RIGHT START INC /CA
10.1 SERIES D CONVERTIBLE PIK STOCK
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>10.1 SERIES D CONVERTIBLE PIK STOCK
<TEXT>


                              THE RIGHT START, INC.






                          SECURITIES PURCHASE AGREEMENT

                           Dated as of October 6, 2000





                                  80,000 shares

                SERIES D CONVERTIBLE PAY-IN-KIND PREFERRED STOCK


<PAGE>


iii

                                TABLE OF CONTENTS

                                                                           Page

Section 1.  ISSUANCE OF SECURITIES.............................................1
     Section 1.1.   Authorization..............................................1
     Section 1.2.   Purchase and Sale of Securities; the Closing...............1
     Section 1.3.   Subsequent Sale of Securities..............................2
     Section 1.4.   Representations of the Purchasers..........................2

Section 2.  REPRESENTATIONS OF THE COMPANY.....................................5
     Section 2.1.   Organization and Authority of the Company..................5
     Section 2.2.   Business, Properties and Other
                       Information Regarding the Company.......................5
     Section 2.3.   Capital Stock..............................................6
     Section 2.4.   Litigation; Observance of Statutes,
                       Regulations and Orders..................................7
     Section 2.5.   Title to Property..........................................7
     Section 2.6.   Taxes......................................................8
     Section 2.7.   Compliance with Laws and Other
                       Instruments of the Company..............................8
     Section 2.8.   Governmental Authorizations................................8
     Section 2.9.   Licenses and Permits.......................................8
     Section 2.10.  Compliance with ERISA......................................8
     Section 2.11.  Investment Company Act....................................10
     Section 2.12.  Environmental Compliance..................................10
     Section 2.13.  Maintenance of Insurance..................................10
     Section 2.14.  Labor Relations...........................................10
     Section 2.15.  Assumptions or Guaranties of
                       Indebtedness of Other Persons..........................10
     Section 2.16.  Disclosure................................................10
     Section 2.17.  Valid Issuance of Preferred and Common Stock..............10

Section 3.  CONDITIONS OF CLOSING.............................................11
     Section 3.1.   Proceedings Satisfactory..................................11
     Section 3.2.   Representations True; Officer's Certificate...............11
     Section 3.3.   Purchase Permitted by Applicable Laws.....................11
     Section 3.4.   Securities................................................11
     Section 3.5.   Registration Rights Agreement.............................11
     Section 3.6.   Third-Party Consents......................................11



Section 4.  DEFINITIONS.......................................................12
     Section 4.1.   Definitions.............................................. 12
     Section 4.2.   Accounting Terms..........................................15


Section 5.  REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES;
             LOST SECURITIES..................................................15

Section 6. TAXES..............................................................16

Section 7. MISCELLANEOUS......................................................16
     Section 7.1.  Indemnification............................................16
     Section 7.2.  Expenses...................................................16
     Section 7.3.  Amendments, Waiver and Consents........................... 17
     Section 7.4.  Reliance on and Survival of Representations................17
     Section 7.5.  Successors and Assigns.....................................17
     Section 7.6.  Notices....................................................17
     Section 7.7.  Counterparts...............................................18
     Section 7.8.  Governing Law..............................................18
     Section 7.9.  Waiver of Jury Trial.......................................18
     Section 7.10.  Effect of Amendment or Waiver.............................18
     Section 7.11.  Entire Agreement..........................................18
     Section 7.12.  Exculpation Among Purchasers..............................19










<PAGE>



Schedules

     SCHEDULE I     -    Purchasers
     SCHEDULE 2.13  -  Insurance

Exhibits

     EXHIBIT A      -    Certificate of Determinations

     EXHIBIT B      -    Form of Warrant

     EXHIBIT C      -    Form of Registration Rights Agreement

     EXHIBIT D      -    Form of Stock Certificate





































<PAGE>


                              THE RIGHT START, INC.

                          SECURITIES PURCHASE AGREEMENT

                           Dated as of October 6, 2000

To each of the Purchasers
Listed on Schedule I hereto

Ladies and Gentlemen:

          The Right Start, Inc.,   a  California  corporation  (the  "Company"),
hereby agrees with the Purchasers as follows:

          Section 1.  ISSUANCE OF SECURITIES.

          Section 1.1.  Authorization.

          The Company has duly  authorized  the issuance of (i) 80,000 shares of
its Series D Convertible  Pay-in-Kind  Preferred  Stock (the "Series D Preferred
Stock")  plus such shares as are issued by the Company in lieu of the payment of
dividends  thereon in cash and (ii) warrants to purchase  800,000  shares (or 10
shares per share of Series D Preferred  Stock sold on the Initial  Closing Date)
of its common stock, no par value ("Common Stock") (the "Warrants").  The Series
D Preferred Stock shall have the rights, privileges and preferences set forth in
a certificate of determinations substantially in the form of Exhibit A.

          As used herein,  the term "Series D Preferred Stock" shall include all
stock  certificates  originally  issued  pursuant  to this  Securities  Purchase
Agreement (the  "Agreement") and all  certificates  delivered in substitution or
exchange  for any of such  stock  certificates  or in  lieu  of the  payment  of
dividends in cash and, where  applicable,  shall include the singular  number as
well as the plural.  The Series D  Preferred  Stock and  Warrants  issued to the
Purchasers   pursuant  to  this  Agreement,   and  the  certificates  and  other
instruments  from  time  to time  evidencing  the  same,  are  herein  sometimes
collectively called the "Securities."

          Section 1.2. Purchase and Sale of Securities; the Closing. The Company
shall sell to the Purchasers  and,  subject to the terms and conditions  hereof,
the Purchasers  shall purchase from the Company the Series D Preferred Stock and
the Warrants,  at an aggregate purchase price equal to the aggregate liquidation
preference on the Series D Preferred Stock.

          The closing (the "Initial Closing") of such purchase of the Securities
shall be held at 10:00 a.m.,  Los Angeles time, on October 6, 2000 (the "Initial
Closing Date"), at the office of Milbank,  Tweed,  Hadley & McCloy, Los Angeles,
or at such other time or place as the parties hereto may mutually agree.

          On the  Initial  Closing  Date,  the  Company  shall  deliver  to each
Purchaser one or more certificates representing the Series D Preferred Stock set
forth as being  purchased by such Purchaser on Schedule I and the  proportionate
number of Warrants,  registered in such  Purchaser's name or in the name of such
Purchaser's  nominee in any denominations,  all as such Purchaser may specify by
notice  delivered to the Company at least two days prior to the Initial  Closing
Date (or, in the absence of such notice, one certificate representing the Series
D Preferred  Stock and one Warrant  agreement,  registered  in such  Purchaser's
name),  duly  executed  and  dated  the  Initial  Closing  Date,   against  each
Purchaser's delivery to the Company of immediately available funds in the amount
of the purchase price.

         Section 1.3 Subsequent  Sale of Securities.  If less than 80,000 shares
of Series D Preferred Stock and the proportionate number of Warrants are sold at
the  Initial  Closing,  then,  subject  to the  terms  and  conditions  of  this
Agreement,  the  Company may sell the unsold  remainder  up to an  aggregate  of
80,000 shares of Series D Preferred Stock and a proportionate number of Warrants
(as such, the  "Remainder  Shares and Warrants") to such Persons as the Board of
Directors may determine,  on the same terms and conditions as those contained in
this Agreement (the date of any such sale, a "Subsequent  Closing Date" and such
closing a "Subsequent  Closing").  The  purchasers  of any Remainder  Shares and
Warrants shall become, by their purchase thereof,  parties to this Agreement and
the Registration  Rights Agreement and shall acknowledge their obligations under
this Agreement and the Registration  Rights Agreement in a writing  delivered to
the Company.

          On any  Subsequent  Closing  Date,  the Company  shall deliver to each
purchaser on such Subsequent Closing Date (a "Subsequent Purchaser") one or more
certificates  representing  the  Series  D  Preferred  Stock  purchased  by such
Subsequent  Purchaser on such Subsequent Closing Date and a proportionate number
of Warrants,  registered in such Subsequent  Purchaser's  name or in the name of
such Subsequent Purchaser's nominee in any denominations, all as such Subsequent
Purchaser may specify by notice delivered to the Company at least two days prior
to the  Subsequent  Closing  Date  (or,  in the  absence  of  such  notice,  one
certificate representing the Series D Preferred Stock and one Warrant agreement,
registered in such  Subsequent  Purchaser's  name),  duly executed and dated the
Subsequent  Closing Date,  against each Subsequent  Purchaser's  delivery to the
Company of immediately available funds in the amount of the purchase price.

          Section 1.4.  Representations  of the Purchasers.     Each   Purchaser
represents and warrants to the Company that:

(a)      Authorization.

                           Such  Purchaser has full power and authority to enter
into this Agreement, and that this Agreement, when

executed and delivered, will constitute a  valid and legally  binding obligation
of the Purchaser.

(b)      Purchase Entirely for Own Account.

                  This  Agreement is made with such  Purchaser in reliance  upon
the Purchaser's  representation  to the Company,  which by its execution of this
Agreement such Purchaser hereby confirms, that the Securities to be purchased by
such Purchaser will be acquired for investment for such Purchaser's own account,
not as a nominee or agent,  and not with a view to the resale or distribution of
any part thereof,  and that such Purchaser has no present  intention of selling,
granting any participation in, or otherwise  distributing the same. By executing
this Agreement,  such Purchaser further  represents that such Purchaser does not
have any  contract,  undertaking,  agreement or  arrangement  with any person to
sell,  transfer or grant  participations  to such person or to any third person,
with respect to any of the Securities.

                  (c)      Reliance Upon Purchasers' Representations.

                  Such  Purchaser   understands  that  the  Securities  are  not
registered  under the  Securities  Act on grounds that the sale  provided for in
this  Agreement  and  the  issuance  of  securities  hereunder  is  exempt  from
registration under the Securities Act pursuant to Section 4(2) thereof, and that
the  Company's  reliance on such  exemption is  predicated  on such  Purchasers'
representations set forth herein. Such Purchaser realizes that the basis for the
exemption  may not be present if,  notwithstanding  such  representations,  such
Purchaser  has  in  mind  merely   acquiring  the  Securities  for  a  fixed  or
determinable  period in the  future,  or for a market  rise,  or for sale if the
market does not rise. Such Purchaser has no such intention.

                  (d)      Investment Experience.

                  Such Purchaser represents that it is experienced in evaluating
and investing in private placement transactions and acknowledges that it is able
to fend for itself,  can bear the economic risk of such Purchaser's  investment,
and has such  knowledge and  experience  in financial and business  matters that
such  Purchaser is capable of evaluating  the merits and risks of the investment
in the Securities. Such Purchaser also represents that it has not been organized
for the purpose of acquiring the Securities.

(e)      Accredited Investor.

(1)      The term "Accredited Investor" as used herein refers to:

(i)      A  person or  entity  who  is  a director  or  executive officer of the
Company;

                           (ii) Any bank as defined  in  Section  3(a)(2) of the
                  Securities  Act, or any savings and loan  association or other
                  institution as defined in Section 3(a)(5)(A) of the Securities
                  Act whether  acting in its  individual or fiduciary  capacity;
                  any broker or dealer registered  pursuant to Section 15 of the
                  Securities  Exchange  Act of 1934 as  amended;  any  insurance
                  company as defined in Section 2(13) of the Securities Act; any
                  investment company registered under the Investment Company Act
                  of  1940 as  amended  or a  business  development  company  as
                  defined in Section  2(a)(48) of that act;  any Small  Business
                  Investment   Company  licensed  by  the  United  States  Small
                  Business  Administration  under  Section  301(c) or (d) of the
                  Small  Business  Investment  Act of 1958 as amended;  any plan
                  established   and   maintained  by  a  state,   its  political
                  subdivisions,  or any agency or  instrumentality of a state or
                  its political subdivisions,  for the benefit of its employees,
                  if such plan has total  assets  in excess of  $5,000,000;  any
                  employee  benefit  plan  within the  meaning of Title I of the
                  Employee Retirement Income Security Act of 1974 as amended, if
                  the  investment  decision  is  made  by a plan  fiduciary,  as
                  defined in Section 3(21) of such act,  which is either a bank,
                  savings and loan association, insurance company, or registered
                  investment  adviser, or if the employee benefit plan has total
                  assets in excess of $5,000,000  or, if a  self-directed  plan,
                  with  investment  decisions  made  solely by persons  that are
                  Accredited Investors;

                           (iii) Any  private  business  development  company as
                  defined in Section  202(a)(22) of the Investment  Advisers Act
                  of 1940 as amended;

                  (iv) Any  organization  described in Section  501(c)(3) of the
                  Internal Revenue Code,  corporation,  Massachusetts or similar
                  business trust,  or  partnership,  not formed for the specific
                  purpose of acquiring the securities offered, with total assets
                  in excess of $5,000,000;

                  (v)      Any  natural  person  whose  individual net worth, or
                  joint net worth with that person's spouse, at the time of  the
                  purchase exceeds $1,000,000;

                  (vi) Any natural person who had an individual income in excess
                  of  $200,000  in each of the two  most  recent  years or joint
                  income with that person's spouse in excess of $300,000 in each
                  of those years and has a  reasonable  expectation  of reaching
                  the same income level in the current year;

                  (vii) Any trust,  with total  assets in excess of  $5,000,000,
                  not  formed  for  the  specific   purpose  of  acquiring   the
                  securities offered, whose purchase is directed by a person who
                  has such  knowledge  and  experience in financial and business
                  matters that he or she is capable of evaluating the merits and
                  risks of the prospective investment; or

                  (viii)   Any  entity  in which all of the  equity  owners  are
                  Accredited Investors.

                  As used in this Paragraph  3.6(a),  the term "net worth" means
the  excess  of  total  assets  over  total  liabilities.  For  the  purpose  of
determining a person's net worth, the principal residence owned by an individual
should be valued at fair market value,  including the cost of improvements,  net
of current  encumbrances.  As used in this  Section 1.4 (e)(1),  "income"  means
actual economic  income,  which may differ from adjusted gross income for income
tax purposes.  Accordingly,  the Purchaser should consider whether it should add
any or all of the following items to the Purchaser's gross income for income tax
purposes in order to reflect more  accurately the  Purchaser's  actual  economic
income: any amounts  attributable to tax-exempt income received,  losses claimed
as a  limited  partner  in  any  limited  partnership,  deductions  claimed  for
depletion,  contributions  to an IRA  or  Keogh  retirement  plan,  and  alimony
payments.

                  (2) Such  Purchaser  further  represents  to the Company that,
except  as  otherwise  disclosed  to  the  Company  in  writing  prior  to  such
Purchaser's execution hereof, it is an Accredited Investor.

                  (f)      Restricted Securities.

                  The Purchaser understands that the Securities may not be sold,
transferred,  or otherwise disposed of without registration under the Securities
Act  or an  exemption  therefrom,  and  that  in  the  absence  of an  effective
registration  statement  covering the Securities or an available  exemption from
registration under the Securities Act, the Securities must be held indefinitely.

                  (g)      Legends.

                  To the extent  applicable,  each certificate or other document
evidencing   any  of  the   Securities   shall  be  endorsed  with  the  legends
substantially in the form set forth below:

                           (1)    The following legend under the Securities Act:

                       THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT
                  BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
                  OR REGISTERED OR QUALIFIED  UNDER ANY STATE  SECURITIES  LAWS.
                  THE  SECURITIES  MAY  NOT BE  SOLD,  TRANSFERRED,  PLEDGED  OR
                  HYPOTHECATED UNLESS THE PROPOSED  TRANSACTION DOES NOT REQUIRE
                  REGISTRATION   OR   QUALIFICATION   UNDER   FEDERAL  OR  STATE
                  SECURITIES  LAWS,  OR  UNLESS  THE  PROPOSED   TRANSACTION  IS
                  REGISTERED OR QUALIFIED AS REQUIRED.

                           (2)      Any   legend  imposed   or  required  by the
Company's Bylaws or applicable state securities laws.


          Section 2.  REPRESENTATIONS OF THE COMPANY.   The  Company  represents
and warrants to each of the Purchasers as  of the  date hereof  and  as  of  the
Closing Date that:

          Section 2.1.  Organization and Authority of the Company.

          (a) The Company is a corporation duly organized,  validly existing and
in  good  standing  under  the  laws of the  State  of  California,  and has all
requisite  power  and  authority  to own or hold  under  lease the  property  it
purports to own or hold under lease and to transact  the  business it  transacts
and proposes to transact.  The Company has all requisite  power and authority to
execute and deliver this Agreement,  the Securities,  and any other documents or
agreements contemplated hereby and thereby, to perform its obligations hereunder
and  thereunder and to consummate the  transactions  contemplated  hereunder and
thereunder.  The Company is duly  qualified as a foreign  corporation  and is in
good  standing in each  jurisdiction  in which the  character of the  properties
owned or held under lease by it or the nature of the business  transacted  by it
requires  such  qualification  except such  jurisdictions,  if any, in which the
failure to be so qualified or in good standing will not have a Material  Adverse
Effect on the Company.

          (b) The execution,  delivery and  performance of this  Agreement,  the
Securities,  and any other  documents  or  agreements  to which the Company is a
party contemplated hereby and thereby,  and the consummation of the transactions
contemplated  hereby and thereby,  have been duly authorized and approved by the
Board of  Directors.  Each of this  Agreement,  the  Securities,  and any  other
document or  agreement  to which the Company is a party  contemplated  hereby or
thereby  has been (or on the  Closing  Date will  have  been)  duly  authorized,
executed and  delivered by, and each is (or, when duly executed and delivered on
the Closing  Date,  will be) the valid and binding  obligation  of, the Company,
enforceable in accordance with its terms, except as may be limited by applicable
bankruptcy,  reorganization,  insolvency, moratorium or other similar laws or by
legal  or  equitable  principles  relating  to  or  limiting  creditors'  rights
generally.

          Section 2.2.  Business, Properties and Other Information Regarding the
Company.

          (a) The Company has delivered to each of the Purchasers  copies of the
(i) audited report of the Company's independent  accountants for the fiscal year
ended January 29, 2000  containing  balance sheets of the Company as of the last
day of the fiscal year ended  January 29, 2000,  and the related  statements  of
operations,  shareholders'  equity and cash flows of the  Company for the fiscal
year  ended  January  29,  2000 and (ii) the  unaudited  balance  sheets and the
related  statements of  operations,  shareholders'  equity and cash flows of the
Company for the periods  ended April 29, 2000 and June 29, 2000 (such  financial
statements being referred to collectively herein as the "Financial Statements").

The Financial Statements fairly present the financial position of the Company as
of the respective  dates of such balance sheets and the results of the Company's
operations for the respective  periods covered by such statements of operations,
shareholders' equity and cash flows. The Financial Statements are true, accurate
and complete in all material  respects and have been prepared in accordance with
GAAP consistently applied throughout the periods involved. There are no material
liabilities,  contingent or otherwise,  of the Company as of the date hereof and
as of the Closing Date required to be reflected in a balance  sheet  prepared in
accordance with GAAP which are not reflected in such balance sheets.  Since June
29, 2000,  the Company has continued to experience  operating  losses.  However,
there have been no changes in the assets,  liabilities or financial  position of
the Company  from that set forth in such  balance  sheet as of such date,  other
than such  continued  operating  losses and  changes in the  ordinary  course of
business or are otherwise disclosed in the reports filed by the Company pursuant
to the Exchange Act.

          (b) As of their respective dates, neither the Financial Statements nor
any  certificate  executed by the Company in  connection  with the  transactions
contemplated  hereby and thereby,  contained any untrue  statement of a material
fact or omitted to state any  material  fact  necessary  to make the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  Since  June 29,  2000,  there has been no  change in the  business,
prospects,  properties,  condition  (financial or otherwise) or operations which
has had a  Material  Adverse  Effect on the  Company  other  than its  potential
delisting  from  Nasdaq  for which it has a hearing  with  Nasdaq  scheduled  on
October 12, 2000. To the best of the Company's  knowledge,  no fact that has not
been disclosed in the Company's  Exchange Act reports or otherwise in writing to
the Purchasers  has had a Material  Adverse Affect or, so far as the Company can
reasonably foresee,  will have a Material Adverse Effect on the Company, or will
materially adversely affect the ability of the Company to perform its respective
obligations  under this  Agreement,  the  Securities,  the  Registration  Rights
Agreement or any other documents or agreements contemplated hereby and thereby.

          Section 2.3.  Capital Stock.

          (a) The authorized capital stock of the Company consists of 25,000,000
shares of Common  Stock  and  250,000  shares  of  preferred  stock  ("Preferred
Stock").  On the date hereof and on the Closing  Date,  approximately  5,617,275
shares of Common  Stock and 83,833  shares of  Preferred  Stock  (other than the
Series D Preferred Stock) are and will be issued and  outstanding,  all of which
shares have been duly and validly issued and are fully paid and nonassessable.

          (b) The Company does not have  outstanding  any capital stock or other
securities  convertible into or exchangeable for any of its capital stock or any
rights to subscribe  for or to purchase,  or any options for the purchase of, or
any agreements  (contingent or otherwise)  providing for the issuance of, or any
calls,  commitments  or claims of any character  relating to, any of its capital
stock or any securities  convertible into or exchangeable for any of its capital
stock,  other than (i) stock  options  issued under the  Company's  stock option
plans,  (ii) Warrants  dated January 18, 2000 and August 8, 2000, to purchase an
aggregate of 30,000  shares of Common Stock  issued to Heller  Financial,  Inc.,
(iii) the Company's Senior Subordinated  Convertible  Pay-In-Kind Notes due 2005
(the  "Convertible  Notes"),  (iv) the  Series  D  Preferred  Stock  and (v) the
Warrants.

          (c) The Company does not have any obligation (contingent or otherwise)
to  repurchase  or  otherwise  acquire  or retire  any of its  capital  stock or
obligation  evidencing  the right of the holder  thereof to purchase  any of its
capital stock, other than the Company's  obligation to repurchase stock owned by
an employee under The Right Start,  Inc. Employee Stock Purchase Plan after such
employee elects to withdraw from such plan. There is not in effect any agreement
by the Company pursuant to which any holders of securities of the Company have a
right to cause the Company to register such securities under the Securities Act,
other  than (i) the shelf  registration  on file with the  Commission  for Kayne
Anderson  to  register  shares of common  stock  owned by Kayne  Anderson,  (ii)
registration  rights  set  forth in the  Securities  Purchase  Agreements  dated
January 18, 2000 and August 8, 2000,  between the Company and Heller  Financial,
Inc., (iii) registration  rights set forth in the Registration  Rights Agreement
dated as of  September  1,  2000 with  respect  to Common  Stock  issuable  upon
conversion of the Convertible  Notes and (iv)  registration  rights set forth in
the  Registration  Rights  Agreement dated as of the date hereof with respect to
Common Stock  issuable upon  conversion of the Series D Preferred  Stock and the
Warrants.

          Section 2.4.  Litigation;  Observance  of  Statutes,  Regulations  and
Orders.

          (a) There are no actions, suits or proceedings pending or, to the best
knowledge of the Company,  threatened against or affecting the Company or any of
its properties in any court or before any arbitrator of any kind or before or by
any  Governmental  Body  except  actions,  suits or  proceedings  arising in the
ordinary course of business which individually or in the aggregate, if adversely
determined,  would  not  have  a  Material  Adverse  Effect  on the  Company  or
materially  adversely  affect its ability to perform its obligations  under this
Agreement,  the  Securities,  and any other  document or agreement  contemplated
hereby or thereby.

          (b) The  Company  is not in  default  under  any  order of any  court,
arbitrator  or  Governmental  Body, or subject to or a party to any Order of any
court or Governmental  Body arising out of any action,  suit or proceeding under
any statute or other law  respecting  antitrust,  monopoly,  restraint of trade,
unfair  competition or similar  matters.  The Company is not in violation of any
statute or other rule or  regulation of any  Governmental  Body the violation of
which  would  have a  Material  Adverse  Effect  on the  Company  or  materially
adversely  affect its ability to perform its  obligations  under this Agreement,
the  Securities,  and any other  document or  agreement  contemplated  hereby or
thereby.

          Section 2.5.  Title to Property.

          (a) The Company has good and marketable  title to its real  properties
and good and merchantable title to each of its other properties as are reflected
on the  Financial  Statements,  except for personal  property  sold or otherwise
disposed of in the ordinary  course of business.  All  properties of the Company
are free and clear of all Liens, other than Permitted Liens.

          (b) The  Company  enjoys  full and  undisturbed  possession  under all
leases  necessary in any material respect for the operation of its business (the
"Leases").  None of the  Company's  Leases  contain  any  unusual or  burdensome
provisions  which,  individually  or in the aggregate,  are likely to materially
impair the operation of the business of the Company.  The  Company's  Leases are
valid and subsisting and are in full force and effect, and there are no existing
material  defaults by the Company or events that with notice or lapse of time or
both would constitute material defaults by the Company under any of the Leases.

          Section 2.6.  Taxes.  The Company has filed all tax returns  which are
required to have been filed in any jurisdiction, and has paid all taxes shown to
be due and payable on such returns and all other taxes and  assessments  payable
by the  Company to the extent the same have  become due and  payable  and before
they have become  delinquent,  except for any taxes and  assessments the amount,
applicability or validity of which is currently being contested in good faith by
appropriate  proceedings  and with respect to which the Company has set aside on
its books reserves  (segregated to the extent  required by GAAP) deemed by it to
be adequate.  The Company knows of no proposed  material tax assessment  against
the Company and in the opinion of the Company all tax liabilities are adequately
provided for on the books of the Company.

          Section  2.7.  Compliance  with  Laws  and  Other  Instruments  of the
Company. The consummation of the transactions contemplated by this Agreement and
the  execution,  delivery and  performance  of the terms and  provisions of this
Agreement,  the  Securities,  or any other  document or  agreement  contemplated
hereby  or  thereby  will  not (i)  contravene,  result  in any  breach  of,  or
constitute a default under,  or result in the creation of any Lien in respect of
any property of the Company under,  any material  indenture,  mortgage,  deed of
trust,  bank loan or  credit  agreement,  corporate  charter,  by-laws  or other
material agreement or instrument to which the Company is a party or by which the
Company or any of its properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any Order of
any court,  arbitrator or Governmental Body applicable to the Company,  or (iii)
violate  any  provision  of any  statute  or  other  rule or  regulation  of any
Governmental Body applicable to the Company.

          Section  2.8.  Governmental  Authorizations.  No consent,  approval or
authorization of, or registration,  filing or declaration with, any Governmental
Body is required for the issuance of the  Securities or the valid  execution and
delivery  of the  Securities  or for  the  performance  by the  Company  of this
Agreement,  the Securities,  and any other documents or agreements  contemplated
hereby and thereby other than filings of Securities Act Form D,  California Form
25102(f) and similar filings.

          Section 2.9. Licenses and Permits. The Company possesses all licenses,
permits, franchises,  authorizations,  patents, copyrights, trademarks and trade
names, or rights thereto,  required to conduct its business substantially as now
conducted and as currently proposed to be conducted, without known conflict with
the rights of others.

          Section 2.10.  Compliance with ERISA.

          (a) Neither the Company nor any Related  Person (as defined below) has
breached the fiduciary rules of the Employee  Retirement  Income Security Act of
1974, as amended  ("ERISA"),  or engaged in any  transaction in connection  with
which  the  Company  or any  Related  Person  could be  subjected  to a suit for
damages,  a civil penalty assessed  pursuant to Section 502(i) of ERISA or a tax
imposed by Section  4975 of the Internal  Revenue Code of 1986,  as amended (the
"Code"), in any such case which would be materially adverse to the Company.

For purposes of this Section  2.10, a "Related  Person"  shall mean any trade or
business,  whether or not incorporated,  which, together with the Company, would
be treated as a single employer under Section 414 of the Code.

          (b) Neither any employee  pension  benefit plan (as defined in Section
3(2) of  ERISA)  which is or has been  established  or  maintained,  or to which
contributions  are or have been made,  by the Company or any  Related  Person or
with respect to which the Company or any Related Person is or has been obligated
to  contribute  (a  "Plan")  nor any  trust  created  under  any  Plan  has been
terminated within the meaning of Title IV of ERISA since September 2, 1974 under
circumstances  that could result in liability which could be materially  adverse
to the  Company.  Other than  premiums  due and owing in the normal  course,  no
liability  to the Pension  Benefit  Guaranty  Corporation  (the "PBGC") has been
incurred  and remains  unsatisfied  or is expected by the Company to be incurred
with respect to any Plan by the Company or any Related  Person which is or would
be materially adverse to the Company. There has been no reportable event (within
the meaning of Section  4043(b) of ERISA) or any other event or  condition  with
respect to any Plan which presents a risk of termination of any such Plan by the
PBGC under circumstances which in any case could result in liability which would
be materially adverse to the Company.

          (c) Neither the Company nor any Related Person has within the past six
years  contributed,  or had any obligation to contribute,  to a single  employer
plan that has at least two contributing sponsors not under common control or has
ceased  operations  at a facility  under  circumstances  which  could  result in
liability under Section 4068(f) of ERISA.

          (d) There is no  multiemployer  plan  (within  the  meaning of Section
4001(a)(3)  of ERISA) to which the Company or any Related  Person is or has ever
been obligated to contribute under Title IV of ERISA.

          (e) No  accumulated  funding  deficiency (as defined in Section 302 of
ERISA and Section 412 of the Code),  whether or not waived,  exists with respect
to any Plan.  Full payment has been made within the time required  under Section
412 of the Code of all amounts that the Company or any of its Related Persons is
required  under  the  terms of each  Plan  and  applicable  law to have  paid as
contributions  to such  Plan as of the date  hereof.  Each  Plan  satisfies  the
minimum funding standard of Section 412 of the Code.

          (f) The present value of the benefit  liabilities  (within the meaning
of Title IV of ERISA) under all Plans  determined  as of May 31, 1996 and on the
basis of PBGC  assumptions  required  under Title IV of ERISA did not exceed the
current value of the assets of all such Plans determined as of such date.

          (g) Neither  the  Company  nor any  Related  Person has engaged in any
transaction that could result in the incurrence of any liabilities under Section
4069 or Section 4212 of ERISA.

          (h) The  Company  is not a  party  in  interest  with  respect  to any
employee benefit plan, except for The Right Start, Inc. Employee Stock Ownership
Plan and The Right Start, Inc. 401(k) Plan and securities of the Company are not
employer  securities  with respect to any  employee  benefit plan other than the
above listed plans.  For such purpose,  the term  "employee  benefit plan" shall
have the  meaning  assigned  to such  term in  Section  3 of ERISA  and the term
"employer  security"  shall have the  meaning  assigned  to such term in Section
407(d)(1) of ERISA. The execution and delivery of this Agreement, the Securities
and any other  agreements or  instruments  executed in  connection  herewith and
therewith will not involve any transaction  which is subject to the prohibitions
of  Section  406 of ERISA or in  connection  with  which a tax could be  imposed
pursuant to Section 4975 of the Code.

          Section 2.11. Investment Company Act. The Company is not an investment
company or a person directly or indirectly  controlled by or acting on behalf of
an investment  company within the meaning of the Investment Company Act of 1940,
as amended.

          Section 2.12. Environmental  Compliance.  The Company has obtained and
is in compliance with all permits,  licenses,  and other authorizations that are
required under all Environmental Laws (as hereinafter  defined),  including laws
relating  to  emissions,   discharges,   releases  or  threatened   releases  of
contaminants into the environment (including,  without limitation,  ambient air,
surface water,  ground water or land) or otherwise  relating to the manufacture,
processing,  distribution,  use, treatment,  storage,  disposal,  transport,  or
handling of  contaminants,  except to the extent  that  failure to have any such
permit,  license or other  authorization does not have a Material Adverse Effect
on the Company.

          Section 2.13. Maintenance of Insurance.  The Company carries insurance
covering its  properties  and business  adequate and  customary for the type and
scope of the properties and business.  The Company's present insurance  coverage
is as set forth in Schedule 2.13 hereto.

          Section 2.14. Labor  Relations.  To the best knowledge of the Company,
no  material  unfair  labor  practice  complaint  or sex,  age,  race  or  other
discrimination  claim has been  brought  during the last five years  against the
Company  before  the  National  Labor  Relations  Board,  the  Equal  Employment
Opportunity  Commission or any other  Governmental Body. During that period, the
Company has complied in all material  respects with all applicable laws relating
to the employment of labor,  including,  without  limitation,  those relating to
immigration, wages, hours and collective bargaining.

          Section  2.15.  Assumptions  or Guaranties  of  Indebtedness  of Other
Persons. The Company has not assumed,  guaranteed,  endorsed or otherwise become
directly or contingently liable (including, without limitation, liability by way
of  agreement,  contingent  or  otherwise,  to  purchase,  to provide  funds for
payment,  to supply funds to or  otherwise  invest in the debtor or otherwise to
assure the creditor against loss) on any Indebtedness of any other Person.

          Section 2.16. Disclosure. The Company has provided to Purchaser copies
of its Annual  Report on Form 10-K for the fiscal year ended  January 29,  2000,
and its quarterly  reports on Form 10-Q for the periods ended April 29, 2000 and
June 29,  2000,  which  include the  Financial  Statements  (the  "Exchange  Act
Documents").  Such  documents  are true,  accurate  and complete in all material
respects.  Neither this Agreement,  the Financial  Statements,  the Exchange Act
Documents nor any other agreement,  document,  certificate or written  statement
furnished  to Purchaser  by or on behalf of the Company in  connection  with the
transactions  contemplated  hereby  contains any untrue  statement of a material
fact.  There  is no fact  within  the  knowledge  of the  Company  or any of its
executive  officers which has not been  disclosed  herein or in the Exchange Act
Documents or in writing by them to  Purchaser  and that now, or in the future in
their opinion may, insofar as they can now reasonably foresee, have a Materially
Adverse Effect on the Company.

          Section 2.17. Valid Issuance of Preferred and Common Stock. The Series
D Preferred  Stock that is being  purchased by the  Purchasers  hereunder,  when
issued,  sold, and delivered in accordance  with the terms of this Agreement for
the consideration expressed herein, will be duly and validly issued, fully paid,
and  nonassessable,  and will be free of  restrictions  on  transfer  other than
restrictions  on transfer  under this Agreement and under  applicable  state and
federal securities laws. The Common Stock issuable upon conversion of the Series
D Preferred Stock and the Warrants being purchased under this Agreement has been
duly and validly reserved for issuance and, upon issuance in accordance with the
terms of the  Series D  Preferred  Stock,  as set  forth in the  Certificate  of
Determinations,  will be duly and validly issued,  fully paid, and nonassessable
and will be free of restrictions on transfer other than restrictions on transfer
under this Agreement and under applicable state and federal securities laws.

          Section 3.  CONDITIONS  OF CLOSING.  Each  Purchaser's  obligation  to
purchase and pay for the  Securities  to be  purchased by such  Purchaser on the
Closing Date shall be subject to the  satisfaction on or before the Closing Date
of the conditions hereinafter set forth.

          Section 3.1.  Proceedings  Satisfactory.  All proceedings  taken on or
prior to the Closing Date in connection  with the issuance of the Securities and
the consummation of the transactions  contemplated  hereby and all documents and
papers relating  thereto shall be reasonably  satisfactory in form and substance
to the Purchasers and their special counsel, and they shall have received copies
of such documents,  papers, and certificates of officers of the Company,  all in
form and substance  reasonably  satisfactory to the Purchasers and their special
counsel, as they may reasonably request in connection therewith.

          Section  3.2.   Representations  True;  Officer's   Certificate.   All
representations  and  warranties of the Company  contained in Section 2 shall be
true in all material  respects,  in each case on and as of the Closing Date with
the same effect as though such  representations  and warranties had been made on
and as of the Closing Date;  the Company shall have  performed all agreements on
its part  required  to be  performed  under  this  Agreement  on or prior to the
Closing Date;  the Company  shall not have  consolidated  with,  merged into, or
sold,  leased  or  otherwise  disposed  of  its  properties  as an  entirety  or
substantially as an entirety to any Person; all conditions  specified in Section
3  shall  have  been  satisfied;  and  the  Purchasers  shall  have  received  a
certificate  signed by the Chairman of the Board of Directors,  the President or
the  principal  financial  officer  of the  Company,  dated  the  Closing  Date,
certifying to the effect specified in this Section.

          Section 3.3.  Purchase  Permitted by Applicable  Laws. The sale by the
Company and the payment for the Securities to be purchased by the Purchasers (i)
shall  not be  prohibited  by any  applicable  law or  governmental  regulation,
release,  interpretation or opinion, (ii) shall not subject any Purchaser to any
penalty under or pursuant to any applicable law or governmental regulation,  and
(iii) shall be permitted by the laws and  regulations  of the  jurisdictions  to
which any Purchaser is subject.

          Section 3.4. Securities.  The Securities shall have been duly executed
and  delivered  by the  parties  thereto in the  respective  forms  attached  as
Exhibits B and D, with only such changes or additions as the Purchasers or their
special  counsel  shall,  in their sole judgment,  require and all  governmental
charges  payable in connection  therewith shall have been paid (or payment shall
have been  provided  for) in full,  and shall be in full force and effect and no
term or condition  thereof shall have been amended,  modified or waived  without
each  Purchaser's  prior written  consent.  A Certificate of  Determinations  in
substantially  the form of Exhibit A shall have been filed with the Secretary of
State of the State of California.

          Section 3.5.  Registration Rights Agreement.  The  Company  shall have
entered into the Registration Rights Agreement  substantially  in  the  form set
forth as Exhibit C hereto.

          Section 3.6. Third-Party Consents. The Company shall have received all
third  party  and  governmental   consents  and  waivers   necessary  to  permit
consummation of the transactions contemplated hereunder.

          Section 4.  DEFINITIONS.

          Section 4.1.  Definitions.  Except as otherwise specified  or  as  the
context may otherwise require, the following  terms  shall  have  the respective
meanings set forth below whenever used in this Agreement:

          "Affiliate"  means a Person (i) that directly or indirectly  controls,
or is controlled  by, or is under common  control with,  the Company,  (ii) that
beneficially  owns ten percent (10%) or more of the Voting Stock of the Company,
or (iii)  ten  percent  (10%) or more of the  Voting  Stock (or in the case of a
Person  which is not a  corporation,  ten  percent  (10%) or more of the  equity
interest)  of which  is owned by the  Company.  The  term  "control"  means  the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting securities, by contract or otherwise.

          "Agreement" has the meaning ascribed thereto in Section 1.1.

          "Board  of  Directors"  means  either  the Board of  Directors  of the
Company or any duly authorized committee of that board.

          "Business Day" means any day other than a Saturday, Sunday or a day on
which banks in the State of California are required or permitted to close.

          "Capital  Lease" means any lease of property that, in accordance  with
GAAP,  should be  capitalized  on the  lessee's  balance  sheet or for which the
amount of the asset  and  liability  thereunder,  if so  capitalized,  should be
disclosed in a note to such balance sheet; and "Capital Lease  Obligation" means
the amount of the  liability  with respect to a Capital  Lease that should be so
capitalized or disclosed.

          "Closing" has the meaning ascribed thereto in Section 1.2.

          "Closing Date" has the meaning ascribed thereto in Section 1.2.

          "Code" has the meaning ascribed thereto in Section 2.10.

          "Commission"  means the  Securities  and Exchange  Commission  and any
other similar or successor agency of the federal  government  administering  the
Securities Act and the Exchange Act.

          "Common Stock" has the meaning ascribed thereto in Section 1.1.

          "Company" means The Right Start, Inc., a California corporation.

          "Environmental  Law" or  "Environmental  Laws"  mean  any law or Order
relating  to the  regulation  or  protection  of  human  health,  safety  or the
environment  or to emissions,  discharges,  releases or  threatened  releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes into the  environment  (including,  without  limitation,  ambient air,
soil, surface water,  ground water,  wetlands,  land or subsurface  strata),  or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants,  contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.

          "ERISA" has the meaning ascribed thereto in Section 2.10.

          "Exchange  Act" means the  Securities  and  Exchange  Act of 1934,  as
amended,  and any  similar  or  successor  federal  statute,  and the  rules and
regulations of the Commission thereunder,  all as the same shall be in effect at
any applicable time.

          "Exchange Act Documents" has the meaning  ascribed  thereto in Section
2.16.

          "Financial  Statements"  has the meaning  ascribed  thereto in Section
2.2.

          "GAAP" means generally accepted accounting  principles as in effect at
the time of application to the provisions hereof.

          "Governmental  Body"  means any  federal,  state,  municipal  or other
governmental department,  commission,  board, bureau, agency or instrumentality,
foreign or domestic, or any financial or other rating agency.

          "Guarantee" means any guarantee or other contingent liability,  direct
or indirect,  with respect to any  Indebtedness  of another  person,  through an
agreement or  otherwise,  including,  without  limitation,  (i) any  endorsement
(otherwise than for collection or deposit in the ordinary course of business) or
discount  with  recourse or  undertaking  substantially  equivalent to or having
similar  economic  effect of a guarantee with respect to any such  Indebtedness,
and (ii) any  agreement  (A) to purchase,  or to advance or supply funds for the
payment or purchase of, any such Indebtedness of another, (B) to purchase,  sell
or lease  property,  products,  materials  or  supplies,  or  transportation  or
services,  primarily  for the purpose of enabling  such other person to pay such
Indebtedness  or to assure the owner  thereof  against  loss  regardless  of the
delivery or  non-delivery  of the property,  products,  materials or supplies or
transportation  or  services,  or  (C)  to  make  any  loan,  advance,   capital
contribution  or other  investment  in such  other  person  to  assure a minimum
equity,  working  capital or other balance  sheet  condition for any date, or to
provide funds for the payment of any  liability,  dividend or stock  liquidation
payment,  or otherwise to supply funds to or in any manner  invest in such other
person. The amount of any Guarantee shall be equal to the outstanding  principal
amount  of  the  Indebtedness  guaranteed,  unless  some  lesser  limitation  is
specifically stated in such Guarantee.

          "Holder"  means  each of the  Purchasers  and any  other  Person  that
becomes a registered holder of any of the Series D Preferred Stock as registered
on the books of the Company.

          "Indebtedness"  means any  obligation  for borrowed money or for which
interest is customarily paid, but in any event shall include without  limitation
(i) any  obligation  owed for all or any part of the purchase price of property,
services or other assets or for the cost of property or other assets constructed
or of  improvements  thereto,  other than accounts  payable  included in current
liabilities and incurred in respect of property  purchased or services  rendered
in the ordinary course of business,  (ii) any obligations secured by any Lien in
respect of property  even though the person  owning the property has not assumed
or become  liable for the payment of such  obligation,  (iii) any Capital  Lease
Obligation,  (iv)  any  Guarantee  with  respect  to  Indebtedness  (of the kind
otherwise  described in this definition) of another person,  and (v) obligations
in respect of letters of credit, surety bonds and completion bonds.

          "Kayne  Anderson"  means  Kayne  Anderson Investment Management, Inc.,
Kayne  Anderson   Capital  Advisors, L.P.,   Kayne   Anderson    Non-Traditional
Investments, L.P.,  Kayne  Anderson Offshore  Limited,  ARBCO  Associates, L.P.,
Kayne Anderson Diversified Capital Partners, L.P., and Kayne Anderson Capital
Partners, L.P. and each of their Affiliates.

          "Leases" has the meaning ascribed thereto in Section 2.5.

          "Lien" means, as to any person, any mortgage,  lien,  pledge,  charge,
security interest or other encumbrance in or on, or any interest or title of any
vendor,  lessor,  lender or other  secured  party to or of the person  under any
Indebtedness,  conditional  sale or other title  retention  agreement or Capital
Lease with  respect to, any  property or asset of the person,  or the signing or
filing of a financing statement which names the person as debtor, or the signing
of any  security  agreement  authorizing  any other party as the  secured  party
thereunder to file any financing statement.

          "Material  Adverse  Effect"  means,  with  respect  to any  Person,  a
material  adverse  effect  on the  business,  prospects,  properties,  condition
(financial or otherwise) or operations of such Person.

          "Order" means any order, writ, injunction,  decree,  judgment,  award,
determination, direction or demand.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "Permitted Liens" means:

               (a) Liens for  taxes,  assessments,  or  governmental  charges or
     claims the payment of which is not yet past due or that are being contested
     in good faith by appropriate  proceedings  and for which adequate  reserves
     have been established;

               (b)  statutory  Liens  of  landlords,   carriers,   warehousemen,
     mechanics,  or materialmen,  and other Liens imposed by law and incurred in
     the ordinary course of business, that are for sums not yet delinquent for a
     period of more than thirty (30) days or are being  contested in good faith,
     if reserves or other appropriate  provisions,  if any, as shall be required
     by GAAP, shall have been made therefor;

               (c) Liens  incurred or deposits or pledges  made in the  ordinary
     course of business in connection with workers'  compensation,  unemployment
     insurance, and other types of social security laws;

               (d) any attachment or judgment  Lien;  provided that (i) the time
     for the appeal or petition for  rehearing of such  judgment  lien shall not
     have expired; (ii) the Company in good faith shall be prosecuting an appeal
     or  proceeding  for review with respect to which  execution has been stayed
     pending such appeal or which is vacated or  discharged  within  thirty (30)
     days of the  termination  of such  stay;  or (iii)  with  respect  to which
     payment in full above any applicable deductible is covered by insurance (so
     long as no reservation of rights has been made by the insurer in connection
     with such coverage),  and Liens incurred to secure any surety bonds, appeal
     bonds, supersedeas bonds, or other instruments serving a similar purpose in
     connection  with the appeal of any such judgment or any proceeding to which
     the Company is a party;

               (e) minor survey exceptions, easements and licenses, reservations
     of, or rights of others for, rights-of-way, highway and railroad crossings,
     sewers,  electric lines,  telegraph and telephone  lines, and other similar
     purposes,  or zoning or other  restrictions or similar charges with respect
     to the use of real properties not incurred in connection with  Indebtedness
     of the Company or materially  detracting from the value of such properties;
     and

               (f) any  Lien on  the  Company's assets  or  properties to secure
payment to a lender to the Company.

          "Person" shall include an individual, a corporation, an association, a
partnership,  a limited liability  company, a limited liability  partnership,  a
trust or estate, a government,  foreign or domestic, and any agency or political
subdivision thereof, or any other entity.

          "Purchasers"  means the  Purchasers  listed on  Schedule  I hereto and
their successors and assigns.

            "Remainder  Shares and Warrants" has the meaning ascribed thereto in
Section 1.3.

          "Securities" has the meaning ascribed thereto in Section 1.1.

          "Securities Act" means the Securities Act of 1933, as amended, and any
similar or  successor  federal  statute,  and the rules and  regulations  of the
Commission  thereunder,  all as the same  shall be in effect  at any  applicable
time.

          "Voting Stock" means any equity security  entitling the holder of such
security to vote at meetings of  shareholders  except an equity  security  which
entitles the holder of such  security to vote only upon the  occurrence  of some
contingency, unless that contingency shall have occurred and be continuing.

          Section 4.2.  Accounting Terms. All accounting terms used herein which
are not expressly defined in this Agreement have the meanings respectively given
to  them in  accordance  with  GAAP,  all  computations  made  pursuant  to this
Agreement  shall be made in  accordance  with GAAP,  and all balance  sheets and
other financial  statements shall be prepared in accordance with GAAP, except in
the case of unaudited  financial  statements which are subject to year-end audit
adjustments and the absence of footnotes.

          Section 5.  REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES; LOST
SECURITIES.  The Company shall keep at its principal executive office a register
in which, subject to such reasonable regulations as it may prescribe, but at its
expense  (other  than  transfer  taxes,  if  any),  it  shall  provide  for  the
registration and transfer of the Securities.

          The Securities may not be sold,  transferred,  pledged or hypothecated
unless the proposed  transaction does not require  registration or qualification
under federal or state  securities  laws or unless the proposed  transaction  is
registered or qualified as required.

          The Holder of any of the  Securities  may,  at such  Holder's  option,
surrender the same for transfer or exchange at the principal executive office of
the Company,  accompanied  in the case of a transfer or  assignment by a written
instrument of transfer or assignment  in form  satisfactory  to the Company duly
executed by the  registered  Holder  thereof or by such  Holder's  attorney duly
authorized  in  writing.  In case any  Holder  shall so  request  the  transfer,
assignment or exchange of any Security, the Company at its expense shall execute
and deliver in exchange therefor one or more new Securities, as may be requested
by such Holder,  in the same  denomination or denominations as the Securities or
Securities so surrendered.

          The Company and any agent of the Company may treat the Person in whose
name any Security is registered as the owner of such Security for the purpose of
receiving payment of dividends and for all other purposes whatsoever.

          Upon  receipt by the  Company of  evidence  satisfactory  to it of the
loss,  theft,  destruction or mutilation of any Security,  and (in case of loss,
theft or destruction) of indemnity reasonably satisfactory to it, upon surrender
and  cancellation  of such  Security or receipt of such  indemnity,  the Company
shall make and  deliver  in lieu of such  Security  a new  Security  in the same
denomination.

          Notwithstanding  the  foregoing  provisions  of this  Section,  if any
Security of which any Purchaser or any other  institutional  Holder is the owner
is lost,  stolen or  destroyed,  then the  affidavit  of such  Purchaser or such
Holder's  Treasurer  or Assistant  Treasurer  (or other  responsible  official),
setting forth the name of the owner of such Security and the circumstances  with
respect to such loss,  theft or  destruction,  shall be accepted as satisfactory
evidence  thereof,  and no  indemnity  shall be required  as a condition  to the
execution and delivery by the Company of a new Security in lieu of such Security
(or as a condition  to the payment  thereof,  if due and  payable)  other than a
Purchaser's or such Holder's written agreement to indemnify the Company.

          Section 6. TAXES. The Company shall pay all taxes (including  interest
and penalties),  other than taxes imposed on the income of the Purchasers, which
may be payable in respect of the execution and delivery of this  Agreement or of
the  execution  and delivery of any of the Common Shares or of any amendment of,
or waiver or consent  under or with  respect  to, this  Agreement  or any of the
Common  Shares  and  shall  save each  Purchaser  harmless  against  any loss or
liability resulting from nonpayment or delay in payment of any such tax.

          Section 7.  MISCELLANEOUS.

          Section 7.1. Indemnification.  The Company hereby agrees to indemnify,
exonerate  and hold each  Purchaser  and each of their  respective  partners and
affiliates, and their shareholders,  officers, directors,  employees and agents,
free and harmless from and against any and all actions, causes of action, suits,
litigation,  losses,  liabilities  and damages,  investigations  or  proceedings
instituted  by any  governmental  agency or any other  Person,  and  expenses in
connection  therewith,  including without limitation  reasonable attorneys' fees
and disbursements,  incurred by the indemnitee or any of them as a result of, or
arising out of, or relating to (a) any transaction financed or to be financed in
whole or in part  directly  or  indirectly  with  proceeds  from the sale by the
Company of any securities hereunder, or (b) the execution, delivery, performance
or enforcement of this Agreement or any instrument contemplated hereby by any of
the  indemnitees,  except in each such case to the extent  any such  indemnified
liabilities  arise on account of such  indemnitee's  gross  negligence,  willful
misconduct or bad faith.

          Section 7.2.  Expenses.  The Company and Purchasers  each agree to pay
all their own costs and expenses in connection with the  preparation,  execution
and  delivery  of this  Agreement,  the  Securities  and other  instruments  and
documents to be delivered hereunder.

         Section  7.3.  Amendments,  Waiver  and  Consents.  Any  term  of  this
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively),  only with the written consent of the Company and the Holders of
more than fifty  percent  (50%) of the Common Stock not  previously  sold to the
public  that is issued or  issuable  upon  conversion  of the Series D Preferred
Stock.  Any amendment or waiver effected in accordance with this paragraph shall
be binding upon each holder of any securities  purchased under this Agreement at
the time outstanding  (including securities into which such securities have been
converted), each future holder of all such securities, and the Company.

          Section  7.4.  Reliance  on  and  Survival  of  Representations.   All
agreements,  representations  and  warranties  of the Company  contained in this
Agreement and in any  certificates or other  instruments  delivered  pursuant to
this  Agreement  shall (i) be deemed to be material and to have been relied upon
by the Purchasers,  notwithstanding  any  investigation  heretofore or hereafter
made by any  Purchaser  or on such  Purchaser's  behalf,  and (ii)  survive  the
execution and delivery of this Agreement and the Securities,  and shall continue
in effect so long as any Security is outstanding.

          Section 7.5.  Successors and Assigns.  This  Agreement  shall bind and
inure  to the  benefit  of and  be  enforceable  by  the  Company,  each  of the
Purchasers,  and the  Purchasers'  respective  successors  and assigns,  and, in
addition,  shall inure to the benefit of and be  enforceable  by each Person who
shall from time to time be a Holder of any of the  Securities.  The  Company may
not assign its rights under this Agreement.

          Section 7.6.  Notices.  All notices and other communications provided
for in this Agreement shall be in writing and delivered,  telecopied  or mailed,
first class postage prepaid, addressed:

          (a)  If to the Company:

                    The Right Start, Inc.
                    5388 Sterling Center Drive Unit C
                    Westlake Village, CA 91361
                    Attention:  President
                    Facsimile:  (818) 707-7132

    with a copy to:

                    Milbank, Tweed, Hadley & McCloy
                    601 S. Figueroa, 30th Floor
                    Los Angeles, CA 90017
                    Attention:  Kenneth J. Baronsky, Esq.
                    Facsimile:  (213) 629-5063


          (b) If to the Holders,  at the  addresses  set forth on the  signature
page (in the case of the  Purchaser)  and as may be  designated by notice to the
Company.

          Any such  notice  or  communication  shall be deemed to have been duly
given  when  delivered,  telecopied  or  mailed  as  aforesaid.  Each  party may
designate  by  notice in  writing a new  address  to which any  notice,  demand,
request  or  communication  may  thereafter  be so given,  served or sent.  Each
notice,  demand,  request, or communication which shall be mailed,  delivered or
transmitted in the manner  described above shall be deemed  sufficiently  given,
served,  sent and  received  for all purposes at such time as it is delivered to
the addressee (with the return receipt,  the delivery receipt,  the affidavit of
messenger  or  (with  respect  to a  telecopy)  the  confirmation  being  deemed
conclusive  (but not  exclusive)  evidence of such  delivery) or at such time as
delivery is refused by the addressee upon presentation.

          Section 7.7.  Counterparts.  This Agreement may be executed in two  or
more counterparts, each of which shall be deemed an original but  all  of  which
together shall constitute one and the same instrument.

          Section 7.8.  Governing  Law. This  Agreement and the  Securities  and
(unless otherwise  provided) all amendments,  supplements,  waivers and consents
relating hereto or thereto shall be governed by and construed in accordance with
the  laws of the  State  of  California  without  regard  to  conflicts  of laws
principles thereof.

          Section 7.9.  Waiver of Jury Trial.   EACH PURCHASER, EACH  HOLDER, BY
ITS ACCEPTANCE OF ANY OF THE SECURITIES,  AND THE COMPANY, EACH HEREBY AGREES TO
WAIVE  ITS  RESPECTIVE  RIGHTS  TO A JURY  TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED  UPON OR  ARISING  OUT OF THIS  AGREEMENT,  THE  SECURITIES,  OR ANY OTHER
AGREEMENTS  RELATING TO THE SECURITIES OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT
IS  BEING   ESTABLISHED.   The  scope  of  this   waiver  is   intended   to  be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction,  including without limitation,
contract claims, tort claims, breach of duty claims and all other common law and
statutory  claims.  The  Purchasers and the Company each  acknowledge  that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on the waiver in entering into this Agreement,  and that each
shall  continue  to rely on the waiver in their  related  future  dealings.  The
Purchasers and the Company further  represent and warrant that each has reviewed
this waiver with its legal  counsel,  and that each  knowingly  and  voluntarily
waives  its  jury  trial  rights  following  consultation  with  legal  counsel.
NOTWITHSTANDING  ANYTHING TO THE CONTRARY  HEREIN,  THIS WAIVER IS  IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,  AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS  AGREEMENT,  THE  SECURITIES,  OR TO ANY OTHER  DOCUMENTS OR  AGREEMENTS
RELATING TO THE  SECURITIES.  In the event of litigation,  this Agreement may be
filed as a written consent to a trial by the Court.

            Section  7.10  Effect  of  Amendment  or  Waiver.   Each   Purchaser
acknowledges  that by  operation  of Section  9.3 the Holders of more than fifty
percent  (50%) of the Common  Stock not  previously  sold to the public  that is
issued or issuable upon conversion of the Series D Preferred Stock will have the
right and power to diminish or eliminate all rights of such Purchaser under this
Agreement.

            Section 7.11 Entire Agreement.  This Agreement,  including the other
writings referred to herein or delivered pursuant hereto, constitutes the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and it supersedes all prior oral or written  agreements,  commitments or
understandings with respect to the matters provided for herein.

            Section  7.12   Exculpation   Among   Purchasers.   Each   Purchaser
acknowledges  that such  Purchaser is not relying upon any Person other than the
Company in making its  investment  or  decision to invest in the  Company.  Each
Purchaser  agrees that no  Purchaser  nor the  respective  controlling  persons,
officers,  directors,  partners,  agents or employees of any Purchaser  shall be
liable for any action taken or omitted to be taken at any time by any of them in
connection  with the Series D Preferred  Stock (and the Common Stock issued upon
conversion of the Series D Preferred Stock).

[Remainder of page intentionally left blank]

<PAGE>


          Each  Purchaser  is requested  to sign the form of  acceptance  in the
space provided below whereupon this Agreement  shall become a binding  agreement
between such Purchaser and the Company.

                         Very truly yours,


                         THE RIGHT START, INC.



                         By: /s/ Jerry R. Welch
                             Jerry R. Welch
                             Chief Executive Officer


<PAGE>


                                       S-7

                         Securities Purchase Agreement

 The foregoing Agreement is hereby accepted as of the date first above written:

                                  KAYNE FAMILY PARTNERSHIP, L.P.

                                  By: Jemasa, Inc.

                                  /s/ Richard Kayne
                                  Richard Kayne
                                  President

                                  Address for Notices:
                                  1800 Avenue of the Stars
                                  2nd Floor

                                  Los Angeles, California 90067
                                  Attention:  Richard Kayne

                                  Facsimile: 310.284.6490


                                  FORTUNE TWENTY-FIFTH, INC.

                                  /s/ Fred Kayne
                                  Fred Kayne

                                  Address:
                                  c/o Fred Kayne

                                  P.O. Box 381,
                                  Glenbrook, Nevada 89413

                                  Copy to:
                                  1800 Avenue of the Stars
                                  Suite 310
                                  Los Angeles, California 90067
                                  Attention:  Fred Kayne

                                  Facsimile: 310.551.3077



                                  /s/ Jerry D. Kayne
                                  Jerry D. Kayne, Trustee

                                  Address:
                                  c/o Fortune Financial
                                  1800 Avenue of the Stars
                                  Suite 310
                                  Los Angeles, California 90067

                                  Facsimile: 310.551.3077

                                  /s/ Stephen Kayne
                                  Stephen Kayne

                                  Address:
                                  c/o Fortune Financial
                                  1800 Avenue of the Stars
                                  Suite 310
                                  Los Angeles, California 90067

                                  Facsimile: 323.277.9025

                                  /s/ Lloyd Miller
                                  Lloyd Miller
                                  Address:
                                  4550 Gordon Drive
                                  Naples, Florida 34102

                                  Facsimile: 941.262.8025


                                  NEWBERG FAMILY TRUST dated 12-18-90
                                  /s/ Bruce Newberg
                                  Bruce Newberg, Trustee

                                  Address:
                                  466 North Carmelina Avenue
                                  Los Angeles, California 90049

                                  Facsimile: 310.914.9242


<PAGE>

                                  O.S. II, Inc.
                                  By:
                                  /s/ Jill Higgins
                                  Jill Higgins
                                  its President
                                  Address:
                                  4224 Clybourne Avenue
                                  Burbank, California 91505

                                  Facsimile: 818.559.5617


<PAGE>

                                  HSMC PARTNERS, L.P.

                                  By:/s/ Jerrold N. Fine
                                  Jerrold N. Fine
                                  its managing partner

                                  Address:
                                  10 Wright Street
                                  Building B-4
                                  Westport, Connecticut 06881

                                  Facsimile: 203.226.7596


<PAGE>


                                  /s/ William Calvert
                                  William Calvert

                                  Address: c/o Lehman Brothers
                                  1100 Glendon Avenue  11th Floor
                                  Westwood, California 90024

                                  Facsimile: 310.481.4102


                                  /s/ Milton T. Okun Rosemary Okun
                                  Milton T. Okun & Rosemary Okun,
                                  as community property

                                  Address: 942 North Alpine
                                  Beverly Hills, CA 90210

                                  Facsimile: 310.285.0892


                                  /s/ Robert A. Muh
                                  Robert A. Muh

                                  Address: c/o Sutter Securities, Inc.
                                  1 Sansome Street Suite 3950
                                  San Francisco, CA 94104

                                  Facsimile: 415.288.2355


                                  /s/ Sigmund Wolkomir and Judith Wolkomir
                                  Sigmund and Judith Wolkomir

                                  Address: 707 Broughton Road
                                  Bethel Park, PA 15102

                                  Facsimile:


                                  /s/ Bryant Riley
                                  Bryant Riley

                                  Address: 11150 Santa Monica Boulevard
                                  Suite 750
                                  Los Angeles, California 90025

                                  Facsimile: 310.966.1448


<PAGE>


                                  /s/ Gilbert E. Matthews
                                  Gilbert E. Matthews

                                  Address: c/o Sutter Securities, Inc.
                                  1 Sansome Street Suite 3950
                                  San Francisco, CA 94104

                                  Facsimile: 415.288.2355


<PAGE>



                                  /s/ Keith Kretschmer
                                  Keith Kretschmer

                                  Address:
                                  c/o PIMCO/OPPENHEIMER
                                  41 George St

                                  The Rocks

                                  Sydney NSW 2000
                                  AUSTRALIA

                                  Copy to:
                                  6 Astor Court
                                  Doylestown, PA 18901

                                  Facsimile: 011 612 9241 6955
                                  215.230.9018



                                  /s/ Carl E. Warden
                                  Carl E. Warden SEP/IRA
                                  Dain Rauscher Custodian

                                  Address:
                                  800 North Shoreline, Suite 2200
                                  Corpus Christi, Texas 78401

                                  Facsimile: 361.888.8613


<PAGE>



                                  /s/ Michael Targoff
                                  Michael Targoff

                                  Address:
                                  1330 Avenue of the Americas
                                  36th Floor
                                  New York, New York 10019

                                  Facsimile: 212.842.1540


<PAGE>


                                  HACKING FAMILY TRUST


                                  /s/ Thomas T. Hacking
                                  Thomas T. Hacking, Trustee

                                  Address :
                                  1800 Avenue of the Stars
                                  2nd Floor
                                  Los Angeles, CA 90067

                                  Facsimile: 310.284.6444


<PAGE>



                                  A.E. HALL & COMPANY MONEY PURCHASE PLAN

                                  /s/ Arthur E. Hall
                                  Arthur E. Hall, Trustee

                                  Address :
                                  P.O. Box 1479
                                  or 1726 Cedarwood Drive
                                  Minden, Nevada 89423

                                  Facsimile: 775.782.4787

                                  /s/ Robert Schnell
                                  Robert Schnell, IRA

                                  Address :
                                  933 North Rexford Drive
                                  Beverly Hills, California 90210

                                  Facsimile: 213.624.1224



<PAGE>

                                   EXHIBIT B


No. of Stock Units: _______                                Warrant No. __

                                     WARRANT

                           to Purchase Common Stock of

                              The Right Start, Inc.

THIS IS TO  CERTIFY  THAT  _______________,  a  ___________,  or its  registered
assigns,  is entitled to  purchase  from The Right  Start,  Inc.,  a  California
corporation  (the  "Company"),  at any time on and  after the date  hereof  (the
"Closing Date"), but not later than 5:00 p.m., Pacific Standard time, on October
6, 2005 (the "Expiration Date"), _____ (_____) Stock Units, in whole or in part,
at a  purchase  price  per Stock  Unit of $2.00 all on the terms and  conditions
hereinbelow provided.

This Warrant has been issued in accordance with that certain Securities Purchase
Agreement  dated as of the date hereof  between  the  Company and the  investors
named therein (the "Purchase Agreement").

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR REGISTERED OR QUALIFIED  UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD,  TRANSFERRED,  PLEDGED OR
HYPOTHECATED  UNLESS THE PROPOSED  TRANSACTION DOES NOT REQUIRE  REGISTRATION OR
QUALIFICATION  UNDER  FEDERAL OR STATE  SECURITIES  LAWS, OR UNLESS THE PROPOSED
TRANSACTION IS REGISTERED OR QUALIFIED AS REQUIRED.

     Section 1. Certain Definitions. As used in this Warrant, unless the context
otherwise requires:

     "Affiliate"  of any Person means a Person (1) that  directly or  indirectly
controls,  or is  controlled  by, or is under common  control  with,  such other
Person, (2) that beneficially owns ten percent (10%) or more of the Voting Stock
of such other  Person,  or (3) ten percent (10%) or more of the Voting Stock (or
in the case of a Person which is not a corporation, ten percent (10%) or more of
the equity interest) of which is owned by such other Person.  The term "control"
means the  possession,  directly or indirectly,  of the power to direct or cause
the direction of the  management and policies of a Person,  whether  through the
ownership of voting securities, by contract or otherwise.

     "Appraised  Value"  shall  mean the fair  market  value of all  outstanding
shares of Common Stock (on a fully diluted basis including any fractional shares
and assuming the exercise in full of all then-outstanding  options,  warrants or
other  rights  to  purchase  shares  of  Common  Stock  that are then  currently
exercisable  at  exercise  prices  less  than  the  Current  Market  Price),  as

                                       1
<PAGE>

determined  by a written  appraisal  prepared by an appraiser  acceptable to the
Company and the holders of Warrants evidencing a majority in number of the total
number of Stock  Units at the time  purchasable  upon the  exercise  of all then
outstanding  Warrants.  "Fair  market  value" is defined for this purpose as the
price in a single transaction  determined on a going-concern basis that would be
agreed  upon  by the  most  likely  hypothetical  buyer  for a 100%  controlling
interest  in the  equity  capital  of the  Company  (on a  fully  diluted  basis
including  any  fractional  shares  and  assuming  the  exercise  in full of all
then-outstanding  options, warrants or other rights to purchase shares of Common
Stock that are then  currently  exercisable  at  exercise  prices  less than the
Current Market Price),  with consideration given to the effect of all noncompete
covenants  signed  by  the  seller  and  employment  agreements  signed  by  key
management  personnel of the Company (and of its  subsidiaries),  each extending
for a period of time considered sufficient by all parties to effect the transfer
of goodwill  from the seller to the buyer and  disregarding  any  discounts  for
nonmarketability  of Common Stock of the Company.  In the event that the Company
and said  holders  cannot,  in good  faith,  agree upon an  appraiser,  then the
Company, on the one hand, and said holders, on the other hand, shall each select
an appraiser,  the two appraisers so selected shall select a third appraiser who
shall be directed to prepare such a written  appraisal (the "Appraisal") and the
term Appraised  Value shall mean the appraised  value set forth in the Appraisal
prepared  in  accordance  with this  definition.  The fees and  expenses  of any
appraisers  shall  be paid by the  Company,  except  in the  case in  which  the
valuation of any  appraiser who renders an Appraisal is within ten percent (10%)
of the value originally determined by the Board of Directors,  in which case the
holders shall pay the fees and expenses of any appraisers. In the event that the
Company  bears the cost of the appraisal  process,  such cost shall be deemed an
account payable of the Company and shall be considered in the  determination  of
the Appraised Value.

     "Board of  Directors"  shall  mean  either  the board of  directors  of the
Company or any duly authorized committee of that board.

     "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banks in the State of California are required or permitted to close.

     "Commission"  shall mean the  Securities  and Exchange  Commission  and any
other similar or successor agency of the federal  government  administering  the
Securities Act and the Exchange Act.

     "Common  Stock" shall mean the Company's  authorized  Common Stock,  no par
value  per  share,   irrespective  of  class  unless  otherwise  specified,   as
constituted on the date of original issuance of this Warrant, and any stock into
which such Common Stock may thereafter be changed,  and shall also include stock
of the Company of any other  class,  which is not  preferred  as to dividends or
assets  over any other  class of stock of the  Company  issued to the holders of
shares of stock upon any reclassification thereof.

     "Company" shall mean The Right Start, Inc., a California corporation.

     "Current  Market  Price" per share of Common  Stock for the purposes of any
provision  of this Warrant at the date herein  specified,  shall be deemed to be
the price determined pursuant to the first applicable of the following methods:

          (i) If the Common Stock is traded on a national securities exchange or
     is traded in the  over-the-counter  market,  the Current  Market  Price per
     share of Common Stock shall be deemed to be the average of the daily market
     prices for 20 consecutive  Business Days commencing 20 Business Days before
     such date.  The market price for each such Business Day shall be (a) if the
     Common  Stock  is  traded  on a  national  securities  exchange  or in  the
     over-the-counter  market, its last sale price on the preceding Business Day

                                       2
<PAGE>

     on such  national  securities  exchange or  over-the-counter  market or, if
     there was no sale on that day,  the last sale  price on the next  preceding
     Business  Day on which  there was a sale,  all as made  available  over the
     Consolidated  Last Sale Reporting  System of the CTA Plan (the "CLSRS") or,
     if the Common Stock is not then eligible for reporting over the CLSRS,  its
     last  reported  sale price on the  preceding  Business Day on such national
     securities  exchange  or,  if there  was no sale on that  day,  on the next
     preceding  Business Day on which there was a sale reported on such exchange
     or (b) if the principal market for the Common Stock is the over-the-counter
     market,  but the Common Stock is not then eligible for  reporting  over the
     CLSRS,  but the Common  Stock is quoted on The Nasdaq  Stock  Market,  Inc.
     ("Nasdaq"),  the last  sale  price  reported  on  Nasdaq  on the  preceding
     Business Day or, if the Common Stock is an issue for which last sale prices
     are not reported on Nasdaq,  the closing bid quotation on such day, but, in
     each of the next  preceding  two cases,  if the  relevant  Nasdaq  price or
     quotation  did not exist on such day,  then the price or  quotation  on the
     next preceding Business Day in which there was such a price or quotation.

          (ii) If the Current  Market  Price per share of Common Stock cannot be
     ascertained  by any of the methods set forth in paragraph  (i)  immediately
     above,  the Current  Market Price per share of Common Stock shall be deemed
     to be the price equal to the quotient  determined by dividing the Appraised
     Value by the  number of  outstanding  shares  of  Common  Stock (on a fully
     diluted basis including any fractional  shares and assuming the exercise in
     full of all then-outstanding  options, warrants or other rights to purchase
     shares of Common  Stock that are then  currently  exercisable  at  exercise
     prices equal to or less than the Current Market Price).

     "Current  Warrant Price" per share of Common Stock,  for the purpose of any
provision  of this Warrant at the date herein  specified,  shall mean the amount
equal to the quotient  resulting  from dividing the Exercise  Price in effect on
such date by the number of shares  (including  any  fractional  share) of Common
Stock comprising a Stock Unit on such date.

     "Exchange  Act" shall mean the  Securities  and  Exchange  Act of 1934,  as
amended,  and any  similar  or  successor  federal  statute,  and the  rules and
regulations of the Commission thereunder,  all as the same shall be in effect at
any applicable time.

     "Exercise  Price" shall mean the purchase price per Stock Unit as set forth
on the first page of this Warrant on the Closing Date and thereafter  shall mean
such dollar amount as shall result from the adjustments specified in Section 4.

     "Holder" means, initially,  _______________,  a ___________, and thereafter
any Person that is or Persons that are the  registered  holder(s) of the Warrant
or Warrant Stock as registered on the books of the Company.

     "Liquidity  Event" shall mean (i) the sale of all or substantially  all the
assets  of  the  Company  for  cash,  (ii)  a  merger,   acquisition,   sale  or
recapitalization  of the Company  whereby the Holder of this Warrant is entitled
by the terms of such  transaction to receive cash in lieu of this Warrant or its
exercise or (iii) the initial  firm-commitment public offering by the Company of
its Common Stock.

     "Nonpreferred  Stock"  shall mean the Common  Stock and shall also  include
stock of the Company of any other class which is not  preferred  as to dividends
or assets  over any other class of stock of the Company and which is not subject
to redemption.


                                       3
<PAGE>

     "Person" shall include an  individual,  a corporation,  an  association,  a
partnership,  a limited  liability  company,  a trust or estate,  a  government,
foreign or domestic,  and any agency or political  subdivision  thereof,  or any
other entity.

     "Restricted  Certificate"  shall mean a  certificate  for Common Stock or a
Warrant bearing the restrictive legend set forth in the preamble.

     "Restricted  Securities"  shall mean  Restricted  Stock and the  Restricted
Warrant.

     "Restricted  Stock"  shall mean  Common  Stock  evidenced  by a  Restricted
Certificate.

     "Restricted  Warrant"  shall  mean  a  Warrant  evidenced  by a  Restricted
Certificate.

     "Securities"  shall  mean  the  Warrant  issued  to  the  Holder,  and  the
certificates and other instruments from time to time evidencing the same.

     "Securities Act" shall mean the Securities Act of 1933, as amended, and any
similar or  successor  federal  statute,  and the rules and  regulations  of the
Commission  thereunder,  all as the same  shall be in effect  at any  applicable
time.

     "Stock Unit" shall  constitute  one share of Common  Stock,  as such Common
Stock was  constituted on the date hereof and thereafter  shall  constitute such
number of shares  (including  any  fractional  shares) of Common  Stock as shall
result from the adjustments specified in Section 4.

     "Purchase  Agreement"  has the meaning  assigned to such term in the second
paragraph of this Warrant.

     "Voting Stock" shall mean any equity security  entitling the holder of such
security to vote at meetings of  shareholders  except an equity  security  which
entitles the holder of such  security to vote only upon the  occurrence  of some
contingency, unless that contingency shall have occurred and be continuing.

     "Warrant"  shall mean this Warrant to purchase up to an aggregate of ______
Stock Units  initially  issued to ________,  a _______,  and all Warrants issued
upon transfer, division or combination of, or in substitution therefor.

     "Warrant  Stock" shall mean the shares of Common Stock  purchasable  by the
holder of any Warrants upon the exercise thereof.

     Section 2. Exercise of Warrant. The holder of this Warrant may, at any time
on and after the date hereof,  but not later than the Expiration Date,  exercise
this Warrant in whole at any time or in part from time to time for the number of
Stock Units which such holder is then entitled to purchase hereunder. The Holder
may  exercise  this  Warrant,  in whole or in part,  by either of the  following
methods (or a  combination  thereof or as otherwise  determined by the Company's
Board of Directors):

     (a)  the  Holder  may  deliver  to the  Company  at its  office  maintained
          pursuant to Section 13 for such  purpose (i) a written  notice of such
          Holder's election to exercise this Warrant, which notice shall specify
          the number of Stock Units to be purchased, (ii) this Warrant and (iii)
          a sum equal to the aggregate  Exercise  Price  therefor in immediately
          available funds; or


                                       4
<PAGE>

     (b)  on or after the occurrence of a Liquidity  Event,  the Holder may also
          exercise  this  Warrant,  in whole or in part, in a "cashless" or "net
          issue" exercise by delivering to the Company at its office  maintained
          pursuant to Section 13 for such  purpose (i) a written  notice of such
          Holder's election to exercise this Warrant, which notice shall specify
          the  number of Stock  Units to be  delivered  to such  Holder  and the
          number of Stock  Units with  respect  to which  this  Warrant is being
          surrendered  in payment of the aggregate  Exercise Price for the Stock
          Units to be  delivered  to the  Holder,  and (ii)  this  Warrant.  For
          purposes of this  subparagraph  (b),  each Stock Unit as to which this
          Warrant is surrendered will be attributed a value equal to the product
          of (x) the Current  Market  Price per share of Common  Stock minus the
          Current Warrant Price per share of Common Stock, multiplied by (y) the
          number of shares of Common Stock then comprising a Stock Unit.

     Any  notice  required  under  this  Section  2 may  be  in  the  form  of a
subscription  set out at the end of this  Warrant.  Upon delivery  thereof,  the
Company shall as promptly as  practicable  cause to be executed and delivered to
such holder a certificate or certificates  representing  the aggregate number of
fully-paid and nonassessable shares of Common Stock issuable upon such exercise.

     The stock  certificate or certificates for Warrant Stock so delivered shall
be in such  denominations  as may be  specified  in said  notice  and  shall  be
registered in the name of such Holder or,  subject to Section 9, such other name
or names as shall be designated in said notice. Such certificate or certificates
shall be deemed  to have  been  issued  and such  Holder or any other  Person so
designated to be named therein shall be deemed to have become a holder of record
of such  shares,  including,  to the extent  permitted by law, the right to vote
such shares or to consent or to receive notice as a stockholder,  as of the time
said notice is delivered to the Company as aforesaid. If this Warrant shall have
been exercised only in part, the Company shall,  at the time of delivery of said
certificate or certificates, deliver to such Holder a new Warrant dated the date
it is issued,  evidencing  the rights of such Holder to purchase  the  remaining
Stock Units  called for by this  Warrant,  which new Warrant  shall in all other
respects be identical with this Warrant.

     The Company shall pay all expenses, taxes (other than federal, state, local
or foreign  income  taxes) and other  charges  payable  in  connection  with the
preparation, issue and delivery of stock certificates under this Section 2.

     All shares of Common Stock issuable upon the exercise of this Warrant shall
be validly  issued,  fully paid and  nonassessable,  and free from all liens and
other  encumbrances  thereon.  The Company  will from time to time take all such
action  as may be  necessary  to  assure  that the par  value  per  share of the
unissued  Common Stock  acquirable upon exercise of this Warrant is at all times
equal to or less than the Exercise Price then in effect.

     The Company shall not issue  certificates  for  fractional  shares of stock
upon any exercise of this Warrant whenever, in order to implement the provisions
of this Warrant,  the issuance of such fractional  shares is required.  Instead,
the Company shall pay cash in lieu of such fractional shares upon such exercise.

     Section 3. Transfer,  Division and Combination.  Subject to Section 9, this
Warrant and all rights hereunder are  transferable,  in whole or in part, on the
books of the Company to be maintained  for such purpose,  upon surrender of this
Warrant at the office of the Company  maintained  for such  purpose  pursuant to

                                       5
<PAGE>

Section 13,  together  with (a) a written  assignment in the form set out at the
end of this Warrant duly executed by the Holder hereof or its agent or attorney,
(b)  a  copy  of  the  Purchase   Agreement   duly  executed  by  an  authorized
representative  of the  transferee  (substantially  in the form  executed by the
Holder or in such other form as reasonably acceptable to counsel to the Company)
and (c) payment of funds sufficient to pay any stock transfer taxes payable upon
the making of such transfer.  Upon such  surrender,  execution and payment,  the
Company  shall,  subject to  Section 9,  execute  and  deliver a new  Warrant or
Warrants  in the name of the  assignee  or  assignees  and in the  denominations
specified in such  instrument of assignment,  and this Warrant shall promptly be
canceled.  If  and  when  this  Warrant  is  assigned  in  blank  (in  case  the
restrictions on  transferability  in Section 9 shall have been terminated),  the
Company  may (but  shall  not be  obliged  to) treat  the  bearer  hereof as the
absolute  owner of this Warrant for all  purposes  and the Company  shall not be
affected by any notice to the contrary.  This Warrant,  if properly  assigned in
compliance  with this  Section 3 and Section 9, may be  exercised by an assignee
for the purchase of shares of Common Stock without having a new Warrant issued.

     This Warrant may, subject to Section 9, be divided upon presentation 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 hereof or its agent or attorney. Subject to compliance with the preceding
paragraph  and with Section 9, 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 to be divided or combined in  accordance
with such notice.

     The Company shall pay all expenses, taxes (other than federal, state, local
or  foreign  income  taxes) and other  charges  incurred  by the  Company in the
performance of its  obligations in connection  with the  preparation,  issue and
delivery of Warrants under this Section 3.

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

     Section 4. Adjustment of Stock Unit or Exercise Price. The number of shares
of Common Stock  comprising a Stock Unit, and the Exercise Price per Stock Unit,
shall be subject to adjustment  from time to time as set forth in this Section 4
and in  Section 5. The  Company  will not take any  action  with  respect to its
Nonpreferred  Stock of any class requiring an adjustment  pursuant to any of the
following  Subsections  4.1 or 4.3  without at the same time  taking like action
with respect to its Nonpreferred Stock of each other class.

     4.1. Stock Dividends, Subdivisions and Combinations. In case at any time or
from time to time the Company shall:

     (a) take a record of the holders of its Nonpreferred  Stock for the purpose
of entitling them to receive a dividend  payable in, or other  distribution  of,
Nonpreferred Stock, or

     (b) subdivide its outstanding  shares of  Nonpreferred  Stock into a larger
number of shares of Nonpreferred Stock, or

     (c) combine its  outstanding  shares of  Nonpreferred  Stock into a smaller
number of shares of Nonpreferred Stock,

then the number of shares of Common Stock  comprising  a Stock Unit  immediately
after the  happening of any such event shall be adjusted so as to consist of the
number of shares of Common  Stock which a record  holder of the number of shares
of Common Stock  comprising a Stock Unit  immediately  prior to the happening of

                                       6
<PAGE>

such event  would own or be  entitled  to receive  after the  happening  of such
event; provided,  however, that no such event may take place with respect to any
shares of  Nonpreferred  Stock unless it shall also take place for all shares of
Nonpreferred Stock.

     4.2. Other Provisions  Applicable to Adjustments.  The following provisions
shall be  applicable  to the  making of  adjustments  of the number of shares of
Common Stock comprising a Stock Unit  hereinbefore  provided for in this Section
4:

     (a) When  Adjustments to Be Made. The  adjustments  required by Section 4.1
shall  be made  whenever  and as  often  as any  specified  event  requiring  an
adjustment shall occur.  For the purpose of any adjustment,  any specified event
shall be deemed to have  occurred  at the close of  business  on the date of its
occurrence.

     (b) Fractional  Interests.  In computing  adjustments under this Section 4,
fractional  interests in  Nonpreferred  Stock shall be taken into account to the
nearest one-thousandth of a share.

     (c) When Adjustment Not Required. If the Company shall take a record of the
holders of its Nonpreferred Stock for the purpose of entitling them to receive a
dividend  or  distribution  and shall,  thereafter  and before the  distribution
thereof to  shareholders,  abandon its plan to pay or deliver  such  dividend or
distribution,  then thereafter no adjustment  shall be required by reason of the
taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.

     4.3. Merger,  Consolidation  or Disposition of Assets.  In case the Company
shall merge or consolidate into another corporation,  or shall sell, transfer or
otherwise  dispose  of all or  substantially  all of  its  property,  assets  or
business  to  another  corporation  and  pursuant  to the terms of such  merger,
consolidation or disposition of assets,  shares of common stock of the successor
or acquiring  corporation are to be received by or distributed to the holders of
Nonpreferred Stock of the Company,  then each holder of a Warrant shall have the
right  thereafter to receive,  upon  exercise of such Warrant,  Stock Units each
comprising  the number of shares of common  stock of the  successor or acquiring
corporation  receivable  upon or as a result of such  merger,  consolidation  or
disposition of assets by a holder of the number of shares of Nonpreferred  Stock
comprising a Stock Unit  immediately  prior to such event.  If,  pursuant to the
terms of such merger,  consolidation or disposition of assets,  any cash, shares
of stock,  other  securities  or property or warrants or other  subscription  or
purchase  rights or property of any nature  whatsoever  are to be received by or
distributed to the holders of Nonpreferred Stock of the Company,  there shall be
either,  at the Holder's option,  (i) a reduction of the Exercise Price equal to
the amount  applicable to the number of shares of Common Stock then comprising a
Stock Unit of any such cash and of the fair value of any and all such  shares of
stock or of other securities or property to be received by or distributed to the
holders of Nonpreferred Stock of the Company, or (ii) such Holder shall have the
right to receive,  upon exercise of its Warrant,  such cash,  shares of stock or
other  securities  or property of any nature as a holder of the number of shares
of  Nonpreferred  Stock  underlying  a Stock Unit would  have been  entitled  to
receive upon the  occurrence of such event.  Such fair value shall be determined
in good faith by the Board of Directors of the  Company,  provided  that if such
determination is objected to by the holders of Warrants evidencing a majority in
number  of the  total  number of Stock  Units at the time  purchasable  upon the
exercise of all then outstanding  Warrants,  such determination shall be made by
an independent  appraiser selected by the Company and said holders. In the event
that  the  Company  and  said  holders  cannot,  in good  faith,  agree  upon an
appraiser,  then the Company,  on the one hand,  and said holders,  on the other
hand,  shall each select an  appraiser,  the two  appraisers  so selected  shall
select a third  appraiser  who  shall be  directed  to  prepare  such a  written
appraisal  which shall be  conclusive  and binding on the parties.  The fees and
expenses  of any  appraisers  shall be paid by the  Company,  except in the case
where the  valuation  of any  appraiser  who renders an  Appraisal is within ten
percent (10%) of the value originally  determined by the Board of Directors,  in

                                       7
<PAGE>

which case the holders  shall pay the fees and  expenses of any  appraisers.  In
case of any such merger,  consolidation or disposition of assets,  the successor
acquiring corporation 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 of the obligations and liabilities
hereunder,  subject to such  modification  as shall be  necessary to provide for
adjustments of Stock Units which shall be as nearly equivalent as practicable to
the adjustments provided for in this Section 4. For the purposes of this Section
4 "common stock of the successor or acquiring  corporation"  shall include stock
of such  corporation  of any class,  that is not  preferred  as to  dividends or
assets over any other class of stock of such corporation and that 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 Subsection 4.3
shall similarly apply to successive  mergers,  consolidations or dispositions of
assets.

     Section 5. Notice to Warrant Holders.

     5.1.  Notice of  Adjustment of Stock Unit or Exercise  Price.  Whenever the
number of shares of Common Stock  comprising a Stock Unit, or the price at which
a Stock Unit may be purchased  upon exercise of the Warrants,  shall be adjusted
pursuant to Section 4, the Company shall forthwith  obtain a certificate  signed
by independent  accountants,  of recognized  national standing,  selected by the
Company and  reasonably  acceptable to the  Holder(s) of the  Warrants,  setting
forth, in reasonable  detail,  the event requiring the adjustment and the method
by which such  adjustment  was  calculated  (including  a statement  of the fair
value,  as  determined  by the Board of Directors of the Company or by appraisal
(if  applicable),  of any  evidences  of  indebtedness,  shares of stock,  other
securities or property or warrants or other  subscription  or purchase rights or
property of any nature whatsoever referred to in Section 4.3) and specifying the
number of shares of Common Stock comprising a Stock Unit and (if such adjustment
was made  pursuant to Section 4.3)  describing  the number and kind of any other
shares of stock comprising a Stock Unit, and any change in the purchase price or
prices thereof,  after giving effect to such  adjustment or change.  The Company
shall  promptly,  and in any case  within  three  days  after the making of such
adjustment,  cause a signed copy of such  certificate  to be  delivered  to each
holder of a Warrant in accordance with Section 14. The Company shall keep at its
office or agency,  maintained for the purpose  pursuant to Section 13, copies of
all such  certificates and cause the same to be available for inspection at said
office  during  normal  business  hours  by  any  holder  of a  Warrant  or  any
prospective purchaser of a Warrant designated by a holder thereof.

     5.2. Notice of Certain  Corporate Action. In case the Company shall propose
(a) to pay any  dividend  payable  in stock of any class to the  holders  of its
Nonpreferred  Stock or to make any  other  distribution  to the  holders  of its
Nonpreferred   Stock  (other  than  a  cash  dividend)  or  (b)  to  effect  any
consolidation,  merger or sale, organic change, transfer or other disposition of
all or substantially all of its property,  assets or business, then in each such
case, the Company shall deliver to each holder of a Warrant,  in accordance with
Section 14, a notice of such  proposed  action,  which shall specify the date on
which  a  record  is to be  taken  for the  purposes  of  such  stock  dividend,
distribution or rights, consolidation,  merger, sale, organic change or transfer
is to take  place  and the  date of  participation  therein  by the  holders  of
Nonpreferred  Stock,  if any such date is to be fixed,  and shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action on the  Nonpreferred  Stock and the number and kind of any
other shares of stock which will comprise a Stock Unit,  and the purchase  price

                                       8
<PAGE>

or prices thereof,  after giving effect to any adjustment which will be required
as a result of such  action.  Such notice  shall be so  delivered as promptly as
reasonably possible.

     Section 6. Reservation and Authorization of Common Stock. The Company shall
at all times reserve and keep  available for issue upon the exercise of Warrants
such number of its  authorized  but  unissued  shares of Common Stock as will be
sufficient  to permit the  exercise  in full of all  outstanding  Warrants.  All
shares of Common Stock which shall be so issuable,  when issued upon exercise of
any Warrant or upon such exercise, as the case may be, shall be duly and validly
issued, fully-paid and nonassessable.

     Section 7. Taking of Record;  Stock and Warrant Transfer Books. In the case
of all  dividends  or other  distributions  by the Company to the holders of its
Nonpreferred  Stock with  respect to which any  provision of Section 4 refers to
the taking of a record of such holders,  the Company will in each such case take
such record as of the close of business on a Business  Day. The Company will not
at any time, except upon dissolution,  liquidation or winding up or as otherwise
may be required by law, close its stock transfer books or Warrant transfer books
so as to result in  preventing  or  delaying  the  exercise  or  transfer of any
Warrant.

     Section 8. Taxes.  The  Company  will pay all taxes  (other  than  federal,
state,  local or foreign  income taxes) which may be payable in connection  with
the  execution  and  delivery of this  Warrant or the  issuance  and sale of the
Restricted  Securities  hereunder or in connection with any  modification of the
Restricted Securities and will save the Holder harmless without limitation as to
time against any and all liabilities with respect to or resulting from any delay
in paying,  or omission to pay, such taxes. The obligations of the Company under
this  Section 8 shall  survive any  redemption,  repurchase  or  acquisition  of
Restricted Securities by the Company.

     Section 9. Restrictions on Transferability. The Restricted Securities shall
not be transferable except upon the conditions specified in this Section 9.

     9.1 Transfer to an  Affiliate.  The Holder shall have the right to transfer
any Restricted  Securities to any Affiliate of the Holder,  in each case free of
the restrictions  imposed by this Section 9 other than the requirement as to the
legending  of the  certificates  for such  Restricted  Securities  specified  in
Section  9.3.  No  opinion  of  counsel  shall be  required  for a  transfer  of
Restricted Securities to an Affiliate of the Holder.

     9.2  Transfer  to a  Non-Affiliate.  The  Holder  and  his  or  her  or her
subsequent   transferees  shall  have  the  right  to  transfer  any  Restricted
Securities to a non-Affiliate of the Holder as follows:

     (a)  Prior  to  any  transfer  or  attempted  transfer  of  any  Restricted
Securities  to a  non-Affiliate  of the  Holder,  the holder of such  Restricted
Certificate shall give written notice to the Company of such Holder's  intention
to effect  such  transfer.  Each such  notice  shall  describe  the  manner  and
circumstances of the proposed transfer in reasonable detail.

     (b) Upon  receipt of such  notice,  the  Company  may request an opinion of
counsel of the transferring Holder to the effect that such proposed transfer may
be effected without  registration under the Securities Act. Upon receipt of such
opinion,  or if the Company  does not request  such an opinion,  within five (5)
Business  Days after  receiving  notice of the  proposed  transfer,  the Company
shall,  as  promptly  as  practicable,  so notify the Holder of such  Restricted
Certificate  and the  Holder  shall  thereupon  be  entitled  to  transfer  such
Restricted  Securities in accordance  with the terms of the notice  delivered by

                                       9
<PAGE>

the Holder to the Company. Each certificate evidencing the Restricted Securities
thus to be  transferred  (and  each  certificate  evidencing  any  untransferred
balance of the Restricted  Securities evidenced by such Restricted  Certificate)
shall  bear the  restrictive  legend  set forth in  Section  9.3,  unless in the
opinion of the Company or the opinion of such counsel, if requested, pursuant to
Rule 144(k) of the Securities  Act or otherwise,  such legend is not required in
order to ensure  compliance  with the  Securities  Act. The fees and expenses of
counsel for any such opinion shall be paid by the Company.

     9.3  Restrictive  Legend.  Unless and until the Restricted  Securities have
been registered  under the Securities Act, this Warrant,  each Warrant issued to
any transferee of the Holder, each certificate for any Warrant Stock issued upon
exercise of any Warrant and each certificate for any Warrant Stock issued to any
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:

     " THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR REGISTERED OR QUALIFIED
     UNDER  ANY  STATE   SECURITIES  LAWS.  THE  SECURITIES  MAY  NOT  BE  SOLD,
     TRANSFERRED,  PLEDGED OR HYPOTHECATED UNLESS THE PROPOSED  TRANSACTION DOES
     NOT REQUIRE REGISTRATION OR QUALIFICATION UNDER FEDERAL OR STATE SECURITIES
     LAWS,  OR UNLESS THE PROPOSED  TRANSACTION  IS  REGISTERED  OR QUALIFIED AS
     REQUIRED."

     Section 10. Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the purchase  price of the Warrant Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

     Section 11. Loss or  Destruction of Warrant  Certificates.  Upon receipt of
evidence  satisfactory  to  the  Company  of the  loss,  theft,  destruction  or
mutilation  of any  Warrant  and,  in  the  case  of any  such  loss,  theft  or
destruction,  upon receipt of indemnity or security  satisfactory to the Company
(the  original  Holder's or any other  institutional  Holder's  indemnity  being
satisfactory indemnity in the event of loss, theft or destruction of any Warrant
owned by such  institutional  Holder),  or, in the case of any such  mutilation,
upon  surrender  and  cancellation  of such  Warrant,  the Company will make and
deliver,  in lieu of such lost,  stolen,  destroyed or mutilated  Warrant, a new
Warrant of like tenor and  representing the right to purchase the same aggregate
number of shares of Common Stock.

     Section 12. Amendments.  The terms of this Warrant may be amended,  and the
observance of any term therein may be waived,  but only with the written consent
of the holders of Warrants  evidencing  a majority in number of the total number
of Stock Units at the time purchasable upon the exercise of all then outstanding
Warrants;  provided that no such action may change the number of shares of stock
comprising a Stock Unit or the Exercise  Price,  without the written  consent of
the holders of Warrants subject to such amendment.

     Section  13.  Office  of  the  Company.  So  long  as any  Warrant  remains
outstanding,  the Company  shall  maintain an office  where the  Warrants may be
presented for exercise,  transfer,  division or  combination  as in this Warrant
provided.  Such office shall be at 5388 Sterling Center Drive,  Unit C, Westlake
Village,  California  91361,  FAX: (818) 707-7132,  unless and until the Company
shall  designate  and maintain  some other office for such  purposes and deliver
written notice thereof to the holders of all outstanding Warrants.


                                       10
<PAGE>

     Section 14. Notices Generally.

     14.1.  All  communications  (including  all required or permitted  notices)
pursuant to the provisions  hereof shall be in writing and shall be sent, to any
registered  Holder of any  Warrants  or Warrant  Stock,  to the  address of such
Holder as it appears in the stock or  warrant  ledger of the  Company or at such
other address as such Holder may have furnished in writing to the Company.

     14.2. Any notice shall be deemed to have been duly delivered when delivered
by hand, if personally  delivered,  and if sent by mail to a party whose address
is in the same country as the sender, two Business Days after being deposited in
the mail,  postage  prepaid,  and if sent by recognized  international  courier,
freight prepaid, with a copy sent by telecopier, to a party whose address is not
in the same country as the sender,  three  Business  Days after the later of (a)
being telecopied and (b) delivery to such courier.

     Section 15.  Governing Law. This Warrant shall be governed by and construed
in  accordance  with the laws of the  State of  California  (without  regard  to
conflicts of law provisions thereof).

                                       11
<PAGE>



     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its
name by its  President or a Vice  President  and attested by its Secretary or an
Assistant Secretary.

Dated:   October 6, 2000

                                                     THE RIGHT START, INC.

                                                     ---------------------
                                                     By:  Jerry R. Welch
                                                     Its:  President

ATTEST:

--------------------------
Name:  Raymond P. Springer
Title:  Secretary


<PAGE>



                                SUBSCRIPTION FORM

                 (to be executed only upon exercise of Warrant)


                  The undersigned  registered owner of this Warrant  irrevocably
exercises this Warrant for and purchases Stock Units of The Right Start, Inc., a
California  corporation,  purchasable  with this  Warrant,  and  herewith  makes
payment  therefor  (by  check  in the  amount  of  $_____),  or  hereby  tenders
_______________  Stock  Units as payment  therefor,  all at the price and on the
terms and  conditions  specified in this Warrant and requests that  certificates
for the shares of Common Stock hereby  purchased  (and any  securities  or other
property  issuable upon such exercise) be issued in the name of and delivered to
_________________________  whose  address is and,  if such Stock Units shall not
include all of the Stock Units  issuable as provided in this  Warrant that a new
Warrant  of like  tenor and date for the  balance  of the Stock  Units  issuable
thereunder be delivered to the undersigned.

Dated:  _____________, _____

                                           -------------------------------
                                           (Signature of Registered Owner)


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

                                           -------------------------------
                                          (City)       (State)   (Zip Code)



<PAGE>



                                 ASSIGNMENT FORM

                  FOR VALUE RECEIVED the  undersigned  registered  owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under this Warrant,  with respect to the number of
Stock Units set forth below:

Number of Stock Units                             Name and Address of Assignee
---------------------                             ----------------------------









and does hereby irrevocably  constitute and appoint  ___________________Attorney
to make sure transfer occurs on the books of The Right Start, Inc., a California
corporation,  maintained for the purpose, with full power of substitution in the
premises.

Dated:

---------------------------
        Signature

---------------------------
        Witness

NOTICE:           The signature to the assignment  must correspond with the name
                  as written  upon the face of the  Warrant in every  particular
                  instance,  without  alteration  or  enlargement  or any change
                  whatsoever.

                  The signature to this  assignment must be guaranteed by a bank
or trust company having an office or  correspondent in New York, New York or Los
Angeles,  California  or by a firm  having  membership  on the  New  York  Stock
Exchange.


<PAGE>
                                   EXHIBIT C

                          REGISTRATION RIGHTS AGREEMENT

          THIS  REGISTRATION  RIGHTS  AGREEMENT (the  "Agreement") is made as of
October 6, 2000 between The Right Start,  Inc.,  a California  corporation  (the
"Company"),  and the undersigned and those who may purchase the Companies Series
D Preferred  Stock (as defined) in the future (each  individually a "Purchaser,"
and collectively the "Purchasers").

          WHEREAS,  the Company and  Purchasers  have  entered into a Securities
Purchase Agreement dated as of the date hereof (the "Purchase Agreement").

          WHEREAS,   pursuant  to  the  Purchase  Agreement,   the  Company  and
Purchasers  desire to enter  into this  Agreement  to  provide  Purchasers  with
certain registration rights and to address related matters;

          NOW,  THEREFORE,  in  consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties agree as follows:

          1.   Registration Rights.

               1.1  Demand Registration Rights.

               (a) Subject to the  provisions  of this  Section 1.1, at any time
              after the date  hereof,  Purchasers  holding,  or entitled to hold
              upon  conversion  or exercise,  not less than 50% of the Company's
              Common Stock,  no par value ("Common  Stock"),  issued or issuable
              upon conversion of the Series D Convertible  Pay-in-Kind Preferred
              Stock  (the  "Series  D  Preferred  Stock")  and  exercise  of the
              warrants  issued in connection  therewith  (the  "Warrants",  and,
              collectively with the Series D Preferred Stock, the "Securities"),
              issued by the  Company  to  Purchasers  pursuant  to the  Purchase
              Agreement may request  registration  for sale under the Securities
              Act of 1933 as amended  (the  "Act") of all or part of such Common
              Stock.   The  Company  shall   thereafter,   as  expeditiously  as
              practicable,  use its best efforts (i) to file with the Securities
              and Exchange  Commission (the "SEC") under the Act, a registration
              statement on the appropriate  form (using Form S-3 or other "short
              form," if  available)  covering  all the  shares  of Common  Stock
              specified   in  the  demand   request   and  (ii)  to  cause  such
              registration statement to be declared effective. The Company shall
              use its best  efforts  to cause  each  offering  pursuant  to this
              Section  1.1 to be  managed,  on a  firm  commitment  basis,  by a
              recognized regional or national underwriter. The Company shall not
              be  required  to  comply  with  more  than  two  (2)  requests  by
              Purchasers  for  demand  registration  pursuant  to  this  Section
              1.1(a).  The  Company  shall  not be  required  to effect a demand
              registration under the Act pursuant to Section 1.1(a) above if (i)
              the Company receives such request for registration within 120 days
              preceding   the   anticipated   effective   date  of  a   proposed
              underwritten public offering of securities of the Company approved
              by the Company's Board of Directors prior to the Company's receipt
              of such  request;  (ii) within 180 days prior to any such  request
              for registration,  a registration of securities of the Company has
              been  effected in which  Purchasers  had the right to  participate
              pursuant to Section 1.2 hereof; or (iii) the Board of Directors of
              the Company  reasonably  determines  in good faith that  effecting
              such a demand  registration  at such time  would  have a  material
              adverse effect upon a proposed sale of all (or substantially  all)

                                       1
<PAGE>

              the  assets  of  the   Company,   or  a  merger,   reorganization,
              recapitalization,  or similar transaction materially affecting the
              capital  structure or equity  ownership of the Company;  provided,
              however,  that the  Company  may only delay a demand  registration
              pursuant to this Section 1.1(a)(iii) for a period not exceeding 90
              days  (or  until  such  earlier  time  as  such   transaction   is
              consummated  or no longer  proposed).  The Company shall  promptly
              notify  Purchasers  in writing of any  decision  not to effect any
              such request for  registration  pursuant to this  Section  1.1(a),
              which notice shall set forth in  reasonable  detail the reason for
              such  decision  and shall  include an  undertaking  by the Company
              promptly to notify Purchasers as soon as a demand registration may
              be effected.

               (b) Purchasers may withdraw a request for demand  registration at
              any time before a registration statement is declared effective, in
              which  event  the  Company  shall   withdraw   such   registration
              statement. If the Company withdraws a registration statement under
              this  Section  1.1(b) in respect of a  registration  for which the
              Company would  otherwise be required to pay expenses under Section
              1.4  hereof,  Purchasers  shall be liable to the  Company  for all
              expenses of such  registration  specified in Section 1.4 hereof in
              proportion  to the number of shares each of the  Purchasers  shall
              have  requested  to be  registered,  and  Purchasers  shall not be
              deemed to have  requested a demand  registration  for  purposes of
              Section 1.1(a) hereof.

               1.2  Piggyback Registration Rights.

               (a) If at any time or times  after the date  hereof,  the Company
              proposes  to  make  a  registered  public  offering  of any of its
              securities  under the Act,  whether  to be sold by it or by one or
              more third  parties  (other than an offering  pursuant to a demand
              registration under Section 1.1(a) hereof or an offering registered
              on Form S-8, Form S-4, or comparable  forms),  the Company  shall,
              not less than 45 days  prior to the  proposed  filing  date of the
              registration   form,   give   written   notice  of  the   proposed
              registration  to  Purchasers,   and  at  the  written  request  of
              Purchasers delivered to the

                    Company  within 20 days after the  receipt  of such  notice,
              shall  include  in  such  registration  and  offering,  and in any
              underwriting of such offering, all shares of Common Stock that may
              have been designated in Purchasers' request.

               (b) If a  registration  in which  Purchasers  have  the  right to
              participate  pursuant  to  this  Section  1.2  is an  underwritten
              offering  for the  account of the  Company or for the account of a
              security holder (other than Purchaser) pursuant to the exercise of
              a demand registration right, and the managing  underwriters advise
              the  Company  or such  security  holder,  as the case  may be,  in
              writing that in their opinion the number of  securities  requested
              to be included in such registration,  together with the securities
              being offered by the Company or such security holder,  as the case
              may be, exceeds the number which can be  effectively  sold in such
              offering,  the  Company  shall  include in such  registration  (i)
              first,  the  securities  of the  Company or such  security  holder
              proposed to be sold, and (ii) second, to the extent possible,  the
              Common Stock proposed to be sold by each of the Purchasers and any
              other selling shareholders,  in proportion to the number of shares
              of  Common  Stock  with  respect  to  which  they  have  requested
              registration.

               1.3 Registration Procedures. The Company shall have no obligation
to file a registration  statement  pursuant to Section 1.1 hereof, or to include

                                       2
<PAGE>

shares of Common Stock owned by or issuable to any  Purchaser in a  registration
statement pursuant to Section 1.2 hereof,  unless and until such Purchaser shall
have  furnished  the  Company  with  all  information  and  statements  about or
pertaining to such Purchaser in such reasonable  detail and on such timely basis
as is reasonably  required by the Company in connection  with the preparation of
the registration  statement.  Whenever Purchasers have requested that any shares
of Common Stock be registered pursuant to Section 1.1 or 1.2 hereof, the Company
shall, as expeditiously as reasonably possible:

               (a) prepare and file with the SEC a  registration  statement with
              respect  to such  shares  and use its best  efforts  to cause such
              registration  statement to become  effective as soon as reasonably
              practicable thereafter (provided that before filing a registration
              statement or prospectus or any amendments or supplements  thereto,
              the Company shall furnish  counsel for  Purchasers  with copies of
              all such documents proposed to be filed);

               (b) prepare and file with the SEC such amendments and supplements
              to such  registration  statement and prospectus used in connection
              therewith as may be necessary to keep such registration  statement
              effective for a period of not less than nine months (or two years,
              if the  provisions  of Rule 415 under the Act are  available  with
              respect   thereto)  or  until   Purchasers   have   completed  the
              distribution described in such registration  statement,  whichever
              occurs first;

               (c)  furnish  to  Purchasers   such  number  of  copies  of  such
              registration statement, each amendment and supplement thereto, the
              prospectus included in such registration statement (including each
              preliminary prospectus), and such other document as Purchasers may
              reasonably request;

               (d) use its best efforts to register or qualify such shares under
              such other  securities or blue sky laws of such  jurisdictions  as
              Purchasers   request  (and  to  maintain  such  registrations  and
              qualifications  effective  for a period  of nine  months  or until
              Purchasers  have  completed  the   distribution  of  such  shares,
              whichever  occurs  first),  and to do any and all  other  acts and
              things which may be necessary or advisable to enable Purchasers to
              consummate the disposition in such  jurisdictions  of such shares;
              provided  that the  Company  will not be  required  to (i) qualify
              generally to do business in any jurisdiction where it would not be
              required  but for this  Section  1.3(d),  (ii)  subject  itself to
              taxation  in any  such  jurisdiction,  or (iii)  file any  general
              consent to service of process in any such jurisdiction;

               (e) notify  Purchasers,  at any time  during  which a  prospectus
              relating  thereto is required to be delivered under the Act within
              the period that the  Company is  required  to keep a  registration
              statement effective,  of the happening of any event as a result of
              which  the  prospectus  included  in such  registration  statement
              contains an untrue  statement of a material fact or omits any fact
              necessary  to make the  statements  therein  not  misleading,  and
              prepare a supplement  or amendment to such  prospectus so that, as
              thereafter  delivered  to the  purchasers  of  such  shares,  such
              prospectus will not contain an untrue statement of a material fact
              or omit to state any fact necessary to make the statements therein
              not misleading;

               (f) use its best efforts to cause all such shares to be listed on
              securities  exchanges or interdealer  quotation systems (including
              NASDAQ  National  Market),  if any,  on which  similar  securities
              issued by the Company are then listed;

                                       3
<PAGE>


               (g)  enter  into  such   customary   agreements   (including   an
              underwriting  agreement in customary form) and take all such other
              actions  as   Purchasers   reasonably   request  (and  subject  to
              Purchasers'   reasonable   approval)   in  order  to  expedite  or
              facilitate the disposition of such shares; and

               (h) make  reasonably  available for inspection by Purchasers,  by
              any underwriter participating in any distribution pursuant to such
              registration statement,  and by any attorney,  accountant or other
              agent  retained  by  Purchasers  or by any such  underwriter,  all
              relevant   financial  and  other  records,   pertinent   corporate
              documents,  and properties (other than  confidential  intellectual
              property) of the Company; provided,  however, that any information
              that is  designated in writing by the Company,  in good faith,  as
              confidential at the time of delivery of such information  shall be
              kept confidential by Purchasers or any such underwriter, attorney,
              accountant or agent,  unless such disclosure is made in connection
              with a court  proceeding  or required by law, or such  information
              becomes available to the public generally or through a third party
              without an accompanying obligation of confidentiality.

               1.4  Registration Expenses.

          The Company will pay all  Registration  Expenses of all  registrations
under this Agreement,  provided,  however,  that if a registration under Section
1.1 is  withdrawn  at the  request  of  Purchasers  (other  than as a result  of
information  concerning the business or financial  condition of the Company that
is made known to the Purchasers  after the date on which such  registration  was
requested) and if the requesting  Purchasers elect not to have such registration
counted as a registration  requested under Section 1.1, Purchasers shall pay the
Registration  Expenses of such registration.  For purposes of this Section,  the
term  "Registration  Expenses"  means all  expenses  incurred  by the Company in
complying with this Section, including, without limitation, all registration and
filing fees (other than National Association of Securities Dealers,  Inc. filing
fees pursuant to an  underwritten  offering),  exchange  listing fees,  printing
expenses,  fees, and expenses of counsel for the Company and the reasonable fees
and expenses of one firm or counsel  selected by  Purchasers  to  represent  it,
state Blue Sky fees and expenses, and the expense of any special audits incident
to or required by any such registration,  but excluding  underwriting  discounts
and selling commissions.

               1.5  Indemnity.

               (a) In the  event  that  any  shares  of  Common  Stock  owned by
              Purchasers are sold by means of a registration  statement pursuant
              to Section 1.1 or 1.2 hereof,  the Company agrees to indemnify and
              hold  harmless  such  Purchasers,  each of its  partners and their
              officers and directors, and each person, if any, who controls such
              Purchasers within the meaning of the Act (each such Purchaser, its
              partners  and their  officers  and  directors,  and any such other
              persons  individually  an  "Indemnified  Person" and  collectively
              "Indemnified  Persons")  from and  against  all  demands,  claims,
              actions  or  causes  of  action,  assessments,   losses,  damages,
              liabilities,  costs, and expenses,  including, without limitation,
              interest,   penalties,   and   reasonable   attorneys'   fees  and
              disbursements,  asserted  against,  resulting to,  imposed upon or
              incurred by such  Indemnified  Person,  directly or indirectly (in
              this  Section  1.5 in the  singular  a "claim"  and in the  plural
              "claims"), based upon, arising out of or resulting from any untrue
              statement  of  a  material  fact  contained  in  the  registration
              statement  or any  omission  to  state  therein  a  material  fact
              necessary to make the statements made therein, in the light of the
              circumstances  under which they were made, not misleading,  except

                                       4
<PAGE>

              insofar as such claim is based upon, arises out of or results from
              information  furnished to the Company in writing by such Purchaser
              for use in connection with the registration statement.

               (b) Each  Purchaser  agrees to  indemnify  and hold  harmless the
               Company, its officers and directors, and each person, if any, who
               controls  the Company  within the meaning of the Act (each of the
               Company,  its officers and directors,  and any such other persons
               individually   as  an  "Indemnified   Person"  and   collectively
               "Indemnified  Persons")  from and against all claims  based upon,
               arising  out of or  resulting  from  any  untrue  statement  of a
               material  fact  contained  in the  registration  statement or any
               omission to state therein a material  fact  necessary in order to
               make  the   statements   made  therein,   in  the  light  of  the
               circumstances under which they were made, not misleading,  to the
               extent  that such claim is based  upon,  arises out of or results
               from information furnished to the Company in writing by Purchaser
               for use in connection with the registration statement.

               (c) The  indemnification set forth herein shall be in addition to
              any liability the Company or a Purchaser may otherwise have to the
              Indemnified Persons.  Promptly after actually receiving definitive
              notice of any claim in respect of which an Indemnified  Person may
              seek  indemnification  under this  Section 1.5,  such  Indemnified
              Person shall submit  written  notice thereof to either the Company
              or Purchaser,  as the case may be (an "Indemnifying  Person"). The
              failure of the  Indemnified  Person so to notify the  Indemnifying
              Person of any such claim shall not relieve the Indemnifying Person
              from any liability it may have hereunder except to the extent that
              (a) such  liability  was caused or  materially  increased  by such
              failure,  or (b) the ability of the Indemnifying  Person to reduce
              such liability was materially  adversely affected by such failure.
              In addition,  the failure of the  Indemnified  Person so to notify
              the  Indemnifying  Person of any such claim  shall not relieve the
              Indemnifying  Person from any liability it may have otherwise than
              hereunder.

                    The  Indemnifying  Person shall have the right to undertake,
              by counsel or  representatives  of its own choosing,  the defense,
              compromise  or  settlement  (without  admitting  liability  of the
              Indemnified  Person) of any such  claim  asserted,  such  defense,
              compromise  or settlement to be undertaken at the expense and risk
              of the Indemnifying  Person, and the Indemnified Person shall have
              the right to engage separate counsel, at such Indemnified Person's
              own expense,  whom counsel for the Indemnifying  Person shall keep
              informed and consult with in a reasonable manner. In the event the
              Indemnifying  Person shall elect not to undertake  such defense by
              its own representatives, the Indemnifying Person shall give prompt
              written notice of such election to the Indemnified Person, and the
              Indemnified  Person  may  undertake  the  defense,  compromise  or
              settlement (without admitting liability of the Indemnified Person)
              thereof  on  behalf  of  and  for  the  account  and  risk  of the
              Indemnifying Person by counsel or other representatives designated
              by the  Indemnified  Person.  Notwithstanding  the  foregoing,  no
              Indemnifying  Person shall be obligated  hereunder with respect to
              amounts  paid in  settlement  of any claim if such  settlement  is
              effected without the consent of such  Indemnifying  Person,  which
              consent shall not be unreasonably withheld.

               (d) If for any reason the foregoing  indemnity is unavailable to,
              or is insufficient to hold harmless,  an Indemnified  Person, then
              the  Indemnifying  Person shall  contribute  to the amount paid or
              payable by the Indemnified  Person as a result of such claims,  in
              such proportion as is appropriate to reflect the relative fault of
              the Indemnifying  Person and the Indemnified Person as well as any

                                       5
<PAGE>

              other  relevant  equitable  considerations.  No  person  guilty of
              fraudulent  misrepresentation (within the meaning of Section 11(f)
              of the Act) shall be entitled to contribution  from any person who
              was not guilty of such fraudulent misrepresentation.

               1.6  Subsequent  Registration  Statements.  The Company shall not
cause or permit any new registration  statements (except registration statements
on Form S-8, S-4, or comparable  forms) to become  effective  during the 90 days
after the effective date of a registration  statement  covering shares of Common
Stock owned by Purchasers.

          2.   Miscellaneous.

               2.1 Additional Actions and Documents.  Each of the parties hereto
hereby  agrees to use its good faith  best  efforts to take or cause to be taken
such  further  actions,  to execute,  deliver and file or cause to be  executed,
delivered and filed such further  documents and instruments,  and to obtain such
consents,  as may be  necessary  or as may be  reasonably  requested in order to
fully effectuate the purposes, terms and conditions of this Agreement.

               2.2  Assignment.  Any  Purchaser may assign its rights under this
Agreement  to any  assignee  of the  Securities  or the  shares of Common  Stock
issuable upon exercise thereof.

               2.3 Entire Agreement;  Amendment.  This Agreement,  including the
other writings referred to herein or delivered pursuant hereto,  constitutes the
entire  agreement  among the  parties  hereto with  respect to the  transactions
contemplated  herein,  and it supersedes  all prior oral or written  agreements,
commitments or  understandings  with respect to the matters provided for herein.
No  amendment,  modification  or discharge of this  Agreement  shall be valid or
binding  unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, or discharge is sought.

               2.4 Limitation on Benefits.  It is the explicit  intention of the
parties hereto that no person or entity other than the parties hereto (and their
respective  successors  and assigns) is or shall be entitled to bring any action
to enforce any provision of this  Agreement  against any of the parties  hereto,
and the covenants, undertakings and agreements set forth in this Agreement shall
be solely for the  benefit  of, and shall be  enforceable  only by, the  parties
hereto or their respective successors and assigns.

               2.5 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

               2.6 Governing Law. This Agreement,  the rights and obligations of
the  parties  hereto,  and any claims or  disputes  relating  thereto,  shall be
governed by and  construed in accordance  with the laws of  California  (without
regard to conflicts of laws principles).

               2.7  Notices.   All   notices,   demands,   requests,   or  other
communications  which may be or are required to be given, served, or sent by any
party to any other  party  pursuant  to this  Agreement  shall be in writing and
shall be mailed by  first-class,  registered or certified  mail,  return receipt
requested,  postage prepaid, or transmitted by hand delivery, including delivery
by courier, telegram, telex, or facsimile transmission, addressed as follows:


                                       6
<PAGE>

          (a) If to the Company:

                            The Right Start, Inc.
                            5388 Sterling Center Drive Unit C
                            Westlake Village, California 91361
                            Attention:  President
                            Facsimile:  (818) 707-7132

                    with a copy (which shall not constitute notice) to:

                            Milbank, Tweed, Hadley & McCloy
                            601 S. Figueroa, 30th Floor
                            Los Angeles, CA 90017
                            Attention:  Kenneth J. Baronsky, Esq.
                            Facsimile:  (213) 629-5063

          (b) If to  Purchaser,  to the  address  set  forth  in the  Securities
     Purchase Agreement for such Purchaser.

Each party may designate by notice in writing a new address to which any notice,
demand,  request or  communication  may thereafter be so given,  served or sent.
Each notice, demand, request, or communication which shall be mailed,  delivered
or transmitted in the manner described above shall be deemed sufficiently given,
served,  sent and  received  for all purposes at such time as it is delivered to
the addressee (with the return receipt,  the delivery receipt,  the affidavit of
messenger or (with  respect to a telex) the answer back being deemed  conclusive
(but not  exclusive)  evidence of such  delivery) or at such time as delivery is
refused by the addressee upon presentation.

               2.8 Headings.  Section  headings  contained in this Agreement are
inserted for convenience of reference only,  shall not be deemed to be a part of
this  Agreement  for any purpose,  and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.

               2.9  Execution in  Counterparts.  To facilitate  execution,  this
Agreement  may be executed in as many  counterparts  as may be required;  and it
shall  not be  necessary  that  the  signatures  of each  party  appear  on each
counterpart;  but it shall be sufficient that the signature of each party appear
on  one or  more  of  the  counterparts.  All  counterparts  shall  collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement  to  produce  or  account  for  more  than a  number  of  counterparts
containing the respective signatures of all of the parties hereto.


                                       7
<PAGE>


            IN WITNESS  WHEREOF,  each of the  parties  hereto  has caused  this
Agreement to be duly executed on its behalf as of the date first above written.

                                    THE RIGHT START, INC.



                                    By: ___________________________
                                    Jerry R. Welch
                                    Chief Executive Officer




                                       8
<PAGE>
                                  KAYNE FAMILY PARTNERSHIP, L.P.

                                  By: Jemasa, Inc.


                                  -----------------
                                  Richard Kayne
                                  President

                                  Address for Notices:
                                  1800 Avenue of the Stars
                                  2nd Floor

                                  Los Angeles, California 90067
                                  Attention:  Richard Kayne

                                  Facsimile: 310.284.6490


                                  FORTUNE TWENTY-FIFTH, INC.


                                  -----------------
                                  Fred Kayne

                                  Address:
                                  c/o Fred Kayne

                                  P.O. Box 381,
                                  Glenbrook, Nevada 89413

                                  Copy to:
                                  1800 Avenue of the Stars
                                  Suite 310
                                  Los Angeles, California 90067
                                  Attention:  Fred Kayne

                                  Facsimile: 310.551.3077




                                  -----------------
                                  Jerry D. Kayne, Trustee

                                  Address:
                                  c/o Fortune Financial
                                  1800 Avenue of the Stars
                                  Suite 310
                                  Los Angeles, California 90067

                                  Facsimile: 310.551.3077


                                  -----------------
                                  Stephen Kayne

                                  Address:
                                  c/o Fortune Financial
                                  1800 Avenue of the Stars
                                  Suite 310
                                  Los Angeles, California 90067

                                  Facsimile: 323.277.9025


                                  -----------------
                                  Lloyd Miller
                                  Address:
                                  4550 Gordon Drive
                                  Naples, Florida 34102

                                  Facsimile: 941.262.8025


                                  NEWBERG FAMILY TRUST dated 12-18-90

                                  -----------------
                                  Bruce Newberg, Trustee

                                  Address:
                                  466 North Carmelina Avenue
                                  Los Angeles, California 90049

                                  Facsimile: 310.914.9242


<PAGE>

                                  O.S. II, Inc.
                                  By:

                                  -----------------
                                  Jill Higgins
                                  its President
                                  Address:
                                  4224 Clybourne Avenue
                                  Burbank, California 91505

                                  Facsimile: 818.559.5617


<PAGE>

                                  HSMC PARTNERS, L.P.
                                  By:

                                  -----------------
                                  Jerrold N. Fine
                                  its managing partner

                                  Address:
                                  10 Wright Street
                                  Building B-4
                                  Westport, Connecticut 06881

                                  Facsimile: 203.226.7596


<PAGE>



                                  -----------------
                                  William Calvert

                                  Address: c/o Lehman Brothers
                                  1100 Glendon Avenue  11th Floor
                                  Westwood, California 90024

                                  Facsimile: 310.481.4102



                                  -----------------
                                  Milton T. Okun & Rosemary Okun,
                                  as community property

                                  Address: 942 North Alpine
                                  Beverly Hills, CA 90210

                                  Facsimile: 310.285.0892



                                  -----------------
                                  Robert A. Muh

                                  Address: c/o Sutter Securities, Inc.
                                  1 Sansome Street Suite 3950
                                  San Francisco, CA 94104

                                  Facsimile: 415.288.2355



                                  -----------------
                                  Sigmund and Judith Wolkomir

                                  Address: 707 Broughton Road
                                  Bethel Park, PA 15102

                                  Facsimile:



                                  -----------------
                                  Bryant Riley

                                  Address: 11150 Santa Monica Boulevard
                                  Suite 750
                                  Los Angeles, California 90025

                                  Facsimile: 310.966.1448


<PAGE>



                                  -----------------
                                  Gilbert E. Matthews

                                  Address: c/o Sutter Securities, Inc.
                                  1 Sansome Street Suite 3950
                                  San Francisco, CA 94104

                                  Facsimile: 415.288.2355


<PAGE>




                                  -----------------
                                  Keith Kretschmer

                                  Address:
                                  c/o PIMCO/OPPENHEIMER
                                  41 George St

                                  The Rocks

                                  Sydney NSW 2000
                                  AUSTRALIA

                                  Copy to:
                                  6 Astor Court
                                  Doylestown, PA 18901

                                  Facsimile: 011 612 9241 6955
                                  215.230.9018




                                  -----------------
                                  Carl E. Warden SEP/IRA
                                  Dain Rauscher Custodian

                                  Address:
                                  800 North Shoreline, Suite 2200
                                  Corpus Christi, Texas 78401

                                  Facsimile: 361.888.8613


<PAGE>




                                  -----------------
                                  Michael Targoff

                                  Address:
                                  1330 Avenue of the Americas
                                  36th Floor
                                  New York, New York 10019

                                  Facsimile: 212.842.1540


<PAGE>


                                  HACKING FAMILY TRUST



                                  -----------------
                                  Thomas T. Hacking, Trustee

                                  Address :
                                  1800 Avenue of the Stars
                                  2nd Floor
                                  Los Angeles, CA 90067

                                  Facsimile: 310.284.6444


<PAGE>



                                  A.E. HALL & COMPANY MONEY PURCHASE PLAN


                                  -----------------
                                  Arthur E. Hall, Trustee

                                  Address :
                                  P.O. Box 1479
                                  or 1726 Cedarwood Drive
                                  Minden, Nevada 89423

                                  Facsimile: 775.782.4787


                                  -----------------
                                  Robert Schnell, IRA

                                  Address :
                                  933 North Rexford Drive
                                  Beverly Hills, California 90210

                                  Facsimile: 213.624.1224

<PAGE>

                                   EXHIBIT D

                               (face of security)

Number                                                                  Shares



                 THE RIGHT START, INC., a California Corporation

                Series D Convertible Pay-in-Kind Preferred Stock

       Authorized: 80,000 shares of Series D Convertible Pay-in-Kind Stock

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR REGISTERED OR QUALIFIED  UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD,  TRANSFERRED,  PLEDGED OR
HYPOTHECATED  UNLESS THE PROPOSED  TRANSACTION DOES NOT REQUIRE  REGISTRATION OR
QUALIFICATION  UNDER  FEDERAL OR STATE  SECURITIES  LAWS, OR UNLESS THE PROPOSED
TRANSACTION IS REGISTERED OR QUALIFIED AS REQUIRED.

This  Certifies that  ______________________________________________________  is
the   holder  of   _____________________________________________________________
shares of the Capital Stock transferable only on the books of the Corporation by
the holder  hereof in person or by attorney  for such holder upon  surrender  of
this Certificate properly endorsed.

In Witness  Whereof,  the said  Corporation  has caused this  Certificate  to be
signed by its duly  authorized  officers and its  Corporate  Seal to be hereunto
affixed This _____ day of ______________A.D. 2000


----------------------                                  ------------------------
Secretary                                                           President


<PAGE>


                              (reverse of security)

FOR VALUE RECEIVED  ______________________HEREBY SELL, ASSIGN AND TRANSFER UNTO:

--------------------------------------------------------------------------------
(Insert Social Security or other
identifying number of assignee)

_________________________________________   SHARES  REPRESENTED  BY  THE  WITHIN
CERTIFICATE    AND   DO    HEREBY    IRREVOCABLY    CONSTITUTE    AND    APPOINT
________________________________________________________________________________
ATTORNEY TO  TRANSFER THE SAID SHARES  ON  THE  SHARE  REGISTER  OF THE  WITHIN
NAMED CORPORATION, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

DATED ___________________________, 20_____

IN PRESENCE OF ________________________

Notice:  The  signature  on this  Assignment  must  correspond  with the name as
written upon the face of the Certificate in every particular  without alteration
or enlargement or any change whatever.

                                Conversion Notice

To convert all of the shares represented by this Certificate check the box: ___

To convert only a part of the shares  represented by this Certificate  state the
number of shares to be converted: ____

The  undersigned  hereby  irrevocably  elects to  convert  the  number of shares
indicated  above  of  the  Series  D  Convertible  Pay-in-Kind  Preferred  Stock
represented  by  this  Certificate  into  shares  of  the  Common  Stock  of the
Corporation  (as such  shares  may be  constituted  on the  conversion  date) in
accordance  with  the  provisions  of  the  Articles  of  Incorporation  of  the
Corporation,  and amendments  thereto,  and directs that the shares  deliverable
upon the  conversion  be  registered  in the  names(s)  of the  undersigned  and
delivered  together with a check as to payment for any  fractional  shares and a
certificate   representing  any  shares  of  Series  D  Convertible  Pay-in-Kind
Preferred Stock not converted to the undersigned  unless a different name(s) has
been indicated in the assignment form on this Certificate or in an assignment on
any other permitted form which accompanies this Conversion Notice.

Dated: ______                           _______________________________

Fill in for the Registration of Shares  _______________________________
                                                (Signatures)
____________________________      Notice:  The  signature   on  this  Conversion
Name                                       Notice must correspond with the  name
                                           as   written  upon the  face of   the
                                           Certificate   in  every    particular
                                           without   alteration   or enlargement
____________________________               or any change whatever.
Address (including Zip)

</TEXT>
</DOCUMENT>
