Exhibit 10.4

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

DATATEC SYSTEMS, INC.

COMMON STOCK PURCHASE WARRANT

July 28, 2003

THIS CERTIFICATE certifies that Joseph Stevens & Company, Inc., having an
address at 59 Maiden Lane, 32nd Floor, New York, New York 10038, or permitted
assignees is the registered holder (the "Holder") of this Common Stock Purchase
Warrant (the "Warrant") to purchase shares of the common stock, $.001 par value
per share (the "Common Stock") of Datatec Systems, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware (the
"Company"). This Warrant has been issued to the Holder as part of the
consideration paid for services provided in connection with a private placement
of securities offered pursuant to the Company's Confidential Private Placement
Memorandum dated as of June 6, 2003, as amended or supplemented (together with
all documents and filings attached thereto, the "PPM").

FOR VALUE RECEIVED, the Company hereby certifies that the Holder is entitled to
purchase from the Company 554,492 duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock at a purchase price per share equal to
$1.3637 (the "Warrant Price"), and subject to the terms, conditions and
adjustments set forth below in this Warrant and in the PPM. The person or entity
in whose name this Warrant (or one or more predecessor Warrants) is registered
on the records of the Company regarding registration and transfers of this
Warrant (the "Warrant Register") is the owner and holder thereof for all
purposes, except as described in Section 8 hereof.

1. Vesting of Warrant. This Warrant shall vest and become exercisable
immediately following the Closing (as defined in the PPM).

2. Expiration of Warrant. This Warrant shall expire at 5:00 p.m., New York local
time, on July 28, 2008, which is the fifth anniversary date of the Closing (the
"Expiration Date").

3. Exercise of Warrant. This Warrant shall be exercisable pursuant to the terms
of Section 1 and this Section 3 hereof.

3.1 Manner of Exercise. This Warrant may only be exercised by the Holder hereof,
in accordance with the terms and conditions hereof, in whole or in part with
respect to any portion of this Warrant, into shares of Common Stock, during
normal business hours on any day other than a Saturday or a Sunday or a day on
which commercial banking institutions in New York, New York are authorized by
law to be closed (a "Business Day") on or prior to the Expiration Date with
respect to such portion of this Warrant, by surrender of this Warrant to the
Company at its office maintained pursuant to Section 8.2(a) hereof, accompanied
by an exercise notice in substantially the form attached to this Warrant as
Exhibit A (or a reasonable facsimile thereof) duly executed by the Holder,
together with the payment of the Warrant Price.

3.2 Cashless Exercise. Notwithstanding any provisions herein to the contrary, in
lieu of exercising this Warrant in the manner set forth in Section 3.1 hereof,
the Holder may elect to exercise this Warrant or a portion hereof and to pay for
the shares of Common Stock issuable upon such exercise by way of cashless
exercise by surrendering this Warrant at the principal executive office of the
Company, together with the Notice of Exercise attached hereto duly executed, in
which event the Company shall issue to the Holder that number of shares of
Common Stock of the Company computed using the following formula:

X = Y (A - B)

A

Where X = the number of shares of Common Stock to be issued to the Holder.

Y = the number of shares of Common Stock purchasable under this Warrant or, if
only a portion of the Warrant is being exercised, the portion of the Warrant
being cancelled (at the date of such calculation).

A = the closing price of one share of Common Stock (at the date of such
calculation).

B = the Exercise Price (as adjusted to the date of such calculation).

If the above calculation results in a negative number, then no shares of Common
Stock of the Company shall be issued or issuable upon conversion of this
Warrant.

3.3 When Exercise Effective. Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the Business
Day on which this Warrant shall have been surrendered to the Company as provided
in Section 3.1 hereof, and, at such time, the corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or a governmental agency (a "Person" or the "Persons") in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon exercise as provided in Section 3.4 hereof shall be
deemed to have become the holder or holders of record thereof.

3.4 Delivery of Stock Certificates. As soon as practicable after each exercise
of this Warrant, in whole or in part, and in any event within fifteen (15)
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder hereof or, subject to Section 7 hereof, as the Holder
(upon payment by the Holder of any applicable transfer taxes) may direct:

(a) a certificate or certificates (with appropriate restrictive legends, as
applicable) for the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock to which the Holder shall be entitled upon
exercise plus, in lieu of any fractional share to which the Holder would
otherwise be entitled, all issuances of Common Stock shall be rounded up to the
nearest whole share.

(b) in case exercise is in part only, a new Warrant of like tenor, dated the
date hereof and calling in the aggregate on the face thereof for the number of
shares of Common Stock equal to the number of shares called for on the face of
this Warrant minus the number of shares designated by the Holder upon exercise
as provided in Section 3.1 hereof (without giving effect to any adjustment
thereof).

3.5 Company to Reaffirm Obligations. The Company will, at the time of each
exercise of this Warrant, upon the written request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to the Holder all
rights (including without limitation any rights to registration of the shares of
Common Stock issued upon exercise) to which the Holder shall continue to be
entitled after exercise in accordance with the terms of this Warrant; provided,
however, that if the Holder shall fail to make a request, the failure shall not
affect the continuing obligation of the Company to afford the rights to such
Holder.

4. Adjustment of Common Stock Issuable Upon Exercise. The Warrant Price shall be
subject to be adjusted and re-adjusted from time to time as provided in this
Section 4 and, as so adjusted or re-adjusted, shall remain in effect until a
further adjustment or re-adjustment thereof is required by this Section 4:

4.1 Dividends, Reclassifications, Recapitalizations, Reorganizations, etc. In
the event that the Company shall, at any time prior to the exercise of this
Warrant and prior to the full exercise hereof: (i) declare or pay to the holders
of the Common Stock a dividend payable in any kind of shares of stock of the
Company; or (ii) adopt a plan of reorganization or recapitalization or change,
divide or otherwise reclassify its Common Stock into the same or a different
number of shares with or without par value, or in shares of any class or
classes; or (iii) sell, lease, transfer, convey or otherwise dispose of all or
substantially all of its assets; or (iv) merge or consolidate with or into one
or more corporations or other entities; or (v) make any distribution of its
assets to holders of its Common Stock as a liquidation or partial liquidation
dividend or by way of return of capital; then, upon the subsequent exercise of
this Warrant, the Holder shall receive, in addition to or in substitution for
the shares of Common Stock to which it would otherwise be entitled upon such
exercise, the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification, consolidation,
merger or sale by a holder of the number of shares of Common Stock the Holder
would have received had all Warrant Shares issuable upon exercise of this
Warrant been issued immediately prior to the happening of any of the foregoing
events, at a price equal to the Warrant Price then in effect (the kind, amount
and price of such stock and other securities to be subject to adjustment as
herein provided).

4.2 Mergers, etc. The Company covenants and agrees that it will not merge or
consolidate with or into or sell, lease, transfer, convey or otherwise dispose
of all or substantially all of its assets to any other corporation or entity
unless at the time of or prior to such transaction such other corporation or
other entity shall expressly assume all of the liabilities and obligations of
the Company under this Warrant and (without limiting the generality of the
foregoing) shall expressly agree that the Holder of this Warrant shall
thereafter have the right to receive upon the exercise of this Warrant the
number and kind of shares of stock and other securities and property receivable
upon such transaction by a Holder of the number and kind of shares which would
have been receivable upon the exercise of this Warrant immediately prior to such
transaction.

4.3 Notice of Certain Transactions. If, at any time while this Warrant is
outstanding, the Company shall pay any dividend payable in cash or in Common
Stock, shall offer to the holders of its Common Stock rights for subscription or
purchase by them of any shares of stock of any class or any other rights, shall
enter into an agreement to merge or consolidate with another corporation, or
shall propose to liquidate or dissolve, then the Company shall cause notice
thereof to be mailed to the registered Holder of this Warrant at its address
appearing in the Warrant Register, at least 30 days prior to (i) the record date
as of which holders of Common Stock shall participate in such dividend,
distribution, subscription or other rights, or liquidation or dissolution or
(ii) the effective date of any such event or transaction and shall permit the
Holder to exercise this Warrant or any unexercised portion thereof at any time
within twenty (20) days following receipt of such notice, provided, however,
that the Company will not provide notice of any such event prior to public
announcement if such event is deemed by the Company to be material, and in any
such case, the Company shall not be in violation of this provision.

4.4 Carry Forwards. Anything in this Section 4 to the contrary notwithstanding,
no adjustment in the Warrant Price shall be required unless such adjustment
would require an increase or decrease of at least 2% in such Warrant Price;
provided, however, that any adjustments which by reason of this Section 4.4 are
not required to be made shall be carried forward and taken into account in
making subsequent adjustments. All calculations under this Section 4 shall be
made to the nearest cent or to the nearest tenth of a share, as the case may be.

4.5 Notice of Adjustments. Upon any adjustment of the Warrant Price, then and in
each such case the Company shall promptly deliver a notice to the registered
Holder of this Warrant, which notice shall state the Warrant Price resulting
from such adjustment and the increase or decrease, if any, in the number of
Shares purchasable at such price upon the exercise hereof, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.

5. Reservation of Shares. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, free from
all taxes, liens and charges with respect to the issue thereof and not be
subject to preemptive rights or other similar rights of stockholders of the
Company, solely for the purpose of issuing the shares of Common Stock underlying
this Warrant, such number of its shares of Common Stock as shall from time to
time be sufficient to effect the issuance or exercise thereof, and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to issue the Common Stock and effect the exercise of this Warrant, in
addition to such other remedies as shall be available to Holder, the Company
shall take such corporate action as may, in the opinion of its counsel, be
necessary to increase the number of authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including without limitation, using its best efforts to obtain the requisite
stockholder approval necessary to increase the number of authorized shares of
the Company's Common Stock. All shares of Common Stock issuable upon exercise of
this Warrant shall be duly authorized and, when issued upon exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable.

6. Listing. Upon the Closing, the Company shall promptly secure the listing of
the Common Stock underlying this Warrant upon each national securities exchange
or automated quotation system upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain such listing of
shares of Common Stock issued under the terms of this Warrant and the PPM. The
Company shall at all times comply in all respects with the Company's reporting,
filing and other obligations under the by-laws or rules of the National
Association of Securities Dealers, Inc. and the NASDAQ SmallCap Market (or such
other national securities exchange or market on which the Common Stock may then
be listed, as applicable).

7. Restrictions on Transfer.

7.1 Restrictive Legends. This Warrant and each Warrant issued upon transfer or
in substitution for this Warrant pursuant to Section 8, each certificate for
Common Stock issued upon the exercise of any Warrant and each certificate issued
upon the transfer of any such Common Stock shall be transferable only upon
satisfaction of the conditions specified in this Section 7 and Section 8.4. Each
of the foregoing securities shall be stamped or otherwise imprinted with a
legend reflecting the restrictions on transfer set forth in Section 7 and
Section 8.4 hereof and any restrictions required under the Securities Act of
1933, as amended (the "Act").

7.2 Notice of Proposed Transfer; Opinion of Counsel. Prior to any transfer of
any securities which are not registered under an effective registration
statement under the Act ("Restricted Securities"), the Holder will give written
notice to the Company of the Holder's intention to affect a transfer and to
comply in all other respects with this Section 7.2. Each notice (i) shall
describe the manner and circumstances of the proposed transfer, and (ii) shall
designate counsel for the Holder giving the notice (who may be in-house counsel
for the Holder). The Holder giving notice will submit a copy thereof to the
counsel designated in the notice. The following provisions shall then apply:

(a) If in the opinion of counsel for the Holder reasonably satisfactory to the
Company the proposed transfer may be effected without registration of Restricted
Securities under the Act (which opinion shall state the basis of the legal
conclusions reached therein), the Holder shall thereupon be entitled to transfer
the Restricted Securities in accordance with the terms of the notice delivered
by the Holder to the Company. Each certificate representing the Restricted
Securities issued upon or in connection with any transfer shall bear the
restrictive legends required by Section 7.1 hereof.

(b) If the opinion called for in (a) above is not delivered, the Holder shall
not be entitled to transfer the Restricted Securities until either (x) receipt
by the Company of a further notice from such Holder pursuant to the foregoing
provisions of this Section 7.2 and fulfillment of the provisions of clause (a)
above, or (y) such Restricted Securities have been effectively registered under
the Act.

Notwithstanding any other provision of this Section 7, no opinion of counsel
shall be necessary for a transfer of Restricted Securities by the holder thereof
to any Person holding more than 50% of the equity of an entity or any
majority-owned subsidiary of such entity of a Holder, if the transferee agrees
in writing to be subject to the terms hereof to the same extent as if the
transferee were the original purchaser hereof and such transfer is permitted
under applicable securities laws.

7.3 Termination of Restrictions. The restrictions imposed by this Section 7 upon
the transferability of Restricted Securities shall cease and terminate as to any
particular Restricted Securities: (a) which Restricted Securities shall have
been effectively registered under the Act, or (b) when, in the opinions of both
counsel for the holder thereof and counsel for the Company, such restrictions
are no longer required in order to insure compliance with the Act or Section 8
hereof. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the Holder thereof shall be entitled to receive from the
Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
7.1 hereof.

8. Ownership, Transfer and Substitution of Warrant.

8.1 Ownership of Warrant. The Company may treat the person in whose name this
Warrant is registered to in the Warrant Register maintained pursuant to Section
8.2(b) hereof as the owner and holder thereof for all purposes, notwithstanding
any notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes, notwithstanding
any notice to the contrary. Subject to Section 7 hereof, this Warrant, if
properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.

8.2 Office; Transfer and Exchange of Warrant.

(a) The Company will maintain an office (which may be an agency maintained at a
bank) in Fairfield, New Jersey where notices, presentations and demands in
respect of this Warrant may be made upon it. The office shall be maintained at
23 Madison Road, Fairfield, New Jersey 07004 until the Company notifies the
holder of this Warrant of any change of location of the office.

(b) The Company shall cause to be kept at its office maintained pursuant to
Section 8.2(a) hereof a Warrant Register for the registration and transfer of
this Warrant. The names and addresses of holders of this Warrant, the transfers
thereof and the names and addresses of transferees of this Warrant shall be
registered in such Warrant Register. The Person in whose name any Warrant shall
be so registered shall be deemed and treated as the owner and holder thereof for
all purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary.

(c) Upon the surrender of this Warrant, properly endorsed, for registration of
transfer or for exchange at the office of the Company maintained pursuant to
Section 8.2(a) hereof, the Company at its expense will (subject to compliance
with Section 7 hereof, if applicable) execute and deliver to or upon the order
of the Holder thereof a new Warrant of like tenor, in the name of such holder or
as such holder (upon payment by such holder of any applicable transfer taxes)
may direct, calling in the aggregate on the face thereof for the number of
shares of Common Stock called for on the face of this Warrant so surrendered.

8.3 Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, upon
delivery of indemnity reasonably satisfactory to the Company in form and amount
or, in the case of any mutilation, upon surrender of this Warrant for
cancellation at the office of the Company maintained pursuant to Section 8.2(a)
hereof, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor and dated the date hereof.

8.4 Restrictions on Transfer. In addition to the restrictions on transfer set
forth in Section 7 hereof, neither this Warrant nor any portion of this Warrant
may be transferred without the consent of the Company.

Redemption

.

9.1 At any time after the first year, the Company shall have the right to redeem
this Warrant (the "Warrant Redemption Right") at a price of $0.10 per share of
Common Stock underlying this Warrant (the "Warrant Redemption Price") in the
event that the closing price of the Common Stock is at least 180% of the Warrant
Price for twenty (20) out of thirty (30) consecutive trading days (the "Trading
Period") ending within ten (10) trading days of the date on which notice of
redemption is to be given, and that the average daily trading volume for the
Trading Period is greater than 100,000 shares per day and all shares underlying
this Warrant are registered pursuant to an effective registration statement and
all such shares are listed on a national securities exchange.

9.2 If the foregoing conditions to the exercise of the Warrant Redemption Right
are met, the Company may exercise its Warrant Redemption Right by issuing a
notice of such exercise. Beginning on the first Business Day, which is thirty
(30) days after such announcement, the Company shall redeem this Warrant at the
Warrant Redemption Price.

10. No Rights or Liabilities as Stockholder. No Holder shall be entitled to vote
or receive dividends or be deemed the holder of any shares of Common Stock or
any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until this Warrant shall have been
exercised and the shares of Common Stock purchasable upon the exercise hereof
shall have become deliverable, as provided herein. The Holder will not be
entitled to share in the assets of the Company in the event of a liquidation,
dissolution or the winding up of the Company.

11. Notices. Any notice or other communication in connection with this Warrant
shall be deemed to be given if in writing (or in the form of a facsimile)
addressed as hereinafter provided and actually delivered at said address: (a) if
to any Holder, at the registered address of such holder as set forth in the
Warrant Register kept at the office of the Company maintained pursuant to
Section 8.2(a) hereof, or (b) if to the Company, to the attention of its Chief
Financial Officer at its office maintained pursuant to Section 8.2(a) hereof;
provided, however, that the exercise of any Warrant shall be effective in the
manner provided in Section 3 hereof.

12. Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of shares of Common Stock underlying this Warrant
upon exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the registration of any certificate for shares of Common Stock underlying
this Warrant in a name other that of the Holder. The Holder is responsible for
all other tax liability that may arise as a result of holding or transferring
this Warrant or receiving shares of Common Stock underlying this Warrant upon
exercise hereof.

13. Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon thirty (30) days notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or stockholders services business shall be successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The section headings in this
Warrant are for purposes of convenience only and shall not constitute a part
hereof.

 

IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant to
be duly executed as of the date first above written.

DATATEC SYSTEMS, INC.

 

 

By: _________________________

Name:

Title:

 

EXHIBIT A

FORM OF EXERCISE NOTICE

[To be executed only upon exercise of Warrant]

 

To DATATEC SYSTEMS, INC.:

(A) The undersigned registered holder of the within Warrant hereby irrevocably
exercises the Warrant pursuant to Section 3.1 of the Warrant with respect to
__________(1) shares of the Common Stock, at an exercise price per share of
Common Stock of $____, which the holder would be entitled to receive upon the
cash exercise hereof, and requests that the certificates for the shares be
issued in the name of, and delivered to, whose address is:

OR

(B) The undersigned registered holder of the within Warrant hereby irrevocably
exercises the Warrant pursuant to Section 3.2 of the Warrant with respect to
__________(1) shares of the Common Stock, and hereby authorizes DATATEC SYSTEMS,
INC. to withhold _____ shares of Common Stock having a total value of
$__________, such value being determined in accordance with the terms of this
Warrant, from the Shares otherwise to be received, and requests that the
certificates for the shares be issued in the name of, and delivered to, whose
address is:

Dated: _______________

 

________________________________________

Print or Type Name

________________________________________

(Signature must conform in all respects to name of holder as specified on the
face of Warrant)

________________________________________

(Street Address)

________________________________________

(City) (State) (Zip Code)

 

_______________________

(1) Insert here the number of shares called for on the face of this Warrant (or,
in the case of a partial exercise, the portion thereof as to which this Warrant
is being exercised), in either case without making any adjustment of shares of
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of this Warrant, may be delivered upon
exercise. In the case of a partial exercise, a new Warrant or Warrants will be
issued and delivered, representing the unconverted portion of the Warrant, to
the holder surrendering the Warrant.

EXHIBIT B

FORM OF ASSIGNMENT

[To be executed only upon transfer of Warrant]

For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto _____________________ the right
represented by the Warrant to purchase __________(1) shares of Common Stock of
DATATEC SYSTEMS, INC. to which the Warrant relates, and appoints
_____________________ Attorney to make such transfer on the books of DATATEC
SYSTEMS, INC. maintained for the purpose, with full power of substitution in the
premises.

 

Dated: ________________________________________

(Signature must conform in all respects

to name of holder as specified on the

face of Warrant)

________________________________________

(Street Address)

________________________________________

(City) (State) (Zip Code)

Signed in the presence of:

________________________________________

(Signature of Transferee)

________________________________________

(Street Address)

________________________________________

(City) (State) (Zip Code)

Signed in the presence of:

 

_______________________

(1) Insert here the number of shares called for on the face of this Warrant (or,
in the case of a partial exercise, the portion thereof as to which this Warrant
is being exercised), in either case without making any adjustment of shares of
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of this Warrant, may be delivered upon
exercise. In the case of a partial exercise, a new Warrant or Warrants will be
issued and delivered, representing the unexercised portion of the Warrant, to
the holder surrendering the Warrant.