Document:

SECURITIES PURCHASE AGREEMENT

         THIS SECURITIES  PURCHASE  AGREEMENT  (this  "Agreement") is made as of
________,  2004 by and between Star Computing Limited, a Nevada corporation (the
"Company"),  and the  purchaser  whose  name and  address  are set  forth on the
signature page hereto ("Purchaser").

                                    RECITALS

         WHEREAS, pursuant to that certain Subscription Application of Purchaser
dated  _________,  2004 (the  "Subscription  Application"),  an executed copy of
which is attached  hereto as Exhibit A, the Company desires to sell to Purchaser
and  Purchaser  desires to purchase from the Company the number of shares of the
Company's  restricted  common  stock  set  forth on the  signature  page  hereto
(collectively,  the "Common  Stock") at a price of $1.50 per share and a warrant
to purchase additional shares of the common stock of the Company as set forth in
the form of warrant attached hereto as Exhibit B (the "Warrant'), subject to the
terms and  conditions of this  Agreement and the other  documents or instruments
contemplated hereby.

         NOW, THEREFORE, the parties hereto hereby agree as follows:

                                    AGREEMENT

1. Sale and Issuance of Common Stock and Warrant.

         Subject to the terms and conditions of this Agreement,  the Company has
authorized  the sale and issuance  (the  "Issuance")  to Purchaser of the Common
Stock and the Warrant.  At the Closing (as defined in Section 2.1),  the Company
shall sell to Purchaser,  and  Purchaser  shall  purchase from the Company,  the
Common  Stock at a purchase  price of $1.50 per share,  subject to the terms and
conditions of this Agreement. Additionally, the Company shall issue a warrant to
purchase the same amount of shares of the  Company's  Common Stock  purchased by
the Purchaser pursuant to this Agreement at an exercise price of $3.00 per share
in the form of warrant attached hereto as Exhibit B.

2. The Closing; Contingency.

         2.1 Subject to the  contingency  set forth in Section  2.3 hereof,  the
closing of the Issuance to  Purchaser  (the  "Closing")  shall take place at the
principal office of the Escrow Agent as defined in that certain Escrow Agreement
dated of even date hereof  executed  by the Escrow  Agent and all the parties to
this Agreement (the "Escrow Agreement").

         2.2 At the Closing,  (A) the Company shall have delivered to the Escrow
Agent a  stock  certificate  representing  the  Common  Stock  purchased  by the
Purchaser,  the Warrant, an executed copy of this Agreement and an executed copy
of the Escrow  Agreement;  and (B) the  Purchaser  shall have  delivered  to the
Escrow Agent by wire transfer in an aggregate amount equal to the purchase price
therefor as set forth on the  signature  page hereto,  an executed  copy of this
Agreement and an executed copy of the Escrow Agreement.

         2.3 The closing of the Issuance is contingent  on the Company  entering
into that  certain  Stock  Purchase  Agreement  dated of even date hereof by and
among the Company and Larry S. Poland, an individual stockholder of the Company,
on the one hand,  and  Hi-Tech  Environmental  Products,  LLC, a Nevada  limited
liability  company  d/b/a  VitroCo,  VitroCo  Materials,  LLC, a Nevada  limited
liability  company  and all of the  shareholders  of  VitroTech  Corporation,  a
Delaware corporation, on the other hand.

<PAGE>

3. Representations and Warranties of the Company.

         The Company hereby represents and warrants to Purchaser as follows:

         3.1      Organization.

         The Company is duly  organized,  validly  existing and in good standing
under the laws of the State of Nevada and is  qualified  to conduct its business
as a  foreign  corporation  in each  jurisdiction  where  the  failure  to be so
qualified would have a material adverse effect on the Company.

         3.2      Authorization of Agreement, Etc.

         The  execution,  delivery  and  performance  by  the  Company  of  this
Agreement and the Subscription Application and each other document or instrument
contemplated hereby or thereby  (collectively,  the "Financing  Documents") have
been duly authorized by all requisite corporate action by the Company;  and this
Agreement  and each  other  Financing  Document  have  been  duly  executed  and
delivered by the Company.  Each of the  Financing  Documents,  when executed and
delivered by the Company,  constitutes  the valid and binding  obligation of the
Company,  enforceable against the Company in accordance with its terms,  subject
to applicable  bankruptcy,  insolvency,  reorganization,  fraudulent conveyance,
moratorium  or other  similar  laws  affecting  creditors'  rights and  remedies
generally,  and subject as to  enforceability  to general  principles  of equity
(regardless  of  whether  enforcement  is  sought in a  proceeding  at law or in
equity).

4. Representations and Warranties of Purchaser.

         Purchaser hereby represents and warrants to the Company as follows:

         4.1      Authorization of the Documents.

         Purchaser  has  all  requisite   power  and  authority   (corporate  or
otherwise)  to execute,  deliver and perform  the  Financing  Documents  and the
transactions  contemplated thereby, and the execution,  delivery and performance
by  Purchaser  of the  Financing  Documents  have  been duly  authorized  by all
requisite  action by Purchaser and each such Financing  Document,  when executed
and  delivered  by  Purchaser,  constitutes  a valid and binding  obligation  of
Purchaser,  enforceable against Purchaser in accordance with its terms,  subject
to applicable  bankruptcy,  insolvency,  reorganization,  fraudulent conveyance,
moratorium  or other  similar  laws  affecting  creditors'  rights and  remedies
generally,  and subject,  as to enforceability,  to general principles of equity
(regardless  of  whether  enforcement  is  sought in a  proceeding  at law or in
equity).

         4.2      Investment Representations.

         All of the  representations,  warranties  and  information of Purchaser
provided in the Subscription Application are incorporated herein and made a part
hereof by this  reference  and shall be true at the Closing with the same effect
as though made at the Closing.

         4.3      U.S.A. Patriot Act Representations

         (A) Purchaser represents, warrants and covenants that Purchaser:

                                       2
<PAGE>

              (i)(a) is  subscribing  for the Common Stock for  Purchaser's  own
account,  own risk and own beneficial  interest,  (b) is not acting as an agent,
representative,  intermediary,  nominee or in a similar  capacity  for any other
person or entity,  nominee account or beneficial owner, whether a natural person
or entity (each such natural person or entity, an "Underlying Beneficial Owner")
and no Underlying  Beneficial Owner will have a beneficial or economic  interest
in  the  Common  Stock  being  purchased  by  Purchaser   (whether  directly  or
indirectly,  including without limitation,  through any option, swap, forward or
any other hedging or derivative transaction), (c) if it is an entity, including,
without  limitation,  a fund-of-funds,  trust,  pension plan or any other entity
that is not a natural person (each,  an "Entity"),  has carried out thorough due
diligence as to and  established  the  identities  of such  Entity's  investors,
directors,  officers,  trustees,  beneficiaries  and  grantors  (to  the  extent
applicable,  each a "Related Person" of such Entity), holds the evidence of such
identities,  will  maintain  all such  evidence for at least five years from the
date of Purchaser's  resale or other  disposition of all the Common Stock,  will
request such  additional  information  as the Company may require to verify such
identities as may be required by applicable law, and will make such  information
available to the Company upon its request,  and (d) does not have the  intention
or obligation to sell, pledge,  distribute,  assign or transfer all or a portion
of the Common Stock to any Underlying  Beneficial Owner or any other person;  or
(check and initial one box)

              (ii)(a) is subscribing  for the Common Stock as a record owner and
will not have a beneficial ownership interest in the Common Stock, (b) is acting
as an agent, representative,  intermediary, nominee or in a similar capacity for
one or more Underlying  Beneficial Owners (as defined in (A)(i)(a)  above),  and
understands and acknowledges that the representations, warranties and agreements
made in the  Financing  Documents  are made by  Purchaser  with  respect to both
Purchaser and the Underlying  Beneficial  Owner(s),  (c) has all requisite power
and authority from the Underlying Beneficial Owner(s) to execute and perform the
obligations under the Subscription  Agreement,  (d) has carried out thorough due
diligence as to and  established  the  identities of all  Underlying  Beneficial
Owners (and,  if an Underlying  Beneficial  Owner is not a natural  person,  the
identities of such Underlying  Beneficial Owner's Related Persons (to the extent
applicable)),  holds the  evidence of such  identities,  will  maintain all such
evidence  for at least five years from the date of  Purchaser's  resale or other
disposition of all the Common Stock, and will make such information available to
the Company upon its request and (e) does not have the  intention or  obligation
to sell, pledge,  distribute,  assign or transfer all or a portion of the Common
Stock to any person other than the Underlying Beneficial Owner(s).

         (B)  Purchaser  hereby   represents  and  warrants  that  the  proposed
investment  in the  Company  that  is  being  made  on its  own  behalf  or,  if
applicable,  on behalf of any Underlying  Beneficial Owners does not directly or
indirectly contravene United States federal,  state, local or international laws
or regulations applicable to Purchaser,  including anti-money laundering laws (a
"Prohibited Investment").

         (C) Federal  regulations and Executive Orders  administered by the U.S.
Treasury Department's Office of Foreign Assets Control ("OFAC") prohibit,  among
other things, the engagement in transactions with, and the provision of services
to, certain foreign countries,  territories, entities and individuals. The lists
of OFAC prohibited countries,  territories, persons and entities can be found on
the OFAC website at www.treas.gov/ofac. Purchaser hereby represents and warrants
that neither  Purchaser nor, if applicable,  any Underlying  Beneficial Owner or
Related Person, is a country, territory, person or entity named on an OFAC list,
nor is Purchaser nor, if applicable,  any Underlying Beneficial Owner or Related
Person,  a natural person or entity with whom dealings are prohibited  under any
OFAC regulations.

         (D) Purchaser  represents  and warrants that neither  Purchaser nor, if
applicable,  any  Underlying  Beneficial  Owner or Related  Person,  is a senior
foreign political figure, or any immediate family member or close associate of a
senior foreign  political figure within the meaning of, and applicable  guidance
issued by the Department of the Treasury  concerning,  the U.S. Bank Secrecy Act
(31  U.S.C.  ss.5311  et seq.),  as  amended,  and any  regulations  promulgated
thereunder.

                                       3
<PAGE>

                  (E)  Purchaser  agrees  promptly to notify the Company  should
Purchaser  become aware of any change in the information set forth in paragraphs
(A) through (D).

                  (F)  Purchaser  agrees  to  indemnify  and hold  harmless  the
Company, its affiliates,  their respective  directors,  officers,  shareholders,
employees,  agents and representatives  (each, an "Indemnitee") from and against
any and all losses,  liabilities,  damages,  penalties, costs, fees and expenses
(including  legal fees and  disbursements)  (collectively,  "Damages") which may
result,   directly  or  indirectly,   from  Purchaser's   misrepresentations  or
misstatements  contained  herein or breaches  hereof  relating to paragraphs (A)
through (D).

                  (G)  Purchaser  understands  and agrees that,  notwithstanding
anything to the contrary  contained in any document  (including any side letters
or similar agreements),  if, following Purchaser's investment in the Company, it
is discovered that the investment is or has become a Prohibited Investment, such
investment may immediately be redeemed by the Company or otherwise be subject to
the remedies  required by law,  and  Purchaser  shall have no claim  against any
Indemnitee  for any form of Damages  as a result of such  forced  redemption  or
other action.

                  (H) Upon the  written  request  from  the  Company,  Purchaser
agrees to provide all information to the Company to enable the Company to comply
with all applicable  anti-money  laundering  statutes,  rules,  regulations  and
policies,  including any policies  applicable to a portfolio  investment held or
proposed to be held by the Company.  Purchaser  understands  and agrees that the
Company may release confidential information about Purchaser and, if applicable,
any Underlying  Beneficial  Owner(s) or Related  Person(s) to any person, if the
Company, in its sole discretion, determines that such disclosure is necessary to
comply with applicable statutes, rules, regulations and policies.

5. Brokers and Finders.

         The Company shall not be obligated to pay any commission, brokerage fee
or  finder's  fee  based  on any  alleged  agreement  or  understanding  between
Purchaser and a third person in respect of the transactions contemplated hereby.
Purchaser  hereby agrees to indemnify the Company against any claim by any third
person for any  commission,  brokerage  or finder's  fee or other  payment  with
respect to this Agreement or the transactions  contemplated  hereby based on any
alleged  agreement or  understanding  between  Purchaser  and such third person,
whether express or implied from the actions of Purchaser.

6. Indemnification.

         Purchaser   hereby   agrees  to  indemnify  and  defend  (with  counsel
acceptable  to the Company) the Company and its officers,  directors,  employees
and agents and hold them harmless from and against any and all liability,  loss,
damage,  cost or  expense,  including  costs  and  reasonable  attorneys'  fees,
incurred on account of or arising from:

         (i)  Any  breach  of  or  inaccuracy  in  Purchaser's  representations,
warranties or agreements herein or in the Subscription Application; and

         (ii)  Any  action,  suit or  proceeding  based  on a claim  that any of
Purchaser's  representations and warranties in the Subscription Application were
inaccurate or misleading,  or otherwise  cause for obtaining  damages or redress
from the  Company or any  officer,  director,  employee  or agent of the Company
under the Securities Act.

                                       4
<PAGE>

7. Piggy-Back Registration Rights.

        If the  Company  at any time  proposes  for any reason to  register  its
restricted common stock under the Securities Act of 1933, as amended (the "Act")
(other than on Form S-4 or Form S-8  promulgated  under the Act or any successor
forms  thereto),  it shall  promptly  give  written  notice to  Purchaser of its
intention  to so  register  such  common  stock and,  upon  Purchaser's  written
request,  given within 30 days after delivery of any such notice by the Company,
to include in such  registration  some or all of the Common Stock  ("Registrable
Shares")  (which  request  shall  specify  the number of shares  proposed  to be
included in such registration),  the Company shall use its best efforts to cause
all such  Registrable  Shares to be  included in such  registration  on the same
terms  and   conditions  as  the  securities   otherwise   being  sold  in  such
registration;  provided,  however,  that if a managing  underwriter  advises the
Company that the inclusion of all Registrable  Shares proposed to be included in
such  registration  would  interfere  with the successful  marketing  (including
pricing) of the common stock proposed to be registered by the Company,  then the
number of Registrable  Shares proposed to be included in such registration shall
be reduced accordingly.

8. Successors and Assigns.

         This  Agreement  shall bind and inure to the  benefit  of the  Company,
Purchaser and their respective successors and assigns.

9. Entire Agreement.

         This  Agreement and the other  writings and  agreements  referred to in
this  Agreement  or  delivered  pursuant  to this  Agreement  contain the entire
understanding  of the  parties  with  respect to the subject  matter  hereof and
supersedes  all prior  agreements  and  understandings  among the  parties  with
respect thereto.

10. Notices.

         All  notices,  demands and  requests of any kind to be delivered to any
party in connection  with this Agreement shall be in writing and shall be deemed
to   have   been   duly   given   if   personally   delivered   or  if  sent  by
internationally-recognized overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:

                  if to the Company, to:

                                Star Computing Limited (VitroTech Corporation)
                                5 Hutton Centre Drive Suite 700
                                Santa Ana, CA 92707
                                Attn: Jess Rae Booth

                                with a copy to:

                                Richardson & Patel LLP
                                10900 Wilshire Blvd., Suite 500
                                Los Angeles, CA 90024
                                Telecopier: (310) 208-1154
                                Attention: Kevin K. Leung, Esq.

                                       5
<PAGE>

                  if to Purchaser, to:

                           the address of Purchaser  set forth on the  signature
                           page hereto;

or to such  other  address  as the party to whom  notice is to be given may have
furnished to the other parties to this  Agreement in writing in accordance  with
the  provisions  of this Section 10. Any such notice or  communication  shall be
deemed to have been received (i) in the case of personal  delivery,  on the date
of such  delivery,  (ii) in the  case  of  internationally-recognized  overnight
courier, on the next business day after the date when sent and (iii) in the case
of mailing,  on the third business day following that on which the piece of mail
containing such communication is posted.

11.      Amendments.

         This Agreement may not be modified or amended, or any of the provisions
of this  Agreement  waived,  except by  written  agreement  of the  Company  and
Purchaser.

12. Governing Law; Waiver of Jury Trial.

         All questions concerning the construction,  interpretation and validity
of this Agreement  shall be governed by and construed and enforced in accordance
with the domestic  laws of  California  without  giving  effect to any choice or
conflict of law  provision or rule  (whether in the State of  California  or any
other  jurisdiction)  that  would  cause  the  application  of the  laws  of any
jurisdiction  other than the State of Nevada.  In  furtherance of the foregoing,
the internal law of the State of California will control the  interpretation and
construction of this Agreement,  even if under such jurisdiction's choice of law
or conflict of law  analysis,  the  substantive  law of some other  jurisdiction
would ordinarily or necessarily apply.

         BECAUSE   DISPUTES   ARISING  IN  CONNECTION  WITH  COMPLEX   FINANCIAL
TRANSACTIONS  ARE MOST QUICKLY AND  ECONOMICALLY  RESOLVED BY AN EXPERIENCED AND
EXPERT  PERSON  AND THE  PARTIES  WISH  APPLICABLE  LAWS TO APPLY  (RATHER  THAN
ARBITRATION  RULES),  THE PARTIES  DESIRE  THAT THEIR  DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,  TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL  SYSTEM AND OF  ARBITRATION,  THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,  SUIT OR  PROCEEDING  BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES  UNDER THIS  AGREEMENT OR ANY DOCUMENTS
RELATED HERETO.

13. Submission to Jurisdiction.

         Any legal action or  proceeding  with respect to this  Agreement or the
other  Financing  Documents  may be  brought  in the  courts  of  the  State  of
California and the United States of America  located in the City of Los Angeles,
California, U.S.A. and, by execution and delivery of this Agreement, the Company
hereby  accepts  for  itself  and in  respect  of its  property,  generally  and
unconditionally,  the  jurisdiction of the aforesaid  courts.  Purchaser  hereby
irrevocably  waives,  in  connection  with any such  action or  proceeding,  any
objection, including, without limitation, any objection to the venue or based on
the grounds of forum non  conveniens,  which it may now or hereafter have to the
bringing  of any such action or  proceeding  in such  respective  jurisdictions.
Purchaser  hereby  irrevocably  consents to the service of process of any of the
aforementioned  courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail,  postage prepaid,  to it at its address
as set forth herein.

                                       6
<PAGE>

14. Severability.

         It is the desire and intent of the parties that the  provisions of this
Agreement be enforced to the fullest extent permissible under the law and public
policies  applied  in  each   jurisdiction  in  which   enforcement  is  sought.
Accordingly,  in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction,  shall be ineffective,  without invalidating
the  remaining  provisions  of this  Agreement  or  affecting  the  validity  or
enforceability  of  such  provision  in any  jurisdiction.  Notwithstanding  the
foregoing,  if such  provision  could  be more  narrowly  drawn  so as not to be
invalid, prohibited or unenforceable in such jurisdiction,  it shall, as to such
jurisdiction,   be  so  narrowly  drawn,   without  invalidating  the  remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

15. Independence of Agreements, Covenants, Representations and Warranties.

         All  agreements  and  covenants  hereunder  shall be given  independent
effect so that if a certain  action or condition  constitutes  a default under a
certain  agreement  or  covenant,  the fact that such  action  or  condition  is
permitted by another  agreement or covenant  shall not affect the  occurrence of
such default, unless expressly permitted under an exception to such covenant. In
addition,   all  representations   and  warranties   hereunder  shall  be  given
independent effect so that if a particular  representation or warranty proves to
be incorrect or is breached,  the fact that another  representation  or warranty
concerning the same or similar subject matter is correct or is not breached will
not affect the  incorrectness  of or a breach of a  representation  and warranty
hereunder.  The exhibits and any schedules  attached hereto are hereby made part
of this Agreement in all respects.

16. Counterparts.

         This Agreement may be executed in any number of counterparts,  and each
such counterpart of this Agreement shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and binding.

17. Headings.

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

18. Expenses.

         Purchaser  shall pay  Purchaser's  own fees and  expenses  incurred  in
connection  with the  preparation,  negotiation,  execution  and delivery of the
Financing Documents.

19. Preparation of Agreement.

         The Company  prepared this Agreement and the  Subscription  Application
solely on its behalf.  Each party to this Agreement  acknowledges  that: (i) the
party had the  advice  of, or  sufficient  opportunity  to obtain the advice of,
legal  counsel  separate and  independent  of legal  counsel for any other party
hereto;  (ii) the terms of the  transactions  contemplated by this Agreement are
fair and reasonable to such party; and (iii) such party has voluntarily  entered
into the transactions contemplated by this Agreement without duress or coercion.
Each party further acknowledges that such party was not represented by the legal
counsel  of  any  other  party  hereto  in  connection  with  the   transactions
contemplated  by  this  Agreement,  nor  was  he  or  it  under  any  belief  or
understanding  that such legal counsel was  representing  his or its  interests.
Each party agrees that no conflict,  omission or ambiguity in this Agreement, or
the interpretation  thereof,  shall be presumed,  implied or otherwise construed
against  any other  party to this  Agreement  on the basis  that such  party was
responsible for drafting this Agreement.

                                    * * * * *

                                       7
<PAGE>

         IN WITNESS  WHEREOF,  each of the  undersigned  has duly  executed this
Securities Purchase Agreement as of the date first written above.

                                COMPANY:

                                STAR COMPUTING LIMITED

                                By: __________________________
                                    Name:
                                    Title:

PURCHASER:

------------------------------          --------------------------------
Name of Purchaser (Individual or        Name of Individual representing
  Institution)                          Purchaser (if an Institution)

------------------------------          --------------------------------
Title of Individual representing        Signature of Individual Purchaser or
  Purchaser (if an Institution)         Individual representing Purchaser

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

                                        Telephone:
                                        --------------------------------

                                        Telecopier:
                                        --------------------------------

Number of Shares  Aggregate Purchase Price

---------------   $--------------------------

<PAGE>

                                    EXHIBIT A

                        EXECUTED SUBSCRIPTION APPLICATION

                                 (see attached)

                             STAR COMPUTING LIMITED
                            SUBSCRIPTION APPLICATION

                         (for Accredited Investors Only)

Name of Subscriber.................................   __________________________

Name of Co-Subscriber, if any......................   __________________________

Address of Subscriber(1)...........................   __________________________

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

Address of Co-Subscriber (if different)(1).........   __________________________

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

Aggregate number of shares of Common Stock            ___________________
subscribed to purchase.............................

Check enclosed (or wire transfer) in the amount of.
                                                      $------------------

(1)    Permanent  legal  residence and domicile  (other than Post Office Box) if
       the Subscriber is an individual,  or permanent  principal legal executive
       offices  and  place of  business  (other  than  Post  Office  Box) if the
       Subscriber is an entity.

                            Personal and Confidential

         The undersigned (the "Subscriber") hereby makes application to purchase
from STAR COMPUTING  LIMITED.,  a Nevada  corporation (the  "Company"),  _______
shares of the Company's Common Stock (the "Subscribed  Shares") and a warrant to
purchase  additional  shares of the  Company's  Common  Stock  (the  "Warrant"),
pursuant to a Securities  Purchase  Agreement in substantially the form attached
hereto as Exhibit A (the  "Agreement").  The Subscriber  understands  and agrees
that this Subscription  Application to purchase the Subscribed Shares is binding
and  irrevocable on the  Subscriber's  part, and that  acceptance by the Company
shall be in its sole  discretion and otherwise in accordance  with the terms set
forth in this Subscription Application and the Agreement (the Agreement and this
Subscription  Application are sometimes  referred to collectively  herein as the
"Offering Materials").

                       [SUBSCRIBER QUESTIONNAIRE FOLLOWS]

<PAGE>

1.      CONFIDENTIAL SUBSCRIBER INFORMATION

<TABLE>
<S>                                                                     <C>

--------------------------------------------------------------------------------------------------------------------------
Name of Subscriber

--------------------------------------------------------------------------------------------------------------------------
If Subscriber is an Entity Provide Name                     Year Formed               State of Formation

--------------------------------------------------------------------------------------------------------------------------
Street Address                          City                                                   Zip

--------------------------------------------------------------------------------------------------------------------------
Subscriber SS# or EIN/TIN       Cell Phone Number     Work Phone Number      Home Phone Number

--------------------------------------------------------------------------------------------------------------------------
Subscriber's Age          Date of Birth                  Married (Y/N)/Divorced                      # of Dependants

--------------------------------------------------------------------------------------------------------------------------
Name and Address of Subscriber's Current Employer

--------------------------------------------------------------------------------------------------------------------------
Type of Business of Subscriber            Position/Title                                         Number of Years

--------------------------------------------------------------------------------------------------------------------------
College/Degree                            Graduate School/Degree                                    Professional Licenses

--------------------------------------------------------------------------------------------------------------------------
List Previous Investment Experience
Number of Years

--------------------------------------------------------------------------------------------------------------------------
List Previous Private Placement Investments                     Total Invested

--------------------------------------------------------------------------------------------------------------------------
List any Securities Currently                                   Owned                           Total Value

--------------------------------------------------------------------------------------------------------------------------
How does Subscriber Know the Company?

--------------------------------------------------------------------------------------------------------------------------
Name of Primary Financial Institution                         Address                           Phone Number

---------------------------------------------------------------------------------
Name in which Subscribed Shares will be Held.  (check one below)
|_| Individually |_| A married man(woman) as his(her) separate property |_| Community property
|_| JTWROS |_| Tenants in common |_| Other (Describe):  ____________________________________

---------------------------------------------------------------------------------
Aggregate Number of Subscribed Shares                        Amount Invested ($)

---------------------------------------------------------------------------------
Subscriber's
Signature
Date
</TABLE>

2.      SUBSCRIBER'S ACCREDITED STATUS

         (a)  Accredited   Investor   (Regulation   D).  The  Subscriber  is  an
"Accredited  Investor"  as that  term is  defined  in Rule 501 of  Regulation  D
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
as follows:  [Please initial one or more of the following provisions  describing
the Subscriber's Accredited Investor status as may be applicable.]

         (b) Individuals. (Check all that apply)

                  |_| The  Subscriber's  individual  net worth* or combined  net
worth* with his or her spouse exceeds $1,000,000;

                  |_| The  Subscriber's  individual  income,**  exclusive of any
income  attributable to his or her spouse, was in excess of $200,000 for the two
most recent  calendar  years  preceding the calendar  year of this  Subscription
Application, and the Subscriber reasonably expects an income,** exclusive of any
income  attributable to his or her spouse,  in excess of $200,000 in the current
calendar year;  and/or (3) the  Subscriber's  combined  income** with his or her
spouse  was in  excess  of  $300,000  for the two  most  recent  calendar  years
preceding the calendar year of this Subscription  Application and the Subscriber
and his or her  spouse  reasonably  expect a  combined  income**  in  excess  of
$300,000 in the current calendar year.

                  * For  purposes  of this  Subparagraph,  the term "net  worth"
means the excess of total value (including principal residence, home furnishings
and automobiles at fair market value) over total  liabilities.  In computing net
worth, the fair market value of the principal  residence of the Subscriber shall
be valued at cost,  including  cost of  improvements,  or at recently  appraised
value by an institutional lender making a secured loan, net of encumbrances.

                  ** The Subscriber  may determine  income by adding to his, her
or its  adjusted  gross  income any amounts  attributable  to tax exempt  income
received,  losses  claimed  as a limited  partner  in any  limited  partnership,
deductions or claims for depletion,  contributions to an IRA or Keogh retirement
plan,  alimony  payments and any amount by which income from  long-term  capital
gains has been reduced in arriving at adjusted gross income.

         (c)      Entities. (Check all that apply)

                  (i) |_| Entity With Value Exceeding $5 Million. The Subscriber
is a corporation,  partnership (general or limited),  limited liability company,
limited liability  partnership or Massachusetts or similar business trust which:
(1) was not formed for the specific purpose of acquiring the Subscribed  Shares,
and (2) has total assets in excess of $5,000,000.

                  (ii)  |_|  Entity  Comprised  of  Accredited  Investors.   The
Subscriber is a corporation, partnership (general or limited), limited liability
company,  limited  liability  partnership or  Massachusetts  or similar business
trust in which all of the Subscriber's equity owners are Accredited Investors.

                  (iii) |_| Revocable Trust. The Subscriber is a revocable trust
(also commonly known as a family or living trust)  established to facilitate the
distribution of the estate of the settlors (grantors):  (1) which may be revoked
or  amended at any time by the  settlors  (grantors);  (2) which  passes all tax
benefits of  investments  made by such trust through to the settlors  (grantors)
individually;  and (3) in which all of the settlors  (grantors)  are  Accredited
Investors.

                  (iv) |_| Trust Whose Assets Exceed $5 Million.  The Subscriber
is a trust that has total assets in excess of $5,000,000,  and the person making
the investment decision on behalf of the trust has such knowledge and experience
in financial and business  matters that such person is capable of evaluating the
merits and risks of an investment in the Subscribed Shares.

<PAGE>

                  (v) |_| Financial  Institution as Trustee. The Subscriber is a
financial  institution  which: (1) is a bank,  savings and loan association,  or
other regulated financial  institution;  (2) is acting in its fiduciary capacity
as trustee;  and (3) is subscribing for the purchase of the Subscribed Shares on
behalf of the subscribing trust.

                  (vi) |_|  Employee  Benefit Plan  (including  Keogh Plan) With
Self-Directed Investments and Segregated Accounts. The Subscriber is an employee
benefit plan within the meaning of the Employee  Retirement  Income Security Act
of 1974, as amended ("ERISA"),  and: (1) such plan is self directed and provides
for segregated accounts;  (2) the investment decision to purchase the Subscribed
Shares is being made by a plan  participant who is an Accredited  Investor;  and
(3) the  investment in the  Subscribed  Shares is being made solely on behalf of
such Accredited Investor.

                  (vii) |_| Employee  Benefit Plan  (including  Keogh Plan) With
Financial  Institution As Trustee.  The  Subscriber is an employee  benefit plan
within the meaning of ERISA, and the decision to invest in the Subscribed Shares
was made by a plan  fiduciary (as defined in Section  3(21) of ERISA),  which is
either a bank, savings and loan association,  insurance  company,  or registered
investment adviser.

                  (viii) |_| Employee  Benefit Plan (including  Keogh Plan) With
Assets  Exceeding $5 Million.  The Subscriber is an employee benefit plan within
the meaning of ERISA and has total assets in excess of $5,000,000.

                  (ix) |_| Tax Exempt 501(c)(3) Organization.  The Subscriber is
an organization  described in Section  501(c)(3) of the Internal Revenue Code of
1986, as amended,  which organization was not formed for the specific purpose of
acquiring the  Subscribed  Shares,  and which  organization  has total assets in
excess of $5,000,000.

                  (x) |_| Bank.  The  Subscriber  is a bank as  defined  in
Section 3(a)(2) of the Securities Act.

                  (xi) |_| Savings and Loan  Association.  The  Subscriber  is a
savings  and loan  association  or  other  institution  as  defined  in  Section
3(a)(5)(i) of the Securities Act.

                  (xii) |_| Insurance  Company.  The  Subscriber is an insurance
company as defined in Section 2(14) of the Securities Act.

                  (xiii) |_| Investment Company. The Subscriber is an investment
company registered under the Investment Company Act of 1940.

                  (xiv) |_| Business  Development  Company.  The Subscriber is a
business  development  company as defined in Section  2(a)(48) of the Investment
Company Act of 1940.

                  (xv) |_| Small Business Investment Company.  The Subscriber is
a  small  business  investment  company  licensed  by the  U.S.  Small  Business
Administration  under Section 301(c) or (d) of the Small Business Investment Act
of 1958.

                  (xvi) |_| Private Business Development Company. The Subscriber
is a private business  development  company as defined in Section  202(a)(22) of
the Investment Advisors Act of 1940.

<PAGE>

                  (xvii) |_|  Registered  Broker or Dealer.  The Subscriber is a
broker or dealer  registered  pursuant to Section 15 of the Securities  Exchange
Act of 1934.

3.       REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

         The  Subscriber  and,  if the  Subscriber  is an  entity,  each  of its
officers,  directors,  partners, managers, members, trustees, beneficial owners,
principals and/or agents,  hereby represent and warrant to the Company,  each of
which is deemed to be a separate representation and warranty, as follows:

         (a) Residence. The Subscriber's permanent legal residence and domicile,
if the Subscriber is an individual,  or permanent  legal  executive  offices and
principal place of business,  if the Subscriber is an entity,  was and is at the
address  designated on the cover page of this  Subscription  Application at both
the time of the "offer" and the time of the "sale" of the  Subscribed  Shares to
the Subscriber.

         (b) Age. The Subscriber,  if a natural person,  is age eighteen (18) or
over.

         (c) Knowledge and Experience;  Sophistication (Regulation D; Blue Sky).
The  Subscriber  (together  with his,  her and/or its  Advisors  (as  defined in
subsection (f) below)) has such knowledge and experience in business,  financial
and tax matters  including,  in particular,  investing in private  placements of
securities in companies similar to the Company,  so as to enable them to utilize
the information  made available to them in connection with this offering to: (i)
evaluate  the merits and risks of an  investment  in the  Company and to make an
informed  investment  decision with respect  thereto;  and (ii) to reasonably be
assumed to have the  capacity  to protect  the  Subscriber's  own  interests  in
connection with the transaction contemplated by this Subscription Application.

         (d)  Minimum  Net Worth (Blue Sky).  An  investment  in the  Subscribed
Shares will not exceed ten percent  (10%) of the  Subscriber's  net worth if the
Subscriber  is an  entity,  or joint  net  worth  with his or her  spouse if the
Subscriber is a natural person.

         (e) Receipt and Review of Offering Materials.  The Subscriber:  (i) has
received  the  Offering  Materials;  and  (ii)  has  read  each of the  Offering
Materials in its entirety and fully  understands the matters  discussed  therein
and the terms of thereof.

         (f) Independent Review of Investment Merits; Due Diligence.  During the
course of the transactions  contemplated by this offering, and before purchasing
the Subscribed  Shares:  (i) the  Subscriber had the  opportunity to engage such
investment   professionals   and   advisors   including,   without   limitation,
accountants,  appraisers,  investment, tax and legal advisors (collectively, the
"Advisors"),  each of whom are  independent  of the Company and its advisors and
agents  (including its legal counsel) to: (1) review the terms and conditions of
this  Subscription   Application,   the  Agreement,   and  the  information  and
disclosures  contained herein and therein; (2) conduct such due diligence review
as the Subscriber and/or such Advisors deemed necessary or advisable, and (3) to
provide such opinions as to (A) the investment  merits of a proposed  investment
in the  Subscribed  Shares;  (B) the tax  consequences  of the  purchase  of the
Subscribed Shares and the subsequent  disposition of the Subscribed  Shares; and
(C) the effect of same upon the Subscriber's  personal financial  circumstances,
as the  Subscriber  and/or such  Advisors  may deem  advisable;  and (ii) to the
extent the Subscriber  availed himself,  herself or itself of this  opportunity,
received satisfactory information and answers from such Advisors.

         (g)  Opportunity  to Ask Questions and to Review  Documents,  Books and
Records;   Opportunity  to  Meet  with  Representatives  of  the  Company;  Full
Satisfaction.  Without limiting the generality of subsections (e) and (f) above,
during  the  course  of  the  transaction   contemplated  by  this  Subscription
Application,  and before purchasing the Subscribed Shares, the Subscriber and/or
his, her or its Advisors had the  opportunity,  to the extent they determined to
be  necessary  or  relevant in order to verify the  accuracy of the  information
contained  in the  Offering  Materials  and/or  to  evaluate  the  merits  of an
investment in the Subscribed Shares: (i) to be provided with financial and other
written  information  about the Company (in  addition to that  contained  in the
Offering  Materials)  to the  extent the  Company  has such  information  in its
possession or could acquire it without  unreasonable effort or expense;  (ii) to
meet with  representatives  of the  Company  and to ask  questions  and  receive
answers  concerning  the terms and  conditions  of the  Offering  Materials,  an
investment  in the  Subscribed  Shares,  and the business of the Company and its
finances;  (iii) to review all documents,  books and records of the Company; and
(iv) to the  extent the  Subscriber  and/or  his,  her or its  Advisors  availed
themselves of this opportunity, received satisfactory information and answers.

<PAGE>

         (h) Risk Factors. The Subscriber  understands and acknowledges that the
purchase of the Subscribed  Shares  involves a number of  significant  risks and
that  the  Subscriber  may  lose  the  Subscriber's  entire  investment  in  the
Subscribed Shares.

         (i)  Acceptance of Investment  Risks.  The Subscriber  understands  and
acknowledges  that:  (i)  an  investment  in  the  Subscribed  Shares:  (1) is a
speculative  investment  with a high  degree of risk of loss and the  Subscriber
must, therefore, be able to presently afford a complete loss of this investment;
(2) the Subscriber must be able to hold the Subscribed Shares indefinitely;  and
(3) it may not be possible for the Subscriber to liquidate the Subscribed Shares
in the case of emergency and/or other need and the Subscriber  must,  therefore,
have adequate means of providing for the  Subscriber's  current and future needs
and personal  contingencies,  and have no need for liquidity in this investment;
and (ii) the Subscriber has evaluated the Subscriber's  financial  resources and
investment  position in view of the foregoing,  and is able to bear the economic
risk of an investment in the Subscribed Shares.

         (j) Shares Purchased For  Subscriber's  Own Account.  The Subscriber is
purchasing the Subscribed  Shares: (i) as principal and not by any other person;
(ii) with the Subscriber's own funds and not with the funds of any other person;
and (iii) for the account of the  Subscriber,  and not as a nominee or agent and
not for the  account of any other  person.  The  Subscriber  is  purchasing  the
Subscribed Shares for investment purposes only for an indefinite period, and not
with a view to the sale or distribution of any part or all thereof, by public or
private sale or other disposition. No person other than the Subscriber will have
any  interest,  beneficial  or  otherwise,  in the  Subscribed  Shares,  and the
Subscriber  is not  obligated  to transfer  the  Subscribed  Shares to any other
person nor does the Subscriber have any agreement or understanding to do so. The
Subscriber  understands  that the Company is relying in  material  part upon the
Subscriber's  representations  as set  forth in the  Agreement  and  herein  for
purposes of claiming the "Federal Exemptions" or "Blue Sky Exemptions" (as those
are defined in subsection (l) below), and that the basis for such exemptions may
not be presented  if,  notwithstanding  the  Subscriber's  representations,  the
Subscriber has in mind merely acquiring the Subscribed Shares for resale of such
Subscribed  Shares upon the occurrence or  nonoccurrence  of some  predetermined
event, and the Subscriber has no such intention.

         (k) Compliance With  Investment  Laws. The Subscriber has complied with
all applicable investment laws and regulations in force relating to the legality
of an investment in the Subscribed  Shares by the Subscriber in any jurisdiction
in which he, she or it purchases the Subscribed Shares or is otherwise  subject,
and has obtained any consent,  approval or permission required of him, her or it
for the  purchase  of the  Subscribed  Shares  under  such  investment  laws and
regulations.

         (l) Subscribed  Shares Not Registered.  The Subscriber  understands and
acknowledges that: (i) the Subscribed Shares have not been, and when issued will
not  be,   registered   with  the  Securities  and  Exchange   Commission   (the
"Commission") under Section 5 of the Securities Act in reliance upon one or more
exemptions  afforded  by the  Securities  Act and/or  rules  promulgated  by the
Commission  pursuant  thereto  which may be  selected by the Company in its sole
discretion  including,  without  limitation  (collectively  and  severally,  the
"Federal  Exemptions"):  (1)  Section  4(2) of the  Securities  Act for  private
offerings;  and (2) Rule 506 of Regulation D  promulgated  under Section 4(2) of
the Securities Act for private  offerings;  and (ii) the Subscribed  Shares have
not  been,  and  when  issued  will not be,  registered  or  qualified  with any
applicable state or territorial  securities  regulatory  agency in reliance upon
one or more  exemptions  afforded from  registration or  qualification  afforded
under the securities laws of such state or territory (the "Blue Sky Laws") which
exemptions may be selected by the Company in its sole  discretion  (collectively
and severally, the "Blue Sky Exemptions").

<PAGE>

         (m) Resale  Restrictions  On Subscribed  Shares  Pursuant to Securities
Laws. The Subscriber  understands and acknowledges  that: (i) should the Company
elect to rely upon the exemptions  afforded by Rule 506 under  Regulation D, the
Subscribed Shares will be classified, pursuant to Rule 502(d) of Regulation D of
the Securities Act, as "restricted  securities"  acquired in a transaction under
Section 4(2) of the Securities  Act,  which cannot be sold without  registration
under the  Securities  Act or an exemption  therefrom such as, by way of example
and not  limitation:  (1) Section 4(1) of the Securities  Act; (2) the so-called
"Section 4(1 1/2)  Exemption" to the Securities  Act which,  pursuant to Section
4(1) of the  Securities  Act,  exempts from the provisions of the Securities Act
requiring the  registration  of  securities  certain  "private  sales" which are
effectuated in a manner  similar to private  placements by issuers under Section
4(2) of the Securities  Act; and (3) Rule 144 and/or Rule 144A to the Securities
Act; (ii) if the  Subscriber is an  "Affiliate"  of the Company (as such term is
defined  below),  he, she or it  generally  will not be able to sell,  transfer,
assign,  or otherwise  dispose of the  Subscribed  Shares except under Rule 144;
(iii) should the Company rely upon the exemption afforded by Section 3(a)(11) of
the  Securities  Act and Rule 147  promulgated  pursuant  thereto for intrastate
offerings,  the  Subscriber  will  not be  able to  sell,  transfer,  assign  or
otherwise  dispose  of the  Subscribed  Shares for a period of at least nine (9)
months from the date of the last sale by the Company of its  securities  as part
of an offering,  including the offering of the Subscribed Shares contemplated by
this Subscription Application,  to any person who is not a resident of the state
where the Subscriber is domiciled;  and (iv) the Subscribed  Shares will also be
subject to applicable  state  securities  laws that may require  registration or
qualification of the Subscribed  Shares in connection with their resale,  unless
an exemption from such  registration or qualification is available.  In general,
an "Affiliate" is defined as a person who is a director or officer of a company,
or who directly or indirectly controls a company. As a rule of thumb,  ownership
of 10% or  more  of a  company's  voting  stock  generally  will  be  deemed  to
constitute control,  while ownership of less than 5% of a company's voting stock
will generally not be deemed to constitute control.

                  (n)  Satisfaction  of Counsel of  Company As to  Transfers  of
Subscribed Shares.  The Subscriber  understands and acknowledges that: (i) prior
to any sale, transfer, assignment, pledge, hypothecation or other disposition of
the Subscribed  Shares, the Subscriber must either: (1) furnish the Company with
a  detailed   explanation  of  the   circumstances   surrounding   the  proposed
disposition;  furnish the Company with an opinion of legal counsel (which may be
the Company's), in form and substance reasonably satisfactory to the Company and
its legal  counsel,  to the effect that such  disposition  is exempted  from the
registration and prospectus  delivery  requirements under the Securities Act and
the securities  laws of the state in which the Subscriber is then resident;  and
legal  counsel  for the Company  shall have  concurred  in such  opinion and the
Company shall have advised the  Subscriber of such  concurrence;  or (2) satisfy
the Company that a  registration  statement on Form S-1, Form SB-1, or Form SB-2
under the  Securities  Act (or any other form  appropriate  under the Securities
Act, or any form replacing any such form) with respect to the Subscribed  Shares
proposed to be so disposed of shall then be effective, and that such disposition
shall have been  appropriately  qualified or registered  in accordance  with the
applicable  Blue Sky Laws; and (ii)  notwithstanding  the  foregoing,  if in the
opinion  of  counsel  for the  Company,  the  Subscriber  has  acted in a manner
inconsistent  with  the  representations  and  warranties  in this  Subscription
Application or the Agreement,  the Company may refuse to transfer the Subscribed
Shares  until such time as counsel for the  Company is of the opinion  that such
transfer:  (1) will not require  registration of the Shares under the Securities
Act,  and  registration  or  qualification  of the  Subscribed  Shares under the
applicable  Blue Sky Laws; or (2) will otherwise  comply with the Securities Act
or the  applicable  Blue Sky Laws with  respect to the sale or  transfer  of the
Subscribed  Shares.  The Subscriber  understands and agrees that the Company may
refuse to acknowledge or permit any disposition of the Subscribed Shares that is
not in all respects in compliance with this  Subscription  Application,  and the
Company intends to make an appropriate notation in its records to that effect.

<PAGE>

         (o)  Legend  on  Certificates  to  Comply  with  Securities  Laws.  The
Subscriber  understands  and  agrees  that  the  certificates  representing  the
Subscribed Shares,  when issued,  shall bear such legend as the Company may deem
reasonably  necessary or advisable to facilitate  compliance with the Securities
Act and the  securities  laws of the  state  or  territory  of the  Subscriber's
residence, including, without limitation, substantially the following legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         WITH  THE  UNITED  STATES  SECURITIES  AND  EXCHANGE   COMMISSION  (THE
         "COMMISSION")  UNDER SECTION 5 OF THE UNITED STATES  SECURITIES  ACT OF
         1933, AS AMENDED (THE  "SECURITIES  ACT"), IN RELIANCE UPON ONE OR MORE
         EXEMPTIONS  FROM   REGISTRATION  OR   QUALIFICATION   AFFORDED  BY  THE
         SECURITIES  ACT AND/OR RULES  PROMULGATED  BY THE  COMMISSION  PURSUANT
         THERETO.  THE SECURITIES  REPRESENTED BY THIS CERTIFICATE HAVE ALSO NOT
         BEEN  REGISTERED OR QUALIFIED (AS THE CASE MAY BE) UNDER THE SECURITIES
         LAWS OF ANY STATE OR  TERRITORY  OF THE  UNITED  STATES  (THE "BLUE SKY
         LAWS"),  IN RELIANCE UPON ONE OR MORE EXEMPTIONS  FROM  REGISTRATION OR
         QUALIFICATION (AS THE CASE MAY BE) AFFORDED UNDER SUCH SECURITIES LAWS.
         NEITHER THE  COMMISSION  NOR ANY  SECURITIES  REGULATORY  AGENCY OF ANY
         STATE OR TERRITORY OF THE UNITED  STATES HAS REVIEWED OR PASSED UPON OR
         ENDORSED THE MERITS OF THE OFFERING  CONTEMPLATED BY THIS  CERTIFICATE,
         AND ANY  REPRESENTATION  TO THE CONTRARY IS A CRIMINAL  OFFENSE.  THESE
         SECURITIES  HAVE  BEEN  ACQUIRED  FOR  THE  HOLDER'S  OWN  ACCOUNT  FOR
         INVESTMENT   PURPOSES   ONLY  AND  NOT  WITH  A  VIEW  FOR   RESALE  OR
         DISTRIBUTION.

         THESE SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE
         144 PROMULGATED  UNDER THE SECURITIES ACT. THESE  SECURITIES MAY NOT BE
         SOLD,  TRANSFERRED,  ASSIGNED  OR  HYPOTHECATED,  OR OFFERED  FOR SALE,
         TRANSFER, ASSIGNMENT OR HYPOTHECATION,  WITHIN THE UNITED STATES OR ANY
         OF ITS  TERRITORIES  OR TO A  UNITED  STATES  PERSON,  UNLESS:  (i) THE
         SECURITIES ARE  REGISTERED  PURSUANT TO SECTION 5 OF THE SECURITIES ACT
         AND/OR  REGISTERED  OR QUALIFIED  PURSUANT TO ANY  APPLICABLE  BLUE SKY
         LAWS; OR (ii) THE PROPOSED  TRANSACTION IS EXEMPT FROM THE REGISTRATION
         AND  PROSPECTUS  DELIVERY  REQUIREMENTS  OF THE  SECURITIES ACT AND THE
         REGISTRATION  AND  QUALIFICATION  PROVISIONS OF ANY APPLICABLE BLUE SKY
         LAWS.  AS A RESULT,  THESE  SECURITIES  ARE  SUITABLE  ONLY FOR CERTAIN
         SOPHISTICATED  AND QUALIFIED  INVESTORS WHO CAN BEAR THE FINANCIAL RISK
         OF AN INVESTMENT IN THESE SECURITIES FOR AN INDEFINITE PERIOD OF TIME.

<PAGE>

         (p) Completeness and Accuracy of Information. All information which the
Subscriber has heretofore  furnished or furnishes herewith to the Company or its
agents is  complete  and  accurate  and may be  relied  upon by the  Company  in
determining the availability of an exemption from registration under Federal and
state  securities  laws in connection  with the offer and sale of the Subscribed
Shares to the Subscriber in particular.

         (q) Material  Changes in  Information.  The Subscriber  will notify and
supply corrective  information to the Company immediately upon the occurrence of
any material  change(s) in any  information  provided by the  Subscriber  to the
Company  occurring prior to the Closing,  (as defined in the Agreement),  of the
purchase by the Subscriber of the Subscribed Shares.

         (r)  Cooperation.  Within five (5) days after receipt of a request from
the Company,  the  Subscriber  will provide  such  information  and deliver such
documents  as may  reasonably  be  necessary to comply with any and all laws and
ordinances to which the Company is subject.

         (s) Offering Representations and Communications. No person has provided
any information (other than the Offering  Materials) or made any oral or written
representations or warranties to the Subscriber and/or his, her or its Advisors,
if any, about the Company, the Subscribed Shares or this offering, other than as
stated in Section 3 of the Agreement.

         (t) Reliance  Upon  Offering  Materials and  Information  Provided.  In
evaluating  the  suitability  of an investment  in the  Subscribed  Shares,  the
Subscriber has not relied upon, and agrees that he/she/it may not rely upon, any
representation,  warranty or other  information  (oral or written) other than as
stated in Section 3 of the Agreement.

         (u) No Awareness of Public  Advertising.  The Subscriber is unaware of,
is in no way relying on, and did not become aware of this  offering,  through or
as a result of any form of public advertising including, without limitation, any
advertisement,   article,   notice,  leaflet  or  other  communication  (whether
published  in any  newspaper,  magazine,  or  similar  media or  broadcast  over
television or radio, or otherwise generally disseminated or distributed).

         (v) No  General  Solicitation.  The  Subscriber  did not  subscribe  to
purchase the Subscribed Shares, or become aware of this offering,  through or as
the  result  of any  public  or  promotional  seminar  or  meeting  to which the
Subscriber was invited by, or any  solicitation  of a subscription  by, a person
not  previously  known to the  Subscriber  in  connection  with  investments  in
securities generally.

         (w) |_|  Pre-Existing  Relationship  with Company.  The Subscriber,  by
initialing this box,  represents that he, she or it has a pre-existing  personal
or business  relationship* with the Company or any of its managers,  officers or
controlling persons.

                  * The term  "pre-existing  personal or business  relationship"
includes  any  relationship  consisting  of personal  or business  contacts of a
nature and  duration  which would enable a  reasonably  prudent  purchaser to be
aware of the  character,  business  acumen and general  business  and  financial
circumstances of the person with whom the relationship exists.

         (x) Investment  Knowledge.  Does Subscriber  believe that he/she/it has
sufficient  knowledge and  experience in financial and business  matters so that
he/she/it  is capable  of  evaluating  the  merits or risks of this  investment?
|_|Yes |_|No

<PAGE>

         WHEREFORE, the Subscriber, as of the date set forth below, is deemed to
have  executed  this   Industries   International,   Incorporated   Subscription
Application in the City of _________________, County of _________________, State
of ________________________, Country of _____________________.

                                SUBSCRIBER:

                                By:
                                   -----------------------------------------
                                   (Signature)

                                Print Name:
                                           ---------------------------------

                                Print Title:
                                            --------------------------------

                                Date:
                                     ---------------------------------------

<PAGE>

                                    EXHIBIT B

                                 FORM OF WARRANT

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS  EVIDENCED BY A LEGAL  OPINION OF COUNSEL TO THE  TRANSFEROR
REASONABLY  ACCEPTABLE  TO THE COMPANY TO SUCH  EFFECT,  THE  SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                             STAR COMPUTING LIMITED

         THIS COMMON STOCK PURCHASE WARRANT (the "Warrant")  CERTIFIES that, for
value received,  _____________ (the "Holder"),  is entitled,  upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after  _______________ (the "Initial Exercise Date") and on or
prior to the close of business on the fifth  anniversary of the Initial Exercise
Date (the "Termination Date") but not thereafter,  to subscribe for and purchase
from Star Computing Limited,  a corporation  incorporated in the State of Nevada
(the  "Company"),  up to  ____________  shares (the "Warrant  Shares") of Common
Stock,  par value $0.001 per share,  of the Company (the  "Common  Stock").  The
purchase  price of one share of Common Stock (the  "Exercise  Price") under this
Warrant shall be $3.00 subject to adjustment  hereunder.  The Exercise Price and
the number of  Warrant  Shares for which the  Warrant  is  exercisable  shall be
subject  to  adjustment  as  provided  herein.  Capitalized  terms  used and not
otherwise  defined  herein  shall have the  meanings  set forth in that  certain
Securities Purchase Agreement (the "Purchase Agreement"),  among the Company and
the purchasers signatory thereto.

                                       1
<PAGE>

         1.  Title to  Warrant.  Prior to the  Termination  Date and  subject to
compliance with applicable laws and Section 7 of this Warrant,  this Warrant and
all rights  hereunder  are  transferable,  in whole or in part, at the office or
agency of the  Company by the Holder in person or by duly  authorized  attorney,
upon surrender of this Warrant  together with the Assignment Form annexed hereto
properly  endorsed.  The transferee shall sign an investment  letter in form and
substance reasonably satisfactory to the Company.

         2.  Authorization  of Shares.  The Company  covenants  that all Warrant
Shares which may be issued upon the exercise of the purchase rights  represented
by this Warrant will, upon exercise of the purchase  rights  represented by this
Warrant,  be duly authorized,  validly issued,  fully paid and nonassessable and
free from all taxes,  liens and charges in respect of the issue  thereof  (other
than taxes in  respect of any  transfer  occurring  contemporaneously  with such
issue).

         3. Exercise of Warrant.

              (a) Exercise of the purchase  rights  represented  by this Warrant
may be made at any time or times on or after the Initial Exercise Date and on or
before the  Termination  Date by  delivery  to the  Company  of a duly  executed
facsimile  copy of the Notice of  Exercise  Form  annexed  hereto (or such other
office or agency of the Company as it may  designate by notice in writing to the
registered  Holder at the address of such Holder  appearing  on the books of the
Company);  provided,  however,  within 5 Trading Days of the date said Notice of
Exercise is  delivered to the Company,  the Holder shall have  surrendered  this
Warrant  to the  Company  and the  Company  shall have  received  payment of the
aggregate  Exercise  Price of the shares  thereby  purchased by wire transfer or
cashier's check drawn on a United States bank. Certificates for shares purchased
hereunder  shall be  delivered  to the Holder  within 15  Trading  Days from the
delivery  to the  Company  of the Notice of  Exercise  Form by  facsimile  copy,
surrender of this  Warrant and payment of the  aggregate  Exercise  Price as set
forth above.

              (b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the  certificate or certificates  representing
Warrant Shares,  deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.

              (c) Subject to the  provisions  of this  Section 3, if the closing
price for each of any thirty  consecutive  Trading Days after the Effective Date
(the  "Measurement  Price")  exceeds  $5.00 (the  "Threshold  Price"),  then the
Company may,  within two Trading Days of such period,  call for  cancellation of
all or any portion of this  Warrant  for which a Notice of Exercise  has not yet
been delivered (such right, a "Call").  To exercise this right, the Company must
deliver to the Holder an irrevocable notice (a "Call Notice") indicating therein
the portion of unexercised portion of this Warrant to which such notice applies.
If the  conditions  set forth below for such Call are satisfied  from the period
from the date of the Call Notice through and including the Call Date (as defined
below), then any portion of this Warrant subject to such Call Notice for which a
Notice of Exercise  and,  within 3 Trading  Days after the Call Date (as defined
below),  payment of the aggregate Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank shall not have
been received by the Company from and after the date of the Call Notice, will be

                                       2
<PAGE>

cancelled at 6:30 p.m. (Los Angeles time) on the 30th Trading Day after the date
the Call Notice is received by the Holder  (such  date,  the "Call  Date").  Any
unexercised  portion of this  Warrant to which the Call  Notice does not pertain
will be  unaffected by such Call Notice.  In  furtherance  thereof,  the Company
covenants  and agrees that it will honor all Notices of Exercise with respect to
Warrant  Shares  subject to a Call  Notice  that are  tendered  from the time of
delivery of the Call Notice  through 6:30 p.m.  (Los  Angeles  time) on the Call
Date. The parties agree that any Notice of Exercise  delivered  following a Call
Notice shall first reduce to zero the number of Warrant  Shares  subject to such
Call  Notice  prior to reducing  the  remaining  Warrant  Shares  available  for
purchase under this Warrant.  For example,  if (x) this Warrant then permits the
Holder to acquire 100 Warrant  Shares,  (y) a Call Notice pertains to 75 Warrant
Shares,  and (z)  prior to 6:30 p.m.  (New York City  time) on the Call Date the
Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (1) on
the Call Date the right under this Warrant to acquire 25 Warrant  Shares will be
automatically  cancelled, (2) the Company, in the time and manner required under
this Warrant,  will have issued and delivered to the Holder 50 Warrant Shares in
respect  of the  exercises  following  receipt of the Call  Notice,  and (3) the
Holder may,  until the  Termination  Date,  exercise this Warrant for 25 Warrant
Shares  (subject to adjustment as herein provided and subject to subsequent Call
Notices).  Subject  again to the  provisions  of this Section 3, the Company may
deliver  subsequent  Call  Notices for any portion of this Warrant for which the
Holder shall not have delivered a Notice of Exercise.  Notwithstanding  anything
to the  contrary set forth in this  Warrant,  the Company may not deliver a Call
Notice or require the  cancellation of this Warrant (and any Call Notice will be
void),  unless,  from the beginning of the 30  consecutive  Trading Days used to
determine  whether the Common Stock has achieved the Threshold Price through the
Call Date,  (i) the Company shall have honored in  accordance  with the terms of
this Warrant all Notices of Exercise  delivered by 6:30 p.m.  (Los Angeles time)
on the Call  Date,  (ii) a  registration  statement  filed  with the  Securities
Exchange  Commission  shall  be  effective  as to all  Warrant  Shares  and  the
prospectus  thereunder  available  for use by the Holder for the resale all such
Warrant Shares, and (iii) the Common Stock shall be listed or quoted for trading
on the Trading Market.

              (d) The term:  "Trading Day" means a day on which the Common Stock
is traded or quoted on a Trading  Market,  provided,  that in the event that the
Common Stock is not listed or quoted on a Trading Market, then Trading Day shall
mean a business  day. The term "Trading  Market" means the following  markets or
exchanges  on which the Common Stock is listed or quoted for trading on the date
in question:  the OTC Bulletin Board, the American Stock Exchange,  the New York
Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market.

         4. No  Fractional  Shares  or  Scrip.  No  fractional  shares  or scrip
representing  fractional  shares  shall  be  issued  upon the  exercise  of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase  upon such  exercise,  the Company  shall pay a cash  adjustment  in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

         5. Charges,  Taxes and Expenses.  Issuance of certificates  for Warrant
Shares shall be made without  charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate,  all
of which taxes and expenses shall be paid by the Company,  and such certificates
shall be  issued  in the name of the  Holder  or in such name or names as may be
directed by the Holder;  provided,  however,  that in the event certificates for
Warrant  Shares are to be issued in a name  other  than the name of the  Holder,
this  Warrant  when  surrendered  for  exercise  shall  be  accompanied  by  the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

         6. Closing of Books.  The Company will not close its stockholder  books
or records in any manner  which  prevents the timely  exercise of this  Warrant,
pursuant to the terms hereof.

         7. Transfer, Division and Combination.

                                       3
<PAGE>

              (a) Subject to compliance with any applicable  securities laws and
the  conditions  set forth in Sections 1 and 7(e)  hereof,  this Warrant and all
rights hereunder are  transferable,  in whole or in part, upon surrender of this
Warrant  at  the  principal  office  of the  Company,  together  with a  written
assignment  of this  Warrant  substantially  in the form  attached  hereto  duly
executed by the Holder or its agent or attorney and funds  sufficient to pay any
transfer  taxes payable upon the making of such  transfer.  Upon such  surrender
and, if required,  such  payment,  the Company  shall  execute and deliver a new
Warrant  or  Warrants  in the  name  of the  assignee  or  assignees  and in the
denomination or  denominations  specified in such instrument of assignment,  and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned,  and this Warrant shall  promptly be cancelled.  A Warrant,  if
properly assigned,  may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.

              (b) This  Warrant may be divided or combined  with other  Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice  specifying the names and denominations in which new Warrants are
to be  issued,  signed  by the  Holder  or its  agent or  attorney.  Subject  to
compliance  with Section 7(a), as to any transfer  which may be involved in such
division or combination,  the Company shall execute and deliver a new Warrant or
Warrants  in  exchange  for the Warrant or Warrants to be divided or combined in
accordance with such notice.

              (c) The  Company  shall  prepare,  issue  and  deliver  at its own
expense  (other than  transfer  taxes) the new  Warrant or  Warrants  under this
Section 7.

              (d) The Company agrees to maintain, at its aforesaid office, books
for the registration and the registration of transfer of the Warrants.

              (e) If, at the time of the surrender of this Warrant in connection
with any transfer of this  Warrant,  the  transfer of this Warrant  shall not be
registered pursuant to an effective  registration statement under the Securities
Act and under  applicable  state  securities  or blue sky laws,  the Company may
require,  as a  condition  of  allowing  such  transfer  (i) that the  Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion  of  counsel  (which  opinion  shall be in  form,  substance  and  scope
customary  for opinions of counsel in  comparable  transactions  and  reasonably
acceptable  to the Company) to the effect that such transfer may be made without
registration  under the Securities Act and under  applicable state securities or
blue sky laws,  (ii) that the holder or  transferee  execute  and deliver to the
Company an investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an "accredited  investor" as defined in Rule 501(a)
promulgated under the Securities Act.

         8. No Rights as  Shareholder  until  Exercise.  This  Warrant  does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate  Exercise  Price (or by means of a cashless  exercise),
the  Warrant  Shares  so  purchased  shall be and be deemed to be issued to such
Holder as the record  owner of such  shares as of the close of  business  on the
later of the date of such surrender or payment.

         9. Loss,  Theft,  Destruction  or  Mutilation  of Warrant.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction,  of indemnity or security reasonably  satisfactory to it (which, in
the case of the  Warrant,  shall not include the posting of any bond),  and upon
surrender and cancellation of such Warrant or stock  certificate,  if mutilated,
the Company  will make and deliver a new  Warrant or stock  certificate  of like
tenor  and  dated  as of such  cancellation,  in lieu of such  Warrant  or stock
certificate.

                                       4
<PAGE>

         10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

         11. Stock Splits.  The number and kind of securities  purchasable  upon
the  exercise  of this  Warrant  and the  Exercise  Price  shall be  subject  to
adjustment from time to time upon the happening of any of the following. In case
the  Company  shall (i) pay a  dividend  in  shares  of  Common  Stock or make a
distribution  in shares of Common  Stock to  holders of its  outstanding  Common
Stock,  (ii)  subdivide  its  outstanding  shares of Common Stock into a greater
number of shares,  (iii) combine its  outstanding  shares of Common Stock into a
smaller  number  of  shares of Common  Stock,  or (iv)  issue any  shares of its
capital  stock in a  reclassification  of the Common  Stock,  then the number of
Warrant  Shares  purchasable  upon  exercise of this Warrant  immediately  prior
thereto  shall be adjusted  so that the Holder  shall be entitled to receive the
kind and number of Warrant  Shares or other  securities  of the Company which it
would  have  owned or have  been  entitled  to  receive  had such  Warrant  been
exercised in advance  thereof.  Upon each such adjustment of the kind and number
of Warrant  Shares or other  securities  of the  Company  which are  purchasable
hereunder,  the Holder  shall  thereafter  be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security  obtained by multiplying  the Exercise
Price in effect  immediately  prior to such  adjustment by the number of Warrant
Shares  purchasable  pursuant  hereto  immediately  prior to such adjustment and
dividing  by the number of Warrant  Shares or other  securities  of the  Company
resulting from such  adjustment.  An adjustment  made pursuant to this paragraph
shall  become  effective  immediately  after the  effective  date of such  event
retroactive to the record date, if any, for such event.

         12.   Reorganization,   Reclassification,   Merger,   Consolidation  or
Disposition  of  Assets.  In case the  Company  shall  reorganize  its  capital,
reclassify  its  capital  stock,  consolidate  or  merge  with or  into  another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell,  transfer or otherwise  dispose of its property,  assets or business to
another  corporation  and,  pursuant  to  the  terms  of  such   reorganization,
reclassification,  merger,  consolidation  or disposition  of assets,  shares of
common stock of the successor or acquiring  corporation,  or any cash, shares of
stock or other  securities  or  property  of any  nature  whatsoever  (including
warrants or other  subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring  corporation ("Other Property"),  are
to be received by or  distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive, at the option of the
Holder, (a) upon exercise of this Warrant,  the number of shares of Common Stock
of the  successor  or  acquiring  corporation  or of the  Company,  if it is the
surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common  Stock for which  this  Warrant is
exercisable  immediately  prior to such  event or (b) cash equal to the value of
this Warrant as determined in accordance  with the Black Scholes  option pricing
formula.  In  case  of  any  such  reorganization,   reclassification,   merger,
consolidation or disposition of assets,  the successor or acquiring  corporation
(if  other  than  the  Company)  shall  expressly  assume  the due and  punctual
observance  and  performance  of each and every  covenant and  condition of this
Warrant to be performed and observed by the Company and all the  obligations and
liabilities   hereunder,   subject  to  such  modifications  as  may  be  deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for  adjustments of Warrant Shares for which
this Warrant is exercisable  which shall be as nearly  equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such  corporation  of any class which is not  preferred  as to  dividends  or
assets  over any  other  class of stock  of such  corporation  and  which is not
subject to  redemption  and shall also include any  evidences  of  indebtedness,
shares of stock or other  securities  which are convertible into or exchangeable
for any such stock,  either  immediately or upon the arrival of a specified date
or the  happening  of a  specified  event and any  warrants  or other  rights to
subscribe  for or purchase  any such stock.  The  foregoing  provisions  of this
Section   12   shall    similarly    apply   to   successive    reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

                                       5
<PAGE>

         13.  Voluntary  Adjustment by the Company.  The Company may at any time
during the term of this Warrant  reduce the then current  Exercise  Price to any
amount and for any period of time deemed  appropriate  by the Board of Directors
of the Company.

         14.  Notice of  Adjustment.  Whenever  the number of Warrant  Shares or
number or kind of securities or other property  purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided,  the Company
shall give notice thereof to the Holder,  which notice shall state the number of
Warrant Shares (and other securities or property)  purchasable upon the exercise
of this  Warrant  and the  Exercise  Price of such  Warrant  Shares  (and  other
securities or property) 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.

         15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding,  it will reserve from its authorized and unissued Common
Stock a  sufficient  number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.  The Company
further  covenants  that its  issuance of this  Warrant  shall  constitute  full
authority  to its  officers  who are charged  with the duty of  executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such  reasonable  action as may be  necessary  to assure that such
Warrant  Shares  may be issued  as  provided  herein  without  violation  of any
applicable law or regulation,  or of any requirements of the Trading Market upon
which the Common Stock may be listed.

         16. Miscellaneous.

              (a)  Jurisdiction.  All  questions  concerning  the  construction,
validity,  enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.

              (b) Restrictions.  The Holder acknowledges that the Warrant Shares
acquired  upon the  exercise  of this  Warrant,  if not  registered,  will  have
restrictions upon resale imposed by state and federal securities laws.

              (c) Nonwaiver  and Expenses.  No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding  all rights hereunder  terminate on the Termination Date. If the
Company  willfully  and  knowingly  fails to comply with any  provision  of this
Warrant,  which results in any material damages to the Holder, the Company shall
pay to  Holder  such  amounts  as shall be  sufficient  to cover  any  costs and
expenses including,  but not limited to, reasonable  attorneys' fees,  including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights,  powers or remedies
hereunder.

              (d) Notices.  Any notice,  request or other  document  required or
permitted  to be  given or  delivered  to the  Holder  by the  Company  shall be
delivered in accordance with the notice provisions of the Purchase Agreement.

                                       6
<PAGE>

              (e) Limitation of Liability.  No provision  hereof, in the absence
of any affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration  herein of the rights or privileges of Holder,  shall
give rise to any liability of Holder for the purchase  price of any Common Stock
or as a stockholder  of the Company,  whether such  liability is asserted by the
Company or by creditors of the Company.

              (f)  Remedies.  The  Holder,  in  addition  to being  entitled  to
exercise  all rights  granted by law,  including  recovery of  damages,  will be
entitled to specific  performance of its rights under this Warrant.  The Company
agrees that  monetary  damages would not be adequate  compensation  for any loss
incurred  by reason  of a breach by it of the  provisions  of this  Warrant  and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

              (g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations  evidenced hereby shall inure to the
benefit of and be binding upon the  successors of the Company and the successors
and permitted assigns of Holder.  The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

              (h)  Amendment.  This  Warrant  may be  modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

              (i)  Severability.  Wherever  possible,  each  provision  of  this
Warrant shall be  interpreted  in such manner as to be effective and valid under
applicable  law, but if any  provision of this Warrant shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

              (j)  Headings.  The  headings  used  in this  Warrant  are for the
convenience of reference  only and shall not, for any purpose,  be deemed a part
of this Warrant.

                              ********************

<PAGE>

                  IN WITNESS WHEREOF,  the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:  _______, 2004

                                        STAR COMPUTING LIMITED

                                        By: ____________________________________
                                        Name:
                                        Title:

                                       7
<PAGE>

                               NOTICE OF EXERCISE

To:      Star Computing Limited

         (1) The undersigned  hereby elects to purchase  ________ Warrant Shares
of Star Computing Limited pursuant to the terms of the attached Warrant (only if
exercised in full),  and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

         (2) Payment shall take the form of (check applicable box):

                           [  ] in lawful money of the United States; or

                           [ ] the cancellation of such number of Warrant Shares
                           as is necessary,  in accordance  with the formula set
                           forth in  subsection  3(d),  to exercise this Warrant
                           with respect to the maximum  number of Warrant Shares
                           purchasable   pursuant  to  the   cashless   exercise
                           procedure set forth in subsection 3(d).

         (3)  Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

         (4) Accredited Investor. The undersigned is an "accredited investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

                                    [PURCHASER]

                                    By: ______________________________
                                    Name:
                                    Title:

                                    Dated:  ________________________

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

         FOR VALUE  RECEIVED,  the  foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

---------------------------------------------------------------.

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

                           Dated:  ______________, _______

                           Holder's Signature: __________________________

                           Holder's Address:_____________________________

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

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.EXHIBIT 4.1

                            PALOMAR ENTERPRISES, INC.
                 EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004

     1. GENERAL PROVISIONS.

     1.1 PURPOSE.  This Stock  Incentive  Plan (the "Plan") is intended to allow
designated  officers  and  employees  (all of whom  are  sometimes  collectively
referred to herein as the  "Employees,"  or  individually  as the "Employee") of
Palomar  Enterprises,  Inc.,  a  Nevada  corporation  (the  "Company")  and  its
Subsidiaries  (as that term is defined  below)  which they may have from time to
time (the Company and such Subsidiaries are referred to herein as the "Company")
to receive certain options (the "Stock Options") to purchase common stock of the
Company,  par value $0.001 per share (the "Common Stock"), and to receive grants
of the Common Stock subject to certain  restrictions (the "Awards").  As used in
this  Plan,  the  term  "Subsidiary"  shall  mean  each  corporation  which is a
"subsidiary  corporation" of the Company within the meaning of Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code").  The purpose of this
Plan is to  provide  the  Employees,  who  make  significant  and  extraordinary
contributions  to the  long-term  growth and  performance  of the Company,  with
equity-based compensation incentives, and to attract and retain the Employees.

     1.2 ADMINISTRATION.

     1.2.1 The Plan shall be  administered  by the  Compensation  Committee (the
"Committee")  of, or  appointed  by, the Board of  Directors of the Company (the
"Board").  The  Committee  shall select one of its members as Chairman and shall
act by vote of a  majority  of a quorum,  or by  unanimous  written  consent.  A
majority  of its members  shall  constitute  a quorum.  The  Committee  shall be
governed by the provisions of the Company's  Bylaws and of Nevada law applicable
to the Board, except as otherwise provided herein or determined by the Board.

     1.2.2  The  Committee  shall  have  full  and  complete  authority,  in its
discretion,  but subject to the express  provisions  of this Plan (a) to approve
the Employees nominated by the management of the Company to be granted Awards or
Stock  Options;  (b) to  determine  the number of Awards or Stock  Options to be
granted to an Employee;  (c) to  determine  the time or times at which Awards or
Stock Options shall be granted; to establish the terms and conditions upon which
Awards  or  Stock  Options  may  be  exercised;  (d) to  remove  or  adjust  any
restrictions and conditions upon Awards or Stock Options; (e) to specify, at the
time of grant,  provisions  relating to  exercisability  of Stock Options and to
accelerate or otherwise modify the exercisability of any Stock Options;  and (f)
to adopt such rules and regulations and to make all other determinations  deemed
necessary or desirable for the administration of this Plan. All  interpretations
and  constructions  of  this  Plan  by the  Committee,  and  all of its  actions
hereunder, shall be binding and conclusive on all persons for all purposes.

     1.2.3  The  Company  hereby  agrees to  indemnify  and hold  harmless  each
Committee  member and each Employee,  and the estate and heirs of such Committee
member or  Employee,  against  all  claims,  liabilities,  expenses,  penalties,
damages or other pecuniary  losses,  including legal fees,  which such Committee
member  or  Employee,  his  estate  or  heirs  may  suffer  as a  result  of his
responsibilities,  obligations  or duties in  connection  with this Plan, to the
extent that  insurance,  if any,  does not cover the  payment of such items.  No
member  of the  Committee  or the  Board  shall  be  liable  for any  action  or
determination made in good faith with respect to this Plan or any Award or Stock
Option granted pursuant to this Plan.

     1.3 ELIGIBILITY AND  PARTICIPATION.  The Employees eligible under this Plan
shall be approved by the Committee  from those  Employees who, in the opinion of
the  management  of the  Company,  are in  positions  which  enable them to make
significant  contributions  to  the  long-term  performance  and  growth  of the
Company.  In  selecting  the  Employees  to whom Award or Stock  Options  may be
granted,  consideration  shall be given to factors such as employment  position,
duties and responsibilities,  ability, productivity,  length of service, morale,
interest in the Company and recommendations of supervisors.

     1.4 SHARES SUBJECT TO THIS PLAN. The maximum number of shares of the Common
Stock that may be issued  pursuant to this Plan shall be 160,000,000  subject to
adjustment  pursuant to the provisions of Paragraph 4.1. If shares of the Common
Stock  awarded or issued under this Plan are  reacquired by the Company due to a

                                       1
<PAGE>
forfeiture  or for  any  other  reason,  such  shares  shall  be  cancelled  and
thereafter shall again be available for purposes of this Plan. If a Stock Option
expires, terminates or is cancelled for any reason without having been exercised
in full, the shares of the Common Stock not purchased  thereunder shall again be
available for purposes of this Plan.

     In the event that any Outstanding Stock Option or Award under this plan for
any reason expires or is terminated, the shares of common stock allocable to the
unexercised portion of the Stock Award or Option shall be available for issuance
under the Palomar  Enterprises,  Inc.  Non-Employee  Directors  and  Consultants
Retainer Stock Plan for the Year 2004.

     2. PROVISIONS RELATING TO STOCK OPTIONS.

     2.1 GRANTS OF STOCK OPTIONS.  The Committee may grant Stock Options in such
amounts,  at such times, and to the Employees nominated by the management of the
Company as the  Committee,  in its  discretion,  may  determine.  Stock  Options
granted under this Plan shall  constitute  "incentive  stock options" within the
meaning of Section 422 of the Code,  if so  designated  by the  Committee on the
date of grant.  The  Committee  shall also have the  discretion  to grant  Stock
Options which do not  constitute  incentive  stock  options,  and any such Stock
Options shall be designated  non-statutory stock options by the Committee on the
date of grant.  The aggregate  Fair Market Value  (determined  as of the time an
incentive  stock  option is granted) of the Common  Stock with  respect to which
incentive  stock  options  are  exercisable  for the first time by any  Employee
during any one  calendar  year (under all plans of the Company and any parent or
subsidiary  of the Company) may not exceed the maximum  amount  permitted  under
Section 422 of the Code (currently,  $100,000.00).  Non-statutory  stock options
shall not be subject to the  limitations  relating to  incentive  stock  options
contained in the preceding  sentence.  Each Stock Option shall be evidenced by a
written agreement (the "Option  Agreement") in a form approved by the Committee,
which shall be executed on behalf of the Company and by the Employee to whom the
Stock Option is granted,  and which shall be subject to the terms and conditions
of this Plan.  In the  discretion  of the  Committee,  Stock Options may include
provisions  (which need not be  uniform),  authorized  by the  Committee  in its
discretion,  that  accelerate  an  Employee's  rights to exercise  Stock Options
following a "Change in Control," upon  termination of the Employee's  employment
by the Company  without  "Cause" or by the Employee  for "Good  Reason," as such
terms are defined in  Paragraph  3.1 hereof.  The holder of a Stock Option shall
not be entitled to the  privileges  of stock  ownership  as to any shares of the
Common Stock not actually issued to such holder.

     2.2 PURCHASE PRICE. The purchase price (the "Exercise  Price") of shares of
the Common Stock subject to each Stock Option (the "Option Shares") shall not be
less than 85 percent of the Fair Market Value of the Common Stock on the date of
exercise.  For an Employee  holding  greater than 10 percent of the total voting
power of all stock of the  Company,  either  Common or  Preferred,  the Exercise
Price of an  incentive  stock  option  shall be at least 110 percent of the Fair
Market Value of the Common Stock on the date of the grant of the option. As used
herein,  "Fair  Market  Value"  means the mean  between  the  highest and lowest
reported  sales  prices  of the  Common  Stock  on the New York  Stock  Exchange
Composite  Tape or,  if not  listed  on such  exchange,  on any  other  national
securities  exchange on which the Common  Stock is listed or on The Nasdaq Stock
Market,  or, if not so listed on any other national  securities  exchange or The
Nasdaq  Stock  Market,  then the  average of the bid price of the  Common  Stock
during  the  last  five  trading  days on the  OTC  Bulletin  Board  immediately
preceding  the last trading day prior to the date with respect to which the Fair
Market  Value is to be  determined.  If the  Common  Stock is not then  publicly
traded,  then the Fair Market  Value of the Common Stock shall be the book value
of the  Company  per  share  as  determined  on the  last  day of  March,  June,
September, or December in any year closest to the date when the determination is
to be made.  For the purpose of  determining  book value  hereunder,  book value
shall be  determined by adding as of the  applicable  date called for herein the
capital,  surplus,  and  undivided  profits  of the  Company,  and after  having
deducted any reserves theretofore  established;  the sum of these items shall be
divided by the number of shares of the Common Stock outstanding as of said date,
and the quotient thus obtained  shall  represent the book value of each share of
the Common Stock of the Company.

     2.3 OPTION  PERIOD.  The Stock Option period (the "Term") shall commence on
the date of grant of the  Stock  Option  and  shall be 10 years or such  shorter
period as is determined by the  Committee.  Each Stock Option shall provide that
it is exercisable  over its term in such periodic  installments as the Committee
may determine,  subject to the provisions of Paragraph  2.4.1.  Section 16(b) of
the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act") exempts
persons normally  subject to the reporting  requirements of Section 16(a) of the

                                       2
<PAGE>
Exchange  Act (the  "Section  16  Reporting  Persons")  pursuant  to a qualified
employee  stock option plan from the normal  requirement of not selling until at
least six months and one day from the date the Stock Option is granted.

     2.4 EXERCISE OF OPTIONS.

     2.4.1 Each Stock Option may be exercised in whole or in part (but not as to
fractional shares) by delivering it for surrender or endorsement to the Company,
attention of the Corporate  Secretary,  at the principal  office of the Company,
together with payment of the Exercise Price and an executed Notice and Agreement
of Exercise in the form prescribed by Paragraph  2.4.2.  Payment may be made (a)
in cash,  (b) by cashier's or certified  check,  (c) by surrender of  previously
owned  shares of the Common  Stock  valued  pursuant  to  Paragraph  2.2 (if the
Committee  authorizes  payment in stock in its  discretion),  (d) by withholding
from the Option  Shares which would  otherwise be issuable  upon the exercise of
the Stock Option that number of Option Shares equal to the exercise price of the
Stock  Option,  if  such  withholding  is  authorized  by the  Committee  in its
discretion,  or (e) in the discretion of the  Committee,  by the delivery to the
Company of the optionee's promissory note secured by the Option Shares,  bearing
interest at a rate  sufficient  to prevent  the  imputation  of  interest  under
Sections 483 or 1274 of the Code,  and having such other terms and conditions as
may be  satisfactory  to  the  Committee.  Subject  to the  provisions  of  this
Paragraph 2.4 and  Paragraph  2.5, the Employee has the right to exercise his or
her Stock  Options at the rate of at least 20  percent  per year over five years
from the date the Stock Option is granted.

     2.4.2  Exercise of each Stock Option is  conditioned  upon the agreement of
the Employee to the terms and  conditions  of this Plan and of such Stock Option
as evidenced by the Employee's  execution and delivery of a Notice and Agreement
of Exercise in a form to be determined by the Committee in its discretion.  Such
Notice and  Agreement of Exercise  shall set forth the agreement of the Employee
that (a) no Option Shares will be sold or otherwise  distributed in violation of
the  Securities  Act of 1933,  as amended  (the  "Securities  Act") or any other
applicable  federal or state securities laws, (b) each Option Share  certificate
may be  imprinted  with  legends  reflecting  any  applicable  federal and state
securities law restrictions and conditions, (c) the Company may comply with said
securities  law  restrictions  and issue  "stop  transfer"  instructions  to its
Transfer Agent and Registrar without liability, (d) if the Employee is a Section
16 Reporting  Person,  the  Employee  will furnish to the Company a copy of each
Form 4 or Form 5 filed  by said  Employee  and  will  timely  file  all  reports
required  under federal  securities  laws,  and (e) the Employee will report all
sales of Option  Shares to the  Company in writing on a form  prescribed  by the
Company.

     2.4.3 No Stock Option shall be exercisable  unless and until any applicable
registration or qualification requirements of federal and state securities laws,
and all other legal  requirements,  have been fully  complied  with.  At no time
shall the total number of securities  issuable upon exercise of all  outstanding
options under this Plan,  and the total number of securities  provided for under
any  bonus or  similar  plan or  agreement  of the  Company  exceed a number  of
securities  which is equal to 30 percent of the then  outstanding  securities of
the Company,  unless a percentage higher than 30 percent is approved by at least
two-thirds of the outstanding  securities entitled to vote. The Company will use
reasonable  efforts to maintain the  effectiveness  of a Registration  Statement
under the Securities  Act for the issuance of Stock Options and shares  acquired
thereunder,  but there may be times when no such Registration  Statement will be
currently effective.  The exercise of Stock Options may be temporarily suspended
without  liability  to the  Company  during  times  when  no  such  Registration
Statement  is  currently  effective,  or during  times when,  in the  reasonable
opinion of the Committee,  such suspension is necessary to preclude violation of
any requirements of applicable law or regulatory bodies having jurisdiction over
the Company.  If any Stock Option would expire for any reason  except the end of
its term during such a suspension, then if exercise of such Stock Option is duly
tendered  before its  expiration,  such Stock  Option shall be  exercisable  and
exercised (unless the attempted exercise is withdrawn) as of the first day after
the end of such  suspension.  The Company  shall have no  obligation to file any
Registration Statement covering resales of Option Shares.

     2.5 CONTINUOUS  EMPLOYMENT.  Except as provided in Paragraph 2.7 below,  an
Employee may not  exercise a Stock  Option  unless from the date of grant to the
date of exercise the Employee remains continuously in the employ of the Company.
For purposes of this  Paragraph  2.5, the period of continuous  employment of an
Employee with the Company shall be deemed to include (without extending the term
of the Stock Option) any period during which the Employee is on leave of absence
with the consent of the Company,  provided  that such leave of absence shall not
exceed three  months and that the Employee  returns to the employ of the Company
at the  expiration of such leave of absence.  If the Employee fails to return to

                                       3
<PAGE>
the  employ of the  Company at the  expiration  of such  leave of  absence,  the
Employee's employment with the Company shall be deemed terminated as of the date
such leave of absence commenced.  The continuous  employment of an Employee with
the Company shall also be deemed to include any period during which the Employee
is a member of the Armed Forces of the United States, provided that the Employee
returns to the employ of the Company  within 90 days (or such  longer  period as
may be prescribed by law) from the date the Employee first becomes entitled to a
discharge from military service. If an Employee does not return to the employ of
the Company  within 90 days (or such longer  period as may be prescribed by law)
from the date the Employee  first becomes  entitled to a discharge from military
service,  the  Employee's  employment  with the Company  shall be deemed to have
terminated as of the date the Employee's military service ended.

     2.6  RESTRICTIONS  ON TRANSFER.  Each Stock Option  granted under this Plan
shall be transferable only by will or the laws of descent and  distribution.  No
interest  of any  Employee  under  this Plan  shall be  subject  to  attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or  equitable  process.  Each  Stock  Option  granted  under  this Plan shall be
exercisable  during  an  Employee's  lifetime  only  by the  Employee  or by the
Employee's legal representative.

     2.7 TERMINATION OF EMPLOYMENT.

     2.7.1 Upon an Employee's  Retirement,  Disability (both terms being defined
below) or death, (a) all Stock Options to the extent then presently  exercisable
shall  remain in full  force and  effect and may be  exercised  pursuant  to the
provisions  thereof,  and (b) unless  otherwise  provided by the Committee,  all
Stock Options to the extent not then presently exercisable by the Employee shall
terminate  as of the date of such  termination  of  employment  and shall not be
exercisable thereafter. Unless employment is terminated for cause, as defined by
applicable law, the right to exercise in the event of termination of employment,
to the  extent  that  the  optionee  is  entitled  to  exercise  on the date the
employment terminates as follows:

          (i) At least six months from the date of  termination  if  termination
was caused by death or disability.

          (ii) At least 30 days from the date of termination if termination  was
caused by other than death or disability.

     2.7.2 Upon the  termination of the employment of an Employee for any reason
other  than  those  specifically  set forth in  Paragraph  2.7.1,  (a) all Stock
Options to the extent then  presently  exercisable  by the Employee shall remain
exercisable  only for a period of 90 days after the date of such  termination of
employment  (except that the 90 day period shall be extended to 12 months if the
Employee shall die during such 90 day period),  and may be exercised pursuant to
the  provisions  thereof,  including  expiration  at the end of the  fixed  term
thereof,  and (b) unless otherwise provided by the Committee,  all Stock Options
to the extent not then presently  exercisable by the Employee shall terminate as
of the date of such  termination  of  employment  and shall  not be  exercisable
thereafter.

     2.7.3 For purposes of this Plan:

          (a) "Retirement"  shall mean an Employee's  retirement from the employ
of the Company on or after the date on which the Employee  attains the age of 65
years; and

          (b)  "Disability"  shall mean  total and  permanent  incapacity  of an
Employee, due to physical impairment or legally established mental incompetence,
to perform the usual duties of the Employee's employment with the Company, which
disability shall be determined (i) on medical  evidence by a licensed  physician
designated  by the  Committee,  or (ii) on evidence that the Employee has become
entitled to receive  primary  benefits as a disabled  employee  under the Social
Security Act in effect on the date of such disability.

                                       4
<PAGE>
     3. PROVISIONS RELATING TO AWARDS.

     3.1 GRANT OF AWARDS.  Subject to the provisions of this Plan, the Committee
shall have full and complete  authority,  in its discretion,  but subject to the
express  provisions of this Plan, to (1) grant Awards pursuant to this Plan, (2)
determine  the number of shares of the Common  Stock  subject to each Award (the
"Award  Shares"),  (3)  determine  the terms and  conditions  (which need not be
identical) of each Award, including the consideration (if any) to be paid by the
Employee for such the Common Stock,  which may, in the  Committee's  discretion,
consist  of  the  delivery  of  the  Employee's   promissory  note  meeting  the
requirements of Paragraph 2.4.1, (4) establish and modify  performance  criteria
for Awards, and (5) make all of the  determinations  necessary or advisable with
respect to Awards under this Plan. Each Award under this Plan shall consist of a
grant of shares of the Common Stock subject to a restriction period (after which
the restrictions  shall lapse),  which shall be a period  commencing on the date
the Award is granted and ending on such date as the  Committee  shall  determine
(the  "Restriction  Period").  The  Committee  may  provide  for  the  lapse  of
restrictions in installments, for acceleration of the lapse of restrictions upon
the satisfaction of such performance or other criteria or upon the occurrence of
such events as the Committee shall  determine,  and for the early  expiration of
the  Restriction  Period upon an Employee's  death,  Disability or Retirement as
defined in Paragraph 2.7.3, or, following a Change of Control,  upon termination
of an Employee's  employment by the Company  without  "Cause" or by the Employee
for "Good Reason," as those terms are defined herein. For purposes of this Plan:

     "Change of  Control"  shall be deemed to occur (a) on the date the  Company
first has actual  knowledge  that any  person (as such term is used in  Sections
13(d) and  14(d)(2) of the  Exchange  Act) has become the  beneficial  owner (as
defined in Rule 13(d)-3  under the Exchange  Act),  directly or  indirectly,  of
securities of the Company representing 40 percent or more of the combined voting
power  of the  Company's  then  outstanding  securities,  or (b) on the date the
stockholders of the Company approve (i) a merger of the Company with or into any
other  corporation  in which the Company is not the surviving  corporation or in
which the  Company  survives  as a  subsidiary  of another  corporation,  (ii) a
consolidation  of the Company with any other  corporation,  or (iii) the sale or
disposition  of all or  substantially  all of the Company's  assets or a plan of
complete liquidation.

     "Cause," when used with  reference to  termination  of the employment of an
Employee by the Company for "Cause," shall mean:

         (a) The Employee's continuing willful and material breach of his duties
to the  Company  after he  receives  a demand  from the Chief  Executive  of the
Company specifying the manner in which he has willfully and materially  breached
such  duties,  other than any such  failure  resulting  from  Disability  of the
Employee or his resignation for "Good Reason," as defined herein; or

         (b) The conviction of the Employee of a felony; or

         (c) The Employee's  commission of fraud in the course of his employment
with the  Company,  such as  embezzlement  or  other  material  and  intentional
violation of law against the Company; or

         (d)  The  Employee's  gross  misconduct  causing  material  harm to the
Company.

     "Good  Reason"  shall  mean  any one or more  of the  following,  occurring
following or in connection  with a Change of Control and within 90 days prior to
the Employee's resignation,  unless the Employee shall have consented thereto in
writing:

         (a) The  assignment  to the  Employee of duties  inconsistent  with his
executive  status prior to the Change of Control or a substantive  change in the
officer or officers  to whom he reports  from the officer or officers to whom he
reported immediately prior to the Change of Control; or

         (b) The  elimination  or  reassignment  of a majority of the duties and
responsibilities  that were  assigned to the Employee  immediately  prior to the
Change of Control; or

                                       5
<PAGE>
         (c) A reduction by the Company in the Employee's  annual base salary as
in effect immediately prior to the Change of Control; or

         (d) The Company  requiring the Employee to be based anywhere  outside a
35-mile radius from his place of employment  immediately  prior to the Change of
Control,  except for  required  travel on the  Company's  business  to an extent
substantially   consistent  with  the  Employee's  business  travel  obligations
immediately prior to the Change of Control; or

         (e) The  failure  of the  Company to grant the  Employee a  performance
bonus  reasonably  equivalent  to the same  percentage  of salary  the  Employee
normally received prior to the Change of Control,  given comparable  performance
by the Company and the Employee; or

         (f) The  failure  of the  Company to obtain a  satisfactory  Assumption
Agreement (as defined in Paragraph  4.13 of this Plan) from a successor,  or the
failure of such successor to perform such Assumption Agreement.

     3.2  INCENTIVE  AGREEMENTS.  Each  Award  granted  under this Plan shall be
evidenced by a written  agreement (an "Incentive  Agreement") in a form approved
by the  Committee and executed by the Company and the Employee to whom the Award
is  granted.  Each  Incentive  Agreement  shall  be  subject  to the  terms  and
conditions of this Plan and other such terms and conditions as the Committee may
specify.

     3.3 AMENDMENT,  MODIFICATION AND WAIVER OF RESTRICTIONS.  The Committee may
modify  or amend  any  Award  under  this  Plan or  waive  any  restrictions  or
conditions  applicable to the Award;  provided,  however, that the Committee may
not  undertake  any such  modifications,  amendments  or  waivers  if the effect
thereof materially increases the benefits to any Employee,  or adversely affects
the rights of any Employee without his consent.

     3.4 TERMS AND  CONDITIONS OF AWARDS.  Upon receipt of an Award of shares of
the Common  Stock  under this Plan,  even  during  the  Restriction  Period,  an
Employee  shall be the  holder of record of the  shares  and shall  have all the
rights of a  stockholder  with respect to such shares,  subject to the terms and
conditions of this Plan and the Award.

     3.4.1 Except as otherwise  provided in this Paragraph 3.4, no shares of the
Common  Stock  received  pursuant  to  this  Plan  shall  be  sold,   exchanged,
transferred,   pledged,   hypothecated  or  otherwise  disposed  of  during  the
Restriction Period applicable to such shares. Any purported  disposition of such
the Common Stock in violation of this Paragraph 3.4 shall be null and void.

     3.4.2 If an Employee's  employment with the Company terminates prior to the
expiration of the Restriction Period for an Award,  subject to any provisions of
the Award with respect to the Employee's  death,  Disability or  Retirement,  or
Change of Control,  all shares of the Common Stock subject to the Award shall be
immediately  forfeited by the Employee and  reacquired  by the Company,  and the
Employee  shall  have no  further  rights  with  respect  to the  Award.  In the
discretion of the Committee,  an Incentive  Agreement may provide that, upon the
forfeiture  by an  Employee  of Award  Shares,  the  Company  shall repay to the
Employee the consideration (if any) which the Employee paid for the Award Shares
on the grant of the Award.  In the  discretion  of the  Committee,  an Incentive
Agreement may also provide that such repayment  shall include an interest factor
on such  consideration  from the date of the  grant of the  Award to the date of
such repayment.

     3.4.3 The Committee may require under such terms and conditions as it deems
appropriate  or  desirable  that  (a)  the  certificates  for the  Common  Stock
delivered  under this Plan are to be held in custody by the  Company or a person
or institution  designated by the Company until the Restriction  Period expires,
(b) such  certificates  shall bear a legend referring to the restrictions on the
Common Stock pursuant to this Plan, and (c) the Employee shall have delivered to
the Company a stock power endorsed in blank relating to the Common Stock.

     4. MISCELLANEOUS PROVISIONS.

     4.1 ADJUSTMENTS UPON CHANGE IN CAPITALIZATION.

                                       6
<PAGE>
     4.1.1 The number  and class of shares  subject  to each  outstanding  Stock
Option, the Exercise Price thereof (but not the total price), the maximum number
of Stock  Options  that may be granted  under this Plan,  the minimum  number of
shares as to which a Stock  Option  may be  exercised  at any one time,  and the
number  and  class  of  shares  subject  to each  outstanding  Award,  shall  be
proportionately  adjusted in the event of any increase or decrease in the number
of the issued  shares of the  Common  Stock  which  results  from a split-up  or
consolidation  of shares,  payment of a stock dividend or dividends  exceeding a
total of five percent for which the record dates occur in any one fiscal year, a
recapitalization  (other than the conversion of convertible securities according
to their terms),  a combination of shares or other like capital  adjustment,  so
that (a) upon  exercise of the Stock  Option,  the  Employee  shall  receive the
number and class of shares the  Employee  would have  received  had the Employee
been the holder of the number of shares of the Common  Stock for which the Stock
Option is being  exercised  upon the date of such change or increase or decrease
in the  number  of  issued  shares  of the  Company,  and (b) upon the  lapse of
restrictions  of the Award  Shares,  the Employee  shall  receive the number and
class of shares the  Employee  would have  received if the  restrictions  on the
Award  Shares had lapsed on the date of such  change or  increase or decrease in
the number of issued shares of the Company.

     4.1.2 Upon a  reorganization,  merger or  consolidation of the Company with
one or more  corporations  as a result of which the Company is not the surviving
corporation  or in which the Company  survives as a  wholly-owned  subsidiary of
another corporation,  or upon a sale of all or substantially all of the property
of the  Company to another  corporation,  or any  dividend  or  distribution  to
stockholders  of  more  than  10  percent  of  the  Company's  assets,  adequate
adjustment  or other  provisions  shall be made by the Company or other party to
such transaction so that there shall remain and/or be substituted for the Option
Shares and Award Shares  provided for herein,  the shares,  securities or assets
which would have been  issuable or payable in respect of or in exchange for such
Option Shares and Award Shares then  remaining,  as if the Employee had been the
owner of such shares as of the  applicable  date.  Any securities so substituted
shall be subject to similar successive adjustments.

     4.2  WITHHOLDING  TAXES.  The  Company  shall have the right at the time of
exercise  of  any  Stock  Option,  the  grant  of an  Award,  or  the  lapse  of
restrictions on Award Shares, to make adequate provision for any federal, state,
local or foreign  taxes  which it  believes  are or may be required by law to be
withheld  with respect to such  exercise  (the "Tax  Liability"),  to ensure the
payment of any such Tax  Liability.  The  Company may provide for the payment of
any Tax Liability by any of the following  means or a combination of such means,
as  determined  by the  Committee  in its sole and  absolute  discretion  in the
particular  case (1) by  requiring  the Employee to tender a cash payment to the
Company,  (2) by withholding from the Employee's salary, (3) by withholding from
the Option  Shares which would  otherwise be issuable upon exercise of the Stock
Option,  or  from  the  Award  Shares  on  their  grant  or  date  of  lapse  of
restrictions,  that number of Option  Shares or Award Shares having an aggregate
Fair Market Value  (determined in the manner  prescribed by Paragraph 2.2) as of
the date the  withholding  tax obligation  arises in an amount which is equal to
the  Employee's  Tax Liability or (4) by any other method deemed  appropriate by
the  Committee.  Satisfaction  of the Tax  Liability  of a Section 16  Reporting
Person may be made by the method of payment  specified  in clause (3) above only
if the following two conditions are satisfied:

          (a) The  withholding of Option Shares or Award Shares and the exercise
of the related  Stock Option occur at least six months and one day following the
date of grant of such Stock Option or Award; and

          (b) The  withholding  of Option  Shares or Award Shares is made either
(i) pursuant to an irrevocable election (the "Withholding Election") made by the
Employee at least six months in advance of the  withholding of Options Shares or
Award Shares,  or (ii) on a day within a 10-day "window period" beginning on the
third  business day following the date of release of the Company's  quarterly or
annual summary statement of sales and earnings.

     Anything herein to the contrary notwithstanding, a Withholding Election may
be disapproved by the Committee at any time.

     4.3 RELATIONSHIP TO OTHER EMPLOYEE BENEFIT PLANS.  Stock Options and Awards
granted hereunder shall not be deemed to be salary or other  compensation to any
Employee for purposes of any pension, thrift, profit-sharing,  stock purchase or
any other  employee  benefit plan now  maintained  or  hereafter  adopted by the
Company.

                                       7
<PAGE>
     4.4  AMENDMENTS  AND  TERMINATION.  The Board of Directors  may at any time
suspend,  amend or  terminate  this Plan.  No  amendment,  except as provided in
Paragraph 3.3, or  modification  of this Plan may be adopted,  except subject to
stockholder approval,  which would (1) materially increase the benefits accruing
to the  Employees  under  this  Plan,  (2)  materially  increase  the  number of
securities which may be issued under this Plan (except for adjustments  pursuant
to Paragraph  4.1  hereof),  or (3)  materially  modify the  requirements  as to
eligibility for participation in this Plan.

     4.5 SUCCESSORS IN INTEREST.  The provisions of this Plan and the actions of
the  Committee  shall be binding upon all heirs,  successors  and assigns of the
Company and of the  Employees.  4.6 OTHER  DOCUMENTS.  All  documents  prepared,
executed  or  delivered  in  connection  with  this  Plan  (including,   without
limitation,  Option Agreements and Incentive  Agreements) shall be, in substance
and form, as established and modified by the Committee;  provided, however, that
all such  documents  shall be subject in every respect to the provisions of this
Plan,  and in the event of any conflict  between the terms of any such  document
and this Plan, the provisions of this Plan shall prevail.

     4.7  FAIRNESS  OF THE  REPURCHASE  PRICE.  In the  event  that the  Company
repurchases  securities  upon  termination of employment  pursuant to this Plan,
either:  (a) the  price  will  not be less  than the  fair  market  value of the
securities to be repurchased  on the date of termination of employment,  and the
right to repurchase will be exercised for cash or cancellation of purchase money
indebtedness for the securities  within 90 days of termination of the employment
(or in the case of securities  issued upon exercise of options after the date of
termination,  within  90 days  after  the date of the  exercise),  and the right
terminates when the Company's  securities become publicly traded, or (b) Company
will repurchase  securities at the original  purchase  price,  provided that the
right to  repurchase  at the  original  purchase  price lapses at the rate of at
least 20  percent of the  securities  per year over five years from the date the
option is granted  (without  respect to the date the  option  was  exercised  or
became  exercisable)  and the right to repurchase  must be exercised for cash or
cancellation of purchase money indebtedness for the securities within 90 days of
termination  of  employment  (or in case of  securities  issued upon exercise of
options  after the date of  termination,  within  90 days  after the date of the
exercise).

     4.8 NO  OBLIGATION TO CONTINUE  EMPLOYMENT.  This Plan and the grants which
might be made  hereunder  shall not  impose  any  obligation  on the  Company to
continue to employ any  Employee.  Moreover,  no  provision  of this Plan or any
document executed or delivered pursuant to this Plan shall be deemed modified in
any way by any employment  contract  between an Employee (or other employee) and
the Company.

     4.9 MISCONDUCT OF AN EMPLOYEE.  Notwithstanding any other provision of this
Plan,  if an  Employee  commits  fraud  or  dishonesty  toward  the  Company  or
wrongfully  uses or  discloses  any  trade  secret,  confidential  data or other
information  proprietary to the Company, or intentionally takes any other action
which results in material harm to the Company,  as determined by the  Committee,
in its sole and absolute  discretion,  the Employee shall forfeit all rights and
benefits under this Plan.

     4.10 TERM OF PLAN. No Stock Option shall be exercisable,  or Award granted,
unless and until the  Directors of the Company have  approved  this Plan and all
other  legal  requirements  have been met.  This Plan was  adopted  by the Board
effective  February 10, 2004.  No Stock  Options or Awards may be granted  under
this Plan after February 10, 2014.

     4.11  GOVERNING  LAW. This Plan and all actions taken  thereunder  shall be
governed by, and construed in accordance with, the laws of the State of Nevada.

     4.12 APPROVAL.  This Plan must be approved by a majority of the outstanding
securities  entitled  to vote  within  12 months  before  or after  this Plan is
adopted or the date the  agreement is entered  into.  Any  securities  purchased
before security holder approval is obtained must be rescinded if security holder
approval is not obtained  within 12 months  before or after this Plan is adopted
or the date the agreement is entered into. Such securities  shall not be counted
in determining whether such approval is obtained.

                                       8
<PAGE>
     4.13  ASSUMPTION  AGREEMENTS.  The Company  will  require  each  successor,
(direct or indirect, whether by purchase,  merger,  consolidation or otherwise),
to all or substantially  all of the business or assets of the Company,  prior to
the  consummation of each such  transaction,  to assume and agree to perform the
terms and  provisions  remaining  to be  performed  by the  Company  under  each
Incentive  Agreement  and Stock  Option  and to  preserve  the  benefits  to the
Employees  thereunder.  Such  assumption  and agreement  shall be set forth in a
written  agreement  in form and  substance  satisfactory  to the  Committee  (an
"Assumption  Agreement"),  and shall  include such  adjustments,  if any, in the
application of the provisions of the Incentive  Agreements and Stock Options and
such additional provisions,  if any, as the Committee shall require and approve,
in order to  preserve  such  benefits to the  Employees.  Without  limiting  the
generality of the foregoing,  the Committee may require an Assumption  Agreement
to include satisfactory undertakings by a successor:

          (a)  To  provide  liquidity  to  the  Employees  at  the  end  of  the
Restriction  Period  applicable  to the Common Stock  awarded to them under this
Plan, or on the exercise of Stock Options;

          (b) If the  succession  occurs  before  the  expiration  of any period
specified in the Incentive  Agreements for satisfaction of performance  criteria
applicable to the Common Stock awarded  thereunder,  to refrain from interfering
with the Company's  ability to satisfy such performance  criteria or to agree to
modify  such  performance  criteria  and/or  waive any  criteria  that cannot be
satisfied as a result of the succession;

          (c) To  require  any  future  successor  to enter  into an  Assumption
Agreement; and

          (d) To take or refrain from taking such other actions as the Committee
may require and approve, in its discretion.

     4.14 COMPLIANCE WITH RULE 16B-3.  Transactions under this Plan are intended
to comply with all  applicable  conditions of Rule 16b-3  promulgated  under the
Exchange  Act.  To the extent that any  provision  of this Plan or action by the
Committee  fails to so comply,  it shall be deemed null and void,  to the extent
permitted by law and deemed advisable by the Committee.

     4.15 INFORMATION TO SHAREHOLDERS.  The Company shall furnish to each of its
stockholders financial statements of the Company at least annually.

     IN WITNESS  WHEREOF,  this Plan has been executed  effective as of February
10, 2004.

                                          PALOMAR ENTERPRISES, INC.

                                          By /s/ Steven Bonenberger
                                            ------------------------------
                                            Steven Bonenberger, President

                                       9

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