FORM OF WARRANT


THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                                   DIGS, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:      102                              Number of Shares:  200,000
Date of Issuance:  March  14, 2000

Digs, Inc., a Delaware  corporation (the "Company"),  hereby certifies that, for
Ten United States  Dollars  ($10.00) and other good and valuable  consideration,
the receipt and sufficiency of which are hereby  acknowledged,  May Davis Group,
Inc.,  the  registered  holder  hereof or its  permitted  assigns,  is entitled,
subject  to the  terms  set forth  below,  to  purchase  from the  Company  upon
surrender of this Warrant, at any time or times on or after the date hereof, but
not after 4:59 P.M.  Pacific Time on the Expiration Date (as defined herein) two
hundred thousand (200,000) fully paid  nonassessable  shares of Common Stock (as
defined herein) of the Company (the "Warrant  Shares") at the purchase price per
share provided in Section 1(b) below; provided,  however, that in no event shall
the holder be entitled to exercise  this Warrant for a number of Warrant  Shares
in excess of that number of Warrant  Shares  which,  upon giving  effect to such
exercise,   would  cause  the  aggregate   number  of  shares  of  Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding shares of the Common Stock following such exercise.  For purposes of
the  foregoing  proviso,   the  aggregate  number  of  shares  of  Common  Stock
beneficially  owned by the holder and its affiliates shall include the number of
shares of Common Stock  issuable  upon  exercise of this Warrant with respect to
which the  determination of such proviso is being made, but shall exclude shares
of Common  Stock  which would be issuable  upon (i)  exercise of the  remaining,
unexercised  Warrants  beneficially  owned by the holder and its  affiliates and
(ii) exercise or conversion of the  unexercised  or  unconverted  portion of any
other  securities  of the  Company  beneficially  owned  by the  holder  and its
affiliates  (including,  without limitation,  any convertible notes or preferred
stock)  subject to a  limitation  on  conversion  or exercise  analogous  to the
limitation contained herein. Except as set forth in the preceding sentence,  for

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purposes  of  this  paragraph,  beneficial  ownership  shall  be  calculated  in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended.  For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock a holder may rely on the number of outstanding  shares of
Common  Stock as reflected  in (1) the  Company's  most recent Form 10-Q or Form
10-K, as the case may be, (2) a more recent public  announcement  by the Company
or (3) any other notice by the Company or its transfer  agent  setting forth the
number of shares of Common Stock  outstanding.  Upon the written  request of any
holder, the Company shall promptly,  but in no event later than one (1) Business
Day following the receipt of such notice,  confirm in writing to any such holder
the number of shares of Common Stock then  outstanding.  In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to
the  exercise of Warrants (as defined  below) by such holder and its  affiliates
since the date as of which such number of outstanding shares of Common Stock was
reported.

         Section 1.

     (a)  Placement  Agent  Agreement.  This  Warrant is one of the Common Stock
Purchase  Warrants  (the  "Warrants")  issued  pursuant to the  Placement  Agent
Agreement  dated as of  February  29,  2000,  among the  Company  and the Buyers
referred to therein (the "Placement Agent Agreement").

     (b)  Definitions.  The  following  words and terms as used in this  Warrant
shall have the following meanings:

          (i) "Approved  Stock Plan" shall mean any employee  benefit plan which
     has been  approved by the Board of Directors  of the  Company,  pursuant to
     which the Company's  securities  may be issued to any employee,  officer or
     director for services provided to the Company.

          (ii) "Business Day" means any day other than Saturday, Sunday or other
     day on which  commercial  banks in the City of New York are  authorized  or
     required by law to remain closed.

          (iii)  "Closing Bid Price" means the closing bid price of Common Stock
     as quoted on the  Principal  Market (as  reported  by  Bloomberg  Financial
     Markets ("Bloomberg") through its "Volume at Price" function).

          (iv) "Common  Stock" means (i) the Company's  common stock,  par value
     $0.001 per share,  and (ii) any capital  stock into which such Common Stock
     shall  have  been   changed  or  any  capital   stock   resulting   from  a
     reclassification of such Common Stock.

          (v) "Convertible Securities" means any stock or securities (other than
     Options) directly or indirectly convertible into or exchangeable for Common
     Stock.


<PAGE>
          (vi) "Excluded  Securities" means, provided such security is issued at
     a price  which is greater  than or equal to the  arithmetic  average of the
     Closing Bid Prices of the Common Stock for the ten (10) consecutive trading
     days immediately preceding the date of issuance, any of the following:  (a)
     any issuance by the Company of securities  in  connection  with a strategic
     partnership  or a joint  venture  (the  primary  purpose of which is not to
     raise equity  capital),  (b) any issuance by the Company of  securities  as
     consideration  for a  merger  or  consolidation  or  the  acquisition  of a
     business, product, license, or other assets of another person or entity and
     (c) options to purchase  shares of Common Stock,  provided (I) such options
     are issued  after the date of this  Warrant  to  employees  of the  Company
     within 30 days of such employee  starting his employment  with the Company,
     (II) an aggregate of no more than 1,000,000  options are issued in reliance
     on this  exclusion and (III) the exercise price of such options is not less
     than the Closing  Bid Price of the Common  Stock on the date of issuance of
     such option.

          (vii)  "Expiration  Date"  means the date  three  (3)  years  from the
     Issuance Date of this Warrant or, if such date falls on a Saturday,  Sunday
     or other day on which banks are required or  authorized to be closed in the
     City of New York or the State of New York or on which trading does not take
     place on the principal exchange or automated  quotation system on which the
     Common Stock is traded (a "Holiday"), the next date that is not a Holiday.

          (viii) "Issuance Date" means,  with respect to each Warrant,  the date
     of closing  pursuant  to the  Securities  Purchase  Agreement  on which the
     applicable Warrant is issued.

          (ix) "Market  Price" means,  with respect to any security for any date
     of  determination,  that price which  shall be  computed as the  arithmetic
     average of the Weighted Average Price for such security on each of the five
     (5)   consecutive   trading  days   immediately   preceding  such  date  of
     determination (all such determinations to be appropriately adjusted for any
     stock  dividend,  stock  split or similar  transaction  during the  pricing
     period).

          (x) "Options"  means any rights,  warrants or options to subscribe for
     or purchase Common Stock or Convertible Securities.

          (xi) "Other  Securities"  means (i) those  options and warrants of the
     Company issued prior to, and  outstanding  on, the date of issuance of this
     Warrant,  (ii) the shares of Common  Stock  issuable  on  exercise  of such
     options and  warrants,  provided  such options and warrants are not amended
     after the issuance  date of this Warrant,  (iii) the  Preferred  Shares and
     (iv) the shares of Common Stock  issuabale upon conversion of the Preferred
     Shares or exercise of the Warrants.

          (xii) "Person" means an individual,  a limited  liability  company,  a
     partnership,  a joint venture,  a corporation,  a trust, an  unincorporated
     organization and a government or any department or agency thereof.

<PAGE>


          (xiii)  "Preferred  Shares" means the shares of the Company's Series A
     Redeemable  Convertible  Preferred Stock, $0.01 par value per share, issued
     pursuant to the Securities Purchase Agreement.

          (xiv)  "Principal  Market"  means the  over-the-counter  market on the
     electronic bulletin board for such security as reported by Bloomberg or, if
     no bid or sale information is reported for such security by Bloomberg, then
     the  average  of the bid  prices  of each of the  market  makers  for  such
     security as reported in the "pink sheets" by the National Quotation Bureau,
     Inc.

          (xv)  "Registration  Rights  Agreement" means the Registration  Rights
     Agreement  dated as of  February  29, 2000 by and among the Company and the
     Holder  referred  to  therein  with  respect  to  the  registration  rights
     pertaining to the Common Stock issuable upon exercise of this Warrant.

          (xvi) "Securities Act" means the Securities Act of 1933, as amended.

          (xvii)  "Warrant"  means  this  Warrant  and all  Warrants  issued  in
     exchange, transfer or replacement thereof.

          (xiii) "Warrant Exercise Price" shall be equal to, with respect to any
     Warrant  Shares,  110%of the Closing  Bid Price of the Common  Stock on the
     Issuance Date, subject to adjustment as hereinafter provided.

          (xix)  "Warrant  Shares" means the shares of Common Stock  issuable at
     any time upon exercise of this Warrant.

          (xx) "Weighted  Average Price" means, for any security as of any date,
     the dollar volume-weighted average price for such security on the Principal
     Market (as reported by Bloomberg).  If the Weighted Average Price cannot be
     calculated  for such security on such date on any of the  foregoing  bases,
     the Weighted  Average Price of such security on such date shall be the fair
     market value as mutually  determined  by the Company and the holders of the
     Preferred Shares. If the Company and the holders of the Warrants are unable
     to agree upon the fair market value of the Common Stock,  then such dispute
     shall be resolved  pursuant to Section  2(a) below with the term  "Weighted
     Average  Price" being  substituted  for the term  "Market  Price." All such
     determinations to be appropriately  adjusted for any stock dividend,  stock
     split or other similar transaction during such period.

<PAGE>


(c)  Other Definitional Provisions.

          (i) Except as otherwise specified herein, all references herein (A) to
     the Company shall be deemed to include the Company's  successors and (B) to
     any applicable law defined or referred to herein shall be deemed references
     to such  applicable  law as the  same may have  been or may be  amended  or
     supplemented from time to time.

          (ii) When used in this  Warrant,  the words  "herein,"  "hereof,"  and
     "hereunder," and words of similar import,  shall refer to this Warrant as a
     whole and not to any  provision of this Warrant,  and the words  "Section,"
     "Schedule,"  and  "Exhibit"  shall refer to Sections of, and  Schedules and
     Exhibits to, this Warrant unless otherwise specified.

          (iii) Whenever the context so requires, the neuter gender includes the
     masculine or feminine,  and the singular  number  includes the plural,  and
     vice versa.

Section 2. Exercise of Warrant.

     (a)  Subject  to the terms  and  conditions  hereof,  this  Warrant  may be
exercised by the holder hereof then  registered on the books of the Company,  in
whole or in part,  at any time on any  Business  Day on or after the  opening of
business  on the  date  hereof  and  prior  to  4:59  P.M.  Pacific  Time on the
Expiration  Date  by (i)  delivery  of a  written  notice,  in the  form  of the
subscription  notice  attached as Exhibit A hereto (the "Exercise  Notice"),  of
such holder's election to exercise this Warrant,  which notice shall specify the
number of Warrant Shares to be purchased,  (ii) (A) payment to the Company of an
amount equal to the applicable  Warrant  Exercise Price multiplied by the number
of  Warrant  Shares  as to which  this  Warrant  is being  exercised  (plus  any
applicable issue or transfer taxes) (the "Aggregate  Exercise Price") in cash or
wire  transfer of  immediately  available  funds or (B) by notifying the Company
that this Warrant is being exercised pursuant to a Cashless Exercise (as defined
in Section  2(f)) and (iii) the  surrender  to a common  carrier  for  overnight
delivery to the Company as soon as practicable following such date, this Warrant
(or an  indemnification  undertaking with respect to this Warrant in the case of
its loss,  theft or  destruction).  In the event of any  exercise  of the rights
represented  by this Warrant in compliance  with this Section 2(a),  the Company
shall on the second  Business Day  following the date of receipt of the Exercise
Notice, the Aggregate Exercise Price (or notice of a Cashless Exercise) and this
Warrant (or an  indemnification  undertaking with respect to this Warrant in the
case of its loss,  theft or destruction)  (the "Exercise  Delivery  Documents"),
credit such aggregate number of shares of Common Stock to which the holder shall
be  entitled  to the  holder's  or  its  designee's  balance  account  with  The
Depository  Trust Company;  provided,  however,  if the holder who submitted the
Exercise Notice requested physical delivery of any or all of the Warrant Shares,
then the Company shall, on or before the second  Business Day following  receipt
of the Exercise  Delivery  Documents issue and surrender to a common carrier for
overnight   delivery  to  the  address  specified  in  the  Exercise  Notice,  a
certificate,  registered in the name of the holder,  for the number of shares of
Common  Stock to which the holder  shall be entitled  pursuant to such  request.

<PAGE>


Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in
clause  (ii)(A)  above or  notification  to the  Company of a Cashless  Exercise
referred to in Section 2(e),  the holder of this Warrant shall be deemed for all
corporate  purposes to have  become the holder of record of the  Warrant  Shares
with respect to which this Warrant has been exercised,  irrespective of the date
of  delivery  of  this  Warrant  as  required  by  clause  (iii)  above  or  the
certificates  evidencing such Warrant Shares. In the case of a dispute as to the
determination  of  the  Warrant  Exercise  Price  or  the  Market  Price  or the
arithmetic  calculation of the Warrant Shares,  the Company shall promptly issue
to the holder the number of Warrant Shares that is not disputed and shall submit
the  disputed  determinations  or  arithmetic  calculations  to the  holder  via
facsimile  within one (1) Business  Day of receipt of the holder's  subscription
notice. If the holder and the Company are unable to agree upon the determination
of the Warrant  Exercise  Price or arithmetic  calculation of the Warrant Shares
within one day of such disputed  determination or arithmetic  calculation  being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed determination of the Warrant Exercise Price or the Market Price
to an  independent,  reputable  investment  banking  firm or (ii)  the  disputed
arithmetic  calculation  of  the  Warrant  Shares  to its  independent,  outside
accountant  The  Company  shall  cause  the  investment   banking  firm  or  the
accountant,  as the case may be, to perform the  determinations  or calculations
and notify the Company  and the holder of the results no later than  forty-eight
(48)  hours  from  the  time  it  receives   the  disputed   determinations   or
calculations.  Such investment  banking firm's or accountant's  determination or
calculation,  as the case may be,  shall be deemed  conclusive  absent  manifest
error.

     (b) Unless the rights  represented  by this  Warrant  shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than five (5) Business  Days after any exercise and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall  represent  rights to  purchase  the  number of  Warrant  Shares
purchasable  immediately  prior to such exercise  under this Warrant  exercised,
less the  number of  Warrant  Shares  with  respect  to which  such  Warrant  is
exercised.

     (c) No fractional Warrant Shares are to be issued upon the exercise of this
Warrant,  but rather the number of Warrant  Shares  issued upon exercise of this
Warrant shall be rounded up or down to the nearest whole number.

     (d) If the  Company  shall fail for any reason or for no reason to issue to
the holder  within three (3) Business  Days of receipt of the Exercise  Delivery
Documents, a certificate for the number of Warrant Shares to which the holder is
entitled or to credit the holder's  balance  account with The  Depository  Trust
Company  for such  number of  Warrant  which the  holder  is  entitled  upon the
holder's  exercise of this Warrant,  the Company shall, in addition to any other
remedies  under this  Warrant or the  Placement  Agent  Agreement  or  otherwise
available to such holder,  including  any  indemnification  under the  Placement
Agent  Agreement,  pay as additional  damages in cash to such holder on each day
the issuance of such  certificate  for Warrant Shares is not timely  effected an
amount  equal to 0.5% of the  product  of (A) the sum of the  number of  Warrant
Shares  not  issued to the  holder on a timely  basis and to which the holder is

<PAGE>

entitled,  and (B) the average of the Weighted Average Price of the Common Stock
for the three consecutive  trading days immediately  preceding the last possible
date which the Company could have issued such Common Stock to the holder without
violating this Section 2.

     (e) If within five (5)  Business  Days after the  Company's  receipt of the
Exercise Delivery  Documents,  the Company fails to deliver a new Warrant to the
holder for the number of Warrant  Shares of Common Stock to which such holder is
entitled  pursuant  to Section  2(b)  hereof,  then,  in  addition  to any other
available  remedies  under  this  Warrant  or  the  Placement  Agent  Agreement,
including  indemnification  pursuant  thereto,  or  otherwise  available to such
holder,  the Company shall pay as  additional  damages in cash to such holder on
each day after such fifth  (5th)  Business  Day that such  delivery  of such new
Warrant is not timely  effected in an amount equal to 0.5% of the product of (A)
the number of Warrant Shares represented by the portion of this Warrant which is
not being  exercised and (B) the average of the Weighted  Average  Prices of the
Common Stock for the three  consecutive  trading days immediately  preceding the
last  possible  date which the Company  could have  issued  such  Warrant to the
holder without violating this Section 2.

     (f) The holder of this Warrant  may, at its election  exercised in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate  Exercise Price,  elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined  according to the
following formula (a "Cashless Exercise"):

         Net Number = (A x B) - (A x C)
                      -----------------
                              B

                  For purposes of the foregoing formula:

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

     B=   the Closing Sale Price (as reported in  Bloomberg) of the Common Stock
          on the date immediately preceding the date of the subscription notice.

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

<PAGE>


Section 3. Covenants as to Common Stock. The Company hereby covenants and agrees
           as follows:

     (a) This  Warrant  is,  and any  Warrants  issued  in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

     (b) All Warrant  Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

     (c) During the period within which the rights  represented  by this Warrant
may be exercised,  the Company will at all times have authorized and reserved at
least 100% of the  number of shares of Common  Stock  needed to provide  for the
exercise of the rights  then  represented  by this  Warrant and the par value of
said  shares will at all times be less than or equal to the  applicable  Warrant
Exercise Price.

     (d) The Company  shall  promptly  file a  registration  statement  with the
Securities  and Exchange  Commission to secure the listing of the Warrant Shares
on the Principal  Market in accordance  with the terms and conditions  regarding
the  registration  rights of holders of Warrants  set forth in the  Registration
Rights Agreement and shall maintain, so long as any other shares of Common Stock
shall be so  listed,  such  listing  of all  Warrant  Shares  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.

     (e) The Company will not, by amendment of its Certificate of  Incorporation
or  through  any  reorganization,  transfer  of assets,  consolidation,  merger,
dissolution,  issue or sale of securities,  or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed  or  performed  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 Warrant  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.

     (f) This Warrant will be binding upon any entity  succeeding to the Company
by merger,  consolidation  or  acquisition  of all or  substantially  all of the
Company's assets.

<PAGE>


     Section 4.  Taxes.  The  Company  shall pay any and all taxes  which may be
payable  with  respect to the  issuance  and  delivery  of Warrant  Shares  upon
exercise of this Warrant.

     Section 5.  Warrant  Holder Not Deemed a  Stockholder.  Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled to vote or receive  dividends  or be deemed the holder of shares of the
Company  for any  purpose,  nor shall  anything  contained  in this  Warrant  be
construed  to confer  upon the holder  hereof,  as such,  any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization,  issue of stock,  reclassification
of stock,  consolidation,  merger,  conveyance or otherwise),  receive notice of
meetings,  receive dividends or subscription rights, or otherwise,  prior to the
issuance to the holder of this Warrant of the Warrant  Shares which he or she is
then  entitled to receive  upon the due exercise of this  Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase  any  securities  (upon  exercise of this  Warrant or
otherwise)  or as a stockholder  of the Company,  whether such  liabilities  are
asserted by the Company or by  creditors of the  Company.  Notwithstanding  this
Section 5, the Company  will  provide the holder of this  Warrant with copies of
the same notices and other  information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the stockholders.

     Section 6.  Representations of Holder.  The holder of this Warrant,  by the
acceptance hereof,  represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment  only and not with a view towards,  or
for resale in connection  with, the public sale or  distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided,  however,  that by making the representations  herein,
the holder does not agree to hold this Warrant or any of the Warrant  Shares for
any minimum or other  specific  term and  reserves  the right to dispose of this
Warrant and the Warrant  Shares at any time in accordance  with or pursuant to a
registration  statement or an exemption  under the Securities Act. The holder of
this Warrant further  represents,  by acceptance hereof,  that, as of this date,
such  holder  is an  "accredited  investor"  as  such  term is  defined  in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange  Commission
under the  Securities  Act (an  "Accredited  Investor").  Upon  exercise of this
Warrant,  other than  pursuant  to a Cashless  Exercise,  the holder  shall,  if
requested  by the Company,  confirm in writing,  in a form  satisfactory  to the
Company,  that the Warrant Shares so purchased are being acquired solely for the
holder's own account and not as a nominee for any other party,  for  investment,
and not with a view  toward  distribution  or resale and that such  holder is an
Accredited  Investor.  If such holder cannot make such  representations  because
they would be  factually  incorrect,  it shall be a condition  to such  holder's
exercise of this Warrant,  other than pursuant to a Cashless Exercise,  that the
Company receive such other  representations as the Company considers  reasonably
necessary  to assure  the  Company  that the  issuance  of its  securities  upon
exercise of this Warrant shall not violate any United States or state securities
laws.

<PAGE>


Section 7. Ownership and Transfer.

     (a) 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.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

     (b) This Warrant and the rights granted  hereunder  shall not be assignable
by the holder hereof without the written consent of the Company.

     (c) The  Company is  obligated  to register  the Warrant  Shares for resale
under the Securities Act pursuant to the  Registration  Rights Agreement and the
initial  holder of this Warrant (and certain  assignees  thereof) is entitled to
the  registration  rights in respect of the  Warrant  Shares as set forth in the
Registration Rights Agreement.

Section 8.  Adjustment  of  Warrant  Exercise  Price and  Number of Shares.  The
Warrant  Exercise  Price and the number of shares of Common Stock  issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

     (a) Adjustment of Warrant Exercise Price and Number of Shares upon Issuance
of Common Stock.  If and whenever on or after the Issuance Date of this Warrant,
the Company issues or sells,  or is deemed to have issued or sold, any shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than a price (the "Applicable  Price") equal
to the Warrant  Exercise Price in effect  immediately  prior to such issuance or
sale, then immediately  after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such  consideration  per share.
Upon each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant  Shares  issuable upon exercise of this Warrant shall be adjusted to the
number of shares  determined by multiplying the Warrant Exercise Price in effect
immediately  prior to such  adjustment by the number of Warrant Shares  issuable
upon exercise of this Warrant  immediately prior to such adjustment and dividing
the product thereof by the Warrant Exercise Price resulting from such djustment.

     (b) Effect on Warrant  Exercise  Price of Certain  Events.  For purposes of
determining the adjusted  Warrant  Exercise Price under Section 8(a) above,  the
following shall be applicable:

          (i)  Issuance  of  Options.  If the  Company in any manner  grants any
     Options and the lowest  price per share for which one share of Common Stock
     is issuable  upon the  exercise of any such  Option or upon  conversion  or
     exchange of any Convertible  Securities  issuable upon exercise of any such

<PAGE>


     Option is less than the Applicable  Price,  then such share of Common Stock
     shall be deemed to be  outstanding  and to have been issued and sold by the
     Company at the time of the  granting  or sale of such Option for such price
     per share.  For purposes of this  Section  8(b)(i),  the Alowest  price per
     share for which one share of Common Stock is issuable upon exercise of such
     Options or upon  conversion  or  exchange of such "Convertible  Securities"
     shall be equal to the sum of the lowest amounts of  consideration  (if any)
     received  or  receivable  by the Company  with  respect to any one share of
     Common Stock upon the granting or sale of the Option,  upon exercise of the
     Option or upon conversion or exchange of any Convertible  Security issuable
     upon exercise of such Option. No further adjustment of the Warrant Exercise
     Price shall be made upon the actual  issuance  of such  Common  Stock or of
     such  Convertible  Securities upon the exercise of such Options or upon the
     actual  issuance of such Common Stock upon  conversion  or exchange of such
     Convertible Securities.

          (ii) Issuance of Convertible Securities.  If the Company in any manner
     issues or sells any  Convertible  Securities and the lowest price per share
     for which one share of Common  Stock is  issuable  upon the  conversion  or
     exchange  thereof  is less than the  Applicable  Price,  then such share of
     Common Stock shall be deemed to be outstanding  and to have been issued and
     sold by the Company at the time of the issuance or sale of such Convertible
     Securities  for such  price per share.  For the  purposes  of this  Section
     8(b)(ii),  the Alowest  price per share for which one share of Common Stock
     is issuable upon such  conversion or exchange" shall be equal to the sum of
     the lowest amounts of consideration  (if any) received or receivable by the
     Company with respect to one share of Common Stock upon the issuance or sale
     of the  Convertible  Security  and  upon  conversion  or  exchange  of such
     Convertible  Security.  No further adjustment of the Warrant Exercise Price
     shall be made upon the actual issuance of such Common Stock upon conversion
     or exchange of such Convertible  Securities,  and if any such issue or sale
     of such  Convertible  Securities  is made upon  exercise of any Options for
     which  adjustment of the Warrant  Exercise Price had been or are to be made
     pursuant to other provisions of this Section 8(b), no further adjustment of
     the Warrant Exercise Price shall be made by reason of such issue or sale.

          (iii)  Change in Option Price or Rate of  Conversion.  If the purchase
     price provided for in any Options,  the additional  consideration,  if any,
     payable  upon  the  issue,   conversion  or  exchange  of  any  Convertible
     Securities, or the rate at which any Convertible Securities are convertible
     into or  exchangeable  for Common  Stock  changes at any time,  the Warrant
     Exercise  Price in effect at the time of such  change  shall be adjusted to
     the Warrant Exercise Price which would have been in effect at such time had
     such Options or Convertible  Securities  provided for such changed purchase
     price, additional consideration or changed conversion rate, as the case may
     be, at the time initially granted, issued or sold and the number of Warrant
     Shares  issuable  upon  exercise of this Warrant  shall be  correspondingly
     readjusted.  For  purposes of this Section  8(b)(iii),  if the terms of any
     Option or Convertible Security that was outstanding as of the Issuance Date
     of this  Warrant are  changed in the manner  described  in the  immediately
     preceding sentence, then such Option or Convertible Security and the Common
     Stock deemed issuable upon exercise,  conversion or exchange  thereof shall
     be deemed to have been issued as of the date of such change.  No adjustment
     pursuant to this Section 8(b) shall be made if such adjustment would result

<PAGE>


     in an increase of the Warrant Exercise Price then in effect.

     (c) Effect on Warrant  Exercise  Price of Certain  Events.  For purposes of
determining  the adjusted  Warrant  Exercise Price under Sections 8(a) and 8(b),
the following shall be applicable:

          (i)  Calculation  of  Consideration  Received.  If any  Common  Stock,
     Options or Convertible Securities are issued or sold or deemed to have been
     issued or sold for cash, the consideration received therefor will be deemed
     to be the net amount received by the Company therefor. If any Common Stock,
     Options or Convertible  Securities  are issued or sold for a  consideration
     other than cash, the amount of such  consideration  received by the Company
     will  be  the  fair  value  of  such   consideration,   except  where  such
     consideration consists of marketable  securities,  in which case the amount
     of  consideration  received by the Company will be the Market Price of such
     securities on the date of receipt of such securities.  If any Common Stock,
     Options  or  Convertible  Securities  are  issued  to  the  owners  of  the
     non-surviving  entity in connection with any merger in which the Company is
     the surviving entity,  the amount of consideration  therefor will be deemed
     to be the fair value of such  portion of the net assets and business of the
     non-surviving  entity 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  jointly by
     the Company and the holders of Warrants  representing  at least  two-thirds
     (b) of the Warrant  Shares  issuable  upon  exercise of the  Warrants  then
     outstanding.  If such parties are unable to reach agreement within ten (10)
     days after the occurrence of an event  requiring  valuation (the "Valuation
     Event"),  the fair value of such  consideration  will be determined  within
     five (5) Business  Days after the tenth (10th) day  following the Valuation
     Event  by an  independent,  reputable  appraiser  jointly  selected  by the
     Company and the holders of Warrants representing at least two-thirds (b) of
     the Warrant Shares issuable upon exercise of the Warrants then outstanding.
     The  determination  of such  appraiser  shall be final and binding upon all
     parties and the fees and expenses of such appraiser  shall be borne jointly
     by the Company and the holders of Warrants.

          (ii)  Integrated  Transactions.  In  case  any  Option  is  issued  in
     connection  with  the  issue or sale of other  securities  of the  Company,
     together  comprising  one  integrated  transaction  in  which  no  specific
     consideration  is  allocated to such  Options by the parties  thereto,  the
     Options will be deemed to have been issued for a consideration of $.01.

          (iii)  Treasury   Shares.   The  number  of  shares  of  Common  Stock
     outstanding  at any given time does not include  shares owned or held by or
     for the account of the Company,  and the disposition of any shares so owned
     or held will be considered an issue or sale of Common Stock.

          (iv)  Record  Date.  If the  Company  takes a record of the holders of
     Common Stock for the purpose of entitling them (1) to receive a dividend or
     other  distribution  payable in Common  Stock,  Options  or in  Convertible
     Securities  or (2) to subscribe for or purchase  Common  Stock,  Options or

<PAGE>


     Convertible Securities, then such record date will be deemed to be the date
     of the  issue or sale of the  shares of  Common  Stock  deemed to have been
     issued or sold upon the  declaration of such dividend or the making of such
     other   distribution  or  the  date  of  the  granting  of  such  right  of
     subscription or purchase, as the case may be.

     (d) Adjustment of Warrant Exercise Price upon Subdivision or Combination of
Common  Stock.  If the  Company at any time after the date of  issuance  of this
Warrant  subdivides (by any stock split,  stock  dividend,  recapitalization  or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
greater number of shares, any Warrant Exercise Price in effect immediately prior
to such subdivision will be proportionately  reduced and the number of shares of
Common Stock  obtainable  upon exercise of this Warrant will be  proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination,  reverse stock split or otherwise) one or more classes
of its outstanding  shares of Common Stock into a smaller number of shares,  any
Warrant Exercise Price in effect  immediately  prior to such combination will be
proportionately  increased  and the  number  of  Warrant  Shares  issuable  upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section  8(d) shall  become  effective at the close of business on the date
the subdivision or combination becomes effective.

     (e)  Distribution  of  Assets.  If the  Company  shall  declare or make any
dividend or other  distribution  of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without  limitation,  any  distribution  of cash,  stock  or  other  securities,
property or options by way of a dividend, spin off, reclassification,  corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

          (i) any  Warrant  Exercise  Price in effect  immediately  prior to the
     close of business on the record date fixed for the determination of holders
     of Common  Stock  entitled  to receive the  Distribution  shall be reduced,
     effective  as of the close of  business  on such  record  date,  to a price
     determined  by  multiplying  such Warrant  Exercise  Price by a fraction of
     which (A) the numerator shall be the Closing Sale Price of the Common Stock
     on the trading day  immediately  preceding such record date minus the value
     of the  Distribution (as determined in good faith by the Company's Board of
     Directors) applicable to one share of Common Stock, and (B) the denominator
     shall be the  Closing  Sale Price of the Common  Stock on the  trading  day
     immediately preceding such record date; and

          (ii) either (A) the number of Warrant Shares  obtainable upon exercise
     of this  Warrant  shall be  increased  to a number of  shares  equal to the
     number of shares of Common Stock obtainable  immediately prior to the close
     of business on the record  date fixed for the  determination  of holders of
     Common  Stock  entitled  to  receive  the  Distribution  multiplied  by the
     reciprocal of the fraction set forth in the  immediately  preceding  clause
     (i),  or (B) in the event  that the  Distribution  is of common  stock of a
     company whose common stock is traded on a national securities exchange or a
     national automated  quotation system, then the holder of this Warrant shall

<PAGE>


     receive an additional  warrant to purchase Common Stock, the terms of which
     shall be identical to those of this Warrant, except that such warrant shall
     be  exercisable  into the amount of the assets that would have been payable
     to the holder of this Warrant  pursuant to the  Distribution had the holder
     exercised  this Warrant  immediately  prior to such record date and with an
     exercise  price  equal to the  amount by which the  exercise  price of this
     Warrant was  decreased  with  respect to the  Distribution  pursuant to the
     terms of the immediately preceding clause (i).

     (f) Certain  Events.  If any event occurs of the type  contemplated  by the
provisions of this Section 8 but not expressly  provided for by such  provisions
(including,  without  limitation,  the  granting of stock  appreciation  rights,
phantom stock rights or other rights with equity  features),  then the Company's
Board of Directors will make an appropriate  adjustment in the Warrant  Exercise
Price and the number of shares of Common Stock  obtainable upon exercise of this
Warrant so as to protect  the rights of the  holders of the  Warrants;  provided
that no such adjustment  pursuant to this Section 8(f) will increase the Warrant
Exercise  Price or decrease the number of shares of Common Stock  obtainable  as
otherwise determined pursuant to this Section 8.

     (g) Notices.

          (i) Immediately upon any adjustment of the Warrant Exercise Price, the
     Company will give  written  notice  thereof to the holder of this  Warrant,
     setting forth in reasonable detail, and certifying, the calculation of such
     adjustment.

          (ii) The  Company  will  give  written  notice  to the  holder of this
     Warrant  at least  ten (10)  days  prior to the date on which  the  Company
     closes its books or takes a record  (A) with  respect  to any  dividend  or
     distribution  upon  the  Common  Stock,  (B) with  respect  to any pro rata
     subscription offer to holders of Common Stock or (C) for determining rights
     to vote with respect to any Organic Change (as defined below),  dissolution
     or liquidation,  provided that such information  shall be made known to the
     public prior to or in  conjunction  with such notice being provided to such
     holder.

          (iii) The Company will also give written  notice to the holder of this
     Warrant  at least  ten (10)  days  prior to the date on which  any  Organic
     Change,  dissolution  or  liquidation  will take place,  provided that such
     information  shall be made known to the public  prior to or in  conjunction
     with such notice being provided to such holder.

Section 9. Purchase  Rights;  Reorganization,  Reclassification,  Consolidation,
           Merger or Sale.

     (a) In addition to any  adjustments  pursuant to Section 8 above, if at any
time the Company grants, issues or sells any Options,  Convertible Securities or
rights to purchase stock, warrants, securities or other property pro rata to the
record  holders of any class of Common Stock (the "Purchase  Rights"),  then the
holder of this Warrant will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable

<PAGE>


upon complete  exercise of this Warrant  immediately  before the date on which a
record is taken for the grant,  issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

     (b) Any recapitalization,  reorganization, reclassification, consolidation,
merger,  sale of all or  substantially  all of the  Company's  assets to another
Person or other  transaction  in each case which is  effected in such a way that
holders  of Common  Stock are  entitled  to  receive  (either  directly  or upon
subsequent  liquidation)  stock,  securities  or assets  with  respect  to or in
exchange for Common Stock is referred to herein as an "Organic Change." Prior to
the  consummation of any (i) sale of all or  substantially  all of the Company's
assets to an acquiring  Person or (ii) other Organic Change  following which the
Company is not a  surviving  entity,  the  Company  will  secure from the Person
purchasing  such assets or the successor  resulting from such Organic Change (in
each case,  the "Acquiring  Entity") a written  agreement (in form and substance
satisfactory to the holders of Warrants  representing at least two-thirds (b) of
the Warrant Shares  issuable upon exercise of the Warrants then  outstanding) to
deliver to each holder of Warrants in exchange for such Warrants,  a security of
the Acquiring Entity evidenced by a written instrument  substantially similar in
form and  substance  to this  Warrant  and  satisfactory  to the  holders of the
Warrants  (including an adjusted  warrant  exercise price equal to the value for
the Common Stock reflected by the terms of such  consolidation,  merger or sale,
and exercisable for a corresponding  number of shares of Common Stock acquirable
and receivable upon exercise of the Warrants  (without regard to any limitations
or exercise),  if the value so reflected is less than any Warrant Exercise Price
in effect immediately prior to such consolidation, merger or sale). Prior to the
consummation  of any other Organic  Change,  the Company shall make  appropriate
provision  (in  form and  substance  satisfactory  to the  holders  of  Warrants
representing  a majority of the Warrant  Shares  issuable  upon  exercise of the
Warrants  then  outstanding)  to insure that each of the holders of the Warrants
will  thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the Warrant Shares immediately  theretofore issuable and
receivable  upon the exercise of such holder's  Warrants  (without regard to any
limitations on exercise),  such shares of stock, securities or assets that would
have been  issued or  payable  in such  Organic  Change  with  respect  to or in
exchange  for the number of Warrant  Shares  which would have been  issuable and
receivable  upon the  exercise of such  holder's  Warrant as of the date of such
Organic Change  (without  taking into account any limitations or restrictions on
the exercisability of this Warrant).

     Section 10. Lost, Stolen,  Mutilated or Destroyed Warrant.  If this Warrant
is lost, stolen,  mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification  undertaking (or, in the case of a mutilated Warrant,  the
Warrant),  issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

     Section 11. Notice. Any notices,  consents, waivers or other communications

<PAGE>


required or  permitted  to be given under the terms of this  Warrant  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

         If to the Holder:
                  May Davis Group, Inc.
                  1 World Trade Center, Suite 8735
                  New York, NY 10048
                  Telephone: (212) 775-7400
                  Facsimile: (212) 775-8166
                  Attention:

         If to the Company:
                  Digs, Inc.
                  17327 Ventura Blvd.
                  Encino, CA 91316
                  Telephone:  (818) 995-3650
                  Facsimile:   (818) 789-3985
                  Attention: President

         With a copy to:
                  Silverman, Collura & Chernis, P.C.
                  381 Park Avenue South, Suite 1601
                  New York, New York 10016
                  Telephone:        (212) 779-8600
                  Facsimile:        (212) 779-8858
                  Attention:        Martin C. Licht, Esq.

     Each party shall provide five days' prior written notice to the other party
of any change in address or facsimile  number.  Written  confirmation of receipt
(A)  given  by  the  recipient  of  such  notice,   consent,   waiver  or  other
communication,  (B)  mechanically  or  electronically  generated by the sender's
facsimile machine containing the time, date,  recipient  facsimile number and an
image of the first page of such  transmission  or (C)  provided by a  nationally
recognized  overnight delivery service shall be rebuttable  evidence of personal
service,  receipt by facsimile or receipt from a nationally recognized overnight
delivery   service  in  accordance   with  clause  (i),  (ii)  or  (iii)  above,
respectively.

     Section 12. Date. The date of this Warrant is March __, 2000. This Warrant,
in all events, shall be wholly void and of no effect after the close of business
on the Expiration Date, except that notwithstanding any other provisions hereof,
the  provisions  of Section  7(c) shall  continue in full force and effect after

<PAGE>


such date as to any Warrant Shares or other securities  issued upon the exercise
of this Warrant.

     Section 13. Amendment and Waiver.  Except as otherwise provided herein, the
provisions  of the  Warrants  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Warrants  representing  at least  two-thirds (b) of the Warrant Shares  issuable
upon exercise of the Warrants then outstanding; provided that no such action may
increase the Warrant Exercise Price or decrease the number of shares or class of
stock obtainable upon exercise of any Warrant without the written consent of the
holder of such Warrant.

     Section 14. Descriptive  Headings;  Governing Law. The descriptive headings
of the  several  sections  and  paragraphs  of this  Warrant  are  inserted  for
convenience  only and do not  constitute a part of this  Warrant.  The corporate
laws of the State of Delaware  shall govern all issues  concerning  the relative
rights of the Company and its stockholders.  All other questions  concerning the
construction,  validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law  provision or rule (whether of the State of
New York, or any other  jurisdiction)  that would cause the  application  of the
laws of any jurisdiction other than the State of New York.


                            [Signature Page Follows]



<PAGE>


         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
Peter B. Dunn, its President, to be effective as of the 14th day of March, 2000.


                                                              DIGS, INC.

                                                       By:  /s/ PETER B. DUNN
                                                                ----------------
                                                          Name: Peter B. Dunn
                                                         Title: President



<PAGE>

                              EXHIBIT A TO WARRANT

                                SUBSCRIPTION FORM
        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
                                   DIGS, INC.

         The  undersigned   holder  hereby   exercises  the  right  to  purchase
_________________  of the shares of Common  Stock  ("Warrant  Shares")  of Digs,
Inc., a Delaware corporation (the "Company"),  evidenced by the attached Warrant
(the "Warrant").  Capitalized  terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.

         1. Form of Warrant  Exercise Price.  The Holder intends that payment of
the Warrant Exercise Price shall be made as:

 __________      a "Cash Exercise" with respect to _________________ Warrant
                 Shares; and/or


 __________      a "Cashless  Exercise" with respect to  _______________Warrant
                 Shares (to the extent permitted by the terms of the Warrant).

         2. Payment of Warrant  Exercise Price. In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant  Shares to be
issued pursuant hereto, the holder shall pay the sum of  $___________________ to
the Company in accordance with the terms of the Warrant.

         3. Delivery of Warrant Shares.  The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

         Date: _______________ __, ______



                            Name of Registered Holder


                                            By:
         Name:
         Title:



<PAGE>



                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER


         FOR VALUE RECEIVED,  the undersigned does hereby assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________ shares of the capital stock of Digs, Inc., a Delaware  corporation,
represented  by  warrant  certificate  no.  _____,  standing  in the name of the
undersigned  on the  books of said  corporation.  The  undersigned  does  hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.


         Dated:  _________, ____




                   ------------------------------------

                   By:      _____________________________
                   Its:     _____________________________