  law of the State of
Delaware and the Federal law of the United States of America.  Please be advised
that when in the  following  opinion we have made  statements as to "the best of
our knowledge",  it is intended to mean the actual knowledge of attorneys within
our firm based on: (i) work performed on substantive aspects of this transaction
or other  matters  which  have  come to their  attention  in the  course  of the
representation  of the Company and (ii)  inquiries of, and  consultations  with,
officers of the Company, and does not include matters as to which such attorneys
could  be  deemed  to  have  constructive  knowledge.  Nothing  has  come to our
attention which leads us to question the accuracy of any information provided to
us by the Company.

     Based upon the foregoing, we are of the opinion that:

          1. The Company is a corporation  duly organized,  validly existing and
     in good standing under the laws of the State of Delaware.

          2. The  execution,  delivery  and  performance  of the Stock  Purchase
     Agreement has been duly  authorized by the Company's Board of Directors and
     no  other  corporate  proceedings  on  the  part  of  the  Company  or  its
     stockholders  are  required.  The  Agreement  has been  duly  executed  and
     delivered  by the  Company  and  constitutes  the legal,  valid and binding
     obligation  of the Company  enforceable  against the Company in  accordance
     with its terms, except as enforcement thereof may be limited by bankruptcy,
     insolvency,  or similar laws affecting the enforcement of creditors' rights
     in general or general  principles of equity.  The Certificate has been duly
     authorized and upon filing of the  Certificate  with the Secretary of State
     of the State of Delaware, the Preferred Stock will be duly authorized.

          3. The shares to be issued,  sold and delivered in accordance with the
     terms  of the  Stock  Purchase  Agreement  for  the  consideration  set out
     therein,  will, upon issuance in accordance with the terms thereof, be duly
     and validly issued,  fully paid and nonassessable,  free of restrictions on
     transfer  other than  restrictions  on  transfer  under the Stock  Purchase
     Agreement  and under  applicable  federal and state  securities  laws.  The
     issuance of the shares of Preferred Stock to GAIC and GALIC pursuant to the
     Stock Purchase  Agreement will comply with all applicable  laws,  including
     federal  and  state  securities  laws,  and  will  not  violate   statutory
     preemptive  rights or, to the best of our  knowledge,  similar  contractual
     rights of any person.  The common stock  issuable  upon  conversion  of the
     shares of Preferred Stock will be, upon issuance and delivery in accordance
     with the terms of the Certificate,  duly and validly issued, fully paid and
     nonassessable  and free of restrictions on transfer other than restrictions
     on transfer under the Stock Purchase Agreement and under applicable federal
     and state securities laws. The issuance of the common stock upon conversion
     of the shares of  Preferred  Stock will  comply with all  applicable  laws,
     including  federal and state  securities laws (assuming the accuracy of the
     representations of GAIC and GALIC set forth in the Stock Purchase Agreement
     as of the date of  issuance  of such  common  stock)  and will not  violate
     statutory  preemptive  rights,  or to the  best of our  knowledge,  similar
     contractual rights of any person.

          4. To the best of our knowledge, no consent, approval,  qualification,
     order of authorization of, or registration, declaration or filing with, any
     court,  administrative agency or commission or other governmental authority
     or  instrumentality,  domestic or foreign, or other third party is required
     by or with  respect to the Company in  connection  with the  execution  and
     delivery  of the  Stock  Purchase  Agreement,  or the  consummation  by the
     Company of the  transactions  contemplated  thereby,  which has not already
     been obtained,  except for filing an application  for listing of additional
     shares with the NASDAQ  Stock  Market,  any notices of sale  required to be
     filed with the Securities and Exchange  Commission under the Securities Act
     of 1933, as amended or the Securities Exchange Act of 1934, as amended, and
     such  post  closing  filings  as may be  required  under  applicable  state
     securities  laws which will be timely filed within the  applicable  periods
     therefor.

     This opinion is being  delivered  to you  pursuant to Section  3.1.4 of the
Stock  Purchase  Agreement and may not be relied upon by any Person without this
firm's prior written consent.

                                                     Very truly yours,







                                 Schedule 5.1.4

INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) September 30, December 31, ASSETS 1998 1997 --------------- ---------------- Current assets: Cash and cash equivalents $4,657,987 $3,533,622 Marketable securities (Note 6) 518,392 - Accounts receivable (net of allowances of $336,964 in 2,511,571 2,993,299 1998 and $533,693 in 1997) Investment in discontinued operations (Note 2) 816,580 4,037,432 Prepaid expenses and other current assets 223,832 224,801 --------------- ---------------- Total current assets 8,728,362 10,789,154 Deferred subscription expense 623,180 426,826 Property and equipment - net 419,529 556,070 Other assets 385,727 384,917 =============== ================ Total assets $10,156,798 $12,156,967 =============== ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,256,689 $2,093,987 Accrued expenses 778,230 803,502 Deferred revenue 167,034 343,250 --------------- ---------------- Total current liabilities 3,201,953 3,240,739 Deferred subscription revenue 2,248,562 2,661,129 --------------- ---------------- Total liabilities 5,450,515 5,901,868 --------------- ---------------- Stockholders' Equity: Preferred stock, $.01 par value, authorized 2,000,000 shares - - Common stock, $.01 par value; authorized 18,000,000 shares; issued and outstanding 8,490,851 84,908 71,461 shares in 1998 and 7,146,071 shares in 1997 Additional paid-in capital 24,899,068 19,514,363 Accumulated deficit (19,946,257) (13,330,725) Accumulated other comprehensive loss (Note 6) (331,436) - --------------- ---------------- Total stockholders' equity 4,706,283 6,255,099 =============== ================ Total liabilities and stockholders' equity $10,156,798 $12,156,967 =============== ================
See Notes to Consolidated Condensed Financial Statements INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1. BASIS OF PRESENTATION The consolidated condensed financial statements include the accounts of Individual Investor Group, Inc. and its subsidiaries (the "Company"). Such financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes as required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report for the year ended December 31, 1997 on Form 10-KSB. 2. DISCONTINUED OPERATIONS On April 30, 1998 the Company's Board of Directors decided to discontinue the Company's investment management services business. A wholly owned subsidiary of the Company, WisdomTree Capital Management, Inc. ("WTCM"), serves as general partner of (and is an investor in) a domestic private investment fund. The Company is also a limited partner in the fund. As a result of the Board's decision, WTCM is dissolving the domestic investment fund, liquidating its investments and distributing the net assets to all investors as promptly as possible. In July 1998 the fund distributed $19,682,415 to its partners in cash and securities. In October 1998 the fund distributed additional funds totaling approximately $4,500,000 in cash to its partners. The remainder of the net assets will be distributed as soon as the investments held by the fund are liquidated. The operating results relating to investment management services have been segregated from continuing operations and reported as a separate line item on the statement of operations. As a result the Company has restated its financial statements for the corresponding periods of the prior year. Operating results from discontinued operations are as follows:
Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Investment management services revenues $ - $ 141,999 $ 137,183 $ 439,191 Net (depreciation) appreciation in fund - 1,371,887 (276,497) (159,283) Operating expenses - (40,662) (50,315) (194,580) ============== ================ ============== =============== (Loss) income from discontinued operations - $1,473,224 ($ 189,629) $ 85,328 ============== ================ ============== ===============
Loss on disposal of discontinued operations totaled $145,291 and $591,741 for the three and nine months ended September 30, 1998, respectively. Under generally accepted accounting principles, loss on disposal of discontinued operations includes actual losses from the date the Board resolved to discontinue the investment management services operations plus a provision for additional losses based on management's best estimate of the amount to be realized on dissolution of the fund, including applicable severance and legal fees. Additional losses were incurred in the third quarter as a result of changes in the market value of the fund's investments. The fair market value of the Company's investment in the discontinued operations decreased from $4,037,432 at December 31, 1997 to $816,580 at September 30, 1998. The net depreciation in the Company's investment for the three and nine months ended September 30, 1998 was $168,799 and $927,054, respectively. In July 1998 the Company received $2,293,799 of its investment, including cash of $1,443,997 and securities of $849,822 (valued as of June 30, 1998). In October 1998 the Company received an additional $524,432 in cash from the fund. No assurance can be given that the Company will realize any further amount with respect to its investment in the domestic fund. Moreover, the securities received by the Company in July 1998 suffered a material decline in value between June 30, 1998 and September 30, 1998, and subsequently through the date of this Report. There can be no assurance that such securities will not suffer further material declines in value. Selected unaudited financial information for the fund as of September 30, 1998 and December 31, 1997 is as follows: September 30, December 31, 1998 1997 Assets (at fair value) $ 7,195,281 $71,245,441 Liabilities 188,459 32,104,302 Partners' capital 7,006,822 39,141,139 The net losses for the fund for the three and nine months ended September 30, 1998 totaled $1,448,415 and $7,954,776, respectively, as compared to a net gain of $16,544,302 and $3,242,622 for the corresponding periods in 1997. The Company, through WTCM, also provides investment management services to an offshore private investment fund. On May 21, 1998 the sole voting shareholder of the offshore fund, in consultation with WTCM, resolved to wind up the fund and appointed a liquidator to distribute the assets of the fund to its investors in accordance with Cayman Islands law. In July 1998 approximately 55% of the net assets of the offshore fund were distributed in cash to its investors. The remainder of the net assets will be distributed promptly following the liquidation of the investments held by the fund. The Company has no investment in the offshore fund. WTCM is also entitled to receive a special allocation equal to 20% of the net income, if any, of each of the funds (not including income earned on its own investment with respect to the domestic fund), subject to certain limitations, calculated at each funds' year-end, which is December 31st for the domestic fund and June 30th for the offshore fund. The amount of the special allocation for the offshore fund for the year ended June 30, 1998 was $109,319. The Company does not expect to receive a special allocation during 1998 from the domestic fund based on the negative performance of that fund to date. 3. STOCK OPTIONS During the three and nine months ended September 30, 1998, the Company granted 563,000 and 751,000 options, respectively, to purchase the Company's Common Stock; 84,938 options were exercised year to date providing proceeds of $398,152 (none were exercised in the third quarter); and 112,500 and 534,310 options were canceled, respectively. Of the total options granted in the third quarter, 250,500 were under the Company's stock option plans and 312,500 were outside the Company's plans, all of which expire at various dates through September 2008. 4. LOSS PER COMMON SHARE Net loss per basic and dilutive common share for the three and nine month periods ended September 30, 1998 and 1997, respectively, were computed using the weighted average number of common shares outstanding during each period. The exercise of stock options and warrants were not assumed in the computation of loss per common share, as the effect would have been antidilutive. Previously reported net loss per share amounts are the same as required by the adoption of Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share," which became effective in the fourth quarter of 1997. 5. SALE OF COMMON STOCK On June 26, 1998 the Company entered into a Stock Purchase Agreement with Wise Partners, L.P. providing for the sale of 1,259,842 shares of Common Stock for an aggregate purchase price of $5,000,000, which was based on the closing "ask" price of the common stock on June 25, 1998. Wise Partners; L.P. is a limited partnership of which the Chief Executive Officer of the Company, Jonathan L. Steinberg, is the General Partner. 6. OTHER COMPREHENSIVE INCOME During the year, the Company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 requires the disclosure of comprehensive income, defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Comprehensive loss for the three and nine months ended September 30, 1998 and 1997, respectively, is presented in the following table: Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Net loss $(1,476,271) $(34,507) $(6,615,532) $(3,769,195) Accumulated other comprehensive loss: Unrealized loss on securities (331,436) - (331,436) - =========== ========== ========== =========== Total comprehensive loss $(1,807,707) $(34,507) $(6,946,968) (3,769,195) =========== ========== ========== ===========



                            STOCK PURCHASE AGREEMENT


     THIS  STOCK  PURCHASE  AGREEMENT,  dated  as  of  November  30,  1998  (the
"Agreement"), is between INDIVIDUAL INVESTOR GROUP, INC., a Delaware corporation
with its principal place of business at 1633 Broadway, 38th Floor, New York, New
York 10019 (the "Company"),  and GREAT AMERICAN LIFE INSURANCE COMPANY,  an Ohio
corporation,  having  its  principal  place  of  business  at  250  East  Fifth,
Cincinnati, Ohio 45202 (the "Buyer").

     1. SALE AND ISSUANCE OF PREFERRED STOCK.

     1.1 The  Company  shall  adopt  and  file  with the  Secretary  of State of
Delaware  on  or  before  the  Closing  (as  defined  below)  a  Certificate  of
Designations,  Preferences,  and Other  Rights  and  Qualifications  of Series A
Preferred  Stock in the form attached  hereto as Exhibit A (the  "Certificate").
The Series A Preferred Stock will have the rights,  preferences,  privileges and
restrictions set forth in the Certificate.

     1.2 Subject to the terms and conditions of this  Agreement,  at the Closing
Buyer agrees to purchase from the Company, and the Company agrees to sell, issue
and deliver to Purchaser,  Five Thousand  (5,000)  shares (the  "Shares") of the
Company's  Series A  Preferred  Stock,  $200.00  stated  value  per  share  (the
"Preferred  Stock"),   for  a  total  purchase  price  of  One  Million  Dollars
($1,000,000) or Two Hundred Dollars ($200.00) per share of Preferred Stock.

     2. CLOSING.  The closing of the transaction  contemplated by this Agreement
(the  "Closing")  will occur within three (3) business  days after the filing of
the  Certificate  with the Delaware  Secretary  of State,  at the offices of the
Company,  or at such other time, date, or place as shall be mutually agreed upon
by the parties hereto in writing (the "Closing Date").

     3. CLOSING ITEMS.

          3.1  At the  Closing,  the  Company  shall  deliver,  or  cause  to be
     delivered, the following items:

               3.1.1  certificate(s)  in  Buyer's  name  representing  the  Five
          Thousand (5,000) shares of Preferred Stock that Buyer is purchasing;

               3.1.2 the  Certificate,  certified by the  Delaware  Secretary of
          State;

               3.1.3  resolutions  of the  board  of  directors  of the  Company
          authorizing   the  execution,   delivery  and   consummation  of  this
          Agreement,  the filing of the Certificate,  the issuance of the shares
          of  Preferred  Stock  and  the  other  matters   contemplated  hereby,
          certified  as to their due  adoption  and  continued  validity  by the
          Secretary of the Company;

               3.1.4  opinion  of  Graubard  Mollen  &  Miller,  counsel  to the
          Company, in the form attached hereto as Exhibit 3.1.4; and

               3.1.5  such  other  certificates  and  documentation  as  may  be
          reasonably requested by Buyer.

          3.2 At the Closing, Purchaser shall deliver, or cause to be delivered,
     One Million Dollars ($1,000,000) in immediately available funds.

     4. FURTHER ASSURANCES.  Each party shall execute such additional  documents
and take such other actions as the other party or parties may reasonably request
to  consummate  the  transactions  contemplated  hereby and  otherwise as may be
necessary to effectively carry out the terms and provisions of this Agreement.

     5.  REPRESENTATIONS  AND  COVENANTS  OF THE  COMPANY.  The  Company  hereby
represents and warrants to and covenants with Buyer as follows:

          5.1 Organization.  The Company is duly organized, validly existing and
     in good  standing in the State of Delaware.  The Company has all  requisite
     corporate  power and authority to own, lease and operate its properties and
     to carry on its business as now being  conducted and as presently  proposed
     to be conducted  and to execute,  deliver and perform this  Agreement.  The
     Company is duly licensed, authorized and qualified to do business and is in
     good  standing  in all  jurisdictions  (domestic  or  foreign) in which the
     conduct of its  business  or the  ownership  or  leasing of its  properties
     requires it to be so licensed,  authorized or  qualified,  except where its
     failure  to be so  licensed,  authorized  or  qualified  would  not  have a
     material adverse effect,  singularly or in the aggregate,  on the condition
     (financial  or  otherwise)  of  the  properties,  business,  operations  or
     prospects of the Company.

          5.2 Authority;  Execution and Delivery, Etc. The execution,  delivery,
     and performance of this Agreement has been duly authorized by the Company's
     Board of Directors and no other  corporate  proceedings  on the part of the
     Company or its  stockholders  are  required.  This  Agreement has been duly
     executed and delivered by the Company and constitutes the legal, valid, and
     binding  obligation  of the  Company  enforceable  against  the  Company in
     accordance with its terms,  except as enforcement thereof may be limited by
     bankruptcy,  insolvency,  or similar  laws  affecting  the  enforcement  of
     creditors'  rights  in  general  or  general   principles  of  equity.  The
     Certificate  has been duly  authorized  and upon filing of the  Certificate
     with the Secretary of State of the State of Delaware,  the Preferred  Stock
     will be duly authorized.

          5.3 Financial Condition.  The consolidated financial statements of the
     Company included in the Disclosure Documents (as described in Section 5.11)
     fairly present on a consolidated basis the financial position,  the results
     of  operations,  the  changes  in  financial  position  and the  changes in
     stockholders'  equity  and the  other  information  purported  to be  shown
     therein of the Company and its consolidated  subsidiaries at the respective
     dates and for the respective periods to which they apply and such financial
     statements  have  been  prepared  in  conformity  with  generally  accepted
     accounting   principles,   consistently   applied  throughout  the  periods
     involved,  and all  adjustments  necessary for a fair  presentation  of the
     results for such periods have been made. The  capitalization of the Company
     as of September 30, 1998 is as set forth on Schedule 5.3.1.

          5.4 Validly Issued Shares. The Shares to be issued, sold and delivered
     in accordance  with the terms of this Agreement for the  consideration  set
     out herein,  will,  upon issuance in accordance  with the terms hereof,  be
     duly and validly issued, fully paid and nonassessable, free of restrictions
     on transfer  other than  restrictions  on transfer under this Agreement and
     under  applicable  federal and state  securities  laws. The issuance of the
     Shares to Buyer  pursuant to this Agreement will comply with all applicable
     laws, including federal and state securities laws, and will not violate the
     preemptive rights of any person.  The common stock issuable upon conversion
     of the Shares will be, upon  issuance and delivery in  accordance  with the
     terms  of  the  Certificate,  duly  and  validly  issued,  fully  paid  and
     nonassessable  and free of restrictions on transfer other than restrictions
     on transfer  under this  Agreement and under  applicable  federal and state
     securities  laws.  The issuance of the common stock upon  conversion of the
     Shares will comply with all applicable  laws,  including  federal and state
     securities  laws  (assuming the accuracy of the  representations  set forth
     herein  as of the date of  issuance  of such  common  stock),  and will not
     violate the preemptive rights of any person.

          5.5  Consents.   No  consent,   approval,   qualification,   order  or
     authorization  of, or registration,  declaration or filing with, any court,
     administrative  agency or  commission  or other  governmental  authority or
     instrumentality,  domestic or foreign,  or other third party is required by
     or with  respect  to the  Company  in  connection  with the  execution  and
     delivery  of this  Agreement,  or the  consummation  by the  Company of the
     transactions  contemplated  hereby,  which has not already  been  obtained,
     except for the filing of the  Certificate  with the  Secretary  of State of
     Delaware,  any notices of sale required to be filed with the Securities and
     Exchange  Commission  under the  Securities  Act of 1933,  as amended  (the
     "Securities  Act") or  Securities  Exchange Act of 1934, as amended or with
     the Nasdaq Stock  Market,  or such post closing  filings as may be required
     under  applicable  state  securities laws which will be timely filed within
     the applicable periods therefor.

          5.6 Litigation.  There is no action, suit, proceeding or investigation
     pending or to the  Company's  knowledge  currently  threatened  against the
     Company,  nor does the Company have any actual  knowledge that there is any
     basis for the  foregoing,  except  for those  disclosed  in the  Disclosure
     Documents or in a separate writing to Buyer; those for which there has been
     no  manifestation  by a potential  claimant of an  awareness  of a possible
     claim and for which the Company has not determined that it is probable that
     a claim will be asserted;  and those which, if adversely determined,  would
     not reasonably be expected to have a material adverse effect on the results
     of operations,  financial  condition or business of the Company  ("Material
     Adverse Effect").  The foregoing  includes,  without  limitation,  actions,
     suits,  proceedings or investigations  pending or threatened  involving the
     prior  employment  or  engagement  of  any of the  Company's  employees  or
     consultant,  their use in  connection  with the  Company's  business of any
     information  or  techniques  allegedly  proprietary  to any of their former
     employers or their current  employers/clients (in the case of consultants),
     or their obligations under any agreements with such employers/clients.  The
     Company  is not a party or subject to the  provisions  of any order,  writ,
     injunction,  judgment  or  decree  of any  court or  government  agency  or
     instrumentality.  There is no action, suit,  proceeding or investigation by
     the Company currently pending or that the Company intends to initiate.

          5.7 Compliance with Other Instruments. The Company is not in violation
     or  default  in any  material  respect  of  any  provision  of its  Amended
     Certificate of Incorporation  or bylaws,  or in any material respect of any
     instrument,  judgment,  order,  writ,  decree or  contract to which it is a
     party or by which it is  bound,  or, to the best of its  knowledge,  of any
     provision of any federal or state statute, rule or regulation applicable to
     the Company; except where such violation or default would not reasonably be
     expected to have a Material  Adverse  Effect.  The execution,  delivery and
     performance  of this  Agreement and the  consummation  of the  transactions
     contemplated hereby will not result in any such violation or be in conflict
     with or  constitute,  with or  without  the  passage  of time and giving of
     notice,  either a default under any such provision,  instrument,  judgment,
     order, writ, decree or contract or an event that results in the creation of
     any lien,  charge or  encumbrance  upon any  assets of the  Company  or the
     suspension,  revocation,  impairment,  forfeiture,  or  nonrenewal  of  any
     material  permit,  license,  authorization,  or approval  applicable to the
     Company,  its business or  operations  or any of its assets or  properties,
     except  where  such  violation,  default,  event,  suspension,  revocation,
     impairment,  forfeiture or nonrenewal  would not  reasonably be expected to
     have a Material Adverse Effect.

          5.8  Material  Facts.  The  Company  has  provided  Buyer with all the
     information  reasonably  available  to it  that  Buyer  has  requested  for
     deciding whether to purchase the Shares. The representations and warranties
     by the Company  contained in this  Agreement,  when taken together with the
     Disclosure  Documents and other written  information  furnished to Buyer in
     connection  with this Agreement,  do not contain any untrue  statement of a
     material  fact or omit to state any  material  fact  necessary  to make the
     statements  contained herein or therein,  in light of the  circumstances in
     which they are made, not misleading,  except,  with respect to assumptions,
     projections  and  expressions of opinions or  predictions  contained in the
     documents or written materials furnished by the Company, Company represents
     only that such  assumptions,  projections  and  expressions of opinions and
     predictions  were made in good faith and the Company believes that there is
     a reasonable basis therefor.

          5.9 Compliance  with Laws. To the best  knowledge of the Company,  the
     Company is in  compliance  in all  material  respects  with all  applicable
     statutes,   laws,  ordinances,   rules,   regulations  and  orders  of  any
     governmental  entity,  except where  non-compliance would not reasonably be
     expected  to  have a  Material  Adverse  Effect,  and the  Company  has not
     received any notice or other communication whether oral or written from any
     governmental  entity,  arbitrator  or any other person  regarding  any such
     violation or failure.

          5.10 Subsequent Events. Subsequent to the respective dates as of which
     information  is given in the  Disclosure  Documents,  except  as  described
     therein,  there has not been any material  adverse  change in the condition
     (financial or otherwise), earnings, businesses,  properties or prospects of
     the Company and its subsidiaries,  whether or not arising from transactions
     in the ordinary course of business,  the Company and its subsidiaries  have
     not sustained any material loss or  interference  with their  businesses or
     properties  from  fire,  explosion,  earthquake,  flood or other  calamity,
     whether or not covered by insurance, or from any labor dispute or any court
     or legislative or other governmental action, order or decree, and since the
     date of the latest  balance  sheet  included in the  Disclosure  Documents,
     neither the Company nor any of its  subsidiaries has incurred or undertaken
     any liability or obligation, indirect or contingent, except for liabilities
     or  obligations  incurred or undertaken in the ordinary  course of business
     and except for any such  liabilities or obligations as are reflected in the
     Disclosure Documents.

          5.11 Disclosure.  The Company has provided to Buyer true,  correct and
     complete  copies of its Annual  Report on Form  10-KSB for the fiscal  year
     ended  December 31  1997; its Quarterly Reports on Form 10-Q for the fiscal
     quarters  ended March 31, 1998,  June 30,  1998 and September 30, 1998; and
     its Notice of Annual Meeting of Stockholders  and Proxy Statement  relating
     to its annual meeting of stockholders held on June 17, 1998  (collectively,
     the "Disclosure Documents").

          5.12 Observer Rights.  For so long as Buyer owns at least seventy-five
     percent  (75%) of the Shares being  purchased  hereunder  (adjusted for any
     stock dividends, consolidations or splits with respect to such shares), the
     Company  shall invite a  representative  of Buyer to attend all meetings of
     its board of  directors  in a  nonvoting  observer  capacity  and,  in this
     respect,  shall give such  representative  copies of all notices,  minutes,
     consents, and other materials that it provides to its directors;  provided,
     however,  that such  representative  shall agree to hold in confidence  and
     trust and to act in a fiduciary  manner with respect to all  information so
     provided;  and,  provided  further,  that the Company reserves the right to
     withhold  any  information  and to  exclude  such  representative  from any
     meeting or portion  thereof if access to such  information or attendance at
     such meeting could adversely affect the  attorney-client  privilege between
     the Company and its counsel or would result in  disclosure of trade secrets
     to such  representative or if such Buyer or its  representative is a direct
     competitor of the Company.

          6.  REPRESENTATIONS  OF BUYER. Buyer hereby represents and warrants to
     the Company as follows:

               6.1 Buyer is aware that its investment in the Company  involves a
          substantial  degree  of  risk,  including,  but  not  limited  to  the
          following:  (i) if the Company fails to meet the maintenance  criteria
          for continued  inclusion on the Nasdaq National Market System ("NMS"),
          including  but not  limited  to,  the  requirement  that  the  Company
          maintain  minimum net tangible  assets of at least  $4,000,000 and the
          requirement that the minimum bid price of the Common Stock is at least
          $1.00,  it may be  delisted  from the NMS;  (ii) the  Company  has had
          substantial  operating  losses for the fiscal year ended  December 31,
          1997 and for the fiscal  quarters ended March 31, 1998,  June 30, 1998
          and  September 30, 1998 and expects to continue to incur losses in the
          future; (iii) the Company will need additional financing in the future
          to fund operating losses and for capital investment in its current and
          proposed business  operations;  (iv) the Company's  development of its
          internet products is not currently  generating  sufficient  revenue to
          cover development and operating expenses, and may not be profitable in
          the future; (v) management and the existing principal  stockholders of
          the Company  beneficially own a substantial  amount of the outstanding
          voting  stock of the  Company  and  accordingly  are in a position  to
          substantially  influence  the election of all directors of the Company
          and the vote on matters requiring stockholder  approval;  and (vi) the
          Company's success will to a significant extent rely upon the continued
          services and abilities of Jonathan  Steinberg.  Buyer acknowledges and
          is aware that there is no  assurance as to the future  performance  of
          the Company.

               6.2 Buyer is purchasing  the Shares,  and upon  conversion of the
          Preferred Stock will purchase the underlying common stock ("Underlying
          Common Stock"), for its own account for investment and not with a view
          to or  in  connection  with  a  distribution  of  the  Shares  or  the
          Underlying  Common Stock, nor with any present intention of selling or
          otherwise disposing of all or any part of the Shares or the Underlying
          Common Stock,  except as contemplated  in Section 8 below.  Subject to
          Section 8 below,  Buyer agrees that it must bear the economic  risk of
          its  investment  because,  among  other  reasons,  the  Shares and the
          Underlying  Common Stock have not been registered under the Securities
          Act, or under the securities laws of any state and, therefore,  cannot
          be resold,  pledged,  assigned,  or  otherwise  disposed of unless and
          until  they  are  registered   under  the  Securities  Act  and  under
          applicable  securities  laws of certain  states,  or an exemption from
          such registration is available.

               6.3 Buyer has the financial  ability to bear the economic risk of
          its  investment  in the Company  (including  its complete  loss),  has
          adequate means for providing for its current needs and has no need for
          liquidity with respect to its investment in the Company.

               6.4 Buyer has such  knowledge  and  experience  in financial  and
          business  matters as to be capable of evaluating  the merits and risks
          of an  investment  in the Company and has  obtained,  in its judgment,
          sufficient  information  from the Company to  evaluate  the merits and
          risks of an investment in the Company.  Buyer has had full opportunity
          to ask  questions  and receive  satisfactory  answers  concerning  all
          matters  pertaining to its investment and all such questions have been
          answered  to  its  full  satisfaction.  Buyer  has  been  provided  an
          opportunity  to  obtain  any  additional  information  concerning  the
          Company and all other  information to the extent the Company possesses
          such  information  or can  acquire it without  unreasonable  effort or
          expense.  Buyer has received no  representation  or warranty  from the
          Company with respect to its  investment in the Company,  and Buyer has
          relied  solely  upon its own  investigation  in making a  decision  to
          invest in the Company.

               6.5 Buyer is an "accredited investor" as defined in Section 2(15)
          of the Securities Act and in Rule 501 promulgated thereunder.

               6.6 This  Agreement has been duly executed and delivered by Buyer
          and  constitutes  the legal,  valid,  and binding  obligation of Buyer
          enforceable  against  Buyer in  accordance  with its terms,  except as
          enforcement  thereof  may be limited  by  bankruptcy,  insolvency,  or
          similar laws affecting the enforcement of creditors' rights in general
          or general principles of equity.

     7. RESTRICTIONS ON TRANSFER.

          7.1  Restrictions  on  Transfer.  Buyer  agrees that it will not sell,
     transfer,  or  otherwise  dispose  of  any  of  the  Shares  or  any of the
     Underlying  Common  Stock,  except  pursuant to an  effective  registration
     statement  under the Securities  Act or an exemption from the  registration
     requirements  of the Securities Act and the Company has received an opinion
     of counsel satisfactory to the Company that such exemption is available.

          7.2 Legend.  Each certificate for the Shares and the Underlying Common
     Stock shall bear the following legend:

               "THE  SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN
          REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR THE
          SECURITIES LAWS OF ANY STATE AND MAY BE SOLD OR OTHERWISE  TRANSFERRED
          ONLY IF SO REGISTERED  OR IF AN EXEMPTION  FROM SUCH  REGISTRATION  IS
          AVAILABLE  AND THE  CORPORATION  HAS  RECEIVED  AN  OPINION OF COUNSEL
          SATISFACTORY TO THE CORPORATION THAT SUCH EXEMPTION IS AVAILABLE."

     8. REGISTRATION RIGHTS.

          8.1 Piggyback Registration.  From the date of this Agreement until the
     second  anniversary of the issuance of the Shares to Buyer,  if the Company
     proposes  to  file  a  registration  statement  under  the  Securities  Act
     ("Registration  Statement") with respect to an offering for its own account
     of any class of security  (other than a registration  statement on Form S-4
     or S-8 or successor  forms thereto or filed in connection  with an exchange
     offer or business  combination  or an offering of securities  solely to the
     Company's existing stockholders),  then the Company shall in each case give
     written  notice of such proposed  filing to Buyer at least thirty (30) days
     before the  anticipated  filing date, and such notice shall offer Buyer the
     opportunity  to register such number of shares of  Underlying  Common Stock
     (and none of the  Shares)  of the  Company as Buyer may  request.  Upon the
     written  request of Buyer made  within  twenty (20) days of receipt of such
     notice,  the Company shall use its best efforts to register the  Underlying
     Common Stock on the Registration  Statement,  provided however, that if, in
     the written opinion of the Company's managing  underwriter or underwriters,
     if any, for such offering,  the inclusion of the  Underlying  Common Stock,
     when added to the securities being registered by the Company or the selling
     stockholder(s),  will exceed the maximum amount of the Company's securities
     which can be  marketed  (i) at a price  reasonably  related  to their  then
     current market value,  or (ii) without  materially and adversely  affecting
     the entire  offering,  the Company shall  nevertheless  register all or any
     portion of the  Underlying  Common Stock  required to be so registered  but
     such  Underlying  Common Stock shall not be sold by Buyer until one hundred
     and eighty (180) days after the  registration  statement  for such offering
     has become  effective  and provided  further that,  if any  securities  are
     registered  for sale on behalf of other  stockholders  in such offering and
     such  stockholders  have not agreed to defer such sale until the expiration
     of such one hundred and eighty (180) day period,  the number of  securities
     to be sold by all  stockholders  in such  public  offering  during such one
     hundred and eighty  (180) period  shall be  apportioned  pro rata among all
     such selling stockholders,  including Buyer,  according to the total amount
     of securities of the Company owned by said selling stockholders,  including
     Buyer.  Buyer  agrees  that  the  Company  may  withdraw  the  Registration
     Statement at any time before it is declared effective by the Securities and
     Exchange Commission.

          8.2 Expenses.  All expenses in connection  with  registrations  of the
     Underlying   Common  Stock  shall  be  borne  by  the  Company  except  for
     underwriting  discounts  and  commissions,  applicable  transfer  taxes and
     expenses of counsel to Buyer, which shall be borne by Buyer.

          8.3  Information  Relating to Buyer.  Buyer agrees that in  connection
     with any  Registration  Statement  which  registers its  Underlying  Common
     Stock,  that it will provide to the Company all information and execute and
     deliver  all  documents,  agreements,  certificates  and other items at its
     expense,  as the Company  and/or its counsel  reasonably  request,  and the
     failure to provide  such  information  or items shall permit the Company to
     exclude the Underlying Common Stock from any Registration Statement, or not
     have declared  effective any  Registration  Statement  filed by the Company
     pursuant to Section 8.1.

          8.4 Indemnification.

               8.4.1  Subject to the  conditions  set forth  below,  the Company
          agrees to indemnify and hold  harmless  Buyer and its  affiliates  and
          each of their officers, directors,  trustees, agents and employees and
          each person, if any, who controls Buyer ("Controlling  Person") within
          the meaning of Section 15 of the  Securities  Act or Section  20(a) of
          the Exchange Act against any and all loss,  liability,  claim,  damage
          and expense whatsoever (including but not limited to any and all legal
          or other expenses reasonably  incurred in investigating,  preparing or
          defending  against any  litigation,  commenced or  threatened,  or any
          claim  whatsoever) to which it may become subject under the Securities
          Act, the Securities  Exchange Act of 1934, as amended ("Exchange Act")
          or any other statute or at common law or otherwise,  arising out of or
          based  upon any untrue  statement  or alleged  untrue  statement  of a
          material fact contained in any Registration Statement in which Buyer's
          securities  shall be  included  or the  omission  or alleged  omission
          therefrom  of a  material  fact  required  to  be  stated  therein  or
          necessary  to  make  the  statements  therein,  in  the  light  of the
          circumstances under which they were made, not misleading,  unless such
          statement or omission was made in reliance upon and in conformity with
          information furnished to the Company with respect to Buyer by Buyer or
          its agents,  in writing,  expressly  for use in any such  Registration
          Statement.  The  Company  agrees  promptly  to  notify  Buyer  of  the
          commencement  of any litigation or proceedings  against the Company or
          any of its officers,  directors or  controlling  persons in connection
          with the issue and sale of the  Underlying  Common Stock in connection
          with any such Registration Statement.

               8.4.2 If any action is brought  against Buyer in respect of which
          indemnity may be sought  against the Company  pursuant to this Section
          8.4,  Buyer  shall  promptly  notify  the  Company  in  writing of the
          institution of such action and the Company shall assume the defense of
          such action,  including the employment and fees of counsel and payment
          of actual  expenses.  Buyer  shall  have the  right to employ  its own
          counsel in any such case,  but the fees and  expenses of such  counsel
          shall be at the  expense of Buyer  unless (i) the  employment  of such
          counsel  shall  have been  authorized  in  writing  by the  Company in
          connection with the defense of such action,  or (ii) the Company shall
          not have  employed  counsel  to have  charge  of the  defense  of such
          action, or (iii) Buyer shall have reasonably  concluded that there may
          be defenses  available to it which are different from or additional to
          those  available  to the Company (in which case the Company  shall not
          have the  right to  direct  the  defense  of such  action on behalf of
          Buyer), in any of which events the reasonable fees and expenses of not
          more than one  additional  firm of attorneys  selected by Buyer and/or
          controlling  person  shall be borne  by the  Company.  Notwithstanding
          anything to the contrary  contained  herein, if Buyer shall assume the
          defense of such action as provided  above,  the Company shall have the
          right to approve  the terms of any  settlement  of such  action  which
          approval shall not be unreasonably withheld.

               8.4.3 Buyer agrees to  indemnify  and hold  harmless  each of the
          Company, its directors, officers and employees and any underwriter (as
          defined  in the  Securities  Act) and each  Controlling  Person of the
          Company,  against  any and all  loss,  liability,  claim,  damage  and
          expense  described  in the  foregoing  indemnity  from the  Company to
          Buyer,  but only with respect to untrue  statements or  omissions,  or
          alleged untrue  statements or omissions  directly relating to Buyer in
          any such registration  statement  furnished to the Company by Buyer or
          its agents,  in writing,  expressly  for use in any such  registration
          statement.  In case any action shall be brought against the Company or
          any  other  person  so  indemnified  based  on any  such  registration
          statement,  and in respect of which  indemnity  may be sought  against
          Buyer,  Buyer shall have the rights and duties  given to the  Company,
          and the Company and each other  person so  indemnified  shall have the
          rights and duties given to Buyer by the provisions of paragraph  8.4.2
          above.

          8.5 Contribution.

               (a) In order to provide for just and equitable contribution under
          the  Securities  Act in any case in which (i) any person  entitled  to
          indemnification  under  Section  8.4 makes  claim for  indemnification
          pursuant  hereto but it is  judicially  determined  (by the entry of a
          final judgment or decree by a court of competent  jurisdiction and the
          expiration  of time to  appeal  or the  denial  of the  last  right of
          appeal)  that such  indemnification  may not be  enforced in such case
          notwithstanding the fact that Section 8.4 provides for indemnification
          in such case,  or (ii)  contribution  under the  Securities  Act,  the
          Exchange  Act,  or  otherwise  may be required on the part of any such
          person in circumstances  for which  indemnification  is provided under
          Section 8.4,  then, and in each such case, the Company and Buyer shall
          contribute,  in proportion to their relative  fault,  to the aggregate
          losses,  liabilities,  claims,  damages  and  expenses  of the  nature
          contemplated by said indemnity  agreement  incurred by the Company and
          Buyer, as incurred;  provided,  that, no person guilty of a fraudulent
          misrepresentation   (within  the  meaning  of  Section  11(f)  of  the
          Securities Act) shall be entitled to contribution  from any person who
          was not guilty of such fraudulent misrepresentation.

               (b)  Within  fifteen  days  after  receipt  by any  party to this
          Agreement (or its representative) of notice of the commencement of any
          action,  suit  or  proceeding,   such  party  will,  if  a  claim  for
          contribution  in respect  thereof is to be made against  another party
          (the  "contributing  party"),  notify  the  contributing  party of the
          commencement  thereof,  but the omission to so notify the contributing
          party will not relieve it from any liability  which it may have to any
          other party other than for  contribution  hereunder.  In case any such
          action,  suit or  proceeding  is brought  against any party,  and such
          party  notifies  a  contributing  party or its  representative  of the
          commencement   thereof   within  the  aforesaid   fifteen  days,   the
          contributing  party will be entitled to  participate  therein with the
          notifying party and any other contributing  party similarly  notified.
          Any such  contributing  party shall not be liable to any party seeking
          contribution  on account  of any  settlement  of any claim,  action or
          proceeding  effected by such party seeking  contribution on account of
          any  settlement of any claim,  action or  proceeding  effected by such
          party  seeking  contribution  without  the  written  consent  of  such
          contributing  party.  The  contribution  provisions  contained in this
          Section 8 are intended to supersede,  to the extent  permitted by law,
          any right to  contribution  under the Securities Act, the Exchange Act
          or otherwise available.

     9. MISCELLANEOUS.

          9.1  Expenses.  Each  party  shall be liable for its own  expenses  in
     connection with the transactions contemplated by this Agreement.

          9.2  Successors  and Assigns.  All  covenants  and  agreements in this
     Agreement  contained by or on behalf of either of the parties  hereto shall
     bind and inure to the benefit of the  respective  successors and assigns of
     the Company and of Buyer, whether so expressed or not.

          9.3  Notices,   Etc.  All   notices,   requests,   demands  and  other
     communications  hereunder  shall be in writing  and shall be  delivered  in
     person or mailed by  certified  or  registered  mail  first-class,  postage
     prepaid:

         If to the Company:                       with a copy to:

         Individual Investor Group, Inc.          Graubard Mollen & Miller
         1633 Broadway, 38th Floor                600 Third Avenue
         New York, New York 10019                 New York, New York  10016
         Attention:  General Counsel              Attn:  Peter M. Ziemba, Esq.

         If to Buyer:                             with a copy to:

         Great American Life Insurance Company    American Financial Group, Inc.
         250 East Fifth Street                    One East Fourth Street
         Cincinnati, Ohio  45202                  Cincinnati, Ohio  45202
         Attention:  Mark F. Muething, Esq.       Attn:  Karl J. Grafe, Esq.

     Any such notice,  request, demand or other communication hereunder shall be
deemed to have  been  duly  given or made and to have  become  effective  (i) if
delivered by hand or overnight courier,  at the time of receipt thereof and (ii)
if sent by registered  or certified  first-class  mail,  postage  prepaid,  five
business days thereafter.

     Any party may, by written notice to the other,  change the address to which
notices to such party are to be delivered or mailed.

          9.4 Governing Law. This  Agreement is being  delivered and is intended
     to be  performed  in the  State  of New York and  shall  be  construed  and
     enforced  in  accordance  with,  and the  rights  of the  parties  shall be
     governed by, the law of such State.

          9.5 Entire  Agreement.  This  Agreement,  together  with any  exhibits
     hereto (which exhibits are an integral part hereof), constitutes the entire
     agreement  between the parties with respect to the subject  matter  hereof,
     and  supersedes  all  prior   agreements,   understandings,   negotiations,
     representations  and  proposals,  written  or oral,  with  respect  to such
     subject  matter.  Each  party  represents  that  it is not  relying  on any
     representations,  whether written or oral, not set forth in this Agreement,
     in determining to execute this Agreement.

          9.6 Amendments.  This Agreement may not be changed orally, but only by
     an agreement in writing  signed by the party  against whom  enforcement  is
     sought.

          9.7 Severability.  If any provision of this Agreement is held invalid,
     illegal or unenforceable in any respect (an "Impaired Provision"), (a) such
     Impaired Provision shall be interpreted in such a manner as to preserve, to
     the maximum extent possible,  the intent of the parties,  (b) the validity,
     legality and  enforceability  of the remaining  provisions shall not in any
     way be affected or impaired thereby, and (c) such decision shall not affect
     the validity,  legality or enforceability of such Impaired  Provision under
     other circumstances. The parties agree to negotiate in good faith and agree
     upon  a  provision  to  substitute  for  the  Impaired   Provision  in  the
     circumstances  in which the  Impaired  Provision  is  invalid,  illegal  or
     unenforceable.

          9.8 Negotiation.  The parties  acknowledge that they are entering into
     this  Agreement  after   consulting  with  counsel  and  based  upon  equal
     bargaining  power, with all parties  participating in its preparation.  The
     parties acknowledge and agree that the attorneys for each party have had an
     equal opportunity to participate in the negotiation and preparation of this
     Agreement. The terms of this Agreement shall not be interpreted in favor of
     or  against  any  party  on  account  of the  draftsperson,  but  shall  be
     interpreted solely for the purpose of fairly effectuating the intent of the
     parties hereto.

          9.9  Counterparts  and  Facsimile/Photocopy  Signatures;  Authority of
     Signatories. This Agreement may be executed in counterparts,  and when each
     Party  has  signed  and  delivered  at  least  one such  counterpart,  each
     counterpart  shall be deemed an original,  and,  when taken  together  with
     other signed counterparts,  shall constitute one Agreement,  which shall be
     binding  upon and  effective as to all  parties.  A signature  received via
     facsimile or photocopy  shall be deemed an original for all purposes.  Each
     party  represents  that the person  signing  this  Agreement on the party's
     behalf has been duly authorized to execute this Agreement on behalf of such
     party,  and  all of the  signatories  hereto  signing  in a  representative
     capacity  warrant and represent that they have been duly  authorized by and
     on behalf of their respective principals to execute this Agreement.

          9.10  Headings.  The Article and Section  headings used herein are for
     convenience  only and do not define,  limit or construe the content of such
     sections.  All references in this Agreement to Article and Section  numbers
     refer  to  Articles  and  Sections  of  this  Agreement,  unless  otherwise
     indicated.

          IN WITNESS WHEREOF,  the parties have duly executed and delivered this
     Agreement as of the date first above written.

                                           INDIVIDUAL INVESTOR GROUP, INC.



                                                By:/s/ Jonathan Steinberg
                                                   Jonathan L. Steinberg
                                                   Chief Executive Officer

 
                                           GREAT AMERICAN LIFE INSURANCE COMPANY



                                                By:/s/ Mark F. Muething
                                                   Mark F. Muething
                                                   Senior Vice President,
                                                   General Counsel and Secretary


                                    Exhibit A

                         INDIVIDUAL INVESTOR GROUP, INC.

                    CERTIFICATE OF DESIGNATIONS, PREFERENCES
                     AND OTHER RIGHTS AND QUALIFICATIONS OF
                            SERIES A PREFERRED STOCK
                       __________________________________

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law
                       __________________________________


     INDIVIDUAL INVESTOR GROUP, INC., a corporation organized and existing under
the Business Corporation Law of the State of Delaware ("Corporation"),

     DOES HEREBY CERTIFY:

     FIRST: That, pursuant to authority conferred upon the Board of Directors of
the Corporation  ("Board") by the Certificate of Incorporation,  as amended,  of
said Corporation,  and pursuant to the provisions of Section 151 of the Delaware
General  Corporation Law, said Board duly determined that ten thousand  (10,000)
shares of  Preferred  Stock,  $0.01 par value  per  share,  shall be  designated
"Series A  Preferred  Stock,"  and to that end the Board  adopted  a  resolution
providing for the designation, preferences and relative, participating, optional
or other rights, and the  qualifications,  limitations and restrictions,  of the
Series A Preferred Stock, which resolution is as follows:

     RESOLVED,  that the Board,  pursuant to the  authority  vested in it by the
provisions of the Certificate of Incorporation,  as amended, of the Corporation,
hereby creates a series of Preferred Stock of the  corporation,  par value $0.01
per share, to be designated as "Series A  Preferred  Stock" and to consist of an
aggregate of ten thousand  (10,000) shares.  The Series A  Preferred Stock shall
have such  designations,  preferences and relative,  participating,  optional or
other rights, and the qualifications, limitations and restrictions as follows:

          1.  Designation  and  Amount.  Ten  thousand  (10,000)  shares  of the
     Preferred  Stock of the  Corporation,  par  value  $0.01 per  share,  shall
     constitute a class of Preferred  Stock  designated  as "Series A  Preferred
     Stock"  ("Series A  Preferred  Stock").  The Series A Preferred Stock shall
     have a stated value of two hundred  dollars  ($200.00)  per share  ("Stated
     Value").

          2.  Redemption  Rights.  The  Series A  Preferred  Stock  shall not be
     subject  to any right of  redemption  by the  Corporation  or by the holder
     thereof.

          3. Dividends.  The holders of shares of Series A Preferred Stock shall
     be  entitled  to receive  out of any  assets  legally  available  therefore
     cumulative  dividends  at the per share  rate of ten  percent  (10%) of the
     Stated  Value (or  twenty  dollars  ($20.00)  per  share) for each share of
     Series A Preferred  Stock,  per annum,  payable annually on December 31, of
     each year,  commencing  December 31, 1999 (each a "Dividend Payment Date"),
     or, if earlier,  upon conversion of the shares of Series A Preferred Stock.
     Dividends  will  accrue  from the date of issue of the  Series A  Preferred
     Stock and thereafter from the most recent date on which a dividend has been
     paid with respect to such share,  or if no dividends  have been paid,  from
     the date of issue,  and  dividends  shall accrue from day to day whether or
     not declared,  based on the actual  number of days elapsed.  If at any time
     accrued  dividends on the Series A Preferred Stock are not paid or declared
     and set aside for payment with respect to all preceding periods, the amount
     of the deficiency  will be paid or declared and set aside for payment,  but
     without  interest  on such  dividend  amount,  before any  distribution  by
     dividend  or  otherwise  will be paid or set apart for any shares of Common
     Stock, $0.01 par value of the Corporation ("Common Stock").

          4. Rights on Liquidation, Dissolution or Winding Up, Etc. In the event
     of any voluntary or involuntary  liquidation,  dissolution or winding up of
     the  Corporation,  as a result  of which  the  assets  of the  Corporation,
     whether from  capital,  surplus or earnings,  shall be  distributed  to the
     stockholders  of the  Corporation  (a  "Liquidation"),  the  holders of the
     Series A  Preferred  Stock shall be  entitled  to  receive,  subject to the
     rights of any  other  class of stock  which  ranks  senior to the  Series A
     Preferred Stock as to the payment of dividends or distribution of assets on
     a Liquidation,  but before any  distribution  is made on any class of stock
     ranking  junior  to the  Series  A  Preferred  Stock as to the  payment  of
     dividends or the  distribution  of assets,  the sum of two hundred  dollars
     ($200.00) per share, plus any arrearages in dividends thereon.

          5. Voting Rights. The holders of Series A Preferred Stock shall not be
     entitled to vote on any matter, except as may be required by law.

          6. Conversion of Series A Preferred Stock.

               (a) Right to Convert.  The holders of  Series A  Preferred  Stock
          shall have the right,  at such  holders'  option,  at any time or from
          time to time, to convert all or any part of such shares into shares of
          Common  Stock at any time on and subject to terms and  conditions  set
          forth in this Paragraph 6.

               (b) Initial Conversion Price; No Fractional Shares. The shares of
          Series A  Preferred  Stock shall be  convertible  at the office of the
          transfer  agent  for the  Series  A  Preferred  Stock  (the  "Transfer
          Agent"),  and at such other  place or places,  if any, as the Board of
          Directors  of the  Corporation  may  designate,  into  fully  paid and
          non-assessable shares (calculated as to each conversion to the nearest
          one-hundredth  (1/100)  of a share) of  Common  Stock.  The  number of
          shares of Common  Stock  issuable  upon  conversion  of each  share of
          Series  A  Preferred  Stock  shall be  equal  to two  hundred  dollars
          ($200.00)  divided  by the  conversion  price in effect at the time of
          conversion   determined  as  hereinafter   provided  (the  "Conversion
          Price").  The  Conversion  Price  shall be  initially  two dollars and
          twelve cents  ($2.12) per share of Common  Stock;  provided,  however,
          that such Conversion Price shall be subject to adjustment from time to
          time in certain  instances  as  hereinafter  provided.  No  fractional
          shares of Common Stock will be issued; and a cash payment will be paid
          in lieu of any  fractional  shares  in an  amount  equal  to the  same
          fraction  of the  last  sale  price of  Common  Stock  (determined  as
          provided  in  Paragraph  6(d)(iv))  at the  close of  business  on the
          business day which immediately precedes the day of conversion.

               (c)  Delivery  of  Certificates.  Before  any holder of shares of
          Series A  Preferred  Stock  shall be entitled to convert the same into
          Common Stock,  he shall  surrender  the  certificate  or  certificates
          therefor,  duly endorsed to the Corporation or in blank, at the office
          of the Transfer Agent or at such other place or places, if any, as the
          Board of Directors of the Corporation  has designated,  and shall give
          written  notice to the  Corporation  at said  office or place  that he
          elects to convey the same and shall state in writing  therein the name
          or names  (with  addresses)  in which he  wishes  the  certificate  or
          certificates for Common Stock to be issued.  The Corporation  will, as
          soon as  practicable  thereafter,  issue and deliver at said office or
          place to such holder of shares of Series A Preferred  Stock, or to his
          nominee or  nominees,  certificates  for the number of full  shares of
          Common Stock to which he shall be entitled as aforesaid, together with
          cash in lieu of any fraction of a share.  Shares of Series A Preferred
          Stock  shall be  deemed  to have  been  converted  as of the  close of
          business on the date of the surrender of such shares for conversion as
          provided above,  and the person or persons  entitled to receive Common
          Stock  issuable upon  conversion  shall be treated for all purposes as
          the record  holder or holders of such Common  Stock as of the close of
          business on such date.

               (d)  Adjustment  of Conversion  Price.  The  Conversion  Price in
          effect at any time shall be subject to adjustment as follows:

                    (i) In case the Corporation  shall (A) declare a dividend on
               its Common stock in shares of its capital  stock,  (B)  subdivide
               its  outstanding   shares  of  Common  Stock,   (C)  combine  its
               outstanding  shares of  Common  Stock  into a  smaller  number of
               shares,  or (D) issue by  reclassification  of its  Common  Stock
               (including  any  such   reclassification  in  connection  with  a
               consolidation   or  merger  in  which  the   Corporation  is  the
               continuing  corporation,  but excluding a change in par value, or
               from par value to no par value, or from no par value to par value
               of Common Stock) any shares of its capital stock,  the Conversion
               Price in effect at the time of the record date for such  dividend
               or of the  effective  date of such  subdivision,  combination  or
               reclassification  shall be  proportionately  adjusted so that the
               holder of any share of Series A Preferred  Stock  surrendered for
               conversion  after such time shall be entitled to receive the kind
               and  amount  of  shares  which he would  have  owned or have been
               entitled to receive  had such share of Series A  Preferred  Stock
               been converted  immediately  prior to such time.  Such adjustment
               shall be made successively  whenever any event listed above shall
               occur.

                    (ii) In case the Corporation  shall issue rights or warrants
               to all holders of its Common  Stock  entitling  them to subscribe
               for or purchase  shares of Common Stock at a price per share less
               than the Current  Market Price (as defined in Paragraph  6(d)(iv)
               below) on the date fixed for the  determination  of  stockholders
               entitled to receive such rights or warrants, the Conversion Price
               shall be reduced by multiplying the Conversion  Price by fraction
               of which the  numerator  shall be the  number of shares of Common
               Stock  outstanding at the close of business on the date fixed for
               such  determination  plus the  number of  shares of Common  Stock
               which the aggregate of the offering  price of the total number of
               shares of Common Stock so offered for  subscription  or purchaser
               would purchase at such Current  Market Price and the  denominator
               shall be the number of shares of Common Stock  outstanding at the
               close of business on the date fixed for such  determination  plus
               the number of shares of Common Stock so offered for  subscription
               or purchase, such reduction to become effective immediately after
               the opening of business on the date  following the date fixed for
               such determination.

                    (iii)  In  case  the  Corporation  shall  distribute  to all
               holders of its Common Stock (including any such distribution made
               in  connection  with a  consolidation  or  merger  in  which  the
               Corporation  is  the  continuing  corporation)  evidences  of its
               indebtedness   or   assets   (excluding    dividends   or   other
               distributions paid out of earned surplus) or subscription  rights
               or warrants  (excluding  those referred to in Paragraph  6(d)(ii)
               above),  the Conversion  Price shall be adjusted so that the same
               shall equal the price  determined by  multiplying  the Conversion
               Price in effect immediately prior to the close of business on the
               date fixed for the  determination  of  stockholders  entitled  to
               receive such  distribution  by a fraction of which the  numerator
               shall be the Current  Market  Price per share of Common  Stock on
               the date fixed for such  determination  less the then fair market
               value  (as   determined   by  the  Board  of   Directors  of  the
               Corporation,   whose   determination   shall  be  conclusive  and
               described in a Board Resolution of the Corporation filed with the
               Transfer  Agent) of the  portion  of the assets or  evidences  of
               indebtedness  so  distributed  applicable  to one share of Common
               Stock and the denominator  shall be such Current Market Price per
               share of  Common  Stock,  such  adjustment  to  become  effective
               immediately prior to the opening of business of the day following
               the date fixed for the determination of stockholders  entitled to
               receive such distribution.

                    (iv) For the  purpose of any  computation  under  Paragraphs
               6(d)(ii) and 6(d)(iii)  above,  the "Current Market Price" on any
               date  shall be deemed  to be the  average  of the  daily  closing
               prices  per share of Common  Stock for  twenty  (20)  consecutive
               business days selected by the Corporation  commencing thirty-five
               (35) business  days before such date.  The closing price for each
               day shall be the last sale price  regular way or, in case no such
               sale takes place on such day,  the average of the closing bid and
               asked  prices  regular  way, in either case on the New York Stock
               Exchange,  or,  if Common  Stock is not  listed  or  admitted  to
               trading on such Exchange,  on the principal  national  securities
               exchange on which  Common  Stock is listed or admitted to trading
               or, if it is not listed or  admitted  to trading on any  national
               securities  exchange,  the  average of the  closing bid and asked
               prices as furnished by any member of the National  Association of
               Securities  Dealers,  Inc.,  selected  from  time  to time by the
               Corporation for that purpose.

                    (v) All calculations under this Paragraph 6 shall be made to
               the nearest cent or the nearest one-hundredth (1/100) of a share,
               as the case may be.

                    (vi)  In  case  of  any   consolidation  or  merger  of  the
               Corporation  with or into any  other  corporation  (other  than a
               consolidation   or  merger  in  which  the   Corporation  is  the
               continuing  corporation),  or in case of any sale or  transfer of
               all or substantially  all of the assets of the  Corporation,  the
               holder of each share of Series A Preferred Stock shall after such
               consolidation, merger, sale or transfer have the right to convert
               such share of Series A  Preferred  Stock into the kind and amount
               of shares of stock and other  securities  and property which such
               holder   would  have  been   entitled   to   receive   upon  such
               consolidation,  merger,  sale,  or  transfer  if he had  held the
               Common Stock issuable upon the conversion of such share of Series
               A  Preferred  Stock  immediately  prior  to  such  consolidation,
               merger, sale or transfer.

                    (vii) In the  event  that at any  time,  as a  result  of an
               adjustment made pursuant to Paragraph  6(d)(i) above,  the holder
               of  any  share  of  Series  A  Preferred  Stock  surrendered  for
               conversation  shall  become  entitled to receive  any  securities
               other than shares of Common Stock,  thereafter the amount of such
               other  securities so receivable  upon  conversion of any share of
               Series A Preferred Stock shall be subject to adjustment from time
               to  time  in a  manner  and on  terms  as  nearly  equivalent  as
               practicable  to the  provisions  with  respect  to  Common  Stock
               contained in Paragraphs  6(d)(i)-6(d)(vi),  inclusive, above, and
               the  provisions of this  Paragraph 6 with respect to Common Stock
               shall apply on like terms to any such other securities.

                    (viii)  No  adjustment  in the  Conversion  Price  shall  be
               required  unless  such  adjustment  would  require a change of at
               least one percent (1%) in such price; provided, however, that any
               adjustments which by reason of this Paragraph  6(d)(viii) are not
               required  to be made  shall be  carried  forward  and taken  into
               account in any subsequent adjustment.

               (e) Certificate as to Adjustments.  Whenever the Conversion Price
          is adjusted as herein provided:

                    (i) the  Corporation  shall  promptly file with the Transfer
               Agent  for the  Series A  Preferred  Stock a  certificate  of the
               treasurer  of  the   Corporation   setting   forth  the  adjusted
               Conversion Price and showing in reasonable  detail the facts upon
               which such  adjustment  is based,  including a  statement  of the
               consideration  received or to be received by the  Corporation for
               any shares of Common  Stock issued or deemed to have been issued;
               and

                    (ii) a notice  stating  that the  Conversion  Price has been
               adjusted and setting  forth the adjusted  Conversion  Price shall
               forthwith be  required,  and as soon as  practicable  after it is
               required,  such additional  notice shall be deemed to be required
               pursuant to this Paragraph 6(e)(ii) as of the opening of business
               on the tenth (10th) business day after such mailing and shall set
               forth  the  Conversion  Price  as  adjusted  at such  opening  of
               business, and upon the mailing of such additional notice no other
               notice need be given of any  adjustment in the  Conversion  Price
               occurring  at or prior to such  opening of business and after the
               time  that the next  preceding  notice  given by  mailing  became
               required.

               (f) Notification of Certain Events. In case:

                    (i) the Corporation  shall authorize the distribution to all
               holders of its Common Stock of evidences of its  indebtedness  or
               assets (other than dividends or other  distributions  paid out of
               earned surplus); or

                    (ii) the  Corporation  shall  authorize  the granting to the
               holders  of its  Common  Stock  of  rights  to  subscribe  for or
               purchase any shares of capital stock of any class or of any other
               rights; or

                    (iii) of any  reclassification of Common Stock (other than a
               subdivision or combination  of its  outstanding  shares of Common
               Stock),   or  of  any   consolidation  or  merger  to  which  the
               Corporation is a party and for which approval of any stockholders
               of the Corporation is required, or of the sale or transfer of all
               or substantially all of the assets of the Corporation; or

                    (iv)   of  the   voluntary   or   involuntary   dissolution,
               liquidation or winding up of the Corporation;

               then, in each case, the Corporation  shall cause to be filed with
          the Transfer  Agent and shall cause to be mailed,  first class postage
          prepaid,  to the holders of record of the outstanding shares of Series
          A  Preferred  Stock,  at least  ten (10)  calendar  days  prior to the
          applicable record date hereinafter specified, a notice stating (x) the
          date  on  which a  record  is to be  taken  for  the  purpose  of such
          distribution or rights,  or, if a record is not to be taken,  the date
          as of which the  holders of Common  Stock of record to be  entitled to
          such  distribution or rights are to be determined,  or (y) the date on
          which such  reclassification,  consolidation,  merger, sale, transfer,
          dissolution,   liquidation   or  winding  up  is  expected  to  become
          effective,  and the date as of which it is  expected  that  holders of
          Common  Stock of record  shall be entitled to  exchange  their  Common
          Stock  for  securities  or  other  property   deliverable   upon  such
          reclassification,  consolidation, merger, sale, transfer, dissolution,
          liquidation or winding up.

               (g)  Reservation  of Shares.  The  Corporation  will at all times
          reserve,  keep  available  and be  prepared  to  issue,  free from any
          preemptive  rights,  out of its authorized but unissued  Common Stock,
          solely  for the  purpose  of  effecting  conversion  of the  Series  A
          Preferred  Stock,  the full  number of shares  of  Common  Stock  then
          issuable  upon the  conversion of all  outstanding  Series A Preferred
          Stock. The Corporation shall from time to time, in accordance with the
          laws of the  State of  Delaware,  endeavor  to amend its  Articles  of
          Incorporation to increase the authorized amount of its Common Stock if
          at any  time the  authorized  amount  of its  Common  Stock  remaining
          unissued  shall be not  sufficient  to permit  the  conversion  of all
          Series A Preferred Stock.

               (h) Issuance Taxes.  The  Corporation  will pay any and all taxes
          that may be payable in respect of the issue or  delivery  of shares of
          Common  Stock on  conversion  of shares of  Series A  Preferred  Stock
          pursuant hereto.  The Corporation shall not,  however,  be required to
          pay any tax which may be payable in respect of any  transfer  involved
          in the issue or transfer  and  delivery of shares of Common Stock in a
          name other than that in which the share of Series A Preferred Stock so
          converted were registered, and no such issue or delivery shall be made
          unless  and until the  person  requesting  such  issue has paid to the
          Corporation  the  amount  of any  such tax or has  established  to the
          satisfaction of the Corporation that such tax has been paid.

               (j)  Mandatory  Conversion.  If any Series A  Preferred  Stock is
          issued and outstanding on December 31, 2003,  such Series A  Preferred
          Stock,  without any action on the part of the holder thereof,  will be
          automatically  converted  into  Common  Stock  on  that  date  at  the
          Conversion Rate on the above terms.

               (k) Cancellation.  In the event any shares of Series A  Preferred
          Stock shall be  converted  pursuant to this  Paragraph 6  hereof,  the
          shares of Series A Preferred  Stock so converted shall be canceled and
          returned to the status of authorized and unissued  shares of preferred
          stock, without any class designation.

               (l)  Impairment.  The  Corporation  will not, by amendment of its
          Certificate 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  to be  observed  or
          performed hereunder by the Corporation,  but will at all times in good
          faith  assist  in the  carrying  out of all  the  provisions  of  this
          Certificate of Designation for the Series A Preferred Stock and in the
          taking of all such action as may be necessary or  appropriate in order
          to  protect  the  conversion  rights of the  holders  of the  Series A
          Preferred Stock against impairment.

               (m)  Notices.  Any notice to be given to the holders of shares of
          Series A Preferred  Stock shall be deemed  given if  deposited  in the
          United States mail, postage prepaid, and addressed

     to each  holder  of record at his  address  appearing  on the books of this
Corporation.

     Such resolution was signed by the Chairman of the Board and Chief Executive
Officer and Secretary of the
Corporation.

     IN WITNESS  WHEREOF,  we have executed this Certificate of Designation this
____ day of _______________, 1998.

                               INDIVIDUAL INVESTOR GROUP, INC.


                               By:                                       
                               Jonathan L.  Steinberg,
                               Chairman of the Board and Chief Executive Officer


                               By:                                    
                               Henry Clark, Secretary



                                  Exhibit 3.1.4

                                November __, 1998


Great American Insurance Company
Great American Life Insurance Company
580 Walnut Street
Cincinnati, Ohio 45202

     Re: Individual Investor Group, Inc.

Gentlemen:

     We have acted as counsel for Individual  Investor  Group,  Inc., a Delaware
corporation  ("Company"),  in connection with the Company's issuance and sale of
5,000  shares of Series A  Preferred  Stock,  par value $.01 per  share,  of the
Company ("Preferred Stock") to each of Great American Insurance Company ("GAIC")
and Great American Life Insurance Company ("GALIC"),  upon the terms and subject
to the conditions set forth in the Stock Purchase Agreement,  dated November 30,
1998  ("Stock  Purchase  Agreement")  between the Company,  GAIC AND GALIC.  All
capitalized  terms not otherwise defined herein shall have the meanings given to
them in the Stock  Purchase  Agreement.  For  purposes of the opinion  expressed
herein, we have examined, among other documents, the following documents:

          (1) executed copies of the Stock Purchase Agreement;

          (2) the Certificate of  Incorporation of the Company as amended by the
     Certificate of Amendment,  which includes the terms of the Preferred  Stock
     ("Certificate");

          (3) the By-laws of the Company; and

          (4) the  Certificate of Good Standing issued by the Secretary of State
     of the State of Delaware for the Company, dated ___________, 1998.

     We have also examined such other documents,  and made such  examinations of
law, as we deem necessary as a basis for the opinions hereafter expressed.  With
respect to such examination,  we have assumed the genuineness of all signatures,
the authenticity and completeness of all documents submitted to us as originals,
the  conformity  to  original  documents  of all  documents  submitted  to us as
photostatic or certified copies of original documents,  and the authenticity and
completeness of those latter documents.  As to all questions of fact material to
this opinion that have not been independently  established,  except as otherwise
stated  herein,  we have relied upon  certificates  and inquiries of appropriate
public officials,  the officers of the Company, and upon the representations and
warranties of the Company set forth in the Stock Purchase Agreement.

     We are members of the Bar of the State of New York and we do not purport to
be experts on, or to express any opinion herein concerning,  any laws other than
the law of the State of New York,  the General  Corporation  law of the State of
Delaware and the Federal law of the United States of America.  Please be advised
that when in the  following  opinion we have made  statements as to "the best of
our knowledge",  it is intended to mean the actual knowledge of attorneys within
our firm based on: (i) work performed on substantive aspects of this transaction
or other  matters  which  have  come to their  attention  in the  course  of the
representation  of the Company and (ii)  inquiries of, and  consultations  with,
officers of the Company, and does not include matters as to which such attorneys
could  be  deemed  to  have  constructive  knowledge.  Nothing  has  come to our
attention which leads us to question the accuracy of any information provided to
us by the Company.

     Based upon the foregoing, we are of the opinion that:

          1. The Company is a corporation  duly organized,  validly existing and
     in good standing under the laws of the State of Delaware.

          2. The  execution,  delivery  and  performance  of the Stock  Purchase
     Agreement has been duly  authorized by the Company's Board of Directors and
     no  other  corporate  proceedings  on  the  part  of  the  Company  or  its
     stockholders  are  required.  The  Agreement  has been  duly  executed  and
     delivered  by the  Company  and  constitutes  the legal,  valid and binding
     obligation  of the Company  enforceable  against the Company in  accordance
     with its terms, except as enforcement thereof may be limited by bankruptcy,
     insolvency,  or similar laws affecting the enforcement of creditors' rights
     in general or general  principles of equity.  The Certificate has been duly
     authorized and upon filing of the  Certificate  with the Secretary of State
     of the State of Delaware, the Preferred Stock will be duly authorized.

          3. The shares to be issued,  sold and delivered in accordance with the
     terms  of the  Stock  Purchase  Agreement  for  the  consideration  set out
     therein,  will, upon issuance in accordance with the terms thereof, be duly
     and validly issued,  fully paid and nonassessable,  free of restrictions on
     transfer  other than  restrictions  on  transfer  under the Stock  Purchase
     Agreement  and under  applicable  federal and state  securities  laws.  The
     issuance of the shares of Preferred Stock to GAIC and GALIC pursuant to the
     Stock Purchase  Agreement will comply with all applicable  laws,  including
     federal  and  state  securities  laws,  and  will  not  violate   statutory
     preemptive  rights or, to the best of our  knowledge,  similar  contractual
     rights of any person.  The common stock  issuable  upon  conversion  of the
     shares of Preferred Stock will be, upon issuance and delivery in accordance
     with the terms of the Certificate,  duly and validly issued, fully paid and
     nonassessable  and free of restrictions on transfer other than restrictions
     on transfer under the Stock Purchase Agreement and under applicable federal
     and state securities laws. The issuance of the common stock upon conversion
     of the shares of  Preferred  Stock will  comply with all  applicable  laws,
     including  federal and state  securities laws (assuming the accuracy of the
     representations of GAIC and GALIC set forth in the Stock Purchase Agreement
     as of the date of  issuance  of such  common  stock)  and will not  violate
     statutory  preemptive  rights,  or to the  best of our  knowledge,  similar
     contractual rights of any person.

          4. To the best of our knowledge, no consent, approval,  qualification,
     order of authorization of, or registration, declaration or filing with, any
     court,  administrative agency or commission or other governmental authority
     or  instrumentality,  domestic or foreign, or other third party is required
     by or with  respect to the Company in  connection  with the  execution  and
     delivery  of the  Stock  Purchase  Agreement,  or the  consummation  by the
     Company of the  transactions  contemplated  thereby,  which has not already
     been obtained,  except for filing an application  for listing of additional
     shares with the NASDAQ  Stock  Market,  any notices of sale  required to be
     filed with the Securities and Exchange  Commission under the Securities Act
     of 1933, as amended or the Securities Exchange Act of 1934, as amended, and
     such  post  closing  filings  as may be  required  under  applicable  state
     securities  laws which will be timely filed within the  applicable  periods
     therefor.

     This opinion is being  delivered  to you  pursuant to Section  3.1.4 of the
Stock  Purchase  Agreement and may not be relied upon by any Person without this
firm's prior written consent.

                                                 Very truly yours,



                                 Schedule 5.1.4

INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) September 30, December 31, ASSETS 1998 1997 --------------- ---------------- Current assets: Cash and cash equivalents $4,657,987 $3,533,622 Marketable securities (Note 6) 518,392 - Accounts receivable (net of allowances of $336,964 in 2,511,571 2,993,299 1998 and $533,693 in 1997) Investment in discontinued operations (Note 2) 816,580 4,037,432 Prepaid expenses and other current assets 223,832 224,801 --------------- ---------------- Total current assets 8,728,362 10,789,154 Deferred subscription expense 623,180 426,826 Property and equipment - net 419,529 556,070 Other assets 385,727 384,917 =============== ================ Total assets $10,156,798 $12,156,967 =============== ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,256,689 $2,093,987 Accrued expenses 778,230 803,502 Deferred revenue 167,034 343,250 --------------- ---------------- Total current liabilities 3,201,953 3,240,739 Deferred subscription revenue 2,248,562 2,661,129 --------------- ---------------- Total liabilities 5,450,515 5,901,868 --------------- ---------------- Stockholders' Equity: Preferred stock, $.01 par value, authorized 2,000,000 shares - - Common stock, $.01 par value; authorized 18,000,000 shares; issued and outstanding 8,490,851 84,908 71,461 shares in 1998 and 7,146,071 shares in 1997 Additional paid-in capital 24,899,068 19,514,363 Accumulated deficit (19,946,257) (13,330,725) Accumulated other comprehensive loss (Note 6) (331,436) - --------------- ---------------- Total stockholders' equity 4,706,283 6,255,099 =============== ================ Total liabilities and stockholders' equity $10,156,798 $12,156,967 =============== ================
See Notes to Consolidated Condensed Financial Statements INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1. BASIS OF PRESENTATION The consolidated condensed financial statements include the accounts of Individual Investor Group, Inc. and its subsidiaries (the "Company"). Such financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes as required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report for the year ended December 31, 1997 on Form 10-KSB. 2. DISCONTINUED OPERATIONS On April 30, 1998 the Company's Board of Directors decided to discontinue the Company's investment management services business. A wholly owned subsidiary of the Company, WisdomTree Capital Management, Inc. ("WTCM"), serves as general partner of (and is an investor in) a domestic private investment fund. The Company is also a limited partner in the fund. As a result of the Board's decision, WTCM is dissolving the domestic investment fund, liquidating its investments and distributing the net assets to all investors as promptly as possible. In July 1998 the fund distributed $19,682,415 to its partners in cash and securities. In October 1998 the fund distributed additional funds totaling approximately $4,500,000 in cash to its partners. The remainder of the net assets will be distributed as soon as the investments held by the fund are liquidated. The operating results relating to investment management services have been segregated from continuing operations and reported as a separate line item on the statement of operations. As a result the Company has restated its financial statements for the corresponding periods of the prior year. Operating results from discontinued operations are as follows:
Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Investment management services revenues $ - $ 141,999 $ 137,183 $ 439,191 Net (depreciation) appreciation in fund - 1,371,887 (276,497) (159,283) Operating expenses - (40,662) (50,315) (194,580) ============== ================ ============== =============== (Loss) income from discontinued operations - $1,473,224 ($ 189,629) $ 85,328 ============== ================ ============== ===============
Loss on disposal of discontinued operations totaled $145,291 and $591,741 for the three and nine months ended September 30, 1998, respectively. Under generally accepted accounting principles, loss on disposal of discontinued operations includes actual losses from the date the Board resolved to discontinue the investment management services operations plus a provision for additional losses based on management's best estimate of the amount to be realized on dissolution of the fund, including applicable severance and legal fees. Additional losses were incurred in the third quarter as a result of changes in the market value of the fund's investments. The fair market value of the Company's investment in the discontinued operations decreased from $4,037,432 at December 31, 1997 to $816,580 at September 30, 1998. The net depreciation in the Company's investment for the three and nine months ended September 30, 1998 was $168,799 and $927,054, respectively. In July 1998 the Company received $2,293,799 of its investment, including cash of $1,443,997 and securities of $849,822 (valued as of June 30, 1998). In October 1998 the Company received an additional $524,432 in cash from the fund. No assurance can be given that the Company will realize any further amount with respect to its investment in the domestic fund. Moreover, the securities received by the Company in July 1998 suffered a material decline in value between June 30, 1998 and September 30, 1998, and subsequently through the date of this Report. There can be no assurance that such securities will not suffer further material declines in value. Selected unaudited financial information for the fund as of September 30, 1998 and December 31, 1997 is as follows: September 30, December 31, 1998 1997 Assets (at fair value) $ 7,195,281 $71,245,441 Liabilities 188,459 32,104,302 Partners' capital 7,006,822 39,141,139 The net losses for the fund for the three and nine months ended September 30, 1998 totaled $1,448,415 and $7,954,776, respectively, as compared to a net gain of $16,544,302 and $3,242,622 for the corresponding periods in 1997. The Company, through WTCM, also provides investment management services to an offshore private investment fund. On May 21, 1998 the sole voting shareholder of the offshore fund, in consultation with WTCM, resolved to wind up the fund and appointed a liquidator to distribute the assets of the fund to its investors in accordance with Cayman Islands law. In July 1998 approximately 55% of the net assets of the offshore fund were distributed in cash to its investors. The remainder of the net assets will be distributed promptly following the liquidation of the investments held by the fund. The Company has no investment in the offshore fund. WTCM is also entitled to receive a special allocation equal to 20% of the net income, if any, of each of the funds (not including income earned on its own investment with respect to the domestic fund), subject to certain limitations, calculated at each funds' year-end, which is December 31st for the domestic fund and June 30th for the offshore fund. The amount of the special allocation for the offshore fund for the year ended June 30, 1998 was $109,319. The Company does not expect to receive a special allocation during 1998 from the domestic fund based on the negative performance of that fund to date. 3. STOCK OPTIONS During the three and nine months ended September 30, 1998, the Company granted 563,000 and 751,000 options, respectively, to purchase the Company's Common Stock; 84,938 options were exercised year to date providing proceeds of $398,152 (none were exercised in the third quarter); and 112,500 and 534,310 options were canceled, respectively. Of the total options granted in the third quarter, 250,500 were under the Company's stock option plans and 312,500 were outside the Company's plans, all of which expire at various dates through September 2008. 4. LOSS PER COMMON SHARE Net loss per basic and dilutive common share for the three and nine month periods ended September 30, 1998 and 1997, respectively, were computed using the weighted average number of common shares outstanding during each period. The exercise of stock options and warrants were not assumed in the computation of loss per common share, as the effect would have been antidilutive. Previously reported net loss per share amounts are the same as required by the adoption of Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share," which became effective in the fourth quarter of 1997. 5. SALE OF COMMON STOCK On June 26, 1998 the Company entered into a Stock Purchase Agreement with Wise Partners, L.P. providing for the sale of 1,259,842 shares of Common Stock for an aggregate purchase price of $5,000,000, which was based on the closing "ask" price of the common stock on June 25, 1998. Wise Partners; L.P. is a limited partnership of which the Chief Executive Officer of the Company, Jonathan L. Steinberg, is the General Partner. 6. OTHER COMPREHENSIVE INCOME During the year, the Company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 requires the disclosure of comprehensive income, defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Comprehensive loss for the three and nine months ended September 30, 1998 and 1997, respectively, is presented in the following table: Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Net loss $(1,476,271) $(34,507) $(6,615,532) $(3,769,195) Accumulated other comprehensive loss: Unrealized loss on securities (331,436) - (331,436) - =========== ========== ========== =========== Total comprehensive loss $(1,807,707) $(34,507) $(6,946,968) (3,769,195) =========== ========== ========== ===========