Document:

1/14/00

                             TECHNOLOGY PURCHASE

     This TECHNOLOGY PURCHASE AND RESCISSION AGREEMENT (this "Agreement") is
made this 14 day of January 2000 (the "Effective Date") by and between 1st Net
Technologies, Inc., a Colorado corporation ("1st Net" or "Buyer"), and Spirit
32 Development Corporation, a Colorado corporation ("Spirit 32" or "Seller"),
with reference to the facts set forth in the Recitals below:

                                  RECITALS

     Buyer and Seller are parties to that certain Stock Acquisition Agreement
dated January 22, 1999, (the "Stock Acquisition Agreement") pursuant to which,
inter alia, Buyer was to acquire all of Seller's stock; and

     Buyer and Seller acknowledge that Buyer has funded certain technology
development activities and network services of Seller since August 1998 in the
amount of approximately $587,000.00 in anticipation and understanding that the
buyer would be acquiring the certain Technologies referenced in Section 1.1
below.

     Buyer and Seller now wish to terminate and rescind the Stock Acquisition
Agreement as of its date and, instead, Seller wishes to sell and Buyer wishes
to buy certain of Seller's Technologies in accordance with the terms and
conditions set forth herein; and

     In connection with, and as a condition of entering into this Agreement
and the consummation of the transactions contemplated hereby, Buyer and Seller
wish to provide for certain releases as set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:

     1.  Sale and Transfer of Assets; Closing.

     1.1 Technologies.  Subject to the terms and conditions of this Agreement,
at the Closing, Seller will sell, convey and transfer to Buyer, and Buyer will
purchase from Seller, the following Technologies (the "Technologies"):

     All of Seller's right, title and interest to the Mariah
     Internet Protocol Telecomputing Project, the MindWalker
     Series, the Crayon Crawler Browser, the Spirit 32 Voice
     Mailer and all of the tradenames and copyrights associated
     with the names "Crayon Crawler," "Mindwalker" and "Mariah."

Buyer takes said Technologies "as is" without warranty of any kind either
expressed or implied.

     1.2  Closing.  The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Buyer, 11423 West Bernardo Court,
San Diego, California on or before February 14, 2000 at 10:00 a.m. (local

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time), or at such other time and place as the parties may agree (the "Closing
Date").

     1.3  Closinq Obligations.  At the Closing:

        (a)  Seller will deliver to Buyer instruments of conveyance and
assignment in the form attached hereto with respect to the transfer of the
Technologies to Buyer; and

         (b)  Buyer will deliver to Seller the full purchase price to be paid
by Buyer for the Technology being purchased herein by delivery to Seller of
250,000 shares of Buyer's restricted common stock and $100,000 USD.

         (c)  Seller will perform the following tasks prior to the closing of
this Agreement:

     1) The latest, most current version of the Server software
     delivered to Buyer.
     3) Update the Registration screen to include the credit card
     information.
     4) Update database to accept credit card information.
     5) Deliver IEAK for the Crayon Crawler with IDT dial-up.
     6) Deliver IBAK script used.
     7) Deliver Crayon Crawler server (hardware).
     8) An install routine that will launch default dialer if
     user not online.

     Regarding Kola contract:

     1) Completion of the Kola application.
     2) Deliver Source code for the Kola application.
     3) Deliver IEAK including script for Kola.
     4) Deliver KOLA wise Install script and wise installer.

     2.  Representations and Warranties of Seller.

     Seller represents and warrants to Buyer as follows:

     2.1  Organization and Good Standing.  Seller is a corporation duly
organized, validly existing, and in good standing under the laws of Colorado,
with full corporate power and authority to conduct its business as it is now
being conducted and is not currently contemplating any filing for protection
under any bankruptcy, receivership or similar laws.

     2.2  Authority; No Conflict.

         (a)  This Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
Seller has the absolute and unrestricted right, power, authority and capacity
to execute and deliver this Agreement and to perform its obligations
hereunder.

         (b)  Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of time)
contravene, conflict with or result in a violation of:

             (i) any provision of the Articles of
         Incorporation or Bylaws of Seller, or any resolution
         adopted by the board of directors or the shareholders
         of Seller;

             (ii) any legal requirement or any order to which
         the Seller, or any of the assets owned or used by
         Seller, may be subject; or

             (iii) any material Contract of Seller.

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        (c)  Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of time) result
in the imposition or creation of any encumbrance upon or with respect to any
of the Technologies.

        (d)  Seller is not and will not be required to give any notice to or
obtain any consent from any person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
transactions contemplated hereby.

     2.3  Title and Encumbrances.  Seller has valid title to and possession of
the Technologies free and clear of all encumbrances.

     2.4  Investment Intent.  Seller has experience in making investments of
this type and is acquiring the shares of the Buyer to be delivered at Closing
for its own account and not with a present view to, or for sale in connection
with, any distribution thereof in violation of the registration requirements
of the Securities Act of 1933, as amended.  The Seller consents to the placing
of a legend on the certificates representing the shares to be delivered by
Buyer at Closing to the effect that the shares have not been registered under
the Securities Act and may not be transferred except in accordance with
applicable securities laws or an exception there from.

     2.5  Suitability.  Seller acknowledges that there is an economic risk.
Seller warrants that their business and/or financial experience, can be
reasonably assured to have the capacity to protect their own interests.

     2.6  Risks.  Seller acknowledges that this investment is speculative in
nature and involves a high degree of risk in that the Seller may not be able
to liquidate this investment and that transferability is extremely limited.

     3.  Representations and Warranties of Buyer.  Buyer represents and
warrants to Seller as follows:

     3.1  Orqanization and Good Standing.  Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Colorado.

     3.2  Authority; No Conflict.

         (a)  This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the absolute and unrestricted right, power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.

         (b)  Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will contravene, conflict with, result in a violation of or give any Person
the right to prevent, delay, or otherwise interfere with any of the
transaction  contemplated hereby pursuant to:

             (i) any provision of Buyer's Articles of
         Incorporation or Bylaws;

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             (ii) any resolution adopted by the board of
         directors or the shareholders of Buyer;

             (iii) any legal requirement or order to which
         Buyer may be subject; or

             (iv) any material contract to which Buyer is a
         party or by which Buyer may be bound.

         (c)  Buyer is not and will not be required to obtain any consent from
any person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the transactions contemplated
hereby.

     4.  Termination of January 22, 1999 Acquisition Aqreement; Consideration.
That certain Stock Acquisition Agreement by and between Buyer and Seller dated
January 22, 1999 (the "Stock Acquisition Agreement"), is hereby mutually
terminated and is of no further force or effect whatsoever without either
party having recourse aqainst the other pursuant to such Agreement.  Each of
the parties hereto hereby fully and finally terminates, settles, discharges
and releases all past and present claims, controversies, demands, actions, or
causes of action which either party may have or claim to have against the
other, which arise out of or are in any way related to the Stock Acquisition
Agreement.

     5.  Release.  Each of Buyer and Seller, on behalf of themselves and each
of their respective subsidiary and parent corporations, partnerships, business
entities, officers, directors, employees, personal representatives, successors
and assigns, hereby forever releases and discharges each other and each of
their past and present officers, directors, shareholders, principals, joint
ventures, partners, trustees, employees, agents, personal representatives,
successors and assigns, and all entities presently or formerly related to or
affiliated in any way with the other, and any and all persons, predecessors,
firms, associations, insurers, attorneys, limited partnerships or
corporations, and their respective heirs, successors and assigns, and each of
them, with whom the other was, are or may hereafter be, affiliated or
associated in any manner, of and from any and all claims, demands, damages,
actions, causes of action of every kind incurred or caused prior to the
Effective Date in law, equity or otherwise, known or unknown, suspected or
unsuspected, disclosed or undisclosed, for damages actual, consequential or
exemplary, past, present and future, arising out of or in any way related to
their obligations, activities and/or dealings with each other or their
affiliates at any time prior to the Effective Date, including without
limitation all claims and demands arising out of or in any way related to the
Stock Acquisition Agreement and the circumstances thereof.

     6.  Miscellaneous.

     6.1  Publicity.  All notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by both 1st Net and Spirit 32. Neither party shall act
unilaterally in this regard without the prior express written approva1 of the
other; provided, however, this approval shall not be unreasonably withheld.

     6.2  Assiqnment.  This Agreement shall be binding on, and shall inure to
the benefit of, the parties and their respective heirs, legal representatives,
successors and assigns.

     6.3  Survival of Representations and Obligations.  All representations,
warranties, covenants and agreements of the parties contained in this

<PAGE>

Agreement, or in any instrument, certificate, opinion or other writing
provided for in it, shall survive the Effective Date.

     6.4  Finality.  It is understood that this Agreement is a full and final
release of any and all claims described above, and the parties expressly agree
that it shall apply to all unknown, unanticipated, unsuspected and undisclosed
claims, demands, liabilities, actions or causes of action, as well as those
which are now known, anticipated, suspected or disclosed.

     6.5  No Admission.  It is expressly understood and agreed that this is a
compromise settlement of disputed claims. The consideration given for the
release contained in this Agreement shall not be construed to be an admission
of liability by, or to, either party or any other person whomsoever. The
representations of facts set forth in the Recitals shall not be admissible in
any court of law.

     6.6  Nonwaiver.  No failure by a party to take action by reason of any
default by the other party, whether in a single instance or repeatedly, shall
constitute a waiver of any such default or of the performance required of the
defaulting party. No express waiver by a party of any provision of this
Agreement or a default by the other party in any one instance shall be
construed as a waiver of the same provision or default in any subsequent
instance.

     6.7  Attorneys; Attorneys' Fees.  If any action is instituted among the
parties related to this Agreement, the prevailing party or parties shall be
entitled to recover from the losing party or parties all of the prevailing
party's costs and expenses, including court costs and reasonable attorneys'
fees.

     6.8  Nature of Agreement.  This Agreement constitutes the entire and
whole agreement between the parties and supersedes any prior agreements
between the parties.  This Agreement may not be modified or amended except by
a written instrument, signed by the parties expressing such amendment or
modification.

     6.9  Choice of Law.  Except as otherwise expressly provided, this
Agreement and the respective contractual obligations of the parties incurred
hereunder shall be governed by and construed in accordance with the laws of
the State of Colorado pertaining to agreements between Colorado residents to
be entered into, and fully performed, in Colorado, without reference to
principles of conflicts of law.

     6.10  Venue and Jurisdiction.  For purposes of venue and jurisdiction,
this Agreement shall be deemed made and to be performed in the City and County
of Denver, Colorado, United States of America.  In the event of any litigation
between the parties arising out of or relating to this Agreement, the parties
hereby consent to the exclusive and sole jurisdiction of the United States
District Court for the District of Colorado in Denver, Colorado.  In the event
such court determines that it does not have jurisdiction over the parties or
the subject matter of the dispute in question, the parties hereby consent to
the exclusive and sole jurisdiction of the District Court of the City and
County of Denver, Colorado.

     6.11  Service of Process.  In the event of any litigation related to this
Agreement, the moving party's service of process shall be deemed effective
immediately upon the personal delivery of such process to the other party's
designated agent for service.

<PAGE>

     6.12  Headings.  The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any provision of this Agreement.

     6.13  Gender and Number.  Whenever the context so requires, the masculine
gender herein shall include the feminine or neuter {and vice versa), and the
singular number shall include the plural.

     6.14  Notices.

    (a)  Method of Delivery.  Any notice, request, demand, consent, approval
or other communication (hereafter "notice") required or permitted under this
Agreement or by law shall be in writing and delivered by any of the following:
(1) personally delivering the notice to a senior officer or duly authorized
representative of the other party, (2) depositing the notice in the United
States mail, postage prepaid, duly certified (return receipt requested), (3)
sending the notice by private express mail service (with return receipt or
proof of delivery), or (4) sending the notice by electronic facsimule (fax).

     (b)  Addresses.  Notices shall be addressed as follows:

     If to Buyer:     1st Net Technologies, Inc
                      11423 West Bernardo Court
                      San Diego, California 92127
                      Attn:  Mr James Watson
                      Telecopier: (858) 675-4443

     With a copy to:  Krys Boyle Freedman & Sawyer,P.C.
                      600 17th Street, Suite 2700 South Tower
                      Denver, Colorado 80202
                      Attn:  Stanley F. Preedman, Esq.
                      Telecopier: (303)893-2882

     If to Seller:    Spirit 32 Development Corporation
                      11059 E. Bethany Drive, Suite 104
                      Aurora, Colorado 80014
                      Attn:  Mr. Miachael D. Writer

Any party may, from time to time, by written notice to the other, designate a
different address that shall be substituted for that specified above.

     6.15  Effectiveness.  All notices shall be deemed effective upon receipt.
If personally delivered, notices shall be deemed received at the time of
delivery.  If sent by mail, the notice shall be deemed fully delivered and
received three (3) business days after the date of the postmark on the
certified mail receipt.  If sent by private express mail service, the notice
shall be deemed fully delivered and received three (3) business days after the
date of deposit with such express mail service. If sent by telex, telegram,
fax or other electronic means of communication, notices shall be deemed
received twenty-four (24) hours after transmission.  Rejection or other
refusal to accept a notice or the inability to deliver the same because of a
changed address of which no notice was given shall be deemed to be receipt of
the notice sent.  In the event of a postal strike, all notices shall be
personally delivered, sent by private express mail service, or sent by telex,
telegram, fax or other electronic means of communication.

     6.16  Legal Fees and Costs.  In the event a dispute arises under this
Agreement, the prevailing party shall be entitled to recover its expenses,
including attorneys' fees and accounting fees, in addition to any other relief
to which it is found entitled.

<PAGE>

     6.17  Severability.  In the event that any provision of this Agreement,
in whole or in part (or the application of any provision to a specific
situation), is held to be invalid or unenforceable by the final judgment of an
arbitration panel and/or a court of competent jurisdiction after appeal or the
time for appeal has expired, such invalidity shall be limited to such specific
provision or portion thereof (or to such situation), and this Agreement shall
be construed and applied in such manner as to minimize such unenforceability.
This Agreement shall otherwise remain in full force and effect.

     6.18  Force Majoure.  No party shall be liable for any failure or delay
in performance under this Agreement which is due in whole or in part directly
or indirectly to any cause of any nature beyond the reasonable control of such
party, including, without in any way limiting the generality of the foregoing,
firer explosion, earthquake, storm, flood, strike, lockout, activities of a
combination of workman or other labor difficulties, wars, insurrection, riot,
acts of God or the public enemy, law, act, order, export or import control
regulations, proclamation, decree, regulation, ordinance, or instructions of
local, federal or foreign government or other public authorities, or judgment
or decree of a court of competent jurisdiction (not arising out of a breach by
the party to this Agreement seeking the benefit of this Section 7.20).  In the
event of the occurrence of such a Cause, the affected party shall give prompt
written notice to the other party, stating the period of time the same is
expected to continue, and shall take all reasonable measures to ensure that
the effects of such cause of force majeure are kept as minimal as possible.

     6.19  Further Assurances.  Each party shall execute, acknowledge and
deliver such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the purposes of this Agreement.

     6.20  Consents.  The consent by one party to any act by the other for
which such consent was required shall not be deemed to imply consent or waiver
of the hecesSity of obtaining such consent for the same or any similar acts in
the future.  No waiver or consent shall be implied from silence or any failure
of a party to act, except as otherwise specified in this Agreement.

     6.21  Invalidity of Provision.  If any provision of this Agreement as
applied to either party or to any circumstance shall be adjudged by a court of
competent jurisdiction to be void or unenforceable for any reason, the same
shall in no way affect (to the maximum extent permissible by law) any other
provision of this Agreement, the application of any such provision under
circumstances different from those adjudicated by the court, or the validity
or enforceability of this Agreement as a whole.

     7.  Counterparts.  This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.

     8.  Confidentiality.  Neither party to this Agreement shall disclose the
terms and conditions of this Agreement to any third party, nor will either
party issue a press release and/or otherwise disclose the existence of this
Agreement to the media or general public, without the express written consent
of the other. The parties shall work together, in good faith, to issue a
mutually agreeable joint press release. Notwithstanding the foregoinq, neither
Seller nor Buyer shall be prevented from disclosing all or part of the
Confidential Infonmation: (a) in a legal proceeding to enforce its rights or
defend itself under this agreement; (b) if it is legally compelled to do so by
oral deposition, interrogatories, request for information or documents,
subpoena, civil investigative demand, or other legal process; or (c) if it is
required to do so by the Securities and  Exchange Commission in relation to a
public filing requirement under the Securities Act of 1933 or the Exchange Act

<PAGE>

<PAGE>
of 1934 provided a request is made to make the material contained within
the filing confidential.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

                         "SPIRIT 32"
                         SPIRIT 32 DEVELOPMENT CORPORATION,
                         a Colorado corporation

                         By:  /s/ Michael D. Writer
                         Name: Michael D. Writer
                         Title: C.E.O.

                         "1ST NET"
                         1ST NET TECHNOLOGIES. INC.,
                         a Colorado corporation

                         By:  /s/ James H. Watson, Jr.
                         Name: James H. Watson, Jr.
                         Title: Chairman/CEOEXHIBIT 4.2

                               WARRANT TO PURCHASE
                                 COMMON STOCK OF
                                  CALTON, INC.

NEITHER THIS WARRANT NOR ANY SECURITIES PURCHASABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND NEITHER THIS WARRANT NOR ANY SECURITIES PURCHASABLE
UPON EXERCISE HEREOF MAY BE SOLD OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE SECURITIES LAWS, OR EVIDENCE REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND LAWS.

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

     This is to certify that, FOR VALUE RECEIVED, Taytrowe Van Fechtmann World
Companies, Inc. ("TVF"), or its designee (the "Holder") or registered assigns is
entitled to purchase, subject to the provisions of this Warrant, from CALTON,
INC., a New Jersey corporation (the "Company"), 1,200,000 shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), at a price per
share equal to TWO AND 50/100 DOLLARS ($2.50) at any time during the period from
January 27, 2000 (the "Closing Date") to 5:00 P.M., New York City Time, on the
Expiration Date (as hereinafter defined), at which time this Warrant shall
expire and become void. Exercise of this Warrant is conditioned upon the
satisfaction by PrivilegeOne Networks, Inc. ("PNI"), a subsidiary of TVF, of
certain financial performance criteria, as hereinafter set forth. The number of
shares of Common Stock to be received upon the exercise of this Warrant and the
price to be paid for each share of Common Stock shall be adjusted from time to
time as hereinafter set forth. The shares of Common Stock or other securities or
property deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares" and the exercise price of
a share of Common Stock in effect at any time and as adjusted from time to time
is hereinafter sometimes referred to as the "Warrant Price". Unless the context
otherwise requires, the term "Warrant" or "Warrants" as used herein includes
this Warrant and any other Warrant or Warrants which may be issued pursuant to
the provisions of this Warrant, whether upon transfer, assignment, partial
exercise, divisions, combinations, exchange or otherwise, and the term "Holder"
includes any transferee or transferees or assignee or assignees of the Holder
named above, all of whom shall be subject to the provisions of this Warrant,
and, when used with reference to Warrant Shares, means the holder or holders of
such Warrant Shares. The term "Expiration Date" means that date which is five
(5) years from the Closing Date.

<PAGE>

     Section 1. Exercise of Warrant.

     1.1 If (a) PNI achieves fifty percent (50%) of the EBITDA Projection (as
hereinafter defined) for the first four (4) full fiscal quarters on a cumulative
basis following the Closing Date or (b) PNI's cumulative EBITDA (as hereinafter
defined) during any four (4) consecutive fiscal quarters during the two year
period commencing with the beginning of the first fiscal quarter following the
Closing Date exceeds $5,000,000, then, upon the presentation of financial
statements reasonably satisfactory to the Company demonstrating PNI's
achievement of the financial performance criteria set forth in clauses (a) or
(b) above, this Warrant shall become exercisable and may be exercised in whole
or in part at any time or from time to time before 5:00 P.M., New York City
Time, on the Expiration Date, or if either such day is a day on which Federal or
State chartered banking institutions located in the State of New Jersey are
authorized by law to close, then on the next succeeding day which shall not be
such a day, by presentation and surrender hereof to the Company at its principal
office or, subject to Section 9, at the office or its stock transfer agent, if
any, with the Purchase Form annexed hereto duly executed and accompanied by
payment, in cash or certified or official bank check payable to the order of the
Company, of the aggregate Warrant Price for the number of Warrant Shares
specified in such form. If this Warrant should be exercised in part only, the
Company shall, upon presentation of this Warrant upon such exercise, execute and
deliver a new Warrant, dated the date hereof, evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder under the same terms and conditions as herein set forth. Upon and as
of receipt by the Company of this Warrant at its office or, subject to Section
9, by the stock transfer agent, at its office, in proper form for exercise and
accompanied by payment as herein provided, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder.

     1.2 The term "EBITDA" as used herein means Earnings Before Interest, Tax,
Depreciation and Amortization, as determined in accordance with generally
accepted accounting principles. The term "EBITDA Projection" as used herein
means forecasted EBITDA for PNI, as set forth on Exhibit A hereto, subject to
reasonable adjustment to reflect any agreement between PNI and a card issuer.

     1.3 The term "fiscal quarter" as used herein means any of the three month
periods commencing December 1, March 1, June 1 or September 1 of each year.

     Section 2. Reservation of Shares. The Company hereby agrees that at all
times until expiration of this Warrant there shall be reserved for issuance
and/or delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance or delivery upon exercise of this
Warrant.

     Section 3. Exchange or Loss of Warrant.

     3.1 This Warrant is exchangeable, without expense, at the option of the
Holder, upon presentation and surrender hereof to the Company at its principal
office or, subject to Section 9, at the office of its stock transfer agent, if
any, for other Warrants of different denominations entitling the Holder thereof
to purchase in the aggregate the same number of Warrant Shares purchasable
hereunder on the same terms and conditions as herein set forth.

<PAGE>

     3.2 Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date and any such lost,
stolen, or destroyed Warrant shall thereupon become void. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not the Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.

     Section 4. Warrant Price. The exercise price at which Warrant Shares shall
be purchasable upon exercise of this Warrant shall be TWO AND 50/100 DOLLARS
($2.50) per share, subject to adjustment pursuant to Section 5 of this
Agreement.

     Section 5. Adjustment of Warrant Price and Number of Warrant Shares. The
Warrant Price and the number and kind of securities purchasable upon the
exercise of this Warrant shall be subject to adjustment from time to time upon
the happening of certain events or as otherwise provided in this Section 5;
provided that in no event shall the Warrant Price be reduced below the par value
of the Warrant Shares at the time of such adjustment. The Warrant Price in
effect at any time and the number and kind of securities purchasable upon
exercise of this Warrant shall be subject to adjustment as follows:

     5.1 Stock Dividends, Reclassification and Recapitalization. In case the
Company shall (i) pay a dividend or make a distribution on all of its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide,
reclassify or recapitalize its outstanding Common Stock into a greater number of
shares, or (iii) combine, reclassify or recapitalize its outstanding Common
Stock into a smaller number of shares, the Warrant Price in effect at the time
of the record date for such dividend or distribution or on the effective date of
such subdivision, combination, reclassification or recapitalization shall be
proportionately adjusted (but in no event shall the aggregate Warrant Price for
all of the shares of Common Stock subject to this Warrant be in excess of
$3,000,000) and the Holder of any Warrant exercised after such date shall be
entitled to receive the aggregate number and kind of shares which, if such
Warrant had been exercised immediately prior to such time, he would have owned
upon such exercise and been entitled to receive upon such dividend, subdivision,
combination, reclassification or recapitalization. Such adjustment shall be made
successively whenever any event listed in this Section 5.1 shall occur.

     5.2 Notice of Adjustment. Whenever the number of Warrant Shares purchasable
upon the exercise of this Warrant or the Warrant Price of such Warrant Shares is
adjusted, as herein provided, the Company shall file in the custody of its
Secretary or an Assistant Secretary at its principal office and subject to
Section 9, with its stock transfer agent, if any, an officer's certificate
setting forth the number of Warrant Shares purchasable upon the exercise of this
Warrant and the Warrant Price of the Warrant Shares after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made. Each such
officer's certificate shall be made available at all reasonable times for
inspection by the Holder of this Warrant and the Company shall, forthwith after
each such adjustment, mail a copy of such certificate to such Holder by
first-class mail, postage prepaid.

<PAGE>

     5.3 No Adjustment for Dividends. Except as provided in Section 5.1 of this
Warrant, no adjustment in respect of any cash dividends shall be made during the
term of this Warrant or upon exercise of this Warrant.

     5.4 Purchase Rights Upon Merger, Consolidation, etc. In case of any
consolidation of the Company with or merger of the Company into another
corporation or in case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, the
surviving corporation, if other than the Company, resulting therefrom or the
acquiring corporation, as the case may be, shall assume by written agreement the
obligation to deliver, upon exercise of this Warrant and payment of the Warrant
Price in effect immediately prior to such corporate event, the kind and amount
of shares or other securities and property which the Holder would have owned or
have been entitled to receive after the happening of such consolidation, merger,
sale or conveyance had this Warrant been exercised immediately prior thereto.

     Section 6. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares on the exercise of this Warrant. If any fraction of a
Warrant Share would, except for the provisions of this Section 6, be issuable on
the exercise of this Warrant (or specified portion hereof), then the Company
shall elect, at its option to either (i) round such fractional Warrant Share
upwards to the nearest whole Warrant Share or (ii) pay to the holder an amount
in cash equal to such fraction multiplied by the then current fair value of a
Warrant Share, determined as follows:

     6.1 If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange, the current fair value
shall be the last reported sale price of the Common Stock on such exchange on
the last business day prior to the date of exercise of this Warrant or if no
such sale is made on such day, the average of the closing bid and asked prices
for such day on such exchange; or

     6.2 If the Common Stock is not so listed or admitted to unlisted trading
privileges, the current fair value shall be the mean of the last reported bid
and asked prices reported by the Nasdaq Stock Market (or, if not so quoted on
the Nasdaq Stock Market, by the NASD Electronic Bulletin Board) on the last
business day prior to the day of the exercise of this Warrant; or

     6.3 If the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current value shall
be an amount determined in such reasonable manners may be prescribed by the
Board of Directors of the Company, such determination to be final and binding on
the Holder.

     Section 7. No Rights as Shareholders; Notices to Holders. Nothing contained
in this Warrant shall be construed as conferring upon the Holder or any
transferee the right to vote or to receive dividends or to consent or to receive
notice as shareholders in respect of any meeting of shareholders for the
election of directors of the Company or any other matter, or any rights
whatsoever as shareholders of the Company, prior to the valid exercise of this
Warrant and receipt of the Warrant Shares hereunder.

     Section 8. Notice of Certain Proposed Actions. In case at any time the
Company shall propose:

          (a) to pay any dividend or make any distribution on shares of Common
     Stock in shares of Common Stock or make any other distribution (other than

<PAGE>

     regularly scheduled cash dividends which are not in a greater amount per
     share than the most recent such cash dividend) to all holders of Common
     Stock; or

          (b) to issue any rights, warrants or other securities to all holders
     of Common Stock entitling them to purchase any additional shares of Common
     Stock or any rights, warrants or other securities; or

          (c) to effect any reclassification or change of outstanding shares of
     Common Stock, or any consolidation, merger, sale, lease or conveyance of
     property described in Section 5; or

          (d) to effect any liquidation, dissolution or winding-up of the
     Company;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder, at the
Holder's address as it shall appear in the warrant register, mailed at least 15
days prior to the earlier to occur of (i) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such dividend,
distribution, rights, warrants or other securities are to be determined, or (ii)
the date on which any such reclassification, change of outstanding shares of
Common Stock, consolidation, merger, sale, lease, conveyance of property,
liquidation, dissolution, or winding up is expected to become effective, and the
date as of which it is expected that holders of record of shares of Common
Stock, as the case may be, shall be entitled to exchange their shares or
warrants for securities or other property, if any, deliverable upon such
reclassification, change of outstanding shares, consolidation, merger, sale,
lease, conveyance of property, liquidation, dissolution, or winding up.

     Section 9. Transfer to Comply with the Securities Act of 1933.

     9.1 This Warrant or the Warrant Shares may not be sold or otherwise
disposed of except to a person who, in the opinion of counsel in form and
substance satisfactory to the Company, is a person to whom this Warrant or the
Warrant Shares may be legally transferred within the terms of this Warrant and
without registration and without the delivery of a current prospectus with
respect thereto under the Securities At of 1933, as amended, and then only
against receipt of an agreement of such person to comply with the provisions of
this Section 8 with respect to any resale or other disposition of such Warrant
or Warrant Shares unless, in the opinion of counsel, such agreement is not
required; or

     9.2 Each certificate for Warrant Shares or for any other security issued or
issuable upon exercise of this Warrant shall contain a legend on the face
thereof, in the form and substance satisfactory to counsel of the Company,
setting forth the restrictions on transfer thereof contained in Section 8.1
hereof.

     Section 10. Piggyback Registration Rights.

     10.1 Grant of Rights. If, after the time this Warrant becomes exercisable),
the Company at any time proposes to file a registration statement (other than
upon Form S-4, Form S-8, or any successor form) with the Securities and Exchange
Commission (the "Commission") relating to the Company's Common Stock, the
Company shall give the Holders of Warrants and the holders of Common Stock
acquired upon exercise of the Warrants prompt written notice thereof. If
requested by any such holder in writing within 15 days receipt of any such
notice, the

<PAGE>

Company shall, at the Company's sole expense (other than the fees and
disbursements of counsel for such holder and the underwriting discounts, if any,
payable in respect of the shares of Common Stock to be sold by such holder),
include in such registration the Common Stock acquired or acquirable upon
exercise of this Warrant (collectively, the "Registrable Shares") of any such
holder who shall have made such request concurrently with the registration
covering such other securities of the Company.

     10.2 Underwriter Cutbacks. If the good faith judgment of the managing
underwriter the inclusion of all of the Registrable Shares requested to be
registered under this Section 10 would adversely affect the marketing of the
shares for which the registration statement was to be filed, the number of
Registrable Shares otherwise to be included in the underwritten public offering)
may be reduced pro rata (by number of shares requested to be registered) among
the holders thereof requesting registration. All holders proposing to distribute
their Registrable Shares through such underwriting shall (together with the
Company) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected.

     10.3 Expenses. With respect to any registration under this Section 10, the
Company shall bear the following fees, costs and expenses: all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel for
the underwriter of such securities (if the Company or the selling security
holders are required to bear such fees and disbursements), all internal Company
expenses, all legal fees and disbursements and other expenses of complying with
state securities or blue sky laws of any jurisdictions in which the securities
to be offered are to be registered or qualified, and any premiums or other costs
of policies of insurance, if any, arising out of such public offering, except
that Company shall not be required to expend more than twenty thousand dollars
($20,000.00) in blue sky fees. Fees and disbursements of counsel for the selling
security holders, underwriting discounts and commissions and transfer taxes
relating to the shares included in the offering, and any other expenses not
expressly included above, shall be borne by the selling security holders.

     10.4 Other Obligations of the Company.

          (a) The Company shall use its best efforts to cause the Registrable
     Shares registered under this Section 10 to be registered or qualified for
     sale under the securities or "blue sky" laws of such jurisdictions as such
     holders may reasonably request; provided, however, that the Company shall
     not be required to qualify to do business in any state by reason of this
     paragraph in which it is not otherwise required to qualify to do business.

          (b) The Company shall keep effective the registration or qualification
     contemplated by this Section 10 and shall from time to time amend or
     supplement each applicable registration statement, preliminary prospectus,
     final prospectus, application, document and communication for such period
     of time as shall be required to permit the holders to complete the offer
     and sale of the Registrable Shares covered thereby. The Company shall in no
     event be required to keep any such registration or qualification in effect
     for a period in excess of six months from the date on which the holders are
     first free to sell such Registrable Shares.

          (c) In connection with a registration pursuant to the provisions of
     this Section 10, the Company shall furnish to each holder of any
     Registrable Shares included therein such number of copies of the
     registration statement and of each amendment and

<PAGE>

     supplement thereto (in each case, including all exhibits), such reasonable
     number of copies of each prospectus contained in such registration
     statement and each supplement or amendment thereto (including each
     preliminary prospectus), all of which shall conform to the requirements of
     the Securities Act, and the roles and regulations thereunder, and such
     other documents, as the holders may reasonably request in order to
     facilitate the disposition of the Registrable Shares included in such
     registration.

          (d) The Company agrees that it shall keep current in filing all
     reports, statements and other materials required to be filed with the
     Commission to permit holders of the Registrable Shares to sell such
     securities under Rule 144.

          (e) Notwithstanding anything to the contrary herein, the Company shall
     not be required to register the Registrable Shares if counsel for the
     Company delivers an opinion to the holders that the proposed sale of
     Registrable Shares may be effected in its entirety within any 90 day period
     without registration and without any further holding period pursuant to
     Rule 144 under the Securities Act of 1933, as amended.

     10.5 Indemnification.

          (a) The Company will indemnify each holder for whom shares are
     registered pursuant to this Section 10 (a "Selling Shareholder"), and each
     underwriter, if any, and each Person who controls any underwriter, against
     all claims, losses, damages and liabilities (or actions, proceedings or
     settlements in respect thereof) arising out of or based on any untrue
     statement of a material fact contained in any prospectus, offering circular
     or other document (including any related registration statement,
     notification or the like) incident to any such registration, or based on
     any omission to state therein a material fact required to be stated therein
     or necessary to make the statements therein not misleading, or any
     violation by the Company of the Securities Act or the Exchange Act or any
     rule or regulation thereunder applicable to the Company and relating to
     action or inaction required of the Company in connection with any such
     registration, qualification or compliance, and will reimburse the Selling
     Shareholder for any legal and any other expenses reasonably incurred in
     connection with investigating and defending or settling any such claim,
     loss, damage, liability or action, provided that the Company will not be
     liable in any such case to the extent that any such claim, loss, damage,
     liability or expense arises out of or is based on any untrue statement or
     omission based upon written information furnished to the Company by the
     Selling Shareholder or underwriter and stated to be specifically for use
     therein. Notwithstanding the foregoing, the obligation of the Company to
     provide indemnity pursuant to this subsection shall not apply to amounts
     paid in settlement of any such loss, claim, damage or liability if such
     settlement is effected without the consent of the indemnifying party (which
     consent shall not be unreasonably withheld).

          (b) Each Selling Shareholder will, if Registrable Securities held by
     it are included in the securities as to which such registration is being
     effected, indemnify the Company, each of its directors, officers and
     employees and each underwriter, if any, of the Company's securities covered
     by such a registration statement, and each Person who controls the Company
     or such underwriter, against all claims, losses, damages and liabilities
     (or actions in respect thereof) arising out of or based on any untrue
     statement of a material fact contained in any such registration statement,
     prospectus, offering circular

<PAGE>

     or other document, or any omission to state therein a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading or any violation by the Selling Shareholder of the
     Securities Act or the Exchange Act or any rule or regulation thereunder
     applicable to the Selling Shareholder and relating to action or inaction
     required of the Selling Shareholder in connection with any such
     registration, qualification or compliance, and will reimburse the Company,
     each of its officers, directors and employees, and each Person who controls
     the Company, each such underwriter and each Person who controls any such
     underwriter for any legal or any other expenses reasonably incurred in
     connection with investigating and defending or settling such claim, loss,
     damage, liability or action, in each case to the extent, but only to the
     extent, that such untrue statement or omission is made in such registration
     statement, prospectus, offering circular or other document in reliance upon
     and in conformity with written information furnished to the Company by the
     Selling Shareholder and stated to be specifically for use therein;
     provided, however, that the obligations of the Selling Shareholder
     hereunder shall be limited to an amount equal to the proceeds to the
     Selling Shareholder of securities sold as contemplated herein, unless such
     claim, loss, damage or liability resulted from the Selling Shareholder's
     fraudulent misconduct. Notwithstanding the foregoing, the obligation of a
     Selling Shareholder to provide indemnity pursuant to this subsection shall
     not apply to amounts paid in settlement of any such loss, claim, damage or
     liability if such settlement is effected without the consent of the
     indemnifying party (which consent shall not be unreasonably withheld).

          (c) Each party entitled to indemnification under this Section 10 (the
     "Indemnified Party") shall give notice to the party required to provide
     indemnification (the "Indemnifying Party") promptly after such Indemnified
     Party has actual knowledge of any such claim as to which indemnity may be
     sought, and shall permit the Indemnifying Party to assume the defense of
     any such claim or any litigation resulting therefrom, provided that counsel
     for the Indemnifying Party, who shall conduct the defense of such claim or
     any litigation resulting therefrom, shall be approved by the Indemnified
     Party (whose approval shall not unreasonably be withheld), and the
     Indemnified Party may participate in such defense at such party's expense,
     and provided further that the failure of any Indemnified Party to give
     notice as provided herein shall not relieve the Indemnifying Party of its
     obligations under this Section 10 provided that such failure does not
     prejudice the Indemnifying Party. No Indemnifying Party, in the defense of
     any such claim or litigation, shall, except with the consent of each
     Indemnified Party, consent to entry of any judgment or enter into any
     settlement which does not include as an unconditional term thereof the
     giving by the claimant or plaintiff to such Indemnified Party of a release
     from all liability in respect to such claim or litigation. Each Indemnified
     Party shall furnish such information regarding itself or the claim in
     question as an Indemnifying Party may require in connection with defense of
     such claim and litigation resulting therefrom.

          (d) Contribution. If recovery is not available under the foregoing
     indemnification provisions of Section 10, for any reason other than as
     specified therein, the parties entitled to indemnification by the terms
     thereof shall be entitled to contribution to liabilities and expenses. In
     determining the amount of contribution to which the respective parties are
     entitled, there shall be considered the relative benefits received by each
     party from the offering of the securities (taking into account the portion
     of the proceeds of the offering realized by each), the parties' relative
     knowledge and access to information concerning the matter with respect to
     which the claim was asserted,

<PAGE>

     the opportunity to correct and prevent any statement or omission and any
     other equitable considerations appropriate under the circumstances.
     Notwithstanding the provisions of this Section 10, no person guilty of
     fraudulent misrepresentation (within the meaning of Section 11(f) of the
     Securities Act), shall be entitled to contribution from any person who is
     not guilty of such fraudulent misrepresentation.

     Section 11. Stock Transfer Agent. Any reference in this Warrant to the
stock transfer agent shall apply if, and only if, the Company shall have advised
the Holder that such an agent has been designated as an agency for the transfer
or exercise of this Warrant.

     Section 12. Governing Law. This Warrant is being delivered in the State of
New Jersey, and this Warrant shall be construed in accordance with the laws of
such state applicable to contracts executed and to be performed wholly within
such state.

     Section 13. Notice. Notices and other communications to be given to the
Holder of the Warrants evidenced by this certificate shall be deemed to have
been sufficiently given, if delivered or mailed, addressed in the name and at
the address of such owner appearing on the records of the Company, and if
mailed, sent registered or certified mail, postage prepaid. Notices or other
communications to the Company shall be deemed to have been sufficiently given if
delivered by hand or mailed postage prepaid, to the Company 500 Craig Road,
Manalapan, New Jersey 07726-87890.

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the ____
day of January, 2000.

                                          CALTON, INC.

                                          By:
                                              ------------------------------
                                          ANTHONY J. CALDARONE, Chairman
                                          of the Board, President and Chief
                                          Executive Officer

                                          TAYTROWE VAN FECHTMANN
                                          WORLD COMPANIES, INC.

                                          By:
                                              ------------------------------

<PAGE>

                                   Schedule A

                                EBITDA PROJECTION

                              Fiscal Quarter ended

<TABLE>
<CAPTION>

    May 31, 2000         August 31, 2000       November 30, 2000       February 28, 2001
    ------------         ---------------       -----------------       -----------------
<S>                      <C>                   <C>                     <C>
     ($656,260)            $4,571,473             $21,941,599             $25,554,552
</TABLE>

<PAGE>

                                  PURCHASE FORM

     (To be executed by the holder of the Warrant if he (it) desires to exercise
     the Warrant in whole or in part)

TO:  CALTON, INC.

     The undersigned, whose Social Security or other identifying number is
_______, hereby irrevocably elects the right of purchase represented by the
within Warrant for, and to purchase thereunder, _________ shares of Common Stock
provided for therein and tenders payment therewith to the order of CALTON, INC.,
in the amount of $_________. The undersigned requests that certificates for such
shares of Common Stock be issued as follows:

         Name:
                      ---------------------------------------------------------
         Address:
                      ---------------------------------------------------------
         Deliver to:
                      ---------------------------------------------------------
         Address:
                      ---------------------------------------------------------

and, if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the shares of Common Stock purchasable under the within Warrant be registered
in the name of, and delivered to, the undersigned at the address stated below:

         Address:
                      ---------------------------------------------------------

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

                                         (Signature must conform in all respects
                                         to the name of the Holder of the
                                         Warrant, without alteration,
                                         enlargement or any change whatsoever,
                                         and the signature must be guaranteed in
                                         the usual manner).

                                         Signature Guaranteed:

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