<PAGE>




                                                                   EXHIBIT 4.12



         THIS WARRANT AND THE SHARES  ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         EXCEPT AS OTHERWISE  SET FORTH  HEREIN OR IN A SECURITIES  SUBSCRIPTION
         AGREEMENT  DATED AS OF DECEMBER __, 2002,  NEITHER THIS WARRANT NOR ANY
         OF SUCH SHARES MAY BE SOLD,  TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE  REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT
         OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE,  CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE  TRANSACTIONS,  THAT  REGISTRATION IS
         NOT  REQUIRED  UNDER SUCH ACT OR UNLESS  SOLD  PURSUANT  TO RULE 144 OR
         REGULATION S UNDER SUCH ACT.

                                     Right to Purchase 1,000,000 Shares of
                                     Common Stock, $.001 par value per
                                     share

                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received,  Mercator Momentum Fund or its
registered assigns, is entitled to purchase from Famous Fixins, Inc., a New York
corporation (the "Company"),  at any time or from time to time during the period
specified  in  Paragraph  2  hereof,  one  million  (1,000,000)  fully  paid and
nonassessable  shares of the Company's Common Stock,  $0.001 par value per share
(the  "Common  Stock"),  AT AN  EXERCISE  PRICE  PER SHARE  EQUAL TO $0.01  (THE
"EXERCISE  PRICE").  The term  "Warrant  Shares," as used herein,  refers to the
shares of  Common  Stock  purchasable  hereunder.  The  Warrant  Shares  and the
Exercise Price are subject to adjustment as provided in Paragraph 4 hereof.  The
term  "Warrants"  means this Warrant and the other warrants  issued  pursuant to
that certain  Securities  Purchase  Agreement,  dated  December 27, 2002, by and
among the Company  and the Buyers  listed on the  execution  page  thereof  (the
"Securities  Purchase  Agreement"),  including any additional  warrants issuable
pursuant to Section 4(l) thereof.

         This  Warrant  is  subject  to the  following  terms,  provisions,  and
conditions:

         MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
                  EXERCISE OF WARRANT.  SUBJECT TO THE PROVISIONS  HEREOF,  THIS
WARRANT  MAY BE  EXERCISED  BY THE HOLDER  HEREOF,  IN WHOLE OR IN PART,  BY THE
SURRENDER OF THIS WARRANT,  TOGETHER WITH A COMPLETED  EXERCISE AGREEMENT IN THE
FORM ATTACHED  HERETO (THE "EXERCISE  AGREEMENT"),  TO THE COMPANY DURING NORMAL
BUSINESS HOURS ON ANY BUSINESS DAY AT THE COMPANY'S  PRINCIPAL EXECUTIVE OFFICES
(OR SUCH OTHER OFFICE OR AGENCY OF THE COMPANY AS IT MAY  DESIGNATE BY NOTICE TO
THE HOLDER HEREOF), AND UPON (I) PAYMENT TO THE COMPANY IN CASH, BY CERTIFIED OR
OFFICIAL  BANK CHECK OR BY WIRE  TRANSFER  FOR THE ACCOUNT OF THE COMPANY OF THE
EXERCISE  PRICE FOR THE WARRANT  SHARES  SPECIFIED IN THE EXERCISE  AGREEMENT OR
(II) IF THE RESALE OF THE  WARRANT  SHARES BY THE HOLDER IS NOT THEN  REGISTERED
PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE  "SECURITIES  ACT"),  DELIVERY TO THE COMPANY OF A WRITTEN
NOTICE OF AN  ELECTION TO EFFECT A  "CASHLESS  EXERCISE"  (AS DEFINED IN SECTION
11(C) BELOW) FOR THE WARRANT  SHARES  SPECIFIED IN THE EXERCISE  AGREEMENT.  THE
WARRANT SHARES SO PURCHASED SHALL BE DEEMED TO BE ISSUED TO THE HOLDER HEREOF OR
SUCH HOLDER'S  DESIGNEE,  AS THE RECORD OWNER OF SUCH SHARES, AS OF THE CLOSE OF
BUSINESS  ON THE DATE ON WHICH THIS  WARRANT  SHALL HAVE BEEN  SURRENDERED,  THE


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COMPLETED EXERCISE  AGREEMENT SHALL HAVE BEEN DELIVERED,  AND PAYMENT SHALL HAVE
BEEN MADE FOR SUCH  SHARES  AS SET FORTH  ABOVE.  CERTIFICATES  FOR THE  WARRANT
SHARES SO PURCHASED,  REPRESENTING  THE AGGREGATE  NUMBER OF SHARES SPECIFIED IN
THE  EXERCISE  AGREEMENT,  SHALL BE  DELIVERED  TO THE  HOLDER  HEREOF  WITHIN A
REASONABLE TIME, NOT EXCEEDING THREE (3) BUSINESS DAYS, AFTER THIS WARRANT SHALL
HAVE  BEEN  SO  EXERCISED.  THE  CERTIFICATES  SO  DELIVERED  SHALL  BE IN  SUCH
DENOMINATIONS  AS MAY BE REQUESTED BY THE HOLDER  HEREOF AND SHALL BE REGISTERED
IN THE NAME OF SUCH  HOLDER OR SUCH  OTHER NAME AS SHALL BE  DESIGNATED  BY SUCH
HOLDER.  IF THIS WARRANT SHALL HAVE BEEN  EXERCISED ONLY IN PART,  THEN,  UNLESS
THIS  WARRANT HAS EXPIRED,  THE COMPANY  SHALL,  AT ITS EXPENSE,  AT THE TIME OF
DELIVERY OF SUCH CERTIFICATES,  DELIVER TO THE HOLDER A NEW WARRANT REPRESENTING
THE NUMBER OF SHARES WITH RESPECT TO WHICH THIS WARRANT SHALL NOT THEN HAVE BEEN
EXERCISED.  IN ADDITION TO ALL OTHER AVAILABLE  REMEDIES AT LAW OR IN EQUITY, IF
THE COMPANY FAILS TO DELIVER  CERTIFICATES  FOR THE WARRANT  SHARES WITHIN THREE
(3) BUSINESS DAYS AFTER THIS WARRANT IS EXERCISED, THEN THE COMPANY SHALL PAY TO
THE  HOLDER  IN CASH A  PENALTY  (THE  "PENALTY")  EQUAL TO 2% OF THE  NUMBER OF
WARRANT SHARES THAT THE HOLDER IS ENTITLED TO MULTIPLIED BY THE MARKET PRICE (AS
HEREINAFTER DEFINED) FOR EACH DAY THAT THE COMPANY FAILS TO DELIVER CERTIFICATES
FOR THE  WARRANT  SHARES.  FOR  EXAMPLE,  IF THE HOLDER IS  ENTITLED  TO 100,000
WARRANT SHARES AND THE MARKET PRICE IS $2.00,  THEN THE COMPANY SHALL PAY TO THE
HOLDER  $4,000 FOR EACH DAY THAT THE COMPANY FAILS TO DELIVER  CERTIFICATES  FOR
THE WARRANT SHARES.  THE PENALTY SHALL BE PAID TO THE HOLDER BY THE FIFTH DAY OF
THE MONTH FOLLOWING THE MONTH IN WHICH IT HAS ACCRUED.

                  Notwithstanding  anything in this Warrant to the contrary,  in
no event  shall the holder of this  Warrant be  entitled to exercise a number of
Warrants (or portions  thereof) in excess of the number of Warrants (or portions
thereof)  upon  exercise  of which the sum of (i) the number of shares of Common
Stock  beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised  Warrants and the  unexercised or  unconverted  portion of any other
securities  of  the  Company  (including  the  Debentures  (as  defined  in  the
Securities  Purchase  Agreement))  subject  to a  limitation  on  conversion  or
exercise  analogous to the limitation  contained  herein) and (ii) the number of
shares of Common  Stock  issuable  upon  exercise of the  Warrants  (or portions
thereof) with respect to which the determination described herein is being made,
would result in  beneficial  ownership by the holder and its  affiliates of more
than 4.9% of the  outstanding  shares  of  Common  Stock.  For  purposes  of the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the  preceding  sentence.  The  holder  of this  Warrant  may  waive  the
limitations  set forth  herein by  sixty-one  (61)  days  written  notice to the
Company.   Notwithstanding  anything  to  the  contrary  contained  herein,  the
limitation  on  exercise  of this  Warrant  set forth  herein may not be amended
without  (i) the written  consent of the holder  hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

                  MANDATORY  EXERCISE RIGHT.  THE COMPANY SHALL BE ENTITLED,  ON
ANY DAY (THE  "CALCULATION  DATE") ON WHICH THE CLOSING PRICE (AS DEFINED BELOW)
OF THE COMMON STOCK FOR THIRTY (30) CONSECUTIVE  TRADING DAYS (AS DEFINED BELOW)
IS EQUAL TO OR GREATER THAN $3.00,  TO DELIVER A WRITTEN NOTICE (THE  "MANDATORY
EXERCISE  NOTICE") TO THE HOLDER  REQUIRING SUCH HOLDER TO EXERCISE THIS WARRANT
IN ACCORDANCE WITH SECTION 1 HEREOF AT ANY TIME DURING A THIRTY (30) TRADING DAY
PERIOD  FOLLOWING  THE DATE OF SUCH  MANDATORY  EXERCISE  NOTICE (THE  "EXERCISE
DATE"); PROVIDED, HOWEVER, THAT THE COMPANY SHALL HAVE SUCH RIGHT IF AND ONLY IF
(X)  FOR A  PERIOD  OF  THIRTY  (30)  CONSECUTIVE  TRADING  DAYS  PRIOR  TO  THE
CALCULATION  DATE AND (Y) AT ALL  TIMES  DURING  SUCH  THIRTY  (30)  CONSECUTIVE
TRADING DAY PERIOD AND CONTINUING  THROUGH THE EXERCISE DATE, THE WARRANT SHARES
ISSUABLE  UPON  EXERCISE OF THE  WARRANTS  ARE (I)  AUTHORIZED  AND RESERVED FOR
ISSUANCE,  (II)  REGISTERED  FOR RESALE  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED,  BY THE HOLDER OF THIS  WARRANT (OR MAY  OTHERWISE  BE RESOLD  PUBLICLY
WITHOUT  RESTRICTION)  AND SALES OF THE WARRANT SHARES MAY BE MADE  CONTINUOUSLY
THEREUNDER  DURING  SUCH TIME  PERIODS,  AND (III)  LISTED  FOR  TRADING ON EACH


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PRINCIPAL  EXCHANGE OR MARKET ON WHICH THE SHARES OF COMMON STOCK OF THE COMPANY
WERE THEN TRADED;  AND PROVIDED,  FURTHER,  THAT THE HOLDER SHALL BE REQUIRED TO
EXERCISE ONLY THAT PORTION OF THIS WARRANT THAT IS EQUAL TO TEN PERCENT (10%) OF
THE AVERAGE TRADING VOLUME OF THE COMMON STOCK OVER THE THIRTY (30)  CONSECUTIVE
TRADING DAYS  IMMEDIATELY  PRECEDING THE  CALCULATION  DATE. THE COMPANY MAY NOT
DELIVER MORE THAN ONE MANDATORY  EXERCISE  NOTICE DURING ANY THIRTY (30) TRADING
DAY PERIOD.  NOTHING IN THIS SECTION 2(B) SHALL PROHIBIT EXERCISE OF THE WARRANT
OTHERWISE PERMITTED PURSUANT TO THE TERMS OF THIS WARRANT DURING THE PENDENCY OF
ANY  MANDATORY  EXERCISE  NOTICE.  "TRADING DAY" SHALL MEAN ANY DAY ON WHICH THE
COMMON  STOCK IS TRADED FOR ANY PERIOD ON THE  OVER-THE-COUNTER  BULLETIN  BOARD
(THE  "OTCBB"),  OR ON THE  PRINCIPAL  SECURITIES  EXCHANGE OR OTHER  SECURITIES
MARKET ON WHICH THE COMMON STOCK IS THEN BEING  TRADED.  "CLOSING  PRICE," AS OF
ANY DATE,  (I) MEANS THE LAST REPORTED SALE PRICE FOR THE SHARES OF COMMON STOCK
ON THE  OTCBB AS  REPORTED  BY  BLOOMBERG  FINANCIAL  MARKETS  OR OTHER  SIMILAR
RELIABLE REPORTING SERVICE AS DESIGNATED BY THE HOLDER ("BLOOMBERG"), OR (II) IF
THE OTCBB IS NOT THE  PRINCIPAL  TRADING  MARKET FOR THE SHARES OF COMMON STOCK,
THE LAST  REPORTED  SALE PRICE ON THE  PRINCIPAL  TRADING  MARKET FOR THE COMMON
STOCK AS REPORTED BY BLOOMBERG,  OR (III) IF THE LAST REPORTED SALE PRICE CANNOT
BE DETERMINED AS OF SUCH DATE ON ANY OF THE FOREGOING  BASES,  THE CLOSING PRICE
SHALL BE THE FAIR MARKET  VALUE AS  REASONABLY  DETERMINED  IN GOOD FAITH BY THE
BOARD OF DIRECTORS OF THE COMPANY OR, AT THE OPTION OF A MAJORITY-IN-INTEREST OF
THE HOLDERS OF THE OUTSTANDING  WARRANTS,  BY AN INDEPENDENT  INVESTMENT BANK OF
NATIONALLY  RECOGNIZED  STANDING IN THE VALUATION OF  BUSINESSES  SIMILAR TO THE
BUSINESS OF THE CORPORATION.

         PERIOD OF  EXERCISE.  This Warrant is  exercisable  at any time or from
time to time on or after the date on which this Warrant is issued and  delivered
pursuant to the terms of the Securities Purchase Agreement and before 6:00 p.m.,
New York,  New York time on the fifth (5th)  anniversary of the date of issuance
(the "Exercise Period").

CERTAIN  AGREEMENTS OF THE COMPANY.  The Company hereby  covenants and agrees as
follows:

                  SHARES  TO BE  FULLY  PAID.  ALL  WARRANT  SHARES  WILL,  UPON
ISSUANCE IN ACCORDANCE WITH THE TERMS OF THIS WARRANT, BE VALIDLY ISSUED,  FULLY
PAID, AND NONASSESSABLE AND FREE FROM ALL TAXES, LIENS, AND CHARGES WITH RESPECT
TO THE ISSUE THEREOF.

                  RESERVATION OF SHARES. DURING THE EXERCISE PERIOD, THE COMPANY
SHALL AT ALL TIMES HAVE  AUTHORIZED,  AND  RESERVED  FOR THE PURPOSE OF ISSUANCE
UPON EXERCISE OF THIS WARRANT,  A SUFFICIENT NUMBER OF SHARES OF COMMON STOCK TO
PROVIDE FOR THE EXERCISE OF THIS WARRANT.

                  LISTING.  THE COMPANY SHALL PROMPTLY SECURE THE LISTING OF THE
SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE OF THE WARRANT UPON EACH NATIONAL
SECURITIES  EXCHANGE OR AUTOMATED QUOTATION SYSTEM, IF ANY, UPON WHICH SHARES OF
COMMON  STOCK ARE THEN  LISTED  (SUBJECT TO  OFFICIAL  NOTICE OF  ISSUANCE  UPON
EXERCISE OF THIS  WARRANT)  AND SHALL  MAINTAIN,  SO LONG AS ANY OTHER SHARES OF
COMMON STOCK SHALL BE SO LISTED, SUCH LISTING OF ALL SHARES OF COMMON STOCK FROM
TIME TO TIME ISSUABLE  UPON THE EXERCISE OF THIS WARRANT;  AND THE COMPANY SHALL
SO LIST ON EACH NATIONAL  SECURITIES  EXCHANGE OR AUTOMATED QUOTATION SYSTEM, AS
THE CASE MAY BE, AND SHALL MAINTAIN SUCH LISTING OF, ANY OTHER SHARES OF CAPITAL
STOCK OF THE COMPANY  ISSUABLE  UPON THE EXERCISE OF THIS WARRANT IF AND SO LONG
AS ANY  SHARES OF THE SAME  CLASS  SHALL BE LISTED ON SUCH  NATIONAL  SECURITIES
EXCHANGE OR AUTOMATED QUOTATION SYSTEM.

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                  CERTAIN ACTIONS PROHIBITED. THE COMPANY WILL NOT, BY AMENDMENT
OF ITS CHARTER 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  BY IT  HEREUNDER,  BUT WILL AT ALL TIMES IN GOOD  FAITH
ASSIST IN THE  CARRYING  OUT OF ALL THE  PROVISIONS  OF THIS  WARRANT AND IN THE
TAKING OF ALL SUCH ACTION AS MAY  REASONABLY  BE REQUESTED BY THE HOLDER OF THIS
WARRANT IN ORDER TO PROTECT THE EXERCISE PRIVILEGE OF THE HOLDER OF THIS WARRANT
AGAINST DILUTION OR OTHER  IMPAIRMENT,  CONSISTENT WITH THE TENOR AND PURPOSE OF
THIS WARRANT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE COMPANY (I)
WILL NOT INCREASE THE PAR VALUE OF ANY SHARES OF COMMON  STOCK  RECEIVABLE  UPON
THE EXERCISE OF THIS WARRANT ABOVE THE EXERCISE  PRICE THEN IN EFFECT,  AND (II)
WILL TAKE ALL SUCH ACTIONS AS MAY BE NECESSARY OR  APPROPRIATE IN ORDER THAT THE
COMPANY MAY VALIDLY AND  LEGALLY  ISSUE FULLY PAID AND  NONASSESSABLE  SHARES OF
COMMON STOCK UPON THE EXERCISE OF THIS WARRANT.

                  SUCCESSORS AND ASSIGNS.  THIS WARRANT WILL BE BINDING UPON ANY
ENTITY SUCCEEDING TO THE COMPANY BY MERGER, CONSOLIDATION, OR ACQUISITION OF ALL
OR SUBSTANTIALLY ALL THE COMPANY'S ASSETS.

         ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise Price
and the number of Warrant  Shares  shall be subject to  adjustment  from time to
time as provided in this Paragraph 4.

         In the event that any  adjustment  of the  Exercise  Price as  required
herein results in a fraction of a cent,  such Exercise Price shall be rounded up
to the nearest cent.

                  ADJUSTMENT  OF  EXERCISE  PRICE  AND  NUMBER  OF  SHARES  UPON
ISSUANCE OF COMMON STOCK.  EXCEPT AS OTHERWISE  PROVIDED IN PARAGRAPHS  4(C) AND
4(E) HEREOF,  IF AND WHENEVER ON OR AFTER THE DATE OF ISSUANCE OF THIS  WARRANT,
THE COMPANY  ISSUES OR SELLS,  OR IN ACCORDANCE  WITH  PARAGRAPH  4(B) HEREOF IS
DEEMED TO HAVE ISSUED OR SOLD,  ANY SHARES OF COMMON STOCK FOR NO  CONSIDERATION
OR FOR A  CONSIDERATION  PER SHARE (BEFORE  DEDUCTION OF REASONABLE  EXPENSES OR
COMMISSIONS  OR  UNDERWRITING  DISCOUNTS OR ALLOWANCES IN CONNECTION  THEREWITH)
LESS THAN THE MARKET PRICE ON THE DATE OF ISSUANCE (A "DILUTIVE ISSUANCE"), THEN
IMMEDIATELY UPON THE DILUTIVE ISSUANCE,  THE EXERCISE PRICE WILL BE REDUCED TO A
PRICE DETERMINED BY MULTIPLYING THE EXERCISE PRICE IN EFFECT  IMMEDIATELY  PRIOR
TO THE DILUTIVE ISSUANCE BY A FRACTION,  (I) THE NUMERATOR OF WHICH IS AN AMOUNT
EQUAL  TO THE  SUM OF  (X)  THE  NUMBER  OF  SHARES  OF  COMMON  STOCK  ACTUALLY
OUTSTANDING IMMEDIATELY PRIOR TO THE DILUTIVE ISSUANCE, PLUS (Y) THE QUOTIENT OF
THE AGGREGATE  CONSIDERATION,  CALCULATED AS SET FORTH IN PARAGRAPH 4(B) HEREOF,
RECEIVED BY THE COMPANY UPON SUCH DILUTIVE  ISSUANCE DIVIDED BY THE MARKET PRICE
IN EFFECT IMMEDIATELY PRIOR TO THE DILUTIVE  ISSUANCE,  AND (II) THE DENOMINATOR
OF WHICH IS THE TOTAL NUMBER OF SHARES OF COMMON STOCK  DEEMED  OUTSTANDING  (AS
DEFINED BELOW) IMMEDIATELY AFTER THE DILUTIVE ISSUANCE.

                  EFFECT ON EXERCISE  PRICE OF CERTAIN  EVENTS.  FOR PURPOSES OF
DETERMINING  THE  ADJUSTED  EXERCISE  PRICE UNDER  PARAGRAPH  4(A)  HEREOF,  THE
FOLLOWING WILL BE APPLICABLE:

     ISSUANCE  OF RIGHTS OR  OPTIONS.  If the  Company in any  manner  issues or
grants any warrants,  rights or options, whether or not immediately exercisable,
to subscribe  for or to purchase  Common Stock or other  securities  convertible
into or exchangeable for Common Stock ("Convertible Securities") (such warrants,
rights and  options to  purchase  Common  Stock or  Convertible  Securities  are
hereinafter  referred to as "Options")  and the price per share for which Common
Stock is  issuable  upon the  exercise  of such  Options is less than the Market
Price on the date of issuance or grant of such  Options,  then the maximum total
number of shares of Common Stock  issuable upon the exercise of all such Options
will, as of the date of the issuance or grant of such  Options,  be deemed to be
outstanding  and to have been  issued and sold by the Company for such price per
share.  For purposes of the preceding  sentence,  the "price per share for which
Common Stock is issuable  upon the exercise of such  Options" is  determined  by
dividing (i) the total amount,  if any, received or receivable by the Company as
consideration for the issuance or granting of all such Options, plus the minimum


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aggregate  amount of additional  consideration,  if any,  payable to the Company
upon  the  exercise  of all  such  Options,  plus,  in the  case of  Convertible
Securities  issuable  upon the exercise of such Options,  the minimum  aggregate
amount of  additional  consideration  payable  upon the  conversion  or exchange
thereof at the time such  Convertible  Securities  first become  convertible  or
exchangeable,  by (ii) the  maximum  total  number of  shares  of  Common  Stock
issuable  upon the exercise of all such Options  (assuming  full  conversion  of
Convertible  Securities,  if applicable).  No further adjustment to the Exercise
Price  will be made upon the  actual  issuance  of such  Common  Stock  upon the
exercise of such  Options or upon the  conversion  or  exchange  of  Convertible
Securities issuable upon exercise of such Options.

     ISSUANCE OF CONVERTIBLE SECURITIES.  If the Company in any manner issues or
sells any Convertible Securities,  whether or not immediately convertible (other
than where the same are issuable upon the exercise of Options) and the price per
share for which Common  Stock is issuable  upon such  conversion  or exchange is
less than the  Market  Price on the date of  issuance,  then the  maximum  total
number of shares of Common Stock issuable upon the conversion or exchange of all
such  Convertible  Securities  will,  as of the  date  of the  issuance  of such
Convertible Securities,  be deemed to be outstanding and to have been issued and
sold by the Company for such price per share.  For the purposes of the preceding
sentence,  the "price per share for which  Common  Stock is  issuable  upon such
conversion or exchange" is determined by dividing (i) the total amount,  if any,
received or receivable by the Company as consideration  for the issuance or sale
of all  such  Convertible  Securities,  plus the  minimum  aggregate  amount  of
additional consideration,  if any, payable to the Company upon the conversion or
exchange  thereof  at  the  time  such   Convertible   Securities  first  become
convertible  or  exchangeable,  by (ii) the  maximum  total  number of shares of
Common Stock  issuable upon the  conversion or exchange of all such  Convertible
Securities.  No further  adjustment to the Exercise  Price will be made upon the
actual  issuance  of such  Common  Stock upon  conversion  or  exchange  of such
Convertible Securities.

     CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a change at any time
in (i) the amount of  additional  consideration  payable to the Company upon the
exercise of any Options;  (ii) the amount of additional  consideration,  if any,
payable to the  Company  upon the  conversion  or  exchange  of any  Convertible
Securities;   or  (iii)  the  rate  at  which  any  Convertible  Securities  are
convertible into or exchangeable for Common Stock (other than under or by reason
of  provisions  designed to protect  against  dilution),  the Exercise  Price in
effect at the time of such change will be readjusted to the Exercise Price which
would  have  been in  effect  at such  time  had  such  Options  or  Convertible
Securities still outstanding provided for such changed additional  consideration
or changed  conversion rate, as the case may be, at the time initially  granted,
issued or sold.

     TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE SECURITIES. If, in
any case,  the total number of shares of Common Stock  issuable upon exercise of
any Option or upon conversion or exchange of any Convertible  Securities is not,
in fact, issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which would have been in
effect  at the  time of such  expiration  or  termination  had  such  Option  or
Convertible  Securities,  to the extent  outstanding  immediately  prior to such
expiration or termination  (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been issued.


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     CALCULATION  OF  CONSIDERATION  RECEIVED.  If any Common Stock,  Options or
Convertible  Securities are issued,  granted or sold for cash, the consideration
received  therefore for purposes of this Warrant will be the amount  received by
the Company therefore, before deduction of reasonable commissions,  underwriting
discounts or  allowances  or other  reasonable  expenses paid or incurred by the
Company in  connection  with such  issuance,  grant or sale.  In case any Common
Stock, Options or Convertible  Securities are issued or sold for a consideration
part or all of which shall be other than cash,  the amount of the  consideration
other  than  cash  received  by the  Company  will  be the  fair  value  of such
consideration,  except where such consideration consists of securities, in which
case the amount of  consideration  received  by the  Company  will be the Market
Price thereof as of the date of receipt.  In case any Common  Stock,  Options or
Convertible Securities are issued in connection with any acquisition,  merger or
consolidation in which the Company is the surviving  corporation,  the amount of
consideration  therefore  will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving  corporation as is attributable
to such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
in good faith by the Board of Directors of the Company.

     EXCEPTIONS TO ADJUSTMENT OF EXERCISE  PRICE.  No adjustment to the Exercise
Price will be made (i) upon the exercise of any warrants, options or convertible
securities  granted,  issued and  outstanding  on the date of  issuance  of this
Warrant;  (ii) upon the grant or  exercise  of any  stock or  options  which may
hereafter be granted or exercised under any employee  benefit plan, stock option
plan or restricted  stock plan of the Company now existing or to be  implemented
in the future, so long as the issuance of such stock or options is approved by a
majority of the independent  members of the Board of Directors of the Company or
a majority of the members of a committee of  independent  directors  established
for such purpose; or (iii) upon the exercise of the Warrants.

                  SUBDIVISION OR COMBINATION OF COMMON STOCK.  IF THE COMPANY AT
ANY TIME  SUBDIVIDES  (BY ANY STOCK  SPLIT,  STOCK  DIVIDEND,  RECAPITALIZATION,
REORGANIZATION,  RECLASSIFICATION  OR  OTHERWISE)  THE  SHARES OF  COMMON  STOCK
ACQUIRABLE  HEREUNDER INTO A GREATER NUMBER OF SHARES,  THEN,  AFTER THE DATE OF
RECORD FOR EFFECTING SUCH SUBDIVISION,  THE EXERCISE PRICE IN EFFECT IMMEDIATELY
PRIOR TO SUCH SUBDIVISION WILL BE PROPORTIONATELY REDUCED. IF THE COMPANY AT ANY
TIME  COMBINES  (BY  REVERSE  STOCK  SPLIT,  RECAPITALIZATION,   REORGANIZATION,
RECLASSIFICATION  OR OTHERWISE) THE SHARES OF COMMON STOCK ACQUIRABLE  HEREUNDER
INTO A SMALLER  NUMBER OF SHARES,  THEN,  AFTER THE DATE OF RECORD FOR EFFECTING
SUCH  COMBINATION,  THE  EXERCISE  PRICE  IN  EFFECT  IMMEDIATELY  PRIOR TO SUCH
COMBINATION WILL BE PROPORTIONATELY INCREASED.

                  ADJUSTMENT  IN NUMBER OF SHARES.  UPON EACH  ADJUSTMENT OF THE
EXERCISE  PRICE  PURSUANT TO THE  PROVISIONS OF THIS  PARAGRAPH 4, THE NUMBER OF
SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE OF THIS WARRANT SHALL BE ADJUSTED
BY MULTIPLYING A NUMBER EQUAL TO THE EXERCISE PRICE IN EFFECT  IMMEDIATELY PRIOR
TO SUCH  ADJUSTMENT  BY THE  NUMBER  OF SHARES OF  COMMON  STOCK  ISSUABLE  UPON
EXERCISE OF THIS WARRANT  IMMEDIATELY  PRIOR TO SUCH ADJUSTMENT AND DIVIDING THE
PRODUCT SO OBTAINED BY THE ADJUSTED EXERCISE PRICE.

                  CONSOLIDATION, MERGER OR SALE. IN CASE OF ANY CONSOLIDATION OF
THE COMPANY  WITH,  OR MERGER OF THE COMPANY INTO ANY OTHER  CORPORATION,  OR IN
CASE OF ANY SALE OR CONVEYANCE OF ALL OR SUBSTANTIALLY  ALL OF THE ASSETS OF THE
COMPANY  OTHER THAN IN  CONNECTION  WITH A PLAN OF COMPLETE  LIQUIDATION  OF THE
COMPANY,  THEN  AS  A  CONDITION  OF  SUCH  CONSOLIDATION,  MERGER  OR  SALE  OR
CONVEYANCE,  ADEQUATE  PROVISION WILL BE MADE WHEREBY THE HOLDER OF THIS WARRANT
WILL HAVE THE RIGHT TO ACQUIRE AND RECEIVE UPON EXERCISE OF THIS WARRANT IN LIEU
OF THE  SHARES OF  COMMON  STOCK  IMMEDIATELY  THERETOFORE  ACQUIRABLE  UPON THE
EXERCISE OF THIS WARRANT,  SUCH SHARES OF STOCK,  SECURITIES OR ASSETS AS MAY BE
ISSUED OR PAYABLE  WITH  RESPECT TO OR IN  EXCHANGE  FOR THE NUMBER OF SHARES OF
COMMON STOCK IMMEDIATELY  THERETOFORE ACQUIRABLE AND RECEIVABLE UPON EXERCISE OF
THIS  WARRANT HAD SUCH  CONSOLIDATION,  MERGER OR SALE OR  CONVEYANCE  NOT TAKEN
PLACE. IN ANY SUCH CASE, THE COMPANY WILL MAKE  APPROPRIATE  PROVISION TO INSURE


                                       74
<PAGE>

THAT THE PROVISIONS OF THIS PARAGRAPH 4 HEREOF WILL  THEREAFTER BE APPLICABLE AS
NEARLY AS MAY BE IN  RELATION  TO ANY SHARES OF STOCK OR  SECURITIES  THEREAFTER
DELIVERABLE  UPON THE EXERCISE OF THIS WARRANT.  THE COMPANY WILL NOT EFFECT ANY
CONSOLIDATION,  MERGER OR SALE OR  CONVEYANCE  UNLESS PRIOR TO THE  CONSUMMATION
THEREOF,  THE  SUCCESSOR  CORPORATION  (IF OTHER  THAN THE  COMPANY)  ASSUMES BY
WRITTEN INSTRUMENT THE OBLIGATIONS UNDER THIS PARAGRAPH 4 AND THE OBLIGATIONS TO
DELIVER TO THE HOLDER OF THIS WARRANT SUCH SHARES OF STOCK, SECURITIES OR ASSETS
AS, IN ACCORDANCE WITH THE FOREGOING  PROVISIONS,  THE HOLDER MAY BE ENTITLED TO
ACQUIRE.

                  DISTRIBUTION  OF ASSETS.  IN CASE THE COMPANY SHALL DECLARE OR
MAKE ANY DISTRIBUTION OF ITS ASSETS  (INCLUDING CASH) TO HOLDERS OF COMMON STOCK
AS A PARTIAL  LIQUIDATING  DIVIDEND,  BY WAY OF RETURN OF CAPITAL OR  OTHERWISE,
THEN,  AFTER THE DATE OF RECORD FOR  DETERMINING  SHAREHOLDERS  ENTITLED TO SUCH
DISTRIBUTION,  BUT PRIOR TO THE DATE OF DISTRIBUTION, THE HOLDER OF THIS WARRANT
SHALL BE ENTITLED  UPON  EXERCISE OF THIS WARRANT FOR THE PURCHASE OF ANY OR ALL
OF THE SHARES OF COMMON  STOCK  SUBJECT  HERETO,  TO RECEIVE  THE AMOUNT OF SUCH
ASSETS  WHICH  WOULD HAVE BEEN  PAYABLE TO THE HOLDER HAD SUCH  HOLDER  BEEN THE
HOLDER OF SUCH SHARES OF COMMON  STOCK ON THE RECORD DATE FOR THE  DETERMINATION
OF SHAREHOLDERS ENTITLED TO SUCH DISTRIBUTION.

                  NOTICE OF  ADJUSTMENT.  UPON THE OCCURRENCE OF ANY EVENT WHICH
REQUIRES ANY ADJUSTMENT OF THE EXERCISE PRICE,  THEN, AND IN EACH SUCH CASE, THE
COMPANY SHALL GIVE NOTICE  THEREOF TO THE HOLDER OF THIS  WARRANT,  WHICH NOTICE
SHALL STATE THE EXERCISE PRICE  RESULTING FROM SUCH  ADJUSTMENT AND THE INCREASE
OR  DECREASE  IN THE NUMBER OF  WARRANT  SHARES  PURCHASABLE  AT SUCH PRICE UPON
EXERCISE,  SETTING FORTH IN REASONABLE  DETAIL THE METHOD OF CALCULATION AND THE
FACTS UPON WHICH SUCH CALCULATION IS BASED.  THE CHIEF FINANCIAL  OFFICER OF THE
COMPANY SHALL CERTIFY SUCH CALCULATION.

                  MINIMUM  ADJUSTMENT  OF EXERCISE  PRICE.  NO ADJUSTMENT OF THE
EXERCISE  PRICE SHALL BE MADE IN AN AMOUNT OF LESS THAN 1% OF THE EXERCISE PRICE
IN EFFECT AT THE TIME SUCH ADJUSTMENT IS OTHERWISE  REQUIRED TO BE MADE, BUT ANY
SUCH LESSER  ADJUSTMENT  SHALL BE CARRIED  FORWARD AND SHALL BE MADE AT THE TIME
AND  TOGETHER  WITH THE NEXT  SUBSEQUENT  ADJUSTMENT  WHICH,  TOGETHER  WITH ANY
ADJUSTMENTS  SO  CARRIED  FORWARD,  SHALL  AMOUNT  TO NOT  LESS  THAN 1% OF SUCH
EXERCISE PRICE.

                  NO FRACTIONAL SHARES. NO FRACTIONAL SHARES OF COMMON STOCK ARE
TO BE ISSUED UPON THE EXERCISE OF THIS WARRANT, BUT THE COMPANY SHALL PAY A CASH
ADJUSTMENT IN RESPECT OF ANY FRACTIONAL  SHARE WHICH WOULD OTHERWISE BE ISSUABLE
IN AN AMOUNT EQUAL TO THE SAME FRACTION OF THE MARKET PRICE OF A SHARE OF COMMON
STOCK ON THE DATE OF SUCH EXERCISE.

                  OTHER NOTICES.  IN CASE AT ANY TIME:
                  -------------

     the Company  shall  declare any dividend  upon the Common Stock  payable in
shares of stock of any class or make any other distribution (including dividends
or distributions payable in cash out of retained earnings) to the holders of the
Common Stock;

     the  Company  shall offer for  subscription  pro rata to the holders of the
Common Stock any additional shares of stock of any class or other rights;

     there   shall  be  any   capital   reorganization   of  the   Company,   or
reclassification  of the Common Stock, or consolidation or merger of the Company
with or  into,  or sale of all or  substantially  all  its  assets  to,  another
corporation or entity; or



                                       75
<PAGE>

     there shall be a  voluntary  or  involuntary  dissolution,  liquidation  or
winding up of the Company;

then,  in each such case,  the Company  shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for  determining  the holders of Common Stock entitled to receive
any such dividend,  distribution,  or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such  reorganization,
reclassification,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding-up  and (b) in the  case of any such  reorganization,  reclassification,
consolidation,  merger, sale, dissolution,  liquidation or winding-up, notice of
the date (or,  if not then  known,  a  reasonable  approximation  thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or  other  securities  or  property   deliverable   upon  such   reorganization,
reclassification,  consolidation,  merger, sale,  dissolution,  liquidation,  or
winding-up,  as the case  may be.  Such  notice  shall be given at least 30 days
prior to the record date or the date on which the Company's  books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings  referred to in clauses (i), (ii),  (iii)
and (iv) above.

                  CERTAIN EVENTS.  IF ANY EVENT OCCURS OF THE TYPE  CONTEMPLATED
BY THE ADJUSTMENT  PROVISIONS OF THIS PARAGRAPH 4 BUT NOT EXPRESSLY PROVIDED FOR
BY SUCH  PROVISIONS,  THE COMPANY  WILL GIVE NOTICE OF SUCH EVENT AS PROVIDED IN
PARAGRAPH  4(G)  HEREOF,  AND THE  COMPANY'S  BOARD OF  DIRECTORS  WILL  MAKE AN
APPROPRIATE  ADJUSTMENT IN THE EXERCISE PRICE AND THE NUMBER OF SHARES OF COMMON
STOCK  ACQUIRABLE UPON EXERCISE OF THIS WARRANT SO THAT THE RIGHTS OF THE HOLDER
SHALL BE NEITHER ENHANCED NOR DIMINISHED BY SUCH EVENT.

                  CERTAIN DEFINITIONS.

                           "COMMON  STOCK  DEEMED  OUTSTANDING"  shall  mean the
number of shares of Common Stock actually outstanding (not
including shares of Common Stock held in the treasury of the Company),  plus (x)
pursuant to  Paragraph  4(b)(i)  hereof,  the maximum  total number of shares of
Common  Stock  issuable  upon the  exercise of  Options,  as of the date of such
issuance  or  grant of such  Options,  if any,  and (y)  pursuant  to  Paragraph
4(b)(ii)  hereof,  the maximum  total number of shares of Common Stock  issuable
upon  conversion  or  exchange  of  Convertible  Securities,  as of the  date of
issuance of such Convertible Securities, if any.

                           "MARKET PRICE," as of any date, (i) means the average
of the last reported sale prices for the shares of
Common  Stock on the OTCBB for the five (5) Trading Days  immediately  preceding
such date as reported by  Bloomberg,  or (ii) if the OTCBB is not the  principal
trading market for the shares of Common Stock,  the average of the last reported
sale prices on the principal trading market for the Common Stock during the same
period as reported by  Bloomberg,  or (iii) if market value cannot be calculated
as of such date on any of the  foregoing  bases,  the Market  Price shall be the
fair market  value as  reasonably  determined  in good faith by (a) the Board of
Directors  of the  Company  or, at the option of a  majority-in-interest  of the
holders of the  outstanding  Warrants by (b) an independent  investment  bank of
nationally  recognized  standing in the valuation of  businesses  similar to the
business of the  corporation.  The manner of determining the Market Price of the
Common Stock set forth in the foregoing  definition  shall apply with respect to
any other security in respect of which a  determination  as to market value must
be made hereunder.

                           "COMMON  STOCK," for  purposes of this  Paragraph  4,
includes the Common Stock, par value $0.001 per share,
and any  additional  class of stock of the Company  having no  preference  as to
dividends or distributions on liquidation,  provided that the shares purchasable
pursuant to this Warrant shall  include only shares of Common  Stock,  par value


                                       76
<PAGE>

$0.001 per share,  in respect of which this  Warrant is  exercisable,  or shares
resulting from any  subdivision  or combination of such Common Stock,  or in the
case of any reorganization, reclassification,  consolidation, merger, or sale of
the  character  referred  to in  Paragraph  4(e)  hereof,  the  stock  or  other
securities or property provided for in such Paragraph.

         ISSUE TAX. The  issuance of  certificates  for Warrant  Shares upon the
exercise  of this  Warrant  shall be made  without  charge to the holder of this
Warrant or such shares for any issuance  tax or other costs in respect  thereof,
provided  that the  Company  shall not be  required  to pay any tax which may be
payable in respect of any transfer  involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

         NO RIGHTS OR  LIABILITIES  AS A  SHAREHOLDER.  This  Warrant  shall not
entitle the holder  hereof to any voting rights or other rights as a shareholder
of the  Company.  No provision of this  Warrant,  in the absence of  affirmative
action by the holder hereof to purchase Warrant Shares,  and no mere enumeration
herein of the rights or privileges of the holder hereof,  shall give rise to any
liability  of such  holder for the  Exercise  Price or as a  shareholder  of the
Company,  whether  such  liability is asserted by the Company or by creditors of
the Company.

         TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.

                  RESTRICTION  ON TRANSFER.  THIS WARRANT AND THE RIGHTS GRANTED
TO THE HOLDER HEREOF ARE  TRANSFERABLE,  IN WHOLE OR IN PART,  UPON SURRENDER OF
THIS WARRANT,  TOGETHER WITH A PROPERLY EXECUTED ASSIGNMENT IN THE FORM ATTACHED
HERETO,  AT THE OFFICE OR AGENCY OF THE COMPANY  REFERRED TO IN  PARAGRAPH  7(E)
BELOW,  PROVIDED,  HOWEVER,  THAT ANY TRANSFER OR ASSIGNMENT SHALL BE SUBJECT TO
THE  CONDITIONS  SET  FORTH  IN  PARAGRAPH  7(F)  HEREOF  AND TO THE  APPLICABLE
PROVISIONS OF THE  SECURITIES  PURCHASE  AGREEMENT.  UNTIL DUE  PRESENTMENT  FOR
REGISTRATION OF TRANSFER ON THE BOOKS OF THE COMPANY,  THE COMPANY MAY TREAT THE
REGISTERED  HOLDER HEREOF AS THE OWNER AND HOLDER  HEREOF FOR ALL PURPOSES,  AND
THE COMPANY SHALL NOT BE AFFECTED BY ANY NOTICE TO THE CONTRARY. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE REGISTRATION  RIGHTS DESCRIBED IN
PARAGRAPH  8 ARE  ASSIGNABLE  ONLY IN  ACCORDANCE  WITH THE  PROVISIONS  OF THAT
CERTAIN  REGISTRATION  RIGHTS  AGREEMENT OF EVEN DATE  HEREWITH BY AND AMONG THE
COMPANY AND THE OTHER SIGNATORIES THERETO (THE "REGISTRATION RIGHTS AGREEMENT").

                  WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. THIS WARRANT
IS EXCHANGEABLE, UPON THE SURRENDER HEREOF BY THE HOLDER HEREOF AT THE OFFICE OR
AGENCY OF THE COMPANY  REFERRED TO IN PARAGRAPH 7(E) BELOW,  FOR NEW WARRANTS OF
LIKE TENOR  REPRESENTING  IN THE  AGGREGATE  THE RIGHT TO PURCHASE THE NUMBER OF
SHARES  OF  COMMON  STOCK  WHICH MAY BE  PURCHASED  HEREUNDER,  EACH OF SUCH NEW
WARRANTS TO  REPRESENT  THE RIGHT TO PURCHASE  SUCH NUMBER OF SHARES AS SHALL BE
DESIGNATED BY THE HOLDER HEREOF AT THE TIME OF SUCH SURRENDER.

                  REPLACEMENT  OF WARRANT.  UPON RECEIPT OF EVIDENCE  REASONABLY
SATISFACTORY TO THE COMPANY OF THE LOSS,  THEFT,  DESTRUCTION,  OR MUTILATION OF
THIS  WARRANT AND, IN THE CASE OF ANY SUCH LOSS,  THEFT,  OR  DESTRUCTION,  UPON
DELIVERY OF AN INDEMNITY AGREEMENT REASONABLY SATISFACTORY IN FORM AND AMOUNT TO
THE  COMPANY,  OR,  IN THE  CASE OF ANY  SUCH  MUTILATION,  UPON  SURRENDER  AND
CANCELLATION  OF THIS  WARRANT,  THE COMPANY,  AT ITS EXPENSE,  WILL EXECUTE AND
DELIVER, IN LIEU THEREOF, A NEW WARRANT OF LIKE TENOR.

                  CANCELLATION;  PAYMENT OF EXPENSES. UPON THE SURRENDER OF THIS
WARRANT IN CONNECTION WITH ANY TRANSFER, EXCHANGE, OR REPLACEMENT AS PROVIDED IN
THIS  PARAGRAPH 7, THIS WARRANT SHALL BE PROMPTLY  CANCELED BY THE COMPANY.  THE
COMPANY SHALL PAY ALL TAXES (OTHER THAN SECURITIES TRANSFER TAXES) AND ALL OTHER
EXPENSES  (OTHER  THAN  LEGAL  EXPENSES,  IF  ANY,  INCURRED  BY THE  HOLDER  OR
TRANSFEREES) AND CHARGES PAYABLE IN CONNECTION WITH THE PREPARATION,  EXECUTION,
AND DELIVERY OF WARRANTS PURSUANT TO THIS PARAGRAPH 7.



                                       77
<PAGE>

                  REGISTER.   THE  COMPANY  SHALL  MAINTAIN,  AT  ITS  PRINCIPAL
EXECUTIVE  OFFICES  (OR SUCH  OTHER  OFFICE OR AGENCY OF THE  COMPANY  AS IT MAY
DESIGNATE BY NOTICE TO THE HOLDER HEREOF), A REGISTER FOR THIS WARRANT, IN WHICH
THE COMPANY  SHALL  RECORD THE NAME AND ADDRESS OF THE PERSON IN WHOSE NAME THIS
WARRANT HAS BEEN ISSUED,  AS WELL AS THE NAME AND ADDRESS OF EACH TRANSFEREE AND
EACH PRIOR OWNER OF THIS WARRANT.

                  EXERCISE OR TRANSFER WITHOUT REGISTRATION.  IF, AT THE TIME OF
THE SURRENDER OF THIS WARRANT IN  CONNECTION  WITH ANY  EXERCISE,  TRANSFER,  OR
EXCHANGE OF THIS  WARRANT,  THIS WARRANT (OR, IN THE CASE OF ANY  EXERCISE,  THE
WARRANT SHARES ISSUABLE HEREUNDER), SHALL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT") AND UNDER  APPLICABLE  STATE
SECURITIES OR BLUE SKY LAWS, THE COMPANY MAY REQUIRE, AS A CONDITION OF ALLOWING
SUCH EXERCISE,  TRANSFER, OR EXCHANGE, (I) THAT THE HOLDER OR TRANSFEREE OF THIS
WARRANT,  AS THE CASE MAY BE,  FURNISH  TO THE  COMPANY  A  WRITTEN  OPINION  OF
COUNSEL,  WHICH OPINION AND COUNSEL ARE ACCEPTABLE TO THE COMPANY, TO THE EFFECT
THAT SUCH EXERCISE, TRANSFER, OR EXCHANGE MAY BE MADE WITHOUT REGISTRATION UNDER
SAID ACT AND UNDER  APPLICABLE  STATE SECURITIES OR BLUE SKY LAWS, (II) THAT THE
HOLDER OR TRANSFEREE  EXECUTE AND DELIVER TO THE COMPANY AN INVESTMENT LETTER IN
FORM AND SUBSTANCE ACCEPTABLE TO THE COMPANY AND (III) THAT THE TRANSFEREE BE AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A) PROMULGATED UNDER THE SECURITIES
ACT; PROVIDED THAT NO SUCH OPINION, LETTER OR STATUS AS AN "ACCREDITED INVESTOR"
SHALL BE REQUIRED IN CONNECTION  WITH A TRANSFER  PURSUANT TO RULE 144 UNDER THE
SECURITIES  ACT.  THE FIRST  HOLDER OF THIS  WARRANT,  BY TAKING AND HOLDING THE
SAME,  REPRESENTS TO THE COMPANY THAT SUCH HOLDER IS ACQUIRING  THIS WARRANT FOR
INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF.

         REGISTRATION  RIGHTS.  The initial  holder of this Warrant (and certain
assignees  thereof) is entitled  to the benefit of such  registration  rights in
respect of the Warrant Shares as are set forth in Section 2 of the  Registration
Rights Agreement.

         NOTICES. All notices,  requests,  and other communications  required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered,  or shall be sent by certified
or registered mail or by recognized overnight mail courier,  postage prepaid and
addressed,  to such holder at the address  shown for such holder on the books of
the  Company,  or at such  other  address as shall  have been  furnished  to the
Company  by  notice  from  such  holder.  All  notices,   requests,   and  other
communications  required or permitted to be given or delivered  hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 1325 Howard Avenue, Suite
#422,  Burlingame,  California 94010,  Attention:  President and Chief Operating
Officer,  or at such other address as shall have been furnished to the holder of
this Warrant by notice from the  Company.  Any such  notice,  request,  or other
communication  may be sent by facsimile,  but shall in such case be subsequently
confirmed by a writing  personally  delivered or sent by certified or registered
mail or by recognized  overnight  mail courier as provided  above.  All notices,
requests,  and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for  purposes of this  Paragraph  9, or, if mailed by
registered or certified  mail or with a recognized  overnight  mail courier upon
deposit with the United States Post Office or such  overnight  mail courier,  if
postage is prepaid and the mailing is properly addressed, as the case may be.

         GOVERNING  LAW.  THIS  WARRANT  SHALL  BE  ENFORCED,  GOVERNED  BY  AND
CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF CALIFORNIA  APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED  ENTIRELY WITHIN SUCH STATE,  WITHOUT REGARD
TO THE  PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE  JURISDICTION  OF THE  UNITED  STATES  FEDERAL  COURTS  LOCATED IN LOS


                                       78
<PAGE>

ANGELES,  CALIFORNIA WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS  CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE
THAT  SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY  OTHER  MANNER   PERMITTED  BY  LAW.   BOTH  PARTIES   AGREE  THAT  A  FINAL
NON-APPEALABLE  JUDGMENT IN ANY SUCH SUIT OR PROCEEDING  SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER  JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE  ARISING  UNDER
THIS  WARRANT  SHALL  BE  RESPONSIBLE  FOR  ALL  FEES  AND  EXPENSES,  INCLUDING
ATTORNEYS'  FEES,  INCURRED  BY THE  PREVAILING  PARTY IN  CONNECTION  WITH SUCH
DISPUTE.

         MISCELLANEOUS.

                  AMENDMENTS. AN INSTRUMENT IN WRITING SIGNED BY THE COMPANY AND
THE HOLDER HEREOF HEREOF MAY ONLY AMEND THIS WARRANT AND ANY PROVISION.

                  DESCRIPTIVE HEADINGS.  THE DESCRIPTIVE HEADINGS OF THE SEVERAL
PARAGRAPHS  OF THIS WARRANT ARE INSERTED  FOR  PURPOSES OF REFERENCE  ONLY,  AND
SHALL NOT AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE PROVISIONS HEREOF.

                  CASHLESS  EXERCISE.  NOTWITHSTANDING  ANYTHING TO THE CONTRARY
CONTAINED IN THIS WARRANT,  IF THE RESALE OF THE WARRANT SHARES BY THE HOLDER IS
NOT THEN REGISTERED  PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE
SECURITIES ACT, THIS WARRANT MAY BE EXERCISED BY  PRESENTATION  AND SURRENDER OF
THIS WARRANT TO THE COMPANY AT ITS  PRINCIPAL  EXECUTIVE  OFFICES WITH A WRITTEN
NOTICE OF THE  HOLDER'S  INTENTION  TO EFFECT A CASHLESS  EXERCISE,  INCLUDING A
CALCULATION  OF THE  NUMBER OF SHARES  OF  COMMON  STOCK TO BE ISSUED  UPON SUCH
EXERCISE IN  ACCORDANCE  WITH THE TERMS HEREOF (A "CASHLESS  EXERCISE").  IN THE
EVENT OF A CASHLESS EXERCISE,  IN LIEU OF PAYING THE EXERCISE PRICE IN CASH, THE
HOLDER  SHALL  SURRENDER  THIS WARRANT FOR THAT NUMBER OF SHARES OF COMMON STOCK
DETERMINED  BY  MULTIPLYING  THE  NUMBER  OF  WARRANT  SHARES  TO WHICH IT WOULD
OTHERWISE  BE  ENTITLED  BY A  FRACTION,  THE  NUMERATOR  OF WHICH  SHALL BE THE
DIFFERENCE  BETWEEN THE THEN CURRENT  MARKET PRICE PER SHARE OF THE COMMON STOCK
AND THE EXERCISE  PRICE,  AND THE DENOMINATOR OF WHICH SHALL BE THE THEN CURRENT
MARKET PRICE PER SHARE OF COMMON STOCK. FOR EXAMPLE, IF THE HOLDER IS EXERCISING
100,000  WARRANTS WITH A PER WARRANT EXERCISE PRICE OF $0.75 PER SHARE THROUGH A
CASHLESS  EXERCISE  WHEN THE COMMON  STOCK'S  CURRENT  MARKET PRICE PER SHARE IS
$2.00 PER SHARE, THEN UPON SUCH CASHLESS EXERCISE THE HOLDER WILL RECEIVE 62,500
SHARES OF COMMON STOCK.

                  REMEDIES.  THE COMPANY ACKNOWLEDGES THAT A BREACH BY IT OF ITS
OBLIGATIONS  HEREUNDER WILL CAUSE  IRREPARABLE HARM TO THE HOLDER,  BY VITIATING
THE INTENT AND PURPOSE OF THE TRANSACTION CONTEMPLATED HEREBY. ACCORDINGLY,  THE
COMPANY  ACKNOWLEDGES  THAT THE  REMEDY AT LAW FOR A BREACH  OF ITS  OBLIGATIONS
UNDER THIS WARRANT WILL BE  INADEQUATE  AND AGREES,  IN THE EVENT OF A BREACH OR
THREATENED  BREACH BY THE COMPANY OF THE  PROVISIONS OF THIS  WARRANT,  THAT THE
HOLDER SHALL BE ENTITLED,  IN ADDITION TO ALL OTHER AVAILABLE REMEDIES AT LAW OR
IN EQUITY, AND IN ADDITION TO THE PENALTIES  ASSESSABLE HEREIN, TO AN INJUNCTION
OR INJUNCTIONS RESTRAINING,  PREVENTING OR CURING ANY BREACH OF THIS WARRANT AND
TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS THEREOF,  WITHOUT THE NECESSITY
OF SHOWING ECONOMIC LOSS AND WITHOUT ANY BOND OR OTHER SECURITY BEING REQUIRED.



                                       79
<PAGE>



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]










                                       80
<PAGE>


                  IN WITNESS WHEREOF,  the Company has caused this Warrant to be
signed by its duly authorized officer.

                               FAMOUS FIXINS, INC.

                                   /s/ Michael Rudolph
                         By: _______________________________
                                Michael Rudolph
                                Chief Executive Officer


Dated as of December 27, 2002



<PAGE>


                           FORM OF EXERCISE AGREEMENT



                         Dated:  ________ __, 200_



To:      Famous Fixins, Inc.





         The  undersigned,  pursuant to the  provisions  set forth in the within
Warrant,  hereby agrees to purchase  ________  shares of Common Stock covered by
such  Warrant,  and makes  payment  herewith in full  therefore at the price per
share provided by such Warrant in cash or by certified or official bank check in
the amount of, or, if the resale of such Common Stock by the  undersigned is not
currently registered pursuant to an effective  registration  statement under the
Securities  Act of 1933, as amended,  by surrender of  securities  issued by the
Company  (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________.  Please issue a certificate  or  certificates  for
such shares of Common  Stock in the name of and pay any cash for any  fractional
share to:



                                     Name:    ______________________________


                                     Signature:
                                     Address:____________________________
                                              -----------------------------


         Note:       The above signature should correspond exactly with the
                     name on the face of the within Warrant, if applicable.


and,  if said  number  of shares of  Common  Stock  shall not be all the  shares
purchasable under the within Warrant,  a new Warrant is to be issued in the name
of said undersigned  covering the balance of the shares  purchasable  thereunder
less any fraction of a share paid in cash.




                                       81
<PAGE>


                               FORM OF ASSIGNMENT





         FOR  VALUE  RECEIVED,   the  undersigned  hereby  sells,  assigns,  and
transfers  all the  rights of the  undersigned  under the within  Warrant,  with
respect to the number of shares of Common Stock covered thereby set forth herein
below, to:


NAME OF ASSIGNEE                    ADDRESS               NO OF SHARES







,      and      hereby      irrevocably       constitutes      and      appoints
___________________________________  as agent and  attorney-in-fact  to transfer
said Warrant on the books of the  within-named  corporation,  with full power of
substitution in the premises.



Dated:   ________ __, 200_



In the presence of:                        ______________________________

                                      Name:______________________________


                       Signature:_________________________
                   Title of Signing Officer or Agent (if any):
                                                       ------------------------
                                     Address: ______________________________
                                                       ------------------------


  Note:    The above signature should  correspond  exactly with the name on
           the face of the within Warrant, if applicable.




                                       82


<PAGE>