Document:

Exhibit 10.4
                            STOCK PURCHASE AGREEMENT

     This Stock Purchase  Agreement  ("Agreement") is entered into this 16th day
of  November,   2000   ("Effective   Date")  by  and  between  Enova   Holdings,
Inc.("Enova"),  a Nevada  Corporation  with  principal  offices  located  in Los
Angeles,  California, and Staruni Corporation ("SRUN"), a California Corporation
with principal offices located in Los Angeles, California.

     WHEREAS,  SRUN desires to acquire from Enova all of the outstanding  shares
of Pego Systems, Inc; and

     WHEREAS, Enova desires to acquire 15,000,000 or any other amount that shall
be equal to one- half of all  authorized  and issued  shares of SRUN so that the
effect of this transaction is that Enova shall,  upon closing hereof,  own Fifty
(50%) Percent of SRUN; and

     WHEREAS, Enova and SRUN will exchange the above mentioned shares.

     NOW,  THEREFORE  with the  above  being  incorporated  into and made a part
hereof  for the  mutual  consideration  set out  herein  and,  the  receipt  and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.  Exchange.  Enova will transfer  thirty-three  thousand  shares of the common
stock of Pego Systems,  Inc., a California  Corporation  (a figure  representing
100% of the  shares  of Pego  Systems,  Inc.)  to SRUN and  SRUN  will  transfer
restricted  shares or such  amount of shares as shall make Enova  owner of Fifty
(50%)  Percent of all  issued and  outstanding  shares of SRUN  common  stock to
Enova.

2. No Guarantee of Price.  Enova and SRUN do not  guarantee  the future value of
their respective shares to the other party.

3.  Termination.  This  Agreement  may be  terminated  at any time  prior to the
Closing Date:

     A.   By Enova or SRUN.

          (1) If there shall be any actual or threatened action or proceeding by
          or before any court or any other governmental body which shall seek to
          restrain,  prohibit,  or invalidate the  transactions  contemplated by
          this Agreement and which,  in judgment of such Board of Directors made
          in good  faith and based upon the  advice of legal  counsel,  makes it
          inadvisable  to proceed  with the  transactions  contemplated  by this
          Agreement; or

          (2) If the  Closing  shall  not have nor  occurred  prior to  December
          1,2000,  or such  later date as shall  have been  approved  by parties
          hereto, other than for reasons set forth herein.

     B.   By Enova

          (1) If SRUN shall fail to comply in any  material  respect with any of
          its or their covenants or agreements contained in this Agreement or if
          any of the representation or warranties of SRUN contained herein shall
          be inaccurate in any material respect; or

                                    10.4 - 1
<PAGE>

     C.   By SRUN:

          (1) if Enova shall fail to comply in any material  respect with any of
          its covenants or agreements  contained in this  Agreement or if any of
          the  representation  or warranties of Enova contained  herein shall be
          inaccurate in any material respect;

     In the event this Agreement is terminated pursuant to this Paragraph,  this
     Agreement shall be of no farther force or effect, no obligation,  right, or
     liability shall arise hereunder, and each party shall bear its own costs as
     well as the  legal,  accounting,  printing,  and other  costs  incurred  in
     connection with negotiation, preparation and execution of the Agreement and
     the transactions herein contemplated.

4. Representations and Warrantees of Enova. Enova hereby represents and warrants
that effective this date ai the Closing Date, the representations and warranties
listed below are true and correct:

     A.   Corporate Authority.  Enova has the full corporate power and authority
          to enter this Agreement and tc carry out the transactions contemplated
          by this Agreement. The Board of Directors of Enova has duly authorized
          the execution, delivery, and performance of this Agreement.

     B.   No Conflict with Other  Instruments.  The execution of this  Agreement
          will not  violate  or  breach  any  document,  instrument,  agreement,
          contract, or commitment material to the business of Pego Systems, Inc.
          to  which  Enova  is a  party  and has  been  duly  authorized  by all
          appropriated and necessary action.

     C.   Deliverance  of Shares.  As of the Closing Date, the Pego Shares to be
          delivered  to SRUN will be re cted and  constitute  valid and  legally
          issued shares of Pego Systems, fully paid and non- assessable.

     D.   Conflict with Other  Instrument.  The execution of this agreement will
          not violate or breach any document, instrument, agreement, contract or
          comniitment material to Enova.

     E.   Enova has furnished to SRUN certain  Unaudited and Internally  created
          Financial Statements regarding Pego Systems, Inc. These statements are
          dated November 8, 2000 and cover the period of January 1, 2000 through
          September 30, 2000.  Said  statements  are attached  hereto as Exhibit
          "A". Enova warrants that these statements are true and accurate.

5.  Representations  and Warranties of SRUN. SRUN hereby represents and warrants
that,  effective  this  date  and the  Closing  Date,  the  representations  and
warranties listed below are true and correct.

     A.   Corporate  Authority.  SRUN has the full corporate power and authority
          to enter this Agreement an to carry out the transactions  contemplated
          by this Agreement.  The Board of Directors of SRUN has duly authorized
          the execution, delivery, and performance of this Agreement.

                                    10.4 - 2
<PAGE>

     B.   No Conflict With Other  Instruments.  The execution of this  Agreement
          will not  violate  or  breach  any  document,  instrument,  agreement,
          contract, or commitment material to the business of SRUN to which SRUN
          is a party  and has  been  duly  authorized  by all  appropriated  and
          necessary action.

     C.   Deliverance  of Shares.  As of the Closing Date, the SRUN Shares to be
          delivered to Enova will be restricted and constitute valid and legally
          issued shares of SRUN, fully paid and non-accessible.

     D.   No Conflict with other  Instruments.  The execution of this  agreement
          will not  violate  or breach  any  document,  agreement,  contract  or
          commitment material to SRUN.

6.  Closing.  The Closing as herein referred  to  shall  occur upon such date as
the parties hereto may mutually agree  upon,  but is expected to be on or before
December  1, 2000 by which  time all  parties  shall  have  completed  their due
diligence.

     At  closing  SRUN will  deliver  the SRUN  shares  to Enova and Enova  will
deliver the Pego Systems, Inc. shares to SRUN.

7.  Conditions  Precedent of Enova to Effect  Closing.  All obligations of Enova
under this  Agreement are subject to  fulfillment  prior to or as of the Closing
Date, of each of the following conditions:

     A.   The  representations  and warranties by or on behalf of SRUN contained
          in this  Agreement or in any  certificate  or  documents  delivered to
          Enova pursuant to the provisions  hereof shall be true in all material
          respects   at  end  as  of  the  time  of  closing   as  though   such
          representations and warranties were made at and as of such time.

     B.   SRUN shall have performed and complied with all covenants,  agreements
          and conditions  required by this Agreement to be performed or complied
          with by it prior to or at the Closing.

     C.   All  instruments  and  documents  delivered  to Enova  pursuant to the
          provisions  hereof shall be reasonably  satisfactory  to Enova's legal
          counsel.

     Conditions  Precedent of SRUN to Effect  Closing.  All  obligations of SRUN
under this  agreement are subject to  fulfillment  prior to or as of the date of
Closing, of each of the following conditions:

     A.   The  representations and warranties by or on behalf of Enova contained
          in this Agreement or in any certificate or documents delivered to SRUN
          pursuant  to the  provisions  hereof  shall  be true  in all  material
          respects   at  end  as  of  the  time  of  Closing   as  though   such
          representations and warranties were made at and as of such time.

     B.   Enova shall have performed and complied with all covenants, agreements
          and conditions  required by this Agreement to be performed or complied
          with by it prior to or at the Closing.

                                    10.4 - 3
<PAGE>

     C.   All  instruments  and  documents  delivered  to SRUN  pursuant  to the
          provisions  hereof shall be  reasonably  satisfactory  to SRUN's legal
          counsel.

9. Damages and Limit of Liability.  Each party shall be liable, for any material
breach of the representations,  warranties, ai covenants contained herein, which
results in a failure to perform any obligation  under this Agreement only to the
extent of the  expenses  incurred in  connection  with such breach or failure to
perform Agreement.

10. Nature and Survival of Representations and Warranties.  All representations,
warranties and covenants  made by any party in this Agreement  shall survive the
Closing hereunder.  All of the parties hereto are executing and carrying out the
provisions  of  this  Agreement  in  reliance  solely  on  the  representations,
warranties  and covenants and  agreements  contained in this Agreement or at the
Closing of the transactions  herein provided for and not upon any  investigation
upon  which it might  have  made or any  representations,  warranty,  agreement,
promise,  or information,  written or oral, made by the other party or any other
person other than as specifically set forth herein.

11. Indemnification Procedures

     A.   Pego  Systems,  Inc.  presently  is  in  debt  to  Comerica  Bank  for
          approximately  $9507000. Said sum has been guaranteed by Enova and The
          Hartcourt  Companies  (OTCBB "BRCT") There is a present  litigation in
          the matter with Comerica Bank suing both Pego and HRCT. Both Hartcourt
          and Enova agree to remain as guarantors of such debt (until and unless
          any court of competent  jurisdiction  shall rule  otherwise) and shall
          hold SRUN  harmless for any and all costs  incidental  to this matter.
          However,  Pego owns  200000  shares of  Hartcourt,  which,  if Pego is
          compelled to pay Comerica, may only be used to diminish that debt, for
          that purpose and no other.

     B.   If any other claim is made by a party which would give rise to a right
          of   indemnification   under  this   paragraph,   the  party   seeking
          indemnification (Indemnified Party) will promptly cause notice thereof
          to be delivered to the parry from whom is sought  (Indemnifying Party)
          The Indemnified Party will permit the Indemnifying Party to assume the
          defense of any such claim or any litigation resulting from the claims.
          Counsel for the Indemnifying Party which will conduct the defense must
          be approved  by the  Indemnified  Party  (whose  approval  will not be
          unreasonable  withheld),  and the Indemnified Party may participate in
          such defense at the expense of the Indemnified Party. The indemnifying
          Party will not in the defense of any such claim or litigation, consent
          to entry of any  judgment  or enter into any  settlement  without  the
          written  consent of the  Indemnified  Party (which consent will not be
          unreasonably withheld).  The Indemnified Parry will not, in connection
          with any such claim or litigation, consent to entry of any judgment or
          enter  into  any  settlement   without  the  written  consent  of  the
          Indemnifying Party (which consent will not be unreasonable  withheld).
          The Indemnified Party will cooperate fully with the Indemnifying Party
          and make available to the Indemnifying Party all pertinent information
          under its  control  relating to any such claim or  litigation.  if the
          indemnifying Parry refuses or fails to conduct the defense as required

                                    10.4 - 4
<PAGE>

          in this Section,  then the Indemnified  Party may conduct such defense
          at the  expense  of the  Indemnifying  Party and the  approval  of the
          Indemnifying  Party will not be required for any settlement or consent
          or entry of judgment.

12.  Changes in  Management  of SRUN.  The Board of Directors of SRUN  presently
consists  of three  persons.  As a result of this  transaction,  Frederic  Cohn,
Chairman of Enova,  shall be added to the Board of SRUN. He shall also become an
officer of SRUN.  Both  Harcourt  and Enova agree to this  management  and Board
structure  of SRUN for a  period  of at least  two  years  from the date of this
agreement,  unless all parties and signatories to this agreement  mutually agree
to a change.

13. Costs and  Expenses.  Enova and SRUN shall bear their own costs and expenses
in the proposed  exchange and transfer  described in this  Agreement.  Enova and
SRUN have been represented by their own attorney in this transaction,  and shall
pay the fees of its attorney, except as may be expressly set forth herein to the
contrary.

14.  Notices.  Any  notice  under  this  Agreement  shall be deemed to have been
sufficiently  given if sent by registered or certified  mail,  postage  prepaid,
addressed as follows:

To Enova:                                     To SRUN:

Enova Holdings, Inc.                          Staruni Corporation
9800 South Sepulveda Boulevard, Suite 818     1642 Westwood Boulevard, Suite 201
Los Angeles California 90045                  Los Angeles, California 90024
Telephone:  (310) 410-7290                    Telephone:  (310) 470-9358
Telefax:  (310) 410-7297                      Telefax:  (310) 470-9127
Attn:  Frederic Cohn, Chairman                Attn:  Bruce Stuart, President

15. Miscellaneous.

     A.   Further  Assurances.  At any  time and from  time to time,  after  the
          effective date,  each party will execute such  additional  instruments
          and take such as may be  reasonably  requested  by the other  party to
          confirm or perfect  title to any  property  transferred  hereunder  or
          otherwise to carry out the intent and purposes of this Agreement.

     B.   Waiver. Any failure on the part of any party hereto to comply with any
          of its obligations,  agreements, or conditions hereunder may be waived
          in writing by the party to whom such compliance is owed.

     C.   Headings.  The section and  subsection  headings in this Agreement are
          inserted  for  convenience  only and shall  not  affect in any way the
          meaning or interpretation of this Agreement.

     D.   Counterparts.  This Agreement may be executed simultaneously in two or
          more counterparts,  each of which shall be deemed an original, but all
          of which together shall constitute one and the same instrument.

                                    10.4 - 5
<PAGE>

     E.   Governing Law. This  Agreement was negotiated and is being  contracted
          for in the State of  California,  and shall be governed by the laws of
          the  State  of  California,   notwithstanding   any  conflict-of-  law
          provision  to the  contrary.  Any  suit.  action  or legal  proceeding
          arising  from or  related to this  Agreement  shall be  submitted  for
          binding  arbitration   resolution  to  the  Judicial  Arbitration  and
          Mediation  Services in Los  Angeles,  Ca.,  pursuant to their Rules of
          Procedure or any other mutually  agreed upon  arbitrator.  The parties
          agree to abide by decisions  rendered as final and  binding,  and each
          party irrevocably and unconditionally  consents to the jurisdiction of
          such Courts in such suit,  action or legal  proceeding  and waives any
          objection  to the  laying of venue in, or the  jurisdiction  of,  said
          Courts.

     F.   Binding  Effect.  This  Agreement  shall be binding  upon the  parties
          hereto and inure to the benefit of the parties their respective heirs,
          administrators, executors, successors, and assigns.

     G.   Severability.   If  any  part  of  this  Agreement  is  deemed  to  be
          unenforceable  the balance of the Agreement shall remain in full force
          and effect.

     IN WITNESS  WHEREOF,  the parties have executed this  Agreement the day and
above written.

ENOVA HOLDINGS, INC.                   STARUNI CORPORATION

By:/s/  Frederic Cohn                  By:/s/  Bruce Stuart
   ----------------------------           --------------------------------------
Frederic Cohn, Chairman                Bruce Stuart, President

                                    10.4 - 6PRIVATE EQUITY LINE OF CREDIT AGREEMENT
                                 BY AND BETWEEN
                            BOAT BASIN INVESTORS LLC
                                       AND
                               STARUNI CORPORATION
        ----------------------------------------------------------------
                         DATED AS OF SEPTEMBER 28, 2000
        ----------------------------------------------------------------

                                    10.5 - 1
<PAGE>

         This PRIVATE EQUITY LINE OF CREDIT  AGREEMENT is entered into as of the
28th day of  September,  2000  (this  "Agreement"),  by and  between  Boat Basin
Investors LLC, a limited  liability  company formed under the laws of Nevis (the
"Investor"), and Staruni Corporation, a corporation organized and existing under
the laws of the State of California (the "Company").

         WHEREAS,  the parties  desire  that,  upon the terms and subject to the
conditions  contained  herein,  the Company shall issue and sell to the Investor
and the Investor  shall  purchase  from time to time as provided  herein,  up to
$2,000,000 of the Common Stock (as defined below), and

         WHEREAS,  such investments will be made in reliance upon the provisions
of Section 4(2) ("Section 4(2)") and Regulation D ("Regulation D") of the United
States  Securities  Act of 1933,  as  amended  and the  regulations  promulgated
thereunder  (the  "Securities  Act"),  and/or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect
to any or all of the investments in Common Stock to be made hereunder.

         NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

         Section 1.1  "Affiliates"  shall have the meaning assigned to such term
in Section 3.4 hereof.

         Section 1.2  "Sale  Price"  shall  mean  the  closing  sale  price  (as
reported by Bloomberg L.P.) of the Common Stock on the Principal Market.

         Section 1.3  "Capital  Shares"  shall  mean the  Common  Stock  and any
shares of any other class of common stock  whether now or hereafter  authorized,
having the right to  participate in the  distribution  of earnings and assets of
the Company.

         Section 1.4  "Commitment  Amount" shall mean the $2,000,000 up to which
the  Investor  has  agreed to provide to the  Company in order to  purchase  Put
Shares pursuant to the terms and conditions of this Agreement.

         Section 1.5  "Commitment  Period"  shall mean the period  commencing on
the  Effective  Date and  expiring  on the  earliest to occur of (x) the date on
which the Investors  shall have purchased Put Shares  pursuant to this Agreement
for an  aggregate  Purchase  Price  of  $2,000,000,  or (y) the  date  occurring
forty-eight (48) months from the date of commencement of the Commitment Period.

         Section 1.6  "Common Stock" shall mean the Company's  common stock,  no
par value per share.

         Section 1.7  "Common Stock Equivalents"  shall mean any securities that
are convertible into or exchangeable  for Common Stock or any warrants,  options
or  other  rights  to  subscribe  for or  purchase  Common  Stock  or  any  such
convertible or exchangeable securities.

         Section 1.8  "Condition  Satisfaction  Date"  shall  have  the  meaning
assigned to such term in Section 7.2 hereof.

                                    10.5 - 2
<PAGE>

         Section 1.9  "Control Persons" shall  have the meaning assigned to such
term in Section 12.2 hereof.

         Section 1.10 "Damages" shall mean any loss, claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorneys' fees
and disbursements and costs and expenses of expert witnesses and investigation).

         Section 1.11 "EDGAR" shall mean the SEC's electronic data gathering and
retrieval system.

         Section 1.12 "Effective  Date"  shall  mean  the  date on which the SEC
first declares  effective a  Registration  Statement  registering  resale of the
Registrable Securities as set forth in Section 7.2(a).

         Section 1.13 "Escrow  Agent" shall  mean  Novack  Burnbaum Crystal LLP.

         Section 1.14 "Exchange  Act" shall mean the Securities  Exchange Act of
1934, as amended and the regulations promulgated thereunder.

         Section 1.15 "Floor  Price P" shall  mean a closing bid price of twenty
cents ($.20) per share or less for any five consecutive  Trading Days during the
Valuation  Period.  "Floor  Price C" shall mean  fifteen  cents ($.15) per share
determined on any Put Date.

         Section 1.16 "Investment  Amount" shall  mean the dollar amount (within
the range  specified  in Section 2.2) to be invested by the Investor to purchase
Put Shares with respect to any Put Purchase  Notice  delivered by the Company to
the Investor in accordance with Section 2.2 hereof.

         Section 1.17 "Legend"  shall  have the meaning assigned to such term in
Section 9.1 hereof.

         Section 1.18 "Material  Adverse  Effect"  shall  mean any effect on the
business,  operations,  properties,  prospects  or  financial  condition  of the
Company  that is material  and adverse to the Company or to the Company and such
other  entities  controlling  or  controlled  by the Company,  taken as a whole,
and/or any condition, circumstance or situation that would prohibit or otherwise
interfere  with the  ability  of the  Company  to enter  into  and  perform  its
obligations  under this Agreement and to carry on the business of the Company as
presently conducted.

         Section 1.19 "Market  Price" shall mean for the purpose of  calculating
the Purchase Price of the Put Shares, the lowest closing bid price of the Common
Stock as reported on the Principal Market over the Valuation Period.

         Section 1.20 "Maximum  Put Amount"  shall  mean a maximum of 15% of the
aggregate  trading  volume  during  the  Valuation  Period  excluding  from such
calculation  any  Trading Day where the lowest bid price is less than 25% of the
Floor Price C.

         Section 1.21 "NASD" shall mean the National  Association  of Securities
Dealers, Inc.

         Section 1.22 "Outstanding"  when used with reference to Common Stock or
Capital Shares (collectively the "Shares"),  shall mean, at any date as of which
the  number of such  Shares is to be  determined,  all  issued  and  outstanding

                                    10.5 - 3
<PAGE>

Shares,  and shall  include all such Shares  issuable in respect of  outstanding
scrip or any  certificates  representing  fractional  interests  in such Shares;
provided,  however,  that  "Outstanding"  shall  not mean any such  Shares  then
directly or indirectly owned or held by or for the account of the Company.

         Section 1.23 "Person"  shall  mean  an  individual,  a  corporation,  a
partnership,  an  association,  a limited  liability  company,  a trust or other
entity or  organization,  including a government or political  subdivision or an
agency or instrumentality thereof.

         Section 1.24 "Principal  Market" shall mean the Nasdaq National Market,
the Nasdaq  Small-Cap  Market,  the NASD OTC Bulletin Board,  the American Stock
Exchange or the New York Stock Exchange,  whichever is at the time the principal
trading exchange or market for the Common Stock.

         Section 1.25 Intentionally omitted.

         Section 1.26 "Purchase  Price"  as  used in this  Agreement  shall mean
seventy-five  percent  (75%) of the Market Price on the Put Date.  The foregoing
percentage is the "Purchase Price Percentage."

         Section 1.27 "Put" shall mean each occasion the Company  elects to draw
down a portion  from the  equity  line by  exercising  its right to tender a Put
Purchase Notice requiring the Investor to purchase a discretionary amount of the
Company's Common Stock, subject to the terms of this Agreement which tender must
be given to the Investor.

         Section 1.28 "Put Closing" shall mean one of the closings of a purchase
and sale of the Put Shares pursuant to Section 2.3.

         Section 1.29 "Put  Closing  Date"  shall  mean,  with  respect to a Put
Closing  the  fourth  Trading  Day  following  the Put Date  related to such Put
Closing,  provided all  conditions to such Put Closing have been satisfied on or
before such Trading Day.

         Section 1.30  "Put Date" shall mean such date as a Put Purchase  Notice
has been delivered to the Investor.

         Section 1.31 "Put Purchase  Notice" shall mean a written  notice to the
Investor setting forth the Investment Amount that the Company intends to sell to
the Investor, as such form is attached hereto as Exhibit A.

         Section 1.32 "Put Shares"  shall mean all shares of Common Stock issued
or issuable  pursuant to a Put that has occurred or may occur in accordance with
the terms and conditions of this Agreement.

         Section 1.33 "Registrable Securities" shall mean the Put Shares and the
Warrant Shares until the Registration  Statement has been declared  effective by
the SEC and all Put Shares and Warrant  Shares have been disposed of pursuant to
the Registration Statement.

         Section 1.34 "Registration   Statement"  shall   mean  a   registration
statement  on Form SB-2 (if use of such form is then  available  to the  Company
pursuant to the rules of the SEC and, if not, on such other form  promulgated by

                                    10.5 - 3
<PAGE>

the SEC for which the Company then  qualifies  and which counsel for the Company
shall deem  appropriate  and which form shall be available for the resale of the
Registrable  Securities  to be  registered  thereunder  in  accordance  with the
provisions  of this  Agreement,  and in accordance  with the intended  method of
distribution  of such  securities),  for the  registration  of the resale by the
Investor and Placement Agent of the Registrable  Securities under the Securities
Act.

         Section 1.35 "Regulation  D"  shall  have the  meaning set forth in the
recitals of this Agreement.

         Section 1.36 "SEC" shall mean the Securities and Exchange Commission.

         Section 1.37 "Section  4(2)"  shall  have  the meaning set forth in the
recitals of this Agreement.

         Section 1.38 "Securities Act" shall  have the definition ascribed to it
in the recitals of this Agreement.

         Section 1.39 "SEC Documents" shall mean, to the extent applicable,  the
Company's  latest Form 10-KSB as of the time in  question,  all Forms 10-QSB and
8-K filed  thereafter,  and the Proxy Statement for its latest fiscal year as of
the time in question  until such time the Company no longer has an obligation to
maintain the effectiveness of a Registration Statement.

         Section 1.40 "Subscription  Date"  shall  mean  the  date on which this
Agreement is executed and delivered by the parties hereto.

         Section 1.41 "Put   Cushion"   shall   mean   the   mandatory   minimum
twenty-five (25) Trading Days between Put Dates.

         Section 1.42 "Trading  Day"  shall  mean  any   day  during  which  the
Principal Market shall be open for business.

         Section 1.43 Intentionally Omitted.

         Section 1.44 "Valuation  Period"  shall  mean the period of thirty (30)
days during which the  Purchase  Price of the Common  Stock is  determined  with
respect to any Put Date, which shall occur during the immediate thirty (30) days
prior to the Put Date.

         Section 1.45 "Warrants"  shall mean the common stock purchase  warrants
of the Company collectively described in Section 2.4, forms of which are annexed
hereto as Exhibits E and F. "Put Warrants"  shall mean the common stock purchase
warrants of the  Company  described  in Section  2.4, a form of which is annexed
hereto as Exhibit E.

         Section 1.46 "Warrant Shares" shall mean the Common Stock issuable upon
exercise of the Warrants.

                                   ARTICLE II
                        PURCHASE AND SALE OF COMMON STOCK

                                    10.5 - 4
<PAGE>

         Section 2.1  Investments/Puts.  Upon the terms and conditions set forth
                      -----------------
herein (including, without limitation, the provisions of Article VII hereof), on
any Put Date the Company may  exercise a Put by the  delivery of a Put  Purchase
Notice.  The number of Put Shares that the Investor  shall  receive  pursuant to
such Put shall be determined by dividing the Investment  Amount specified in the
Put  Purchase  Notice by the  Purchase  Price  determined  during the  Valuation
Period.

         Section 2.2  Mechanics.
                      ----------
                  (a) Put  Purchase  Notice.  At any time during the  Commitment
                      ----------------------
Period, the Company may deliver a Put Purchase Notice, in substantially the form
and substance of Exhibit A, to the Investor, subject to the conditions set forth
in  Section  7.2;  provided,  however,  the  Investment  Amount  for each Put as
designated  by the  Company in the  applicable  Put  Purchase  Notices  shall be
neither less than $50,000 nor more than $100,000, subject further to the Maximum
Put  Amount  and,  provided  further,  that any  amount in excess of  $50,000 be
consented to in writing by the Investor.

                  (b) Date of Delivery of Put  Purchase  Notice.  A Put Purchase
                      ------------------------------------------
Notice  shall be deemed  delivered  on (i) the  Trading  Day it is  received  by
facsimile or otherwise by the Investor if such notice is received prior to 12:00
noon New York time,  or (ii) the  immediately  succeeding  Trading  Day if it is
received by facsimile  or otherwise  after 12:00 noon New York time on a Trading
Day or at any time on a day which is not a Trading Day. No Put  Purchase  Notice
may be deemed delivered, on a day that is not a Trading Day.

                  (c)  Determination  of Purchase Price and Put Shares Issuable.
                       ---------------------------------------------------------
The  Purchase  Price  for any Put  shall  be the  product  of the  Market  Price
multiplied by the Purchase Price Percentage less 10% of the amount stated in any
Put  Purchase  Notice.  The number of Put Shares to be purchased by the Investor
shall be settled on the Put Closing Date

                  (d) Floor Price  Limitation.  If the Market Price is less than
                      ------------------------
either  Floor  Price P or  Floor  Price C the  Company  shall  not  sell and the
Investor  shall not purchase the Put Shares  otherwise to be purchased  for such
Put Date,  unless the  Company  and the  Investor  each  consent to such sale in
writing.

                  Section 2.3 Put  Closings.  On each Put Closing Date for a Put
                              --------------
(i) the Company shall deliver in the form required pursuant to Article IX hereof
to the Escrow  Agent to be held in  escrow,  certificates  representing  the Put
Shares to be  purchased by the  Investor  pursuant to Section 2.1 herein,  or if
deliverable  without legend pursuant to Article IX and if DTC eligible,  deliver
the Put Shares  electronically by DTC or DWAC after the Put Date and on or prior
to the Put  Closing  Date,  registered  in the name of the  Investor  or, at the
Investor's  option,  deposit such  certificate(s)  into such account or accounts

                                    10.5 - 5
<PAGE>

previously  designated  by the Investor  (ii) the Company  shall  deliver to the
Escrow  Agent Put Warrants in  accordance  with Section 2.4, in the form annexed
hereto as Exhibit E, and (iii) the Investor shall deliver to the Escrow Agent to
be held in escrow the Investment  Amount specified in the Put Purchase Notice by
wire transfer of immediately  available funds on or before the Put Closing Date.
In addition,  on or prior to the Put Closing  Date,  each of the Company and the
Investor shall deliver all documents,  instruments  and writings  required to be
delivered or reasonably  requested by either of them pursuant to this  Agreement
in order to implement and effect the transactions  contemplated herein.  Payment
of funds to the Company and delivery of the certificates and the Put Warrants to
the Investor shall occur out of escrow in accordance  with the escrow  agreement
referred to in Section 7.2(o) following (x) the Company's deposit into escrow of
the  certificates  representing  the Put Shares and the Put Warrants and (y) the
Investor's deposit into escrow of the Investment Amount.

         Section 2.4  Issuance of Warrants.  Under the terms of this  Agreement,
                      ---------------------
the Company  shall issue to the  Investor  Warrants to purchase up to 10% of the
number of Put Shares  purchased  on each Put  Closing  Date in the form  annexed
hereto as Exhibit E and the  Company  shall  issue to the  Investor  Warrants to
purchase  1,000,000  Warrant  Shares in the form of  Warrant  annexed  hereto as
Exhibit F.

         Section 2.5 Termination of Investment Obligation. The obligation of the
                     -------------------------------------
Investor  to  purchase  shares  of  Common  Stock  shall  terminate  permanently
(including  with respect to a Put Closing Date that has not yet occurred) in the
event  that  (i)  there  shall  occur  any  stop  order  or  suspension  of  the
effectiveness of the  Registration  Statement for a consecutive ten day calendar
period or for an aggregate  of thirty (30)  Trading  Days during the  Commitment
Period,  for any reason,  (ii) the Company  files a petition in  bankruptcy or a
petition  in  bankruptcy  is  filed  against  the  Company  or  the  Company  is
adjudicated  bankrupt,  (iii) the Company  consolidates  with or merges into any
other  Person  and  the  Company  shall  not  be  the  continuing  or  surviving
corporation,  (iv) the Company  fails to deliver the  Warrants as  described  in
Section  2.4, (v) the Company  effects a  reclassification  or  recapitalization
without the Investor's consent as described in Section 6.11, or (vi) the Company
shall at any time fail to comply with the requirements of Section 6.2, 6.3, 6.4,
6.5 or 6.6.

         Section 2.6  Non-Usage  Fee. The Company  shall have the  obligation to
                      ---------------
deliver Put Purchase Notices to the Investor during each six (6) month period of
the Commitment  Period having an aggregate  dollar amount of $200,000  ("Minimum
Put Commitment"). In the event the Company does not deliver Put Purchase Notices
during any six (6) month  period of the  Commitment  Period for the  Minimum Put
Commitment,  then the Company  shall pay the Investor a non-usage fee of $25,000
less 10% of the actual  aggregate  dollar amount of Put Purchase  Notices during
the subject six (6) month period  ("Non-Usage Fee"). The Investor shall give the
Company written notice to pay the Non-Usage Fee 10 days after the end of any six
(6) month period during which the Minimum Put  Commitment has not been made. The
Company  shall be required to pay the  Non-Usage Fee 5 days after the receipt of
such notice.  If the Company  fails to pay the  Non-Usage  Fee upon notice,  the
Non-Usage  Fee may be deducted by the Investor  from the  Purchase  Price of any
subsequent Put Purchase Notice delivered by the Company. Failure of the Investor
to give written  notice of a Non-Usage  Fee to the Company,  shall not waive the
Investor's  rights  to  collect  any such fee nor  relieve  the  Company  of its
obligation to pay such fee.
                                    10.5 - 6
<PAGE>

                                   ARTICLE III
                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

         The Investor represents and warrants to the Company that:

         Section 3.1 Intent.  The Investor is entering  into this  Agreement for
                     -------
its own account and not with a view to the distribution of the Common Stock, and
the Investor has no present arrangement  (whether or not legally binding) at any
time to sell the  Common  Stock to or through  any  person or entity;  provided,
however, that by making the representations  herein, the Investor does not agree
to hold the Common Stock for any minimum or other specific term and reserves the
right to dispose of the Common Stock at any time in accordance  with federal and
state securities laws applicable to such disposition.

         Section 3.2  Sophisticated  Investor.  The Investor is a  sophisticated
                      ------------------------
investor (as described in Rule  506(b)(2)(ii) of Regulation D) and an accredited
investor  (as  defined  in Rule 501 of  Regulation  D),  and  Investor  has such
experience  in business and  financial  matters that it is capable of evaluating
the merits and risks of an investment in Common Stock. The Investor acknowledges
that an investment in the Common Stock is speculative and involves a high degree
of risk.

         Section 3.3  Authority.  This  Agreement has been duly  authorized  and
                      ----------
validly  executed  and  delivered  by the  Investor  and is a valid and  binding
agreement of the Investor  enforceable  against it in accordance with its terms,
subject to applicable  bankruptcy,  insolvency,  or similar laws relating to, or
affecting  generally the  enforcement of,  creditors'  rights and remedies or by
other equitable principles of general application.

         Section 3.4 Not an Affiliate. The Investor is not an officer,  director
                     -----------------
or to Investor's  good faith belief,  an "affiliate" (as that term is defined in
Rule 405 of the Securities Act) of the Company.

         Section 3.5 Absence of  Conflicts.  The  execution and delivery of this
                     ----------------------
Agreement and any other document or instrument executed in connection  herewith,
and the consummation of the  transactions  contemplated  hereby,  and compliance
with the requirements hereof, will not violate any law, rule, regulation, order,
writ,  judgment,  injunction,  decree or award  binding on Investor,  or, to the
Investor's knowledge, (a) violate any provision of any indenture,  instrument or
agreement to which  Investor is a party or is subject,  or by which  Investor or
any of its assets is bound,  (b) conflict with or constitute a material  default
thereunder, (c) result in the creation or imposition of any lien pursuant to the
terms of any such indenture,  instrument or agreement, or constitute a breach of
any  fiduciary  duty owed by  Investor  to any third  party,  or (d) require the
approval  of any  third-party  (which  has not been  obtained)  pursuant  to any
material contract,  agreement,  instrument,  relationship or legal obligation to
which  Investor  is  subject  or to  which  any of  its  assets,  operations  or
management may be subject.

                                    10.5 - 7
<PAGE>

         Section  3.6  Disclosure;  Access  to  Information.  The  Investor  has
                       -------------------------------------
received all  documents,  records,  books and other  information  pertaining  to
Investor's  investment in the Company that have been  requested by the Investor.
The Company is subject to the periodic  reporting  requirements  of the Exchange
Act,  and the  Investor  has had access to copies of any such  reports that have
been requested by it.

         Section 3.7 Manner of Sale. At no time was Investor  presented  with or
                     ---------------
solicited  by or through any leaflet,  public  promotional  meeting,  television
advertisement or any other form of general solicitation or advertising.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company  represents and warrants to the Investor,  except as may be
set forth in the disclosure schedule delivered in connection herewith, that:

         Section 4.1  Organization of the Company.  The Company is a corporation
                      ----------------------------
duly  organized  and  existing in good  standing  under the laws of the State of
California and has all requisite  corporate  authority to own its properties and
to carry on its business as now being  conducted.  The Company is duly qualified
as a  foreign  corporation  to do  business  and is in good  standing  in  every
jurisdiction in which the nature of the business  conducted or property owned by
it makes such qualification necessary,  other than those in which the failure so
to qualify would not have a Material Adverse Effect.

         Section 4.2  Authority.  (i) The Company  has the  requisite  corporate
                      ----------
power and  authority  to enter  into and  perform  its  obligations  under  this
Agreement to issue the Put Shares; (ii) the execution,  issuance and delivery of
this  Agreement  and the  consummation  by it of the  transactions  contemplated
hereby  have been duly  authorized  by all  necessary  corporate  action  and no
further  consent or  authorization  of the Company or its Board of  Directors or
stockholders  is required;  and (iii) this  Agreement has been duly executed and
delivered by the Company and  constitutes a valid and binding  obligation of the
Company  enforceable against the Company in accordance with its terms, except as
such  enforceability  may be limited by applicable  bankruptcy,  insolvency,  or
similar laws relating to, or affecting  generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.

         Section  4.3  Capitalization.  As of the date  hereof,  the  authorized
                       ---------------
capital stock of the Company consists of 250,000,000  shares of Common Stock, of
which  15,526,839  shares are issued and  outstanding  and 50,000,000  shares of
preferred  stock, of which no shares are issued and  outstanding.  Except as set
forth in Schedule 4.3,  there are no options,  warrants,  or rights to subscribe
to,  securities,  rights or obligations  convertible into or exchangeable for or
giving any right to  subscribe  for any shares of capital  stock of the Company.
All of the outstanding  shares of Common Stock of the Company have been duly and
validly authorized and issued and are fully paid and nonassessable.

                                    10.5 - 8
<PAGE>

         Section 4.4 Common  Stock.  As of the  commencement  of the  Commitment
                     --------------
Period,  the Company will have  registered  its Common Stock pursuant to Section
12(b) or 12(g) of the Exchange Act and be in full  compliance with all reporting
requirements  of the Exchange Act, if any, and the Company will have  maintained
all requirements for the continued listing or quotation of its Common Stock, and
such Common Stock is then listed or quoted on the  Principal  Market.  As of the
date hereof, the Common Stock is quoted on the OTC Bulletin Board.

         Section 4.5  Financial  Statements.  The Company has  delivered or made
                      ----------------------
available  to the  Investor  true and  complete  copies of  unaudited  financial
statements  (without  footnotes)  as of and for the period  ending June 30, 2000
("Financial  Statements").  The Company has not  provided  to the  Investor  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.  The Financial  Statements fairly present in all material
respects the  financial  position of the Company as of the dates thereof and the
results of  operations  for the periods then ended,  subject to normal  year-end
audit adjustments.

         Section   4.6  Valid   Issuances.   Assuming   the   accuracy   of  the
                        ------------------
representations  and  warranties  contained in Sections  3.1, 3.2 and 3.7 hereof
both at the  date  hereof  and at the time of sale  and  issuance,  the sale and
issuance of the Put Shares will be exempt from registration under the Securities
Act in reliance upon Section 4(2) thereof  and/or  Regulation D thereto and when
issued,  the Put  Shares  shall be duly and  validly  issued,  fully  paid,  and
nonassessable.  Neither  the  sales  of the  Put  Shares  pursuant  to,  nor the
Company's performance of its obligations under this Agreement will (i) result in
the creation or imposition of any liens,  charges,  claims or other encumbrances
upon the Put Shares or any of the assets of the  Company,  or (ii)  entitle  the
holders of Outstanding Capital Shares to preemptive or other rights to subscribe
to or acquire the Capital  Shares or other  securities  of the Company.  The Put
Shares  shall not subject the  Investor to personal  liability  by reason of the
possession thereof.

         Section 4.7 No General  Solicitation  or  Advertising in Regard to this
                     -----------------------------------------------------------
Transaction.  Neither the Company nor any of its affiliates nor any  distributor
------------
or any person  acting on its or their  behalf (i) has  conducted or will conduct
any general  solicitation  (as that term is used in Rule 502(c) of Regulation D)
or general  advertising with respect to any of the Put Shares,  or (ii) made any
offers or sales of any  security  or  solicited  any offers to buy any  security
under any  circumstances  that would  require  registration  of the Common Stock
under the Securities Act.

         Section 4.8  Corporate  Documents.  The Company has  furnished  or made
                      ---------------------
available to the Investor true and correct  copies of the Company's  Certificate
of   Incorporation,   as  amended   and  in  effect  on  the  date  hereof  (the
"Certificate"),  and the Company's By-Laws, as amended and in effect on the date
hereof (the "By-Laws").

                                    10.5 - 9
<PAGE>

         Section 4.9 No Conflicts.  The execution,  delivery and  performance of
                     -------------
this  Agreement  by the  Company  and the  consummation  by the  Company  of the
transactions contemplated hereby, including, without limitation, the issuance of
Common  Stock do not and will not (i)  result in a  violation  of the  Company's
Certificate  or By-Laws or (ii)  conflict  with,  or constitute a default (or an
event that with notice or lapse of time or both would  become a default)  under,
or  give to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation of, any material agreement,  indenture, instrument or any "lock-up"
or similar  provision  of any  underwriting  or similar  agreement  to which the
Company is a party, or (iii) result in a violation of any federal,  state, local
or foreign law, rule,  regulation,  order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Company or by which
any  property  or asset of the  Company is bound or  affected  (except  for such
conflicts, defaults, terminations, amendments, accelerations,  cancellations and
violations  as would  not,  individually  or in the  aggregate,  have a Material
Adverse  Effect) nor is the Company  otherwise in violation of, conflict with or
in default  under any of the  foregoing;  provided  that,  for  purposes  of the
Company's  representations  and warranties as to violations of foreign law, rule
or regulation referenced in clause (iii), no such representations and warranties
are being made  insofar  as the  execution,  delivery  and  performance  of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated  hereby are or may be affected by the status of the Investor  under
or pursuant to any such foreign  law,  rule or  regulation.  The business of the
Company is not being conducted in violation of any law,  ordinance or regulation
of  any  governmental  entity,   except  for  possible  violations  that  either
individually  or in the  aggregate  do not and will not have a Material  Adverse
Effect.  The Company is not required under federal,  state or local law, rule or
regulation to obtain any consent,  authorization or order of, or make any filing
or  registration  with,  any  court or  governmental  agency  in order for it to
execute, deliver or perform any of its obligations under this Agreement or issue
and sell the Common Stock in  accordance  with the terms hereof  (other than any
SEC,  NASD or state  securities  filings  that may be required to be made by the
Company  subsequent to any Put Closing,  any registration  statement that may be
filed  pursuant  hereto,  and any  shareholder  approval  required  by the rules
applicable  to companies  whose common  stock trades on any  Principal  Market);
provided that,  for purposes of the  representation  made in this sentence,  the
Company  is  assuming   and   relying   upon  the   accuracy  of  the   relevant
representations and agreements of the Investor herein.

         Section  4.10  No  Material  Adverse  Change.  Since  the  date  of the
                        ------------------------------
Financial  Statements  described in Section 4.5, no Material  Adverse Effect has
occurred or exists with respect to the Company.

         Section 4.11 No Undisclosed Liabilities. The Company has no liabilities
                      ---------------------------
or obligations which are material, individually or in the aggregate, and are not
disclosed to the Investor in the  Financial  Statements or otherwise in writing,
other than those  incurred in the ordinary  course of the  Company's  businesses
since the date of the Financial  Statements  and which,  individually  or in the
aggregate, do not or would not have a Material Adverse Effect on the Company.

         Section  4.12 No  Undisclosed  Events  or  Circumstances.  No  event or
                       -------------------------------------------
circumstance  has  occurred  or  exists  with  respect  to  the  Company  or its

                                    10.5 - 10
<PAGE>

businesses,  properties,  prospects,  operations or financial  condition,  that,
under applicable law, rule or regulation, requires as of the date hereof, public
disclosure or announcement prior to the date hereof by the Company.

         Section 4.13 No Integrated  Offering.  Neither the Company,  nor any of
                      ------------------------
its  affiliates,  nor any person acting on its or their behalf has,  directly or

indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  other than pursuant to this  Agreement,  under  circumstances
that would require registration of the Common Stock under the Securities Act.

         Section 4.14 Litigation and Other  Proceedings.  Except as set forth in
                      ----------------------------------
the  Financial  Statements  described in Section  4.5,  there are no lawsuits or
proceedings pending or to the best knowledge of the Company threatened,  against
the Company, nor has the Company received any written or oral notice of any such
action, suit,  proceeding or investigation,  which might have a Material Adverse
Effect.  Except  as set  forth on  Schedule  4.14,  no  judgment,  order,  writ,
injunction,  decree  or award  has been  issued by or, so far as is known by the
Company,  requested by any court,  arbitrator or governmental agency which might
result in a Material Adverse Effect.

         Section 4.15 No Misleading or Untrue Communication. The Company and any
                      --------------------------------------
Person   representing   the  Company,   in  connection  with  the   transactions
contemplated  by  this  Agreement,   have  not  made,  at  any  time,  any  oral
communication in connection with same, which contained any untrue statement of a
material fact or omitted to state any material  fact  necessary in order to make
the statements,  in the light of the  circumstances  under which they were made,
not misleading.

         Section 4.16 Non-Public  Information.  Neither  the  Company nor any of
                      ------------------------
its officers of agents has disclosed any material  non-public  information about
the Company to the Investor or the Placement Agent.

         Section 4.17 No Default or Violation. The Company is not (i) in default
                      ------------------------
under or in  violation  of and no event has  occurred  which has not been waived
which,  with notice or lapse of time or both,  would  result in a default by the
Company,  nor has the Company  received  notice of a claim that it is in default
under or that it is in violation of, any indenture,  loan or credit agreement or
any other  agreement or  instrument to which it is a party or by which it or any
of its  properties  is  bound,  (ii) in  violation  of any  order of any  court,
arbitration or governmental body, or (iii) in violation of any statute,  rule or
regulation of any governmental authority,  except as could not have or result in
a Material Adverse Effect.

         Section 4.18  Financial  Statements.  The  financial  statements of the
                       ----------------------
Company  included in the reports  filed by the Company  under the  Exchange  Act
comply in all material respects with applicable accounting  requirements and the
rules and  regulations of the SEC with respect  thereto as in effect at the time
of filing.  Such  financial  statements  have been prepared in  accordance  with

                                    10.5 - 11
<PAGE>

generally accepted accounting  principles ("GAAP") applied on a consistent basis
during  the  periods  involved,  except as may be  otherwise  specified  in such
financial  statements or the notes  thereto,  and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

                                    ARTICLE V
                            COVENANTS OF THE INVESTOR

         Section 5.1 Compliance with Law. The Investor's trading activities with
                     --------------------
respect to shares of the Company's  Common Stock will be in compliance  with all
applicable  state and federal  securities  laws,  rules and  regulations and the
rules and  regulations  of the Principal  Market on which the  Company's  Common
Stock is listed.

         Section 5.2 Selling  Restrictions.  The  Investor has the right to sell
                     ----------------------
shares of the Company's Common Stock equal in number to the number of the Shares
to be purchased pursuant to this Agreement during the Commitment Period.

                                   ARTICLE VI
                            COVENANTS OF THE COMPANY

         Section 6.1 Registration Rights. The Company shall cause a Registration
                     --------------------
Statement to be filed with respect to all Put Shares and Warrant  Shares  within
sixty (60) days of the Subscription Date and shall use its best efforts to cause
such Registration  Statement to be declared  effective within one hundred twenty
(120) days of the Subscription Date and remain effective for a period of two (2)
years.  The Company shall provide the  Investor,  or its counsel,  a copy of the
Registration Statement at least two (2) days prior to filing with the SEC.

         Section 6.2  Reservation  of Common Stock.  As of the date hereof,  the
                      -----------------------------
Company  has  reserved  and the  Company  shall  continue  to  reserve  and keep
available  at all times  shares of Common  Stock for the purpose of enabling the
Company to satisfy any obligation to issue the Put Shares.

         Section  6.3  Quoting or Listing of Common  Stock.  The  Company  shall
                       ------------------------------------
maintain the quoting or listing of the Common Stock on a Principal  Market,  and
as soon as  practicable  (but in any  event  prior  to the  commencement  of the
Commitment  Period)  to list the Put  Shares  on the  Principal  Market,  if the
Principal Market is the Nasdaq,  AMEX or NYSE. The Company further shall, if the
Company applies to have the Common Stock traded on any other  Principal  Market,
include in such application the Put Shares,  and shall take such other action as
is  necessary  or  desirable  in the opinion of the Investor to cause the Common
Stock to be listed on such other Principal  Market as promptly as possible.  The
Company  shall take all action  necessary to continue  the quoting,  listing and
trading  of its Common  Stock on the  Principal  Market  and will  comply in all
respects with the Company's  reporting,  filing and other  obligations under the
bylaws or rules of the Principal Market.

                                    10.5 - 12
<PAGE>

         Section 6.4  Exchange  Act  Registration.  The Company  shall cause its
                      ----------------------------
Common  Stock to become and continue to be  registered  under  Section  12(g) or
12(b) of the Exchange  Act,  will comply in all respects  with its reporting and
filing  obligations under the Exchange Act, and will not take any action or file
any  document  (whether  or not  permitted  by  the  Exchange  Act or the  rules
thereunder) to terminate or suspend such registration or to terminate or suspend
its  reporting and filing  obligations  under the Exchange Act. The Company will
take all action to obtain a listing and  continue the listing and trading of its
Common Stock on the  Principal  Market and will comply in all respects  with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
the Principal Market.

         Section 6.5 Legends. The certificates evidencing the Common Stock to be
                     --------
sold by the  Investor  pursuant  to  Section  9.1  shall be free of  restrictive
legends, except as set forth in Article IX.

         Section 6.6  Corporate  Existence.  The  Company  will  take  all steps
                      ---------------------
necessary to preserve and continue the corporate existence of the Company.

         Section  6.7 Additional  SEC  Documents.  In  the  event  that  the SEC
                      ---------------------------
Documents  furnished or submitted to the SEC by the Company are not available or
accessible  by the  Investor(s)  on  EDGAR,  the  Company  will  deliver  to the
Investor, as and when the originals thereof are submitted to the SEC for filing,
copies of all such SEC Documents.

         Section 6.8. Blackout Period.  The Company will immediately  notify the
                      ----------------
Investor  upon the  occurrence  of any of the  following  events in respect of a
registration  statement  or related  prospectus  in respect  of an  offering  of
Registrable 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 for 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  Registrable  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 such  registration  statement  or  related
prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any  material  respect or 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

                                    10.5 - 13
<PAGE>

the Investor any such  supplement  or amendment to the related  prospectus.  The
Company  shall not deliver to the Investor any Put  Purchase  Notice  during the
continuation of any of the foregoing events or if the Company has knowledge that
any of the  foregoing  events  will  occur  within  twenty  (20)  days  of  such
knowledge.

         Section 6.9.  Expectations  Regarding Put Purchase Notices.  Within ten
                       ---------------------------------------------
(10) days after the commencement of each calendar quarter  occurring  subsequent
to the commencement of the Commitment  Period,  the Company undertakes to notify
the  Investor  as to its  reasonable  expectations  as to the  dollar  amount it
intends to raise during such calendar  quarter,  if any, through the issuance of
Put Purchase Notices. Such notification shall constitute only the Company's good
faith estimate and shall in no way obligate the Company to raise such amount, or
any amount, or otherwise limit its ability to deliver Put Purchase Notices.  The
failure  by the  Company  to  comply  with  this  provision  can be cured by the
Company's  notifying the Investor at any time as to its reasonable  expectations
with respect to the current calendar quarter.

         Section 6.10.     Capital Raising Limitations.
                           ----------------------------
                           (i)      Capital Raising Limitations.  For so long as
                                    ----------------------------
a Put  Closing  has  occurred in the  Investment  Agreements  as the Company has
designated in its Put Purchase  Notice  (Investor  consented to each  Investment
Amount  in excess  of  $50,000  and less than  $100,000  and a Put  Closing  has
occurred at each time  designated in the Put Purchase  Notice) during the period
from the date of this  Agreement  until its  expiration,  the Company  shall not
issue or sell, or agree to issue or sell Equity  Securities (as defined  below),
for cash in private capital  raising  transactions  without  obtaining the prior
written approval of the Investor (the limitations referred to in this subsection
6.10(i) are collectively referred to as the "Capital Raising Limitations").  For
purposes hereof, the following shall be collectively  referred to herein as, the
"Equity Securities":  (i) Common Stock or any other equity securities,  (ii) any
debt  or  equity   securities  which  are  convertible   into,   exercisable  or
exchangeable  for,  or carry the right to  receive  additional  shares of Common
Stock  or other  equity  securities,  or (iii)  any  securities  of the  Company
pursuant  to an  equity  line  structure  or  format  similar  in nature to this
transaction.

                           (ii)    Exceptions  to Capital  Raising  Limitations.
                                   ---------------------------------------------
Notwithstanding  the above, the Capital Raising  Limitations  shall not apply to
any transaction  involving  issuances of securities in connection with a merger,
consolidation,  acquisition  or  sale  of  assets,  or in  connection  with  any
strategic  partnership or joint venture (the primary  purpose of which is not to
raise equity capital), or in connection with the disposition or acquisition of a
business, product or license by the Company or exercise of options by employees,
consultants or directors,  or a primary  underwritten  offering of the Company's
Common Stock.

         Section 6.11. No  Reclassification  or  Recapitalization.  The  Company
                       -------------------------------------------
shall  not,  without  the  consent  of the  Investor,  during  the  term of this
Agreement,   effect  a  recapitalization,   reclassification  or  other  similar

                                    10.5 - 14
<PAGE>

transaction  of such  character that the shares of Common Stock shall be changed
into or become  exchangeable  for a smaller  number of shares (a "Reverse  Stock
Split"),  provided  that the Company may effect such Reverse Stock Split without
the consent of Investor in connection with achieving  listing  requirements  for
any Principal Market.

         Section 6.12. Disclosure of Material Information. In the event that any
                       -----------------------------------
or all of the information set forth on Schedule 8.2(a) hereto becomes  material,
the Company shall make full and complete  public  disclosure in accordance  with
all applicable law.

         Section 6.13. Issuance of Put Shares.  The sale and issuance of the Put
                       -----------------------
Shares shall be made in  accordance  with the  provisions  and  requirements  of
applicable federal and state law.

                                   ARTICLE VII
                          CONDITIONS TO DELIVERY OF PUT
                 PURCHASE NOTICES AND CONDITIONS TO PUT CLOSING

         Section 7.1  Conditions  Precedent to the  Obligation of the Company to
                      ----------------------------------------------------------
Issue and Sell Common Stock.  The  obligation  hereunder of the Company to issue
----------------------------
and sell the Put Shares to the Investor  incident to each Put Closing is subject
to the  satisfaction,  at or  before  each  such  Put  Closing,  of  each of the
conditions set forth below.

                  (a) Accuracy of the Investor's  Representation and Warranties.
                      ----------------------------------------------------------
The  representations and warranties of the Investor shall be true and correct in
all  material  respects as of the date of this  Agreement  and as of the date of
each such Put Closing as though made at each such time.

                  (b)  Performance  by the  Investor.  The  Investor  shall have
                       ------------------------------
performed, satisfied and complied in all respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Investor at or prior to such Put Closing.

         Section 7.2 Conditions Precedent to the Right of the Company to Deliver
                     -----------------------------------------------------------
a Put Purchase Notice and the Obligation of the Investor to purchase Put Shares.
--------------------------------------------------------------------------------
The right of the Company to deliver a Put Purchase  Notice and the obligation of
the Investor  hereunder to acquire and pay for the Put Shares  incident to a Put
Closing is subject to the  satisfaction,  (i) on the Put Date, (ii) for each day
during the Valuation Period,  and (iii) on the applicable Put Closing Date (each
a "Condition Satisfaction Date"), of each of the following conditions:

                  (a) Registration of the Common Stock with the SEC. The Company
                      ----------------------------------------------
shall have  filed  with the SEC a  Registration  Statement  with  respect to the
resale of the Registrable  Securities that shall have been declared effective by

                                    10.5 - 15
<PAGE>

the SEC  prior to the first Put Date,  but in no event  later  than one  hundred
twenty (120) days after the Subscription Date.

                  (b)  Effective   Registration   Statement.   The  Registration
                       -------------------------------------
Statement  shall  have  become  effective  on or prior to the Put Date and shall
remain effective on each Condition Satisfaction Date and (i) neither the Company
nor the Investor  shall have received  notice that the SEC has issued or intends
to issue a stop order with respect to the Registration Statement or that the SEC
otherwise  has  suspended or withdrawn  the  effectiveness  of the  Registration
Statement, either temporarily or permanently, or intends or has threatened to do
so, and (ii) no other  suspension of the use or withdrawal of the  effectiveness
of the Registration Statement or related prospectus shall exist.

                  (c) Accuracy of the Company's  Representations and Warranties.
                      ----------------------------------------------------------
The  representations  and warranties of the Company shall be true and correct in
all material  respects as of each Condition  Satisfaction Date as though made at
each such time (except for representations  and warranties  specifically made as
of a  particular  date) with  respect to all  periods,  and as to all events and
circumstances occurring or existing to and including each Condition Satisfaction
Date,   except   for  any   conditions   which  have   temporarily   caused  any
representations  or  warranties  herein  to be  incorrect  and  which  have been
corrected with no continuing impairment to the Company or the Investor.

                  (d)  Performance  by  the  Company.  The  Company  shall  have
                       ------------------------------
performed,  satisfied and complied in all material  respects with all covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Company at or prior to each Condition Satisfaction Date,
including but not limited to the  requirements  for the Company and its transfer
agent set forth in Sections 9.1 and 9.2 to deliver Common Stock without  legends
pursuant  to the terms set forth in Sections  9.1 and 9.2,  and Exhibit B hereto
and each of the  representations  and warranties of the Company, as set forth in
Article IV,  shall be true and correct  and there shall be no  omissions  of any
material  fact which,  if  disclosed,  would render any such  representation  or
warranty untrue.

                  (e) No Injunction.  No statute,  rule,  regulation,  executive
                      --------------
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  that prohibits or directly or materially  adversely affects any of
the  transactions  contemplated by this Agreement,  and no proceeding shall have
been commenced  that may have the effect of prohibiting or materially  adversely
affecting any of the transactions contemplated by this Agreement.

                  (f) Adverse Changes. Since the date of filing of the Company's
                      ----------------
most recent SEC Document,  no event that had or is  reasonably  likely to have a
Material Adverse Effect has occurred.

                  (g) No  Suspension of Trading In or Delisting of Common Stock.
                      ----------------------------------------------------------
The trading of the Common Stock  (including  without  limitation the Put Shares)

                                    10.5 - 16
<PAGE>

shall not have been  suspended by the SEC, the Principal  Market or the NASD and
the Common Stock (including  without  limitation the Put Shares) shall have been
approved for listing or quotation  and shall have actually been listed or quoted
on, and shall not have been delisted from the  Principal  Market,  nor shall the
Company  have  received any letter or notice of any  suspension  or delisting or
warning of such suspension or delisting.  The issuance of shares of Common Stock
with  respect to the  applicable  Put  Closing,  if any,  shall not  violate the
shareholder approval requirements of the Principal Market.

                  (h) Legal Opinions. The Company's counsel shall deliver to the
                      ---------------
Investor prior to the first Put Date an opinion in the form of Exhibit C hereto.

                  (i) Due  Diligence.  No dispute  between  the  Company and the
                      ---------------
Investor  shall  exist  pursuant  to Section  8.2(c) as to the  adequacy  of the
disclosure contained in the Registration Statement.

                  (j) Ten  Percent  Limitation.  The  number of Put Shares to be
                      -------------------------
purchased  on each Put Closing  Date and the number of Warrant  Shares  issuable
upon any exercise of such Warrant by the Investor shall not exceed the number of
such shares  that,  when  aggregated  with all other shares of Common Stock then
owned by the Investor beneficially or deemed beneficially owned by the Investor,
would result in the Investor  owning more than 9.99% of all of such Common Stock
as would be outstanding on such Put Closing Date or such date of exercise of the
Warrant, as determined in accordance with Section 16 of the Exchange Act and the
regulations  promulgated  thereunder.  In  such  event,  the  Investment  Amount
designated  in any Put Purchase  Notice  shall be reduced by the minimum  amount
necessary as to not result in the Investor  owning more than 9.99% of the Common
Stock of the Company. For purposes of this Section 7.2(j), in the event that the
amount of Common Stock  outstanding as determined in accordance  with Section 16
of the Exchange Act and the regulations  promulgated  thereunder is greater on a
Put Closing Date than on the date upon which the Put Purchase Notice  associated
with such Put Closing Date is given,  the amount of Common Stock  outstanding on
such Put  Closing  Date shall  govern for  purposes of  determining  whether the
Investor,  when  aggregating all purchases of Common Stock made pursuant to this
Agreement  and, if any,  Shares,  would own more than 9.99% of the Common  Stock
following such Put Closing Date.

                  (k) Cross  Default.  The Company  shall not be in default of a
                      ---------------
term,  covenant,  warranty or  undertaking  of any other  agreement to which the
Company and  Investor  are  parties,  nor shall there have  occurred an event of
default under any such other agreement,  in each case which default would have a
material  adverse  effect  on the  financial  condition  of the  Company  or the
Company's ability to comply with its obligations to the Investor.

                  (l) No  Knowledge.  The Company shall have no knowledge of any
                      --------------
event  more  likely  than not to have the effect of  causing  such  Registration
Statement to be suspended or otherwise  ineffective  (which event is more likely
than not to occur  within the  Valuation  Period  during  which the Put Purchase
Notice is deemed delivered).

                                    10.5 - 17
<PAGE>

                  (m)   Put Cushion.  The Put Cushion  shall have elapsed  since
                        -----------
the  immediately  preceding Put Date.

                  (n)  Shareholder  Vote. The issuance of shares of Common Stock
                       ------------------
with  respect to the  applicable  Put  Closing,  if any,  shall not  violate the
shareholder approval requirements of the Principal Market.

                  (o) Escrow  Agreement.  The parties  hereto shall have entered
                      ------------------
into a  mutually  acceptable  escrow  agreement  for  the  Purchase  Prices  due
hereunder,  providing for  reasonable  interest on any funds  deposited into the
escrow account established under the escrow agreement.

                  (p)  Compliance  Certificate.  The  Company  shall  deliver  a
                       ------------------------
Compliance  Certificate  in the form  attached  hereto as  Exhibit D on each Put
Closing Date.

                  (q) Other. On each Condition  Satisfaction  Date, the Investor
                      ------
shall have received and been reasonably  satisfied with such other  certificates
and documents as shall have been  reasonably  requested by the Investor in order
for the Investor to confirm the Company's  satisfaction  of the  conditions  set
forth in this Section 7.2.  including,  without  limitation,  a  certificate  in
substantially  the form and  substance  of Exhibit D hereto,  executed in either
case by an  executive  officer of the  Company  and to the  effect  that all the
conditions to such Put Closing shall have been  satisfied as at the date of each
such certificate.

                                  ARTICLE VIII
         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION

         Section 8.1 Due Diligence Review.  The Company shall make available for
                     ---------------------
inspection and review by the Investor,  advisors to and  representatives  of the
Investor  (who  may or may  not be  affiliated  with  the  Investor  and who are
reasonably  acceptable to the Company),  any  underwriter  participating  in any
disposition of the Registrable  Securities on behalf of the Investor pursuant to
the  Registration  Statement,  any such  registration  statement or amendment or
supplement  thereto or any blue sky,  NASD or other  filing,  all  financial and
other  records,  all SEC Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as may be reasonably necessary
for the purpose of such review, and cause the Company's officers,  directors and
employees to supply all such information reasonably requested by the Investor or
any  such  representative,  advisor  or  underwriter  in  connection  with  such
Registration  Statement  (including,  without  limitation,  in  response  to all
questions  and other  inquiries  reasonably  made or  submitted by any of them),
prior to and  from  time to time  after  the  filing  and  effectiveness  of the
Registration  Statement  for the sole  purpose of enabling the Investor and such
representatives,  advisors and underwriters and their respective accountants and
attorneys  to conduct  initial  and ongoing due  diligence  with  respect to the
Company and the accuracy of the Registration Statement.

                                    10.5 - 18
<PAGE>

         Section 8.2       Non-Disclosure of Non-Public Information.
                           -----------------------------------------
                           (a) Except as set forth on  Schedule  8.2(a)  hereof,
the  Company  represents  and  warrants  that  the  Company  and  its  officers,
directors, employees and agents have not disclosed any non-public information to
the  Investor or advisors to or  representatives  of the  Investor.  The Company
covenants and agrees that it shall refrain from disclosing,  and shall cause its
officers,  directors,  employees and agents to refrain from  disclosing,  unless
prior to disclosure of such information the Company  identifies such information
as being  non-public  information  and provides the Investor,  such advisors and
representatives  with the  opportunity  to  accept  or  refuse  to  accept  such
non-public information for review. The Company may, as a condition to disclosing
any  non-public  information  hereunder,  require the  Investor's  advisors  and
representatives  to enter into a  confidentiality  agreement in form  reasonably
satisfactory to the Company and the Investor.

                           (b) The Company acknowledges and understands that the
Investor is entering  into this  Agreement  at the request of the Company and in
good faith  reliance on (i) the  Company's  representation  set forth in Section
4.16 that neither it nor its agents have  disclosed to the Investor any material
non-public  information;  and (ii) the  Company's  covenant set forth in Section
6.10 that if all or any portion of the  information set forth on Schedule 8.2(a)
becomes  material,  the  Company  shall  timely  make full and  complete  public
disclosure  of all or such  portion of such  information  that shall have become
material in accordance with all applicable law.

                           (c) Nothing  herein  shall  require  the  Company  to
disclose   non-public   information   to  the   Investor  or  its   advisors  or
representatives,  and  the  Company  represents  that it  does  not  disseminate
non-public  information  to any investors who purchase stock in the Company in a
public offering, to money managers or to securities analysts, provided, however,
that  notwithstanding  anything  herein to the  contrary,  the Company  will, as
hereinabove provided, immediately notify the advisors and representatives of the
Investor  and,  if any,  underwriters,  of any  event  or the  existence  of any
circumstance   (without  any  obligation  to  disclose  the  specific  event  or
circumstance)  of which it becomes aware,  constituting  non-public  information
(whether or not requested of the Company  specifically  or generally  during the
course of due diligence by such persons or entities), which, if not disclosed in
the  prospectus  included  in  the  Registration   Statement  would  cause  such
prospectus  to  include  a  material  misstatement  or to omit a  material  fact
required to be stated therein in order to make the statements, therein, in light
of the circumstances in which they were made, not misleading.  Nothing contained
in this  Section 8.2 shall be  construed  to mean that such  persons or entities
other than the Investor  (without the written  consent of the Investor  prior to
disclosure of such  information)  may not obtain  non-public  information in the
course  of  conducting  due  diligence  in  accordance  with  the  terms of this
Agreement  and nothing  herein shall  prevent any such persons or entities  from
notifying  the Company of their opinion that based on such due diligence by such
persons  or  entities,  that  the  Registration  Statement  contains  an  untrue
statement of a material  fact or omits a material  fact required to be stated in
the  Registration  Statement  or  necessary  to make  the  statements  contained
therein, in light of the circumstances in which they were made, not misleading.

                                    10.5 - 19
<PAGE>

                                   ARTICLE IX
                                     LEGENDS

         Section 9.1 Legends.  Unless otherwise provided below, each certificate
                     --------
representing   Registrable  Securities  will  bear  the  following  legend  (the
"Legend"):

                  THE  SECURITIES  EVIDENCED BY THIS  CERTIFICATE
                  HAVE  NOT  BEEN   REGISTERED   UNDER  THE  U.S.
                  SECURITIES   ACT  OF  1933,   AS  AMENDED  (THE
                  "SECURITIES  ACT"),  OR  ANY  OTHER  APPLICABLE
                  SECURITIES   LAWS  AND  HAVE  BEEN   ISSUED  IN
                  RELIANCE    UPON   AN   EXEMPTION    FROM   THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
                  AND SUCH OTHER  SECURITIES  LAWS.  NEITHER THIS
                  SECURITY  NOR  ANY  INTEREST  OR  PARTICIPATION
                  HEREIN  MAY  BE  REOFFERED,   SOLD,   ASSIGNED,
                  TRANSFERRED, PLEDGED, ENCUMBERED,  HYPOTHECATED
                  OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN
                  EFFECTIVE   REGISTRATION  STATEMENT  UNDER  THE
                  SECURITIES  ACT OR  PURSUANT  TO A  TRANSACTION
                  THAT IS EXEMPT  FROM,  OR NOT  SUBJECT TO, SUCH
                  REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS
                  THE  BENEFICIARY OF CERTAIN  OBLIGATIONS OF THE
                  COMPANY  SET FORTH IN A PRIVATE  EQUITY LINE OF
                  CREDIT AGREEMENT BETWEEN UNITED VENTURES GROUP,
                  INC. AND BOAT BASIN  INVESTORS LLC DATED AUGUST
                  __,   2000.  A  COPY  OF  THE  PORTION  OF  THE
                  AFORESAID AGREEMENT EVIDENCING SUCH OBLIGATIONS
                  MAY BE OBTAINED  FROM THE  COMPANY'S  EXECUTIVE
                  OFFICES.

         Notwithstanding the foregoing,  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
in  substantially  the form of  Exhibit B  hereto.  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 herein. It is the intent and
purpose of such instructions, as provided therein, to require the transfer agent
for the Common Stock from time to time upon transfer of  Registrable  Securities
by the Investor to issue  certificates  evidencing such  Registrable  Securities
free of the  Legend  during  the  following  periods  and  under  the  following
circumstances 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 the
Investor:

                  (a) at any time after the Effective  Date,  upon  surrender of
         one or more certificates  evidencing Common Stock that bear the Legend,
         to the extent  accompanied  by a notice  requesting the issuance of new
         certificates free of the Legend to replace those surrendered;  provided
         that (i) the Registration  Statement shall then be effective;  (ii) the

                                    10.5 - 20
<PAGE>

         Investor  confirms to the transfer  agent that it has sold,  pledged or
         otherwise  transferred or agreed to sell, pledge or otherwise  transfer
         such Common Stock in a bona fide  transaction  to a third party that is
         not an affiliate of the Company; and (iii) the Investor confirms to the
         transfer  agent that the  Investor  has  complied  with the  prospectus
         delivery requirement; and

                  (b) at any time upon any surrender of one or more certificates
         evidencing  Registrable  Securities that bear the Legend, to the extent
         accompanied  by a notice  requesting  the issuance of new  certificates
         free  of  the  Legend  to  replace  those  surrendered  and  containing
         representations  that (i) the  Investor is permitted to dispose of such
         Registrable  Securities  without  limitation  as to amount or manner of
         sale  pursuant  to Rule  144(k)  under the  Securities  Act or (ii) the
         Investor has sold, pledged or otherwise  transferred or agreed to sell,
         pledge or otherwise  transfer such  Registrable  Securities in a manner
         other  than  pursuant  to an  effective  registration  statement,  to a
         transferee who will upon such transfer be entitled to freely  tradeable
         securities.  Any of the notices  referred to above in this  Section 9.1
         may be sent by facsimile to the Company's transfer agent.

         Section 9.2 No Other Legend or Stock Transfer  Restrictions.  No legend
                     ------------------------------------------------
other than the one  specified  in Section 9.1 has been or shall be placed on the
share  certificates  representing  the Common Stock and no instructions or "stop
transfers   orders,"  so  called,   "stock  transfer   restrictions,"  or  other
restrictions  have been or shall be given to the Company's  transfer  agent with
respect thereto other than as expressly set forth in this Article IX.

         Section 9.3  Investor's  Compliance.  Nothing in this  Article IX shall
                      -----------------------
affect in any way the Investor's  obligations under any agreement to comply with
all applicable securities laws upon resale of the Common Stock.

                                    ARTICLE X
                               CHOICE OF LAW/VENUE

         Section 10.1 Choice of Law/Venue. This Agreement and the Warrants shall
                      --------------------
be governed by and  construed  in  accordance  with the laws of the State of New
York without regard to principles of conflicts of laws. Any controversy or claim
arising  out of or  related to this  Agreement  and the  Warrants  or the breach
thereof,  shall be settled by binding  arbitration in New York City, New York in
accordance  with the rules of the  Judicial  Arbitration  & Mediation  Services'
Eastern  Regional  Office  located  in New  York  City,  New  York  ("JAMS").  A
proceeding  shall be commenced upon written demand by Company or the Investor to
the other. The arbitrator(s) shall enter a judgment by default against any party
which fails or refuses to appear in any properly noticed arbitration proceeding.
The  proceeding  shall be  conducted  by one (1)  arbitrator,  unless the amount
alleged to be in dispute exceeds two hundred fifty thousand dollars  ($250,000),
in which case three (3) arbitrators  shall preside.  The  arbitrator(s)  will be
chosen by the parties  from a list  provided by JAMS,  and if they are unable to
agree within ten (10) days, JAMS shall select the arbitrator(s). The arbitrators
must be experts in securities law and financial  transactions.  The  arbitrators

                                    10.5 - 21
<PAGE>

shall assess costs and expenses of the arbitration, including all attorneys' and
experts' fees, as the arbitrators  believe is appropriate in light of the merits
of parties'  respective  positions  in the issues in  dispute.  The award of the
arbitrator(s) shall be final and binding upon the parties and may be enforced in
any court having  jurisdiction.  Nothing in this section 10.1 shall preclude the
parties  from  seeking  extraordinary  relief  in  the  event  that a  claim  of
irreparable harm arises,  provided however,  that such application shall be made
in the United States District Court for the Southern District of New York, or in
the Supreme Court of the State of New York,  New York County.  In the event that
any provision of this Agreement or any other  agreement  delivered in connection
herewith is invalid or  unenforceable  under any  applicable  statute or rule of
law, then such provision  shall be deemed  inoperative to the extent that it may
conflict  therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or  unenforceable  under
any law shall not affect the validity or  enforceability  of any other provision
of any agreement.

                                   ARTICLE XI
              ASSIGNMENT; ENTIRE AGREEMENT, AMENDMENT; TERMINATION

         Section 11.1  Assignment.  Neither this Agreement nor any rights of the
                       -----------
Investor or the Company  hereunder  may be assigned by either party to any other
person.  Notwithstanding  the  foregoing,  (a) the  provisions of this Agreement
shall inure to the benefit of, and be  enforceable  by, and be binding upon, any
transferee  of any of the Common  Stock  purchased  or acquired by the  Investor
hereunder  with  respect to the Common  Stock held by such  person  unless  such
Common Stock is free from restrictions on further transfer of such Common Stock,
and (b) the  Investor's  interest in this Agreement may be assigned at any time,
in whole or in part, to any other person or entity  (including  any affiliate of
the Investor)  effective upon written  notice to the Company.  The Company shall
have the  right to  require  any  assignee  to  execute  a  counterpart  of this
Agreement.

         Section 11.2  Termination.  This Agreement shall terminate  forty-eight
                       ------------
(48) months after the commencement of the Commitment Period; provided,  however,
that the  provisions of Articles VI, VIII,  IX, X, XI, and XII shall survive the
termination of this Agreement.

         Section 11.3 Entire Agreement,  Amendment.  This Agreement  constitutes
                      -----------------------------
the full and entire  understanding and agreement between the parties with regard
to the subjects hereof, and no party shall be liable or bound to any other party
in  any  manner  by any  warranties,  representations  or  covenants  except  as
specifically set forth in this Agreement.  Except as expressly  provided in this
Agreement,  neither this  Agreement nor any term hereof may be amended,  waived,
discharged  or  terminated  other  than by a written  instrument  signed by both
parties hereto.

                                   ARTICLE XII
                            NOTICES; INDEMNIFICATION

         Section  12.1  Notices.  All  notices,  demands,  requests,   consents,
                        --------
approvals,  and other communications required or permitted hereunder shall be in

                                    10.5 - 22
<PAGE>

writing and, unless otherwise specified herein,  shall be (i) personally served,
(ii) deposited in the mail,  registered or certified,  return receipt requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other  address as such party shall have  specified
most recently by written notice. Any notice or other  communication  required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,   with  accurate  confirmation   generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received),  or the first  business day following  such delivery (if delivered
other than on a business day during normal  business  hours where such notice is
to be received) or (b) on the second  business day following the date of mailing
by express courier service,  fully prepaid,  addressed to such address,  or upon
actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:

                  If to Staruni Corporation:

                  Staruni Corporation
                  1642 Westwood Boulevard
                  LosAngeles, California 90024
                  Telecopier:
                  Attention: Bruce Stuart

                  If to the Investor:

                  To the address and  telecopier  number set forth on Schedule A
                  hereto.

                  With a copy to:

                  Novack Burnbaum Crystal LLP
                  300 East 42nd Street, 10th Floor
                  New York, New York  10017
                  Attention:  Edward H, Burnbaum, Esq.
                  Telecopier:  (212) 986-2907

Either party hereto may from time to time change its address or facsimile number
for  notices  under this  Section  12.1 by giving at least ten (10) days'  prior
written  notice of such changed  address or facsimile  number to the other party
hereto.

         Section 12.2      Indemnification.
                           ----------------
                  (a) The Company  agrees to  indemnify  and hold  harmless  the
Investor, its partners,  Affiliates,  officers,  directors,  employees, and duly
authorized  agents, and each Person or entity, if any, who controls the Investor
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange Act or is controlled  by the Investor  (the "Control  Person") from and
against  any  Damages,  joint or several,  and any action in respect  thereof to
which the Investor, its partners,  Affiliates,  officers, directors,  employees,
and duly  authorized  agents,  and any such Control Person  becomes  subject to,
resulting from, arising out of or relating to any  misrepresentation,  breach of
warranty or nonfulfillment of or failure to perform any covenant or agreement on
the part of Company contained in this Agreement in any event as such Damages are
incurred.
                                    10.5 - 23
<PAGE>

                  (b) The  Investor  agrees to indemnify  and hold  harmless the
Company, its partners,  Affiliates,  officers,  directors,  employees,  and duly
authorized  agents, and each Person or entity, if any, who controls the Investor
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange Act,  together  with the Control  Persons from and against any Damages,
joint or several,  and any action in respect  thereof to which the Company,  its
partners,  Affiliates,  officers,  directors,  employees,  and  duly  authorized
agents,  and any such Control Person becomes subject to, resulting from, arising
out  of  or   relating   to  any   misrepresentation,   breach  of  warranty  or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Investor contained in this Agreement.

         Section 12.3 Method of Asserting Indemnification Claims. All claims for
                      -------------------------------------------
indemnification  by any Indemnified  Party (as defined below) under Section 12.2
will be asserted and resolved as follows:

                  (a) In the event any claim or demand in  respect  of which any
person  claiming  indemnification  under  any  provision  of  Section  12.2  (an
"Indemnified Party") might seek indemnity under Section 12.2 is asserted against
or sought to be collected from such Indemnified Party by a person other than the
Company,  the  Investor  or any  affiliate  of the  Company  or (a "Third  Party
Claim"), the Indemnified Party shall deliver a written notification, enclosing a
copy of all papers  served,  if any, and  specifying the nature of and basis for
such Third Party Claim and for the Indemnified Party's claim for indemnification
that is being  asserted  under any  provision of Section 12.2 against any person
(the "Indemnifying Party"),  together with the amount or, if not then reasonably
ascertainable,  the estimated  amount,  determined in good faith,  of such Third
Party Claim (a "Claim  Notice") with reasonable  promptness to the  Indemnifying
Party.  If the  Indemnified  Party  fails  to  provide  the  Claim  Notice  with
reasonable  promptness after the Indemnified Party receives notice of such Third
Party Claim,  the  Indemnifying  Party will not be  obligated  to indemnify  the
Indemnified  Party with respect to such Third Party Claim to the extent that the
Indemnifying  Party's ability to defend has been irreparably  prejudiced by such
failure  of the  Indemnified  Party.  The  Indemnifying  Party  will  notify the
Indemnified  Party as soon as  practicable  within the period ending thirty (30)
calendar  days  following  receipt by the  Indemnifying  Party of either a Claim
Notice or an Indemnity Notice (as defined below) (the "Dispute  Period") whether
the Indemnifying  Party disputes its liability or the amount of its liability to
the  Indemnified  Party under  Section 12.2 and whether the  Indemnifying  Party
desires,  at its sole cost and expense,  to defend the Indemnified Party against
such Third Party Claim.

                  (b) If the Indemnifying  Party notifies the Indemnified  Party
within the Dispute  Period  that the  Indemnifying  Party  desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to this Section
12.3(a), then the Indemnifying Party will have the right to defend, with counsel
reasonably  satisfactory to the Indemnified  Party, at the sole cost and expense
of  the  Indemnifying   Party,   such  Third  Party  Claim  by  all  appropriate
proceedings,  which proceedings will be vigorously and diligently  prosecuted by
the  Indemnifying  Party  to a  final  conclusion  or  will  be  settled  at the
discretion  of  the  Indemnifying  Party  (but  only  with  the  consent  of the
Indemnified  Party in the case of any  settlement  that  provides for any relief
which affects the Indemnified  Party, other than the payment of monetary damages

                                    10.5 - 24
<PAGE>

or that provides for the payment of monetary damages as to which the Indemnified
Party  will  not  be  indemnified  in  full  pursuant  to  Section  12.2).   The
Indemnifying  Party will have full  control  of such  defense  and  proceedings,
including any  compromise or settlement  thereof;  provided,  however,  that the
Indemnified Party may, at the sole cost and expense of the Indemnified Party, at
any time prior to the Indemnifying Party's delivery of the notice referred to in
the first sentence of this clause 1, file any motion,  answer or other pleadings
or take any other action that the Indemnified  Party  reasonably  believes to be
necessary or appropriate to protect its interests; and provided further, that if
requested by the  Indemnifying  Party,  the Indemnified  Party will, at the sole
cost and expense of the Indemnifying  Party,  provide reasonable  cooperation to
the Indemnifying Party in contesting any Third Party Claim that the Indemnifying
Party  elects to contest.  The  Indemnified  Party may  participate  in, but not
control,  any defense or settlement  of any Third Party Claim  controlled by the
Indemnifying  Party  pursuant  to this  clause 1, and except as  provided in the
preceding  sentence,  the Indemnified Party will bear its own costs and expenses
with  respect  to  such  participation.   Notwithstanding  the  foregoing,   the
Indemnified  Party may take over the control of the defense or  settlement  of a
Third Party Claim at any time if it  irrevocably  waives its right to  indemnity
under Section 12.2 with respect to such Third Party Claim.

                  (c) If the Indemnifying  Party fails to notify the Indemnified
Party within the Dispute  Period that the  Indemnifying  Party desires to defend
the Third Party Claim pursuant to Section 12.3(a),  or if the Indemnifying Party
gives such notice but fails to prosecute vigorously and diligently or settle the
Third  Party  Claim,  or if the  Indemnifying  Party  fails to give  any  notice
whatsoever  within the Dispute Period,  then the Indemnified Party will have the
right to defend,  at the sole cost and expense of the  Indemnifying  Party,  the
Third Party Claim by all  appropriate  proceedings,  which  proceedings  will be
prosecuted by the Indemnified  Party in a reasonable manner and in good faith or
will be settled at the discretion of the Indemnified  Party (with the consent of
the Indemnifying  Party, which consent will not be unreasonably  withheld).  The
Indemnified  Party  will have full  control  of such  defense  and  proceedings,
including any  compromise  or settlement  thereof;  provided,  however,  that if
requested by the Indemnified  Party,  the  Indemnifying  Party will, at the sole
cost and expense of the Indemnifying  Party,  provide reasonable  cooperation to
the Indemnified  Party and its counsel in contesting any Third Party Claim which
the Indemnified Party is contesting. Notwithstanding the foregoing provisions of
this clause 2, if the  Indemnifying  Party has  notified the  Indemnified  Party
within the Dispute Period that the Indemnifying  Party disputes its liability or
the amount of its liability  hereunder to the Indemnified  Party with respect to
such  Third  Party  Claim  and if such  dispute  is  resolved  in  favor  of the
Indemnifying  Party in the manner provided in clause 3 below,  the  Indemnifying
Party will not be  required to bear the costs and  expenses  of the  Indemnified
Party's  defense  pursuant  to  this  clause  2 or of the  Indemnifying  Party's
participation  therein at the Indemnified  Party's request,  and the Indemnified
Party will reimburse the Indemnifying Party in full for all reasonable costs and
expenses incurred by the Indemnifying  Party in connection with such litigation.
The  Indemnifying  Party may  participate  in, but not  control,  any defense or
settlement  controlled by the  Indemnified  Party pursuant to this clause 2, and
the Indemnifying Party will bear its own costs and expenses with respect to such
participation.

                                    10.5 - 25
<PAGE>

                  (d) If the Indemnifying  Party notifies the Indemnified  Party
that it does not dispute its  liability  or the amount of its  liability  to the
Indemnified  Party with  respect to the Third Party Claim under  Section 12.2 or
fails to notify the  Indemnified  Party  within the Dispute  Period  whether the
Indemnifying  Party disputes its liability or the amount of its liability to the
Indemnified Party with respect to such Third Party Claim, the Loss in the amount
specified  in the Claim  Notice will be  conclusively  deemed a liability of the
Indemnifying  Party under Section 12.2 and the Indemnifying  Party shall pay the
amount of such Loss to the  Indemnified  Party on  demand.  If the  Indemnifying
Party has timely  disputed  its  liability or the amount of its  liability  with
respect to such claim,  the  Indemnifying  Party and the Indemnified  Party will
proceed in good faith to  negotiate a  resolution  of such  dispute,  and if not
resolved through  negotiations  within the Resolution Period, such dispute shall
be resolved by  arbitration  in  accordance  with  paragraph (c) of this Section
12.3.

                  (e) In the event any  Indemnified  Party  should  have a claim
under Section 12.2 against the Indemnifying  Party that does not involve a Third
Party Claim,  the  Indemnified  Party shall deliver a written  notification of a
claim for indemnity  under Section 12.2  specifying  the nature of and basis for
such claim,  together with the amount or, if not then reasonably  ascertainable,
the estimated  amount,  determined in good faith,  of such claim (an  "Indemnity
Notice") with reasonable  promptness to the  Indemnifying  Party. The failure by
any Indemnified Party to give the Indemnity Notice shall not impair such party's
rights hereunder except to the extent that the Indemnifying  Party  demonstrates
that it has been  irreparably  prejudiced  thereby.  If the  Indemnifying  Party
notifies the Indemnified  Party that it does not dispute the claim or the amount
of the  claim  described  in such  Indemnity  Notice  or  fails  to  notify  the
Indemnified  Party  within the Dispute  Period  whether the  Indemnifying  Party
disputes  the  claim or the  amount  of the claim  described  in such  Indemnity
Notice,  the  Loss in the  amount  specified  in the  Indemnity  Notice  will be
conclusively deemed a liability of the Indemnifying Party under Section 12.2 and
the  Indemnifying  Party  shall pay the  amount of such Loss to the  Indemnified
Party on demand. If the Indemnifying  Party has timely disputed its liability or
the amount of its liability with respect to such claim, the  Indemnifying  Party
and the  Indemnified  Party will proceed in good faith to negotiate a resolution
of such dispute,  and if not resolved through negotiations within the Resolution
Period,  such  dispute  shall be  resolved by  arbitration  in  accordance  with
paragraph (c) of this Section 12.3.

                                  ARTICLE XIII
                                  MISCELLANEOUS

         Section  13.1 Fees and  Expenses.  Each of the Company and the Investor
                       -------------------
agrees to pay its own expenses  incident to the  performance of its  obligations
hereunder except that the Company shall pay the fees of the Investor's attorneys
and the Escrow Agreement in connection with this transaction and the preparation
of  documents  which  shall be only and to the  extent  set forth in the  Escrow
Agreement.  Any such fees shall be netted from the  proceeds of any Put Purchase
Price.

                                    10.5 - 26
<PAGE>

         Section 13.2 Brokerage.  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  except for  Capstone
Partners.  The  Company  shall pay the fees of Capstone  Partners  pursuant to a
separately negotiated placement agreement

         Section  13.3  Publicity.  Except as required by  applicable  law,  the
                        ----------
Company shall not issue any press release or otherwise make any public statement
or announcement with respect to this Agreement or the transactions  contemplated
hereby or the  existence  of this  Agreement  without  the prior  consent of the
Purchaser.

         Section 13.4  Counterparts.  This Agreement may be executed in multiple
                       -------------
counterparts,  each of which may be executed by less than all of the parties and
shall be deemed to be an original  instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument.

         Section 13.5 Entire Agreement.  This Agreement with the Exhibits hereto
                      -----------------
set forth the entire agreement and  understanding of the parties relating to the
subject matter hereof and supersedes all prior and  contemporaneous  agreements,
negotiations  and  understandings  between  the  parties,  both oral and written
relating to the subject matter hereof.  The terms and conditions of all Exhibits
to this Agreement are incorporated herein by this reference and shall constitute
part of this Agreement as if fully set forth herein.

         Section 13.6 Survival;  Severability. The representations,  warranties,
                      ------------------------
covenants and  agreements  of the parties  hereto shall survive each Put Closing
hereunder.  In the event  that any  provision  of this  Agreement  becomes or is
declared by a court of competent  jurisdiction to be illegal,  unenforceable  or
void,  this  Agreement  shall  continue  in full force and effect  without  said
provision; provided that such severability shall be ineffective if it materially
changes the economic benefit of this Agreement to any party.

         Section 13.7 Title and Subtitles. The titles and subtitles used in this
                      --------------------
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

         Section  13.8  Reporting  Entity for the Common  Stock.  The  reporting
                        ----------------------------------------
entity relied upon for the  determination of the trading price or trading volume
of the Common Stock on any given Trading Day for the purposes of this  Agreement
shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of
the  Investor  and the Company  shall be required to employ any other  reporting
entity.

              [THIS SPACE INTENTIONALLY LEFT BLANK]

                                    10.5 - 27
<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have caused this Private Equity
Line of Credit  Agreement  to be executed  by the  undersigned,  thereunto  duly
authorized, as of the date first set forth above.

                                           STARUNI CORPORATION

                                           By:_____________________________
                                               Bruce Stuart

                                               BOAT BASIN INVESTORS LLC

                                                              By:

                                    10.5 - 28

<PAGE>

                                    EXHIBIT A
                                     FORM OF
                               PUT PURCHASE NOTICE

                  Reference  is  made  to the  Private  Equity  Line  of  Credit
Agreement  dated as of  September  __,  2000(the  "Agreement")  between  Staruni
Corporation,  a  corporation  (the  "Company")  and Boat  Basin  Investors  LLC.
Capitalized  terms used and not otherwise defined herein shall have the meanings
given such terms in the Agreement.

                  In  accordance  with  and  pursuant  to  Section  2.2  of  the
Agreement,  the Company hereby issues this Put Purchase Notice to exercise a Put
request for the Put Amount indicated below.

                  Investment Amount:
                                    -----------------------------
                  Valuation Period start date:
                                              -------------------
                  Valuation Period end date:
                                            ---------------------
                  Put Closing Date:
                                   ------------------------------
                  Floor Price:    $
                                  -------------------------------
Dated:
      ----------------------------
                                     STARUNI CORPORATION

                                     By:______________________________
                                     Name:
                                     Title:
                                     Address:
                                     Facsimile No.:
                                     Wire Instructions: __________________
                                     Contact Name:  __________________________

                                    10.5 - 29

<PAGE>

                                    EXHIBIT B
                         INSTRUCTIONS TO TRANSFER AGENT
                               STARUNI CORPORATION

                                                        ________________, 2000
[Name and address
of Transfer Agent]
Ladies & Gentlemen:

         Reference  is  made to  that  certain  Private  Equity  Line of  Credit
Agreement (the  "Agreement") by and among certain Investors (the "Investor") and
Staruni Corporation.  Pursuant and subject to the terms and conditions set forth
in the  Agreement  the Investor has agreed to purchase  from the Company and the
Company has agreed to sell to the Investor  from time to time during the term of
the Agreement  shares (the "Shares") of Common Stock of the Company,  $0.001 par
value (the "Common Stock") and certain warrants (the "Warrants")  which shall be
exercisable  into shares of Common  Stock.  The shares of Common Stock  issuable
upon  exercise of the Warrants  are referred to herein as "Warrant  Shares." The
Shares and Warrant  Shares are  collectively  referred to herein as  "Underlying
Shares."

         This letter shall serve as our irrevocable  authorization and direction
to you (provided that you are the transfer agent for the Company with respect to
its Common Stock at such time) to issue Underlying Shares from time to time upon
notice from the  Company to issue such  Underlying  Shares.  So long as you have
previously  received  (w) a notice of  effectiveness  of the  Company's  outside
counsel  substantially  in the form of  Exhibit I  attached  hereto  (which  the
Company  shall  direct be  delivered  to you by such  outside  counsel  upon the
effectiveness  of the  registration  statement  covering  resales of  Underlying
Shares)  stating that a registration  statement  covering  resales of Underlying
Shares has been declared  effective by the  Securities  and Exchange  Commission
under the Securities Act of 1933, as amended,  and that Underlying Shares may be
issued (or  reissued  if they have been issued at a time when there was not such
an effective  registration  statement) or resold without any restrictive  legend
(the "Notice of Effectiveness"),  (x) a copy of such registration statement, (y)
an  appropriate  representation  that the  resale  prospectus  contained  in the
registration  statement has been delivered in compliance with  applicable  rules
and  regulations  and (z) with  respect to the issuance of  replacement  Warrant
Shares, the certificates  representing the originally issued Warrant Shares have
been  returned  to  you  as  transfer  agent,  then  certificates   representing
Underlying Shares shall not bear any legend  restricting  transfer of Underlying
Shares  thereby  and should not be  subject  to any  stop-transfer  restriction;
provided, however, that if you have not previously received a copy of the Notice
of  Effectiveness,  such registration  statement and such  representation or you
have  received  a  subsequent  notice  by  the  Company  or its  counsel  of the
suspension or termination of the effectiveness of the registration  statement or
the  imposition  of a  Blackout  Period as set forth in the  Section  6.8 of the
Agreement,  then  certificates  representing  Underlying  Shares  shall bear the
following legend:

                  THESE    SECURITIES    REPRESENTED    BY   THIS
                  CERTIFICATE  (THE  "SECURITIES")  HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                  AMENDED  (THE  "SECURITIES  ACT") OR ANY  STATE

                                    10.5 - 30

<PAGE>

                  SECURITIES   LAWS   AND   MAY   NOT  BE   SOLD,
                  TRANSFERRED  OR  OTHERWISE  DISPOSED  OF UNLESS
                  REGISTERED  UNDER THAT ACT AND UNDER APPLICABLE
                  STATE SECURITIES LAWS OR UNITED VENTURES GROUP,
                  INC.  (THE  "COMPANY")  SHALL HAVE  RECEIVED AN
                  OPINION OF ITS  COUNSEL  THAT  REGISTRATION  OF
                  SUCH  SECURITIES  UNDER THE  SECURITIES ACT AND
                  UNDER  THE   PROVISIONS  OF  APPLICABLE   STATE
                  SECURITIES LAWS IS NOT REQUIRED.

provided,  however, that the Company may, from time to time, notify you to place
stop-transfer  restrictions  on the  certificates  for Underlying  Shares in the
event,  but only in the event,  a  registration  statement  covering  Underlying
Shares is subject to amendment for events then current.

         Please be advised that the  Investor  has relied upon this  instruction
letter as an  inducement  to enter  into the  Agreement  and,  accordingly,  the
Investor, is a third party beneficiary to these instructions.

         Please execute this letter in the space  indicated to acknowledge  your
agreement  to act in  accordance  with these  instructions.  Should you have any
questions concerning this matter, please contact me at                      .
                                                      ----------------------

                                              Very truly yours,
                                              STARUNI CORPORATION

                                              By:_____________________________

ACKNOWLEDGED AND AGREED:
[TRANSFER AGENT]

By:________________________________
   Name: ________________________
   Title: _________________________
   Tel.: ___________________________

                                    10.5 - 31
<PAGE>

                                                                       Exhibit I
                        [FORM OF NOTICE OF EFFECTIVENESS]
[Addressee]
[Address]
TO WHOM IT MAY CONCERN:

         We are counsel to Staruni  Corporation,  a corporation (the "Company"),
and we have  represented  the Company in  connection  with that certain  Private
Equity Line of Credit  Agreement (the  "Agreement")  between the Company and the
Investor  named  therein,  pursuant to which the Company  agreed to issue shares
(the "Shares") of its common stock (the "Common Stock") from time to time during
the term of the  Agreement  and warrants to purchase  shares of the Common Stock
(the  "Warrant  Shares").  Pursuant  to the  Agreement,  the  Company  agreed to
register the Common Stock and the Warrant Shares.

         In  connection  with  the  foregoing,  we have  been  advised  that the
Registration Statement on Form ____ (File No. 333-______________) of the Company
(the  "Registration  Statement"),  a copy of which  is  enclosed,  was  declared
effective at ____________M.,  eastern time, on ____________, 2000. Upon issuance
of the  Underlying  Shares  referred  to in  the  Company's  instruction  letter
attached,  and  provided  that you have  received  a copy of the  representation
pursuant to item (z) in the second paragraph of such instruction letter, you are
authorized  to  issue  certificates  for  the  Company's  Common  Stock  without
restrictive  legends.  We  have  no  knowledge  as of  the  date  hereof,  after
telephonic inquiry of a member of the Securities and Exchange Commission's staff
that any stop order suspending the  effectiveness of the Registration  Statement
has been issued or that any proceedings for that purpose are pending before,  or
threatened by, the  Securities and Exchange  Commission  and,  accordingly,  the
Underlying  Shares are available for resale under the Securities Act of 1933, as
amended  in  the  manner  specified  in,  and  pursuant  to  the  terms  of  the
Registration Statement.

                                           Very truly yours,

                                    10.5 - 32
<PAGE>

                                    EXHIBIT C
                               OPINION OF COUNSEL

                  1. The Company is a  corporation  duly  incorporated,  validly
existing and in good standing under the laws of the State of   . The Company has
the requisite  corporate power to own and operate its properties and assets, and
to carry on its business as presently conducted.

                  2. The Company has the requisite corporate power and authority
to enter  into and  perform  its  obligations  under the  Equity  Line of Credit
Agreement  and to issue and sell the Common  Stock,  the Warrants and the Common
Stock  issuable  upon  exercise of the  Warrants  (the  "Warrant  Shares").  The
execution,  delivery and  performance of the Equity Line of Credit  Agreement by
the Company and the consummation by it of the transactions  contemplated thereby
have been duly and validly  authorized by all necessary  corporate action and no
further  consent or  authorization  of the Company or its Board of  Directors or
stockholders  is  required.  The Equity Line of Credit  Agreement  has been duly
executed and  delivered,  and the Common  Stock and the Warrants  have been duly
executed,  issued and  delivered  by the  Company  and the Equity Line of Credit
Agreement  constitutes  a legal,  valid and binding  obligations  of the Company
enforceable against the Company in accordance with its respective terms.

                  3. The Common Stock and the Warrants have been duly authorized
and the Common Stock,  when delivered against payment in full as provided in the
Equity  Line of  Credit  Agreement,  will be  validly  issued,  fully  paid  and
nonassessable.  The Warrant  Shares have been duly  authorized  and reserved for
issuance,  and,  when  delivered  upon  exercise  or against  payment in full as
provided in the Warrants, will be validly issued, fully paid and nonassessable.

                  4. The execution,  delivery and  performance of and compliance
with the terms of the Equity Line of Credit  Agreement and the  consummation  by
the  Company of the  transactions  contemplated  thereby  (i) do not violate any
provision of the Company's  certificate of incorporation or bylaws,  (ii) to our
knowledge, conflict with, or constitute a default (or an event which with notice
or lapse of time or both would  become a default)  under,  or give to others any
rights of termination,  amendment, acceleration or cancellation of, any material
agreement,  mortgage,  deed of trust,  indenture,  note,  bond,  license,  lease
agreement,  instrument  or  obligation  to which the  Company is a party,  (iii)
create or impose a lien,  charge or  encumbrance  on any property of the Company
under any  agreement  or any  commitment  to which the  Company is a party or by
which the  Company  is bound or by which  any of its  respective  properties  or
assets are bound, or (iv) result in a violation of any federal,  state, local or
foreign statute, rule, regulation,  order, judgment or decree (including federal
and state securities laws and  regulations)  applicable to the Company or any of
its  subsidiaries or by which any property or asset of the Company or any of its
subsidiaries are bound or affected,  except,  in all cases other than violations
pursuant  to clause  (i)  above,  for such  conflicts,  defaults,  terminations,
amendments,   acceleration,   cancellations   and   violations   as  would  not,
individually or in the aggregate, have a Material Adverse Effect.

                  5. No consent,  approval or  authorization  of or designation,
declaration or filing with any governmental authority on the part of the Company
is required in  connection  with the valid  execution and delivery of the Equity

                                    10.5 - 33
<PAGE>

Line of Credit Agreement, or the offer, sale or issuance of the Common Stock and
the Warrants or the  consummation of any other  transaction  contemplated by the
Equity Line of Credit Agreement (other than any filings which may be required to
be made by the Company  with the  Commission,  or the OTC  Bulletin  Board or an
Alternate  Market  subsequent to the Closing,  and, any  registration  statement
which may be filed pursuant to the Equity Line of Credit Agreement).

                                    10.5 - 34
<PAGE>

                                   EXHIBIT D
                             COMPLIANCE CERTIFICATE
                              STARUNI CORPORATION

         The undersigned,  _______________,  hereby  certifies,  with respect to
shares of common  stock of  Staruni  Corporation  (the  "Company")  issuable  in
connection  with  the Put  Purchase  Notice,  dated  (the  "Notice"),  delivered
pursuant to Article II of the Private  Equity  Line of Credit  Agreement,  dated
September  __,  2000,  by and among  the  Company  and  certain  Investors  (the
"Agreement"), as follows:

         1. The  undersigned is the duly elected  [Chairman and Chief  Executive
Officer] of the Company.

         2. The  representations  and  warranties  of the  Company  set forth in
Article IV of the  Agreement  are true and correct in all  material  respects as
though made on and as of the date hereof.

         3. The Company has performed in all material respects all covenants and
agreements  to be  performed  by the Company on or prior to the Put Closing Date
related  to the  Notice  and has  complied  in all  material  respects  with all
obligations  and  conditions  contained  in  Article VI and  Article  VII of the
Agreement.

         The undersigned has executed this  Certificate this ____ day of ______,
2000.

                                            STARUNI CORPORATION

                                            By:_____________________________
                                               Name:
                                               Title:

                                    10.5 - 35

<PAGE>

                                    EXHIBIT E
                                 FORM OF WARRANT

                                    10.5 - 36

<PAGE>

                                    EXHIBIT F
                                 FORM OF WARRANT

                                    10.5 - 37
<PAGE>

                                    EXHIBIT E

THIS COMMON STOCK PURCHASE  WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE  WARRANT,  AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED  ONLY (A) TO THE
COMPANY,  (B) PURSUANT TO AN EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED  UNDER THE  SECURITIES  ACT AND ANY  APPLICABLE  STATE
SECURITIES LAWS. IN ADDITION,  A SECURITIES PURCHASE  AGREEMENT,  DATED THE DATE
HEREOF,  A COPY OF WHICH  MAY BE  OBTAINED  FROM THE  COMPANY  AT ITS  PRINCIPAL
EXECUTIVE  OFFICE,  CONTAINS  CERTAIN  ADDITIONAL  AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF THE
HOLDER.

                                  STARUNI CORP.

                          COMMON STOCK PURCHASE WARRANT

No.                                           Warrant to Purchase         Shares

         STARUNI  CORP.,  a  California  corporation  (the  "Company"),   hereby
certifies  that,  for  value  received,   _________________________________   or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company at any time or from time to time during the period commencing  September
, 2000 and ending  September , 2004 (the  "Exercise  Period"),  at the  Purchase
Price(as  hereinafter  defined),  eight hundred thousand (800,000) shares of the
fully paid and nonassessable  shares of Common Stock of the Company.  The number
and character of such shares of Common Stock and the Purchase  Price are subject
to adjustment as provided herein.

         This Warrant (this "Warrant";  such term to include any warrants issued
in substitution therefor) is one of a series of    warrants issued in connection
with that  certain  Private  Equity Line of Credit  dated of even date  herewith
among the initial Holder hereof, the Company and certain other parties thereto.

         Capitalized  terms used  herein not  otherwise  defined  shall have the
meanings ascribed thereto in the Agreement.  As used herein the following terms,
unless the context otherwise requires, have the following respective meanings:

                  (a) The term "Agreement" refers to that certain Private Equity
         Line of Credit  Agreement  dated the date  herewith  among the  initial
         Holder hereof, the Company and certain other parties hereto.

                  (b) The term  "Company"  shall include  Staruni Corp.  and any
         corporation  that  shall  succeed  or assume  the  obligations  of such
         corporation hereunder.

                  (c) The term "Common Stock" includes (a) the Company's  common
         stock,  no par per share,  (b) any other  capital stock of any class or
         classes  (however  designated)  of the Company,  authorized on or after

                                    10.6 - 1
<PAGE>

         such  date,  the  Holders  of  which  shall  have  the  right,  without
         limitation as to amount,  either to all or to a share of the balance of
         current  dividends  and  liquidating  dividends  after the  payment  of
         dividends and  distributions on any shares entitled to preference,  and
         the Holders of which shall ordinarily, in the absence of contingencies,
         be entitled to vote for the  election of a majority of directors of the
         Company  (even  though the right so to vote has been  suspended  by the
         happening  of such a  contingency)  and (c) any other  securities  into
         which or for which any of the securities described in (a) or (b) may be
         converted  or  exchanged  pursuant  to  a  plan  of   recapitalization,
         reorganization, merger, sale of assets or otherwise.

                  (d) The term  "Other  Securities"  refers to any stock  (other
         than  Common  Stock) and other  securities  of the Company or any other
         person  (corporate or otherwise) that the Holder of this Warrant at any
         time shall be  entitled  to  receive,  or shall have  received,  on the
         exercise of this Warrant, in lieu of or in addition to Common Stock, or
         that at any time  shall  be  issuable  or shall  have  been  issued  in
         exchange  for or in  replacement  of Common  Stock or Other  Securities
         pursuant to Section 3 or otherwise.

                  (e) The term "Purchase  Price" means 120% of the Market Price;
         and the term  "Market  Price"  shall have the  meaning set forth in the
         Agreement and shall be  calculated  based upon the Market Price for the
         Put  Shares  which are  issued to the  Holder  simultaneously  with the
         issuance of these Warrants.

                  (f) The term "Registration  Statement" means that Registration
         Statement   defined  in  a  certain   Registration   Rights   Agreement
         ("Registration Rights Agreement") between the Company and the Holder of
         even date.
                  1.       Exercise of Warrant.
                  1.1.     Method of Exercise.

                  (a) This Warrant may be exercised in whole or in part (but not
         as to a fractional share of Common Stock), at any time and from time to
         time during the Exercise  Period by the Holder  hereof by delivery of a
         notice of exercise (a "Notice of Exercise") in the form attached hereto
         as Exhibit A via facsimile to the Company specifying the Purchase Price
            ---------
         (the "Exercise Price").  This Warrant is a "cashless" Warrant, and upon
         exercise of the  Warrant the Holder  shall not be required to make cash
         payment to the Company  for the shares of Common  Stock  issuable  upon
         such exercise.  Rather, upon exercise,  the Holder shall be entitled to
         receive,  one or more  certificates,  issued in the Holder's name or in
         such name or names as the Holder may direct, subject to the limitations
         on transfer  contained herein, for the number of shares of Common Stock
         so  purchased,  less the  number of shares  equivalent  in value to the
         Purchase Price of the Warrants determined by applying the Market Price.
         The number of shares of Common Stock  constituting  the Purchase  Price
         shall be set forth in the Notice of Exercise  along with the net number
         of shares to be delivered to the Holder.  The shares of Common Stock so
         purchased  shall be deemed to be issued as of the close of  business on
         the date on which the  Company  shall  have  received  from the  Holder
         payment of the Exercise Price (the "Exercise Date").

                                    10.6 - 2
<PAGE>

                  (b) Notwithstanding anything to the contrary set forth herein,
         upon  exercise of all or a portion of this Warrant in  accordance  with
         the terms  hereof,  the  Holder  shall not be  required  to  physically
         surrender  this Warrant to the  Company.  Rather,  records  showing the
         amount so exercised  and the date of exercise  shall be maintained on a
         ledger in the form of Annex B attached hereto (a copy of which shall be
                               -------
         delivered  to the  Company  or  transfer  agent  with  each  Notice  of
         Exercise).  It is  specifically  contemplated  that the Company  hereof
         shall act as the  calculation  agent for all exercises of this Warrant.
         In the event of any dispute or discrepancies,  such records  maintained
         by the Company shall be controlling and determinative in the absence of
         manifest  error.  The Holder and any  assignee,  by  acceptance of this
         Warrant,  acknowledge  and agree that,  by reason of the  provisions of
         this paragraph, following an exercise of a portion of this Warrant, the
         number of shares of Common  Stock  represented  by this Warrant will be
         the amount indicated on Annex B attached hereto (which may be less than
                                 -------
         the amount stated on the face hereof).

                  1.2.  Regulation D Restrictions.  The Holder hereof represents
         and  warrants  to the Company  that it has  acquired  this  Warrant and
         anticipates acquiring the shares of Common Stock issuable upon exercise
         of the Warrant solely for its own account for  investment  purposes and
         not with a view to or for resale of such securities  unless such resale
         has been registered  with the Commission or an applicable  exemption is
         available therefor. At the time this Warrant is exercised,  the Company
         may  require  the  Holder  to  state in the  Notice  of  Exercise  such
         representations  concerning  the Holder as are necessary or appropriate
         to assure compliance by the Holder with the Securities Act.

         2.       Delivery  of  Stock  Certificates  on  Exercise.  As  soon  as
practicable  after the  exercise  of this  Warrant,  the  Company at its expense
(including the payment by it of any applicable  issue,  stamp or transfer taxes)
will cause to be issued in the name of and delivered to the Holder thereof,  or,
to the extent  permissible  hereunder,  to such other  person as such Holder may
direct,  a  certificate  or  certificates  for the  number  of  fully  paid  and
nonassessable  shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such  exercise,  plus, in lieu of any  fractional  share to
which such Holder  would  otherwise  be  entitled,  cash equal to such  fraction
multiplied by the then applicable Purchase Price,  together with any other stock
or other securities and property  (including  cash,  where  applicable) to which
such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

         3.       Adjustment of Purchase Price In Certain  Events.  The Purchase
Price  to be  paid  by the  Holder  upon  exercise  of  this  Warrant,  and  the
consideration to be received upon exercise of this Warrant, shall be adjusted in
case at any time or from time to time for Capital Reorganizations as provided in
the Agreement as if such provisions were specifically set forth herein.

         4.       No  Impairment.  The  Company  will not, by  amendment  of its
Articles of  Incorporation  or through any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of

                                    10.6 - 3
<PAGE>

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  action as may be
necessary  or  appropriate  in order to protect the rights of the Holder of this
Warrant against  impairment.  Without  limiting the generality of the foregoing,
the  Company  (a)  will  not  increase  the par  value  of any  shares  of stock
receivable on the exercise of this Warrant above the amount payable  therefor on
such exercise,  (b) will take all such action as may be necessary or appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable  shares of stock on the exercise of this Warrant, and (c) will not
transfer  all or  substantially  all of its  properties  and assets to any other
person  (corporate or otherwise),  or  consolidate  with or merge into any other
person or permit any such person to  consolidate  with or merge into the Company
(if the Company is not the  surviving  person),  unless such other  person shall
expressly assume in writing and will be bound by all the terms of this Warrant.

         5.       Notices of Record Date. In the event of

                           (a) any  taking  by the  Company  of a record  of the
                  Holders  of  any  class  or  securities  for  the  purpose  of
                  determining  the Holders  thereof who are  entitled to receive
                  any dividend or other distribution,  or any right to subscribe
                  for,  purchase or otherwise acquire any shares of stock of any
                  class or any other  securities or property,  or to receive any
                  other right, or

                           (b) any capital  reorganization  of the Company,  any
                  reclassification  or  recapitalization of the capital stock of
                  the Company or any  transfer of all or  substantially  all the
                  assets of the  Company  to or  consolidation  or merger of the
                  Company with or into any other person, or

                           (c) any   voluntary   or   involuntary   dissolution,
liquidation  or  winding-up  of the  Company,  then and in each  such  event the
Company  will mail or cause to be mailed to the Holder of this  Warrant a notice
specifying  (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such  dividend,  distribution  or  right,  and (ii)  the date on which  any such
reorganization,  reclassification,  recapitalization,  transfer,  consolidation,
merger,  dissolution,  liquidation or winding-up is to take place, and the time,
if any, as of which the Holders of record of Common Stock (or Other  Securities)
shall be entitled to exchange their shares of Common Stock (or Other Securities)
for   securities  or  other  property   deliverable   on  such   reorganization,
reclassification,    recapitalization,    transfer,    consolidation,    merger,
dissolution,  liquidation or winding-up. Such notice shall be mailed at least 20
days  prior to the date  specified  in such  notice on which any action is to be
taken.

         6.       Reservation  of Stock  Issuable on  Exercise  of Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery on the exercise of this  Warrant,  all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

         7.       Exchange  of  Warrant.  On  surrender  for  exchange  of  this
Warrant,  properly  endorsed and in compliance with the restrictions on transfer

                                    10.6 - 4
<PAGE>

set forth in the legend on the face of this Warrant, to the Company, the Company
at its expense will issue and deliver to or on the order of the Holder thereof a
new  Warrant of like  tenor,  in the name of such  Holder or as such  Holder (on
payment by such Holder of any applicable transfer taxes) may direct,  calling in
the  aggregate  on the face or faces  thereof for the number of shares of Common
Stock called for on the face of the Warrant so surrendered.

         8.       Replacement  of  Warrant.  On receipt of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant  and, in the case of any such loss,  theft or  destruction  of this
Warrant,   on  delivery  of  an  indemnity   agreement  or  security  reasonably
satisfactory  in form and  amount  to the  Company  or,  in the case of any such
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9.       Remedies.  The Company  stipulates that the remedies at law of
the Holder of this Warrant in the event of any default or threatened  default by
the Company in the  performance  of or compliance  with any of the terms of this
Warrant  are  not  and  will  not  be  adequate,  and  that  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.

         10.      Negotiability,  etc. This Warrant is issued upon the following
terms, to all of which each Holder or owner hereof by the taking hereof consents
and agrees:  (a) title to this Warrant may be  transferred  by  endorsement  and
delivery  in  the  same  manner  as  in  the  case  of a  negotiable  instrument
transferable by endorsement and delivery.

                           (b) any person in possession of this Warrant properly
                  endorsed is authorized to represent  himself as absolute owner
                  hereof and is empowered to transfer  absolute  title hereto by
                  endorsement  and  delivery  hereof  to a bona  fide  purchaser
                  hereof  for  value;  each  prior  taker  or owner  waives  and
                  renounces  all of his  equities  or rights in this  Warrant in
                  favor of each  such bona  fide  purchaser,  and each such bona
                  fide purchaser shall acquire  absolute title hereto and to all
                  rights represented hereby;

                           (c) until this Warrant is transferred on the books of
                  the  Company,  the  Company  may treat the  registered  Holder
                  hereof  as  the  absolute   owner  hereof  for  all  purposes,
                  notwithstanding any notice to the contrary; and

                           (d) notwithstanding  the foregoing,  this Warrant may
                  not be sold,  transferred  or assigned  except  pursuant to an
                  effective  registration  statement under the Securities Act or
                  pursuant to an applicable exemption therefrom.

         11.      Registration  Rights. The Company is obligated to register the
shares of Common Stock issuable upon exercise of this Warrant in accordance with
the terms of the Registration Rights Agreement.

                                    10.6 - 5
<PAGE>

         12.      Notices. All notices and other communications from the Company
to the  Holder of this  Warrant  shall be mailed by first  class  registered  or
certified mail,  postage prepaid,  at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an  address,  then to, and at the  address  of, the last  Holder of this
Warrant who has so furnished an address to the Company.

         13.      Miscellaneous.  This  Warrant  and  any  term  hereof  may  be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the party against which enforcement of such change, waiver,  discharge
or  termination  is sought.  This  Warrant  shall be  construed  and enforced in
accordance  with and governed by the internal laws of the State of New York. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or  unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision.

                            [Signature Page Follows]

                                    10.6 - 6
<PAGE>

DATED as of September _____, 2000.

                                            STARUNI CORP.

                                            By:
                                            Name:
                                            Title:

[Corporate Seal]

Attest:

By:
      Secretary

                                    10.6 - 7
<PAGE>

                                    EXHIBIT A
                    FORM OF NOTICE OF EXERCISE - WARRANT
                    ------------------------------------
     (To be executed only upon exercise of the Warrant in whole or in part)

To:      STARUNI CORP.

         The undersigned  registered  Holder of the accompanying  Warrant hereby
exercises  such  Warrant or  portion  thereof  for,  and  purchases  thereunder,
____________(1) shares of Common Stock (as defined in such Warrant) and herewith
makes payment  therefor in the amount and manner set forth below, as of the date
written below. The undersigned requests that the certificates for such shares of
Common    Stock   be   issued   in   the   name   of,    and    delivered    to,
_________________________ whose address is _______________________.
         The Exercise  Price for the shares of Common Stock issued on account of
this exercise of Warrant shall be in the amount of $________.
         The number of shares to be issued  hereunder less shares  equivalent to
the Exercise Price, as determined in this Warrant, is______________________ .

Dated:  ____________________
                                     (Name must conform to name of Holder as
                                      specified on the face of the Warrant)
                                     By:
                                        ------------------------------------
                                     Name:
                                          ----------------------------------
                                     Title:
                                           ---------------------------------
                                     Address of Holder:
                                                       ---------------------

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

                                                       ---------------------
Date of exercise:
                 ---------------------
C:\Edgarizing\New\staruniwarrantf\starnuiwarrantexE.wpd
-----------------------
(1)      Insert  the  number  of  shares  of  Common   Stock  as  to  which  the
accompanying  Warrant is being exercised.  In the case of a partial exercise,  a
new  Warrant  or  Warrants  will  be  issued  and  delivered,  representing  the
unexercised portion of the accompanying  Warrant, to the holder surrendering the
same.

                                    10.6 - 8

<PAGE>

                                    EXHIBIT F

THIS COMMON STOCK PURCHASE  WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE  WARRANT,  AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED  ONLY (A) TO THE
COMPANY,  (B) PURSUANT TO AN EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED  UNDER THE  SECURITIES  ACT AND ANY  APPLICABLE  STATE
SECURITIES LAWS. IN ADDITION,  A SECURITIES PURCHASE  AGREEMENT,  DATED THE DATE
HEREOF,  A COPY OF WHICH  MAY BE  OBTAINED  FROM THE  COMPANY  AT ITS  PRINCIPAL
EXECUTIVE  OFFICE,  CONTAINS  CERTAIN  ADDITIONAL  AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF THE
HOLDER.

                                  STARUNI CORP.

                          COMMON STOCK PURCHASE WARRANT

No.                                         Warrant to Purchase 1,000,000 Shares

         STARUNI  CORP.,  a  California  corporation  (the  "Company"),   hereby
certifies  that,  for  value  received,   _________________________________   or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company  at any time or from  time to time  during  the  period  commencing  (i)
September  ,  2000  and  ending  September  ,  2003,  at the  Purchase  Price(as
hereinafter defined),  eight hundred thousand (800,000) shares of the fully paid
and nonassessable  shares of Common Stock of the Company and (ii) the earlier of
(x) February 16, 2001 or (y) the date the Registration Statement (as hereinafter
defined) becomes  effective two hundred  thousand  (200,000) shares of the fully
paid and nonassessable  shares of Common Stock of the Company.  The time periods
for the  exercise  of  Warrants  set  forth in (i) and (ii)  above  shall be the
"Exercise  Period".The  number and  character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein.

         This Warrant (this "Warrant";  such term to include any warrants issued
in  substitution  therefor)  is  one  of  a series of         warrants issued in
connection with that certain  Private  Equity Line of Credit  dated of even date
herewith  among the initial Holder hereof, the Company and certain other parties
thereto.

         Capitalized  terms used  herein not  otherwise  defined  shall have the
meanings ascribed thereto in the Agreement.  As used herein the following terms,
unless the context otherwise requires, have the following respective meanings:

                  (a) The term "Agreement" refers to that certain Private Equity
         Line of Credit  Agreement  dated the date  herewith  among the  initial
         Holder hereof, the Company and certain other parties hereto.

                  (b) The term  "Company"  shall include  Staruni Corp.  and any
         corporation  that  shall  succeed  or assume  the  obligations  of such
         corporation hereunder.

                                    10.6? - 1
<PAGE>

                  (c) The term "Common Stock" includes (a) the Company's  common
         stock,  no par per share,  (b) any other  capital stock of any class or
         classes  (however  designated)  of the Company,  authorized on or after
         such  date,  the  Holders  of  which  shall  have  the  right,  without
         limitation as to amount,  either to all or to a share of the balance of
         current  dividends  and  liquidating  dividends  after the  payment  of
         dividends and  distributions on any shares entitled to preference,  and
         the Holders of which shall ordinarily, in the absence of contingencies,
         be entitled to vote for the  election of a majority of directors of the
         Company  (even  though the right so to vote has been  suspended  by the
         happening  of such a  contingency)  and (c) any other  securities  into
         which or for which any of the securities described in (a) or (b) may be
         converted  or  exchanged  pursuant  to  a  plan  of   recapitalization,
         reorganization, merger, sale of assets or otherwise.

                  (d) The term  "Other  Securities"  refers to any stock  (other
         than  Common  Stock) and other  securities  of the Company or any other
         person  (corporate or otherwise) that the Holder of this Warrant at any
         time shall be  entitled  to  receive,  or shall have  received,  on the
         exercise of this Warrant, in lieu of or in addition to Common Stock, or
         that at any time  shall  be  issuable  or shall  have  been  issued  in
         exchange  for or in  replacement  of Common  Stock or Other  Securities
         pursuant to Section 3 or otherwise.

                  (e) The term  "Purchase  Price" means 75% of the Market Price;
         and the term "Market  Price" shall mean the lowest closing bid price of
         a share of Common Stock as reported on the Principal Market as reported
         by the National  Association of Securities Dealers Electronic  Bulletin
         Board ("OTC Bulletin Board") for the 30 days immediately  preceding the
         date of receipt by the  Company of Notice of Exercise  (as  hereinafter
         defined).  If on any date that a Notice of Exercise is given the Common
         Stock is not  listed or traded on the OTC  Bulletin  Board,  the Market
         Price shall be  determined  by  reference to the Nasdaq Stock Market or
         the principal securities exchange or trading market where such security
         is listed or traded as reported by  Bloomberg,  L.P., or the average of
         the bid prices of any market  makers for such  security  as reported in
         the "pink  sheets"  by the  National  Quotations  Bureau,  Inc.  If the
         closing bid price cannot be  calculated  for such security on such date
         on any of the foregoing  bases,  the closing bid price of such security
         on such date shall be the fair market value as mutually  determined  by
         the Company and the Holder of this Warrant.

                  (f) The term "Registration  Statement" means that Registration
         Statement   defined  in  a  certain   Registration   Rights   Agreement
         ("Registration Rights Agreement") between the Company and the Holder of
         even date.
                  1.  Exercise of Warrant.
                  1.1.Method of Exercise.

                  (a) This Warrant may be exercised in whole or in part (but not
         as to a fractional share of Common Stock), at any time and from time to
         time during the Exercise  Period by the Holder  hereof by delivery of a
         notice of exercise (a "Notice of Exercise") in the form attached hereto
         as Exhibit A via facsimile to the Company specifying the Purchase Price

                                    10.6? - 2
<PAGE>

         (the "Exercise Price").  This Warrant is a "cashless" Warrant, and upon
         exercise of the  Warrant the Holder  shall not be required to make cash
         payment to the Company  for the shares of Common  Stock  issuable  upon
         such exercise.  Rather, upon exercise,  the Holder shall be entitled to
         receive,  one or more  certificates,  issued in the Holder's name or in
         such name or names as the Holder may direct, subject to the limitations
         on transfer  contained herein, for the number of shares of Common Stock
         so  purchased,  less the  number of shares  equivalent  in value to the
         Purchase Price of the Warrants determined by applying the Market Price.
         The number of shares of Common Stock  constituting  the Purchase  Price
         shall be set forth in the Notice of Exercise  along with the net number
         of shares to be delivered to the Holder.  The shares of Common Stock so
         purchased  shall be deemed to be issued as of the close of  business on
         the date on which the  Company  shall  have  received  from the  Holder
         payment of the Exercise Price (the "Exercise Date").

                  (b) Notwithstanding anything to the contrary set forth herein,
         upon  exercise of all or a portion of this Warrant in  accordance  with
         the terms  hereof,  the  Holder  shall not be  required  to  physically
         surrender  this Warrant to the  Company.  Rather,  records  showing the
         amount so exercised  and the date of exercise  shall be maintained on a
         ledger in the form of Annex B attached hereto (a copy of which shall be
         delivered  to the  Company  or  transfer  agent  with  each  Notice  of
         Exercise).  It is  specifically  contemplated  that the Company  hereof
         shall act as the  calculation  agent for all exercises of this Warrant.
         In the event of any dispute or discrepancies,  such records  maintained
         by the Company shall be controlling and determinative in the absence of
         manifest  error.  The Holder and any  assignee,  by  acceptance of this
         Warrant,  acknowledge  and agree that,  by reason of the  provisions of
         this paragraph, following an exercise of a portion of this Warrant, the
         number of shares of Common  Stock  represented  by this Warrant will be
         the amount indicated on Annex B attached hereto (which may be less than
         the amount stated on the face hereof).

                  1.2. Regulation D Restrictions.  The Holder hereof  represents
         and  warrants  to the Company  that it has  acquired  this  Warrant and
         anticipates acquiring the shares of Common Stock issuable upon exercise
         of the Warrant solely for its own account for  investment  purposes and
         not with a view to or for resale of such securities  unless such resale
         has been registered  with the Commission or an applicable  exemption is
         available therefor. At the time this Warrant is exercised,  the Company
         may  require  the  Holder  to  state in the  Notice  of  Exercise  such
         representations  concerning  the Holder as are necessary or appropriate
         to assure compliance by the Holder with the Securities Act. 2. Delivery
         of Stock  Certificates  on Exercise.  As soon as practicable  after the
         exercise of this  Warrant,  the Company at its expense  (including  the
         payment by it of any applicable  issue,  stamp or transfer  taxes) will
         cause to be issued in the name of and delivered to the Holder  thereof,
         or, to the extent permissible  hereunder,  to such other person as such
         Holder may direct,  a  certificate  or  certificates  for the number of
         fully  paid  and  nonassessable   shares  of  Common  Stock  (or  Other
         Securities)  to which such Holder  shall be entitled on such  exercise,
         plus,  in lieu of any  fractional  share to  which  such  Holder  would
         otherwise be entitled,  cash equal to such  fraction  multiplied by the

                                    10.6? - 3
<PAGE>

         then applicable Purchase Price,  together with any other stock or other
         securities and property  (including  cash,  where  applicable) to which
         such Holder is  entitled  upon such  exercise  pursuant to Section 1 or
         otherwise.

         3.       Adjustment of Purchase Price In Certain  Events.  The Purchase
Price  to be  paid  by the  Holder  upon  exercise  of  this  Warrant,  and  the
consideration to be received upon exercise of this Warrant, shall be adjusted in
case at any time or from time to time for Capital Reorganizations as provided in
the Agreement as if such provisions were specifically set forth herein.

         4.       No  Impairment.  The  Company  will not, by  amendment  of its
Articles of  Incorporation  or through any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms 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  action as may be
necessary  or  appropriate  in order to protect the rights of the Holder of this
Warrant against  impairment.  Without  limiting the generality of the foregoing,
the  Company  (a)  will  not  increase  the par  value  of any  shares  of stock
receivable on the exercise of this Warrant above the amount payable  therefor on
such exercise,  (b) will take all such action as may be necessary or appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable  shares of stock on the exercise of this Warrant, and (c) will not
transfer  all or  substantially  all of its  properties  and assets to any other
person  (corporate or otherwise),  or  consolidate  with or merge into any other
person or permit any such person to  consolidate  with or merge into the Company
(if the Company is not the  surviving  person),  unless such other  person shall
expressly assume in writing and will be bound by all the terms of this Warrant.

         5.       Notices of Record Date. In the event of

                           (a) any  taking  by the  Company  of a record  of the
                  Holders  of  any  class  or  securities  for  the  purpose  of
                  determining  the Holders  thereof who are  entitled to receive
                  any dividend or other distribution,  or any right to subscribe
                  for,  purchase or otherwise acquire any shares of stock of any
                  class or any other  securities or property,  or to receive any
                  other right, or

                           (b) any capital  reorganization  of the Company,  any
                  reclassification  or  recapitalization of the capital stock of
                  the Company or any  transfer of all or  substantially  all the
                  assets of the  Company  to or  consolidation  or merger of the
                  Company with or into any other person, or

                           (c) any   voluntary   or   involuntary   dissolution,
                  liquidation  or  winding-up  of the Company,  then and in each
                  such event the Company  will mail or cause to be mailed to the
                  Holder  of this  Warrant a notice  specifying  (i) the date on
                  which any such  record is to be taken for the  purpose of such
                  dividend,  distribution  or right,  and stating the amount and
                  character of such dividend,  distribution  or right,  and (ii)
                  the date on which any such  reorganization,  reclassification,

                                    10.6? - 4
<PAGE>

                  recapitalization,     transfer,     consolidation,     merger,
                  dissolution,  liquidation or winding-up is to take place,  and
                  the time,  if any, as of which the Holders of record of Common
                  Stock (or Other  Securities)  shall be  entitled  to  exchange
                  their  shares  of  Common  Stock  (or  Other  Securities)  for
                  securities   or   other    property    deliverable   on   such
                  reorganization, reclassification,  recapitalization, transfer,
                  consolidation, merger, dissolution, liquidation or winding-up.
                  Such notice shall be mailed at least 20 days prior to the date
                  specified in such notice on which any action is to be taken.

         6.       Reservation  of Stock  Issuable on  Exercise  of Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery on the exercise of this  Warrant,  all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

         7.       Exchange  of  Warrant.  On  surrender  for  exchange  of  this
Warrant,  properly  endorsed and in compliance with the restrictions on transfer
set forth in the legend on the face of this Warrant, to the Company, the Company
at its expense will issue and deliver to or on the order of the Holder thereof a
new  Warrant of like  tenor,  in the name of such  Holder or as such  Holder (on
payment by such Holder of any applicable transfer taxes) may direct,  calling in
the  aggregate  on the face or faces  thereof for the number of shares of Common
Stock called for on the face of the Warrant so surrendered.

         8.       Replacement  of  Warrant.  On receipt of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant  and, in the case of any such loss,  theft or  destruction  of this
Warrant,   on  delivery  of  an  indemnity   agreement  or  security  reasonably
satisfactory  in form and  amount  to the  Company  or,  in the case of any such
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9.       Remedies.  The Company  stipulates that the remedies at law of
the Holder of this Warrant in the event of any default or threatened  default by
the Company in the  performance  of or compliance  with any of the terms of this
Warrant  are  not  and  will  not  be  adequate,  and  that  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.

         10.      Negotiability,  etc. This Warrant is issued upon the following
terms, to all of which each Holder or owner hereof by the taking hereof consents
and agrees:
                           (a) title  to  this  Warrant  may be  transferred  by
                  endorsement and delivery in the same manner  as in the case of
                  a  negotiable  instrument   transferable  by  endorsement  and
                  delivery.

                           (b) any person in possession of this Warrant properly
                  endorsed is authorized to represent  himself as absolute owner
                  hereof and is empowered to transfer  absolute  title hereto by
                  endorsement  and  delivery  hereof  to a bona  fide  purchaser
                  hereof  for  value;  each  prior  taker  or owner  waives  and
                  renounces  all of his  equities  or rights in this  Warrant in

                                    10.6? - 5
<PAGE>

                  favor of each  such bona  fide  purchaser,  and each such bona
                  fide purchaser shall acquire  absolute title hereto and to all
                  rights represented hereby;

                           (c) until this Warrant is transferred on the books of
                  the  Company,  the  Company  may treat the  registered  Holder
                  hereof  as  the  absolute   owner  hereof  for  all  purposes,
                  notwithstanding any notice to the contrary; and

                           (d) notwithstanding  the foregoing,  this Warrant may
                  not be sold,  transferred  or assigned  except  pursuant to an
                  effective  registration  statement under the Securities Act or
                  pursuant to an applicable exemption therefrom.

         11.      Registration  Rights. The Company is obligated to register the
shares of Common Stock issuable upon exercise of this Warrant in accordance with
the terms of the Registration Rights Agreement.

         12.      Notices. All notices and other communications from the Company
to the  Holder of this  Warrant  shall be mailed by first  class  registered  or
certified mail,  postage prepaid,  at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an  address,  then to, and at the  address  of, the last  Holder of this
Warrant who has so furnished an address to the Company.

         13.      Miscellaneous.  This  Warrant  and  any  term  hereof  may  be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the party against which enforcement of such change, waiver,  discharge
or  termination  is sought.  This  Warrant  shall be  construed  and enforced in
accordance  with and governed by the internal laws of the State of New York. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or  unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision.

                            [Signature Page Follows]

                                    10.6? - 6
<PAGE>

DATED as of September _____, 2000.

                                            STARUNI CORP.

                                            By:
                                               ----------------------------
                                            Name:
                                                 --------------------------
                                            Title:
                                                  -------------------------

[Corporate Seal]

Attest:

By:
   ----------------------------
      Secretary

                                    10.6? - 7
<PAGE>

                                    EXHIBIT A
                    FORM OF NOTICE OF EXERCISE - WARRANT
                    ------------------------------------
     (To be executed only upon exercise of the Warrant in whole or in part)

To:      STARUNI CORP.
         The undersigned  registered  Holder of the accompanying  Warrant hereby
exercises  such  Warrant or  portion  thereof  for,  and  purchases  thereunder,
____________(1) shares of Common Stock (as defined in such Warrant) and herewith
makes payment  therefor in the amount and manner set forth below, as of the date
written below. The undersigned requests that the certificates for such shares of
Common    Stock   be   issued   in   the   name   of,    and    delivered    to,
_________________________ whose address is ____________________________________.

         The Exercise  Price for the shares of Common Stock issued on account of
this exercise of Warrant shall be in the amount of $________.

         The number of shares to be issued  hereunder less shares  equivalent to
the Exercise Price, as determined in this Warrant, is______________________ .

Dated:  ____________________        -------------------------------------
                                   (Name must conform to name of Holder as
                                     specified on the face of the Warrant)
                                    By:
                                       ------------------------------------
                                    Name:
                                         ------------------------------
                                    Title:
                                          -----------------------------
                                    Address of Holder:
                                                       --------------------

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

                                                       --------------------
Date of exercise:

C:\Edgarizing\New\staruniwarrantf\Staruni warrantexF.wpd
-------------------------
(1)      Insert  the  number  of  shares  of  Common   Stock  as  to  which  the
accompanying  Warrant is being exercised.  In the case of a partial exercise,  a
new  Warrant  or  Warrants  will  be  issued  and  delivered,  representing  the
unexercised portion of the accompanying  Warrant, to the holder surrendering the
same.

                                    10.6? - 8
<PAGE>

THIS COMMON STOCK PURCHASE  WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE  WARRANT,  AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED  ONLY (A) TO THE
COMPANY,  (B) PURSUANT TO AN EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED  UNDER THE  SECURITIES  ACT AND ANY  APPLICABLE  STATE
SECURITIES LAWS. IN ADDITION,  A SECURITIES PURCHASE  AGREEMENT,  DATED THE DATE
HEREOF,  A COPY OF WHICH  MAY BE  OBTAINED  FROM THE  COMPANY  AT ITS  PRINCIPAL
EXECUTIVE  OFFICE,  CONTAINS  CERTAIN  ADDITIONAL  AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF THE
HOLDER.

                                  STARUNI CORP.

                          COMMON STOCK PURCHASE WARRANT

No. B-001                                   Warrant to Purchase 1,000,000 Shares

         STARUNI  CORP.,  a  California  corporation  (the  "Company"),   hereby
certifies  that, for value  received,  Boat Basin  Investors LLC or assigns,  is
entitled,  subject to the terms set forth below, to purchase from the Company at
any time or from time to time during the period  commencing  (i)  September  28,
2000 and ending  September  28,  2003,  at the  Purchase  Price (as  hereinafter
defined),  eight  hundred  thousand  (800,000)  shares  of the  fully  paid  and
nonassessable  shares of Common  Stock of the Company and (ii) on the earlier of
(x) February 16, 2001 or (y) the date the Registration Statement (as hereinafter
defined) becomes  effective two hundred  thousand  (200,000) shares of the fully
paid and nonassessable  shares of Common Stock of the Company.  The time periods
for the  exercise  of  Warrants  set  forth in (i) and (ii)  above  shall be the
"Exercise  Period".The  number and  character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein.

         This Warrant (this "Warrant";  such term to include any warrants issued
in  substitution  therefor) is one of a series of warrants  issued in connection
with that  certain  Private  Equity Line of Credit  dated of even date  herewith
among the initial Holder hereof, the Company and certain other parties thereto.

         Capitalized  terms used  herein not  otherwise  defined  shall have the
meanings ascribed thereto in the Agreement.  As used herein the following terms,
unless the context otherwise requires, have the following respective meanings:

                  (a)      The term  "Agreement"  refers to that certain Private
         Equity  Line of  Credit  Agreement  dated the date  herewith  among the
         initial Holder hereof, the Company and certain other parties hereto.

                  (b)      The term  "Company"  shall include  Staruni Corp. and
         any  corporation  that shall succeed or assume the  obligations of such
         corporation hereunder.

                                    10.7 - 1
<PAGE>

                  (c)      The term "Common  Stock"  includes (a) the  Company's
         common  stock,  no par per share,  (b) any other  capital  stock of any
         class or classes (however designated) of the Company,  authorized on or
         after such date,  the  Holders of which  shall have the right,  without
         limitation as to amount,  either to all or to a share of the balance of
         current  dividends  and  liquidating  dividends  after the  payment  of
         dividends and  distributions on any shares entitled to preference,  and
         the Holders of which shall ordinarily, in the absence of contingencies,
         be entitled to vote for the  election of a majority of directors of the
         Company  (even  though the right so to vote has been  suspended  by the
         happening  of such a  contingency)  and (c) any other  securities  into
         which or for which any of the securities described in (a) or (b) may be
         converted  or  exchanged  pursuant  to  a  plan  of   recapitalization,
         reorganization, merger, sale of assets or otherwise.

                  (d)      The  term  "Other  Securities"  refers  to any  stock
         (other than Common  Stock) and other  securities  of the Company or any
         other person  (corporate or otherwise)  that the Holder of this Warrant
         at any time shall be entitled to receive,  or shall have  received,  on
         the  exercise  of this  Warrant,  in lieu of or in  addition  to Common
         Stock,  or that at any time shall be issuable or shall have been issued
         in exchange for or in replacement  of Common Stock or Other  Securities
         pursuant to Section 3 or otherwise.

                  (e)      The term  "Purchase  Price"  means 75% of the  Market
         Price;  and the term "Market  Price" shall mean the lowest  closing bid
         price of a share of Common Stock as reported on the Principal Market as
         reported by the National  Association of Securities  Dealers Electronic
         Bulletin  Board  ("OTC  Bulletin  Board")  for the 30 days  immediately
         preceding  the date of receipt by the Company of Notice of Exercise (as
         hereinafter defined). If on any date that a Notice of Exercise is given
         the Common Stock is not listed or traded on the OTC Bulletin Board, the
         Market  Price shall be  determined  by  reference  to the Nasdaq  Stock
         Market or the  principal  securities  exchange or trading  market where
         such  security is listed or traded as reported by  Bloomberg,  L.P., or
         the average of the bid prices of any market makers for such security as
         reported in the "pink sheets" by the National  Quotations Bureau,  Inc.
         If the closing bid price cannot be calculated for such security on such
         date on any of the  foregoing  bases,  the  closing  bid  price of such
         security  on such  date  shall be the  fair  market  value as  mutually
         determined by the Company and the Holder of this Warrant.

                  (f)      The  term   "Registration   Statement"   means   that
         Registration   Statement  defined  in  a  certain  Registration  Rights
         Agreement ("Registration Rights Agreement") between the Company and the
         Holder of even date.

                  1.       Exercise of Warrant.

                  1.1.     Method of Exercise.

                  (a)      This  Warrant  may be  exercised  in whole or in part
         (but not as to a  fractional  share of Common  Stock),  at any time and
         from time to time during the  Exercise  Period by the Holder  hereof by

                                    10.7 - 2
<PAGE>

         delivery of a notice of exercise (a "Notice of  Exercise")  in the form
         attached  hereto as Exhibit A via  facsimile to the Company  specifying
         the Purchase Price (the "Exercise Price"). This Warrant is a "cashless"
         Warrant,  and upon  exercise  of the  Warrant  the Holder  shall not be
         required  to make cash  payment to the Company for the shares of Common
         Stock issuable upon such exercise.  Rather,  upon exercise,  the Holder
         shall be entitled to receive,  one or more certificates,  issued in the
         Holder's  name or in such  name or  names  as the  Holder  may  direct,
         subject to the limitations on transfer contained herein, for the number
         of shares  of  Common  Stock so  purchased,  less the  number of shares
         equivalent in value to the Purchase Price of the Warrants determined by
         applying  the  Market  Price.  The  number of  shares  of Common  Stock
         constituting  the  Purchase  Price  shall be set forth in the Notice of
         Exercise  along  with the net number of shares to be  delivered  to the
         Holder.  The shares of Common Stock so purchased  shall be deemed to be
         issued as of the  close of  business  on the date on which the  Company
         shall have received from the Holder  payment of the Exercise Price (the
         "Exercise Date").

                  (b)      Notwithstanding  anything to the  contrary  set forth
         herein, upon exercise of all or a portion of this Warrant in accordance
         with the terms  hereof,  the Holder shall not be required to physically
         surrender  this Warrant to the  Company.  Rather,  records  showing the
         amount so exercised  and the date of exercise  shall be maintained on a
         ledger in the form of Annex B attached hereto (a copy of which shall be
         delivered  to the  Company  or  transfer  agent  with  each  Notice  of
         Exercise).  It is  specifically  contemplated  that the Company  hereof
         shall act as the  calculation  agent for all exercises of this Warrant.
         In the event of any dispute or discrepancies,  such records  maintained
         by the Company shall be controlling and determinative in the absence of
         manifest  error.  The Holder and any  assignee,  by  acceptance of this
         Warrant,  acknowledge  and agree that,  by reason of the  provisions of
         this paragraph, following an exercise of a portion of this Warrant, the
         number of shares of Common  Stock  represented  by this Warrant will be
         the amount indicated on Annex B attached hereto (which may be less than
         the amount stated on the face hereof).

                  1.2.     Regulation   D   Restrictions.   The  Holder   hereof
         represents  and  warrants  to the  Company  that it has  acquired  this
         Warrant and  anticipates  acquiring the shares of Common Stock issuable
         upon exercise of the Warrant  solely for its own account for investment
         purposes and not with a view to or for resale of such securities unless
         such resale has been  registered  with the  Commission or an applicable
         exemption is available therefor. At the time this Warrant is exercised,
         the  Company  may require the Holder to state in the Notice of Exercise
         such  representations   concerning  the  Holder  as  are  necessary  or
         appropriate to assure compliance by the Holder with the Securities Act.

         2.       Delivery  of  Stock  Certificates  on  Exercise.  As  soon  as
practicable  after the  exercise  of this  Warrant,  the  Company at its expense
(including the payment by it of any applicable  issue,  stamp or transfer taxes)
will cause to be issued in the name of and delivered to the Holder thereof,  or,
to the extent  permissible  hereunder,  to such other  person as such Holder may
direct,  a  certificate  or  certificates  for the  number  of  fully  paid  and

                                    10.7 - 3
<PAGE>

nonassessable  shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such  exercise,  plus, in lieu of any  fractional  share to
which such Holder  would  otherwise  be  entitled,  cash equal to such  fraction
multiplied by the then applicable Purchase Price,  together with any other stock
or other securities and property  (including  cash,  where  applicable) to which
such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

         3.       Adjustment of Purchase Price In Certain  Events.  The Purchase
Price  to be  paid  by the  Holder  upon  exercise  of  this  Warrant,  and  the
consideration to be received upon exercise of this Warrant, shall be adjusted in
case at any time or from time to time for Capital Reorganizations as provided in
the Agreement as if such provisions were specifically set forth herein.

         4.       No  Impairment.  The  Company  will not, by  amendment  of its
Articles of  Incorporation  or through any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms 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  action as may be
necessary  or  appropriate  in order to protect the rights of the Holder of this
Warrant against  impairment.  Without  limiting the generality of the foregoing,
the  Company  (a)  will  not  increase  the par  value  of any  shares  of stock
receivable on the exercise of this Warrant above the amount payable  therefor on
such exercise,  (b) will take all such action as may be necessary or appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable  shares of stock on the exercise of this Warrant, and (c) will not
transfer  all or  substantially  all of its  properties  and assets to any other
person  (corporate or otherwise),  or  consolidate  with or merge into any other
person or permit any such person to  consolidate  with or merge into the Company
(if the Company is not the  surviving  person),  unless such other  person shall
expressly assume in writing and will be bound by all the terms of this Warrant.

         5.       Notices of Record Date. In the event of

                           (a) any  taking  by the  Company  of a record  of the
                  Holders  of  any  class  or  securities  for  the  purpose  of
                  determining  the Holders  thereof who are  entitled to receive
                  any dividend or other distribution,  or any right to subscribe
                  for,  purchase or otherwise acquire any shares of stock of any
                  class or any other  securities or property,  or to receive any
                  other right, or

                           (b) any capital  reorganization  of the Company,  any
                  reclassification  or  recapitalization of the capital stock of
                  the Company or any  transfer of all or  substantially  all the
                  assets of the  Company  to or  consolidation  or merger of the
                  Company with or into any other person, or

                           (c) any   voluntary   or   involuntary   dissolution,
                  liquidation  or  winding-up  of the Company,  then and in each
                  such event the Company  will mail or cause to be mailed to the
                  Holder  of this  Warrant a notice  specifying  (i) the date on
                  which any such  record is to be taken for the  purpose of such
                  dividend,  distribution  or right,  and stating the amount and

                                    10.7 - 4
<PAGE>

                  character of such dividend,  distribution  or right,  and (ii)
                  the date on which any such  reorganization,  reclassification,
                  recapitalization,     transfer,     consolidation,     merger,
                  dissolution,  liquidation or winding-up is to take place,  and
                  the time,  if any, as of which the Holders of record of Common
                  Stock (or Other  Securities)  shall be  entitled  to  exchange
                  their  shares  of  Common  Stock  (or  Other  Securities)  for
                  securities   or   other    property    deliverable   on   such
                  reorganization, reclassification,  recapitalization, transfer,
                  consolidation, merger, dissolution, liquidation or winding-up.
                  Such notice shall be mailed at least 20 days prior to the date
                  specified in such notice on which any action is to be taken.

         6.       Reservation  of Stock  Issuable on  Exercise  of Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery on the exercise of this  Warrant,  all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

         7.       Exchange  of  Warrant.  On  surrender  for  exchange  of  this
Warrant,  properly  endorsed and in compliance with the restrictions on transfer
set forth in the legend on the face of this Warrant, to the Company, the Company
at its expense will issue and deliver to or on the order of the Holder thereof a
new  Warrant of like  tenor,  in the name of such  Holder or as such  Holder (on
payment by such Holder of any applicable transfer taxes) may direct,  calling in
the  aggregate  on the face or faces  thereof for the number of shares of Common
Stock called for on the face of the Warrant so surrendered.

         8.       Replacement  of  Warrant.  On receipt of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant  and, in the case of any such loss,  theft or  destruction  of this
Warrant,   on  delivery  of  an  indemnity   agreement  or  security  reasonably
satisfactory  in form and  amount  to the  Company  or,  in the case of any such
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9.       Remedies.  The Company  stipulates that the remedies at law of
the Holder of this Warrant in the event of any default or threatened  default by
the Company in the  performance  of or compliance  with any of the terms of this
Warrant  are  not  and  will  not  be  adequate,  and  that  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.

         10.      Negotiability,  etc. This Warrant is issued upon the following
terms, to all of which each Holder or owner hereof by the taking hereof consents
and agrees:
                           (a) title  to  this  Warrant  may be  transferred  by
                  endorsement  and delivery in the same manner as in the case of
                  a  negotiable  instrument   transferable  by  endorsement  and
                  delivery.

                           (b) any person in possession of this Warrant properly
                  endorsed is authorized to represent  himself as absolute owner
                  hereof and is empowered to transfer  absolute  title hereto by
                  endorsement  and  delivery  hereof  to a bona  fide  purchaser

                                    10.7 - 5
<PAGE>

                  hereof  for  value;  each  prior  taker  or owner  waives  and
                  renounces  all of his  equities  or rights in this  Warrant in
                  favor of each  such bona  fide  purchaser,  and each such bona
                  fide purchaser shall acquire  absolute title hereto and to all
                  rights represented hereby;

                           (c) until this Warrant is transferred on the books of
                  the  Company,  the  Company  may treat the  registered  Holder
                  hereof  as  the  absolute   owner  hereof  for  all  purposes,
                  notwithstanding any notice to the contrary; and

                           (d) notwithstanding  the foregoing,  this Warrant may
                  not be sold,  transferred  or assigned  except  pursuant to an
                  effective  registration  statement under the Securities Act or
                  pursuant to an applicable exemption therefrom.

         11.      Registration  Rights. The Company is obligated to register the
shares of Common Stock issuable upon exercise of this Warrant in accordance with
the terms of the Registration Rights Agreement.

         12.      Notices. All notices and other communications from the Company
to the  Holder of this  Warrant  shall be mailed by first  class  registered  or
certified mail,  postage prepaid,  at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an  address,  then to, and at the  address  of, the last  Holder of this
Warrant who has so furnished an address to the Company.

         13.      Miscellaneous.  This  Warrant  and  any  term  hereof  may  be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the party against which enforcement of such change, waiver,  discharge
or  termination  is sought.  This  Warrant  shall be  construed  and enforced in
accordance  with and governed by the internal laws of the State of New York. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or  unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision.

                            [Signature Page Follows]

                                    10.7 - 6
<PAGE>

DATED as of September 28, 2000.

                                            STARUNI CORP.

                                            By:
                                               -----------------------------
                                            Name:
                                                 ---------------------------
                                            Title:
                                                  --------------------------

[Corporate Seal]

Attest:

By:
   -----------------------
      Secretary

                                    10.7 - 7
<PAGE>

                                    EXHIBIT A
                      FORM OF NOTICE OF EXERCISE - WARRANT
                      ------------------------------------
     (To be executed only upon exercise of the Warrant in whole or in part)

To:      STARUNI CORP.

         The undersigned  registered  Holder of the accompanying  Warrant hereby
exercises  such  Warrant or  portion  thereof  for,  and  purchases  thereunder,
____________(1) shares of Common Stock (as defined in such Warrant) and herewith
makes payment  therefor in the amount and manner set forth below, as of the date
written below. The undersigned requests that the certificates for such shares of
Common    Stock   be   issued   in   the   name   of,    and    delivered    to,
_________________________ whose address is ____________________________________.

         The Exercise  Price for the shares of Common Stock issued on account of
this exercise of Warrant shall be in the amount of $________.

         The number of shares to be issued  hereunder less shares  equivalent to
the Exercise Price, as determined in this Warrant, is_______________ .

Dated:  ____________________
                                 (Name must conform to name of Holder as
                                  specified on the face of the Warrant)
                                  By:
                                     -----------------------------------------
                                  Name:
                                       --------------------------------
                                  Title:
                                       --------------------------------
                                  Address of Holder:
                                                     -------------------------

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

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

Date of exercise:

C:\Edgarizing\New\staruniwarrantf\staruniwarrantf.final.wpd

-------------------
(1)      Insert  the  number  of  shares  of  Common   Stock  as  to  which  the
accompanying  Warrant is being exercised.  In the case of a partial exercise,  a
new  Warrant  or  Warrants  will  be  issued  and  delivered,  representing  the
unexercised portion of the accompanying  Warrant, to the holder surrendering the
same.
                                    10.7 - 8

<PAGE>

                                ESCROW AGREEMENT
                                ----------------
         ESCROW  AGREEMENT (the "Escrow  Agreement")  made as of the 28th day of
                                 -----------------
September,  2000, by and among Staruni  Corporation,  a California  corporation,
with offices at 1642  Westwood  Bouelvard,  Los Angeles,  California  90024 (the
"Company"),  Boat Basin  Investors LLC, a limited  liability  company  organized
 -------
under the laws of Nevis (the  "Investor"),  and Novack Burnbaum Crystal LLP with
                               --------
offices at 300 East 42nd Street,  New York, New York 10017, as escrow agent (the
"Escrow Agent").
 ------------
                              W I T N E S S E T H:
                              --------------------
         WHEREAS,  the Company  desires to raise capital in order to finance the
growth of its business operations and for other general corporate purposes;

         WHEREAS,  the  Investor  will  from  time to time as  requested  by the
Company,  purchase shares of the Company's  common stock, no par value per share
(the  "Common  Stock"),  from the  Company  and will be issued Put  Warrants  in
conjunction  with the  purchase of such  shares of Common  Stock as set forth in
that certain Private Equity Line of Credit Agreement (the "Purchase  Agreement")
dated the date hereof between the Investor and the Company, which shares will be
issued pursuant to the terms and conditions  contained in the Purchase Agreement
and herein; and

         WHEREAS,  pursuant  to the  Purchase  Agreement,  the  Company  and the
Investor have requested that the Escrow Agent receive from the Company,  hold in
escrow and ultimately deliver, as applicable, the Put Warrants, and have further
requested  that upon each Put, the Escrow Agent  receive,  hold,  and ultimately
deliver, the relevant number of Put Shares.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained,  and for other  good and  valuable  consideration,  the  receipt  and
sufficiency  of  which is  hereby  acknowl-edged,  the  parties  to this  Escrow
Agreement hereby agree as follows:

                      1.   Defined  Terms.   Capitalized   terms  used  and  not
                           --------------
otherwise  defined  herein  shall  have  the  meanings  respectively assigned to
them in the Purchase Agreement.

                      2.   (a)      Escrow of Put Warrants.  On or prior to each
                                    ----------------------
Put Closing  Date,  the Company shall issue and deliver or cause to be delivered
to the Escrow  Agent such number of Put  Warrants  as  required by the  Purchase
Agreement The Escrow Agent shall hold the Put Warrants and shall deliver them or
redeliver  them  to the  Investor  or to the  Company,  as  applicable,  only in
accordance with the terms and conditions of this Escrow Agreement.

                           (b)      Escrow of Put Shares.  Each time the Company
                                    --------------------
issues a Put  Purchase  Notice to the  Investor  pursuant  to Section 2.2 of the
Purchase Agreement, the Company shall issue and deliver or cause to be delivered

                                    10.8 - 1
<PAGE>

to the Escrow Agent a copy of such Put Purchase Notice and that number of shares
of Common  Stock (the "Put  Shares" and together  with the Warrant  Shares,  the
                       -----------
"Shares")  that would  cause the number of shares of Common  Stock in the Escrow
 ------
Account as defined  in  Section 3 hereto) to be equal to the  maximum  number of
shares of Common Stock the  Investor may purchase  pursuant to such Put Purchase
Notice.  The  Escrow  Agent  shall  hold the Put  Shares  and shall  deliver  or
redeliver them to the Investor or the Company, as applicable, only in accordance
with the terms and conditions of this Escrow Agreement.

                      3.  Holding of Shares.  The  Escrow  Agent  shall hold the
                          -----------------
Shares  in  a  segregated  escrow account (the "Escrow Account") in a securities
                                                --------------
brokerage firm where it normally holds such Shares or shall  hold  the Shares in
certificated  form,  in the  discretion  of the Escrow Agent, and shall hold the
Put Warrants in escrow.

                      4.   Release of Shares.
                           -----------------
                      (a)  Upon the  receipt of (i) a notice  from the  Investor
(the  "Investor's  Notice") on or prior to the Put Closing Date  stipulating the
       ------------------
number of shares of Common Stock it is purchasing on such date pursuant to a Put
Purchase Notice and Section 2.2 of the Purchase Agreement,  and (ii) evidence of
payment to the  Company  of the full  purchase  price for such  shares of Common
Stock being  purchased,  the Escrow Agent shall release from the Escrow  Account
and transfer to the Investor that number of shares of Common Stock stipulated in
the Investor's Notice (the "Draw Down Transfer") and the Put Warrants.  The Draw
                            ------------------
Down Transfer shall be made to the Investor  through DTC. This Escrow  Agreement
shall  serve as  irrevocable  authorization  and  direction  to make  Draw  Down
Transfer(s) to the Investor pursuant to this Section 4(b).

                      (b)  Except as  provided in  Sections  4(a) and 4(b),  the
Escrow  Agent  shall  release  the Shares upon  receipt,  at any time,  of joint
written  instructions from the Company and the Investor  directing the manner in
which the return or other distribution of the Shares is to be made.

                      (c)  This  Escrow   Agreement  shall  terminate  upon  the
expiration of the  Commitment  Period and upon such  expiration the Escrow Agent
shall return all Shares in the Escrow Account to the Company.

                      5.   Further  Assurances.  The  Company  and the  Investor
                           -------------------
agree to do such  further  acts and to  execute  and  deliver  such  statements,
assignments,  agreements,  instruments  and other documents as the Escrow Agent,
from time to time, may reasonably request in connection with the administration,
maintenance,  enforcement or adjudication of this Escrow  Agreement in order (a)
to give the Escrow  Agent  confirmation  and  assurance  of the  Escrow  Agent's
rights, powers,  privileges,  remedies and interests under this Escrow Agreement
and  applicable  law, (b) to better enable the Escrow Agent to exercise any such
right, power, privilege, rem-edy or interest, or (c) to otherwise effectuate the
purpose and the terms and provisions of this Escrow Agreement, each in such form
and  substance  as  may  be  reasonably  acceptable  to  the  Escrow  Agent.

                                    10.8 - 2
<PAGE>

                      6.   Conflicting Demands. If conflicting or adverse claims
                           -------------------
or demands are made or notices  served upon the Escrow Agent with respect to the
escrow  provided for herein,  the Company and the Investor agree that the Escrow
Agent shall refuse to comply with any such claim or demand and withhold and stop
all  further  performance  of this  escrow  so long as such  disagreement  shall
continue.  In so doing,  the  Escrow  Agent  shall not be or become  liable  for
damages,  losses, costs, expenses or interest to any or any other person for its
failure to comply with such  conflicting  or adverse  demands.  The Escrow Agent
shall be  entitled  to  continue  to so refrain  and refuse to so act until such
conflicting  claims or demands shall have been finally  determined by a court or
arbitrator of competent  jurisdiction or shall have been settled by agreement of
the  parties  to such  controversy,  in which  case the  Escrow  Agent  shall be
notified  thereof in a notice signed by such parties.  The Escrow Agent may also
elect to commence an interpleader  or other action for declaratory  judgment for
the purpose of having the respective  rights of the claimants  adjudicated,  and
may  deposit  with the court all Shares held  hereunder  pursuant to this Escrow
Agreement;  and if it so  commences  and  deposits,  the Escrow  Agent  shall be
relieved  and  discharged  from any further  duties and  obligations  under this
Escrow Agreement.

                      7.   Disputes. Each of the parties hereto hereby covenants
                           --------
and agrees that the Federal or state  courts  located in the County of New York,
State of New York shall have jurisdiction over any dispute with the Escrow Agent
or relating to this Escrow Agreement.

                      8.   Reliance on Documents  and Experts.  The Escrow Agent
                           ----------------------------------
shall be  entitled  to rely upon any notice,  consent,  certificate,  affidavit,
statement,  paper,  document,  writing  or  communication  (which to the  extent
permitted hereunder may be by telegram,  cable, telex, telecopier, or telephone)
reasonably believed by it to be genuine and to have been signed, sent or made by
the proper  person or persons,  and upon  opinions  and advice of legal  counsel
(including  itself  or  counsel  for  any  party  hereto),   independent  public
accountants  and  other  experts  selected  by the  Escrow  Agent  and  mutually
acceptable to each of the Company and the Investor.  If the Shares are evidenced
by stock  certificates,  the Escrow Agent shall not be responsible to review the
stock  certificates  representing  the Shares  other than to confirm that it has
been signed.

                      9.   Status of the Escrow Agent,  Etc. The Escrow Agent is
                           --------------------------------
acting under this Escrow  Agreement as a stakeholder  only. No term or provision
of this  Escrow  Agreement  is  intended  to create,  nor shall any such term or
provision  be  deemed  to  have  created,  any  joint  venture,  partnership  or
attorney-client  relationship  between or among the Escrow Agent and the Company
or the Investor. This Escrow Agreement shall not be deemed to prohibit or in any
way restrict  the Escrow  Agent's  representation  of the  Investor,  who may be
advised by the Escrow  Agent on any and all  matters  pertaining  to this Escrow
Agreement.  To the extent the Investor has been represented by the Escrow Agent,
the Investor hereby waives any conflict of interest and  irrevocably  authorizes
and  directs  the  Escrow  Agent to carry out the terms and  provisions  of this
Escrow  Agreement  fairly  as  to  all  parties,  without  regard  to  any  such
representation  and  irrespective  of the impact upon such Investor.  The Escrow

                                    10.8 - 3
<PAGE>

Agent's only duties are those expressly set forth in this Escrow Agreement,  and
each of the  Company and the  Investor  authorizes  the Escrow  Agent to perform
those duties in accordance with its usual  practices in holding  property of its
own or those of other  escrows.  The Escrow  Agent may  exercise  or  other-wise
enforce any of its rights, powers, privileges, remedies and interests under this
Escrow  Agreement  and  applicable  law or perform any of its duties  under this
Escrow  Agreement by or through its partners,  employees,  attorneys,  agents or
designees.

                      10.  Exculpation.  The Escrow Agent and its designees, and
                           -----------
their respective partners, employees,  attorneys and agents, shall not incur any
liability  whatsoever  for the  disposition  of the  Shares or the taking of any
other  action  in  accordance  with the  terms  and  provisions  of this  Escrow
Agreement,  for any  mistake  or  error in  judgment,  for  compliance  with any
applicable law or any attachment, order or other directive of any court or other
authority  (irrespective  of any  conflicting  term or  provision of this Escrow
Agreement),  or for  any act or  omission  of any  other  person  selected  with
reasonable  care and engaged by the Escrow Agent in connection  with this Escrow
Agreement  (other  than for such  Escrow  Agent's or such  person's  own acts or
omissions  breaching a duty owed to the claimant under this Escrow Agreement and
amounting  to gross  negligence  or willful  misconduct  as  finally  determined
pursuant to applicable law by a governmental  author-ity  having  jurisdiction);
and each of the Company and the  Investor  hereby  waives any and all claims and
actions  whatsoever  against  the  Escrow  Agent  and its  designees,  and their
respective partners, employees,  attorneys and agents, arising out of or related
directly or  indirectly  to any and all of the  foregoing  acts,  omissions  and
circumstances.  Furthermore,  the  Escrow  Agent  and its  designees,  and their
respective  partners,  employees,  attorneys  and  agents,  shall  not incur any
liability (other than for a person's own acts or omissions breaching a duty owed
to the claimant under this Escrow Agreement and amounting to gross negligence or
willful  misconduct  as  finally  determined  pursuant  to  applicable  law by a
governmental authority having jurisdiction) for other acts and omissions arising
out of or related directly or indirectly to this Escrow Agreement or the Shares;
and each of the Company and the  Investor  hereby  expressly  waives any and all
claims and actions  (other than the Escrow  Agent's or such person's own acts or
omissions  breaching  a duty  owed  to  the  claimant  and  amounting  to  gross
negligence or willful  misconduct as finally  determined  pursuant to applicable
law by a governmental  authority having  jurisdiction)  against the Escrow Agent
and its  designees,  and their  respective  partners,  employees,  attorneys and
agents,  arising out of or related  directly or indirectly to any and all of the
foregoing acts, omissions and circumstances.

                      11.  Indemnification.  The Escrow Agent and its designees,
                           ---------------
and  their  respective  partners,  employees,  attorneys  and  agents,  shall be
indemnified,  reimbursed, held harmless and, at the request of the Escrow Agent,
defended,  by the Company  from and  against  any and all  claims,  liabilities,
losses   and   expenses   (including,   without   limitation,   the   reasonable
disbursements,  expenses  and fees of their  respective  attorneys)  that may be
imposed upon,  incurred by, or asserted  against any of them,  arising out of or
related  directly or indirectly to this Escrow  Agreement or the Shares,  except
such as are  occasioned  by the  indemnified  person's  own acts  and  omissions

                                    10.8 - 4
<PAGE>

breaching a duty owed to the claimant under this Escrow  Agreement and amounting
to willful  misconduct  or gross  negligence as finally  determined  pursuant to
applicable law by a governmental authority having jurisdiction.

                      12.  Notices.  Any  notice,   request,   demand  or  other
                           -------
communication  permitted or required to be given  hereunder shall be in writing,
shall be sent by one of the following  means to the addressee at the address set
forth below (or at such other address as shall be designated hereunder by notice
to the other  parties  and  persons  receiving  copies,  effective  upon  actual
receipt) and shall be deemed  conclusively to have been given:  (a) on the first
business day following the day timely  deposited with Federal  Express (or other
equivalent  national  overnight courier) or United States Express Mail, with the
cost of delivery  prepaid;  (b) on the fifth business day following the day duly
sent by certified or registered  United States mail,  postage prepaid and return
receipt requested; or (c) when otherwise actually delivered to the addressee.

If to the Company:

Staruni Corporation
1642 Westwood Boulevard
Los Angeles, California 90024
Attention: Bruce Stuart
Facsimile No.:  (310)

If to the Investor:
At the address of such Investor set forth on Schedule A to this Escrow Agreement

If to the Escrow Agent:

Novack Burnbaum Crystal LLP
300 East 42nd Street, 10th Floor
New York, New York  10017
Attention:  Edward H. Burnbaum, Esq.
Telecopier:  (212) 986-2907

                      13.  Section  and Other  Headings.  The  section and other
                           ----------------------------
headings  contained in this Escrow Agreement are for convenience only, shall not
be deemed a part of this  Escrow  Agreement  and shall not affect the meaning or
interpretation of this Escrow Agreement.

                      14.  Governing  Law.  This  Escrow   Agreement   shall  be
                           --------------
governed by and construed in  accordance  with the laws of the State of New York
without  regard to principles  of conflicts of laws.  Any  controversy  or claim
arising  out of or  related to this  Agreement  and the  Warrants  or the breach
thereof,  shall be settled by binding  arbitration in New York City, New York in
accordance  with the rules of the  Judicial  Arbitration  & Mediation  Services'
Eastern  Regional  Office  located  in New  York  City,  New  York  ("JAMS").  A
proceeding  shall be commenced upon written demand by Company or the Investor to
the other. The arbitrator(s) shall enter a judgment by default against any party
which fails or refuses to appear in any properly noticed arbitration proceeding.
The  proceeding  shall be  conducted  by one (1)  arbitrator,  unless the amount

                                    10.8 - 5
<PAGE>

alleged to be in dispute exceeds two hundred fifty thousand dollars  ($250,000),
in which case three (3) arbitrators  shall preside.  The  arbitrator(s)  will be
chosen by the parties  from a list  provided by JAMS,  and if they are unable to
agree within ten (10) days, JAMS shall select the arbitrator(s). The arbitrators
must be experts in securities law and financial  transactions.  The  arbitrators
shall assess costs and expenses of the arbitration, including all attorneys' and
experts' fees, as the arbitrators  believe is appropriate in light of the merits
of parties'  respective  positions  in the issues in  dispute.  The award of the
arbitrator(s) shall be final and binding upon the parties and may be enforced in
any court having  jurisdiction.  Nothing in this  section 14 shall  preclude the
parties  from  seeking  extraordinary  relief  in  the  event  that a  claim  of
irreparable harm arises,  provided however,  that such application shall be made
in the United States District Court for the Southern District of New York, or in
the Supreme Court of the State of New York,  New York County.  In the event that
any  provision  of this Escrow  Agreement  or any other  agreement  delivered in
connection  herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed  inoperative to the extent that
it may  conflict  therewith  and shall be deemed  modified to conform  with such
statute  or  rule of  law.  Any  such  provision  which  may  prove  invalid  or
unenforceable  under any law shall not affect the validity or  enforceability of
any other provision of any agreement.

                      15.  Counterparts.  This Escrow  Agreement may be executed
                           ------------
by the parties hereto in separate  counterparts,  each of which when so executed
and  delivered  shall be an original but all such  counterparts  shall  together
constitute one and the same agreement.

                      16.  Resignation of Escrow Agent. The Escrow Agent may, at
                           ---------------------------
any time,  at its option,  elect to resign its duties as Escrow Agent under this
Escrow  Agreement  by  providing  notice  thereof to each of the Company and the
Investor.  In such  event,  the  Escrow  Agent  shall  transfer  the Shares to a
successor  independent  escrow  agent to be appointed by (a) the Company and the
Investor  within thirty (30) days following the receipt of notice of resignation
from the Escrow  Agent,  or (b) the Escrow Agent if the Company and the Investor
shall have not agreed on a successor  escrow agent within the  aforesaid  30-day
period,  upon which  appointment  and  delivery of the Shares,  the Escrow Agent
shall be released of and from all lia-bility under this Escrow Agreement.

                      17.  Successors and Assigns; Assignment.  Whenever in this
                           ----------------------------------
Escrow Agreement  reference is made to any party, such reference shall be deemed
to include the successors, assigns and legal representatives of such party, and,
without  limiting  the  generality  of  the  foregoing,   all   representations,
warranties,  covenants and other  agreements made by or on behalf of each of the
Company and the Investor in this Escrow  Agreement shall inure to the benefit of
any successor escrow agent  hereunder;  provided,  however,  that nothing herein
shall be deemed to authorize or permit the Company or the Investor to assign any
of its rights or  obligations  hereunder to any other person  (whether or not an
affiliate of the Company or the Investor) without the written consent of each of
the other  parties nor to  authorize or permit the Escrow Agent to assign any of
its duties or obligations hereunder except as provided in Section 17 hereof.

                                    10.8 - 6
<PAGE>

                      18.  No   Third   Party   Rights.   The   representations,
                           ---------------------------
warranties and other terms and  provisions of this Escrow  Agreement are for the
exclusive  benefit of the parties  hereto,  and no other per-son,  including the
creditors of the Company or the Investor,  shall have any right or claim against
any party by  reason of any of those  terms and  provisions  or be  entitled  to
enforce any of those terms and provisions against any party.

                      19.  No Waiver  by  Action,  Etc.  Any  waiver or  consent
                           ---------------------------
respecting any representation,  warranty, covenant or other term or provision of
this Escrow  Agreement shall be effective only in the specific  instance and for
the  specific  purpose  for which given and shall not be deemed,  regardless  of
frequency given, to be a further or continuing waiver or consent. The failure or
delay of a party at any time or times to require  performance of, or to exercise
its rights with  respect to, any  representation,  war-ranty,  covenant or other
term or  provision of this Escrow  Agreement  in no manner  (except as otherwise
expressly provided herein) shall affect its right at a later time to enforce any
such term or  provision.  No notice to or demand on either  the  Company  or the
Investor in any case shall entitle such party to any other or further  notice or
demand  in the  same,  similar  or  other  circumstances.  All  rights,  powers,
privileges,  remedies and interests of the parties  under this Escrow  Agreement
are cumulative and not  alternatives,  and they are in addition to and shall not
limit (except as otherwise  expressly  provided herein) any other right,  power,
privilege,  remedy or  interest of the parties  under this Escrow  Agreement  or
applicable law.

                      20.  Modification,   Amendment,   Etc.   Each  and   every
                           --------------------------------
modification  and  amendment  of this Escrow  Agreement  shall be in writing and
signed by all of the parties hereto, and each and every waiver of, or consent to
any departure from, any covenant, representation, warranty or other provision of
this Escrow  Agreement shall be in writing and signed by the party granting such
waiver or consent.

                      21.  Entire Agreement.  This Escrow Agreement contains the
                           ----------------
entire agreement of the parties with respect to the matters contained herein and
supersedes all prior  representations,  agreements and  understandings,  oral or
otherwise, among the parties with respect to the matters contained herein.

                      22.  Fees. The Escrow Agent shall receive as its fee 2% of
                           ----
each gross  Investment  Amount as set forth in each Put  Purchase  Notice  which
shall be deducted by the Investor  from the Put Proceeds  paid to the Company by
the Investor and paid directly to the Escrow Agent.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                    10.8 - 7
<PAGE>

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

                          STARUNI CORPORATION

                          By:_________________________________
                             Name: Bruce Stuart
                             Title:   Chief Executive Officer

                          NOVACK BURNBAUM CRYSTAL LLP

                          By:_________________________________
                             Name: Edward H. Burnbaum, Esq.
                             Title:   Partner

                          BOAT BASIN INVESTORS LLC

                          By:
                             ---------------------------------
                             Name:
                             Title:

                                    10.8 - 8
<PAGE>

                            PLACEMENT AGENT AGREEMENT

        THIS AGREEMENT ("Agreement") is made as of the ___ day of October, 2000,
by and between Staruni  Corporation,  a corporation  organized under the laws of
the state of California("Company"),  and Capstone Partners, L.C., a Utah limited
liability company,  with its principal office location at 3475 Lenox Road, Suite
400, Atlanta, Georgia 30326 (the "Agent").

                                    RECITALS:

        WHEREAS,  the  Company  proposes  to issue and sell shares of its Common
Stock,  which are  accompanied  by a warrant or warrants to purchase a number of
shares of Common Stock of the Company (together the  "Securities")  resulting in
gross proceeds to the Company of a maximum of Two Million Dollars  ($2,000,000),
excluding  Warrants,  in an offering  (the  "Offering")  not  involving a public
offering under the  Securities Act of 1933, as amended (the "Act"),  pursuant to
an exemption from the  registration  requirements of the Act under  Regulation D
promulgated under the Act ("Regulation D"), as described below; and

        WHEREAS,  the Agent has  offered  to assist the  Company in placing  the
Securities  on a "best  efforts"  basis  with  respect  to sales  of  Securities
thereafter  up to the  Maximum  Proceeds  (as  defined  below),  and the Company
desires  to  secure  the  services  of the  Agent on the  terms  and  conditions
hereinafter set forth.

                                     TERMS:

        NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
promises,  conditions  and covenants  herein  contained,  the parties  hereto do
hereby agree as follows:

1.  ENGAGEMENT  OF AGENT.  The Company on the basis of the  representations  and
warranties  contained herein, but subject to the terms and conditions herein set
forth,  hereby  appoints  the Agent as its  exclusive  placement  agent for this
Offering,  to sell,  on a "best  efforts  basis,"  a  minimum  dollar  amount of
Securities resulting in gross proceeds to the Company of a maximum dollar amount
of Securities, excluding Warrants, resulting in gross proceeds to the Company of
Two Million Dollars  ($2,000,000)  (the "Maximum  Proceeds").  The Agent, on the
basis of the representations and warranties herein contained, but subject to the
terms and conditions  herein set forth,  accepts such  appointment and agrees to
use its best efforts to find  purchasers for the  Securities.  This  appointment
shall be  irrevocable  for the  period  commencing  on the date of the  executed
Letter of Agreement, being August 22, 2000, and ending on the earlier of (i) the
date that the Company receives the Investment  Amount as defined in Section 1.16
of the Private  Equity Line of Credit  Agreement  (the "Equity Line  Agreement")
hereinafter  to be entered  into by the  Company and the  investor  named in the
Equity Line Agreement (the "Investor"), (ii) on February 1, 2000, if the Initial
Put Closing Date has not occurred by such date,  which period may be extended by
the consent of the Company and the Agent (the "Offering Period"),  or (iii) June
30, 2001.

Capstone Partners, L.C.            10.9 - 1
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<PAGE>

2.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

        In order to induce the Agent to enter into this  Agreement,  the Company
hereby represents and warrants to and agrees with the Agent as follows:

        2.1 Offering  Documents.  The Company (with the  assistance of the Agent
and  Investor)  has prepared the Equity Line  Agreement,  with certain  exhibits
thereto,  which documents have been or will be delivered to one or more proposed
Investors.  In  addition,  all  proposed  Investors  will have  received or will
receive prior to closing,  copies of the  Company's  Annual Report on Form 10-KS
for the year ended September 30, 19991999,  and the Company's  quarterly reports
on Form 10-QSB for the quarters ended December 31, 1999,  March 31, and June 30,
2000 ("SEC  Documents").  The SEC Documents were prepared in conformity with the
requirements (to the extent applicable) of the Securities  Exchange Act of 1934,
as  amended,  (the  "'34  Act")  and  the  rules  and  regulations  ("Rules  and
Regulations")  of  the  Commission  promulgated  thereunder.  As  used  in  this
Agreement,  the term "Offering  Documents"  refer to and mean the SEC Documents,
the Equity Line Agreement and all amendments,  exhibits and supplements thereto,
together  with any  other  documents  which  are  provided  to the  Agent by, or
approved for Agent's use by, the Company for the purpose of this Offering.

        2.2  Provision of Offering  Documents.  The Company shall deliver to the
Agent, without charge, as many copies of the Offering Documents as the Agent may
reasonably require for the purposes contemplated by this Agreement.  The Company
authorizes the Agent, in connection with the Offering of the Securities,  to use
the  Offering  Documents  as from  time  to  time  amended  or  supplemented  in
connection  with the offering and sale of the Securities and in accordance  with
the applicable provisions of the Act and Regulation D.

        2.3 Accuracy of Offering Documents.  The Offering Documents, at the time
of delivery to Investors for the Securities,  conformed in all material respects
with  the  requirements,  to the  extent  applicable,  of the  '34  Act  and the
applicable  Rules and Regulations and did not include 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 light of the circumstances under
which  they were made,  not  misleading.  On the  Closing  Date (as  hereinafter
defined),  the Offering  Documents will contain all statements that are required
to be stated  therein in accordance  with the Act and the Rules and  Regulations
for the purposes of the proposed  Offering,  and all statements of material fact
contained in the Offering  Documents will be true and correct,  and the Offering
Documents  will not include 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 light of the circumstances  under which they were made,
not misleading.

        2.4 Duty to Amend.  If during such  period of time as in the  reasonable
opinion of the Agent,  or its  counsel,  an Offering  Document  relating to this
financing  is required to be  delivered  under the Act,  any event occurs or any
event known to the Company relating to or affecting the Company shall occur as a
result of which the Offering  Documents as then  amended or  supplemented  would
include an untrue  statement of a material  fact,  or omit to state any material
fact necessary to make the  statements  therein,  in light of the  circumstances

Capstone Partners, L.C.             10.9 - 2
Copywrite 2000
<PAGE>

under which they were made,  not  misleading,  or if it is necessary at any time
after the date hereof to amend or  supplement  the Offering  Documents to comply
with  the  Act or the  applicable  Rules  and  Regulations,  the  Company  shall
forthwith  notify the Agent thereof and shall prepare such further  amendment or
supplement  to the Offering  Documents as may be required and shall  furnish and
deliver to the Agent and to others,  whose names and addresses are designated by
the Agent, all at the cost of the Company,  a reasonable number of copies of the
amendment or supplement (or of the amended or supplemented  Offering  Documents)
which, as so amended or supplemented,  will not contain an untrue statement of a
material fact or omit to state any material fact  necessary in order to make the
Offering  Documents,  not  misleading  in the  light of the  circumstances  when
delivered to a purchaser or prospective purchaser,  and which will comply in all
respects with the requirements (to the extent applicable) of the '34 Act and the
applicable Rules Regulations.

        2.5 Corporation  Condition.  The Company's  condition is as described in
its Offering Documents, except for continuing losses and changes in the ordinary
course of business and normal year-end adjustments that are not in the aggregate
materially  adverse to the Company.  The Offering  Documents,  taken as a whole,
present  fairly the  business  and  financial  position of the Company as of the
Closing Date.

        2.6 No  Material  Adverse  Change.  Except  as may  be  reflected  in or
contemplated  by the  Offering  Documents,  subsequent  to the dates as of which
information is given in the Offering  Documents,  and prior to the Closing Date,
taken  as a  whole,  there  has not  been any  material  adverse  change  in the
condition,  financial  or  otherwise,  or in the  results of  operations  of the
Company or in its business.

        2.7 No Defaults.  Except as  disclosed  in the Offering  Documents or in
writing to the Agent,  the Company is not in default in any material  respect in
the  performance  of any  obligation,  agreement or  condition  contained in any
material  debenture,  note or other  evidence of  indebtedness  or any  material
indenture or loan  agreement of the Company.  The execution and delivery of this
Agreement,  and the consummation of the transactions  herein  contemplated,  and
compliance  with the terms of this Agreement will not conflict with or result in
a breach of any of the terms,  conditions  or  provisions  of, or  constitute  a
default under, the Certificate of Incorporation or Bylaws of the Company (in any
respect  that  is  material  to the  Company),  any  material  note,  indenture,
mortgage,  deed of trust,  or other agreement or instrument to which the Company
is a party or by which the Company or any  property of the Company is bound,  or
to the Company's  knowledge,  any existing law, order, rule,  regulation,  writ,
injunction or decree of any government, governmental instrumentality,  agency or
body,  arbitration tribunal or court,  domestic or foreign,  having jurisdiction
over  the  Company  or any  property  of the  Company.  The  consent,  approval,
authorization or order of any court or governmental  instrumentality,  agency or
body  is  not  required  for  the  consummation  of  the   transactions   herein
contemplated  except such as may be required under the Act or under the Blue Sky
or securities laws of any state or jurisdiction.

        2.8 Incorporation and Standing.  The Company is, and at the Closing Date
will be,  duly formed and validly  existing  in good  standing as a  corporation
under the laws of the State of  California  and with  full  power and  authority
(corporate and other) to own its  properties  and conduct its business,  present

Capstone Partners, L.C.             10.9 - 3
Copywrite 2000
<PAGE>

and  proposed,  as described in the Offering  Documents;  the Company,  has full
power and authority to enter into and to perform this Agreement, and the Company
is duly qualified and in good standing as a foreign entity in each  jurisdiction
in which the failure to so qualify would have a material  adverse  effect on the
Company or its properties.

        2.9 Legality of Outstanding  Securities.  Prior to the Closing Date, the
outstanding  securities of the Company have been duly and validly authorized and
issued,  and are fully paid and  non-assessable,  and  conform  in all  material
respects  to the  statements  with  regard  thereto  contained  in the  Offering
Documents.

        2.10 Legality of Securities.  The Securities  when sold and delivered in
accordance with the Offering Documents,  and the Agent Securities (as defined in
Section 3.4 below) when issued and delivered,  will constitute legal,  valid and
binding  obligations of the Company,  enforceable  in accordance  with the terms
thereof,  and the  Securities  and Agent  Securities  shall be duly and  validly
issued and  outstanding,  fully paid and  non-assessable.  The Common Stock into
which any  Securities  are  exercisable  and the Common  Stock into which any of
Agent's Securities are exercisable,  when issued upon exercise of any Securities
or upon exercise of any of Agent's Securities, as applicable,  shall be duly and
validly issued and outstanding, fully paid and non-assessable.

        2.11 Litigation. Except as set forth in the Offering Documents, there is
now, and at the Closing Date there will be, no action, suit or proceeding before
any court or governmental agency, authority or body pending or, to the knowledge
of the Company,  threatened, which might result in judgments against the Company
not adequately  covered by insurance or which  collectively  might result in any
material adverse change in the condition (financial or otherwise) or business of
the Company or which would materially  adversely affect the properties or assets
of the Company.

        2.12 Finders.  The Company does not know of any  outstanding  claims for
services in the nature of a finder's fee or origination fees with respect to the
sale of the Securities hereunder for which the Agent may be responsible, and the
Company will indemnify the Agent from any liability for such fees (including the
payment of attorney's fees incurred by Agent due to any claim by any such finder
or originator) by any party who, in the reasonable  opinion of Agent's  counsel,
has a  legitimate  claim for such  compensation  from the  Company and for which
person the Agent is not legally  responsible.  In the event of such claim, Agent
shall properly  notify Company thereof and the Company may, at its option and at
its sole cost and expense, take over the defense of such a claim with counsel of
its choice,  reasonably  satisfactory to Agent.  Agent shall not settle any such
claims or litigation  arising hereunder without the prior written consent of the
Company, which shall not be unreasonably withheld.

        2.13 Tax Returns.  The Company has filed all federal and state and local
tax returns  which are  required to be filed,  and has paid all  material  taxes
shown on such returns and on all  assessments  received by it to the extent such
taxes have  become  due  (except  for taxes the  amount of which the  Company is
contesting  in good  faith).  All taxes  with  respect  to which the  Company is
obligated  have been paid,  or adequate  accruals  have been set up to cover any
such unpaid taxes.

Capstone Partners, L.C.             10.9 - 4
Copywrite 2000
<PAGE>

        2.14  Authority.  The  execution  and  delivery  by the  Company of this
Agreement have been duly authorized by all necessary action,  and this Agreement
is the valid,  binding and legally enforceable  obligation of the Company except
as   enforcement   may  be  limited  by   applicable   bankruptcy,   insolvency,
reorganization,  moratorium  and other similar  laws,  by  principles  governing
enforcement of equitable remedies and, with respect to  indemnification  against
liabilities under the Act, matters of public policy.

        2.15 Actions by the  Company.  The Company will not take any action that
will  impair  the  effectiveness  of  the  transactions   contemplated  by  this
Agreement.

3.      ISSUE, SALE AND DELIVERY OF THE SECURITIES.

        3.1 Deliveries of Securities. Certificates in such form that, subject to
applicable  transfer  restrictions  as described  in the Equity Line  Agreement,
(issued  in such  denominations  and in such  names as the Agent may  direct the
Company to issue) for the  Securities,  and the Agent  Securities  (described in
Section 3.4 below),  shall be delivered by the Company to the Escrow Agent, with
copies made  available to the Agent for checking at least one (1) full  business
day prior to the Closing Date, it being  understood that the directions from the
Agent to the Company shall be given at least two (2) full business days prior to
the Closing Date. The  certificates  for the Securities and the Agent Securities
shall be delivered at the Initial Put Closing  Date and at each  subsequent  Put
Closing (as defined in the Equity Line Agreement).

        3.2 Escrow of Funds.  Pursuant to a separate form of escrow agreement to
be entered into by and between the Company,  the Investor and the escrow  agent,
as defined in the Equity Line Agreement  ("Escrow  Agreement" and "Escrow Agent"
respectively),  the Investor shall place all funds for purchase of Securities in
an escrow  account  set up on  behalf of the  Company.  Pursuant  to the  Escrow
Agreement,  the Investor  shall place all funds for purchase of Securities  with
respect to any Put into such escrow account set up on behalf of the Company, and
the Company shall place all certificates  for the Securities  subject to any Put
into such escrow  account for the benefit of the  Investor.  With respect to any
Put Closing,  at such time as the Investor has delivered to the Escrow Agent any
necessary Closing  documents,  the Investor has been approved by the Company and
all other  Closing  conditions  have been met,  Escrow  Agent shall  release the
subscription  funds  and  signed  documents  to  the  Company  and  release  the
certificates representing the Securities to the Investor.

        3.3 Closing  Date.  The Initial Put Closing Date shall take place at the
offices of Escrow  Agent on the  Initial Put Closing  Date as  specified  in the
Equity Line  Agreement.  Any  subsequent  Put  Closings  shall take place at the
offices of the Escrow  Agent on each Put Closing Date as specified in the Equity
Line  Agreement.  The Initial Put Closing  Date and any  subsequent  Put Closing
Dates shall be referred to herein as the "Closing Date."

        3.4 Agent's  Compensation.  The Company  shall pay the Agent the amounts
pursuant  to Section  3.4.1 and 3.4.2  herein,  which  shall be the full  amount
payable to the Agent for its services,  as fees and expenses, in connection with
this Offering.

Capstone Partners, L.C.             10.9 - 5
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<PAGE>

                3.4.1 Cash Placement Fee. Based upon the total aggregate  amount
of the Equity Line  Agreement  funds received by the Company and which is placed
in this Offering, the Agent shall be paid:

                      (a) a cash placement fee ("Cash  Placement  Fee") equal to
seven percent (7%) of the purchase  price of any and all Securities placed up to
the aggregate purchase price of two  million dollars  ($2,000,000) of Securities
placed, which shall equal a total of  one-hundred  and  forty  thousand  dollars
($140,000) for the two million dollars ($2,000,000) of Securities placed;

                      (b) a  non-accountable  expense  allowance  equal  to  one
percent (1%) of the purchase  price of any and all  Securities  placed up to the
aggregate purchase price of the two million dollars  ($2,000,0000) of Securities
placed,  which covers legal and due  diligence  expenses of the  placement  (the
"Non-Accountable Expense Allowance," together with the Cash Placement Fee; and

                      (c) an amount of securities (the "Agent Securities") equal
to (i) three percent (3%) of all Common Stock issued to the Investor (the "Agent
Common  Stock")  and (ii)  three  percent  (3%) of all  warrants  issued  to the
Investor (the "Agent  Warrants"),  subject to adjustment as specified in Section
3.5 below.  The Agent  Warrants and the Agent Common Stock to be received by the
Agent shall be issued to Agent on the same terms and  conditions as those issued
to the Investor pursuant to the Equity Line Agreement,  including the provisions
contained  in Section 6.1 of the Equity Line  Agreement  with respect to certain
registration  rights  covering the put shares and warrants shares to be received
by the Investor.

        3.5 Payment of Fees.  The Escrow  Agent shall be  instructed  to pay all
Cash Fees and to deliver  all Agent  Securities  pursuant to Section 3.4 of this
Agreement,  directly  to the Agent from the  proceeds of the Initial Put Closing
Date and all subsequent Put Closings, simultaneous with the transfer of proceeds
to the Company.

        3.6 Press Release.  The Agent shall have the right to review and comment
upon any press release issued by the Company in connection with the Offering.

4.      OFFERING OF THE SECURITIES ON BEHALF OF THE COMPANY.

        4.1 In  offering  the  Securities  for sale,  the Agent shall offer them
solely as an agent for the Company,  and such offer shall be made upon the terms
and subject to the  conditions  set forth in the Offering  Documents.  The Agent
shall commence making such offer as an agent for the Company as soon as possible
following delivery of the final Company approved Offering Documents to Agent (or
notification  by  Company or its  Counsel  the  latest  version of any  Offering
Documents on Agent's computer system is acceptable for faxing to the Investor).

        4.2 The  Agent  will  only make  offers  to sell the  Securities  to, or
solicit  offers to subscribe for any Securities  from,  persons or entities that
Agent reasonably believes are "accredited investors" as defined Regulation D.

5.      RIGHT OF FIRST REFUSAL.

        The Company hereby grants Agent rights of first refusal as follows:

Capstone Partners, L.C.             10.9 - 6
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<PAGE>

        5.1 The Agent has the night of first  refusal to act as placement  agent
for any future private  financings of the Company under which the Company issues
or sells, or agrees to issue or sell, for cash (a) any debt or equity securities
which are convertible into,  exercisable or exchangeable for, or carry the right
to receive  additional  shares of Common  Stock  either  (i) at any  conversion,
exercise or exchange  rate or other price that is based upon and/or  varies with
the  trading  prices of or  quotations  for  Common  Stock at any time after the
initial  issuance  of  such  debt  or  equity  security,  or  (ii)  with a fixed
conversion,  exercise or  exchange  price that is subject to being reset at some
future  date at any time  after  the  initial  issuance  of such  debt or equity
security or upon the  occurrence  of  specified  contingent  events  directly or
indirectly  related to the  business of the Company or the market for the Common
Stock, or (b) any securities of the Company pursuant to an equity line structure
or format  similar in nature to this  Offering  or  otherwise,  excluding  joint
ventures,  mergers,  acquisitions,  or similar transactions;  provided, however,
that the Agent has the right of first refusal to act as placement  agent for any
future private  financings  between the Company and the Investor pursuant to the
Equity Line Agreement,  whether equity securities,  convertible debt securities,
or securities or instruments convertible into or exchangeable for debt or equity
securities of the Company, excluding joint ventures, mergers,  acquisitions,  or
similar  transactions.  The duration of the Agent's right of first refusal under
this  Section 5.1 shall be for a period of two (2) years  following  the Initial
Put Closing Date.

        5.2 In the event that the  Company  wishes to  undertake  a  transaction
described  in this  Section  5, the  Company  must send  Agent a written  notice
generally  describing  the  proposed  transaction  (whether the  transaction  is
initiated  by the  Company or is offered to the  Company by a third  party),  in
sufficient specificity to allow the Agent to understand the proposed transaction
clearly. This notice, which may be delivered by facsimile or email transmission,
must be  delivered  to Agent at least  twenty  (20) days  prior to the  proposed
closing of the transaction.  The Agent shall have fifteen (15) days from receipt
of that notice to  determine  whether or not it wishes to exercise  its right of
first  refusal  with  respect to that  transaction.  The Agent shall  notify the
Company in  writing  of its  decision  to  exercise  or waive its right of first
refusal with respect to the  transaction  described in the notice.  If the Agent
waives its right of first refusal with respect to a particular transaction,  the
Company may proceed with that transaction;  provided,  however, that if prior to
any Closing in the proposed transaction the terms of the transaction are changed
in any  material  way from the terms set forth in the notice to the  Agent,  the
Agent's right of first  refusal  shall  commence  again.  Agent's  waiver of its
rights of its rights of first  refusal with respect to any specific  transaction
shall not act as a waiver of its  rights  with  respect  to future  transactions
within the applicable time period.

        5.3 In the event that Company  breaches  Section 5.1 of this  Agreement,
Agent  shall be  entitled  to  receive  compensation  based  upon the  aggregate
purchase price of securities  placed in such transaction in an amount calculated
pursuant to Section 3.4 hereof,  excluding,  however,  all amounts designated as
Non-Accountable Expense Allowances.

Capstone Partners, L.C.             10.9 - 7
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<PAGE>

6.      COVENANTS OF THE COMPANY.

        The Company covenants and agrees with the Agent that:

        6.1 After the date hereof, the Company will not at any time, prepare and
distribute  any  amendment or  supplement  to the Offering  Documents,  of which
amendment or supplement the Agent shall not previously have been advised and the
Agent and its  counsel  furnished  with a copy within a  reasonable  time period
prior to the  proposed  adoption  thereof,  or to which  the  Agent  shall  have
reasonably  objected in writing on the ground that it is not in compliance  with
the Act or the Rules and Regulations (if applicable).

        6.2 The Company will pay, whether or not the  transactions  contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
or is  terminated,  all costs and expenses  incident to the  performance  of its
obligations  under  this  Agreement,  including  all  expenses  incident  to the
authorization  of the Securities and their issue and delivery to the Agent,  any
original  issue taxes in  connection  therewith,  all  transfer  taxes,  if any,
incident to the initial  sale of the  Securities,  the fees and  expenses of the
Company's  counsel  (except  as  provided  below) and  accountants,  the cost of
reproduction  and  furnishing  to the Agent copies of the Offering  documents as
herein provided;  provided,  however,  that the Company shall not be responsible
for the direct payment of fees and costs incurred by Agent, including attorney's
fees of or any costs incurred by the Agent's counsel.

        6.3 As a  condition  precedent  to the Initial  Put  Closing  Date,  the
Company  will  deliver  to the Agent a true and  correct  copy of all  documents
requested by Agent included in Agent's due diligence request,  including but not
limited to the Certificate of Incorporation  of the Company,  and all amendments
and certificates of designation of preferences of preferred stock,  certified by
the Secretary of State of the State of California.

        6.4 Prior to the Closing Date, the Company will cooperate with the Agent
in  such  investigation  as it  may  make  or  cause  to be  made  of all of the
properties,  business  and  operations  of the  Company in  connection  with the
Offering of the Securities.  The Company will make available to it in connection
therewith such information in its possession as the Agent may reasonably request
and will make  available  to the Agent  such  persons  as the Agent  shall  deem
reasonably necessary and appropriate in order to verify or substantiate any such
information so supplied.

        6.5 The  Company  shall be  responsible  for making any and all  filings
required  by the Blue Sky  authorities  of the State of  California  and filings
required by the laws of the  jurisdictions in which the Investor who is accepted
for purchase of Securities are located, if any.

7. NON-CIRCUMVENTION & CONFIDENTIALITY OF PROPRIETARY AGENT INFORMATION.

        7.1  Non-Circumvention.  The investor(s) who participate in the Offering
and the other  investor(s)  who are listed on the  schedule  attached  hereto as
Exhibit B shall be considered,  for purposes of this Agreement,  the property of
Agent.  The  Company  on  behalf  of  itself,  its  parent  or its  subsidiaries
(collectively  hereinafter  referred to as "Company")  agree not to  circumvent,

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directly or  indirectly,  Agent's  relationship  with these  investor(s),  their
parents or any of the  investor(s')  subsidiaries  or  affiliates  (collectively
hereinafter  referred  to as  "Investor")  and  Company  will  not  directly  or
indirectly contact or negotiate with the Investor regarding an investment in the
Company,  or any  other  company,  and will not  enter  into  any  agreement  or
transaction  with  Investor,  or disclose the names of Investor,  except as such
disclosure may be required by any law, rule, regulation,  regulatory body, court
or administrative  agency, for a period of time beginning on the date hereof and
ending on the date that is two (2) years  after the  Initial  Put  Closing  Date
without  the  prior  written  approval  of  Agent;   provided,   however,   that
notwithstanding  the above,  nothing  contained in this Agreement  shall prevent
Company from directly or indirectly,  selling securities to the Investor through
a public  offering or from,  directly or  indirectly,  contacting or negotiating
with the Investor in satisfaction of Company's obligations under the Equity Line
Agreements entered into in connection  herewith.  In the event that the Company,
with the Agent's advance written permission accepts an investment (a "Subsequent
Investment")  from an Investor or Investors (other than in a public offering) in
a placement  being arranged  without an agent or through an agent other than the
Agent  during the period  beginning  on the date hereof and  terminating  on the
second  (2nd)  anniversary  of the Initial Put Closing  Date as described in the
Equity Line Agreement, the Company agrees to pay to the Agent a fee equal to six
percent(6%) of all amounts invested by such  Investor(s).  In the event that the
Company  accepts a Subsequent  Investment  without the Agent's  advance  written
permission,  the Company agrees to pay to the Agent a fee equal to eight percent
(8%) of all amounts invested by such Investor(s).

        7.2 Specific  Performance and Attorney's Fees. The Company  acknowledges
and agrees that, if it breaches its obligations  under Sections 7.1,  damages at
law  will be an  insufficient  remedy  to  Agent  and that  Agent  would  suffer
irreparable damage as a result of such violation. Accordingly, it is agreed that
Agent shall be entitled,  upon application to a court of competent jurisdiction,
to  obtain  injunctive  relief  against  the  breaching  party  to  enforce  the
provisions of such sections, which injunctive relief shall be in addition to any
other rights or remedies  available to Agent. The Company agrees to pay to Agent
(severally and not jointly) all costs and expenses incurred by Agent relating to
the  enforcement  of the terms of  Sections  7.1 hereof due to its own  actions,
whether by injunction, a suit for damages or both, including reasonable fees and
disbursements of counsel (both at trial and in appellate proceedings).

8.      INDEMNIFICATION.

        8.1 The Company  agrees to indemnify and hold  harmless the Agent,  each
person who  controls  the Agent  within the meaning of Section 15 of the Act and
the  Agent's  employees,   accountants,   attorneys  and  agents  (the  "Agent's
Indemnitees") against any and all losses, claims, damages or liabilities,  joint
or several, to which they or any of them may become subject under the Act or the
'34 Act or any other  statute or at common law and for any  reasonable  legal or
other  expenses  (including  the  costs of any  investigation  and  preparation)
incurred by them in connection with any litigation,  whether or not resulting in
any liability, but only insofar as such losses, claims, damages, liabilities and
litigation  arise  out of or are  based  upon (i) the  Company's  breach  of its
obligations under the Equity Line Agreement to deliver shares of Common Stock to
a Investor upon  submission by Investor of the required  documentation,  or (ii)
any untrue statement of material fact contained in the Offering Documents or any
amendment or supplement  thereto or any  application  or other document filed in

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any state or jurisdiction in order to qualify the Securities  under the Blue Sky
or  securities  laws  thereof,  or the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, under
the circumstances under which they were made, not misleading, all as of the date
of the Offering  Documents or of such amendment as the case may be, or (iii) any
breach of any  representation,  warranty or covenant made by the Company in this
Agreement,  provided,  however,  that the indemnity  agreement contained in this
Section  8.1  shall  not  apply  to  amounts  paid  in  settlement  of any  such
litigation, if such settlements are made without the consent of the Company (but
no such  settlement  may be made without the Company's  prior  written  consent,
which consent  shall not be  unreasonably  withheld),  nor shall it apply to the
Agent's  Indemnitees  in  respect  to  any  such  losses,   claims,  damages  or
liabilities  arising out of or based upon any such untrue  statement  or alleged
untrue statement or any such omission or alleged omission,  if such statement or
omission  was made in  reliance  upon  information  furnished  in writing to the
Company by the Agent  specifically for use in connection with the preparation of
the  Offering  Documents  or any such  amendment  or  supplement  thereto or any
application  or other document  filed in any state or  jurisdiction  in order to
qualify  the  Securities  under the Blue Sky or  securities  law  thereof.  This
indemnify  agreement is in addition to any other liability which the Company may
otherwise have to the Agent's Indemnitees. The Agent's Indemnitees agree, within
ten (10) days after the receipt by them of written notice of the commencement of
any action  against  them in respect to which  indemnify  may be sought from the
Company  under  this  Section  8.1,  to notify  the  Company  in  writing of the
commencement of such action; provided,  however, that the failure of the Agent's
Indemnitees  to notify the  Company of any such  action  shall not  relieve  the
Company  from any  liability  which it may have to the  Agent's  Indemnitees  on
account of the indemnity  agreement  contained in this Section 8.1,  except with
respect to any failure  which  irreparably  prejudices  the Company or causes an
event of adjudication  materially adverse to the Company.  The Company shall not
be  relieved  from  any  other  liability  which  it may  have  to  the  Agent's
Indemnitees,  and if the  Agent's  Indemnitees  shall  notify the Company of the
commencement  thereof,  the Company shall be entitled to participate in (and, to
the extent that the Company  shall wish,  to direct) the defense  thereof at its
own  expense,  but such  defense  shall be  conducted  by counsel of  recognized
standing and reasonably  satisfactory to the Agent's  Indemnitees,  defendant or
defendants,  in such  litigation.  The  Company  agrees  to notify  the  Agent's
Indemnitees  promptly  of the  commencement  of any  litigation  or  proceedings
against the Company or any of the  Company's  officers or directors of which the
Company  may be  advised  in  connection  with the  issue and sale of any of the
Securities and to furnish to the Agent's Indemnitees,  at their request,  copies
of all pleadings  therein and to permit the Agent's  Indemnitees to be observers
therein and apprise the Agent's Indemnitees of all developments  therein, all at
the Company's expense.

        8.2 With the exception  provided  below as to  limitations of indemnity,
the Agent  agrees,  in the same  manner  and to the same  extent as set forth in
Section 8.1 above, to indemnify and hold harmless the Company, and the Company's
and Company's directors, officers, employees, accountants,  attorneys and agents
(the "Company's  Indemnitees")  with respect to (i) any statement in or omission
from the  Offering  Documents  or any  amendment  or  supplement  thereto or any

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application or other document filed by the Company in any state or  jurisdiction
in order  for the  Company  to  qualify,  the  Securities  under the Blue Sky or
securities laws thereof,  or any information  furnished  pursuant to Section 2.4
hereof,  if such  statement  or omission was made in reliance  upon  information
furnished in writing to the Company by the Agent in a document executed by Agent
on its behalf specifically for use in connection with the preparation thereof or
supplement  thereto, or (ii) any untrue statement of a material fact made by the
Agent or its  agents  not  based on  statements  in the  Offering  Documents  or
authorized  in  writing  by the  Company,  or  with  respect  to any  misleading
statement  made by the  Agent  or its  agents  resulting  from the  omission  of
material  facts  which  misleading  statement  is not  based  upon the  Offering
Documents,  and any documents filed with public or  governmental  authorities or
agencies,  and any public press releases or information  furnished in writing by
the Company  or,  (iii) any breach of any  representation,  warranty or covenant
made by the Agent in this  Agreement.  The Agent shall not be liable for amounts
paid in  settlement  of any such  litigation  if such  settlement  was  effected
without its  consent.  In case of the  commencement  of any action in respect of
which indemnity may be sought from the Agent,  the Company's  Indemnitees  shall
have the same  obligation  to have  notice as set forth in  Section  8.1  above,
subject to the same loss of indemnity in the event such notice is not given, and
the Agent shall have the same night to  participate  in (and, to the extent that
it shall wish,  to direct) the  defense of such action at its own  expense,  but
such defense  shall be conducted by counsel of  recognized  standing  reasonably
satisfactory  to  the  Company.   The  Agent  agrees  to  notify  the  Company's
Indemnitees,  at their request,  and to provide copies of all pleadings  therein
and to permit the  Company's  Indemnitees  to be observers  therein and appraise
them of all the developments therein, all at the Agent's expense. As to Damages,
Company  recognizes  that since it is  receiving  the net proceeds of the monies
generated by this placement, that indemnity, if any, to be paid by the Placement
Agent to the Company  shall be strictly  limited to the  Placement  Agent's Cash
Fee,   inclusive  of  attorney  fees  and  costs  of  arbitration  and/or  court
proceedings.

9.      LIQUIDATION DAMAGES.

        Company and Agent both acknowledge that it would be extremely
impractical  and  difficult  to ascertain  the actual  damages to be suffered by
Company if Agent is found by an arbitrator or a court of competent  jurisdiction
to have breached any of the representations,  warranties and covenants contained
in  Section  13  of  this  Agreement.   Accordingly,  should  a  breach  of  the
representations  of Section 13 be proven and Agent found liable for said breach,
Company and Agent  hereby  agree that the damages  shall be limited to an amount
equal to the Cash  Placement  Fee  received by Agent  pursuant to Section 3.4 of
this Agreement plus the return to the Company of the Agent  Securities  received
by Agent  pursuant to Section 3.4 of this  Agreement (or, to the extent that the
Agent  Securities have already been sold by Agent,  the value, as defined below,
of the Agent  Securities),  inclusive of all attorney's  fees and cost of court.
For  purposes  hereof,  the value of the Agent  Common  Stock shall be deemed to
equal the lesser of (i) the  aggregate  Share  Price of any Agent  Common  Stock
issued to Agent or (ii) the market  value of such Agent Common Stock on the date
that such shares were sold by Agent,  and in either  case,  the Agent may return
such Agent Common  Stock to the Company in lieu of any payment,  as to the value
of such Agent  Securities,  for damages  pursuant to this section.  For purposes

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hereof,  the value of each Warrant  issued to Agent which has been  exercised by
Agent  shall be the  difference  of (i) the  market  value of the  Common  Stock
received  upon such  exercise  on the date that such  shares were sold by Agent,
minus (ii) the  Exercise  Price of such  Warrant.  This  provision  is not to be
construed as a penalty, but as full liquidated damages under Georgia law.

10.     EFFECTIVENESS OF AGREEMENT.

        This Agreement shall become effective (i) at 9:00 A.M., Atlanta, Georgia
time, on the date hereof or (ii) upon release by the Agent of the Securities for
offering  after the date hereof,  whichever  occurs  first.  The Agent agrees to
notify the  Company  immediately  after the Agent shall have taken any action by
such release or otherwise wherein this Agreement shall have become effective.

11.     CONDITIONS OF THE AGENT'S OBLIGATIONS.

        The Agent's  obligations to act as agent of the Company hereunder and to
find purchasers for the Securities  shall be subject to the accuracy,  as of the
Closing Date, of the  representations  and warranties on the part of the Company
herein  contained,  to the  fulfillment of or compliance by the Company with all
covenants and conditions hereof, and to the following additional conditions:

        11.1  Counsel to the Agent  shall not have  objected in writing or shall
not have failed to give his consent to the Offering  Documents  (which objection
or failure to give consent shall not have been done unreasonably).

        11.2 The Agent shall not have disclosed to the Company that the Offering
Documents,  or any amendment thereof or supplement  thereto,  contains an untrue
statement of fact,  which,  in the opinion of counsel to the Agent, is material,
or omits to state a fact which, in the opinion of such counsel,  is material and
is  required  to be  stated  therein,  or is  necessary  to make the  statements
therein, under the circumstances in which they were made, not misleading.

        11.3 Between the date hereof and the Closing Date, the Company shall not
have sustained any loss on account of fire, explosion, flood, accident, calamity
or any other cause of such character as would  materially  adversely  affect its
business or property considered as an entire entity, whether or not such loss is
covered by insurance.

        11.4  Except as set forth in the  Offering  Documents  , during the time
period between the date hereof and the Initial Put Closing Date,  there shall be
no litigation  instituted or threatened against the Company,  and there shall be
no  proceeding  instituted or  threatened  against the Company  before or by any
federal or state commission,  regulatory body or administrative  agency or other
governmental body, domestic or foreign,  wherein an unfavorable ruling, decision
or finding would materially adversely effect the business, franchises,  license,
permits,  operations or financial  condition or income of the Company considered
as an entity.

        11.5  Except as  contemplated  herein  or as set  forth in the  Offering
Documents,  during the period subsequent to the most recent financial statements
contained  in the  Offering  Documents,  if any,  and prior to the  Initial  Put
Closing Date,  the Company (i) shall have conducted its business in all material
respects in the usual and ordinary  manner as the same is being  conducted as of

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<PAGE>

the date hereof and (ii) except in the ordinary course of business,  the Company
shall not have incurred any liabilities or obligations (direct or contingent) or
disposed of any assets, or entered into any material  transaction or suffered or
experienced  any  substantially  adverse change in its  condition,  financial or
otherwise.  At the Closing  Date,  the equity  account of the  Company  shall be
substantially  the same as reflected in the most recent balance sheet  contained
in the Offering  Documents  except for reductions  for matters  discussed in the
Equity Line Agreements and without considering the proceeds from the sale of the
Securities other than as may be set forth in the Offering Documents.

        11.6  The  authorization  of the  Securities  by  the  Company  and  all
proceedings  and other  legal  matters  hereto  and to this  Agreement  shall be
reasonably satisfactory in all material respects matters to the Agent or counsel
to the Agent,  who shall have  furnished the Agent on the Closing Date with such
favorable  opinion with respect to the sufficiency of all corporate  proceedings
and other legal matters  relating to this  Agreement as the Agent may reasonably
require,  and the Company shall have furnished such counsel such documents as he
may have  requested  to enable him to pass upon the matters  referred to in this
subparagraph.

        11.7 The Company shall have  furnished to the Investor,  with a true and
correct copy to the Agent, the opinion, dated the Closing Date, addressed to the
Investor,  from counsel to the Company, as required by the Equity Line Agreement
in substantially the form attached to the Equity Line Agreement as an exhibit.

        11.8 The  Company  shall  have  furnished  to the Agent a due  diligence
certificate  signed  by the Chief  Executive  Officer  and the  Chief  Financial
Officer of the Company, dated as of the Closing Date, to the effect that:

             (i) the  representations  and  warranties  of the  Company  in this
Agreement are true and correct in all material respects at and as of the Closing
Date  (other  than  representations  and  warranties  which by their  terms  are
specifically limited to a date other than the Closing Date), and the Company has
complied with all the  agreements  and has  satisfied all the  conditions on its
part to be performed or satisfied at or prior to the Closing Date;

             (ii) the Company has carefully examined the Offering Documents, and
any amendments and supplements thereto,  and, to the best of its knowledge,  all
statements  contained  in  the  Offering  Documents,   and  any  amendments  and
supplements  thereto,  are true and correct, and neither the Offering Documents,
nor any  amendment or  supplement  thereto,  includes 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 under the  circumstances in which they
were made not misleading, and since the date hereof, there has occurred no event
required to be set forth in an amended or supplemented Offering Documents, which
has not been set forth; except as set forth in the Offering Documents, since the
respective  dates as of which the periods for which the  information is given in
the Offering Documents and prior to the date of such certificate,  (a) there has
not been any material adverse change, financial and otherwise, in the affairs of
condition of the Company, and (b) except as disclosed in the Offering Documents,
the Company has not incurred any material  liabilities,  direct or contingent or
entered into any material transactions, otherwise than in the ordinary course of
business; and

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             (iii) the  Company  has  provided  true and  correct  copies of all
documents  in its  possession  or which it could  obtain that were  requested by
Agent pursuant to any due diligence inquiry.

12.     TERMINATION.

        12.1  This  Agreement  may be  terminated  by the Agent by notice to the
Company in the event that the Company shall have failed or been unable to comply
with any of the material  terms,  conditions or provisions of this  Agreement on
the part of the Company to be  performed,  complied  with  fulfilled  within the
respective  times, if any, herein provided for, unless  compliance  therewith or
performance  or  satisfaction  thereof shall have been  expressly  waived by the
Agent in writing.  However,  if any material  breach by the Company can be cured
within ten (10) business days,  Agent shall provide the Company such  reasonable
period to cure.

        12.2 This  Agreement  may be  terminated by the Company by notice to the
Agent  in the  event  that  the  Agent  shall  have  materially  failed  or been
materially  unable to comply with any of the terms,  conditions or provisions of
this  Agreement  on the part of the  Agent  to be  performed,  complied  with or
fulfilled  within the respective  times,  if any,  herein  provided for,  unless
compliance  therewith or  performance  or  satisfaction  thereof shall have been
expressly waived by the Company in writing.  However,  if any material breach by
Agent can be cured within ten (10)  business  days,  Company shall provide Agent
such ten (10) business days to cure.

        12.3  This  Agreement  may be  terminated  by the Agent by notice to the
Company at any time,  if, in the  reasonable,  good faith judgment of the Agent,
payment  for  and  delivery  of the  Securities  is  rendered  impracticable  or
inadvisable  because: (i) additional material  governmental  restrictions not in
force and effect on the date  hereof  shall have been  imposed  upon  trading in
securities generally, (ii) a war or other national calamity shall have occurred,
or (iii) the condition of the market (either  generally or with reference to the
sale of the  Securities  to be offered  hereby) or the  condition  of any matter
affecting  the  Company  or any  other  circumstance  is such  that it  would be
undesirable,  impracticable  or  inadvisable,  in the judgment of the Agent,  to
proceed with this Agreement or with the Offering.

        12.4 Any termination of this Agreement pursuant to this Section 12 shall
be without  liability of any character  (including,  but not limited to, loss of
anticipated profits or consequential  damages) on the part of any party thereto,
except that the Company  shall  remain  obligated  to pay the costs and expenses
provided  to be paid by it  specified  in  Sections 3 ; and the  Company and the
Agent shall be obligated to pay,  respectively,  all losses,  claims, damages or
liabilities,  joint or several, under Section 8.1 in the case of the Company and
Section 8.2 in the case of the Agent.

13.     AGENT'S REPRESENTATIONS, WARRANTIES AND COVENANTS.

        The Agent represents and warrants to and agrees with the Company that:

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<PAGE>

        13.1 The Placement Agent is a limited  liability  company duly organized
and  existing  under the laws of the  state of Utah.  The  Placement  Agent is a
licensed NASD broker-dealer, and a member of SIPC.

        13.2 There is not now pending or threatened or to the Agent's knowledge,
contemplated  against the Agent any action or  proceeding of which the Agent has
been  advised,  either  in any  court  of  competent  jurisdiction,  before  the
Commission or before any state securities commission or the NASD, concerning the
Agent's  activities  which would  impair the ability of the Agent to conduct the
Offering as contemplated by this Agreement.

        13.3 In the  event any  action or  proceeding  of the type  referred  to
Section 13.2 above shall in be instituted or threatened against the Agent at any
time  prior to the  Closing  Date or,  in the event  there  shall be filed by or
against  the  Agent in any  court,  pursuant  to any  federal,  state,  local or
municipal  statute, a petition in bankruptcy or insolvency or for reorganization
or for the  appointment  of a receiver  or trustee of its assets or if the Agent
makes an  assignment  for the benefit of  creditors,  the Company shall have the
right,  on three (3)  days'  written  notice to the  Agent,  to  terminate  this
Agreement without any liability to the Agent of any kind, except for the payment
of all expenses provided herein.

        13.4 Agent  understands  and  acknowledges  that prior to issuance,  the
Equity  Line  Agreement  is not being  registered  under  the Act,  and that the
Offering and sale of the Equity Line  Agreement  is to be conducted  pursuant to
Regulation  D under  the  Securities  Act of  1933,  as  amended,  (the  "Act").
Accordingly, in conducting its activities under this Agreement.

             (a) Agent has not offered or placed and will not offer or place the
Equity Line Agreement or the Securities that may issue therefrom to any investor
which Agent does not have reasonable grounds to believe, or does not believe, is
an "Accredited Investor," within the meaning of Regulation D under the Act.

             (b) Agent has not offered or placed and will not offer or place the
Equity Line  Agreement by means of any form of general  solicitation  or general
advertising, including, but not limited to, the following:

                 (1) any advertisement  article,  notice or other  communication
published  in any  newspaper,  magazine  or  similar  medium or  broadcast  over
television or radio; and

                 (2) any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising.

             (c) Agent will not solicit or accept the subscription of any person
unless  immediately  before  accepting  such  subscription  Agent has reasonable
grounds  to  believe  and does  believe  that (i) such  person is an  Accredited
Investor and (ii) all  representations  made and  information  furnished by such
person in the Equity Line  Agreement and related  documents are true and correct
in all material respects.

             (d) Agent will not solicit any purchasers of any securities  unless
the Offering Documents are furnished to such prospective purchaser.

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<PAGE>

             (e) Upon notice from the Company  that the Offering  Documents  are
required to be amended or supplemented,  Agent will immediately cease use of the
Offering  Documents  until Agent has received such  amendment or supplement  and
thereafter  will  make  use of the  Offering  Documents  only as so  amended  or
supplemented,  and Agent will deliver a copy of such  amendment or supplement to
each  prospective  investor  to  whom  a  copy  of the  Offering  Documents  had
previously been delivered (and who has not returned such copy).

             (f) Agent will use its best  efforts to conduct the offering of the
Securities in a manner that will allow the  availability of the private offering
exemption  from  federal   securities   regulation   provided  by  Regulation  D
promulgated under the Securities Act of 1933, as amended.

             (g) Agent will  notify the  Company  in writing  promptly  when any
event shall have  occurred  during the Offering  Period as a result of which any
representation or warranty of the Agent herein would not be true.

        13.5 Neither the Agent nor any of its affiliates or controlling  persons
will take any action  that will  impair the  effectiveness  of the  transactions
contemplated by this Agreement.

        13.6 All corporate actions by Agent required for the execution, delivery
and performance of this Agreement have been taken. The execution and delivery of
this Agreement by the Agent,  the observance and  performance  thereof,  and the
consummation  of  the  transactions  contemplated  herein  or  in  the  Offering
Documents  do not and will not  constitute  a material  breach of, or a material
default under, any instrument or agreement by which the Agent is bound, and does
not and will not, to the best of the Agent's knowledge,  contravene any existing
law,  decree or order  applicable to it. This Agreement  constitutes a valid and
binding agreement of Agent, enforceable in accordance with its terms.

        13.7  Agent  understands  that  the  Company  is  relying  upon  Agent's
representations  and warranties in connection  with the Offering and the sale of
the Equity Line Agreement and the  underlying  Securities  contemplated  by this
Agreement.

        13.8 Agent's  representations and warranties under this Section 13 shall
be  true  and  correct  as  of  the  Closing,  and  shall  survive  the  Closing
indefinitely.

14.     COMPANY ACKNOWLEDGMENT.

        14.1 Company  understands and acknowledges  that the Investor,  in their
sole  discretion,  may elect to hold the  Securities  underlying the Equity Line
Agreement for various  periods of time,  as provided in the Offering  Documents,
and the Company  further  acknowledges  that Agent makes no  representations  or
warranties  as to how long the  Securities  will be held by each Investor or the
Investors' trading history or investment strategies.

        14.2 The number of shares of Common Stock, as defined in the Equity Line
Agreement, that the Company may be obligated to issue on the Initial Put Closing
Date,  as defined in the Equity Line  Agreement  may increase  substantially  in

Capstone Partners, L.C.            10.9 - 16
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<PAGE>

certain circumstances,  including the circumstance in which the trading price of
the Common Stock declines.  The Company's  executive officers and directors have
studied  and fully  understand  the nature of the Equity  Line  Agreement,  this
Agreement and the Securities  being sold thereunder and recognize that they have
a potential dilutive effect. The board of directors of the Company has concluded
in its good faith business  judgment that such issuance is in the best interests
of the Company.

        14.3 Company understands that there is no assurance as to how the market
and/or  market  makers will respond to the  purchase and sale of the  Securities
underlying the Equity Line Agreement.

        14.4 Company  acknowledges  that Agent has not made (either  directly or
through  any  agent  or  representative)  any  representations,   warranties  or
covenants  contrary to sections  14.1 through 14.3 and that Agent has  disclosed
the  risks  inherent  in  the  structure  of  the  Offering  including,  without
limitation,  risks associated with the activities  contemplated in Sections 14.1
through 14.3.

        14.5  Company  acknowledges  that due to the  increase  in the  possible
issuance of shares of the Company's Common Stock during the course of the Equity
Line Agreement, an issuance of more than twenty percent (20%) of the outstanding
Common Stock of Company could occur.

        14.6 Company  acknowledges  that this  Offering will not be deemed to be
integrated  with any prior placement of securities by the Company under Rule 502
of the Securities Act of 1933 or other applicable law.

15. NOTICES. Except as otherwise expressly provided in this Agreement:

        15.1 Whenever  notice is required by the provisions of this Agreement to
be given to the  Company,  such  notice  shall be in writing,  addressed  to the
Company, at:

        If to Company:      Attn:   Bruce D. Stuart, CEO
                                    Staruni Corporation
                                    1642 Westwood Boulevard
                                    Los Angeles, California  90024

        With a Copy to:     Attn:

        15.2 Whenever  notice is required by the provisions of this Agreement to
be given to the Agent,  such notice shall be given in writing,  addressed to the
Agent, at:

        If to the Agent:    Attn:   Gregory Bartko, CEO
                                    Capstone Partners, L.C.
                                    3475 Lenox Road, Suite 400
                                    Atlanta, Georgia 30326

        With a Copy to:     Attn:

Capstone Partners, L.C.            10.9 - 17
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<PAGE>

        15.3 Any notice  instructing  the Escrow Agent to  distribute  monies or
Securities  held in  Escrow  must be  signed  by  authorized  agents of both the
Company and the Agent in order to be valid.

16.     MISCELLANEOUS.

        16.1 Benefit. This Agreement is made solely for the benefit of the Agent
and the Company,  their  respective  officers and directors and any  controlling
person referred to in Section 15 of the Act and their respective  successors and
assigns, and no other person may acquire or have any night under or by virtue of
this Agreement,  including,  without limitation,  the holders of any Securities.
The  term  "successor"  or the term  "successors  and  assigns"  as used in this
Agreement shall not include any purchasers, as such, of any of the Securities.

        16.2 Survival. The respective indemnities, agreements,  representations,
warranties,  covenants and other statements of the Company and the Agent, or the
officers,  directors or controlling  persons of the Company and the Agent as set
forth in or made pursuant to this Agreement and the indemnity  agreements of the
Company  and the  Agent  shall  survive  and  remain in full  force and  effect,
regardless of (i) any  investigation  made by or on behalf of the Company or the
Agent or any such officer,  director or controlling  person of the Company or of
the Agent; (ii) delivery of or payment for the Securities;  or (iii) the Closing
Date, and any successor of the Company or the Agent or any  controlling  person,
officer  or  director  thereof,  as the case may be,  shall be  entitled  to the
benefits hereof.

        16.3  Governing  Law,   Jurisdiction  and  Arbitration.   The  validity,
interpretation  and construction of this Agreement and of each party hereof will
be  governed  by the laws of the  State of  Georgia.  Any  controversy  or claim
arising  out of or related to this  Agreement  or the breach  thereof,  shall be
settled by binding arbitration in Atlanta,  Georgia in accordance with the rules
of the  Judicial  Arbitration  & Mediation  Services'  Eastern  Regional  Office
located in Atlanta,  Georgia  ("JAMS").  A proceeding  shall be  commenced  upon
written  demand by Company or the Agent to the other.  The  arbitrator(s)  shall
enter a judgment  by default  against any party which fails or refuses to appear
in  any  properly  noticed  arbitration  proceeding.  The  proceeding  shall  be
conducted  by one (1)  arbitrator,  unless the  amount  alleged to be in dispute
exceeds two hundred fifty thousand dollars  ($250,000),  in which case three (3)
arbitrators shall preside.  The arbitrator(s) will be chosen by the parties from
a list  provided by JAMS,  and if they are unable to agree within ten (10) days,
JAMS  shall  select  the  arbitrator(s).  The  arbitrators  must be  experts  in
securities law and financial  transactions.  The arbitrators  shall assess costs
and expenses of the arbitration,  including all attorneys' and experts' fees, as
the  arbitrators  believe  is  appropriate  in light of the  merits of  parties'
respective  positions in the issues in dispute.  The award of the  arbitrator(s)
shall be final and  binding  upon the  parties  and may be enforced in any court
having jurisdiction.

        16.4  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts,  each of which may be deemed an original and all of which together
will constitute one and the same instrument.

Capstone Partners, L.C.            10.9 - 18
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<PAGE>

        16.5 Confidential  Information.  All confidential  financial or business
information  (except  publicly  available or freely  usable  material  otherwise
obtained from another source) respecting either party will be used solely by the
other party in  connection  with the within  transactions,  be revealed  only to
employees or contractors of such other party who are necessary to the conduct of
such transactions, and be otherwise held in strict confidence.

        16.6 Public  Announcements.  Neither  party hereto will issue any public
announcement  concerning the within transactions  without the review and comment
of the other  party.  The Agent shall have the right to review and comment  upon
any press release issued by the Company in connection with the Offering.

        16.7  Finders.  Company  represents  that it is not obligated to pay any
compensation or other fees, costs or related  expenditures in cash or securities
in  excess  of  $20,000  to any  underwriter,  broker,  agent,  finder  or other
representative  other than Agent.  Company  agrees to  indemnify  the Agent with
respect to any other  claim for a fee in  connection  with the  Offering.  Agent
agrees to  indemnify  the Company  with  respect to any claim for a finder's fee
that arises  because of Agent's  agreement  to pay a fee to the person or entity
making such claim.
        16.8  Recitals.  The  recitals  to this  Agreement  are a material  part
hereof,  and each recital Is  incorporated  into this Agreement by reference and
made a part of this Agreement.

17.     ESCROW AGENT FEES.

        The Company  hereby  agrees to pay the Escrow  Agent for the opening and
maintenance of the Escrow Account, incidental expenses and all services provided
by the Escrow Agent under the Escrow  Agreement,  of even date herewith,  by and
between the Company,  the Investor and the Escrow Agent.  The Company  agrees to
pay the Escrow Agent reasonable fees, including fees of counsel on behalf of the
Investor for the preparation of the Equity Line Agreement and related documents,
which fees shall equal two percent (2%) of the total amount of funding  provided
to the Company by the Investor  under the Equity Line  Agreement  (collectively,
"Escrow  Fees").  The Company does hereby agree to indemnify  and hold the Agent
harmless as to the  payment of any such  Escrow  Fees,  in  accordance  with the
provisions of Section 8.1 of this Agreement.

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

                                    "THE COMPANY"
                                    STARUNI CORPORATION

                                    By:
                                        -------------------------------
                                        Bruce D. Stuart, CEO

                                    "THE AGENT"
                                    CAPSTONE PARTNERS, L.C.

                                    By:
                                        -------------------------------
                                        Gregory Bartko, CEO

Capstone Partners, L.C.            10.9 - 19
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