Document:

Exhibit 10.36

                          SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (the "Agreement") dated as of November
16, 2001, between Diamond Entertainment Corporation, a New Jersey corporation
with principal executive offices located at 800 Tucker Lane, Walnut, California
91789 (the "Company"), and the persons signatory hereto (collectively, the
"Buyers" and individually, "Buyer").

                              W I T N E S S E T H:

         WHEREAS, Buyers desires to purchase from the Company, and the Company
desires to issue and sell to the Buyers, upon the terms and subject to the
conditions of this Agreement, (i) 5 shares of Series B Convertible Preferred
Stock, no par value (the "Preferred Stock"), having the rights, preferences and
privileges set forth in the Articles of Amendment of the Articles of
Incorporation of the Company designating the rights, preferences, privileges and
restrictions of Series B Preferred Stock attached hereto as Annex I (the
"Certificate of Designations"), and (ii) warrants to purchase an aggregate of
750,000 shares (the "Warrants") of the Company's common stock no par value (the
"Common Stock");

         WHEREAS, upon the terms and subject to the conditions set forth in the
Certificate of Designations, the Preferred Stock is convertible into shares of
Common Stock; and

         WHEREAS, the Warrants, upon the terms and subject to the conditions in
the Warrants, will for a period of five (5) years be exercisable to purchase
750,000 shares of Common Stock.

         NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:

         I.       PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS

         A. Transaction. Each Buyer hereby agrees to purchase from the Company,
and the Company hereby agrees to issue and sell to each Buyer, in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "Securities Act"), the number of shares
of Preferred Stock and Warrants set forth on the signature page hereof. The
purchase and sale of the Preferred Stock and Warrants shall be made pursuant to
the provisions of this Agreement, which is one of several substantially
identical counterparts executed by the Buyers in connection with the offering
("Offering") by the Company of the Preferred Stock and Warrants for an aggregate
purchase price of $50,000 and which together shall govern the purchase and sale
of the shares of Preferred Stock and Warrants. As used herein, the term
"Agreement" shall mean this Agreement and all Exhibits, Annexes, Schedules and
amendments thereto together with all the other Agreements executed by the Buyers
in the Offering.

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         B. Purchase Price; Form of Payment. The purchase price for the
Preferred Stock and Warrants to be purchased by each Buyer hereunder shall be
equal to ten thousand dollars ($10,000) times the number of shares of Preferred
Stock purchased (the "Purchase Price"). Each Buyer shall pay the Purchase Price
on the date hereof by wire transfer of immediately available funds to the escrow
agent (the "Escrow Agent") identified in those certain Escrow Instructions of
even date herewith, a copy of which is attached hereto as Annex II (the "Escrow
Instructions").

         Simultaneously against receipt by the Escrow Agent of the Purchase
Price, the Company shall deliver one or more duly authorized, issued and
executed certificates (I/N/O Buyer) evidencing the Securities, to the Escrow
Agent or its designated depository. By executing and delivering this Agreement,
Buyer and the Company each hereby agrees to observe the terms and conditions of
the Escrow Instructions, all of which are incorporated herein by reference as if
fully set forth herein.

         C. Method of Payment. Payment into escrow of the Purchase Price shall
be made by wire transfer of immediately available funds to:

                           Bank:            Union Bank of California
                                            The Private Bank - Newport Beach
                                            Irvine, CA 92612
                           ABA Routing:     122 000 496
                           Account No:      470 000 1879
                           Account Name:    Owen M. Naccarato
                                            Attorney Fund Account III

Simultaneously with the execution of this Agreement, the Buyer shall deposit
with the Escrow Agent the Purchase Price and the Company shall deposit with the
Escrow Agent the Securities.

         II.      BUYERS' REPRESENTATIONS, WARRANTIES; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.

         Each Buyer represents and warrants to and covenants and agrees with the
Company as follows:

         A. Buyer is purchasing the Preferred Stock, the Warrants, the Common
Stock issuable upon exercise of the Warrants (the "Warrant Shares") and the
shares of Common Stock issuable upon conversion of the Preferred Stock,
including payment of interest for its own account, for investment purposes only
and not with a view towards or in connection with the public sale or
distribution thereof in violation of the Securities Act.

         B. Buyer (i) is an "accredited investor" within the meaning of Rule 501
of Regulation D under the Securities Act, (ii) is experienced in making
investments of the kind contemplated by this Agreement, (iii) is capable, by

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reason of its business and financial experience, of evaluating the relative
merits and risks of an investment in the Securities, (iv) acknowledges that and
an investment in the Securities involves a high degree of risk, and (v) is able
to afford the loss of its entire investment in the Securities.

         C. Buyer understands that the Securities are being offered and sold by
the Company in reliance on an exemption from the registration requirements of
the Securities Act and equivalent state securities and "blue sky" laws; the
Securities are "restricted securities" as defined in Rule 144 promulgated under
the Securities Act, and that the Company is relying upon the accuracy of, and
Buyer's compliance with, Buyer's representations, warranties and covenants set
forth in this Agreement to determine the availability of such exemption and the
eligibility of Buyer to purchase the Securities;

         D. Buyer has been furnished with or provided access to all materials
relating to the business, financial position and results of operations of the
Company, and all other materials requested by Buyer to enable it to make an
informed investment decision with respect to the Securities.

         E. Buyer acknowledges that it has been furnished with, or had access to
through the EDGAR system of the Securities and Exchange Commission (the "SEC"),
copies of the Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2001 and all other reports and documents heretofore filed by the
Company with the SEC pursuant to the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), since March 31, 2001 (collectively
the "SEC Filings").

         F. Buyer acknowledges that in making its decision to purchase the
Securities it has been given an opportunity to ask questions of and to receive
answers from the Company's executive officers, directors and management
personnel concerning the business, financial position and results of operations
of the Company, as well as the terms and conditions of the private placement of
the Securities by the Company.

         G. Buyer understands that the Securities have not been approved or
disapproved by the SEC or any state securities commission and that the foregoing
authorities have not reviewed any documents or instruments in connection with
the offer and sale to it of the Securities and have not confirmed or determined
the adequacy or accuracy of any such documents or instruments.

         H. This Agreement has been duly and validly authorized, executed and
delivered by Buyer and is a valid and binding agreement of Buyer enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally.

         I. Neither Buyer nor its affiliates, nor any person acting on its or

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their behalf, has the intention of entering, or will enter into, or has entered
within the past 60 days, directly or indirectly, any put option, short position
or other similar instrument or position with respect to the Common Stock and
neither Buyer nor any of its affiliates, nor any person acting on its or their
behalf, will use at any time shares of Common Stock acquired pursuant to this
Agreement to settle any put option, short position or other similar instrument
or position that may have been entered into prior to the execution of this
Agreement; provided, however, that the Buyer may enter into any short sale or
other hedging or similar arrangement it deems appropriate with respect to
Conversion Shares commencing on the day it delivers a Conversion Notice with
respect to such Conversion Shares, so long as such arrangements do not involve
more than the number of such Conversion Shares (determined as of the date of
such Conversion Notice). Neither Buyer nor any of its affiliates will engage in
any action which will have the effect of rendering unavailable the exemption
from the registration requirements of the Securities Act and all applicable
state securities laws relied upon by the Company in issuing the Securities. Each
Buyer hereby agrees to comply with all applicable requirements of federal and
state securities laws in connection with any proposed offer, sale or other
disposition of its Securities and to execute and deliver to the Company all such
documents and other instruments as the Company may reasonably require in order
to comply with all applicable federal and state securities laws and the
regulations of any stock exchange or quotation system on which the Common Stock
may be listed for trading.

         III.     COMPANY'S REPRESENTATIONS

         The Company represents and warrants to Buyer that except as disclosed
on Schedule III hereto:

         A. Capitalization. 1. The authorized capital stock of the Company
consists of 600,000,000 shares of Common Stock, no par value, of which
457,595,650 shares are outstanding on the date hereof and 4,999,950 share of
Convertible Preferred Stock, no par value, of which 483,251 are issued with
172,923 being held in treasury, plus 50 Series A Convertible Preferred Stock, no
par value, of which 40 shares are issued and outstanding. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable. The Conversion Shares and Warrant Shares
have been duly and validly authorized and reserved for issuance by the Company,
and when issued by the Company upon conversion of the Preferred Shares
(including payment of interest), or on exercise of the Warrants in accordance
with their terms, will be duly and validly issued, fully paid and non-assessable
and will not subject the holder thereof to personal liability by reason of being
such holder. There are no preemptive, subscription, "call" or other similar
rights to acquire the Common Stock (including the Conversion Shares and Warrant
Shares) that have been issued or granted to any person.

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         2. The Company does have subsidiaries and does own or control, directly
or indirectly, interest in another corporation, partnership, limited liability
company, unincorporated business organization, association, trust or other
business entity.

         B.       Organization; Reporting Company Status.
         1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and is duly
qualified as a foreign corporation in all jurisdictions in which the failure to
so qualify would have a material adverse effect on the business, properties,
prospects, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole, or on the consummation of any of
the transactions contemplated by this Agreement (a "Material Adverse Effect").

         2. The Company has registered the Common Stock pursuant to Section 12
of the Exchange Act and has timely filed with the SEC all reports and
information required to be filed by it pursuant to all reporting obligations
under Section 13(a) or 15(d), as applicable, of the Exchange Act for the
12-month period immediately preceding the date hereof. The Common Stock is
currently listed and traded on the NASDAQ, OTC:BB Bulletin Board ("OTC") and the
Company has not received any notice regarding, and to its knowledge there is no
threat, of the termination or discontinuance of the eligibility of the Common
Stock for such listing.

         C. Authorized Shares. The Company has duly and validly authorized and
reserved for issuance shares of Common Stock sufficient in number for the
conversion of the Preferred Stock (assuming for purposes of this Section III.C.
a Conversion Price of the lesser of the fixed price or the floating price (as
defined in the Certificate of Designations) and the exercise of the Warrants,
without regard to the anti-dilution provisions of the Preferred Stock and
Warrants. The Company understands and acknowledges the potentially dilutive
effect to the Common Stock of the issuance of the Conversion Shares upon
conversion of the Preferred Stock and the Warrant Shares upon exercise of the
Warrants. The Company further acknowledges that its obligation to issue
Conversion Shares upon conversion of the Preferred Stock and Warrant Shares upon
exercise of the Warrants in accordance with this Agreement is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company, notwithstanding
the commencement of any case under 11 U.S.C. ss. 101 et seq. (the "Bankruptcy
Code"). In the event the Company is a debtor under the Bankruptcy Code, the
Company hereby waives to the fullest extent permitted any rights to relief it
may have under 11 U.S.C. ss. 362 in respect of the conversion of the Preferred
Stock and the exercise of the Warrants. The Company agrees, without cost or
expense to the Buyer, to take or consent to any and all action necessary to
effectuate relief under 11 U.S.C. ss. 362.

         D. Authority; Validity and Enforceability. The Company has the
requisite corporate power and authority to enter into this Agreement, the
Certificate of Designations, the Registration Rights Agreement of even date
herewith between the Company and Buyer, a copy of which is annexed hereto as
Annex IV (the "Registration Rights Agreement") and the Warrants and to perform
all of its obligations hereunder and thereunder (including the issuance, sale
and delivery to Buyer of the Securities). The execution, delivery and

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performance by the Company of this Agreement, the Certificate of Designations,
the Warrants and the Registration Rights Agreement, and the consummation by the
Company of the transactions contemplated hereby and thereby (the issuance of the
Preferred Stock, the Warrants and the issuance and reservation for issuance of
the Conversion Shares and Warrant Shares), has been duly authorized by all
necessary corporate action on the part of the Company and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required, except to the extent stockholder approval is required under NASDAQ
rules. Each of this Agreement, the Certificate of Designations, the Warrants and
the Registration Rights Agreement has been duly validly executed and delivered
by the Company and each instrument constitutes a valid and binding obligation of
the Company enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and general equitable principles. The Securities have been duly and validly
authorized for issuance by the Company against receipt of the consideration
thereof, and, when executed and delivered by the Company, will be valid and
binding obligations of the Company enforceable against it in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and general equitable principles.

         E. Non-contravention. The execution and delivery by the Company of this
Agreement, the Certificate of Designations, the Warrant to Purchase Common Stock
and the Registration Rights Agreement, the issuance of the Securities, and the
consummation by the Company of the other transactions contemplated hereby and
thereby, do not and will not conflict with or result in a breach by the Company
of any of the terms or provisions of, or constitute a default (or an event
which, with notice, lapse of time or both, would constitute a default) under (i)
Articles of Incorporation or by-laws of the Company, (ii) except for such
conflict, breach or default which would not have a Material Adverse Effect, any
indenture, mortgage, deed of trust or other material agreement or instrument to
which the Company is a party or by which their respective properties or assets
are bound, or (iii) any law, rule, regulation, decree, judgment or order of any
court or public or governmental authority having jurisdiction over the Company
or any of the Company's properties or assets, nor is the Company otherwise in
violation of, conflict with or in default under any of the foregoing, except for
such conflict, breach or default which would not have a Material Adverse Affect.

         F. Approvals. Except for the filing of the Certificate of Designations
with the State of New Jersey, no authorization, approval or consent of any court
or public or governmental authority is required to be obtained by the Company
for the issuance and sale of the Preferred Stock and the Warrants (and the
Conversion Shares and Warrant Shares) to Buyer as contemplated by this
Agreement, except such authorizations, approvals and consents that have been
obtained by the Company prior to the date hereof.

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         G. SEC Filings. None of the SEC Filings contained at the time they were
filed any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The Company has not provided to Buyer any information that,
according to applicable law, rule or regulation, should have been disclosed
publicly prior to the date hereof by the Company, but which has not been so
disclosed.

         H. Absence of Certain Changes. Except as disclosed in the SEC Filings
or the Financial Statements (as defined in Section III.L. hereto), since the
Balance Sheet Date (as defined in Section III.L.), there has not occurred any
change, event or development in the business, financial condition, prospects or
results of operations of the Company, and there has not existed any condition
having or reasonably likely to have, a Material Adverse Effect.

         I. Full Disclosure. There is no fact known to the Company (other than
general economic or industry conditions known to the public generally) that has
not been fully disclosed in the SEC Filings or otherwise in writing to the Buyer
that (i) reasonably would be expected to have a Material Adverse Effect or (ii)
reasonably would be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to this Agreement, the
Certificate of Designations, the Warrants or the Registration Rights Agreement.

         J. Absence of Litigation. Except as set forth in the SEC Filings or
Schedule III.J, there is no action, suit, claim, proceeding, inquiry or
investigation pending or, to the Company's knowledge, threatened, by or before
any court or public or governmental authority which, if determined adversely to
the Company, would have a Material Adverse Effect.

         K. Absence of Events of Default. No "Event of Default" (as defined in
any agreement or instrument to which the Company is a party) and no event which,
with notice, lapse of time or both, would constitute an Event of Default (as so
defined), has occurred and is continuing, which could have a Material Adverse
Effect.

         L. Financial Statements; No Undisclosed Liabilities. The Company has
delivered or made available to Buyer true and complete copies of its audited
balance sheet as at March 31, 2001 and the related audited statements of
operations and cash flows for the fiscal year ended March 31, 2001 including the
related notes and schedules thereto as well as the same unaudited financial
statements as of and for the six month period ended September 31, 2001
(collectively, the "Financial Statements"), and all management letters, if any,
from the Company's independent auditors relating to the dates and periods
covered by the Financial Statements. Each of the Financial Statements has been
prepared in accordance with United States Generally Accepted Accounting
Principles ("GAAP") (subject, in the case of the interim Financial Statements,
to normal year end adjustments and the absence of footnotes) and in conformity

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with the practices consistently applied by the Company without modification of
the accounting principles used in the preparation thereof, and fairly presents
the financial position, results of operations and cash flows of the Company as
at the dates and for the periods indicated. For purposes hereof, the audited
balance sheet of the Company as at March 31, 2001 is hereinafter referred to as
the "Balance Sheet" and March 31, 2001 is hereinafter referred to as the
"Balance Sheet Date". The Company has no indebtedness, obligations or
liabilities of any kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due) that would have been required to be reflected in,
reserved against or otherwise described in the Balance Sheet or in the notes
thereto in accordance with GAAP, which was not fully reflected in, reserved
against or otherwise described in the Balance Sheet or the notes thereto or was
not incurred in the ordinary course of business consistent with the Company's
past practices since the Balance Sheet Date or was not previously disclosed to
Astor Capital, Inc. as agent for Buyers or Buyer or disclosed in an SEC Filing .

         M. Compliance with Laws; Permits. The Company is in compliance with all
laws, rules, regulations, codes, ordinances and statutes (collectively "Laws")
applicable to it or to the conduct of its business, except for such
non-compliance, which would not have a Material Adverse Effect. The Company
possesses all permits, approvals, authorizations, licenses, certificates and
consents from all public and governmental authorities, which are necessary to
conduct its business, except for those the absence of which would not have a
Material Adverse Effect.

         N. Related Party Transactions. Neither the Company nor any of its
officers, directors or "Affiliates" (as such term is defined in Rule 12b-2 under
the Exchange Act) has borrowed any moneys from or has outstanding any
indebtedness or other similar obligations to the Company. Neither the Company
nor any of its officers, directors or Affiliates (i) owns any direct or indirect
interest constituting more than a one percent equity (or similar profit
participation) interest in, or controls or is a director, officer, partner,
member or employee of, or consultant to or lender to or borrower from, or has
the right to participate in the profits of, any person or entity which is (x) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of the
Company, (y) engaged in a business related to the business of the Company , or
(z) a participant in any transaction to which the Company is a party (other than
in the ordinary course of the Company's business) or (ii) is a party to any
contract, agreement, commitment or other arrangement with the Company, other
than has already been disclosed in its current SEC filings.

         O. Insurance. The Company maintains property and casualty, general
liability and workers' compensation, insurance with financially sound and
reputable insurers that is adequate in light of the Company's historical claims
experience. The Company has not received notice from, and has no knowledge of
any threat by, any insurer (that has issued any insurance policy to the Company)
that such insurer intends to deny coverage under or cancel, discontinue or not
renew any insurance policy presently in force.

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         P. Securities Law Matters. Based, in part, upon the accuracy and
completeness of the representations, covenants and warranties of Buyer set forth
in Section II hereof, the offer and sale by the Company of the Securities is
exempt from (i) the registration and prospectus delivery requirements of the
Securities Act and the rules and regulations of the SEC thereunder and (ii) the
registration and/or qualification provisions of all applicable state securities
and "blue sky" laws. Other than pursuant to an effective registration statement
under the Securities Act, the Company has not issued, offered or sold Preferred
Stock or any shares of Common Stock (including for this purpose any securities
of the same or a similar class as the Preferred Stock or Common Stock, or any
securities convertible into or exchangeable or exercisable for Preferred Stock
or Common Stock or any such other securities) within the six-month period next
preceding the date hereof, except as previously publicly disclosed or disclosed
in writing to Buyer or in a SEC Filing, and the Company shall not directly or
indirectly take, and shall not permit any of its directors, officers or
Affiliates directly or indirectly to take, any action (including, without
limitation, any offering or sale to any person or entity of Preferred Stock or
shares of Common Stock), so as to make unavailable the exemption from Securities
Act registration being relied upon by the Company for the offer and sale to
Buyer of the Preferred Stock (and the Conversion Shares) as contemplated by this
Agreement. No form of general solicitation or advertising has been used or
authorized by the Company or any of its officers, directors or Affiliates in
connection with the offer or sale of the Preferred Stock (and the Conversion
Shares) as contemplated by this Agreement or any other agreement to which the
Company is a party.

         Q. Labor Matters. The Company is not party to any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements,
which pertain to employees of the Company. No employees of the Company are
represented by any labor organization and none of such employees has made a
pending demand for recognition, and there are no representation proceedings or
petitions seeking a representation proceeding presently pending or, to the
Company's knowledge, threatened to be brought or filed, with the National Labor
Relations Board or other labor relations tribunal. There is no organizing
activity involving the Company or pending or to the Company's knowledge,
threatened by any labor organization or group of employees of the Company. There
are no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or (ii)
material grievances or other labor disputes pending or, to the knowledge of the
Company, threatened against or involving the Company. There are no unfair labor
practice charges, grievances or complaints pending or, to the knowledge of the
Company, threatened by or on behalf of any employee or group of employees of the
Company.

         R. ERISA Matters. The Company and its ERISA Affiliates are in
compliance in all material respects with all provisions of ERISA applicable to
it. Neither the Company nor any ERISA Affiliate maintains, contributes,
maintained or contributed to a plan subject to the provisions of Title IV of
ERISA or Section 412 of the Internal Revenue Code.

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         For purposes of this Section III.S.:

         "ERISA" means the Employee Retirement Income Security Act of 1974, or
any successor statute, together with the final regulations promulgated
thereunder, as the same may be amended from time to time.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group of which the Company is a member and
which is treated as a single employer under ss. 414 of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code").

         S. Tax Matters. 1. The Company has filed all Tax Returns which it is
required to file under applicable Laws, except for such Tax Returns in respect
of which the failure to so file does not and could not have a Material Adverse
Effect; all such Tax Returns are true and accurate in all material respects and
have been prepared in compliance with all applicable Laws; the Company has paid
all Taxes due and owing by it (whether or not such Taxes are required to be
shown on a Tax Return) and have withheld and paid over to the appropriate taxing
authorities all Taxes which they are required to withhold from amounts paid or
owing to any employee, stockholder, creditor or other third parties; and since
December 31, 1999, the charges, accruals and reserves for Taxes with respect to
the Company (including any provisions for deferred income taxes) reflected on
the books of the Company are adequate to cover any Tax liabilities of the
Company if its current tax year were treated as ending on the date hereof.

         2. No claim has been made by a taxing authority in a jurisdiction where
the Company does not file tax returns that such corporation is or may be subject
to taxation by that jurisdiction. To the Company's knowledge, there are no
foreign, federal, state or local tax audits or administrative or judicial
proceedings pending or being conducted with respect to the Company; no
information related to Tax matters has been requested by any foreign, federal,
state or local taxing authority; and, except as disclosed above, no written
notice indicating an intent to open an audit or other review has been received
by the Company from any foreign, federal, state or local taxing authority. To
the Company's knowledge, there are no material unresolved questions or claims
concerning the Company's Tax liability. The Company (A) has not executed or
entered into a closing agreement pursuant to ss. 7121 of the Internal Revenue
Code or any predecessor provision thereof or any similar provision of state,
local or foreign law; or (B) has not agreed to or is required to make any
adjustments pursuant to ss. 481 (a) of the Internal Revenue Code or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by the Company or has any knowledge that the IRS has proposed
any such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any changes in
accounting methods that relate to the business or operations of the Company. The

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Company has not been a United States real property holding corporation within
the meaning of ss. 897(c)(2) of the Internal Revenue Code during the applicable
period specified in ss. 897(c)(1)(A)(ii) of the Internal Revenue Code.

         3. The Company has not made an election under ss. 341(f) of the
Internal Revenue Code. The Company is not liable for the Taxes of another person
that is not a subsidiary of the Company under (A) Treas. Reg. ss. 1.1502-6 (or
comparable provisions of state, local or foreign law), (B) as a transferee or
successor, (C) by contract or indemnity or (D) otherwise. The Company is not a
party to any tax sharing agreement. The Company has not made any payments, is
obligated to make payments or is a party to an agreement that could obligate it
to make any payments that would not be deductible under ss. 28OG of the Internal
Revenue Code.

         For purposes of this Section III:

         "IRS" means the United States Internal Revenue Service.

         "Tax" or "Taxes" means federal, state, county, local, foreign, or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.

         "Tax Return" means any return, information report or filing with
respect to Taxes, including any schedules attached thereto and including any
amendment thereof.

         T. Property. The Company does not own any real property. Except as
disclosed in the SEC Filings or the Financial Statements, the Company has good
and marketable title to all personal property owned by it, free and clear of all
liens, encumbrances and defects except such as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company; and any real property and
buildings held under lease by the Company are held by it under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company.

         U. Intellectual Property. The Company owns or possesses adequate and
enforceable rights to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or

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procedures) and other similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of its business as now being conducted.
To the Company's knowledge, the Company is not infringing upon or in conflict
with any right of any other person with respect to any Intangibles. No claims
have been asserted by any person to the ownership or use of any Intangibles and
the Company has no knowledge of any basis for such claim.

         V. Internal Controls and Procedures. The Company maintains accurate
books and records and internal accounting controls which provide reasonable
assurance that (i) all transactions to which the Company is a party or by which
its properties are bound are executed with management's authorization; (ii) the
reported accountability of the Company's assets is compared with existing assets
at regular intervals; (iii) access to the Company's assets is permitted only in
accordance with management's authorization; and (iv) all transactions to which
the Company is a party or by which its properties are bound are recorded as
necessary to permit preparation of the financial statements of the Company in
accordance with U.S. generally accepted accounting principles.

         W. Payments and Contributions. Neither the Company nor any of its
directors, officers or, to its knowledge, other employees has (i) used any
Company funds for any unlawful contribution, endorsement, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment of Company funds to any foreign or domestic government
official or employee; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other similar payment to any
person with respect to Company matters.

         X. No Misrepresentation. No representation or warranty of the Company
contained in this Agreement, any schedule, annex or exhibit hereto or any
agreement, instrument or certificate furnished by the Company to Buyer pursuant
to this Agreement, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

         Y. Right of First Refusal. The Company has not granted any right of
first refusal to any person with respect to the issuance of the Preferred Stock,
Common Stock or securities convertible into Common Stock.

`        IV.      CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

         A. Restrictive Legend. Buyer acknowledges and agrees that it will not
offer, sell or otherwise dispose of any of its Securities in violation of
federal and state securities laws, and upon issuance pursuant to this Agreement,
the certificates or other evidence of the Securities (and any shares of Common
Stock issued upon conversion of the Preferred Stock or upon exercise of the
Warrants) shall have endorsed thereon a legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the Securities
to the same effect):

                                       12
<PAGE>

         "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE,
AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE
OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS."

         B. Filings. The Company shall make all necessary SEC and "blue sky"
filings required to be made by the Company in connection with the sale of the
Securities to the Buyer as required by all applicable Laws, and shall provide a
copy thereof to the Buyer promptly after such filing.

         C. Reporting Status. So long as the Buyer beneficially owns any of the
Securities, the Company shall use its best efforts to file all reports required
to be filed by it with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act.

         D. Listing. So long as the Buyer beneficially owns any of the
Securities, except to the extent the Company lists its Common Stock on The New
York or American Stock Exchanges, the NASDAQ SmallCap Market or the OTC Bulletin
Board, the Company shall use its best efforts to maintain its listing of the
Common Stock on NASDAQ.

         E. Reserved Conversion Shares. Subject to Section 8 of the Certificate
of Designations and Section 2(d) of the Registration Rights Agreement, the
Company at all times from and after the date hereof shall have a sufficient
number of shares of Common Stock duly and validly authorized and reserved for
issuance to satisfy the conversion, in full, of the Preferred Stock, including
payment of the Additional Amount (assuming for purposes of this Section IV.E., a
Conversion Price of as defined in the Certificate of Designations), and upon the
exercise of the Warrants.

         F. Registration Rights Agreement. The Company shall cause the
Registration Rights Agreement to remain in full force and effect and the Company
shall comply in all material respects with the terms thereof.

         G. Notice of Certain Events Affecting Registration. The Company will
immediately notify the Buyer upon the occurrence of any of the following events
in respect of a registration statement or related prospectus in respect of an
offering of the Securities; (i) receipt of any request for additional
information by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement to be supplied
by amendments or supplements to the registration statement or related
prospectus; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or

                                       13
<PAGE>

that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate; and the Company
will promptly make available to Buyer any such supplement or amendment to the
related prospectus.

         H. Consolidation; Merger. The Company shall not, at any time after the
date hereof, effect any merger or consolidation of the Company with or into, or
a transfer of all or substantially all of the assets of the Company to, another
entity (a "Consolidation Event") unless the resulting successor or acquiring
entity (if not the Company) assumes by written instrument or by operation of law
the obligation to deliver to Buyer such shares of stock and/or securities as
Buyer is entitled to receive pursuant to this Agreement.

         I. Issuance of Preferred Shares and Warrant Shares. The sale of the
Preferred Stock and the issuance of the Warrant Shares pursuant to exercise of
the Warrant and the Conversion Shares upon conversion of the Preferred Stock
shall be made in accordance with the provisions and requirements of Section 4(2)
of the Securities Act and Regulation D promulgated thereunder and any applicable
state securities law. The Company shall make all necessary SEC and "blue sky"
filings required to be made by the Company in connection with the sale of the
Securities to Buyer as required by all applicable Laws, and shall provide a copy
thereof to Buyer promptly after such filing; provided, however, that each Buyer
agrees to furnish all such information as may reasonably be requested by the
Company in order to effect all such filings..

         J. Limitation on Future Financing. The Company agrees that as long as
  the Buyers own Preferred Stock it will not sell or enter into any agreement to
  sell any of its securities or incur any indebtedness outside the ordinary
  course of business, until twelve months after the Closing, without the written
  notice to investors.

         V.       TRANSFER AGENT INSTRUCTIONS.

         A. The Company undertakes and agrees that no instruction other than the
instructions referred to in this Section V and customary stop transfer
instructions prior to the registration and sale of the Common Stock pursuant to
an effective Securities Act registration statement will be given to its transfer
agent for the Common Stock and that the Common Stock issuable upon conversion of
the Preferred Stock, including the payment of interest, and upon exercise of the

                                       14
<PAGE>

Warrants otherwise shall be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement, the Registration Rights
Agreement and applicable Law, including, without limitation, the provisions of
the Securities Act and state securities laws. Nothing contained in this Section
V.A. shall affect in any way Buyer's obligations and agreement to comply with
all applicable securities laws upon resale of such Common Stock. If, at any
time, Buyer provides the Company with an opinion of counsel reasonably
acceptable to the Company in form and substance reasonably satisfactory to the
Company that registration of the resale by Buyer of such Common Stock is not
required under the Securities Act and that the removal of restrictive legends is
permitted under applicable law, the Company shall permit the transfer of such
Common Stock and, promptly instruct the Company's transfer agent to issue one or
more certificates for Common Stock without any restrictive legends endorsed
thereon.

         B. The Company shall permit Buyer to exercise its right to convert the
Preferred Stock by telecopying an executed and completed Notice of Conversion to
the Company. Each date on which a Notice of Conversion is telecopied to and
received by the Company in accordance with the provisions hereof shall be deemed
a Conversion Date. The Company shall transmit the certificates evidencing the
shares of Common Stock issuable upon conversion of any Preferred Stock to Buyer
via express courier, by electronic transfer or otherwise, within five business
days after receipt by the Company of the Notice of Conversion (the "Delivery
Date").

         C. The Company shall permit Buyer to exercise its right to purchase
shares of Common Stock pursuant to exercise of the Warrants in accordance with
its applicable terms of the Warrants. The last date that the Company may deliver
shares of Common Stock issuable upon any exercise of Warrants is referred to
herein as the "Warrant Delivery Date."

         D. The Company understands that a delay in the issuance of the shares
of Common Stock issuable upon the conversion of the Preferred Stock (including
the payment of interest or upon exercise of the Warrants beyond the applicable
Delivery Date or Warrant Delivery Date could result in economic loss to Buyer.
As compensation to Buyer for such loss (and not as a penalty), the Company
agrees to pay to Buyer for late issuance of Common Stock issuable upon
conversion of the Preferred Stock or exercise of the Warrants in accordance with
the following schedule (where "No. Business Days" is defined as the number of
business days beyond five (5) days from the Delivery Date or the Warrant
Delivery Date, as applicable):

                                       15
<PAGE>

                                                  Compensation For Each
                                                    Share of Preferred
                                                   Stock Not Converted
                                               Timely or Shares of Common
                                              Stock Issuable Upon Exercise
                                               of Each 1,000,000 Warrants
         No. Business Days                          Not Issued Timely

                        1                             $ 100
                        2                             $ 200
                        3                             $ 300
                        4                             $ 400
                        5                             $ 500
                        6                             $ 600
                        7                             $ 700
                        8                             $ 800
                        9                             $ 900
                       10                             $1000
             more than 10                             $ 200 for each
                                                      Business Day Late
                                                      beyond 10 days

The Company shall pay to Buyer the compensation described above by the transfer
of immediately available funds upon Buyer's demand. Nothing herein shall limit
Buyer's right to pursue actual damages for the Company's failure to issue and
deliver Common Stock to Buyer (which actual damages shall be reduced by the
amount of any compensation paid by the Company as described above in this
Section V. D.), and in addition to any other remedies which may be available to
Buyer, in the event the Company fails for any reason to effect delivery of such
shares of Common Stock within five business days after the relevant Delivery
Date or the Warrant Delivery Date, as applicable, Buyer shall be entitled to
rescind the relevant Notice of Conversion or exercise of Warrants by delivering
a notice to such effect to the Company whereupon the Company and Buyer shall
each be restored to their respective original positions immediately prior to
delivery of such Notice of Conversion on delivery. The Company may pay the
compensation described above in additional shares of Common Stock based upon the
Market Price (as defined in the Certificate of Designations) as determined on
the date of payment.

         E. Upon the execution and delivery hereof, the Company is issuing to
the transfer agent for its Common Stock (and to any substitute or replacement
transfer agent for its Common Stock upon the Company's appointment of any such
substitute or replacement transfer agent) instructions relating to the
Securities. Such instructions shall be irrevocable by the Company from and after
the date hereof or from and after the issuance thereof to any such substitute or
replacement transfer agent, as the case may be, except as otherwise expressly
provided in the Registration Rights Agreement. It is the intent and purpose of
such instructions, to require the transfer agent for the Common Stock from time
to time upon transfer of Securities by Buyer to issue certificates evidencing
such Registrable Securities free of legends and without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the transfer agent by or from
the Company or its counsel or Buyer.

                                       16
<PAGE>

         VI.      DELIVERY INSTRUCTIONS.

         The Securities shall be delivered by the Company on a
"delivery-against-payment basis" at the Closing.

         VII.     CLOSING DATE.

         The date and time of the issuance and sale of the Preferred Shares (the
"Closing Date") shall be the date hereof or such other as shall be mutually
agreed upon in writing. The issuance and sale of the Securities shall occur on
the Closing Date at the offices of the Escrow Agent.

         VIII.    CONDITIONS TO THE COMPANY'S OBLIGATIONS.

         The Buyer understands that the Company's obligation to sell the
Securities on the Closing Date to Buyer pursuant to this Agreement is
conditioned upon:

         A. Delivery by Buyer of the Purchase Price; provided, however, that the
Company shall have received not less that an aggregate of $50,000 in gross
proceeds from the sale of the Preferred Stock and Warrants to the Buyers (the
"Gross Proceeds") as contemplated by the Agreement.

         B. The accuracy in all material respects on the Closing Date of the
representations and warranties of Buyers contained in this Agreement as if made
on the Closing Date (except for representations and warranties which, by their
express terms, speak as of and relate to a specified date, in which case such
accuracy shall be measured as of such specified date) and the performance by
Buyers in all material respects on or before the Closing Date of all covenants
and agreements of Buyers required to be performed by them pursuant to the
Agreement on or before the Closing Date;

         C. There shall not be in effect any Law or order, ruling, judgment or
writ of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

         IX.      CONDITIONS TO BUYER'S OBLIGATIONS.

         The Company understands that Buyer's obligation to purchase the
Securities on the Closing Date pursuant to this Agreement is conditioned upon:

         A.       Delivery by the Company of one or more certificates (I/N/O
Buyer) evidencing the Securities to be purchased by Buyer pursuant to this
Agreement;

         B. The accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained in this Agreement as if

                                       17
<PAGE>

made on the Closing Date (except for representations and warranties which, by
their express terms, speak as of and relate to a specified date, in which case
such accuracy shall be measured as of such specified date) and the performance
by the Company in all material respects on or before the Closing Date of all
covenants and agreements of the Company required to be performed by it pursuant
to this Agreement on or before the Closing Date;

         C. Buyer having received an opinion of counsel for the Company, dated
the Closing Date, in form, scope and substance reasonably satisfactory to
counsel for Astor Capital, Inc., as agent for the Buyer.

         D. There not having occurred (i) any general suspension of trading in,
or limitation on prices listed for, the Common Stock on the OTC:BB, (ii) the
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly involving the
United States or any of its territories, protectorates or possessions, or (iv)
in the case of the foregoing existing at the date of this Agreement, a material
acceleration or worsening thereof.

         E. There not having occurred any event or development, and there being
in existence no condition, having or which reasonably and foreseeably would have
a Material Adverse Effect.

         F. The Company shall have authorized the Escrow Agent in the Release
Notice annexed to the Escrow Instructions to pay out of the Gross Proceeds
Buyers' out-of-pocket costs and expenses (not to exceed $10,000) incurred in
connection with the transactions contemplated by the Preferred Stock and the
Agreement (including the fees and disbursements of legal counsel).

         G. There shall not be in effect any Law or order, ruling, judgment or
writ of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

J.       Delivery of Irrevocable Instructions to the Transfer Agent.

         X.       TERMINATION.

         A. Termination by Mutual Written Consent. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned, for any
reason and at any time prior to the Closing Date, by the mutual written consent
of the Company and Buyer.

         B. Termination by the Company or Buyer. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned by action
of the Company or Buyer if (i) the Closing shall not have occurred at or prior
to 5:00 p.m., New York City time, on December 31, 2001; provided, however, that
the right to terminate this Agreement pursuant to this Article X.B(i) shall not
be available to any party whose failure to fulfill any of its obligations under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur at or before such time and date or (ii) any court or public or
governmental authority shall have issued an order, ruling, judgment or writ, or

                                       18
<PAGE>

there shall be in effect any Law, restraining, enjoining or otherwise
prohibiting the consummation of any of the transactions contemplated by this
Agreement.

         C. Termination by Buyer. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by Buyer at any time prior to
the Closing Date, if (i) the Company shall have failed to comply in any material
respect with any of its covenants or agreements contained in this Agreement,
(ii) there shall have been a breach by the Company with respect to any
representation or warranty made by it in this Agreement, or (iii) there shall
have occurred any event or development, or there shall be in existence any
condition, having or reasonably and foreseeably likely to have a Material
Adverse Effect.

H. Termination by the Company. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by the Company at any time
prior to the Closing Date, if (i) any Buyer shall have failed to comply in any
material respect with any of its covenants or agreements contained in this
Agreement or (ii) there shall have been a breach by any Buyer with respect to
any representation or warranty made by it in this Agreement or (iii) there is a
failure of any condition to the Company's obligations as set forth in Section
VIII hereof .

I. Fees and Expenses of Termination. If this Agreement is terminated for any
reason, the Company shall reimburse   n/a    as agent for the Buyers for
their out-of-pocket costs and expenses incurred in connection with the
transactions contemplated by this Agreement in an amount not to exceed
$   n/a    in the aggregate (including, but not limited to, the fees and
disbursements of Buyers' legal counsel.)

         XI.      SURVIVAL; INDEMNIFICATION.

         A. The representations, warranties and covenants made by each of the
Company and Buyer in this Agreement, the annexes, schedules and exhibits hereto
and in each instrument, agreement and certificate entered into and delivered by
them pursuant to this Agreement, shall survive the Closing and the consummation
of the transactions contemplated hereby until the second anniversary of the
Closing Date. In the event of a breach or violation of any of such
representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach or violation available to it under the provisions
of this Agreement , irrespective of any investigation made by or on behalf of
such party on or prior to the Closing Date.

         B. The Company hereby agrees to indemnify and hold harmless the Buyer,
its Affiliates and their respective officers, directors, partners and members
(collectively, the "Buyer Indemnitees"), from and against any and all losses,
claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "Losses"), and agrees to reimburse the Buyer Indemnitees for all
out-of-pocket expenses (including the reasonable fees and expenses of legal
counsel), in each case promptly as incurred by the Buyer Indemnitees and to the
extent arising out of or in connection with:

                                       19
<PAGE>

                  1. any material misrepresentation, omission of fact or breach
         of any of the Company's representations or warranties contained in this
         Agreement, the annexes, schedules or exhibits hereto or any instrument,
         agreement or certificate entered into or delivered by the Company
         pursuant to this Agreement; or

                  2. any failure by the Company to perform in any material
         respect any of its covenants, agreements, undertakings or obligations
         set forth in this Agreement, the annexes, schedules or exhibits hereto
         or any instrument, agreement or certificate entered into or delivered
         by the Company pursuant to this Agreement.

         C. Buyer hereby agrees to indemnify and hold harmless the Company, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Company Indemnitees"), from and against any and all Losses,
and agrees to reimburse the Company Indemnitees for all out-of-pocket expenses
(including the reasonable fees and expenses of legal counsel), in each case
promptly as incurred by the Company Indemnitees and to the extent arising out of
or in connection with:

                  1. any material misrepresentation, omission of fact, or breach
         of any of Buyer's representations or warranties contained in this
         Agreement, the annexes, schedules or exhibits hereto or any instrument,
         agreement or certificate entered into or delivered by Buyer pursuant to
         this Agreement; or

                  2. any failure by Buyer to perform in any material respect any
         of its covenants, agreements, undertakings or obligations set forth in
         this Agreement or any instrument, certificate or agreement entered into
         or delivered by Buyer pursuant to this Agreement.

         D. Promptly after receipt by either party hereto seeking
indemnification pursuant to this Section XI (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section XI is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim, the Indemnifying Party shall be entitled to assume
the defense thereof. Notwithstanding the assumption of the defense of any Claim
by the Indemnifying Party, the Indemnified Party shall have the right to employ
separate legal counsel (together with appropriate local counsel) and to
participate in the defense of such Claim, and the Indemnifying Party shall bear
the reasonable fees, out-of-pocket costs and expenses of such separate legal
counsel to the Indemnified Party if (and only if): (x) the Indemnifying Party
shall have agreed to pay such fees, out-of-pocket costs and expenses, (y) the
Indemnified Party and the Indemnifying Party reasonably shall have concluded
that representation of the Indemnified Party and the Indemnifying Party by the
same legal counsel would not be appropriate due to actual or, as
reasonably-determined by legal counsel to the Indemnified Party, (i) potentially

                                       20
<PAGE>

differing interests between such parties in the conduct of the defense of such
Claim, or (ii) if there may be legal defenses available to the Indemnified Party
that are in addition to or disparate from those available to the Indemnifying
Party and which can not be presented by counsel to the Indemnifying Party, or
(z) the Indemnifying Party shall have failed to employ legal counsel reasonably
satisfactory to the Indemnified Party within a reasonable period of time after
notice of the commencement of such Claim. If the Indemnified Party employs
separate legal counsel in circumstances other than as described in clauses (x),
(y) or (z) above, the fees, costs and expenses of such legal counsel shall be
borne exclusively by the Indemnified Party. Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
Jurisdiction, be liable for the fees and expenses of more than one firm of legal
counsel for the Indemnified Party (together with appropriate local counsel). The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (which consent shall not unreasonably be withheld), settle or
compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnified Party from all liabilities
with respect to such Claim or judgment and does involve any continuing
obligations.

         E. In the event one party hereunder should have a claim for
indemnification that does not involve a claim or demand being asserted by a
third party, the Indemnified Party promptly shall deliver notice of such claim
to the Indemnifying Party. If the Indemnified Party disputes the claim, such
dispute shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration in Los Angeles, California
conducted in accordance with the commercial procedures and rules of the American
Arbitration Association. Judgment upon any award rendered by any arbitrators may
be entered in any court having competent jurisdiction thereof.

XII. GOVERNING LAW; MISCELLANEOUS.

         This Agreement shall be governed by and interpreted in accordance with
the laws of the State of California, without regard to the conflicts of law
principles of such state. Each of the parties consents to the jurisdiction of
the federal courts whose districts encompass any part of the City of Los Angeles
or the state courts of the State of California sitting in the City of Los
Angeles in connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the bringing of any such proceeding
in such jurisdictions. In any action or proceeding brought by a party arising
out of, resulting from or relating to the transactions contemplated by this
Agreement, the prevailing party shall be entitled to recover the reasonable
costs and expenses incurred by it in connection with that action or proceeding,
including but not limited to, attorney's fees. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto. This

                                       21
<PAGE>

Agreement may be signed in one or more counterparts, each of which shall be
deemed an original. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.

         XIII. NOTICES. Except as may be otherwise provided herein, any notice
or other communication or delivery required or permitted hereunder shall be in
writing and shall be delivered personally or sent by certified mail, postage
prepaid, or by a nationally recognized overnight courier service, and shall be
deemed given when so delivered personally or by overnight courier service, or,
if mailed, three (3) days after the date of deposit in the United States mails,
as follows:

         (1)      if to the Company, to:

                  Diamond Entertainment Corporation
                  800 Tucker Lane
                  Walnut, California 91789
                  Attention:  President

                  with a copy to:

                  Naccarato & Associates
                  19600 Fairchild, Suite 260
                  Irvine, California  92612
                  Attention: Owen Naccarato

         (2)      if to Buyer, to the address set forth on the signature page
                  hereof.

                  with a copy to:

The Company or Buyer may change the foregoing address by notice given pursuant
to this Section XVIII.

                                       22
<PAGE>

         XIV. CONFIDENTIALITY. Each of the Company and Buyer agrees to keep
confidential and not to disclose to or use for the benefit of any third party
the terms of this Agreement or any other information which at any time is
communicated by the other party as being confidential without the prior written
approval of the other party; provided, however, that this provision shall not
apply to information which, at the time of disclosure, is already part of the
public domain (except by breach of this Agreement) and information which is
required to be disclosed by law (including, without limitation, pursuant to Item
10 of Rule 601 of Regulation S-K under the Securities Act and the Exchange Act).

         XV. ASSIGNMENT. This Agreement shall not be assignable by either of the
parties hereto prior to the Closing without the prior written consent of the
other party, and any attempted assignment contrary to the provisions hereby
shall be null and void; provided, however, that Buyer may assign its rights and
obligations hereunder, in whole or in part, to any affiliate of Buyer who
furnishes to the Company the representations and warranties set forth in Section
II hereof and otherwise agrees to be bound by the terms of this Agreement.

         XVI. BROKERS. Each of the parties hereto represents that it has had no
dealings in connection with this transaction with any finder or broker who will
demand payment of any fee or commission from the other party whose fee shall be
paid by the Company. The Company on the one hand, and Buyer, on the other hand,
agree to indemnify the other against and hold the other harmless from any and
all liabilities to any person claiming brokerage commissions or finder's fees on
account of services purported to have been rendered on behalf of the
indemnifying party in connection with this Agreement or the transactions
contemplated hereby.

         XVII. FEES AND EXPENSES. The Company agrees to pay Buyers' expenses
incident to the performance of its obligations hereunder (including, but not
limited to the fees, expenses and disbursements of Buyers' legal counsel) in an
amount not to exceed $5,000 in the aggregate.

                  [THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

                                       23
<PAGE>

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

                                     DIAMOND ENTERTAINMENT CORPORATION

                                     By: /s/ James K.T. Lu
                                         ---------------------------
                                            James K.T. Lu
                                            President & Chief Executive Officer

                                     Joe Kaufman

                                     By:/s/ Joe Kaufman
                                         ---------------------------
                                            Joe Kaufman

                                       24
<PAGE>

                                                            Name:
                                                            Title:

Jurisdiction of Incorporation:

Address:                   --------------------
                           --------------------
                           ====================
                           --------------------
Telephone No.              --------------------
Fax No.                    --------------------
e-mail                     --------------------
Social Security or E.I.N Number: --------------------

Amount of Investment:

Number of Preferred Shares to be Purchased:

Number of Warrants to be Purchased:

                                       25
<PAGE>

               Purchaser / Number of Preferred Shares and Warrants

Name and Residence             Number of Shares              Dollar Amount
of Purchaser                   and Warrants Purchased         of Investment

Joe Kaufman                      Preferred Shares: 5            $50,000.00
                                 Warrant: to purchase
                                 750,000 shares of
Fax No.: 011 972 265 36 272      Common Stock.

                                       26Exhibit 10.37

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                               WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                        Diamond Entertainment Corporation

                            Expires November 15, 2006

No. W-1                                                Walnut, California
                                                        November 16, 2001

    FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Diamond Entertainment Corporation, a New Jersey corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that

                                   JOE KAUFMAN

or its registered assigns is entitled to subscribe for and purchase, during the
period specified in this Warrant, up to 750,000 shares (subject to adjustment as
hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable Common Stock of the Issuer, at an exercise price per share equal
to $0.02, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this Warrant and not otherwise
defined herein shall have the respective meanings specified in Section 8 hereof.

         1. Term. The right to subscribe for and purchase shares of Warrant
Stock represented hereby shall commence on November 16, 2001 and shall expire at
5:00 p.m., New York City time, on November 15, 2006 (such period being the
"Term").

         2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.

         (a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during
the Term commencing on November 16, 2001.

                                       1
<PAGE>

         (b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable by certified or official bank check.

         (c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding five (5) Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been cancelled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.

         (d) Transferability of Warrant. This Warrant may not be transferred by
a Purchaser without the prior written consent of the Company, such consent not
to be unreasonably withheld. If transferred pursuant to this paragraph and
subject to the provisions of subsection (e) of this Section 2, this Warrant may
be transferred on the books of the Issuer by the Holder hereof in person or by
duly authorized attorney, upon surrender of this Warrant at the principal office
of the Issuer, properly endorsed (by the Holder executing an assignment in the
form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at
the principal office of the Issuer for Warrants for the purchase of the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange. All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant hereto.

         (e)      Compliance with Securities Laws.

                  (i) The Holder of this Warrant, by acceptance hereof,
         acknowledges that this Warrant and the shares of Warrant Stock to be
         issued upon exercise hereof are being acquired solely for the Holder's
         own account and not as a nominee for any other party, and for
         investment, and that the Holder will not offer, sell or otherwise
         dispose of this Warrant or any shares of Warrant Stock to be issued
         upon exercise hereof except pursuant to an effective registration
         statement, or an exemption from registration, under the Securities Act
         and any applicable state securities laws.

                                       2
<PAGE>

                  (ii) Except as provided in paragraph (iii) below, this Warrant
         and all certificates representing shares of Warrant Stock issued upon
         exercise hereof shall be stamped or imprinted with a legend in
         substantially the following form:

                           THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
                  REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
                  RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT.

                  (iii) The restrictions imposed by this subsection (e) upon the
         transfer of this Warrant and the shares of Warrant Stock to be
         purchased upon exercise hereof shall terminate (A) when such securities
         shall have been effectively registered under the Securities Act, (B)
         upon the Issuer's receipt of an opinion of counsel, in form and
         substance reasonably satisfactory to the Issuer, addressed to the
         Issuer to the effect that such restrictions are no longer required to
         ensure compliance with the Securities Act or (C) upon the Issuer's
         receipt of other evidence reasonably satisfactory to the Issuer that
         such registration is not required. Whenever such restrictions shall
         cease and terminate as to any such securities, the Holder thereof shall
         be entitled to receive from the Issuer (or its transfer agent and
         registrar), without expense (other than applicable transfer taxes, if
         any), new Warrants (or, in the case of shares of Warrant Stock, new
         stock certificates) of like tenor not bearing the applicable legends
         required by paragraph (ii) above relating to the Securities Act and
         state securities laws.

         (f) Continuing Rights of Holder. The Issuer will, at the time of or at
any time after each exercise of this Warrant, upon the request of the Holder
hereof or of any shares of Warrant Stock issued upon such exercise, acknowledge
in writing the extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided that if any such
Holder shall fail to make any such request, the failure shall not affect the
continuing obligation of the Issuer to afford such rights to such Holder.

         3.  Stock Fully Paid: Reservation and Listing of Shares: Covenants.

         (a) Stock Fully Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges created by or through Issuer. The Issuer further covenants and agrees
that during the period within which this Warrant may be exercised, the Issuer
will at all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

                                       3
<PAGE>

         (b) Reservation. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

         (c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of the
Common Stock or which would adversely affect the rights of the Holders of the
Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its obligations under this
Warrant.

         (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

                                       4
<PAGE>

         (e) Rights and Obligations under the Registration Rights Agreement. The
Warrant Stock are entitled to the benefits and subject to the terms of the
Registration Rights Agreement dated as of even date herewith between the Issuer
and the Holders listed on the signature pages thereof (as amended from time to
time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be
kept a copy of the Registration Rights Agreement, and any amendments thereto, at
its chief executive office and shall furnish, without charge, copies thereof to
the Holder upon request.

         4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:

         (a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do
any of the following (each, a "Triggering Event") (a) consolidate with or merge
into any other Person and the Issuer shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) permit any other Person to
consolidate with or merge into the Issuer and the Issuer shall be the continuing
or surviving Person but, in connection with such consolidation or merger, any
Capital Stock of the Issuer shall be changed into or exchanged for Securities of
any other Person or cash or any other property, or (c) transfer all or
substantially all of its properties or assets to any other Person, or (d) effect
a capital reorganization or reclassification of its Capital Stock, then, and in
the case of each such Triggering Event, proper provision shall be made so that,
upon the basis and the terms and in the manner provided in this Warrant, the
Holder of this Warrant shall be entitled (x) upon the exercise hereof at any
time after the consummation of such Triggering Event, to the extent this Warrant
is not exercised prior to such Triggering Event, or is redeemed in connection
with such Triggering Event, to receive at the Warrant Price in effect at the
time immediately prior to the consummation of such Triggering Event in lieu of
the Common Stock issuable upon such exercise of this Warrant prior to such
Triggering Event, the Securities, cash and property to which such Holder would
have been entitled upon the consummation of such Triggering Event if such Holder
had exercised the rights represented by this Warrant immediately prior thereto,
subject to adjustments and increases (subsequent to such corporate action) as
nearly equivalent as possible to the adjustments provided for in Section 4
hereof or (y) to sell this Warrant (or, at such Holder's election, a portion
hereof) to the Person continuing after or surviving such Triggering Event, or to
the Issuer (if Issuer is the continuing or surviving Person) at a sales price
equal to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date or
closing of any such Triggering Event (the "Event Consideration"), less the

                                       5
<PAGE>

amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.

         (ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, any continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such Holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this subsection (a))
shall be applicable to the Securities, cash or property which such Person may be
required to deliver upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.

         (iii) If with respect to any Triggering Event, the Holder of this
Warrant has exercised its right as provided in clause (y) of subparagraph (i) of
this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees
that as a condition to the consummation of any such Triggering Event the Issuer
shall secure such right of Holder to sell this Warrant to the Person continuing
after or surviving such Triggering Event and the Issuer shall not effect any
such Triggering Event unless upon or prior to the consummation thereof the
amounts of cash, property and/or Securities required under such clause (y) are
delivered to the Holder of this Warrant. The obligation of the Issuer to secure
such right of the Holder to sell this Warrant shall be subject to such Holder's
cooperation with the Issuer, including, without limitation, the giving of
customary representations and warranties to the purchaser in connection with any
such sale. Prior notice of any Triggering Event shall be given to the Holder of
this Warrant in accordance with Section 11 hereof.

         (b) Subdivision or Combination of Shares. If the Issuer, at any time
while this Warrant is outstanding, shall subdivide or combine any shares of
Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares, the

                                       6
<PAGE>

Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of Holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.

         (c) Certain Dividends and Distributions. If the Issuer, at any time
while this Warrant is outstanding, shall:

                  (i) Stock Dividends. Pay a dividend in, or make any other
         distribution to its stockholders (without consideration therefor) of,
         shares of Common Stock, the Warrant Price shall be adjusted, as at the
         date the Issuer shall take a record of the Holders of the Issuer's
         Capital Stock for the purpose of receiving such dividend or other
         distribution (or if no such record is taken, as at the date of such
         payment or other distribution), to that price determined by multiplying
         the Warrant Price in effect immediately prior to such record date (or
         if no such record is taken, then immediately prior to such payment or
         other distribution), by a fraction (1) the numerator of which shall be
         the total number of shares of Common Stock outstanding immediately
         prior to such dividend or distribution, and (2) the denominator of
         which shall be the total number of shares of Common Stock outstanding
         immediately after such dividend or distribution (plus in the event that
         the Issuer paid cash for fractional shares, the number of additional
         shares which would have been outstanding had the Issuer issued
         fractional shares in connection with said dividends); or

                  (ii) Other Dividends. Pay a dividend on, or make any
         distribution of its assets upon or with respect to (including, but not
         limited to, a distribution of its property as a dividend in liquidation
         or partial liquidation or by way of return of capital), the Common
         Stock (other than as described in clause (i) of this subsection (c)),
         or in the event that the Company shall offer options or rights to
         subscribe for shares of Common Stock, or issue any Common Stock
         Equivalents, to all of its holders of Common Stock, then on the record
         date for such payment, distribution or offer or, in the absence of a
         record date, on the date of such payment, distribution or offer, the
         Holder shall receive what the Holder would have received had it
         exercised this Warrant in full immediately prior to the record date of
         such payment, distribution or offer or, in the absence of a record
         date, immediately prior to the date of such payment, distribution or
         offer.

         (d) Other Provisions Applicable to Adjustments Under this Section 4.
The following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:

                                       7
<PAGE>

                  (i) Computation of Consideration. The consideration received
         by the Issuer shall be deemed to be the following: to the extent that
         any Additional Shares of Common Stock or any Common Stock Equivalents
         shall be issued for a cash consideration, the consideration received by
         the Issuer therefor, or if such Additional Shares of Common Stock or
         Common Stock Equivalents are offered by the Issuer for subscription,
         the subscription price, or, if such Additional Shares of Common Stock
         or Common Stock Equivalents are sold to underwriters or dealers for
         public offering without a subscription offering, the public offering
         price, in any such case excluding any amounts paid or receivable for
         accrued interest or accrued dividends and without deduction of any
         compensation, discounts, commissions, or expenses paid or incurred by
         the Issuer for or in connection with the underwriting thereof or
         otherwise in connection with the issue thereof; to the extent that such
         issuance shall be for a consideration other than cash, then, except as
         herein otherwise expressly provided, the fair market value of such
         consideration at the time of such issuance as determined in good faith
         by the Board. The consideration for any Additional Shares of Common
         Stock issuable pursuant to any Common Stock Equivalents shall be the
         consideration received by the Issuer for issuing such Common Stock
         Equivalents, plus the additional consideration payable to the Issuer
         upon the exercise, conversion or exchange of such Common Stock
         Equivalents. In case of the issuance at any time of any Additional
         Shares of Common Stock or Common Stock Equivalents in payment or
         satisfaction of any dividend upon any class of Capital Stock of the
         Issuer other than Common Stock, the Issuer shall be deemed to have
         received for such Additional Shares of Common Stock or Common Stock
         Equivalents a consideration equal to the amount of such dividend so
         paid or satisfied. In any case in which the consideration to be
         received or paid shall be other than cash, the Board shall notify the
         Holder of this Warrant of its determination of the fair market value of
         such consideration prior to payment or accepting receipt thereof. If,
         within thirty days after receipt of said notice, the Majority Holders
         shall notify the Board in writing of their objection to such
         determination, a determination of the fair market value of such
         consideration shall be made by an Independent Appraiser selected by the
         Majority Holders with the approval of the Board (which approval shall
         not be unreasonably withheld), whose fees and expenses shall be paid by
         the Issuer.

                  (ii) Readjustment of Warrant Price. Upon the expiration or
         termination of the right to convert, exchange or exercise any Common
         Stock Equivalent the issuance of which effected an adjustment in the
         Warrant Price, if such Common Stock Equivalent shall not have been
         converted, exercised or exchanged in its entirety, the number of shares

                                       8
<PAGE>

         of Common Stock deemed to be issued and outstanding by reason of the
         fact that they were issuable upon conversion, exchange or exercise of
         any such Common Stock Equivalent shall no longer be computed as set
         forth above, and the Warrant Price shall forthwith be readjusted and
         thereafter be the price which it would have been (but reflecting any
         other adjustments in the Warrant Price made pursuant to the provisions
         of this Section 4 after the issuance of such Common Stock Equivalent)
         had the adjustment of the Warrant Price been made in accordance with
         the issuance or sale of the number of Additional Shares of Common Stock
         actually issued upon conversion, exchange or issuance of such Common
         Stock Equivalent and thereupon only the number of Additional Shares of
         Common Stock actually so issued shall be deemed to have been issued and
         only the consideration actually received by the Issuer (computed as in
         clause (i) of this subsection (g)) shall be deemed to have been
         received by the Issuer.

                  (iii) Outstanding Common Stock. The number of shares of Common
         Stock at any time outstanding shall (A) not include any shares thereof
         then directly or indirectly owned or held by or for the account of the
         Issuer or any of its Subsidiaries, and (B) be deemed to include all
         shares of Common Stock then issuable upon conversion, exercise or
         exchange of any then outstanding Common Stock Equivalents or any other
         evidences of Indebtedness, shares of Capital Stock or other Securities
         which are or may be at any time convertible into or exchangeable for
         shares of Common Stock or Other Common Stock.

         (e) Other Action Affecting Common Stock. In case after the Original
Issue Date the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections (a) through (d) of
this Section 4, inclusive, and the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in accordance
with the essential intent and principle of this Section 4, then the Warrant
Price shall be adjusted in such manner and at such time as the Board may in good
faith determine to be equitable in the circumstances.

         (f) Adjustment of Warrant Share Number. Upon each adjustment in the
Warrant Price pursuant to any of the foregoing provisions of this Section 4, the
Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole
share, to the product obtained by multiplying the Warrant Share Number
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately before giving effect
to such adjustment and the denominator of which shall be the Warrant Price
immediately after giving effect to such adjustment. If the Issuer shall be in
default under any provision contained in Section 3 of this Warrant so that
shares issued at the Warrant Price adjusted in accordance with this Section 4
would not be validly issued, the adjustment of the Warrant Share Number provided
for in the foregoing sentence shall nonetheless be made and the Holder of this

                                       9
<PAGE>

Warrant shall be entitled to purchase such greater number of shares at the
lowest price at which such shares may then be validly issued under applicable
law. Such exercise shall not constitute a waiver of any claim arising against
the Issuer by reason of its default under Section 3 of this Warrant.

         (g) Form of Warrant after Adjustments. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

         5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.

         6. Fractional Shares. No fractional shares of Warrant Stock will be
issued in connection with and exercise hereof, but in lieu of such fractional
shares, the Issuer shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value then
in effect.

         7. Warrant Exercise Restriction. Notwithstanding anything to the
contrary set forth in this Warrant, at no time may a holder of this Warrant
exercise this Warrant, or a portion hereof, if the number of shares of Common
Stock to be issued pursuant to such exercise would exceed, when aggregated with
all other shares of Common Stock owned by such holder at such time, would result
in such holder owning more than 4.99% of all of the Common Stock issued and
outstanding at such time; provided, however, that upon a holder of this Warrant
providing the Issuer with 75 days notice (pursuant to Section 11 hereof) (the
"Waiver Notice") that such holder would like to waive Section 7 of this Warrant
with regard to any or all shares of Common Stock issuable upon exercise of the

                                       10
<PAGE>

Warrant, this Section 7 will be of no further force or effect with regard to the
number of shares exercisable pursuant to the Warrant, or the applicable portion
thereof, referenced in the Waiver Notice.

         8. Definitions. For the purposes of this Warrant, the following terms
have the following meanings:

                  "Additional Shares of Common Stock" means all shares of Common
Stock issued by the Issuer after the Original Issue Date, and all shares of
Other Common, if any, issued by the Issuer after the Original Issue Date, except
(i) Warrant Stock, (ii) any shares of Common Stock issuable upon conversion of
the Notes pursuant to the Purchase Agreement, (iii) any shares of Common Stock
issuable upon conversion of the Series B Preferred Shares and exercise of the
warrants issued pursuant to the Preferred Stock Securities Purchase Agreement
dated November 16, 2001, and (iv) options or warrants or rights to purchase
stock issued to officers and/or directors of the Maker and any shares of Common
Stock issuable upon exercise of the Stock Options.

                  "Board" shall mean the Board of Directors of the Issuer.

                  "Capital Stock" means and includes (i) any and all shares,
         interests, participations or other equivalents of or interests in
         (however designated) corporate stock, including, without limitation,
         shares of preferred or preference stock, (ii) all partnership interests
         (whether general or limited) in any Person which is a partnership,
         (iii) all membership interests or limited liability company interests
         in any limited liability company, and (iv) all equity or ownership
         interests in any Person of any other type.

                  "Certificate of Incorporation" means the Certificate of
         Incorporation of the Issuer as in effect on the Original Issue Date,
         and as hereafter from time to time amended, modified, supplemented or
         restated in accordance with the terms hereof and thereof and pursuant
         to applicable law.

                  "Original Issue Date" means November 16, 2001.

                  "Common Stock" means the Common Stock, no par value, of the
         Issuer and any other Capital Stock into which such stock may hereafter
         be changed.

                  "Common Stock Equivalent" means any Convertible Security or
         warrant, option or other right to subscribe for or purchase any
         Additional Shares of Common Stock or any Convertible Security.

                                       11
<PAGE>

                  "Convertible Securities" means the Notes, evidences of
         Indebtedness, shares of Capital Stock or other Securities which are or
         may be at any time convertible into or exchangeable for Additional
         Shares of Common Stock. The term "Convertible Security" means one of
         the Convertible Securities.

                  "Governmental Authority" means any governmental, regulatory or
         self-regulatory entity, department, body, official, authority,
         commission, board, agency or instrumentality, whether federal, state or
         local, and whether domestic or foreign.

                  "Holders"  mean the  Persons  who shall from  time to time own
         any  Warrant.  The term  "Holder" means one of the Holders.

                  "Independent Appraiser" means a nationally recognized or major
         regional investment banking firm or firm of independent certified
         public accountants of recognized standing (which may be the firm that
         regularly examines the financial statements of the Issuer) that is
         regularly engaged in the business of appraising the Capital Stock or
         assets of corporations or other entities as going concerns, and which
         is not affiliated with either the Issuer or the Holder of any Warrant.

                  "Issuer" means Diamond Entertainment Corporation, a New Jersey
         corporation, and its successors.

                  "Majority Holders" means at any time the Holders of Warrants
         exercisable for a majority of the shares of Warrant Stock issuable
         under the Warrants at the time outstanding.

                  "NASDAQ" means the National Association of Securities Dealers
         Automated Quotation System.

                  "Other Common" means any other Capital Stock of the Issuer of
         any class which shall be authorized at any time after the date of this
         Warrant (other than Common Stock) and which shall have the right to
         participate in the distribution of earnings and assets of the Issuer
         without limitation as to amount.

                  "Person" means an individual, corporation, limited liability
         company, partnership, joint stock company, trust, unincorporated
         organization, joint venture, Governmental Authority or other entity of
         whatever nature.

                  "Per Share Market Value" means on any particular date (a) the
         closing bid price per share of the Common Stock on such date on The
         Nasdaq Small-Cap Market, the Nasdaq National Market or other registered
         national stock exchange on which the Common Stock is then listed or if

                                       12
<PAGE>

         there is no such price on such date, then the closing bid price on such
         exchange or quotation system on the date nearest preceding such date,
         or (b) if the Common Stock is not listed then on The Nasdaq Small-Cap
         Market, the Nasdaq National Market or any registered national stock
         exchange, the closing bid price for a share of Common Stock in the
         over-the-counter market, as reported by NASDAQ or in the National
         Quotation Bureau Incorporated or similar organization or agency
         succeeding to its functions of reporting prices) at the close of
         business on such date, or (c) if the Common Stock is not then reported
         by the National Quotation Bureau Incorporated (or similar organization
         or agency succeeding to its functions of reporting prices), then the
         average of the "Pink Sheet" quotes for the relevant conversion period,
         as determined in good faith by the holder, or (d) if the Common Stock
         is not then publicly traded the fair market value of a share of Common
         Stock as determined by an Independent Appraiser selected in good faith
         by the Majority Holders; provided, however, that the Issuer, after
         receipt of the determination by such Independent Appraiser, shall have
         the right to select an additional Independent Appraiser, in which case,
         the fair market value shall be equal to the average of the
         determinations by each such Independent Appraiser; and provided,
         further that all determinations of the Per Share Market Value shall be
         appropriately adjusted for any stock dividends, stock splits or other
         similar transactions during such period. The determination of fair
         market value by an Independent Appraiser shall be based upon the fair
         market value of the Issuer determined on a going concern basis as
         between a willing buyer and a willing seller and taking into account
         all relevant factors determinative of value, and shall be final and
         binding on all parties. In determining the fair market value of any
         shares of Common Stock, no consideration shall be given to any
         restrictions on transfer of the Common Stock imposed by agreement or by
         federal or state securities laws, or to the existence or absence of, or
         any limitations on, voting rights.

                  "Purchase Agreement" means the Securities Purchase Agreement
         dated as of November 16, 2001 among the Issuer and the purchaser named
         therein.

                  "Registration Rights Agreement" has the meaning specified in
         Section 3(e) hereof.

                  "Securities" means any debt or equity securities of the
         Issuer, whether now or hereafter authorized, any instrument convertible
         into or exchangeable for Securities or a Security, and any option,
         warrant or other right to purchase or acquire any Security. "Security"
         means one of the Securities.

                  "Securities Act" means the Securities Act of 1933, as amended,
         or any similar federal statute then in effect.

                                       13
<PAGE>

                  "Stock Options" means options to purchase shares of Common
         Stock issued by the Issuer on the Original Issue Date to certain
         members of the Issuer's senior management, as the same may from time to
         time be amended, modified or supplemented in accordance with their
         terms.

                  "Subsidiary" means any corporation at least 50% of whose
         outstanding Voting Stock shall at the time be owned directly or
         indirectly by the Issuer or by one or more of its Subsidiaries, or by
         the Issuer and one or more of its Subsidiaries.

                  "Trading Day" means (a) a day on which the Common Stock is
         traded on The Nasdaq Small-Cap Market, the Nasdaq National Market or
         other registered national stock exchange on which the Common Stock has
         been listed, or (b) if the Common Stock is not listed on The Nasdaq
         Small-Cap Market, the Nasdaq National Market or any registered national
         stock exchange, a day or which the Common Stock is traded in the
         over-the-counter market, as reported by the OTC Bulletin Board, or (c)
         if the Common Stock is not quoted on the OTC Bulletin Board, a day on
         which the Common Stock is quoted in the over-the-counter market as
         reported by the National Quotation Bureau Incorporated (or any similar
         organization or agency succeeding its functions of reporting prices);
         provided, however, that in the event that the Common Stock is not
         listed or quoted as set forth in (a), (b) and (c) hereof, then Trading
         Day shall mean any day except Saturday, Sunday and any day which shall
         be a legal holiday or a day on which banking institutions in the State
         of New York are authorized or required by law or other government
         action to close.

                  "Term" has the meaning specified in Section 1 hereof.

                  "Voting Stock", as applied to the Capital Stock of any
         corporation, means Capital Stock of any class or classes (however
         designated) having ordinary voting power for the election of a majority
         of the members of the Board of Directors (or other governing body) of
         such corporation, other than Capital Stock having such power only by
         reason of the happening of a contingency.

                  "Warrants" means the Warrants issued and sold pursuant to the
         Purchase Agreement, including, without limitation, this Warrant, and
         any other warrants of like tenor issued in substitution or exchange for
         any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e)
         hereof or of any of such other Warrants.

                  "Warrant Price" means initially $.02, as such price may be
         adjusted from time to time as shall result from the adjustments
         specified in Section 4 hereof.

                                       14
<PAGE>

                  "Warrant Share Number" means at any time the aggregate number
         of shares of Warrant Stock which may at such time be purchased upon
         exercise of this Warrant, after giving effect to all prior adjustments
         and increases to such number made or required to be made under the
         terms hereof.

                  "Warrant Stock" means Common Stock issuable upon exercise of
         any Warrant or Warrants or otherwise issuable pursuant to any Warrant
         or Warrants.

         8.       Other Notices.  In case at any time:

                                    (A)     the  Issuer  shall  make any
                                            distributions  to the  holders  of
                                            Common Stock; or

                                    (B)     the Issuer shall authorize the
                                            granting to all holders of its
                                            Common Stock of rights to subscribe
                                            for or purchase any shares of
                                            Capital Stock of any class or of any
                                            Common Stock Equivalents or
                                            Convertible Securities or other
                                            rights; or

                                    (C)     there shall be any reclassification
                                            of  the Capital Stock of the Issuer;
                                            or

                                    (D)     there shall be any capital
                                            reorganization by the Issuer; or

                                    (E)     there shall be any (i) consolidation
                                            or merger involving the Issuer or
                                            (ii) sale, transfer or other
                                            disposition of all or substantially
                                            all of the Issuer's property, assets
                                            or business (except a merger or
                                            other reorganization in which the
                                            Issuer shall be the surviving
                                            corporation and its shares of
                                            Capital Stock shall continue to be
                                            outstanding and unchanged and except
                                            a consolidation, merger, sale,
                                            transfer or other disposition
                                            involving a wholly-owned

                                    (F)     there shall be a voluntary or
                                            involuntary dissolution, liquidation
                                            or winding-up of the Issuer or any
                                            partial liquidation of the Issuer or
                                            distribution to holders of Common
                                            Stock;

                                       16
<PAGE>

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in question and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.

         9. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 9 without the consent of the Holder of this Warrant.

         10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.

         11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., Los Angeles City time,
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., Los Angeles City time, on any
date and earlier than 11:59 p.m., Los Angeles time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:

                                       17
<PAGE>

                  Diamond Entertainment Corporation
                  800 Tucker Lane
                  Walnut, California 91789
                  Attention:  President
                  Facsimile No. (909) 869-1990

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Naccarato & Associates, 19600 Fairchild, Suite 260, Irvine CA
92612 Attention: Owen Naccarato, Facsimile No.: (949) 851-9262.

         12. Warrant Agent. The Issuer may, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, NY 10004 for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

         13. Remedies. The Issuer stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.

         14. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock

         15. Modification and Severability. If, in any action before any court
or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

         16. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                                       18
<PAGE>

         IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year first above written.

                                     Diamond Entertainment Corporation

                                     By: /s/ James K.T. Lu
                                         ----------------------------
                                           James K.T. Lu
                                           President & Chief Executive Officer

<PAGE>
<PAGE>

                                  EXERCISE FORM

Diamond Entertainment Corporation

The undersigned             , pursuant to the provisions of the within
                ------------
Warrant, hereby elects to purchase             shares of Common Stock of Diamond
                                  -------------
Entertainment Corporation covered by the within Warrant.

Dated:                    Signature
      ----------------                -------------------------

                          Address     -------------------------

                                   ASSIGNMENT

FOR VALUE RECEIVED,                hereby sells, assigns and transfers unto
                    --------------
                    the within Warrant and all rights evidenced thereby and does
------------------
irrevocably constitute and appoint              , attorney, to transfer the said
                                   -------------
Warrant on the books of the within named corporation.

Dated:                    Signature
      ----------------                -------------------------

                          Address     -------------------------

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED,                    hereby sells, assigns and transfers unto
                   the right to purchase           shares of Warrant Stock
------------------                       ----------
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint                 , attorney, to transfer
                                   ----------------
that part of the said Warrant on the books of the within named corporation.

Dated:                    Signature
      ----------------                -------------------------

                          Address     -------------------------

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-       cancelled (or transferred or exchanged) this       day
                   ------                                              -----
of           ,       , shares of Common Stock issued therefor in the name of
   ---------  -------
               , Warrant No. W-    issued for        shares of Common Stock in
--------------                 ---            ------
the name of                    .
            ------------------

                                       19

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