Document:

EXHIBIT 10.368
                          Equity Joint Venture Contract

                                     between
                         Shenyang Dongyu Group Co. Ltd.

                                       and

                           Dasibi Environmental Corp.

                            for the Establishment of

   Shenyang Dasibi-Dongyu Environmental Monitoring Equipment Company Limited

                                September 6, 2000

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                        CHAPTER ONE, GENERAL PROVISIONS

1.1   Parties to the Contract

      PARTY A: SHENYANG DONGYU GROUP CO., LTD.
      Registered in: China
      Registered Address: No.2 Xiaoqiaoxiang, Wenti Avenue, Heping District,
      Shenyang City, Liaoning Province, China
      Legal Representative: Zhuang Yuyang
      Position: Chairman of the Board
      Nationality: China

      PARTY B: DASIBI ENVIRONMENTAL CORP.
      Registered in: U.S.A.
      Registered Address: 506 Paula Avenue, Glendale, CA 91201
      Legal Representative: Albert E. Gosselin
      Position: Chairman of the Board
      Nationality: U.S.A.

1.2  Party A and Party B (hereinafter referred to as both parties) agree to set
     up a Joint Venture in China under the Act of Sino-Foreign Joint Ventures of
     the People's Republic of China and the Implementation Rules for that Act,
     and other relevant Chinese laws and regulations. Both parties agree to be
     abided by the Contract sincerely.

                          CHAPTER TWO, NAME AND ADDRESS

2.1   Chinese Name of Joint Venture:

                               ?????--????????????

    English name of Joint Venture:

            Shenyang Dasibi-Dongyu Environmental Monitoring Equipment
                                 Company Limited

    (Hereinafter referred to as JOINT VENTURE)

    Registered Address of Joint Venture:
    Shenyang High and New Technology Industry Development Zone

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                    CHAPTER THREE, AIMS AND SCOPE OF BUSINESS

3.1  Aims of setting up JOINT VENTURE are: to provide end users high quality
     equipment and services, and to gain economic profit for shareholders to
     JOINT VENTURE.

3.2  Business Scope of JOINT VENTURE is: manufacture and sale of air pollution
     monitoring equipment and provide related technical consultation, support
     and after-sale services.

3.3  With the relevant governmental department's approval, JOINT VENTURE may
     timely adjust its investment orientation, scope of business and management
     approaches to meet the development of businesses and the market demand.

                    CHAPTER FOUR, TOTAL AMOUNT OF INVESTMENT
                             AND REGISTERED CAPITAL

4.1  JOINT VENTURE shall be a limited liability company. Both parties bear the
     limited responsibility of JOINT VENTURE respectively according to the quota
     subscribed by each of them.

4.2  Total amount of investment of JOINT VENTURE is USD 3,000,000.00

4.3  The registered capital is USD 3,000,000.00, which shall be contributed by
     both parties respectively according to their subscriptions in 2
     installments:

     In the first installment, Party A shall contribute USD 1,000,000.00 in
     cash, Party B shall contribute USD 600,000.00 in cash and in the form of
     transfer the technology of the 3rd generation products, which is, valued
     USD 400,000.00.

     In the second installment, after setting up JOINT VENTURE, Party B shall
     continue to transfer the technology. With both parties' efforts, JOINT
     VENTURE shall complete the R&D of the 4th generation products, and the
     intellectual property right of the 4th generation products shall belong to
     JOINT VENTURE. Both parties agree that the technology transferred in the
     R&D period is valued USD 300,000.00 and is regarded as one part of the
     investment of Party B when the R&D is successful. USD 200,000.00 in cash is
     the other part of the investment contributed by Party B. Party A shall
     contribute USD 500, 000.00 in cash.

4.4  The transferred technology contributed by Party B should get the approval
     of the relevant Chinese governmental department. Party B should ensure the
     technology is advanced, practical and without any defect. The quality of
     the products manufactured by JOINT VENTURE utilizing the above technology
     should meet the relevant technical requirements of EPA and of SEPA.

For  details of the technology transfer, both parties shall sign a separate
     Technology Transfer Agreement, as Attachment I to the Contract, which shall
     be deemed as an integral part of the Contract and shall be of the same
     effect.

4.5  The first installment should complete within two (2) months after the
     establishment of JOINT VENTURE. The second installment should complete
     within 6 months after the establishment of JOINT VENTURE.

<PAGE>

4.6  The R&D of the 4th generation products should be completed within one year
     beginning from the date of signing the Contract. While certain postponement
     should also be agreed, taking into consideration that the development of
     the system software and the certification by the US EPA to the products
     could also take a rather long time.

4.7  The ownership of the transferred instrumentation technology of Party B and
     the abovementioned intellectual property right cannot be assigned without
     both parties' agreement.

4.8  After transfer of the instrumentation technology, JOINT VENTURE, the
     exclusive possessor to that technology, has all the intellectual property
     right of the coequal technology. Any actualization and utilization of one
     part or total of the abovesaid technology should get the approval of the
     JOINT VENTURE. Party B should provide all the necessary materials, manuals,
     training, approval and assistants to the JOINT VENTURE for the above
     purpose.

4.9  After the subscribed capital is fully paid by both parties and is examined
     and checked and an examination report is presented by a Chinese certified
     public accountant employed by JOINT VENTURE. JOINT VENTURE shall issue the
     subscription certificate with signatures of the Chairman and vice Chairman
     of the Board. The main contents of which are: name of JOINT VENTURE, date
     of establishment, name of the parties to the Venture and subscribed quota
     of each, date of subscription, date of issuance of this certificate, etc.
     The subscription certificate is a non-negotiable document.

4.10 The registered capital shall not be reduced during the term of this
     contract.

4.11 Owing to the efforts that China Environmental Protection Science &
     Technology Development Investment Ltd., Co. and Smart E International (HK)
     Company Limited have contributed throughout the negotiation and execution
     of the JOINT VENTURE, both parties agree to grant partial shares to China
     Environmental Protection Science & Technology Development Investment Ltd.,
     Co. and Smart E International (HK) Company Limited. Party A will transfer
     partial shares to China Environmental Protection Science & Technology
     Development Investment Ltd., Co. and Party B will transfer partial shares
     to. Smart E International (HK) Company Limited. China Environmental
     Protection Science & Technology Development Investment Ltd., Co. and
     Hualong Co., each is allowed to designate one director to the Board of
     Directors.

     For details of the shares transfer, both parties shall sign a separate
     Shares Transfer Agreement, as Attachment II to the Contract, which shall be
     deemed as an integral part of the Contract and shall be of the same effect.

<PAGE>

                       CHAPTER FIVE, OPERATION ARRANGEMENT

5.1  Both parties agree that JOINT VENTURE and ITS manufacturing plant to be
     based in Shenyang, China.

5.2  Both parties agree that all goods to be sold in China by party B not using
     U.S. Ex-Im Bank financing shall be provided by JOINT VENTURE. Both parties
     shall ensure JOINT VENTURE to be capable of selling directly and servicing
     directly to the end users within the shortest amount of time.

5.3  Party B agrees, during the validity period of the Contract, it will not
     seek any other opportunity to set up any company in China, which has such a
     similar business scope with JOINT VENTURE established under the Contract
     that may affect the business of JOINT VENTURE, other than the ones in
     cooperation with Party A.

5.4  Both parties agree to decide issues of product sale, after-sale service,
     and after-sale training through further negotiation, and to settle those
     issues by an additional attachment to the Contract or a separate agreement,
     which shall be deemed as an integral part of the Contract and shall be of
     the same effect.

                      CHAPTER SIX, ADMINISTRATIVE STRUCTURE

6.1  Board of Directors is the supreme authority of JOINT VENTURE, which is
     responsible for all important issues.

6.2  Board of Directors is made of six directors, of which two are appointed or
     changed by Party A and two are appointed or changed by Party B, and one is
     appointed or changed by Smart E International (HK) Co., Ltd and one is
     appointed or changed by China Environmental Protection Science and
     Technology Investment Co., Ltd. Directors are appointed for four years and
     will be eligible for re-appointment where the appointing party chooses.

6.3  Chairman of the Board of Directors shall be appointed by Party B among its
     directors and the vice Chairman of the Board of Directors shall be
     appointed by Party A among its directors.

     Chairman of the Board of Directors is the legal representative of JOINT
     VENTURE. Where he/she may, for a short time, authorize Vice Chairman or any
     other director to act on behalf of himself/herself.

6.4  The general meeting of Board of Directors shall be held at least once per
     year and an extraordinary general meeting may be held upon the proposal of
     no less than one third of the directors. The general meeting shall be held
     in principal at the local of JOINT VENTURE, which shall be called for and
     presided over by the Chairman of the Board of Directors. In case the
     Chairman of the Board is in absent, the Vice Chairman shall call and
     preside over the meeting in the Chairman's place. A quorum at the general
     meeting shall consist of at least two thirds of the directors; no
     resolution passed shall be valid if there is no such quorum. Chairman of
     the Board shall inform the directors with written notice twenty (20) days
     in advance.

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6.5  In case Chairman of the Board cannot present the general meeting, he/she
     shall authorize any other directors to act on behalf of himself/herself
     with written note. The general meeting shall handle the issues concerning
     the rights and benefits of each party under the principal of equality and
     mutual benefit.

6.6  Any resolution of the general meeting should be resulted through secret
     ballot.

6.7  Items aftersaid shall be approved by unanimous resolution of the Board:
     1)   Modifying of Articles of Association,
     2)   Prolonging the term of JOINT VENTURE,
     3)   Canceling or dissolving the JOINT VENTURE,
     4)   Increasing or assigning the registered capital,
     5)   Incorporating JOINT VENTURE with other economic entities.

6.8  Items aftersaid shall be approved by more than two-thirds of the directors
     present at the meeting of the Board:
     1)   Annual Profit Dividing Plan,
     2)   Middle and Long Term Development Plan,
     3)   Appointing and removing General Manager and Vice General Manager, and
          CFO,
     4)   Other material matters, which the Board believes, should be approved
          by two-thirds majority.

     Other items shall be approved by more than half of the directors present at
     the meeting of the Board.

6.9  Minutes of the Board meeting shall be made respectively in Chinese and
     English, and after being signed by the directors present at the meeting,
     shall be placed on file.

6.10 The administrative structure of JOINT VENTURE is the 'General Manager
     taking the responsibility under the leadership of the Board of Directors'.

6.11 The General Manager is responsible for the execution of all resolutions
     agreed and adopted at the meetings of the Board of Directors, organizes and
     manages routine administrative and operating work.

6.12 Without the approval of the Board of Directors, the General Manager and the
     Vice General Manager shall not concurrently hold the office of general
     manager or vice general manager(s) of other economic entities or in any
     wise compete for other business against JOINT VENTURE. Board of Directors
     may from time to time remove the General Manager or Vice General Manager(s)
     or other administrative person(s) by resolution where the General Manager
     or Vice General Manager(s) corrupt (s) or severely neglect (s) his/their
     duty.

6.13 Both parties agree with the selection of the CFO for Joint Venture
     appointed by Smart E International (HK) Co., Ltd.

                          CHAPTER SEVEN, RESPONSIBILITY

7.1  Party A and Party B shall try to realize the business aims and targets with
     the most efficient and economic methods. Both parties shall respectively
     appoint the qualified and experienced managers and technicians who shall
     work hard in JOINT VENTURE.

<PAGE>

7.2  Party A shall be respectively responsible for following matters.

     1)   Assisting to apply to the competent Chinese department (s) for the
          establishment of JOINT VENTURE, having JOINT VENTURE registered and
          getting the business license,
     2)   Responsible for conducting all domestic procedures in order to get the
          approval by relevant Chinese Government as mentioned in Article 4.4;
          all necessary cost thus occurred should be borne by JOINT VENTURE,
     3)   Assisting JOINT VENTURE to apply for the reducing of remitting taxes
          within the permissible limit,
     4)   Assisting the JOINT VENTURE to collect the information on the Chinese
          market demands, the competitive capability of the products and the
          trend of the sale opportunity etc.,
     5)   Assisting foreign employees to get entrance visas, work licenses and
          travel permits, etc.,
     6)   Assisting JOINT VENTURE to arrange the employees' businesses, lodging,
          food, transportation and medical treatment etc.,
     7)   Assisting the JOINT VENTURE to employ Chinese employees, engineers,
          workers and interpreters,
     8)   Assisting the JOINT VENTURE to open foreign currency and RMB accounts
          in the bank permitted by the Chinese authorities concerned,
     9)   Assisting the JOINT VENTURE to arrange the domestic transportation and
          to apply to customs. Party A shall assist the JOINT VENTURE, under its
          requirements, to undertake other matters if the condition permits.

7.3   Party B shall be respectively responsible for following matters:
     1)   Positively and timely assisting the JOINT VENTURE to deal with the
          transfer of the knowledge property right of the technology of 3rd and
          4th generation products possessed by Party B,
     2)   Guiding and assisting JOINT VENTURE to solve the problem in technology
          and business administration and, providing the advanced and practical
          technology as well as the experiences in administration to ensure the
          high quality of the products to gain the greatest profits, in
          additional assuming the relevant responsibilities of the technology,
     3)   Assigning and appointing the experts to do training in JOINT VENTURE,
          assisting JOINT VENTURE to make the training schedule to enable the
          Chinese employees to master the relevant workmanship and special
          skills within the scheduled time,
     4)   Providing and making the working regulations of workmanship, equipment
          maintenance, security and material storage to JOINT VENTURE,
     5)   Assisting JOINT VENTURE to collect the relevant and practicable
          information on the technologies, workmanship and economy as well as
          the material on law,
     6)   Assisting and supporting the technology development, products'
          replacement and R&D on the new products,
     7)   Ensuring all the products sold to mainland China, Hong Kong special
          administrative region, Macao special administrative region and Taiwan
          region to be manufactured or provided by JOINT VENTURE and positively
          assisting JOINT VENTURE to develop that specific overseas markets for
          facilitating the export of the products. Party B shall assist the
          JOINT VENTURE, under its requirements, to undertake other matters if
          the condition permits.

<PAGE>

                CHAPTER EIGHT, DISTRIBUTION OF PROFITS AND TAXES

8.1  The net profits should be distributed by Party A and Party B as soon as
     possible according to their real shares in the registered capital. In order
     to reach that purpose, the hereinafter items should be deducted from the
     gross profits to get the net one:
     1)   The income tax which should be paid according to the relevant Chinese
          laws and regulations and the items described in the contract,
     2)   The reserve funds set up by the Board of Directors in terms of the
          relevant Chinese laws and regulations,
     3)   The enterprise development fund set up by the Board of Directors,
     4)   The welfare and employee-award fund set up by the Board of Directors
          in terms of the relevant Chinese laws and regulations.

8.2  The Board of Directors of JOINT VENTURE may determine one part or all of
     the profits will not be distributed; however, if there is an accumulated
     surplus, one part or all parts shall be distributed.

8.3  The JOINT VENTURE shall enjoy the relevant treatment of reducing of
     remitting taxes according to the relevant Chinese laws and regulations

8.4  The overseas Chinese, Macao and Hong Kong employees in JOINT VENTURE shall
     pay the income taxes according to the laws and regulations in Chinese Taxes
     Act.

               CHAPTER NINE, THE RIGHTS OF JOINT VENTURE AND WAGES

9.1  JOINT VENTURE has the aftersaid rights according to the relevant laws and
     regulations of People's Republic of China:
     1)   Independently managing the business of its own enterprises and may
          appoint staff from U.S. to undertake the technical and administrative
          work.
     2)   Employing the Chinese employees who are subject to the examination and
          enrolled on the basis of competitive selection, signing the contracts
          with the employees, trying out the enrolled employees for 3 to 6
          months, dismissing the employees of whom are surplus caused by the
          changes of the production and technical condition and whom can't meet
          the relevant requirements after training and cannot be maneuvered to
          other post, according to how serious the case are giving a
          disciplinary warning to, recording a demerit or reducing the wages of
          or even dismissing any employee who violates the rules and regulations
          of JOINT VENTURE and causes the bad results.

9.2  JOINT VENTURE may set its salary payment rule according to its operation
     requirement like payment by piece, or by hour, or by day or by month.

<PAGE>

9.3  The wages of the employed foreigners and the overseas Chinese that were
     paid the income taxes and other legitimate incomes should be remitted
     overseas though the China Bank or other banks according to the regulations
     of Foreign Currency Administration.

9.4  In case that JOINT VENTURE terminates before the date of expiration for any
     reason, the assets may be assigned and the capital may be remitted abroad
     after repaying the debt of JOINT VENTURE with the approval of the relevant
     department.

                         CHAPTER TEN, ACCOUNT AND AUDIT

10.1 The accounts of JOINT VENTURE are subject to the regulations and laws for
     Sino-Foreign joint ventures of People's Republic of China.

10.2 JOINT VENTURE should make accounting report within the three months after
     the fiscal year and send its copies to Party A, Party B and each director.
     The accounting report contains a balance sheet and a profit and loss
     statement of the fiscal year, which should be made both in Chinese and
     English, and be audited to ensure its reality and accuracy by an accounting
     firm registered in China, which is entrusted by the Board of Directors.

                  CHAPTER ELEVEN, EFFECTIVENESS OF THE CONTRACT
                          AND THE TERM OF JOINT VENTURE

11.1 The contract should come into effect upon the approval by the governmental
     department in charge. JOINT VENTURE should register in the Industrial and
     Commercial Administration Bureau within one month after receiving the
     approval to apply for the license. The date of establishment of JOINT
     VENTURE is the same date of the issuance of the license of JOINT VENTURE.

11.2 The term of JOINT VENTURE is ten (10) years.

11.3 The contract may be terminated with both parties' agreement or the term of
     JOINT VENTURE may be prolonged with an approval of the relevant
     governmental department six months before the maturity of JOINT VENTURE.

11.4 The termination of the contract caused by any party for any reason should
     be applied to the original ratifying agency of the contract.

                           CHAPTER TWELVE, ASSIGNMENT

12.1 Any party of JOINT VENTURE shall not assign, pledge or transfer to the
     third party or deal with in other ways any or all parts of its stock share
     without the unanimous resolution of the Board of Directors and the approval
     of the Chinese examining and ratifying agency in charge. One party who
     shall assign the stock share shall be subject to the hereinafter items:

<PAGE>

     1)   Where one party shall assign any or parts of the stock shares, the
          non-assigning party shall have priority in purchasing the shares in
          assignment,
     2)   The non-assigning party who have priority in purchasing shall reply to
          the assigning party within 30 days after the written notice is put
          forward by the assigning party, otherwise the assigning party has the
          right to assign to the third party,
     3)   Where one party transfers any or all parts of its shares to the third
          party, the term of the transfer to the third party should not be more
          favorable than what to the non-transferring party except what
          described in the Clause 4.11 in the Contract,
     4)   Dealing with all the matters on the assignment by one party should not
          affect the operation and the administration structure of JOINT
          VENTURE. Where the assignment is approved, JOINT VENTURE shall
          re-register at the Industrial and Commercial Administration Bureau
          within 30 days.

                  CHAPTER THIRTEEN, TERMINATION AND LIQUIDATION

13.1 Any party is entitled to send the written notice 60 days in advance to
     terminate the contract where any case as follows occurs:
     1)   One party willingly or unwillingly declares the bankruptcy,
          liquidation and dismissal,
     2)   One party materially breach the contract,
     3)   JOINT VENTURE shall not continue to operate due to the violation of
          the government's laws and regulations despite of the strict abidance
          of the regulations and laws of JOINT VENTURE by both parties.

13.2 Where the term of JOINT VENTURE is expired or the contract is terminated,
     the Board of Directors shall put forward the liquidation procedure and
     principles, nominate the candidates of the liquidation commission, and
     divide up the assets of JOINT VENTURE. The liquidation commission may
     employ the accountant and lawyer

13.3 According to the relevant Chinese laws and regulations, the liquidation
     commission may sell the JOINT VENTURE as ' company in operation' with the
     approval of the relevant agency. Under the same price condition, parties to
     the Contract shall have the priority in purchasing. Under the same price
     condition, Party A has the priority of purchasing to Party B.

13.4 In case that no party is willing to purchase the 'company in operation',
     JOINT VENTURE should be terminated. The liquidation commission may sell the
     assets of JOINT VENTURE separately. Under the same price condition, parties
     to the Contract shall have the priority in purchasing. Under the same price
     condition, Party A has the priority of purchasing to Party B.

13.5 The remaining property of JOINT VENTURE after the liquidation should be
     distributed to both parties according to their shares in the registered
     capital.

                           CHAPTER FOURTEEN, INSURANCE

14.1 Insurance of JOINT VENTURE against all risks shall be from Chinese
     Insurance Company, in respect to the cover, amount, period, etc of the
     insurance, the General Manager of JOINT VENTURE shall make a decision under
     the provisions concerned of the People's Insurance Company of China.

<PAGE>

                CHAPTER FIFTEEN, APPLICABLE LAWS AND REGULATIONS

15.1 The signing and the implement of the contract, the establishment,
     operation, administration, taxes, imported and exported materials, labor
     administration, usage of land, in and out of China, and other activities of
     JOINT VENTURE should be subject to the effective laws and regulations of
     People's Republic of China.

15.2 The property and the rights and benefits of JOINT VENTURE and, the
     registered capital, distribution of the profits and all the legal rights
     and benefits of and the quotas owe to Party B should be protected by the
     effective laws and regulations of People's Republic of China.

                CHAPTER SIXTEEN, REMEDIES FOR BREACH OF CONTRACT

16.1 If either party does not complete its capital contribution in accordance
     with the schedule and amounts set in the Contract, commencing from the
     first month for which contribution is overdue, the breaching Party shall
     pay liquidated damages to the non-breaching Party at the rate of one
     percent (1%) of the amount of the contribution to be made for every month
     of delay. If contribution is more than three months overdue, the breaching
     Party shall pay aggregate liquidated damages at the rates of three percent
     (3%) of the amount of the capital contribution to be made and, in addition,
     the non-breaching Party shall have the right to terminate the Contract and
     to claim the compensation from the breaching Party for all economic losses
     directly resulting from its breach of contract.

     If a party fails to perform any of its obligations under the Contract or if
     a party's representation or warranty under the Contract is untrue or
     materially inaccurate, such party shall be deemed to have breached the
     Contract. The breaching party shall have thirty days from receipt of notice
     form the other party specifying the breach to correct such breach and the
     non-breaching party shall have the duty to mitigate any losses incurring
     therefrom. If after such thirty-day period such breach is not corrected,
     the breaching party shall become liable to the other party for all economic
     losses directly caused by the breach.

     If any party cannot perform its obligations or responsibilities or loses
     arise form the implementation of the Contract due to reasons of issuance,
     amendments or cancellation of Chinese laws any losses thus incurred or
     arising thereof shall not be borne solely by either party and both parties
     shall discuss a solution.

16.2 If any party fails to raise or delay the raising of its claim, such action
     should not be deemed to waive its right of claim.

<PAGE>

                       CHAPTER SEVENTEEN, DISPUTE SOLVING

17.1 All disputes arising from the implementation of, or in connection with, the
     Contract shall be resolved by the parties through friendly consultation.

17.2 If a dispute cannot be resolved within sixty days of commencement of
     consultations, either party shall refer the dispute to final arbitration to
     the China International Economic and Trade Arbitration Commission in
     accordance with the Arbitration Rules for the time being in force, which
     rules are deemed to be incorporated by reference into this Article. The
     arbitral award shall be final and binding on both parties. The costs of
     arbitration shall be borne by the losing party.

                         CHAPTER EIGHTEEN, FORCE MAJEURE

18.1 Where the performance hereof is hindered by or is absolutely impossible
     under the terms and conditions herein on account of force majeures,
     including earthquakes, typhoons, folds, fires, war or other unexpected,
     irresistible or unavoidable force in respect of their consequences or
     results, the time of performing the obligations described on the contract
     should be prolonged, which should be equal to the time delayed by the force
     majeures.

18.2 The party in contingency shall inform the other party of such contingency
     by telegram immediately, and within 14 days present valid documents signed
     by the notarial agency of the locale, stating the details of the incident
     and proving it is impossible to perform whole or part of this contract or
     that extension of time of performance hereof is necessary. Where the delay
     is over 90 days, whether continue to perform the contract or terminate the
     contract before the expiration should be determined under the friendly
     agreement.

                   CHAPTER NINETEEN, LANGUAGE OF THE CONTRACT

19.1 There are two original contracts made respectively in Chinese and English,
     both of which are of the same effect.

19.2 The titles of each chapter are listed for the markedness, which should not
     affect the implications and the paraphrases of each item.

19.3 Following material documents of JOINT VENTURE should be written
     respectively in Chinese and English:
     1)   Minutes of the meetings of Board,
     2)   All accounting report.

19.4 Under both parties' agreements, Chinese is the working language.

                         CHAPTER TWENTY, CONTRACT COPIES

20.1 Each party shall hold two copies of this contract; the extra copies should
     be made under the requirements of the governmental sectors in charge.

<PAGE>

                           CHAPTER TWENTY ONE, OTHERS

21.1 Any item in the contract or the documents concerning to the contract except
     the violated, the illegal and the non-compulsive should be performed
     without any effect or weakening

21.2 It is proved that the contract should be signed by the legal
     representatives or the authorize representatives of both parties on the
     date marked on the first page of the contract.

                           CHAPTER TWENTY TWO, NOTICE

22.1 Where any party of JOINT VENTURE sends the notices comprising letters and
     facsimiles to the other party, the addresses on the notices should be
     subject to the following:

         Party A: Shenyang Dongyu Group Co., Ltd.
         Address: No2 Heping South Street, Heping District, Shenyang
         Zip: 110003
         Tel: 86-24-2325 8801
         Fax: 86-24-2325 8898
         Party B: Dasibi Environmental Corp.
         Address: 506 Paula Avenue, Glendale, CA
         Zip: 91201
         Tel: 001-818-247-7601
         Fax: 001-818-247-7614

22.2 During the validity period of the Contract, any party has the right to
     modify the address above and shall send the written notice to the other
     party when making such modification.

Party A: Shenyang Dongyu Group Co., Ltd.

/s/ Zhuang Yuyang
-----------------
Authorized representative: Mr. Zhuang Yuyang
Position: Chairman of the Board

Party B: Dasibi Environmental Corp.

/s/ Albert E. Gosselin
----------------------
Authorized representative: Mr. Albert E. Gosselin
Position: Chairman of the Board

<PAGE>

                  ATTACHMENT I - TECHNOLOGY TRANSFER AGREEMENT
                 An integral part of the Joint Venture Contract
Ref.

1.1  Parties to the Agreement
     Party A:  Shenyang Dongyu Group Co., Ltd
     Party B:  Dasibi Environmental Corp.

1.2  Party A and Party B (herein referred to as both parties) agree to set up a
     Joint Venture heretofore known as Shenyang Dasibi-Dongyu Environmental
     Monitoring Equipment Company Limited wherein Party B agree to transfer
     technology to the Joint Venture as capital consideration as follows:
     a.  3rd generation technology valued at USD 400,000
     b.  4th generation technology valued at USD 300,000

     Definition: Technology Transfer is composed of necessary documentation,
     training and direct instrument-related software with source code to
     manufacture the following equipment and related hardware comprising what is
     referred to as "System 1000" complete for US EPA approval:

          1.        Model 8001      - Data Acquisition System
          2.        Model 5008      - W/DET Programmable Multi-Gas Calibrator
          3.        Model 5011-B    - Zero Air Unit
          4.        Model 7001      - TSP Analyzer W/PM10
          5.        Model 1008-AH   - Ambient O3 Analyzer
          6.        Model 3008      - Ambient CO Analyzer
          7.        Model 4108      - Ambient SO2 Analyzer
          8.        Model 2108      - Ambient NOx, NO2, NO Analyzer

1.3  The transferred technology of Party B shall get the approval of the
     relevant Chinese government department. Party B shall ensure the technology
     is advanced, practical and without any defect. The products manufactured by
     JOINT VENTURE utilizing the above technologies shall meet the relevant
     technical requirements of US EPA and China SEPA.

1.4  The R&D of the 4th generation products shall be completed within one year
     of the date of signing the Contract. The manufacture of the products will
     be started after the development of the system software and the
     certification by the US EPA.

1.5  The ownership of the transferred instrumentation technology of Party B and
     the above-mentioned intellectual property right cannot be assigned without
     both parties' agreement.

1.6  After transfer of the instrumentation technology, JOINT VENTURE, the
     exclusive possessor to that technology, has all the intellectual property
     right of the co-equal technology. Any actualization and utilization of one
     part or total of the above said technology shall get the approval of the
     JOINT VENTURE. Party B shall provide all the necessary materials, manuals,
     training, approval and assistants to the JOINT VENTURE for the above
     purposes.

Party B shall guaranty that the products manufactured by the JOINT VENTURE
utilizing the transferred technology could be a complete and independent air
monitoring system.

<PAGE>

The technology transfer should be started immediately after signing the
Contract, in order to ensure that the JOINT VENTURE can manufacture 3rd
generation products pursuant to the Contract before February 2001, utilizing the
transferred technology.

Party B shall provide the JOINT VENTURE all technical materials and
documentation of the 3rd generation products within 3 months after signing the
Contract. And especially the technical materials and documentation of the SO2,
NOX, TSP(PM10), Multi-gas Calibrator and Datalogger shall be transferred to the
Joint Venture before November 6, 2000.

All know-How, advice, documentation, specified manufacture facilities and other
information provided by Dasibi Environmental Corp. pursuant to this Contract
shall be kept strictly confidential by the parties to the Contract and the JOINT
VENTURE, and shall be used solely for benefit in connection with the manufacture
and sale of the JOINT VENTURE products except, however, that the Company has to
disclose any such information to government authorities due to Chinese Laws and
regulations.

PARTY A:   SHENYANG DONGYU GROUP CO., LTD.

/s/ Zhuang Yuyang
Authorized Representative: Mr. Zhuang Yuyang
Position: Chairman of the Board

PARTY B:   DASIBI ENVIRONMENTAL CORP.

<PAGE>

/s/ Albert E. Gosselin
Authorized Representative: Mr. Albert E. Gosselin
Position: Chairman of the Board

                    ATTACHMENT II - SHARE TRANSFER AGREEMENT

                 An integral part of the Joint Venture Contract

Ref.

1.1  Parties to the Agreement

     PARTY A:  SHENYANG DONGYU GROUP CO., LTD.

     PARTY B:  DASIBI ENVIRONMENTAL CORP.

     PARTY C:  CHINA ENVIRONMENTAL PROTECTION SCIENCE & TECHNOLOGY DEVELOPMENT
               INVESTMENT LTD., CO.

     PARTY D:  SMART E INTERNATIONAL (HK) COMPANY LIMITED

2.11 Owing to the efforts that China Environmental Protection Science and
     Technology development Investment Ltd., and Smart E International (HK)
     Company Ltd. have contributed throughout the negotiation and execution of
     the JOINT VENTURE, both parties agree to grant partial shares to China
     Environmental Protection Science & Technology Development Investment Ltd.,
     Co. and Smart E International (HK) Company Ltd. China Environmental
     Protection Science & Technology Development Investment Ltd., Co. and Smart
     E International (HK) Company Ltd, each is allowed to designate one director
     to the Board of Directors.

Pursuant to the above Party A will transfer partial shares 10% of its interest
in the JOINT VENTURE to China Environmental Protection Science and Technology
development Investment Ltd., Co.

Pursuant to the above Party B will transfer partial shares 15% of its interest
in the JOINT VENTURE to Smart E International (HK) Company Ltd.

By signature affixed hereto all parties agree to the share distribution:

PARTY A:   SHENYANG DONGYU GROUP CO., LTD.

/s/ Zhuang Yuyang
Authorized Representative: Mr. Zhuang Yuyang
Position: Chairman of the Board

PARTY B:   DASIBI ENVIRONMENTAL CORP.

/s/ Albert E. Gosselin
Authorized Representative: Mr. Albert E. Gosselin
Position: Chairman of the Board

PARTY C:   CHINA ENVIRONMENTAL PROTECTION SCIENCE & TECHNOLOGY DEVELOPMENT
           INVESTMENT LTD., CO.

/s/ Liu Yige
Authorized Representative: Mr. Liu Yige
Position: Chairman of the Board

PARTY D:   SMART E INTERNATIONAL (HK) COMPANY LIMITED

/s/ Li Peng
Authorized Representative: Mr. Li Peng
Position: Chairman of the BoardEXHIBIT 4.2
                                WARRANT AGREEMENT

         THIS WARRANT AGREEMENT (the "Agreement") is dated as of this 9th day of
August, 2000, by and between TALK.COM INC., a Delaware corporation  ("Company"),
and _____________ (the "Warrant Holder").

         The Warrants  are granted  hereunder  in  substitution  of the Warrants
granted  to  Universal   Claims   Adminstrator,   Inc.  ("UCA")  by  Access  One
Communications  Corp., a New Jersey  corporation  ("Access One"), at an exercise
price  of  $______  per  share  (the  "Prior  Warrant"),   which  Warrants  were
subsequently assigned by UCA to the Warrant Holder. Acceptance of the Warrant by
the Warrant Holder on the terms and conditions specified herein shall render the
Prior Warrant null and void and of no further force or effect.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements  hereinafter  set forth and for the purpose of defining the terms and
provisions of the Warrants and the  certificates  representing  the Warrants and
the respective rights and obligations  thereunder of the Company and the Warrant
Holder, the parties hereto agree as follows:

         1.  Definitions.  As used herein,  the  following  terms shall have the
following meanings, unless the context shall otherwise require:

         (a) "Common  Stock" shall mean the common  stock of the Company,  $ .01
par value;  provided,  however,  that the shares  issuable  upon exercise of the
Warrants shall include (i) only shares of such class designated in the Company's
Certificate of  Incorporation  as Common Stock on the date of the original issue
of  the  Warrants,  or  (ii)  in  the  case  of  any  reclassification,  change,
consolidation,  merger,  sale or  conveyance  of the  character  referred  to in
Section  8(c) hereof,  the stock,  securities  or property  provided for in such
section;  or  (iii)  in  the  case  of any  reclassification  or  change  in the
outstanding  shares of Common Stock  issuable upon exercise of the Warrants as a
result of a subdivision  or  combination  or a change in par value,  or from par
value to no par value, or from no par value to par value,  such shares of Common
Stock as so reclassified or changed.

         (b) "Corporate Office" shall mean the office of the Company at which at
any particular time its principal  business shall be administered,  which office
is located at the date hereof at 6805 Route 202, New Hope, PA 18938.

         (c) "Exercise  Date" shall mean,  as to any Warrant,  the date on which
the Company shall have received  both (i) the Warrant  Certificate  representing
such Warrant,  with the exercise  form thereon duly  executed by the  Registered
Holder (as defined  below)  thereof or his attorney duly  authorized in writing,
and (ii) payment in cash, or by official bank or certified check made payable to
the Company,  of an amount in lawful money of the United States of America equal
to the applicable Purchase Price (as defined below).

         (d) "Initial Warrant Exercise Date" shall mean the date hereof.

<PAGE>

         (e) "Purchase Price" shall mean the purchase price per share to be paid
upon exercise of each Warrant in accordance  with the terms hereof,  which price
shall be _______  Dollars and ______ Cents  ($______) per share of Common Stock,
subject to adjustment  from time to time pursuant to the terms and provisions of
Section 8 hereof.

         (f)  "Registered  Holder"  shall mean as to any  Warrant  and as of any
particular  date,  the person in whose  name the  certificate  representing  the
Warrant shall be registered on that date on the books  maintained by the Company
pursuant to Section 6.

         (g) "Transfer Agent" shall mean the Company or, if applicable,  a third
party stock transfer agent and registrar retained by the Company.

         (h) "Warrant  Expiration Date" shall mean 5:00 P. M. (New York time) on
August 9, 2005;  provided  that if such date shall in the State of New York be a
holiday or a day on which banks are  authorized or required to close,  then 5:00
P.M. (New York time) on the next following day which in the State of New York is
not a holiday or a day on which banks are authorized or required to close.  Upon
thirty (30) days' written notice to the Warrant  Holder,  the Company shall have
the right to extend the Warrant Expiration Date.

         2. Warrants and Issuance of Warrant Certificates.

         (a) A Warrant  initially  shall  entitle the  Registered  Holder of the
Warrant representing such Warrant to purchase one share of Common Stock upon the
exercise thereof (sometimes referred to as the "Warrant Shares"),  in accordance
with the terms hereof,  subject to  modification  and  adjustment as provided in
Section 8.

         (b) Upon execution of this Agreement,  warrant  certificates  ("Warrant
Certificates"),  in the  form of  Exhibit  A  annexed  hereto  (i)  representing
_________ Warrants shall be executed by the Company and delivered to the Warrant
Holder and (ii) representing  ________ Warrants shall be executed by the Company
and delivered,  on behalf of the Warrant Holder, to Wilmington Trust Company,  a
Delaware  banking  corporation,  as escrow agent,  pursuant to the provisions of
that certain  Escrow  Agreement  dated August 9, 2000, by and among the Company,
Aladdin Acquisition Corp., Access One and Kenneth G. Baritz, as representative.

         (c) From time to time, up to the Warrant  Expiration Date, the Transfer
Agent shall countersign and deliver stock  certificates in required whole number
denominations  representing  the  shares of Common  Stock  issuable,  subject to
adjustment as described herein, upon the exercise of Warrants in accordance with
this Agreement.

         (d) From time to time, up to the Warrant  Expiration  Date, the Company
shall  countersign  and deliver  Warrant  Certificates  in required whole number
denominations to the persons entitled thereto in connection with any transfer or
exchange permitted under this Agreement;  provided that no Warrant  Certificates
shall be issued except (i) those initially issued  hereunder,  (ii) those issued
on or after the Initial  Warrant  Exercise Date, upon the exercise of fewer than
all Warrants represented by any Warrant Certificate, to evidence any unexercised
Warrants held by the  exercising  Registered  Holder,  (iii) those issued on any
transfer or exchange  pursuant to Section 6, (iv) those issued in replacement of
lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7,
and (v)  those  issued  at the  option  of the  Company,  in

                                       2
<PAGE>

such  form  as may be  approved  by its  Board  of  Directors,  to  reflect  any
adjustment or change made pursuant to Section 8 hereof in the Purchase  Price or
the number of shares of Common Stock purchasable on exercise of the Warrants.

         3. Form and Execution of Warrant Certificates.

         (a)  The  Warrant  Certificates  shall  be  substantially  in the  form
attached  hereto as Exhibit A (the  provisions of which are hereby  incorporated
herein) and may have such letters,  numbers or other marks of  identification or
designation and such legends, summaries or endorsements printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
law or with any rule or  regulation  made  pursuant  thereto or with any rule or
regulation  of any stock  exchange on which the  Warrants  may be listed,  or to
conform  to  usage  or  to  the   requirements  of  Section  2(b).  The  Warrant
Certificates  shall be dated the date of issuance  thereof (whether upon initial
issuance,  transfer, exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates) and issued in registered form.

         (b) Warrant  Certificates shall be executed on behalf of the Company by
its  President,  or any Vice  President  and by its  Secretary  or an  Assistant
Secretary,  by manual signatures or by facsimile signatures printed thereon, and
shall have  imprinted  thereon a facsimile of the  Company's  seal.  In case any
officer of the Company  who shall have  signed any of the  Warrant  Certificates
shall  cease to be an officer of the  Company or to hold the  particular  office
referenced in the Warrant Certificate before the date of issuance of the Warrant
Certificates, such Warrant Certificates may nevertheless be issued and delivered
with the same force and effect as though  the  person  who signed  such  Warrant
Certificates  had not  ceased to be an  officer  of the  Company or to hold such
office.

         4.  Exercise.  Each Warrant may be exercised by the  Registered  Holder
thereof at any time on or after the Initial Warrant Exercise Date, but not after
the Warrant  Expiration  Date,  on the terms and subject to the  conditions  set
forth  herein and in the  applicable  Warrant  Certificate.  A Warrant  shall be
deemed to have been exercised  immediately prior to the close of business on the
Exercise Date and the person  entitled to receive the securities  deliverable on
such  exercise  shall  be  treated  for all  purposes  as the  holder  of  those
securities  on the  exercise  of the  Warrant as of the close of business on the
Exercise  Date.  Promptly  following,  and in any event within five (5) business
days after the date of such  exercise,  the Company shall cause to be issued and
delivered by the Transfer  Agent,  to the person or persons  entitled to receive
the same, a certificate or certificates  for the securities  deliverable on such
exercise  (plus a  certificate  for any  remaining  unexercised  Warrants of the
Registered Holder).

         5. Reservation of Shares, Listing Payment of Taxes, etc.

         (a) The Company  covenants  that it will at all times  reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue on
exercise of  Warrants,  such  number of shares of Common  Stock as shall then be
issuable on the exercise of all outstanding Warrants. The Company covenants that
all shares of Common  Stock that shall be issuable  on exercise of the  Warrants
shall,  at the  time of  delivery,  be duly  and  validly  issued,  fully  paid,
non-assessable  and free from all taxes,  liens and charges  with respect to the
issue  thereof  (other  than  those  that  the  Company  shall  promptly  pay or
discharge)  and that on issuance  such shares  shall

                                       3
<PAGE>

be listed on each national securities exchange or eligible for inclusion in each
automated  quotation  system,  if any, on which the other shares of  outstanding
Common Stock of the Company are then listed or eligible for inclusion.

         (b) The Company shall pay all  documentary,  stamp or similar taxes and
other  governmental  charges that may be imposed with respect to the issuance of
Warrants,  or the  issuance,  or  delivery  of any  shares  on  exercise  of the
Warrants;  provided,  however,  that if the  shares  of  Common  Stock are to be
delivered in a name other than the name of the Registered  Holder of the Warrant
Certificate  representing  any Warrant  being  exercised,  then no such delivery
shall be made unless the person  requesting the same has paid to the Company the
amount of transfer taxes or charges incident thereto, if any.

         6. Exchange and Registration of Transfer.

         (a)  Warrant   Certificates   may  be  exchanged   for  other   Warrant
Certificates  representing  an equal  aggregate  number of  Warrants of the same
class or may be  transferred  in whole or in part.  Warrant  Certificates  to be
exchanged  shall be surrendered to the Company at its Corporate  Office,  and on
satisfaction  of the terms and  provisions  hereof,  the Company shall  execute,
issue and deliver in exchange  therefor the Warrant  Certificate or Certificates
that the Registered Holder making the exchange shall be entitled to receive. The
Holder  shall pay all  transfer  taxes,  if any,  for any  transfer  of  Warrant
Certificates.

         (b) The  Company  shall keep at its office  books in which,  subject to
such  reasonable  regulations  as it may prescribe,  it shall  register  Warrant
Certificates and the transfer  thereof in accordance with its regular  practice.
Upon due presentment for transfer of any Warrant Certificate at such office, the
Company shall execute,  issue and deliver to the transferee or transferees a new
Warrant  Certificate or Certificates  representing an equal aggregate  number of
Warrants.

         (c) With respect to all Warrant Certificates presented for transfer, or
for exchange or exercise,  the  assignment or  subscription  form on the reverse
thereof shall be duly endorsed,  or be  accompanied  by a written  instrument or
instruments of transfer and  subscription,  in form satisfactory to the Company,
duly executed by the Registered Holder or his  attorney-in-fact  duly authorized
in writing.

         (d) All Warrant  Certificates  surrendered for exercise or for exchange
in case of  mutilated  Warrant  Certificates  shall be promptly  canceled by the
Company  and  thereafter  retained  by the  Company  until  termination  of this
Agreement.

         (e) Prior to due presentment for transfer thereof, the Company may deem
and treat the Registered Holder of any Warrant Certificate as the absolute owner
thereof and of each Warrant represented thereby  (notwithstanding  any notations
of  ownership or writing  thereon  made by anyone  other than a duly  authorized
officer of the Company) for all purposes and shall not be affected by any notice
to the contrary.

         7.  Loss  or  Mutilation.  Upon  receipt  by the  Company  of  evidence
satisfactory  to  it of  the  ownership  of  and  loss,  theft,  destruction  or
mutilation  of  any  Warrant   Certificate  and  (in  case  of  loss,  theft  or
destruction)  of indemnity  satisfactory  to it, and (in the case of mutilation)
upon

                                       4
<PAGE>

surrender and cancellation thereof, the Company shall execute (in the absence of
notice to the Company that the Warrant  Certificate  has been acquired by a bona
fide  purchaser)  and  deliver to the  Registered  Holder in lieu  thereof a new
Warrant  Certificate of like tenor  representing  an equal  aggregate  number of
Warrants. Applicants for a substitute Warrant Certificate shall comply with such
other  reasonable  regulations  and pay such  other  reasonable  charges  as the
Company may prescribe.

         8. Adjustment of Exercise Price and Number of Shares of Common Stock or
Warrants.

         (a) Subject to the exceptions referred to in Section 8(g) below, in the
event the Company shall, at any time or from time to time after the date hereof,
issue any shares of Common  Stock as a stock  dividend  to the holders of Common
Stock,  or  subdivide or combine the  outstanding  shares of Common Stock into a
greater  or  lesser  number  of  shares  (any  such  issuance,   subdivision  or
combination being herein called a "Change of Shares"), then, and thereafter upon
each further Change of Shares, the Purchase Price in effect immediately prior to
such  Change of Shares  shall be changed to a price  (including  any  applicable
fraction of a cent)  determined  by  multiplying  the  Purchase  Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of the number of shares of Common  Stock  outstanding  immediately  prior to the
issuance  of such  additional  shares and the  number of shares of Common  Stock
which the aggregate consideration received (determined as provided in subsection
8(f) below) for the issuance of such  additional  shares would  purchase at such
current  market price per share of Common Stock,  and the  denominator  of which
shall be the sum of the number of shares of Common Stock outstanding immediately
after the issuance of such  additional  shares.  Such  adjustment  shall be made
successively whenever such an issuance is made.

                  Upon each  adjustment of the Purchase  Price  pursuant to this
Section  8, the total  number of shares  of Common  Stock  purchasable  upon the
exercise of each Warrant shall (subject to the  provisions  contained in Section
8(b)  hereof)  be such  number  of  shares  (calculated  to the  nearest  tenth)
purchasable at the Purchase Price in effect immediately prior to such adjustment
multiplied by a fraction,  the numerator of which shall be the Purchase Price in
effect  immediately  prior to such adjustment and the denominator of which shall
be the Purchase Price in effect immediately after such adjustment.

         (b) The Company may elect,  on any  adjustment  of the  Purchase  Price
hereunder,  to  adjust  the  number  of  Warrants  outstanding,  in  lieu of the
adjustment in the number of shares of Common Stock  purchasable  on the exercise
of each Warrant as hereinabove  provided, so that each Warrant outstanding after
such adjustment shall represent the right to purchase one share of Common Stock.
Each Warrant held of record prior to such  adjustment  of the number of Warrants
shall  become  that  number  of  Warrants  (calculated  to  the  nearest  tenth)
determined by multiplying  the number one by a fraction,  the numerator of which
shall be the Purchase Price in effect  immediately  prior to such adjustment and
the denominator of which shall be the Purchase Price in effect immediately after
such adjustment. Upon each adjustment of the number of Warrants pursuant to this
Section  8,  the  Company  shall,  as  promptly  as  practicable,  cause  to  be
distributed to each  Registered  Holder of Warrant  Certificates  on the date of
such  adjustment  Warrant  Certificates  evidencing  the  number  of  additional
Warrants to which such Holder  shall be entitled as a result of such  adjustment
or, at the option of the  Company,  cause to be  distributed  to such  Holder in
substitution and replacement for the Warrant  Certificates  held by him prior to
the date of adjustment  (and on surrender  thereof,  if required by the Company)
new Warrant

                                       5
<PAGE>

Certificates  evidencing  the number of Warrants  to which such Holder  shall be
entitled after such adjustment.

         (c) In case of any  reclassification,  capital  reorganization or other
change of outstanding shares of Common Stock, or in case of any consolidation or
merger  of  the  Company  with  or  into  another   corporation  (other  than  a
consolidation  or merger in which the Company is the continuing  corporation and
that does not result in any  reclassification,  capital  reorganization or other
change  of  outstanding  shares  of  Common  Stock),  or in case of any  sale or
conveyance  to  another  corporation  of the  property  of the  Company  as,  or
substantially  as, an entirety (other than a sale  leaseback,  mortgage or other
financing  transaction),  the Company shall cause effective provision to be made
so that  each  holder  of a  Warrant  then  outstanding  shall  have  the  right
thereafter,  by  exercising  such  Warrant,  to purchase  the kind and number of
shares of stock or other  securities or property  (including cash) receivable on
such reclassification,  capital  reorganization or other change,  consolidation,
merger,  sale or  conveyance by a holder of the number of shares of Common Stock
that might have been purchased on exercise of such Warrant  immediately prior to
such reclassification,  capital  reorganization or other change,  consolidation,
merger,  sale or  conveyance.  Any such  provision  shall include  provision for
adjustments  that shall be as nearly  equivalent  as may be  practicable  to the
adjustments  provided  for in this  Section 8. The Company  shall not effect any
such  consolidation,  merger or sale unless prior to or simultaneously  with the
consummation  thereof the successor (if other than the Company)  resulting  from
such  consolidation  or merger  or the  corporation  purchasing  assets or other
appropriate  corporation or entity shall assume, by written instrument  executed
and  delivered to the Company,  the  obligation to deliver to the holder of each
Warrant such shares of stock,  securities or assets as, in  accordance  with the
foregoing  provisions,  such  holders may be entitled to purchase  and the other
obligations under this Agreement. The foregoing provisions shall similarly apply
to successive  reclassifications,  capital  reorganizations and other changes of
outstanding  shares of Common Stock and to successive  consolidations,  mergers,
sales or conveyances.

         (d) Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock  purchasable  on exercise of the  Warrants,
the Warrant  Certificates  theretofore and thereafter  issued shall,  unless the
Company shall exercise its option to issue new Warrant Certificates  pursuant to
Section  2(d) hereof,  continue to express the Purchase  Price per share and the
number of shares purchasable  thereunder as the Purchase Price per share and the
number of shares purchasable therefor were expressed in the Warrant Certificates
when the same were originally issued.

         (e) After  each  adjustment  of the  Purchase  Price  pursuant  to this
Section  8, the  Company  will  promptly  prepare  a  certificate  signed by the
President or a Vice President, and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant  Secretary,  of the Company setting forth: (i) the
Purchase  Price as so  adjusted,  (ii) the  number of  shares  of  Common  Stock
purchasable  on  exercise of each  Warrant  after such  adjustment,  and, if the
Company  shall have  elected to adjust the number of Warrants  and the number of
Warrants to which the Registered  Holder of each Warrant shall then be entitled,
and (iii) a brief  statement of the facts  accounting for such  adjustment.  The
Company will promptly cause a brief summary thereof to be sent by ordinary first
class mail to each Registered Holder of Warrants at his last address as it shall
appear on the books of the  Company.  No  failure  to mail such  notice  nor any
defect  therein or in the mailing  thereof  shall  affect the  validity  thereof
except as to the  holder to

                                       6
<PAGE>

whom the Company  failed to mail such  notice,  or except as to the holder whose
notice was defective.  The affidavit of the Secretary or an Assistant  Secretary
of the Company that such notice has been mailed shall,  in the absence of fraud,
be prima facie evidence of the facts stated therein.

         (f) For  purposes  of  Section  8(a) and  8(b)  hereof,  the  following
provisions (i) and (ii) shall also be applicable:

                  (i) The number of shares of Common  Stock  outstanding  at any
             given time shall include shares of Common Stock owned or held by or
             for the  account of the  Company  and the sale or  issuance of such
             treasury  shares or the  distribution  of any such treasury  shares
             shall not be  considered  a Change of Shares for  purposes  of said
             sections.

                  (ii) No adjustment of the Purchase  Price shall be made unless
             such  adjustment  would require an increase or decrease of at least
             Ten Cents ($.10) in such price;  provided that any adjustments that
             by reason of this subsection (ii) are not required to be made shall
             be carried  forward  and shall be made at the time of and  together
             with  the  next  subsequent  adjustment  that,  together  with  any
             adjustment(s)  so carried  forward,  shall  require an  increase or
             decrease of at least Ten Cents ($.10) in the Purchase Price then in
             effect hereunder.

         (g) No  adjustment  to the  Purchase  Price of the  Warrants  or to the
number of shares of Common  Stock  purchasable  on the  exercise of each Warrant
will be made, however,

                  (i) on the sale or  exercise  of the  Warrants  or any warrant
             outstanding on the date hereof; or

                  (ii) on the  issuance or sale of Common  Stock or  convertible
             securities  on the  exercise of any rights or warrants to subscribe
             for or purchase,  or any options for the purchase of,  Common Stock
             or convertible securities,  whether or not such rights, warrants or
             options were  outstanding  on the date of the original  sale of the
             Warrants or were thereafter issued or sold; or

                  (iii) on the issuance or sale of Common Stock on conversion or
             exchange  of  any  convertible  securities,   whether  or  not  any
             adjustment in the Purchase Price was made or required to be made on
             the issuance or sale of such convertible  securities and whether or
             not such convertible securities were outstanding on the date of the
             original sale of the Warrants or were thereafter issued or sold; or

                  (iv) on the  issuance or sale of Common  Stock or  convertible
             securities to shareholders  of any  corporation  that merges and/or
             consolidates  into or is  acquired by the Company or from which the
             Company  acquires  assets  and  some  or all  of the  consideration
             consists of equity  securities  of the Company,  in  proportion  to
             their stock holdings of such corporation  immediately  prior to the
             acquisition  but only if no adjustment is required  pursuant to any
             other provision of this Section 8.

                                       7
<PAGE>

                  (v) on the  issuance or exercise of options or on the issuance
             or  grant of  stock  awards  granted  to the  Company's  directors,
             employees or consultants  under a plan or plans (including for this
             purpose any arrangement or agreement that would constitute a "plan"
             under the instructions to the  registration  statement on Form S-8)
             adopted by the  Company's  Board of  Directors  and approved by its
             stockholders.

                  (vi)  on  the  issuance  of  Common  Stock  to  the  Company's
             directors,  employees or consultants under a plan or plans that are
             qualified under the Internal Revenue Code as incentive stock option
             plans; or

                  (vii) on the  issuance  of Common  Stock in a bona fide public
             offering pursuant to a firm commitment underwriting.

         (h) Any determination as to whether an adjustment in the Purchase Price
in effect  hereunder  is required  pursuant to Section 8, or as to the amount of
any such  adjustment,  if  required,  shall be  binding  on the  holders  of the
Warrants  and the Company if made in good faith by the Board of Directors of the
Company.

         (i) If and  whenever  the Company  shall grant to the holders of Common
Stock,  as such,  rights or warrants to  subscribe  for or to  purchase,  or any
options for the purchase  of,  Common Stock or  securities  convertible  into or
exchangeable  for or  carrying  a right,  warrant or option to  purchase  Common
Stock, the Company shall concurrently  therewith grant to each Registered Holder
as of the record date for such transaction of the Warrants then outstanding, the
rights,  warrants  or options to which each  Registered  Holder  would have been
entitled if, on the record date used to determine the  stockholders  entitled to
the rights,  warrants or options  being granted by the Company,  the  Registered
Holder were the holder of record of the number of whole  shares of Common  Stock
then  issuable  on exercise  of his  Warrants.  Such grant by the Company to the
holders of the Warrants shall be in lieu of any adjustment  that otherwise might
be called for pursuant to this Section 8.

         9.  Registration  Rights.  The Warrants and the Warrant Shares have not
been registered under the Securities Act. Upon exercise, in part or in whole, of
this  Warrant,  certificates  representing  the  Warrant  Shares  shall bear the
following legend:

                  These securities have not been registered under the Securities
                  Act of 1933.  Such  securities  may not be sold or offered for
                  sale,  transferred,  hypothecated or otherwise assigned in the
                  absence of an effective  registration  statement  with respect
                  thereto  under such Act or an  opinion  of counsel  reasonably
                  satisfactory   to  the   Company   that  an   exemption   from
                  registration for such sale, offer, transfer,  hypothecation or
                  other assignment is available under such Act.

         10. Fractional Warrants and Fractional Shares.

         (a) If the number of shares of Common Stock purchasable on the exercise
of  each  Warrant  is  adjusted  pursuant  to  Section  8  hereof,  the  Company
nevertheless  shall not be required

                                       8
<PAGE>

to issue  fractions of shares,  on exercise of the Warrants or otherwise,  or to
distribute  certificates  that evidence  fractional  shares.  In such event, the
Company  may at its  option  elect to round up the number of shares to which the
Warrant  Holder is entitled to the nearest whole share or to pay cash in respect
of  fractional  shares in  accordance  with the  following:  With respect to any
fraction of a share called for on any exercise hereof,  the Company shall pay to
the Warrant  Holder an amount in cash equal to such  fraction  multiplied by the
current market value of such fractional share, determined as follows:

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

                  (ii) If the Common Stock is not listed or admitted to unlisted
             trading privileges on a national  securities exchange or listed for
             trading on the Nasdaq Stock Market,  the current value shall be the
             mean of the last  reported  bid and asked  prices  reported  by the
             National  Quotation Bureau,  Inc. on the last business day prior to
             the date of the exercise of this Warrant; or

                  (iii) If the  Common  Stock is not so  listed or  admitted  to
             unlisted trading  privileges on a national  securities  exchange or
             listed for  trading on the  Nasdaq  Stock  Market and bid and asked
             prices are not so  reported,  the current  value shall be an amount
             determined  in such  reasonable  manner as may be prescribed by the
             Board of Directors of the Company.

         11.  Warrant  Holders  Not Deemed  Stockholders.  No holder of Warrants
shall,  as such,  be entitled to vote or to receive  dividends  or be deemed the
holder of Common  Stock that may at any time be  issuable  on  exercise  of such
Warrants for any purpose  whatsoever,  nor shall  anything  contained  herein be
construed to confer on the holder of Warrants,  as such,  any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
on any matter  submitted to stockholders at any meeting  thereof,  or to give or
withhold consent to any corporate action (whether on any recapitalization, issue
or  reclassification  of stock, change of par value or change of stock to no par
value,  consolidation,  merger or conveyance or otherwise), or to receive notice
of meetings,  or to receive dividends or subscription rights, until such Warrant
Holder shall have exercised such Warrants and been issued shares of Common Stock
in accordance with the provisions hereof.

         12.  Rights  of  Action.  All  rights of action  with  respect  to this
Agreement are vested in the respective  Registered Holders of the Warrants,  and
any Registered  Holder of a Warrant or of the holder of any other Warrant,  may,
in his own behalf and for his own benefit, enforce against the Company his right
to exercise  his  Warrants  for the  purchase  of shares of Common  Stock in the
manner provided in the Warrant Certificate and this Agreement.

         13.  Agreement of Warrant  Holders.  Every holder of a Warrant,  by his
acceptance thereof, consents and agrees with the Company, and every other holder
of a Warrant that:

                                       9
<PAGE>

         (a) The Warrants are  transferable  only on the books of the Company by
the  Registered  Holder  thereof  in  person  or by  his  attorney-in-fact  duly
authorized  in writing and only if the Warrant  Certificates  representing  such
Warrants  are  surrendered  at the  office  of the  Company,  duly  endorsed  or
accompanied by a proper  instrument of transfer  satisfactory  to the Company in
its discretion, together with payment of any applicable transfer taxes; and

         (b) The Company may deem and treat the person in whose name the Warrant
Certificate  is registered  as the holder and as the  absolute,  true and lawful
owner of the  Warrants  represented  thereby for all  purposes,  and the Company
shall not be  affected by any notice or  knowledge  to the  contrary,  except as
otherwise expressly provided in Section 7 hereof.

         (c) Warrant Holder hereby  confirms that the Warrants to be received by
Warrant   Holder  and  the  Common  Stock   issuable   upon   exercise   thereof
(collectively,  the "Securities") will be acquired for such Warrant Holder's own
account,  not as a nominee or agent, for investment purposes only and not with a
view to the resale or distribution of any part thereof.

         (d) Warrant Holder  understands  that (i) the Warrants are not, and any
Common  Stock  acquired on exercise  thereof at the time of issuance may not be,
registered  under the Securities Act of 1933, as amended (the "1933 Act") ; (ii)
the sale and  issuance  of the  Securities  by the Company are being made on the
basis  of  exemption  thereunder;  and  (iii)  the  Company's  reliance  on such
exemption is  predicated  on such  Warrant  Holder's  representations  set forth
herein.

         (e) Warrant Holder  represents  that he has had the  opportunity (i) to
discuss the  Company's  business,  management  and  financial  affairs  with the
Company's management, (ii) to review the Company's operations and facilities and
(iii) to ask question and receive  answers from the Company  regarding the terms
and conditions of the offering of the Warrants.

         (f) Warrant  Holder has such  knowledge and  experience in financial or
business  matters that he is capable of  evaluating  the merits and risks of his
investment in the  Securities.  Warrant Holder can bear the economic risk of his
investment  in the  Securities,  including  a partial  or  complete  loss of his
investment.

         (g) Warrant Holder  acknowledges and agrees that the Warrants,  and any
shares of Common Stock issued upon exercise  thereof,  must be held indefinitely
unless  subsequently  registered  under the 1933 Act or an  exemption  from such
registration  is available.  Warrant  Holder has been advised or is aware of the
provisions of Rule 144 promulgated  under the 1933 Act as in effect from time to
time,  which permits limited resale of shares  purchased in a private  placement
subject  to the  satisfaction  of certain  conditions,  including,  among  other
things:  the  availability  of  certain  current  public  information  about the
Company,  the resale occurring  following the required holding period under Rule
144 and the  number of shares  being  sold  during  any  three-month  period not
exceeding  specified  limitations.  Warrant Holder agrees that he will not sell,
assign or otherwise transfer the Warrants,  or any shares of Common Stock issued
upon exercise thereof, in violation of the 1933 Act.

         (h) Warrant Holder is an "accredited  investor" as such term is defined
in Rule 501 promulgated under the 1933 Act.

                                       10
<PAGE>

         14. Cancellation of Warrant Certificates. If the Company shall purchase
or  acquire  any  Warrant,  the  Warrant  Certificate  or  Warrant  Certificates
evidencing the same shall  thereupon be delivered to the Company and canceled by
it and retired. The Company shall also cancel any Warrant Certificates following
exercise of any of the Warrants Certificates represented thereby or delivered to
it for transfer, split up, combination or exchange.

         15.  Modification  of Agreement.  This Agreement shall not be modified,
supplemented or altered in any respect except with the consent in writing of the
Company and the Registered Holders,  other than such changes as are specifically
prescribed by this  Agreement as  originally  executed or are made in compliance
with applicable law.

         16. Notices. All notices,  requests,  consents and other communications
hereunder  shall be in  writing  and  shall be  deemed  to have  been  made when
delivered or mailed first class registered or certified mail, postage prepaid as
follows: if to the Registered Holder of a Warrant Certificate, at the address of
such holder as shown on the books maintained by the Company;  if to the Company,
6805 Route 202,  New Hope,  PA 18938 or such other  address as the  Company  may
specify.

         17. Governing Law. This Agreement shall be governed by and construed in
accordance  with  the  laws of the  State  of  Delaware,  without  reference  to
principles of conflict of laws.

         18. Binding Effect. This Agreement shall be binding on and inure to the
benefit  of the  Company  and  the  Registered  Holders,  and  their  respective
successors  and  assigns,   and  the  holders  from  time  to  time  of  Warrant
Certificates.  Nothing in this  Agreement  is intended or shall be  construed to
confer on any other person any right,  remedy or claim,  in equity or at law, or
to impose on any other person any duty, liability or obligation.

         19.  Termination.  This  Agreement  shall  terminate  at the  close  of
business on the Warrant Expiration Date of all the Warrants or such earlier date
on which all Warrants have been exercised.

         20.   Counterparts.   This   Agreement   may  be  executed  in  several
counterparts, which taken together shall constitute a single document.

                                       11
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first above written.

                                        TALK.COM INC.

                                        By:_____________________________________
                                           Name:
                                           Title:

                                        ________________________________________

                                        AGREED TO AND ACKNOWLEDGED BY:

                                        UNIVERSAL CLAIMS ADMINISTRATOR, INC.

                                        By______________________________________
                                          Name:
                                          Title:

                                       12
<PAGE>

                                    EXHIBIT A

         THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF
1933.  SUCH  SECURITIES  MAY NOT BE  SOLD  OR  OFFERED  FOR  SALE,  TRANSFERRED,
HYPOTHECATED OR OTHERWISE  ASSIGNED IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION
STATEMENT  WITH  RESPECT  THERETO  UNDER  SUCH  ACT  OR AN  OPINION  OF  COUNSEL
REASONABLY  SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM  REGISTRATION FOR
SUCH SALE, OFFER, TRANSFER, HYPOTHECATION OR OTHER ASSIGNMENT IS AVAILABLE UNDER
SUCH ACT.

No. ____                           _________
                         Common Stock Purchase Warrants

                           VOID AFTER AUGUST __, 2005

         STOCK PURCHASE WARRANT CERTIFICATE FOR PURCHASE OF COMMON STOCK

                                  TALK.COM INC.

                               THIS CERTIFIES THAT

         FOR VALUE  RECEIVED  ________ or  registered  assigns (the  "Registered
Holder")  is  the  owner  of  the  number  of  Common  Stock  Purchase  Warrants
("Warrants")  specified above.  Each Warrant  initially  entitles the Registered
Holder  to  purchase,  subject  to the terms  and  conditions  set forth in this
Certificate and the Warrant Agreement (as hereinafter  defined),  one fully paid
and  non-assessable  share of Common Stock, $.01 par value ("Common Stock"),  of
TALK.COM INC., a Delaware  corporation (the "Company"),  at any time between the
Initial   Exercise  Date  (as  herein  defined)  and  the  Expiration  Date  (as
hereinafter  defined),  on  the  presentation  and  surrender  of  this  Warrant
Certificate with the Subscription  Form on the reverse hereof duly executed,  at
the corporate  office of the Company,  accompanied by payment of _______ Dollars
and ________ Cents ($____) per share of Common Stock, subject to adjustment from
time to time  pursuant to the terms and  provisions  of Section 8 of the Warrant
Agreement in lawful money of the United States of America in cash or by official
bank or certified check made payable to TALK.COM INC.

         This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are  subject in all  respects  to the terms and  conditions  set
forth in the Warrant  Agreement (the "Warrant  Agreement") dated August 9, 2000,
by and between the Company and the Registered  Holder.  Terms not defined herein
shall have the meanings assigned to them in the Warrant Agreement.

         In the  event of  certain  contingencies  provided  for in the  Warrant
Agreement,  the  Purchase  Price  and/or  the  number of shares of Common  Stock
subject to  purchase  on the  exercise of each  Warrant  represented  hereby are
subject to modification or adjustment.

                                      B-1
<PAGE>

         Each Warrant  represented  hereby is  exercisable  at the option of the
Registered  Holder,  but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants  represented  hereby, the
Company shall cancel this Warrant  Certificate on the surrender hereof and shall
execute and deliver a new Warrant  Certificate or Warrant  Certificates  of like
tenor,  which the  Warrant  Agent  shall  countersign,  for the  balance of such
Warrants.

         The term "Initial Exercise Date" shall mean as of the date hereof.

         The term  "Expiration  Date"  shall  mean 5:00 p.m.  (New York time) on
August __, 2005, or such earlier date as the Warrants shall be redeemed. If such
date shall in the State of New York be a holiday or a day on which the banks are
authorized  to close,  then the  Expiration  Date shall mean 5:00 p.m. (New York
time) the next  following day which in the State of New York is not a holiday or
a day on which banks are authorized to close.

         This Warrant  Certificate is  exchangeable,  on the surrender hereof by
the Registered Holder at the corporate office of the Company,  for a new Warrant
Certificate  or  Warrant  Certificates  of  like  tenor  representing  an  equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered  Holder at the
time of such surrender.  Upon due presentment  with any transfer fee in addition
to any tax or other  governmental  charge imposed in connection  therewith,  for
registration  of transfer of this  Warrant  Certificate  at such  office,  a new
Warrant  Certificate or Warrant  Certificates  representing  an equal  aggregate
number of  Warrants  will be  issued to the  transferee  in  exchange  therefor,
subject to the limitations provided in the Warrant Agreement.

         Prior to the exercise of any Warrant represented hereby, the Registered
Holder  shall not be entitled  to any rights of a  stockholder  of the  Company,
including,  without  limitation,  the right to vote or to receive  dividends  or
other  distributions,  and shall not be  entitled  to receive  any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.

         Prior to due presentment for transfer hereof,  the Company may deem and
treat the  Registered  Holder as the  absolute  owner hereof and of each Warrant
represented hereby (notwithstanding any notations of ownership or writing hereon
made by anyone  other than a duly  authorized  officer of the  Company)  for all
purposes and shall not be affected by any notice to the contrary.

         This  Warrant  Certificate  shall  be  governed  by  and  construed  in
accordance with the laws of the State of Delaware.

                                      B-2
<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly  executed,  manually  or in  facsimile  by its  officer  thereunto  duly
authorized and a facsimile of its corporate seal to be imprinted hereon.

                                        TALK.COM INC.

                                        By:_____________________________________
                                             Name:
                                             Title:

Date:_________________________________

[Seal]

                                      B-3
<PAGE>

                                SUBSCRIPTION FORM

     (To Be Executed by the Registered Holder in Order to Exercise Warrants)

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

   THE UNDERSIGNED  REGISTERED  HOLDER hereby elects to exercise Warrants
   of TALK.COM  INC.  represented  by this  Warrant  Certificate,  and to
   purchase the securities issuable on the exercise of such Warrants, and
   requests that  certificates for such securities shall be issued in the
   name of:

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

        whose taxpayer identification number is: ________________________

   and be delivered to:

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

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

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

                   ------------------------------------------
                     (please print or type name and address)

and if such number of Warrants  shall not be all the Warrants  evidenced by this
Warrant  Certificate,  that a new  Warrant  Certificate  for the balance of such
Warrants be registered in the name of, and delivered to, the  Registered  Holder
at the address stated below:

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

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

                   ------------------------------------------
                                    (Address)

                           ---------------------------
                                     (Date)

                           ---------------------------
                        (Taxpayer Identification Number)

                           ---------------------------
                                   (Signature)

                              SIGNATURE GUARANTEED

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

         (Bank or trust company having an office or correspondent in the
           United States or a broker or dealer which is a member of a
          registered securities exchange or the National Association of
                            Securities Dealers, Inc.)

                                      B-4
<PAGE>

                                   ASSIGNMENT

     (To Be Executed by the Registered Holder in Order to Assign Warrants)

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

 FOR VALUE RECEIVED, the Undersigned Registered Holder hereby sells, assigns and
 transfers unto

                   ------------------------------------------
                                  (insert name)

whose taxpayer identification or other identifying number is: ______________ and
 whose address is:

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

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

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

                   ------------------------------------------
                         (please print or type address)

the following  number of the Warrants  represented by this Warrant  Certificate:
___________________,   and   hereby   irrevocably   constitutes   and   appoints
___________________  Attorney to transfer this Warrant  Certificate on the books
of the Company, with full power of substitution in the premises.

                           ---------------------------
                                     (Date)

                           ---------------------------
                                   (Signature)

                              SIGNATURE GUARANTEED

                   ------------------------------------------
         (Bank or trust company having an office or correspondent in the
           United States or a broker or dealer which is a member of a
          registered securities exchange or the National Association of
                            Securities Dealers, Inc.)

                                      B-5

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