WARRANT AGREEMENT

                                     Between

              IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP.,
                           IMPERIAL CAPITAL GROUP, LLC

                                       And

                          ON STAGE ENTERTAINMENT, INC.
                           Dated as of March 13, 1998



THE WARRANTS AND WARRANT SECURITIES TO BE RECEIVED UPON EXERCISE OF THE WARRANTS
HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"SECURITIES  ACT"), OR QUALIFIED UNDER ANY STATE  SECURITIES  LAWS. THE WARRANTS
AND WARRANT SECURITIES,  AS THE CASE MAY BE, MAY NOT BE OFFERED,  SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED,  WHETHER OR NOT FOR CONSIDERATION, IN THE
ABSENCE OF (1) AN EFFECTIVE  REGISTRATION  STATEMENT AND QUALIFICATION IN EFFECT
WITH RESPECT TO THE WARRANTS AND WARRANT  SECURITIES,  AS THE CASE MAY BE, UNDER
THE  SECURITIES  ACT AND UNDER ANY APPLICABLE  STATE  SECURITIES  LAWS OR (2) AN
EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION.


<PAGE>


                                WARRANT AGREEMENT


         THIS WARRANT  AGREEMENT (this  "Agreement") is dated as of the 13th day
of March, 1998, by and among ON STAGE ENTERTAINMENT, INC., a Nevada corporation,
IMPERIAL CREDIT COMMERCIAL  MORTGAGE  INVESTMENT  CORP., a Maryland  corporation
("ICCMIC")  and IMPERIAL  CAPITAL  GROUP,  LLC, a California  limited  liability
company ("ICLLC").

         WHEREAS,  the  Company  has agreed to grant to ICCMIC and ICLLC  common
stock  warrants in the form  attached as Exhibit A hereto  (the  "Warrants")  to
acquire  shares of the Company's  Common Stock,  $.01 par value per share.  This
Agreement  sets forth  certain  rights and  obligations  of the  Company and the
Holders with respect to the Warrants.

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
covenants,   representations,   warranties  and  agreements  contained  in  this
Agreement, the parties hereto agree as follows:

                                 I. DEFINITIONS

         Section I.1 Defined  Terms.  As used in this  Agreement,  the following
capitalized terms shall have the meanings  respectively  assigned to them below,
which meanings  shall be applicable  equally to the singular and plural forms of
the terms so defined.

         "Common Stock" shall mean the common stock, par value $.01, of the 
Company.

         "Common Stock Equivalents" shall mean all options,  warrants (including
the Warrants), convertible securities, securities and other rights (in each case
whether now existing or hereafter issued or arising) to acquire from the Company
shares of Common  Stock  (without  regard to  whether  such  options,  warrants,
convertible  securities,  securities  and other  rights  are then  exchangeable,
exercisable  or  convertible  in  full,  in part or at all),  including  without
limitation, those listed on Schedule A hereto.

         "Company"   shall  mean  On  Stage   Entertainment,   Inc.,   a  Nevada
corporation, and any permitted successor or assign.

         "Dividend"  means,  as to any  Person  (as  hereinafter  defined),  any
declaration or payment of any dividend  (other than a stock dividend) on, or the
making of any pro rata distribution,  loan, advance, or investment to or in, the
holder of any shares of capital stock of such Person.

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended, and the rules and regulations promulgated thereunder, and any successor
provisions thereto.

         "Exercise  Price"  shall have the meaning  given in each  Warrant.  The
Exercise Price and the number of shares of Common Stock purchasable  pursuant to
the Warrants shall be subject to adjustment from time to time as hereinafter set
forth in Article V hereof,  provided,  however, that no adjustment shall be made
unless by reason of the  happening of any one or more of the events  hereinafter
specified,  the Exercise Price then in effect shall be changed by one percent or
more,  but any  adjustment  that would  otherwise be required to be made but for
this  provision  shall be carried  forward  and shall be made at the time of and
together with any subsequent  adjustment which,  together with any adjustment or
adjustments so carried  forward,  amounts to one percent or more, or immediately
prior to the exercise of any Warrants if prior thereto.

         "Exercise  Quantity"  shall mean the number of shares of Common  Stock,
determined  from time to time  taking into  account  all shares of Common  Stock
theretofore  issued upon exercise of the Warrants,  required to be issued by the
Company to the Holders of the Warrants. Exercise Quantity shall have the meaning
given in each Warrant,  and may be adjusted  from time to time,  pursuant to the
provisions of the Warrants and this Agreement.
<PAGE>


         "Fair Value" as of a particular  date shall mean the last sale price of
the Common Stock as reported on a national  securities exchange or on the NASDAQ
National  Market  System  or  SmallCap  Market,  or,  if a last  sale  reporting
quotation  is not  available  for the Common  Stock,  the average of the bid and
asked  prices of the  Common  Stock as  reported  by NASDAQ or on the NASD's OTC
Bulletin  Board  Service,  or if not so  reported,  as  listed  in the  National
Quotation Bureau,  Inc.'s "Pink Sheets." If such quotations are unavailable,  or
with  respect to other  appropriate  security,  property,  assets,  business  or
entity,  "Fair  Value" shall mean the fair value of such item as  determined  by
mutual  agreement  reached by the Holder  and the  Company  or, in the event the
parties are unable to agree,  an opinion of an  independent  investment  banking
firm or firms in accordance  with the  procedures  set forth in the  immediately
succeeding three paragraphs.  Notwithstanding  the foregoing,  if as part of the
consideration  in a  transaction  in which the  Company  acquires,  directly  or
indirectly,  all or  substantially  all of the assets or capital  stock or other
evidence of ownership of the equity of a Person,  the Company  issues  shares of
Common Stock as to which, for purposes of recording  acquisition  goodwill only,
generally accepted accounting principles require the Company to record the value
of the Common Stock so issued at a value that otherwise  would not be Fair Value
hereunder,  such  acquisition  goodwill will be added to the value  recorded for
such shares of Common  Stock to  determine  Fair Value for the  issuance of such
shares of Common Stock hereunder.

         In the case of any event  which  gives rise to a  requirement  that the
Company  and  the  Holder  mutually  determine  "Fair  Value"  pursuant  to this
Agreement,  the Company shall be responsible for initiating the process by which
Fair Value shall be  determined  as promptly  as  practicable,  but in any event
within sixty (60) days following  such event and if the procedures  contemplated
herein in  connection  with  determining  Fair Value have not been complied with
fully,  then any such  determination  of Fair  Value  for an),  purpose  of this
Agreement  shall be deemed to be preliminary  and subject to adjustment  pending
full compliance with such procedures.  Upon the occurrence of an event requiring
the  determination  of Fair Value,  the Company  shall give the Holder(s) of the
Warrants  notice of such event,  and the Company and the Holders shall engage in
direct good faith discussions to arrive at a mutually agreeable determination of
Fair Value.

         In the event the Company and the Holder(s) (as hereinafter defined) are
unable to arrive at a mutually agreeable  determination  within thirty (30) days
of the notice,  the Company and the Holder(s) of the Warrants (who, if more than
one,  shall agree among  themselves by a majority)  shall each retain a separate
independent  investment  banking firm of national  reputation.  Such firms shall
jointly determine the Fair Value of the security,  property, assets, business or
entity,  as the case may be, in question and deliver their opinion in writing to
the Company and to such Holder within thirty (30) days of their retention. In no
event shall the  marketability,  or lack thereof,  or lack of  registration of a
security be a factor in determining the "Fair Value" of such security.

         If such firms cannot jointly make each determination within such 30-day
period,  then,  unless  otherwise  directed by  agreement of the Company and the
Holder(s)  of a majority  or more of the  Warrants,  such  firms,  in their sole
discretion,  shall choose  another  independent  investment  banking firm of the
Company or such Holder(s),  which firm shall make such  determination and render
such an opinion.  In either case, the  determination so made shall be conclusive
and  binding on the  Company and such  Holder(s).  The fees and  expenses of all
investment  banking firms retained  pursuant to this provision shall be borne by
the Company.

         "Funding  Failure" shall mean the failure of ICCMIC to fund at least $3
million of Additional  Loans (as defined in the Loan Agreement)  pursuant to and
in  accordance  with Section 11 of the Loan  Agreement,  other than because of a
breach by ICCMIC of its obligation, if any, to fund such Additional Loans.

         "Holder" or "Holders"  shall mean the Persons(s) then registered as the
owners of the Warrants or Warrant  Securities,  as the case may be, on the books
and records of the Company.

         "Loan Agreement" shall mean that certain Loan Agreement made as of this
13th day of March,  1998,  by and among Wild  Bills  California  Inc.,  a Nevada
corporation,  Blazing Piano's, Inc., a Nevada corporation, King Henry's, Inc., a
Nevada corporation and Fort Liberty, Inc., a Nevada corporation,  and ICCMIC, as
lender.

         "Person" shall mean any individual,  corporation,  partnership, limited
liability   company,   association,    joint-stock   company,   trust,   estate,
unincorporated  organization,  joint venture, court or governmental or political
subdivision or agency thereof.

         "Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated  thereunder,  and any successor provisions
thereto.
<PAGE>


         "Subsidiary"  of any Person  means (I) a  corporation,  association  or
other  business  entity of which more than 50% of the total  voting power of all
classes of the  outstanding  voting stock is owned,  directly or indirectly,  by
such  Person  or by one or more  other  Subsidiaries  of such  Person or by such
Person and one or more Subsidiaries  thereof,  (ii) any partnership (a) the sole
general  partner or the  managing  general  partner of which is such Person or a
Subsidiary  of such  Person or (b) the only  general  partners of which are such
Person or one or more  Subsidiaries of such Person (or any combination  thereof)
and (iii) any other  Person  not  described  in  clauses  (I) and (ii) above and
designated  by the Board of Directors  of such Person as a  Subsidiary  in which
such Person, or one or more other Subsidiaries of such Person or such Person and
one or more  other  Subsidiaries  thereof,  directly  or  indirectly,  owns  50%
ownership and the power, pursuant to a written contract or agreement,  to direct
the policies and management of the financial and other affairs thereof.

         "Warrant  Securities"  shall mean the shares of Common  Stock (or other
securities representing Common Stock) purchasable or purchased from time to time
under the  Warrants,  subject to  modification  and  adjustment  as  provided in
Article V hereof.

                                  II. WARRANTS

         The  Company   hereby   grants  to  ICCMIC,   for  good  and   valuable
consideration,  the receipt and sufficiency of which are hereby acknowledged,  a
Warrant substantially in the form attached as Exhibit A initially exercisable to
purchase an aggregate of 325,000 shares of common stock for an initial  Exercise
Price of $4.44 per  share.  The  Company  hereby  grants to ICLLC,  for good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged,  a Warrant  substantially in the form attached as Exhibit A hereto
initially exercisable to purchase an aggregate of 250,000 shares of Common Stock
at an Exercise Price of Common Stock for an initial  Exercise Price of $4.44 per
share. The Company further agrees that in the event that a Funding Failure shall
occur, the Company,  within five days of the occurrence of such Funding Failure,
shall grant to ICCMIC an additional  Warrant  substantially in the form attached
as Exhibit A hereto  initially  exercisable  to purchase an  aggregate of 25,000
shares of Common Stock at an exercise price equal to the Fair Value per share on
the date of any such grant  (such  number of shares  and  exercise  price  being
subject to adjustment at any time prior to issuance in accordance with the terms
of Article V hereof).  Holder and any  subsequent  Holder of the Warrants and of
Warrants  Securities  shall have the rights and obligations  provided for in the
Warrants and in this Agreement.

               III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company hereby represents and warrants as follows:

         (a) The execution and delivery of this  Agreement and the Warrants have
been duly and  properly  authorized  by all  requisite  corporate  action of the
Company  and its board of  directors,  and no  consent  other than that of Whale
Securities  Co.,  L.P.,  which  consent  has  been  obtained  is  required  as a
prerequisite to the validity,  enforceability  and performance of this Agreement
and the  Warrants  that has not been  obtained.  The  Company has the full legal
right,  power and  authority  to execute  and  deliver  this  Agreement  and the
Warrants and to perform its obligations  hereunder and  thereunder.  When issued
and  delivered  pursuant to this  Agreement,  the  Warrants  will have been duly
executed.  issued and delivered and will  constitute  valid and legally  binding
obligations  of the Company  and the Holder  will be  entitled  to the  benefits
provided herein and therein.

         (b) The Company is not a party to or otherwise  subject to any contract
or  agreement  which  restricts  or  otherwise  affects  its right or ability to
execute and deliver this  Agreement or the Warrants or to perform any obligation
hereunder or thereunder (including, without limitation,  issuance of the Warrant
Securities)  except for those for which a consent or approval has been obtained.
Neither the  execution  or  delivery  of this  Agreement  or the  Warrants,  nor
compliance  therewith  (including  without  limitation,  issuance of the Warrant
Securities),  will conflict with or result in a breach of the terms,  conditions
or provisions of, or constitute a default under,  or result in any violation of,
or result in the creation of any material  lien upon any assets or properties of
the Company under, or require any consent,  approval, or other action by, notice
to or filing with any court or  government  agency or  division  pursuant to the
Articles of Incorporation or By-laws of the Company,  as currently in effect any
decree  or  order  of any  court  or  regulatory  authority,  any  award  of any
arbitrator, or any material agreement, instrument or law to which the Company is
subject or by which it or its assets or properties are bound.
<PAGE>

         (c) As of the date of this  Agreement,  without  giving  effect  to the
transaction  between the Company and Gedco USA,  Inc.  (and  certain  affiliates
thereof) and the issuances  contemplated  hereby the authorized capital stock of
the Company  consists of 25,000,000  shares of Common Stock,  6,584,480 of which
are currently issued and  outstanding,  and 1,000,000 shares of Preferred Stock,
none of which has been  designated or which is currently  issued or outstanding.
Other than the Warrants and as listed on Schedule A, there are no subscriptions,
Common  Stock  Equivalents,  preemptive  rights  or  other  rights  of any  kind
outstanding  for  the  purchase  of,  nor  any  securities  convertible  into or
exchangeable for, any Common Stock or Common Stock Equivalents.  The Company has
reserved for  issuance a  sufficient  number of shares of Common Stock to permit
the  exercise  in  full  of all of the  outstanding  Common  Stock  Equivalents,
including without limitation the Warrants,  and for any Common Stock Equivalents
or shares of Common  Stock which are  issuable,  but which have not been issued,
pursuant to any equity  incentive,  stock  option,  restricted  stock or similar
plan.

         (d) All of the  outstanding  shares of Common  Stock have been duly and
validly authorized and issued, are fully paid and non-assessable and were issued
in compliance with all applicable  federal and state securities law registration
requirements  (including,  without  limitation,  any  requirements  pursuant  to
Section 5 of the Securities Act), or pursuant to valid exemptions therefrom.

         (e)  Schedule  A contains a true and  correct  list of all  outstanding
Common Stock  Equivalents and the exercise or conversion price thereof.  Neither
the issuance or the  exercise of the  Warrants  will result in any change in the
exercise or conversion  price or the number of shares issuable upon the exercise
of any of the outstanding Common Stock Equivalents.

         (f) There are no restrictions upon the voting or transfer of any shares
of the Common Stock pursuant to the Company's Articles of Incorporation,  Bylaws
or other governing  documents or any agreement or other  instrument to which the
Company  is a party or by which  the  Company  is bound.  There  are no  voting,
trusts,  proxies or any other agreements or  understandings  with respect to the
voting of the capital stock of the Company to which the Company is a party or of
which it knows, should reasonably know or has received notice.

         (g) The Company  has filed all of the SEC Reports  required to be filed
by it. The SEC Reports and the Registration  Statement (i) were each prepared in
accordance  with, and at the time of filing  complied with, the  requirements of
all  applicable  rules  and  regulations  and (ii) did not at the time they were
filed contain any untrue  statement of material fact or omit to state a material
fact required to be stated therein,  or necessary in order to make the statement
therein,  in the light of the  circumstance  under  which  they were  made,  not
misleading.  Each of the  financial  statements  (including,  in each case,  any
related  notes  thereto)  contained  in the SEC  Reports  has been  prepared  in
accordance with generally accepted accounting  principals  consistently applied,
and each presents fairly the financial position of the Company at the respective
dates thereof and the consolidated results of its operations and changes in cash
flow for the periods  indicated,  except  that the  unaudited  interim  official
statements  were or are  subject to normal and  recurring  year-end  adjustments
which were not or are not expected to be material in amount. "SEC Reports" means
all forms, reports, statements and documents required to be filed by the Company
with the SEC since  August 14, 1 998,  The  "Registration  Statement"  means the
Registration  Statement on Form SB-2 initially  filed by the Company on April 7,
1997, as amended.

                                  IV. COVENANTS

         IV.1 Covenants of the Company.  The Company hereby covenants and agrees
that,  during  the  term of this  Agreement,  for so  long as any  Warrants  are
outstanding unless Holders of outstanding  Warrants issued to the Purchasers and
evidencing  two-thirds  of the  Warrants  then  outstanding  agree  otherwise in
writing:

         (a)  Each of the  Warrant  Securities  issued  and  delivered  upon the
exercise  of the  Warrants  and payment of the  Exercise  Price will be duly and
validly authorized and issued, will be fully paid and  non-assessable,  and will
not be  subject  to any  unpaid  tax of the  Company  or any lien  imposed on or
created by the Company, whether respecting their issuance to and purchase by the
Holder of the Warrants or  otherwise.  The Company will take all such actions as
may be  necessary to assure that all such  Warrant  Securities  may be so issued
without  violation  of any  applicable  law or  governmental  regulation  or any
requirements of any domestic  securities  exchange upon which Warrant Securities
may be listed.

         (b)  The  Company  shall  not  take  any  action,  including,   without
limitation,  amending its articles of incorporation or through a reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution,  issue  or  sale of
securities  or any  other  voluntary  action,  to  avoid  or seek to  avoid  the
observance  or  performance  of any of the terms of the  Warrant  or impair  the
ability of the Holder(s) to realize the full intended  economic  value  thereof,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such  actions as may be  necessary  or  appropriate  to
protect the rights of Holders against impairment.
<PAGE>


         (c) Upon the request of any Holder, the Company will at any time during
the period a Warrant is outstanding acknowledge in writing, in form satisfactory
to such Holder,  the continuing  validity of such Warrant and the obligations of
the Company thereunder and hereunder.

         (d) The  Company  shall  reserve  and at all times keep  available  for
issuance  an  authorized  number  of shares  of  Common  Stock or other  Warrant
Securities  sufficient to permit the full and immediate exercise of the Warrants
and the full and  immediate  exercise,  exchange  and  conversion  of all  other
securities, options, warrants and other rights issued or granted by the Company.

         (e) The Company  shall not permit the par value of its Common  Stock to
exceed,  at any time,  the Exercise Price and shall take all such actions as may
be necessary or appropriate to ensure that it does not do so.

         (f) As soon as practicable,  the Company shall, upon request deliver to
any  Holder(s)  of the  Warrants  and the  Warrant  Securities  copies,  if such
documents are filed with the Securities and Exchange  Commission  (the "SEC") or
other governmental agency or division or other regulatory authority,  of (i) all
annual, quarterly and monthly financial statements made available by the Company
to its  shareholders,  (ii)  all  reports,  notices  and  proxy  or  information
statements sent or made available  generally by the Company to its shareholders,
and (iii) all regular and  periodic  reports  and all  registration  statements,
prospectuses and other  information  filed by the Company with the SEC, relevant
state  authorities or any securities  exchange,  securities  quotation system or
other self-regulatory organization.

         (g) The Company shall  cooperate with the Holder(s) of the Warrants and
the Warrant  Securities  in  supplying  such  information  as may be  reasonably
necessary  for the  Holder(s)  to  complete  and file any  information  or other
reporting  forms from time to time required by the  Commission,  relevant  state
authorities or any securities  exchange,  securities  quotation  system or other
self-regulatory organization, including, without Stations information pertaining
to or required for the  availability  of any exemption from the securities  laws
for the  sale,  transfer  or other  disposition  of the  Warrants  or any of the
Warrant Securities.

         IV.2 Listing on the  Securities  Exchange.  The Company  shall,  at its
expense,  list on any  securities  exchange or NASDAQ  where it lists its Common
Stock,  and maintain and increase when necessary such listing of all outstanding
Warrant Securities so long as any shares of Common Stock shall be so listed. The
Company  shall also so list on each  securities  exchange  or  NASDAQ,  and will
maintain  such listing of, any other  securities  which the  Holder(s)  shall be
entitled to receive upon the exercise  thereof if at the time any  securities of
the same  class  shall be listed on such  securities  exchange  or NASDAQ by the
Company.
<PAGE>

                                 V. ANTIDILUTION

         V.1 Covenant.  For a period of three (3) years (five (5) years for John
Stuart,  members of his family, trusts for the benefit of any of them, or any of
their respective affiliates) after the date hereof, the Company shall not in any
manner (i) issue or sell any shares of its Common  Stock  (other  than shares of
Common Stock issued  pursuant to and in accordance  with the Company's stock and
equity   incentive   plans,  set  forth  in  Schedule  A,  attached  hereto  and
incorporated herein by this reference, each as in effect on the date hereof, the
shares of Common Stock issued upon the  exchange,  exercise  and  conversion  of
Common Stock  Equivalents  issued and  outstanding  as of the date hereof as set
forth in Schedule A, shares of Common Stock issued upon the  exchange,  exercise
and conversion of any other Common Stock  Equivalent  where the aggregate amount
received or receivable by the Company as  consideration  for the issue,  sale or
grant of such Common  Stock  Equivalent,  plus the minimum  aggregate  amount of
additional  consideration,  if any,  payable to the Company  upon the  exchange,
exercise or conversion thereof, is at least equal to Fair Value as determined at
the time of such issuance or sale) and shares of Common Stock issued pursuant to
any stock  dividend for less than Fair Value as  determined  at the time of such
issuance or sale, or (ii) grant  (whether  directly or by assumption in a merger
or  otherwise)  any  rights  to  subscribe  for  or  to  purchase  Common  Stock
Equivalents,  or issue or sell (whether directly or by assumption in a merger or
otherwise)  Common  Stock  Equivalents  (in each case  other than  Common  Stock
Equivalents  granted or issued  pursuant to and in accordance with the Company's
stock and equity  incentive  plans set forth in Schedule A, each as in effect on
the date  hereof),  where the price per share for which Common Stock is issuable
upon  exercise,   conversion  or  exchange  of  such  Common  Stock  Equivalents
(determined by dividing (x) the aggregate  amount  received or receivable by the
Company as  consideration  for the  issue,  sale or grant of such  Common  Stock
Equivalents,  plus the minimum aggregate amount of additional consideration,  if
any, payable to the Company upon the exercise,  conversion or exchange  thereof,
by (y) the total  maximum  number of shares of Common  Stock  issuable  upon the
exercise,  conversion or exchange of all such Common Stock Equivalents) shall be
less than the Fair Value (after taking into account any  consideration  received
by the Company with respect to the  exercise or  conversion  of any Common Stock
Equivalents) on the date of such issue, sale or grant, whether or not the rights
to exercise, exchange or convert thereunder are immediately exercisable.

         V.2 Record Date. In case at any time the Company shall take a record of
the holders of the Common Stock for the purpose of  entitling  them to receive a
dividend or other distribution payable in shares of Common Stock or Common Stock
Equivalents,  then such  record date shall be deemed to be the date of the issue
or sale of the shares of the  Common  Stock  deemed to have been  issued or sold
upon the declaration of such dividend or of such other  distribution or the date
of the granting of such right of subscription or purchase, as the case may be.

         V.3 Certain Dividends. In case the Company shall pay a dividend or make
any other  distribution  upon any stock of the Company payable in: Common Stock,
Common Stock  Equivalents,  other shares of its capital stock,  assets,  rights,
warrants or options  (excluding (i) dividends or  distributions  payable in cash
out  of  the  current  year's  or  retained   earnings  of  the  Company,   (ii)
distributions relating to subdivisions and combinations covered by Section 5.04,
(iii)  distributions  relating to  reclassifications,  changes,  consolidations,
mergers, sales or conveyances covered by Section 5.05 and (iv) rights,  warrants
or options to purchase or  subscribe  for shares of Common Stock or Common Stock
Equivalents  covered by Section  5.01),  then in each such case (A) the Exercise
Price shall be adjusted  so that the same shall  equal the price  determined  by
multiplying  the Exercise Price in effect  immediately  prior to the record date
mentioned  below by a fraction,  the  numerator  of which shall be (x) the total
number of shares of Common Stock then  outstanding  multiplied by the Fair Value
per share of Common Stock on the record date mentioned below,  less (y) the Fair
Value as of such record date of said shares of stock,  evidences of indebtedness
or assets so paid or distributed or of such rights, warrants or options, and the
denominator  of which shall be the total  number of shares of Common  Stock then
outstanding multiplied by the Fair Value per share of Common Stock on the record
date mentioned below,  and (B) the Exercise  Quantity shall be adjusted to equal
the number  obtained by dividing  (x) the Exercise  Price in effect  immediately
prior to such  dividend or  distribution  multiplied  by the  Exercise  Quantity
immediately  prior to such dividend or  distribution  by (y) the Exercise  Price
resulting  from  the  adjustment  made  pursuant  to  clause  (A)  above.   Such
adjustments   shall  be  made  whenever  any  such  dividend  is  paid  or  such
distribution  is made and shall become  effective  immediately  after the record
date for the determination of stockholders  entitled to receive such dividend or
distribution.

         In the  event  that the  Company  shall  make a  dividend  or any other
distribution  upon the stock of the Company  payable in stock of a subsidiary or
securities  convertible  into or exercisable for such stock,  then in lieu of an
adjustment in the Exercise Price, the Holder of this Warrant,  upon the exercise
thereof at any time after such  distribution,  shall be entitled to receive from
the Company, such subsidiary or both, as the Company shall determine,  the stock
or other securities to which such Holder would have been entitled if such Holder
had exercised such Warrant  immediately  prior  thereto,  all subject to further
adjustment as provided in this Section 5; provided,  however, that no adjustment
in respect of dividends or interest on such stock or other  securities  shall be
made during the term of this Warrant upon the exercise of this Warrant.
<PAGE>


         V.4 Subdivision or Combination of Shares.  In case the Company shall at
any time subdivide its outstanding  shares of Common Stock into a greater number
of shares,  the Exercise Price in effect  immediately  prior to such subdivision
shall  be   proportionately   reduced  and  the  number  of  Warrant  Securities
purchasable   hereunder  shall  be  proportionately   increased.   In  case  the
outstanding  shares of the Common Stock of the Company  shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately  increased, but in no event to greater than
the  aggregate  Exercise  Price of all Warrant  Securities in effect on the date
hereof,  and the number of Warrant  Securities  purchasable  hereunder  shall be
proportionately reduced.

         V.5 Reorganization, Merger, etc. In case of any capital reorganization,
reclassification  or similar  transaction  involving  the  capital  stock of the
Company (other than as provided in Section 5.04), any  consolidation,  merger or
business  combination  of the Company with another  corporation,  or the sale or
conveyance  of all or  substantially  all of its assets to another  corporation,
shall be  effected  in such a way that  holders  of the  Common  Stock  shall be
entitled to receive stock, securities or assets (including,  but not limited to,
cash) with respect to or in exchange for shares of the Common Stock, then, prior
to and as a condition of such reorganization,  reclassification,  consolidation,
merger, business combination,  sale or conveyance, lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to purchase and
receive  upon the  basis and upon the terms  and  conditions  specified  in this
Warrant  and  in  lieu  of  the  Warrant  Securities   immediately   theretofore
purchasable and receivable upon the exercise of the rights  represented  hereby,
such  shares of stock,  securities  or assets as may be issued or  payable  with
respect to or in exchange  for a number of  outstanding  shares of Common  Stock
equal  to  the  number  of  shares  of  Common  Stock  immediately   theretofore
purchasable and receivable upon the exercise of the rights  represented  hereby.
In any such case, appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the  provisions  hereof  (including,
without  limitation,  provisions for adjustment of the Exercise Price and of the
number of Warrant  Securities  purchasable upon the exercise of this Warrant and
for the  registration  of the Warrant  Securities to the extent  provided herein
shall thereafter be applicable, as nearly as may be possible, in relation to any
stock, securities or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation,  merger,  business combination,
sale or  conveyance  unless  prior to or  simultaneously  with the  consummation
thereof  the  survivor  or  successor  corporation  (if other than the  Company)
resulting from such  consolidation or merger or the corporation  purchasing such
assets shall assume by a written, valid and binding instrument (which instrument
shall  be  sent  to  each  registered   Holder  before  or  subsequent  to  such
consummation),  the  obligation  to deliver to such Holder such shares of stock,
securities  or assets as, in  accordance  with the  foregoing  provisions,  such
Holder may be entitled to receive, and containing the express assumption by such
successor  corporation of the due and punctual performance and observance of all
of the  provisions of this Agreement to be performed and observed by the Company
and of all liabilities and obligations of the Company hereunder.  The provisions
of this  Section  5.05  shall  similarly  apply to  successive  reorganizations,
recapitalizations,   consolidations,   mergers,  business  combinations,  sales,
conveyances or similar transactions.

         V.6  Purchase of Common by the  Company.  If the Company at any time or
from time to time after the date hereof shall, directly or indirectly, including
through a Subsidiary  or  otherwise,  purchase,  redeem or otherwise  acquire (a
"Repurchase") any of its Common Stock or Common Stock Equivalents at a price per
share (in the case of Common Stock Equivalents,  assuming conversion or exercise
thereof  in full,  and  adding  to the  price  payable  any  amount  payable  in
connection with the exercise or conversion thereof) greater than the Fair Value,
then the Exercise Price upon each such Repurchase shall be adjusted to the price
determined by multiplying the Exercise Price in effect immediately prior thereto
by a fraction (1) the numerator of which shall be the number of shares of Common
Stock  outstanding  immediately  prior to the such Repurchase plus the number of
shares of Common Stock  issuable  upon the exercise or  conversion of any Common
Stock  Equivalents then exercisable or convertible minus the number of shares of
Common Stock which the  aggregate  consideration  for total  repurchased  Common
Stock would purchase at the Fair Value;  and (2) the  denominator of which shall
be the  number of shares of Common  Stock  outstanding  immediately  after  such
Repurchase  plus the number of shares of Common Stock issuable upon the exercise
or conversion of any Common Stock  Equivalents  then exercisable or convertible.
Upon any such adjustment of the Exercise Price,  the Exercise  Quantity shall be
adjusted  to equal the number  obtained by dividing  (x) the  Exercise  Price in
effect immediately prior to such Repurchase by the Exercise Quantity immediately
prior to such Repurchase by (y) the Exercise Price resulting from the adjustment
made pursuant hereto.

         V.7  Exceptions  to  Adjustment.   Anything   herein  to  the  contrary
notwithstanding, the Company shall not be required to make any adjustment of the
Exercise  Price or the number of shares  issuable  hereunder  in the case of the
issuance of the Warrants or Warrant Securities.
<PAGE>


         V.8  Treasury  Shares.  The  number  of  shares  of  the  Common  Stock
outstanding  at any time shall not  include  shares  owned or held by or for the
account of the Company or any of its subsidiaries,  and the disposition (but not
the cancellation) of any such shares shall not be considered an issue or sale of
the Common Stock for the purposes of Article V.

         V.9  Company to Prevent  Dilution.  In case at any time or from time to
time  conditions  arise by reason of action  taken by the  Company or any of its
subsidiaries, which are not adequately covered by the provisions of this Article
V, or which might  materially  and adversely  affect the exercise  rights of the
registered  Holders,  the Board of Directors of the Company shall appoint a firm
of independent  certified  public  accountants,  which may be the firm regularly
retained by the Company,  which shall give their opinion upon the  adjustment if
any,  necessary with respect to the Exercise Price,  on a basis  consistent with
the standards  established  in the other  provisions of this Article V, so as to
preserve,  without dilution, the exercise rights of the registered Holders. Upon
receipt of such opinion,  the Board of Directors of the Company shall  forthwith
make the adjustments described therein.

         V.10 Adjustment Notices to Holder. Upon any increase or decrease in the
number of Warrant  Securities  purchasable  upon the exercise of this Warrant or
upon any  adjustment in the Exercise  Price,  then,  and in each such case,  the
Company shall promptly  deliver  written  notice  thereof to each Holder,  which
notice  shall state the  increased  or  decreased  number of Warrant  Securities
purchasable upon the exercise of this Warrant setting forth in reasonable detail
the method of calculation and the facts upon which such  calculations are based.
Such notice shall also contain a certificate of the Company's President or Chief
Financial Officer as to the correctness of such adjustments and calculations and
to the effect that such adjustments and calculation have been made in accordance
with the terms hereof.

                             VI. REGISTRATION RIGHTS

         VI.1 Piggyback  Registration Right. From and after January 1, 1999, and
so long as any Warrant or Warrant  Securities  are  outstanding,  if the Company
proposes to register any shares of Common Stock under the  Securities Act or any
applicable state securities laws on a form which permits  inclusion " of warrant
shares (whether such  registration is being made on behalf of the Company and/or
on behalf of any of its security holders),  the Company shall give prompt notice
to  the  Holder  and  will  include  in  such   registration   (the   "Piggyback
Registration"),  subject to the allocation provisions discussed in Sections 6.03
and 6.04, all Warrant  Securities with respect to which the Company has received
written  requests for inclusion within 30 days after such notice is given by the
Company.

         VI.2 Expenses. In all Piggyback Registrations, the Company will pay the
expenses related to registration of the Warrant Securities;  provided,  however,
the Holder shall pay the underwriting commissions related to the registration of
the Warrant Securities.

         VI.3     Cut-Backs.

         (a) If a Piggyback Registration is an underwritten primary registration
on behalf of the Company  and the  managing  underwriter  advises the Company in
writing  that in the  underwriter's  opinion  the  number  of  securities  to be
included  in such  registration  exceeds  the  number  that  can be sold in such
offering, at a price reasonably related to fair value, the Company will allocate
the  securities to be included as follows:  first,  the  securities  the Company
proposes  to sell on its own behalf,  and  second,  pro rata on the basis of the
number of shares of common  Stock owned among the Holders of Warrant  Securities
and the other Persons selling in such registration.

         (b)  If a  Piggyback  Registration  is  initiated  as  an  underwritten
secondary registration on behalf of holders of the Company's securities, and the
managing  underwriter  advises the Company in writing that in the  underwriter's
opinion the number of securities to be included in such registration exceeds the
number that can be sold in such offering,  at a price reasonably related to fair
value,  the Company will allocate the securities to be included as follows:  pro
rata on the  basis of the  number of shares  of  Common  Stock  owned  among the
Holders  of  Warrant   Securities   and  the  other  Persons   selling  in  such
registration.

         VI.4  Selection  of  Underwriter.  If  any  Piggyback  Registration  is
underwritten,  the selection of investment  bank(s) and manager(s) and the other
decisions regarding the underwriting  arrangements for the offering will be made
by the  Company  provided  that such  underwriter  is of  nationally  recognized
standing, including, without limitation, Whale Securities Co., L.P.
<PAGE>


         VI.5 Sale of Warrants to Underwriters.  Notwithstanding anything herein
or in any Warrant to the  contrary,  in lieu of exercising a Warrant prior to or
simultaneously  with  the  filing  or  the  effectiveness  of  any  registration
statement,  the Holder may sell the Warrant to the  underwriter  of the offering
being  registered if such  underwriter  consents thereto and if such underwriter
undertakes to exercise such Warrant before making any  distribution  pursuant to
such  registration  statement  and to include the Warrant  Securities  among the
securities being offered pursuant to such  registration  statement.  The Company
agrees to use its best  efforts  to cause the  Warrant  Securities  to be issued
within  such  time as will  permit  the  underwriter  to make and  complete  the
distribution contemplated by the underwriting.

         VI.6  Procedures.  Whenever the Company is required to include  Warrant
Securities in a registration  statement,  the Company will, as  expeditiously as
possible:

                           (i)  furnish  to  counsel  for any  Holder of Warrant
         Securities  copies of all documents  proposed to be filed in connection
         with such registration;

                           (ii)  furnish to each  Holder of  Warrant  Securities
         such number of copies of the  registration  statements,  each amendment
         and supplement  thereto,  the prospectus  included in the  registration
         statement  (including  each  preliminary  prospectus),  and such  other
         documents, as such Holder may reasonably request in order to facilitate
         the public  sale or other  disposition  of the  Warrant  Securities  so
         registered;

                           (iii) use  reasonable  efforts to register or qualify
         all the Warrant Securities covered by such registration statement under
         such other  securities  or blue sky laws of such  jurisdictions  as the
         Holder of such Warrant Securities shall reasonably request,  and do any
         and all  other  acts and  things  which  may be  necessary  under  such
         securities  or blue sky laws to enable  such Holder to  consummate  the
         public sale or other  disposition in such  jurisdiction  of the Warrant
         Securities covered by such registration statement;  provided,  however,
         that the Company shall not be required to (a) qualify to do business as
         a  foreign  corporation  in  any  jurisdiction  wherein  it  would  not
         otherwise be required to qualify but for this subparagraph, (b) subject
         itself to taxation in any such jurisdiction,  or (c) consent to general
         service of process in any such jurisdiction;

                           (iv) notify each Holder of Warrant  Securities at any
         time when a prospectus  relating to their Warrant Securities covered by
         such  registration  statement  is  required to be  delivered  under the
         Securities  Act, of the happening of any event as a result of which the
         prospectus  included in such registration  statement contains an untrue
         statement  of a material  fact or omits any fact  necessary to make the
         statements  therein  not  misleading,  and at the  request  of any such
         Holder,  prepare a supplement or amendment to such  prospectus so that,
         as thereafter  delivered to the  purchasers  of the Warrant  Securities
         covered by such  registration  statement  or such  prospectus  will not
         contain an untrue  statement  of a  material  fact or omit to state any
         fact necessary to make the statements therein not misleading;

                           (v) make  available  for  inspection by any Holder of
         Warrant Securities and any underwriter,  attorney,  accountant or other
         agent  retained by any such Holder,  all financial  and other  records,
         pertinent corporate documents and properties of the Company,  and cause
         the Company's  officers,  directors and employees to provide  access to
         all  nonconfidential  information  reasonably  requested  by  any  such
         Holder, underwriter,  attorney,  accountant or agent in connection with
         such registration statement.
<PAGE>


         VI.7     Indemnification.

         (a) Indemnification by the Company. In the event of any registration of
any Warrant  Securities  under the  Securities  Act, the Company,  to the extent
permitted by law,  shall  indemnify and hold harmless the Holder of such Warrant
Securities  included  therein,  each  underwriter  (as defined in the Securities
Act),  each other  person and entity who  participates  in the  offering of such
Securities,  and each other person and entity,  if any, who controls (within the
meaning of the Securities Act) such Holder,  underwriter or participating Person
(collectively "Offering  Participants"),  against any losses, claims, damages or
liabilities,  joint or several,  to which such Offering  Participant  may become
subject under the Securities Act or any other statute or at common law,  insofar
as such losses,  claims,  damages or liabilities (or actions in respect thereof)
arise out of or are based upon (1) any alleged untrue  statement of any material
fact contained,  on the effective date thereof,  in any  registration  statement
under which such Warrant  Securities were  registered  under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or any summary
prospectus issued in connection with any Warrant Securities being registered, or
any amendment or supplement thereto (collectively "Offering Documents"), (2) any
alleged  omission to state in any such  document a material  fact required to be
stated therein or necessary to make the statements  therein not  misleading,  or
(3) any alleged  violation  by the Company of the  Securities  Act, the Exchange
Act, any state  securities law or any rule or regulation  promulgated  under the
Securities Act, the Exchange Act or any state  securities law in connection with
the offering covered by such  registration  statement,  and shall reimburse each
such Offering Participant for any legal or other expenses reasonably incurred by
such Offering Participant in connection with investigating or defending any such
loss, damage, liability or action; provided, however, that the Company shall not
be liable to the extent that any such loss,  claim,  damage or liability  arises
out of or is based upon any alleged untrue statement or alleged omission made in
such Offering  Document in reliance upon and in conformity  with written or oral
information  furnished  to the  Company  by such  Holder,  specifically  for use
therein.

         (b) Indemnification by Holder. Each Holder, by acceptance of a Warrant,
severally and not jointly,  shall  indemnify and hold harmless each other holder
of securities included in a registration  statement,  the Company, its directors
and  officers,  and  each  other  Offering  Participant  (collectively,   "Other
Participants")  against any losses,  claims,  damages, or liabilities,  joint or
several,  to which any such  Other  Participants  may become  subject  under the
Securities  Act or any other  statute or at common law,  insofar as such losses,
claims,  damages or liabilities (or actions in respect  thereof) arise out of or
are based upon (1). any alleged untrue statement of any material fact contained,
on the effective  date  thereof,  in any Offering  Document,  or (2) any alleged
omission  to state in any such  document a material  fact  required to be stated
therein or necessary to make the statements  therein not  misleading,  in either
case to the extent,  and only to the extent,  that such alleged untrue statement
or alleged  omission was made in reliance upon and in conformity with written or
oral  information  furnished to the Company by such Holder  specifically for use
therein, and then in the case of indemnification  hereunder other than under the
Securities Act only to the extent that such alleged untrue statements or alleged
omissions  by such  Holder  were not based on the  authority  of an expert as to
which such Holder had no reasonable ground to believe, and did not believe. that
the  statements  made on the  authority of such expert were untrue or that there
was an  omission  to  state  a  material  fact.  Notwithstanding  the  foregoing
provisions of this Subsection (b), no Holder shall be required to pay under such
provisions  an amount in excess of the proceeds (net of  underwriter  discounts)
received by such Holder in payment  for the  Warrant  Securities  sold by him in
such offering.

         (c) State Securities Laws. Indemnification similar to that specified in
Sections  7.07(a) and (b) shall be given by the  Company  and each Holder  (with
such modifications as shall be appropriate) covered by any registration or other
qualification  of  Securities  under  any  federal  or state  securities  law or
regulation  other than the Securities Act with respect to any such  registration
or other qualification effected pursuant to this Agreement.

         (d) Not Limited By  Investigation.  The  indemnification  provided  for
under this Section 7.07 will remain in full force and effect  regardless  of any
investigation  made by or on behalf  of the  indemnified  party or any  officer,
director or controlling  Person of such  indemnified  party and will survive the
transfer of Warrant Securities.
<PAGE>


                VII. TRANSFER OF WARRANTS AND WARRANT SECURITIES

         VII.1 Transfer. Except as set forth in Section 7.02 below, the Warrants
and all rights thereunder are transferable, in whole or in part, on the books of
the Company to be maintained for such purpose, upon surrender of such Warrant at
the office of the Company  maintained for such purpose,  together with a written
assignment  of such Warrant duly  executed by the Holder  hereof or its agent or
attorney and payment of funds sufficient to pay any stock transfer taxes payable
upon the making of such  transfer.  The Company may (but shall not be  obligated
to) treat the bearer of a Warrant endorsed in blank for transfer as the absolute
owner of such Warrant for all purposes and the Company  shall not be affected by
any notice to the contrary.  Upon such surrender and payment,  the Company shall
execute and  deliver a new  Warrant or  Warrants in the name of the  assignee or
assignees and in the  denominations  specified in such instrument of assignment,
and this  Warrant  shall  promptly be  canceled.  The  transferred  Warrant,  if
properly  assigned in compliance  herewith,  may be exercised by an assignee for
the purchase of shares of Common Stock without having a new Warrant issued.  The
Company  will not close its  stock  transfer  books  against a  transfer  of the
Warrants or any exercise of the Warrants. Any such transfer or exercise tendered
while  such  stock  transfer  books  shall be closed  shall be deemed  effective
immediately prior to such closure.

         Subject to Section 7.02 below,  the Warrants may be divided or combined
with other Warrants upon  presentation  at the aforesaid  office of the Company,
together with a written notice  specifying the names and  denominations in which
new  Warrants  are to be issued,  signed by the  Holder  thereof or its agent or
attorney.  Subject to  compliance  with this,  as to any  transfer  which may be
involved in such division or combination,  the Company shall execute and deliver
a new Warrant or Warrants in exchange  for the Warrant or Warrants to be divided
or combined in accordance with such notice.

         The Company shall pay all  expenses,  taxes (other than income taxes or
transfer taxes,  if any, of the  transferee)  and other charges  incurred by the
Company  in  the   performance  of  its   obligations  in  connection  with  the
preparation,  issue and  delivery of Warrants  under this  Section.  The Company
agrees to  maintain  at its  aforesaid  office  books for the  registration  and
transfer  of  the  Warrants.  Notwithstanding  any  provision  to  the  contrary
contained herein,  the Warrants and the Warrant Securities shall be transferable
only in compliance  with the  provisions of the  Securities  Act and  applicable
state  securities  laws in respect of the transfer of any Warrant or any Warrant
Securities.

         VII.2  Transfer  Restrictions.  Neither  this  Warrant  Agreement,  the
Warrants nor the Warrant Securities,  when issued, has been registered under the
Securities  Act or  under  the  securities  laws  of  any  state.  Neither  this
Agreement,  the  Warrants  nor  the  Warrant  Securities.  when  issued,  may be
transferred: (a) if such transfer would constitute a violation of any federal or
state  securities  laws or a breach  of the  conditions  to any  exemption  from
registration  thereunder  and (b)  unless  and  until one of the  following  has
occurred:  (i)  registration of the Warrants or the Warrant  Securities,  as the
case may be, under the Securities Art, and such registration or qualification as
may be necessary under the securities law of any state,  have become  effective,
(ii) the Holder has delivered an opinion of counsel or other evidence reasonably
satisfactory  to the Company  that such  registration  or  qualification  is not
required  or (iii) such  transfer  would be  permitted  under Rule 144 under the
Securities Act.

         Each  certificate  for Warrant  Securities  issued  upon  exercise of a
Warrant and each certificate  issued to a subsequent  transferee,  unless at the
time of exercise such Warrant  Securities  are  registered  under the Securities
Act, shall bear a legend substantially in the following form (and any additional
legends required by applicable law) on the face thereof;

         THE WARRANT  SECURITIES  TO BE RECEIVED  UPON  EXERCISE OF THE WARRANTS
         HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
         OR QUALIFIED UNDER ANY STATE  SECURITIES  LAWS. THE WARRANT SEC MAY NOT
         BE OFFERED,  SOLD,  PLEDGED,  HYPOTHECATED  OR  OTHERWISE  TRANSFERRED,
         WHETHER OR NOT FOR  CONSIDERATION,  IN THE ABSENCE OF (1) AN  EFFECTIVE
         REGISTRATION  STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT TO THE
         WARRANT  SECURITIES  UNDER THE  SECURITIES ACT AND UNDER ANY APPLICABLE
         STATE  SECURITIES LAWS OR (2) AN EXEMPTION FROM SUCH  REGISTRATION  AND
         QUALIFICATION.

         VII.3  Replacement  of  Instruments.  Upon  receipt  by the  Company of
evidence reasonably  satisfactory to it of the ownership of and the loss, theft,
destruction  or  mutilation of any  certificate  or  instrument  evidencing  any
Warrants  or  Warrant  Securities,  and  (a) in  the  case  of  loss,  theft  or
destruction, upon receipt by the Company of indemnity reasonably satisfactory to
it  (provided  that,  if the  owner  of the  same  is a  commercial  bank  or an
institutional lender or investor,  its own agreement of indemnification shall be
deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and
cancellation  thereof,  the Company,  at its expense,  will execute register and
deliver,  in lieu thereof,  a new certificate or instrument for (or covering the
purchase of) an equal number of Warrants or Warrant Securities.
<PAGE>

                               VIII0 MISCELLANEOUS

         VIII.1 Term. Except as otherwise  expressly  provided in this Agreement
or the  Warrants,  this  Agreement  shall  expire seven (7) years after the date
hereof,  provided  that the  Company's  obligations  to honor an exercise of the
Warrants given prior to such  expiration or to perform any  obligation  continue
and survive notwithstanding the expiration of this Agreement.

         VIII.2 No  Waiver  Under  Other  Agreements.  The terms and  provisions
contained  in this  Agreement  are not  intended  and shall not be  construed to
waive,  modify,  repeal,  stay,  diminish or  otherwise  impair or affect in any
manner  whatsoever  any right or remedy  of  Holder or the  Holder(s)  under the
Company's Articles of Incorporation, By-laws or similar agreements, or any other
agreements  between the Company and/or its affiliates and Holder or any right or
remedy at law or in equity.

         VIII.3 Reliance. Each party to this Agreement shall be entitled to rely
upon any notice, consent,  certificate,  affidavit,  statement, paper, document,
writing or other  communication  reasonably believed by that party to be genuine
and to have been signed, sent or made by the proper Person or Persons.

         VIII.4  Notice.  All notices and other  communications  provided for or
permitted  hereunder  shall  be  made  in  writing  and be by  hand-delivery  or
certified mail, return receipt requested, or by telecopy:

         (a)      if to ICCMIC to:

                           Imperial Credit Commercial Mortgage Investment Corp.
                           11601 Wilshire Blvd.
                           Suite 2080
                           Los Angeles, California 90025
                           Fax: 310-231-1281
                           Attention: President

                  if to ICLLC to:

                           Imperial Capital, LLC
                           150 S. Rodeo Drive
                           Suite 100
                           Beverly Hills, California 90212
                           Fax: 310-246-3672
                           Attention: President

or to a subsequent  Holder of Warrants or Warrant  Securities issued pursuant to
the exercise of the Warrants,  at the most current  address given by such Holder
to the Company in writing; or

         (b)      if to the Company:

                           On Stage Entertainment, Inc.
                           4625 W. Nevso Drive
                           Las Vegas, Nevada 89103
                           Fax: 702-257-2367
                           Attention: President

         All such notices and  communications  shall be deemed to have been duly
given when delivered by hand, if personally delivered;  four business days after
being  deposited  in the mail,  postage  prepaid,  if  mailed,  when  receipt is
acknowledged, if telecopied, or the next business day, if timely delivered to an
air courier guaranteeing overnight delivery.

         VIII.5  Enforcement.  The  Company  acknowledges  that the  Holders may
proceed to exercise or enforce any right, power,  privilege,  remedy or interest
that they may have under this Agreement or applicable law without notice, except
as  otherwise  expressly  provided  herein,  without  pursuing,   exhausting  or
otherwise exercising or enforcing any other right, power,  privilege,  remedy or
interest  that they may have  against or in respect of any other  party,  or any
other Person or thing,  and without  regard to any act or omission of such party
or any other Person.

         VIII.6  Equitable  Relief.  Each party  acknowledges and agrees that it
would be  impossible  to measure in money the damage in the event of a breach of
any of the terms and provisions of this Agreement by any party hereto, and that,
in the event of any such  breach,  there may not be an  adequate  remedy at law,
although  the  foregoing  shall not  constitute  a waiver of any of the  party's
rights,  powers,  privileges  and remedies  against or in respect of a breaching
party,  any other person or thing under this Agreement or applicable  law. It is
therefore agreed that, in addition to all other such rights, powers,  privileges
and  remedies  that it may have,  each party  shall be  entitled  to  injunctive
relief,  specific  performance or such other equitable  relief as such party may
request to exercise or otherwise enforce any of the terms and provisions of this
Agreement and to enjoin or otherwise restrain any act prohibited thereby.
<PAGE>


         VIII.7   Interpretation; Heading Severability.

         (a) The  parties  acknowledge  and agree  that since each party and its
counsel have reviewed and  negotiated the terms and provisions of this Agreement
and have  contributed to its revision,  the normal rule of  construction  to the
effect that any ambiguities are resolved against the drafting party shall not be
employed in the  interpretation of this Agreement,  and its terms and provisions
shall  be  construed  fairly  as to all  parties  hereto  and not in favor of or
against any party,  regardless of which party was generally  responsible for the
preparation of this Agreement.

         (b) The Section and other headings  contained in this Agreement are for
reference  purposes only and shall not affect the meaning or  interpretation  of
this Agreement.

         (c) In the event that any term or provision of this Agreement  shall be
finally determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by a governmental  authority having  jurisdiction and
venue, determination shall not impair or otherwise affect the validity, legality
or  enforceability:  (I) by or before that authority of the remaining  terms and
provisions  of this  Agreement,  which shall be  enforced as if the  superseded,
invalid,  illegal or otherwise  unenforceable term or provision were modified to
the extent  required to permit such  provision  to be not  superseded,  invalid,
illegal or unenforceable, or (ii) by or before any other authority or any of the
terms and provisions of this Agreement.

         (d) If any period of time specified in this Agreement  expires on a day
that is not a Business  Day,  that period shall be extended to and expire on the
next succeeding Business Day.

         VIII.8  Survival  of  Covenants.   Each  of  the  covenants  and  other
agreements  of the parties  contained in this  Agreement  shall be absolute and,
except  as  otherwise  expressly  provided,  unconditional,  shall  survive  the
execution and delivery of this  Agreement  and shall  continue in full force and
effect until the term of this Agreement has expired, and thereafter with respect
to events occurring prior thereto.

         VIII.9 No Required  Exercise.  No term or  provision of the Warrants or
this  Agreement is intended to require,  nor shall any such term or provision be
construed  as  requiring,  any Holder of the  Warrants  to  exercise or sell the
Warrants.

         VIII.10  Binding  Effect.  This  Agreement  shall be  binding  upon and
enforceable  against  the parties  hereto and their  respective  successors  and
assigns.

         VIII.11  No Waiver by  Action.  The  failure or delay of a party at any
time or times to require  performance of, or to exercise its rights with respect
to, any term or  provision  of this  Agreement  (except as  otherwise  expressly
provided  herein) shall not affect its right at a later time to enforce any such
provision.

         VIII.12  Waiver,  Modification;  Amendment.  This Agreement may only be
modified or amended if the  Company and the Holders of not less than  two-thirds
of all unissued  Warrant  Securities  agree in writing to such  modification  or
amendment.  Each and every waiver of and consent to any departure  from any term
or provision  hereof (except as otherwise  provided  herein) shall be in writing
and signed by the Holders of not less than  two-thirds  of all unissued  Warrant
Securities.  Notwithstanding the foregoing, no modification, amendment or waiver
of any term or provision hereof with respect to the Exercise Price, the Exercise
Quantity,  any terms of Article V hereof,  any of the terms of this Section 8.12
or which purports,  or has the effect of,  shortening the term of any Warrant or
limiting the right or ability of a Holder thereof to exercise a Warrant shall be
enforceable  against a Holder  unless  such  Holder  specifically  approves,  in
writing, such modifications, amendment or modification.

         VIII.13 Entire  Agreement.  This Agreement and the Warrants contain the
entire  agreement  of the  parties  and  supersede  all  other  representations,
warranties, agreements and understandings, oral and otherwise, among the parties
hereto with respect to the Warrants, except as otherwise provided herein.

         VIII.14 No  Inconsistent  Agreement  or Rights.  The Company  shall not
enter into any agreement  with respect to its  securities  that is  inconsistent
with the rights granted to the Holders in this Agreement.
<PAGE>


         VIII.15  Governing Law:  Consent to  Jurisdiction:  Waiver Trial.  THIS
AGREEMENT,   THE  WARRANTS  AND  THE  WARRANT  SECURITIES  AND  ALL  AMENDMENTS,
SUPPLEMENTS,  WAIVERS AND CONSENTS  RELATING HERETO OR THERETO SHALL BE GOVERNED
BY AND  CONSTRUED IN  ACCORDANCE  WITH THE INTERNAL  LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
SITTING IN THE STATE OF NEVADA AND AGREES AND CONSENTS  THAT SERVICES OF PROCESS
MAY BE MADE  UPON IT IN ANY  LEGAL  PROCEEDINGS  RELATING  HERETO  BY ANY  MEANS
ALLOWED  UNDER  NEVADA OR FEDERAL LAW. THE COMPANY  IRREVOCABLY  WAIVES,  TO THE
FULLEST  EXTENT  PERMITTED BY APPLICABLE  LAW, ANY OBJECTION  THAT IT MAY NOW OR
HEREAFTER  HAVE TO THE  LAYING OF VENUE OF ANY SUCH  PROCEEDING  BROUGHT IN SUCH
COURT AND ANY CLAIM  THAT ANY SUCH  PROCEEDING  BROUGHT  IN SUCH  COURT HAS BEEN
BROUGHT IN AN INCONVENIENT  FORUM.  THE COMPANY AND ICCMIC AND ICLLC EACH HEREBY
AGREE TO WAIVE THEIR RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT,  THE SECURITIES OR ANY OTHER
AGREEMENTS  RELATING TO THE SECURITIES OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS TRANSACTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN,  THIS WAIVER IS IRREVOCABLE,  MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING,  AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT  AMENDMENTS,
RENEWALS,  SUPPLEMENTS OR  MODIFICATIONS  TO THIS AGREEMENT,  THE WARRANTS,  THE
WARRANT SECURITIES OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING THERETO.

                            [Signature page follows]


<PAGE>


         IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Warrant
Agreement to be executed as of the day and year first above written.



                                  THE COMPANY:

                                  ON STAGE ENTERTAINMENT, INC.


                                  By: _______________________________
                                  Name:
                                  Title:


                                  IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT
                                    CORP.


                                  By: _______________________________
                                  Name:
                                  Title:


                                  IMPERIAL CAPITAL GROUP, LLC


                                  By: _______________________________
                                  Name:
                                  Title:


<PAGE>



                                    EXHIBIT A

                                       to

                                Warrant Agreement

                                 Form of Warrant


<PAGE>



                         Exhibit A to Warrant Agreement


THE WARRANT  SECURITIES  TO BE RECEIVED  UPON  EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
ANY STATE  SECURITIES  LAWS.  THE WARRANT  SECURITIES  MAY NOT BE OFFERED  SOLD,
PLEDGED,   HYPOTHECATED   OR   OTHERWISE   TRANSFERRED,   WHETHER   OR  NOT  FOR
CONSIDERATION,  IN THE  ABSENCE  OF  (1) AN  EFFECTIVE  REGISTRATION  STATE  AND
QUALIFICATION  IN  EFFECT  WITH  RESPECT  TO THE  WARRANT  SECURITIES  UNDER THE
SECURITIES  ACT  AND  UNDER  ANY  APPLICABLE  STATE  SECURITIES  LAWS  OR (2) AN
EXEMPTION FROM SUCH QUALIFICATION AND REGISTRATION.

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE
TERMS AND PROVISIONS OF A WARRANT AGREEMENT,  DATED AS OF MARCH 13,1998, BETWEEN
ON STAGE  ENTERTAINMENT,  INC.,  IMPERIAL CREDIT COMMERCIAL  MORTGAGE INVESTMENT
CORP.  AND  IMPERIAL  CAPITAL  GROUP,  LLC (AS  THE  SAME  MAY BE  SUPPLEMENTED,
MODIFIED,  AMENDED,  EXTENDED  OR  RESTATED  FROM  TIME  TO TIME  (THE  "WARRANT
AGREEMENT")).  AMONG OTHER THINGS, THE WARRANT AGREEMENT CONTAINS PROVISIONS FOR
RESTRICTIONS  ON TRANSFER  AND FOR  REGISTRATION  RIGHTS.  COPIES OF THE WARRANT
AGREEMENT ARE AVAILABLE AT THE EXECUTIVE OFFICES OF THE COMPANY.

                          COMMON STOCK PURCHASE WARRANT

                                  MARCH 13,1998

Capitalized  terms used and not otherwise defined in this Warrant shall have the
meanings  respectively  assigned to them in the Warrant Agreement referred to in
the legend below.

ON STAGE ENTERTAINMENT,  INC., a Nevada corporation (the "Company"),  having its
executive  offices at 4625 W. Nevso Drive, Las Vegas,  Nevada 89103, does hereby
certify and agree that,  for good and  valuable  consideration  (the  existence,
sufficiency and receipt of which are hereby acknowledged by the Company),  [Name
of Holder], a  ________________________,  its successor, and assigns ("Holder"),
hereby is entitled to purchase  from the  Company,  during the term set forth in
Section I hereof,  up to an aggregate amount of _______ shares, as adjusted from
time to time  pursuant to the terms of this  Warrant  and the Warrant  Agreement
(the "Exercise  Quantity"),  of duly authorized,  validly issued, fully paid and
nonassessable  shares of Common Stock,  par value $.01 per share, of the Company
(the  "Common  Stock"),  all  upon the  terms  and  provisions  and  subject  to
adjustment  of such Exercise  Quantity as provided in the Warrant  Agreement and
this Common Stock Purchase W t (the "Warrant").  The exercise price per share of
Common  Stock for which this  Warrant is  exercisable  shall be FOUR DOLLARS AND
FORTY FOUR CENTS ($4.44), as adjusted from time to time pursuant to the terms of
this Warrant and the Warrant Agreement (the "Exercise Price").

         1 Term of the  Warrant.  The term of this  Warrant  commences as of the
date hereof, and shall expire at 5:00 P.M., Pacific time, on March 13, 2003.

         2        Exercise of Warrant.

                  (a)  This  Warrant  may be  exercised  by the  Holder  of this
Warrant at any time during the term  hereof,  in whole or in part,  from time to
time (but not for fractional shares, unless this Warrant is exercised in whole),
by presentation and surrender of this Warrant to the Company,  together with the
annexed  Exercise Form duly  completed and executed and payment in the aggregate
amount equal to the Exercise Price  multiplied by the number of shares of Common
Stock being  purchased.  At the option of Holder,  payment of the Exercise Price
may be made either by (i)  certified  check payable to the order of the Company,
or (ii) surrender of certificates then held representing,  or deduction from the
number of shares issuable upon exercise of this Warrant of that number of shares
which has an aggregate  Fair Value  determined  in  accordance  with the Warrant
Agreement on the date of exercise equal to the aggregate  Exercise Price for all
shares to be purchased  pursuant to this Warrant or (iii) by any  combination of
the foregoing methods. Upon the Company's receipt of this Warrant, the completed
and signed Exercise Form and the requisite  payment,  the Company shall promptly
issue and deliver (or promptly cause to be delivered) to the  exercising  Holder
stock certificates  representing the number of shares of Common Stock purchased.
In the event, of a partial exercise of this Warrant,  the Company shall promptly
issue and  deliver  to the  Holder a new  Warrant  at the same  time such  stock
certificates  are  delivered,  which new  Warrant  shall  entitle  the Holder to
purchase  the balance of the  Exercise  Quantity  not  purchased in that partial
exercise  and shall  otherwise  be upon the same  terms and  provisions  as this
Warrant.
<PAGE>


                  (b) In the event the Holder of this  Warrant  desires that any
or all of the  stock  certificates  to be  issued  upon the  exercise  hereof be
registered in a name or names other than that of the Holder of this Warrant, the
Holder must (i) so request in writing at the time of exercise if the transfer is
not a  registered  transfer,  (ii)  provide to the Company an opinion of counsel
reasonably  satisfactory to the Company to the effect that the proposed transfer
may be effected without  registration under the Securities Act, and (iii) pay to
the Company funds sufficient to pay all stock transfer taxes (if any) payable in
connection with the transfer and delivery of such stock certificates.

                  (c) Upon  the due  exercise  by the  Holder  of this  Warrant,
whether n whole or in part,  the  Holder  (or any  other  person to whom a stock
certificate  is to be so issued) shall be deemed for all purposes to have become
the Holder of record of the shares of Common  Stock for which this  Warrant  has
been so exercised,  effective  immediately prior to the close of business on the
date this  Warrant,  the  completed  and signed  Exercise Form and the requisite
payment were duly delivered to the Company,  irrespective  of the date of actual
delivery of certificates representing such shares of Common Stock so issued.

         3        Surrender of Warrant; Expenses.

                  (a) Whether in connection  with the exercise,  registration of
transfer or replacement of this Warrant, surrender of this Warrant shall be made
to the  Company  during  normal  business  hours on a business  day  (unless the
Company otherwise permits) at the executive offices of the Company located at On
Stage  Entertainment,  Inc.,  4625 W.  Nevso,  Las  Vegas,  Nevada  89103,  Fax:
702-257-2367,  Attention:  President, or to such other office or duly authorized
representative  of the  Company  as from time to time may be  designated  by the
Company by written notice given to the Holder of this Warrant.

                  (b) The Company  shall pay all costs and expenses  incurred in
connection   with  the  exercise  of  this  Warrant,   including  the  costs  of
preparation, execution and delivery of Warrants and stock certificates.

         4        Warrant Register; Exchange; Transfer; Loss.

                  (a) The Company at all times shall  maintain at its  executive
offices an open register for all Warrants, in which the Company shall record the
name  and  address  of  each  Person  to  whom a  Warrant  has  been  issued  or
transferred,   the  number  of  shares  of  Common  Stock  or  other  securities
purchasable hereunder and the corresponding purchase prices.

                  (b) This  Warrant may be  exchanged  for two or more  warrants
entitling the identical  Holder hereof to purchase the same  aggregate  Exercise
Quantity  at the same  Exercise  Price per share and  otherwise  having the same
terms and provisions as this Warrant.  The identical  Holder may request such an
exchange by surrender of this  Warrant to the Company,  together  with a written
exchange request specifying the desired number of warrants and allocation of the
Exercise Quantity purchasable under the existing Warrant.

                  (c) This Warrant may be  transferred  only in accordance  with
the provisions of Article VII of the Warrant Agreement,  in whole or in part, by
the Holder or any duly authorized  representative of such Holder. A transfer may
be registered  with the Company by  submission  to it of this Warrant,  together
with the  annexed  Assignment  Form  duly  completed  and  executed,  and if the
transfer  is  not a  registered  transfer,  an  opinion  of  counsel  reasonably
satisfactory  to the Company.  Within five (5) business days after the Company's
receipt of this Warrant and the Assignment  Form so completed and executed,  the
Company will issue and deliver to the transferee a new Warrant  representing the
portion of the Exercise  Quantity  transferred  at the same  Exercise  Price per
share and otherwise having the same terms and provisions as this Warrant,  which
the Company will register in the new Holder's name.

                  (d)  Upon  receipt  by  the  Company  of  evidence  reasonably
satisfactory  to it of the  ownership  of and the loss,  theft,  destruction  or
mutilation of this Warrant,  and (a) in the case of loss,  theft or destruction,
upon receipt by the Company of indemnity reasonable satisfactory to it (provided
that, if the owner of the same is a commercial bank or an  institutional  lender
or investor, its own agreement of indemnity shall be deemed to be satisfactory),
or (b) in the case of mutilation,  upon surrender and cancellation  thereof, the
Company, at its expense, will execute,  register and deliver, in lieu thereof, a
new certificate or instrument for (or covering the purchase of) this Warrant.

                  (e) The Company will not close its books  against the transfer
of this Warrant or any of the Warrant  Securities in any manner which interferes
with the timely  exercise of this  Warrant.  The Company  will from time to time
take all such action as may be  necessary to assure that the par value per share
of the unissued Common Stock  acquirable upon exercise of this Warrant is at all
times equal or less than the Exercise Price then in effect.
<PAGE>


         5 Rights and Obligations of the Company and the Holder. The Company and
the  Holder of this  Warrant  are  entitled  to the  rights and are bound by the
obligations  set  forth  in the  Warrant  Agreement,  all of  which  rights  and
obligations are hereby  incorporated by reference herein. This Warrant shall not
entitle its Holder to any rights of a shareholder  in the Company (other than as
provided in the Warrant Agreement and Section 2(c) of this Warrant).

         IN WITNESS WHEREOF,  the Company has caused this Warrant to be executed
by its duly  authorized  representative  and its  corporate  seal, if any, to be
impressed hereupon and attested to by its Secretary or Assistant Secretary.


                                        ON STAGE ENTERTAINMENT, INC.
                                        a Nevada corporation


                                        By: _______________________________
                                        Name:
                                        Title:



Attest:


---------------------------
Name:
Secretary or Assistant Secretary


<PAGE>


                                  EXERCISE FORM


         The undersigned hereby irrevocably elects to exercise,  pursuant to the
terms  of the  Warrant  Agreement,  the  Warrant  represented  by  this  Warrant
Certificate  to the  extent of  purchasing  shares  of Common  Stock of ON STAGE
ENTERTAINMENT,  INC., and encloses  herewith  payment of the aggregate  Exercise
Price for all shares so purchased.



Name:


Address:





Signature:

Dated:                                  


Notice:  The signature on this Exercise Form must correspond with the name as it
appears  upon the face of this  Warrant  Certificate  in every  particular  way,
without alteration or enlargement or any change whatever.


<PAGE>


                                 ASSIGNMENT FORM


     FOR VALUE RECEIVED, hereby sells, assigns and transfers, in accordance with
the Warrant Agreement, unto



                               (Please type name or print name in block letters)






                                                     (Address of transferee)


the right to purchase  shares of Common  Stock of ON STAGE  ENTERTAINMENT,  INC.
Represented  by this  Warrant  Certificate  to the extent of  _______  shares of
Common  Stock  of ON  STAGE  ENTERTAINMENT,  INC.  as to  which  such  right  is
exercisable    and   does   hereby    irrevocably    constitute    and   appoint
_______________________  attorney,  to  transfer  the  same on the  books of the
Company with full power of substitution in the premises.


------------------------------
Signature

Dated: _________________, ______



Notice:  The signature on this  Assignment Form must correspond with the name as
it appears upon the face of this Warrant  Certificate in every  particular  way,
without alteration or enlargement or any change whatever.