OMNIBUS AMENDMENT

         This Omnibus Amendment (this "Supplement"),  dated as of July 29, 2005,
by and  between  IT&E  INTERNATIONAL  GROUP,  INC.,  a Nevada  corporation  (the
"Company"),  and  LAURUS  MASTER  FUND,  LTD.,  a Cayman  Islands  company  (the
"Purchaser"),  amends that certain Securities  Purchase  Agreement,  dated as of
October 18, 2004, by and between the Company and Purchaser (as amended, modified
or supplemented from time to time, the "Securities  Purchase  Agreement");  that
certain  Registration  Rights  Agreement,  dated as of October 18, 2004,  by and
between the Company and the Purchaser (as amended, modified or supplemented from
time to time, the  "Registration  Rights  Agreement");  and that certain Secured
Convertible  Term Note, dated as of October 18, 2004, by the Company in favor of
Purchaser for the total principal amount of $5,000,000 (as amended,  modified or
supplemented from time to time, the "Note"); the Restricted Account Side Letter,
dated as of October 18,  2004,  by and between  the Company and  Purchaser  (the
"Restricted  Account Side Letter",  collectively,  with the Securities  Purchase
Agreement,  the  Related  Agreements  (as  defined  in the  Securities  Purchase
Agreement),  the Note,  and the  Registration  Rights  Agreement,  the  "Funding
Documents").  Capitalized  terms  used but not  defined  herein  shall  have the
meanings given them in the Securities Purchase Agreement.

                                    PREAMBLE

         WHEREAS,  pursuant to the Funding  Documents,  the Purchaser  agreed to
loan the  Company  a total  principal  amount  of  $5,000,000  ("Loan  Amount"),
$2,500,000  of which was  funded to the  Company  on  October  18,  2004 and the
remaining  $2,500,000 of which was funded to the Restricted  Account (as defined
in the Securities Purchase  Agreement);  on April 14, 2005, the Purchaser agreed
to release to the Company an $500,000 from the Restricted  Account;  the Note is
convertible  into shares of the Company's common stock (the "Note Shares") at an
initial fixed conversion price of $1.00;

         WHEREAS,  pursuant to the  Funding  Documents,  the  Company  agreed to
register the Note Shares and Warrant Shares;

         WHEREAS,  in connection with the Funding  Documents,  the Purchaser was
granted a warrant to purchase  1,924,000  shares the Company's common stock (the
"Warrant");

         WHEREAS,  pursuant to the terms of the Funding  Documents,  the Company
filed a registration  statement  with the United States  Securities and Exchange
Commission ("SEC") on November 17, 2004 (the "Registration Statement");

         WHEREAS,  the SEC has determined  that the Purchaser is not irrevocably
bound to purchase the Note Shares  attributable  to the  conversion  of the Loan
Amount held in the Restricted  Account and therefore the shares  attributable to
the  conversion  of such amount may not be  registered  until the  Purchaser  is
irrevocably bound to purchase such Note Shares; and

<PAGE>

         WHEREAS, the Purchaser and the Company desire to amend the transactions
contemplated by the Funding  Documents,  to release,  as of the date hereof, the
sum of  $2,039,233.32  representing  all of the  funds  held  in the  Restricted
Account as of the date  hereof,  which such funds shall be disbursed as follows:
(a) $1,911,164.20  will be wired to the Company or as otherwise  directed by the
Company;  and (b)  $128,069.12  will be wired to the  Purchaser  in  payment  of
accrued and unpaid  interest on the Note through the date hereof,  such payments
to be made without applicable penalty or premium;

         WHEREAS,  the Company  and the  Purchaser  have agreed to make  certain
changes to the Note and the  Registration  Rights Agreement as set forth herein;
and

          NOW,  THEREFORE,  in  consideration  of the covenants,  agreements and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

          1. Terms of this Supplement; Release.

               1.1 Release of Funds and Prepayment.  As of the date hereof,  the
Purchaser shall release, the sum of $2,039,233.32 (the "Funds") representing all
of the funds held in the  Restricted  Account as of the date hereof,  which such
funds will be  disbursed  as  follows:  (a)  $1,911,164.20  will be wired to the
Company or as otherwise  directed by the Company;  and (b)  $128,069.12  will be
wired to the  Purchaser  in payment of accrued  and unpaid  interest on the Note
through the date hereof.  Upon release of the Funds from the Restricted Account,
the Restricted  Account shall be closed and the Restricted Account Agreement and
the  Restricted  Account  Side Letter shall be deemed  automatically  terminated
without further action by either party hereto.

               1.2 References to Restricted  Account or the  Restricted  Account
Side Letter.  All references to the Restricted Account or the Restricted Account
Side Letter contained in any of the (i) Securities Purchase Agreement,  and (ii)
the Related Agreements referred to in the Purchase Agreement, are hereby deleted
and of no further force or effect.

          2. Amendments.

               2.1 The  Registration  Rights  Agreement.  The  Purchaser and the
Company  hereby amend the  Registration  Rights  Agreement to delete the defined
term  "Effectiveness  Date" contained  therein and in their stead, to insert the
following definition in lieu thereof:

                              "Effectiveness Date" means (i) with respect to the
               initial  Registration  Statement  required to be filed hereunder,
               August  31,  2005  and  (ii)  with  respect  to  each  additional
               Registration  Statement required to be filed hereunder, a date no
               later than thirty (30) days following the applicable Filing Date.

         The Purchaser and the Company  hereby agree and confirm that other than
as set forth herein,  the terms of the Registration  Rights Agreement  otherwise
remain in full force and effect and, and without modification thereto.


                                       2

<PAGE>

               2.2 Amended  and  Restated  Secured  Convertible  Term Note.  The
Company  shall issue the Purchaser an Amended and Restated  Secured  Convertible
Term Note (the  "Amended and Restated  Note") that is attached and  incorporated
herein as Exhibit A in  substitution  and not in  satisfaction  of the Note. The
Amended and Restated Note shall include the following changes:

                              2.2.1 Amortizing Principal Amount. The "Amortizing
               Principal Amount" shall be $5,000,000 of which amount, $2,500,000
               was funded to the  Company  on October  18,  2004,  $500,000  was
               funded  to the  Company  on  April  14,  2004  and the  remaining
               $2,000,000 was funded to the Company on the date hereof.

                              2.2.2  Monthly  Amount.   The  "Monthly  Principal
               Amount" shall be $176,923.08.

                              2.2.3   Fixed   Conversion   Price.   The   "Fixed
               Conversion Price" shall be $0.2445.

               2.3 Filing of  Supplement.  The Company  hereby  agrees to, on or
prior to August 31,  2005,  file a Rule  424(b)  supplement  (the  "Registration
Statement  Supplement") to its  Registration  Statements with the Securities and
Exchange Commission (the "SEC") relating to the amendment and restatement of the
Note and the warrants issued in connection therewith (the "Existing Registration
Statement"),  which Registration  Statement  Supplement states the amended Fixed
Conversion  Price  applicable  to the Amended and Restated  Note as set forth in
Section 3.2 of this Supplement.

               2.4 Additional Registration. The Purchaser and the Company hereby
agree that,  notwithstanding any prior agreement to the contrary,  the shares of
Common Stock  issuable as a result of the amendment and  restatement of the Note
set forth in Section 3.2 hereof and the change to the fixed  conversion price to
the  Note as a  result  thereof,  shall  be  registered  in the  Company's  next
registration statement on Form SB-2 (or such other appropriate form, excluding a
Form S-8); provided,  however,  that the Company shall register such shares on a
date no later than  September 1, 2005 (the "Filing  Date");  provided,  further,
that the Filing Date shall be deemed to be a "Filing Date" as defined in Section
1 of the Registration Rights Agreement.

          3. Acknowledgments  and  Agreements  with  respect to various  Related
Agreements.

               3.1 For the avoidance of doubt,  the Company hereby  acknowledges
and confirms its due  authorization,  execution  and delivery of the  Securities
Purchase  Agreement  and all Related  Agreements  referred  to therein  (each as
amended,  restated,  modified and/or supplemented through and including the date
hereof) to which it is a party, including all instruments, financing statements,
agreements,  certificates  and  documents  executed and  delivered in connection
therewith,  and hereby  ratifies  all  actions  heretofore  taken in  connection
therewith, including, without limitation, the

                                       3

<PAGE>

acknowledgement,  ratification  and  confirmation of the grant by the Company to
the Purchaser of a security  interest and charge, to the extent  applicable,  in
the  assets of the  Company  as more  specifically  set forth in the  Securities
Purchase Agreement and the Related Agreements referred to therein;

               3.2 The Company further acknowledges,  ratifies and confirms that
the obligations  and liabilities  under the Amended and Restated Note constitute
"Obligations"  under the Master  Security  Agreement and the term  "Obligations"
under the Master Security Agreement include, without limitation, all obligations
and  liabilities  of the Credit  Parties to the Purchaser  under the  Securities
Purchase Agreement and the Related Agreements (as defined therein) and all other
obligations  and  liabilities  of the  undersigned  to the Purchaser  (including
interest  accruing  after  the  filing of any  petition  in  bankruptcy,  or the
commencement of any insolvency,  reorganization  or like proceeding,  whether or
not a claim for post-filing or post-petition interest is allowed or allowable in
such proceeding), whether now existing or hereafter arising, direct or indirect,
liquidated or unliquidated, absolute or contingent.

          4. Miscellaneous.

               4.1 This  Supplement  shall be  effective  as of the date  hereof
following the execution and delivery of same by each of the Company and Laurus.

               4.2 Except as specifically  set forth in this  Supplement,  there
are no other  amendments  to the  Note,  and all of the other  forms,  terms and
provisions of the Note remain in full force and effect.


               4.3 This Supplement  shall be binding upon the parties hereto and
their respective successors and permitted assigns and shall inure to the benefit
of and be  enforceable  by each of the  parties  hereto and its  successors  and
permitted assigns. THIS SUPPLEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  This  Supplement  may be
executed in any number of counterparts,  each of which shall be an original, but
all of which shall constitute one instrument.

                            [signature page follows]




                                       4

<PAGE>


               IN WITNESS WHEREOF,  each of the parties hereto has executed this
Supplement  or has caused  this  Supplement  to be  executed  on its behalf by a
representative duly authorized, all as of the date first above set forth.




<TABLE>
<CAPTION>


COMPANY:                                                   PURCHASER:

IT&E INTERNATIONAL GROUP, INC.                             LAURUS MASTER FUND, LTD.


<S>                                                    <C>
By:      /s/ Peter Sollenne                            By:      /s/ Eugene Grin
         -------------------------------                        -------------------------------
Name:    Peter Sollenne                                Name:    Eugene Grin
         -------------------------------                        -------------------------------
Title:   Chief Executive Officer                       Title:   Director
         -------------------------------                        -------------------------------
</TABLE>





                                       5
<PAGE>



EXHIBIT A

               AMENDED AND RESTATED SECURED CONVERTIBLE TERM NOTE





THIS NOTE AND THE COMMON STOCK  ISSUABLE  UPON  CONVERSION OF THIS NOTE HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
NOTE MAY NOT BE SOLD,  OFFERED FOR SALE,  PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN  EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY
APPLICABLE   STATE   SECURITIES  LAWS  OR  AN  OPINION  OF  COUNSEL   REASONABLY
SATISFACTORY TO IT&E  INTERNATIONAL  GROUP,  INC. THAT SUCH  REGISTRATION IS NOT
REQUIRED.


               AMENDED AND RESTATED SECURED CONVERTIBLE TERM NOTE
               --------------------------------------------------

         FOR VALUE  RECEIVED,  IT&E  INTERNATIONAL  GROUP,  INC.,  a  California
corporation (the "Company"), hereby promises to pay to LAURUS MASTER FUND, LTD.,
M&C Corporate  Services  Limited,  P.O. Box 309 GT,  Ugland House,  South Church
Street,  George Town,  Grand Cayman,  Cayman  Islands,  Fax:  345-949-8080  (the
"Purchaser") or its registered assigns or successors in interest,  on order, the
sum of Five Million Dollars  ($5,000,000),  together with any accrued and unpaid
interest  hereon,  on October 18, 2007 (the "Maturity Date") if not sooner paid.
The original  principal  amount of this Note is subject to  amortizing  payments
pursuant to Section  1.2 hereof is  hereinafter  referred to as the  "Amortizing
Principal Amount" This Note amends and restates in its entirety, and is given in
substitution for and not in satisfaction of that certain  promissory note in the
original  principal  amount of $5,000,000  issued by the Company in favor of the
Holder on October 18, 2004.

Capitalized  terms  used  herein  without  definition  shall  have the  meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the  date  hereof   between  the  Company  and  the  Purchaser   (the  "Purchase
Agreement").

         The following terms shall apply to this Note:

                                    ARTICLE I
                             INTEREST & AMORTIZATION

         1.1 (a) Interest Rate. Subject to Sections 1.1(b), 4.12 and 5.6 hereof,
interest  payable on this Note shall  accrue at a rate per annum (the  "Interest
Rate") equal to the "prime rate"  published in The Wall Street Journal from time
to time,  plus two and one half  percent  (2.50%).  The  Interest  Rate shall be
increased or  decreased as the case may be for each  increase or decrease in the
prime rate in an amount  equal to such  increase  or decrease in the prime rate;
each change to be effective as of the day of the change in such rate. Subject to
Section  1.1(b)  hereof,  the Interest Rate shall not be less than seven and one
quarter percent (7.25%).  Interest shall be calculated on the basis of a 360 day
year.  Interest on the Amortizing  Principal Amount shall be payable monthly, in
arrears, commencing on November 1, 2004 and on the first day of each consecutive
calendar month

<PAGE>


thereafter  (each,  a  "Repayment  Date") and on the Maturity  Date,  whether by
acceleration or otherwise.

         1.1 (b) Interest Rate Adjustment. The Interest Rate shall be subject to
adjustment on the last business day of each month  hereafter  until the Maturity
Date (each a "Determination  Date").  If on any  Determination  Date the Company
shall  have  registered  under  the  Securities  Act of 1933,  as  amended  (the
"Securities  Act"), the shares of Common Stock underlying each of the conversion
of this Note and the exercise of the Warrant issued on a registration  statement
declared  effective by the Securities and Exchange  Commission (the "SEC"),  and
the  market  price (the  "Market  Price") of the  Common  Stock as  reported  by
Bloomberg,  L.P. on the  Principal  Market (as  defined  below) for the five (5)
consecutive  trading days immediately  preceding such Determination Date exceeds
the then  applicable  Fixed  Conversion  Price by at least  twenty five  percent
(25%), the Interest Rate for the succeeding  calendar month shall  automatically
be reduced by 200 basis points (200 b.p.)  (2.0.%) for each  incremental  twenty
five  percent  (25%)  increase in the Market Price of the Common Stock above the
then  applicable  Fixed  Conversion  Price if the Company  shall have listed the
shares of Common Stock  underlying  each of the  conversion of this Note and the
exercise of the Warrant on the  American  Stock  Exchange,  the Nasdaq  SmallCap
Market or the Nasdaq National  Market for trading on such any such exchange.  If
on any Determination Date the Company shall have registered under the Securities
Act the shares of Common Stock  underlying  the  conversion of this Note and the
exercise of the Warrant on a registration  statement  declared  effective by the
SEC, and the Market Price of the Common Stock as reported by Bloomberg,  L.P. on
the NASD Over the Counter  Bulletin Board for the five (5)  consecutive  trading
days immediately  preceding such  Determination Date exceeds the then applicable
Fixed  Conversion Price by at least twenty five percent (25%), the Interest Rate
for the succeeding  calendar month shall automatically be decreased by 100 basis
points  (100 b.p.)  (1.0.%)  for each  incremental  twenty  five  percent  (25%)
increase in the Market Price of the Common Stock above the then applicable Fixed
Conversion  Price.  Notwithstanding  the foregoing (and anything to the contrary
contained  in  herein),  in no event shall the  Interest  Rate be less than zero
percent (0%).

         1.2 Minimum  Monthly  Principal  Payments.  Amortizing  payments of the
outstanding  principal amount of this Note shall begin on September __, 2005 and
shall recur on each succeeding  Repayment Date thereafter  through and including
the Maturity Date until the Amortizing Principal Amount has been repaid in full,
whether  by the  payment of cash or by the  conversion  of such  principal  into
Common Stock pursuant to the terms hereof.  Subject to Section 2.1 and Article 3
below,  on each Repayment Date, the Company shall make payments to the Purchaser
in the amount of $176,923.08 (the "Monthly Principal Amount"), together with any
accrued and unpaid interest then due on such portion of the Amortizing Principal
Amount  plus any and all other  amounts  which are then due and owing under this
Note that have not been paid (the Monthly Principal  Amount,  together with such
accrued and unpaid interest and such other amounts,  collectively,  the "Monthly
Amount").  Any outstanding Principal Amount together with any accrued and unpaid
interest  and any and all  other  unpaid  amounts  which  are then  owing by the
Company to the Holder under this Note, the Purchase  Agreement  and/or any other
Related Agreement shall be due and payable on the Maturity Date.


<PAGE>

                                   ARTICLE II
                              CONVERSION REPAYMENT

         2.1 (a)  Payment  of  Monthly  Amount in Cash or Common  Stock.  If the
Monthly  Amount (or a portion  thereof of such Monthly Amount if such portion of
the Monthly Amount would have been converted into shares of Common Stock but for
Section 3.2) is required to be paid in cash pursuant to Section 2.1(b), then the
Company  shall pay the  Purchaser an amount equal to one hundred  three  percent
(103%) of the Monthly  Amount due and owing to the  Purchaser  on the  Repayment
Date in cash. If the Monthly  Amount (or a portion of such Monthly Amount if not
all of the Monthly  Amount may be converted into shares of Common Stock pursuant
to Section  3.2) is  required to be paid in shares of Common  Stock  pursuant to
Section  2.1(b),  the number of such  shares to be issued by the  Company to the
Purchaser  on such  Repayment  Date (in  respect of such  portion of the Monthly
Amount  converted  into in shares of Common Stock  pursuant to Section  2.1(b)),
shall be the number determined by dividing (x) the portion of the Monthly Amount
converted  into  shares  of  Common  Stock,  by (y) the  then  applicable  Fixed
Conversion  Price. For purposes  hereof,  the initial "Fixed  Conversion  Price"
means $0.2445.

                  (b) Monthly Amount Conversion Guidelines.  Subject to Sections
2.1(a),  2.2 and 3.2 hereof,  the Purchaser  shall convert into shares of Common
Stock all or a portion of the Monthly Amount due on each Repayment  according to
the following  guidelines  (collectively,  the "Conversion  Criteria"):  (i) the
average closing price of the Common Stock as reported by Bloomberg,  L.P. on the
Principal Market for the five (5) consecutive trading days immediately preceding
such Notice Date shall be greater than or equal to 110% of the Fixed  Conversion
Price and (ii) the amount of such conversion does not exceed twenty five percent
(25%) of the aggregate  dollar trading volume of the Common Stock for the twenty
two (22) day trading period immediately preceding the applicable Repayment Date.
If the  Conversion  Criteria are not met, the Purchaser  shall convert only such
part of the Monthly Amount that meets the Conversion  Criteria.  Any part of the
Monthly  Amount due on a Repayment  Date that the Purchaser has not been able to
convert  into  shares of  Common  Stock due to  failure  to meet the  Conversion
Criteria,  shall  be paid  by the  Company  in  cash at the  rate of 103% of the
Monthly Amount  otherwise due on such Repayment Date,  within three (3) business
days of the applicable Repayment Date.

                   (c) Application of Conversion Amounts.  Any amounts converted
by the  Purchaser  pursuant  to  Section  2.1(b)  shall be deemed to  constitute
payments  of, or applied  against,  (i) first,  outstanding  fees,  (ii) second,
accrued  interest on the  Amortizing  Principal  Amount,  and (iii)  third,  the
Amortizing Principal Amount.

         2.2 No Effective Registration. Notwithstanding anything to the contrary
herein,  no amount  payable  hereunder may be converted into Common Stock unless
(a) either (i) an effective  current  Registration  Statement (as defined in the
Registration  Rights Agreement) covering the shares of Common Stock to be issued
in  satisfaction  of  such  obligations   exists,  or  (ii)  an  exemption  from
registration  of the  Common  Stock  is  available  pursuant  to Rule 144 of the
Securities Act and under the registration,  permit or qualification requirements
of all applicable state  securities laws, and (b) no Event of Default  hereunder
exists and is  continuing,  unless  such  Event of  Default is cured  within any

<PAGE>

applicable  cure period or is  otherwise  waived in writing by the  Purchaser in
whole or in part at the Purchaser's option.

         2.3 Optional  Redemption of Amortizing  Principal  Amount.  The Company
will have the option of prepaying the outstanding  Amortizing  Principal  Amount
("Optional  Amortizing  Redemption"),  in  whole or in part,  by  paying  to the
Purchaser a sum of money equal to one hundred  twenty five percent (125%) of the
Amortizing  Principal  Amount to be redeemed,  together  with accrued but unpaid
interest  thereon  and any and all other  sums due,  accrued  or  payable to the
Purchaser  arising  under this  Note,  the  Purchase  Agreement  or any  Related
Agreement (the  "Amortizing  Redemption  Amount") on the  Amortizing  Redemption
Payment Date (as defined  below).  The Company  shall deliver to the Purchaser a
notice of redemption (the "Notice of Amortizing Redemption") specifying the date
for such Optional  Amortizing  Redemption (the  "Amortizing  Redemption  Payment
Date"), which date shall be not less than seven (7) business days after the date
of the Notice of Amortizing  Redemption (the "Redemption  Period").  A Notice of
Amortizing  Redemption shall not be effective with respect to any portion of the
Amortizing  Principal  Amount for which the Purchaser has a pending  election to
convert  pursuant to Section  3.1, or for  conversions  initiated or made by the
Purchaser  pursuant to Section 3.1 during the Redemption  Period. The Amortizing
Redemption  Amount  shall  be  determined  as  if  such  Purchaser's  conversion
elections  had been  completed  immediately  prior to the date of the  Notice of
Amortizing Redemption. On the Amortizing Redemption Payment Date, the Amortizing
Redemption Amount shall be paid in good funds to the Purchaser. In the event the
Company  fails  to pay  the  Amortizing  Redemption  Amount  on  the  Amortizing
Redemption  Payment  Date as set forth  herein,  then such Notice of  Amortizing
Redemption will be null and void.


         2.4 Mandatory  Conversion.  Subject to Sections 2.2 and 3.2 hereof,  if
(i) the average closing price of the Common Stock as reported by Bloomberg, L.P.
on the Principal Market for the five (5) consecutive trading days and is greater
than or equal to 400% of the Fixed  Conversion  Price, the Company may deliver a
written notice to the Purchaser (a "Mandatory  Conversion Notice") requiring the
conversion  into Common Stock of all or a portion of the  outstanding  Principal
Amount,  provided  however,  that the amount of such conversion set forth in the
Mandatory  Conversion  Notice  does  not  exceed  twenty  percent  (20%)  of the
aggregate  dollar trading volume of the Common Stock for the twenty two (22) day
trading  period  immediately  preceding  the  date of the  applicable  Mandatory
Conversion  Notice  (the  "Mandatory  Conversion  Criteria").  If the  Mandatory
Conversion  Criteria are not met, the Purchaser  shall convert only such portion
of  the  outstanding  Principal  Amount  that  meets  the  Mandatory  Conversion
Criteria.

                                   ARTICLE III
                                CONVERSION RIGHTS

         3.1.  Purchaser's  Conversion  Rights.  Subject  to  Section  2.2,  the
Purchaser shall have the right,  but not the  obligation,  to convert all or any
portion of the then  aggregate  outstanding  principal  amount of this Note (the
"Principal Amount"),  together with interest and fees due hereon, into shares


<PAGE>


of Common Stock,  subject to the terms and  conditions set forth in this Article
III.  The  Purchaser  may  exercise  such right by  delivery to the Company of a
written Notice of Conversion pursuant to Section 3.3. The shares of Common Stock
to be issued upon such  conversion  are herein  referred  to as the  "Conversion
Shares."

         3.2 Conversion Limitation. Notwithstanding anything contained herein to
the  contrary,  the Purchaser  shall not be entitled to convert  pursuant to the
terms of this Note an  amount  that  would be  convertible  into that  number of
Conversion Shares which would exceed the difference  between 4.99% of the issued
and outstanding  shares of Common Stock and the number of shares of Common Stock
beneficially  owned by such Purchaser or issuable upon exercise of Warrants held
by such  Purchaser.  For the  purposes of the  immediately  preceding  sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange  Act and  Regulation  13d-3  thereunder.  The  Purchaser  may  void the
Conversion  Share  limitation  described  in this Section 3.2 upon 75 days prior
notice  to the  Company  or  without  any  notice  requirement  upon an Event of
Default.

         3.3  Mechanics  of  Purchaser's  Conversion.  (a) In the event that the
Purchaser elects to convert any amounts  outstanding under this Note into Common
Stock,  the  Purchaser  shall give  notice of such  election  by  delivering  an
executed and completed  notice of conversion (a "Notice of  Conversion")  to the
Company,  which Notice of  Conversion  shall  provide a breakdown in  reasonable
detail of the Principal  Amount,  accrued interest and fees being converted.  On
each Conversion Date (as hereinafter  defined) and in accordance with its Notice
of  Conversion,  the  Purchaser  shall  make the  appropriate  reduction  to the
Principal Amount,  accrued interest and fees as entered in its records and shall
provide written notice thereof to the Company within two (2) business days after
the Conversion  Date.  Each date on which a Notice of Conversion is delivered or
telecopied  to the Company in  accordance  with the  provisions  hereof shall be
deemed a "Conversion Date". A form of Notice of Conversion to be employed by the
Purchaser is annexed hereto as Exhibit A.

                  (b)  Pursuant  to the  terms of a Notice  of  Conversion,  the
Company will issue  instructions to the transfer agent accompanied by an opinion
of counsel,  if so  required by the  Company's  transfer  agent,  within one (1)
business day of the date of the delivery to Company of the Notice of  Conversion
and shall cause the transfer agent to transmit the certificates representing the
Conversion  Shares to the Purchaser by crediting the account of the  Purchaser's
designated  broker with the Depository  Trust  Corporation  ("DTC")  through its
Deposit  Withdrawal Agent  Commission  ("DWAC") system within three (3) business
days after  receipt by the Company of the Notice of  Conversion  (the  "Delivery
Date").  In the case of the exercise of the  conversion  rights set forth herein
the  conversion  privilege  shall  be  deemed  to have  been  exercised  and the
Conversion  Shares  issuable upon such  conversion  shall be deemed to have been
issued upon the date of receipt by the Company of the Notice of Conversion.  The
Purchaser  shall be treated  for all  purposes as the record  Purchaser  of such
shares of Common  Stock,  unless the  Purchaser  provides  the  Company  written
instructions to the contrary.

         3.4      Conversion Mechanics.

                  (a) The  number of shares  of Common  Stock to be issued  upon
each conversion of

<PAGE>

this Note  pursuant to this  Article III shall be  determined  by dividing  that
portion of the Principal  Amount and interest and fees to be converted,  if any,
by the then applicable Fixed  Conversion  Price. In the event of any conversions
of outstanding obligations under this Note in part pursuant to this Article III,
such  conversions  shall be deemed to constitute  conversions  (i) first, of the
Monthly  Amount for the current  calendar  month,  and (ii) then of  outstanding
Amortizing  Principal  Amount,  by  applying  the  conversion  amount to Monthly
Principal Amounts for the remaining Repayment Dates in chronological order.

                  (b) The Fixed  Conversion  Price and number and kind of shares
or other  securities to be issued upon conversion are subject to adjustment from
time to time upon the occurrence of certain events, as follows:

                           A. Stock Splits,  Combinations and Dividends.  If the
         shares of Common  Stock are  subdivided  or combined  into a greater or
         smaller  number of shares of Common Stock,  or if a dividend is paid on
         the Common Stock in shares of Common Stock,  the Fixed Conversion Price
         or the Conversion  Price, as the case may be, shall be  proportionately
         reduced  in  case  of  subdivision  of  shares  or  stock  dividend  or
         proportionately increased in the case of combination of shares, in each
         such case by the ratio which the total number of shares of Common Stock
         outstanding  immediately  after such event bears to the total number of
         shares of Common Stock outstanding immediately prior to such event.

                           B. During the period the conversion right exists, the
         Company will reserve from its  authorized  and unissued  Common Stock a
         sufficient number of shares to provide for the issuance of Common Stock
         upon the full conversion of this Note. The Company represents that upon
         issuance,  such shares will be duly and validly issued,  fully paid and
         non-assessable. The Company agrees that its issuance of this Note shall
         constitute full authority to its officers,  agents, and transfer agents
         who  are  charged  with  the  duty  of  executing   and  issuing  stock
         certificates to execute and issue the necessary certificates for shares
         of Common Stock upon the conversion of this Note.

                           C. Share Issuances. Subject to the provisions of this
         Section 3.4, if the Company  shall at any time prior to the  conversion
         or repayment in full of the Principal Amount issue any shares of Common
         Stock or  securities  convertible  into Common  Stock to a person other
         than the  Purchaser  (except (i) pursuant to  Subsections A or B above;
         (ii) pursuant to options, warrants or other obligations to issue shares
         outstanding on the date hereof as disclosed to Purchaser in writing; or
         (iii)  pursuant  to  options  that may be  issued  under  any  employee
         incentive  stock option and/or any qualified  stock option plan adopted
         by the Company) for a consideration  per share (the "Offer Price") less
         than the Fixed Conversion Price in effect at the time of such issuance,
         then the Fixed  Conversion  Price  shall be  immediately  reset to such
         lower Offer Price. For purposes hereof, the issuance of any security of
         the Company  convertible into or exercisable or exchangeable for Common
         Stock shall result in an  adjustment to the Fixed  Conversion  Price at
         the time of issuance of such securities.


<PAGE>

                           D. Reclassification,  etc. If the Company at any time
         shall, by reclassification  or otherwise,  change the Common Stock into
         the same or a different  number of  securities of any class or classes,
         this Note,  as to the unpaid  Principal  Amount  and  accrued  interest
         thereon,  shall  thereafter be deemed to evidence the right to purchase
         an adjusted  number of such  securities and kind of securities as would
         have been  issuable as the result of such  change  with  respect to the
         Common  Stock  immediately  prior  to such  reclassification  or  other
         change.

         3.5 Issuance of Replacement  Note. Upon any partial  conversion of this
Note, a replacement  Note  containing  the same date and provisions of this Note
shall  (in  exchange  for  presentation  of the  Note  for  cancellation  by the
Company),  at the written request of the Purchaser,  be issued by the Company to
the  Purchaser  for the  outstanding  Principal  Amount of this Note and accrued
interest which shall not have been converted or paid.  Subject to the provisions
of Article IV, the Company will pay no costs, fees or any other consideration to
the Purchaser for the production and issuance of a replacement Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

           Upon the occurrence and continuance of an Event of Default beyond any
applicable  cure or grace period,  the Purchaser may make all sums of principal,
interest  and other fees then  remaining  unpaid  hereon  and all other  amounts
payable  hereunder  immediately  due  and  payable.  In the  event  of  such  an
acceleration,  the amount due and owing to the Purchaser shall be the sum of (i)
125% of the outstanding  Amortizing  Principal Amount l of the Note (such amount
to  include  accrued  and  unpaid  interest  and  fees,  if any)  (the  "Default
Payment").  The  Default  Payment  shall  be  applied  first to any fees due and
payable to  Purchaser  pursuant  to this Note,  the  Purchase  Agreement  or the
Related Agreements, then to accrued and unpaid interest due on the Note and then
to outstanding principal balance of the Note.

         The occurrence of any of the following events set forth in Sections 4.1
through 4.10, inclusive, is an "Event of Default":

         4.1 Failure to Pay  Principal,  Interest or other Fees. (i) The Company
fails to pay when due,  any  installment  of  principal,  interest or other fees
hereon in accordance  herewith , or (ii) the Company fails to pay, when due, any
amount due (in excess of  $100,000  in the  aggregate  at any time  outstanding)
under any other promissory note issued by the Company and in any such case, such
failure  shall  continue for a period of three (3) days  following the date such
payment was due .

         4.2 Breach of Covenant.  The Company breaches any covenant or any other
term or condition of this Note, the Purchase  Agreement or any Related Agreement
in any material respect, and, in any such case, such breach, if subject to cure,
continues for a period of thirty (30) days after the occurrence thereof.

         4.3 Breach of  Representations  and Warranties.  Any  representation or
warranty made by

<PAGE>


the Company in this Note,  the  Purchase  Agreement  or any  Related  Agreement,
shall,  in any such case, be false or misleading in any material  respect on the
date that such representation or warranty was made or deemed made.

         4.4 Receiver or Trustee.  The Company shall make an assignment  for the
benefit of creditors,  or apply for or consent to the  appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.

         4.5 Judgments.  Any money judgment, writ or similar final process shall
be entered or filed  against the Company or any of its  property or other assets
for more than  $100,000 and shall remain  unvacated,  unbonded or unstayed for a
period of thirty (30) days.

         4.6 Bankruptcy. Bankruptcy,  insolvency,  reorganization or liquidation
proceedings  or other  proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by the Company,  or if against the
Company, such proceedings shall not dismissed within thirty (30) days.

         4.7 Stop Trade.  An SEC stop trade order or  Principal  Market  trading
suspension of the Common Stock shall be in effect for five (5) consecutive  days
or five (5) days during a period of ten (10) consecutive days,  excluding in all
cases a  suspension  of all trading on a  Principal  Market,  provided  that the
Company shall not have been able to cure such trading  suspension  within thirty
(30) days of the notice  thereof or list the Common  Stock on another  Principal
Market  within sixty (60) days of such notice.  The  "Principal  Market" for the
Common Stock shall include the NASD OTC Bulletin Board,  NASDAQ SmallCap Market,
NASDAQ  National  Market  System,  American  Stock  Exchange,  or New York Stock
Exchange  (whichever  of the  foregoing  is at the  time the  principal  trading
exchange or market for the Common Stock).

         4.8 Failure to Deliver  Common Stock or  Replacement  Note. The Company
shall fail (i) to timely deliver  Common Stock to the Purchaser  pursuant to and
in the form required by this Note, and Section 9 of the Purchase  Agreement,  if
such  failure to timely  deliver  Common Stock shall not be cured within two (2)
business  days or (ii) to deliver a replacement  Note to Purchaser  within seven
(7) business days following the required date of such issuance  pursuant to this
Note, the Purchase  Agreement or any Related  Agreement (to the extent  required
under such agreements).

         4.9  Default  Under  Related   Agreements  or  Other  Agreements.   The
occurrence  and  continuance of any Event of Default (as defined in the Purchase
Agreement or any Related  Agreement)  or any event of default (or similar  term)
under any other  indebtedness in excess of $100,000 that causes  acceleration of
such indebtedness.

         4.10  Change in  Control.  There  shall be a change in  control  in the
record or beneficial  ownership of an aggregate of more than forty percent (40%)
of the outstanding  Common Stock, in one or more  transactions,  compared to the
ownership of outstanding shares of Common Stock on the date hereof,  without the
prior  written  consent  of  Holder,  which  consent  shall not be  unreasonably
withheld  (other than the sale of the Borrower's  equity  securities in a public
offering or to venture


<PAGE>

capital or other private equity investors so long as the Borrower identifies and
advises Holder prior to the closing of the investment or to strategic  investors
so long as Borrower  identifies  the strategic  investor prior to the closing of
the investment or issuances to the Holder) unless in the event the Company shall
dissolve, liquidate or merge with any other person or entity, the Company is the
surviving entity or the successor entity is solvent and expressly assumes all of
the  duties and  obligations  of the  Company  and its  Subsidiaries  under this
Agreement and Related Agreements.

                           DEFAULT RELATED PROVISIONS

         4.11 Default  Interest  Rate.  Following the  occurrence and during the
continuance of an Event of Default, the Company shall pay additional interest on
this Note in an amount equal to one and one half  percent  (1.50%) per month and
all outstanding  obligations under this Note,  including unpaid interest,  shall
continue  to accrue  such  additional  interest  from the date of such  Event of
Default until the date such Event of Default is cured or waived.

         4.12  Conversion  Privileges.  The  conversion  privileges set forth in
Article  III shall  remain in full  force and effect  immediately  from the date
hereof and until this Note is paid in full.

         4.13  Cumulative  Remedies.  The  remedies  under  this  Note  shall be
cumulative.


                                    ARTICLE V
                                  MISCELLANEOUS

         5.1 Failure or Indulgence  Not Waiver.  No failure or delay on the part
of the  Purchaser  hereof  in the  exercise  of any  power,  right or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

         5.2 Notices.  Any notice herein required or permitted to be given shall
be in writing and shall be deemed  effectively given: (a) upon personal delivery
to the party  notified,  (b) when sent by  confirmed  telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day,  (c) five days after  having been sent by  registered  or  certified  mail,
return receipt requested,  postage prepaid,  or (d) one day after deposit with a
nationally  recognized  overnight  courier,  specifying next day delivery,  with
written verification of receipt. All communications shall be sent to the Company
at the  address  provided  in the  Purchase  Agreement  executed  in  connection
herewith, and to the Purchaser at the address provided in the Purchase Agreement
for such Purchaser,  with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th
Floor,  New York, New York 10022,  facsimile  number (212) 541-4434,  or at such
other  address as the Company or the Purchaser may designate by ten days advance
written  notice to the other parties  hereto.  A Notice of  Conversion  shall be
deemed given when made to the Company pursuant to the Purchase Agreement.

         5.3 Amendment Provision.  The term "Note" and all reference thereto, as
used  throughout

<PAGE>

this instrument,  shall mean this instrument as originally executed, or if later
amended or supplemented,  then as so amended or supplemented,  and any successor
instrument  issued  pursuant  to  Section  3.5  hereof,  as it may be amended or
supplemented.

         5.4  Assignability. This Note shall be binding upon the Company and its
successors and assigns,  and shall inure to the benefit of the Purchaser and its
successors  and  assigns,  and  may be  transferred  by the  Purchaser  only  in
accordance with the  requirements  of the Purchase  Agreement and all applicable
federal  and state  securities  laws.  This Note  shall not be  assigned  by the
Company without the consent of the Purchaser.

         5.5  Governing  Law.  This Note shall be governed by and  construed  in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of laws.  Any action  brought by either  party  against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties agree to submit to the  jurisdiction of such courts.  The
prevailing  party  shall be  entitled  to  recover  from  the  other  party  its
reasonable  attorney's  fees and costs.  In the event that any provision of this
Note is invalid or  unenforceable  under any applicable  statute or rule of law,
then  such  provision  shall be deemed  inoperative  to the  extent  that it may
conflict  therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or  unenforceable  under
any law shall not affect the validity or unenforceability of any other provision
of this Note.  Nothing  contained  herein shall be deemed or operate to preclude
the  Purchaser  from  bringing  suit or taking  other legal  action  against the
Company in any other  jurisdiction  to collect on the Company's  obligations  to
Purchaser,  to  realize  on  any  collateral  or any  other  security  for  such
obligations, or to enforce a judgment or other court in favor of the Purchaser.

         5.6  Maximum  Payments.  Nothing  contained  herein  shall be deemed to
establish  or require  the  payment of a rate of  interest  or other  charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest  required  to be paid or other  charges  hereunder  exceed the  maximum
permitted by such law, any payments in excess of such maximum  shall be credited
against  amounts owed by the Company to the  Purchaser  and thus refunded to the
Company.

         5.7 Security  Interest.  The  Purchaser of this Note has been granted a
security  interest in certain  assets of the Company  more fully  described in a
Master Security Agreement dated as of October 18, 2005.

         5.8  Construction.  Each  party  acknowledges  that its  legal  counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

         5.9 Cost of Collection. If default is made in the payment of this Note,
the Company shall pay to Purchaser  reasonable  costs of  collection,  including
reasonable attorney's fees.

       [Balance of page intentionally left blank; signature page follows.]


<PAGE>


         IN WITNESS  WHEREOF,  the  Company has caused this Note to be signed in
its name effective as of this 29th day of July 2005.

                                          IT&E INTERNATIONAL GROUP, INC.


                                          By: /s/ Peter Sollenne
                                              ----------------------------------
                                              Name:
                                              Title:





<PAGE>



                                                                       EXHIBIT A

                              NOTICE OF CONVERSION

(To be  executed  by the  Purchaser  in order to convert all or part of the Note
into Common Stock)

[Name and Address of Purchaser]


The  Undersigned  hereby  converts  $_________  of the principal due on [specify
applicable  Repayment Date] under the Amended and Restated Convertible Term Note
issued by IT&E  INTERNATIONAL  GROUP,  INC.  dated July __,  2005 by delivery of
Shares of Common Stock of IT&E  INTERNATIONAL  GROUP, INC. on and subject to the
conditions set forth in Article III of such Note.


1.       Date of Conversion
                                    -----------------------
2.       Shares To Be Delivered:
                                    -----------------------


                                            By:    -----------------------
                                            Name:  -----------------------
                                            Title: -----------------------