Exhibit 10.10

                                     WARRANT

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.


                               CITY NETWORK, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: HHF-001                                    Number of Shares: 25,000

Date of Issuance: August 17, 2005

City Network, Inc., a Nevada corporation (the "COMPANY"),  hereby certifies that
for good and valuable  consideration,  the receipt and  sufficiency of which are
hereby  acknowledged,  Highgate House Funds, Ltd.  ("Highgate"),  the registered
holder hereof or its permitted  assigns,  is entitled,  subject to the terms set
forth below, to purchase from the Company upon surrender of this Warrant, at any
time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time
on the Expiration Date (as defined  herein) Twenty Five Thousand  (25,000) fully
paid and nonassessable shares of Common Stock (as defined herein) of the Company
(the "WARRANT  SHARES") at the exercise price per share provided in Section 1(b)
below or as subsequently adjusted; provided, however, that in no event shall the
holder be entitled to exercise  this  Warrant for a number of Warrant  Shares in
excess of that  number of  Warrant  Shares  which,  upon  giving  effect to such
exercise,   would  cause  the  aggregate   number  of  shares  of  Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding  shares of the Common Stock  following such exercise,  except within
sixty (60) days of the Expiration  Date. For purposes of the foregoing  proviso,
the aggregate number of shares of Common Stock  beneficially owned by the holder
and its  affiliates  shall include the number of shares of Common Stock issuable
upon  exercise of this Warrant with respect to which the  determination  of such
proviso is being made,  but shall exclude  shares of Common Stock which would be
issuable upon (i) exercise of the remaining,  unexercised Warrants  beneficially
owned by the holder and its  affiliates  and (ii)  exercise or conversion of the
unexercised  or  unconverted  portion  of any other  securities  of the  Company
beneficially  owned  by  the  holder  and  its  affiliates  (including,  without
limitation, any convertible notes or preferred stock) subject to a limitation on
conversion or exercise analogous to the limitation  contained herein.  Except as

                                       1
<PAGE>
set forth in the preceding sentence, for purposes of this paragraph,  beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.  For purposes of this Warrant,  in determining
the number of outstanding shares of Common Stock a holder may rely on the number
of  outstanding  shares of Common Stock as reflected in (1) the  Company's  most
recent Form 10-QSB or Form 10-KSB,  as the case may be, (2) a more recent public
announcement  by the  Company  or (3) any  other  notice by the  Company  or its
transfer  agent setting forth the number of shares of Common Stock  outstanding.
Upon the written request of any holder,  the Company shall  promptly,  but in no
event later than one (1)  Business  Day  following  the receipt of such  notice,
confirm in writing to any such holder the number of shares of Common  Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the exercise of Warrants (as defined below)
by such  holder and its  affiliates  since the date as of which  such  number of
outstanding shares of Common Stock was reported.

     Section 1.

     (a) This  Warrant is the common  stock  purchase  warrant  (the  "WARRANT")
issued  pursuant to the Securities  Purchase  Agreement dated the date hereof by
and between the Company and Highgate.

     (b)  DEFINITIONS.  The  following  words and terms as used in this  Warrant
shall have the following meanings:

         (i)  "APPROVED  STOCK PLAN" means any  employee  benefit plan which has
been  approved by the Board of Directors  of the Company,  pursuant to which the
Company's  securities  may be issued to any  employee,  officer or director  for
services provided to the Company.

         (ii) "BUSINESS DAY" means any day other than Saturday,  Sunday or other
day on which commercial banks in the City of New York are authorized or required
by law to remain closed.

         (iii)  "CLOSING  BID PRICE" means the closing bid price of Common Stock
as quoted on the Principal  Market (as reported by Bloomberg  Financial  Markets
("BLOOMBERG") through its "Volume at Price" function).

         (iv) "COMMON  STOCK" means (i) the Company's  common  stock,  par value
$0.001 per share,  and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

         (v) "CONVERTIBLE  SECURITIES"  shall mean any securities of the Company
convertible into Common Stock.

         (vi) "EXCLUDED SECURITIES" means, provided such security is issued at a
price which is greater  than or equal to the  arithmetic  average of the Closing
Bid  Prices  of the  Common  Stock  for the ten (10)  consecutive  trading  days
immediately  preceding  the  date of  issuance,  any of the  following:  (a) any
issuance by the Company of securities in connection with a strategic partnership
or a joint  venture  (the  primary  purpose  of  which  is not to  raise  equity

                                       2
<PAGE>
capital),  (b) any issuance by the Company of securities as consideration  for a
merger or consolidation or the acquisition of a business,  product,  license, or
other assets of another  person or entity and (c) options to purchase  shares of
Common  Stock,  provided  (I) such  options  are  issued  after the date of this
Warrant to employees of the Company  within thirty (30) days of such  employee's
starting his  employment  with the Company,  and (II) the exercise price of such
options is not less than the Closing  Bid Price of the Common  Stock on the date
of issuance of such option.

         (vii)  "EXPIRATION  DATE"  means  the date  three  (3)  years  from the
Issuance  Date of this  Warrant or, if such date falls on a Saturday,  Sunday or
other day on which banks are required or  authorized to be closed in the City of
New York or the State of New York or on which trading does not take place on the
Principal  Exchange or automated  quotation  system on which the Common Stock is
traded (a "HOLIDAY"), the next date that is not a Holiday.

         (viii) "ISSUANCE DATE" means the date hereof.

         (ix) "OPTIONS"  means any rights,  warrants or options to subscribe for
or purchase Common Stock or Convertible Securities.

         (x) "OTHER  SECURITIES"  means (i) those  options  and  warrants of the
Company issued prior to, and  outstanding on, the Issuance Date of this Warrant,
(ii) the  shares of Common  Stock  issuable  on  exercise  of such  options  and
warrants,  provided such options and warrants are not amended after the Issuance
Date of this Warrant and (iii) the shares of Common Stock issuable upon exercise
of this Warrant.

         (xi) "PERSON"  means an  individual,  a limited  liability  company,  a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization and a government or any department or agency thereof.

         (xii)  "PRINCIPAL  MARKET"  means  the New  York  Stock  Exchange,  the
American Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
whichever  is at the time the  principal  trading  exchange  or market  for such
security,  or the  over-the-counter  market on the electronic bulletin board for
such  security as reported by  Bloomberg  or, if no bid or sale  information  is
reported for such security by  Bloomberg,  then the average of the bid prices of
each of the market  makers for such security as reported in the "pink sheets" by
the National Quotation Bureau, Inc.

         (xiii) "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (xiv) "WARRANT" means this Warrant and all Warrants issued in exchange,
transfer or replacement thereof.

         (xv)  "WARRANT  EXERCISE  PRICE"  shall be  $0.001  or as  subsequently
adjusted as provided in Section 8 hereof.

         (xvi) "WARRANT SHARES" means the shares of Common Stock issuable at any
time upon exercise of this Warrant.

                                       3
<PAGE>
     (c) Other Definitional Provisions.

         (i) Except as otherwise  specified herein, all references herein (A) to
the Company shall be deemed to include the Company's  successors  and (B) to any
applicable law defined or referred to herein shall be deemed  references to such
applicable law as the same may have been or may be amended or supplemented  from
time to time.

         (ii)  When used in this  Warrant,  the words  "HEREIN",  "HEREOF",  and
"HEREUNDER" and words of similar import,  shall refer to this Warrant as a whole
and not to any provision of this Warrant,  and the words "SECTION",  "SCHEDULE",
and  "EXHIBIT"  shall refer to Sections of, and  Schedules and Exhibits to, this
Warrant unless otherwise specified.

         (iii) Whenever the context so requires,  the neuter gender includes the
masculine or feminine,  and the singular  number  includes the plural,  and vice
versa.

     Section 2. EXERCISE OF WARRANT. Subject to the terms and conditions hereof,
this Warrant may be exercised by the holder hereof then  registered on the books
of the Company,  pro rata as hereinafter  provided,  at any time on any Business
Day on or after the opening of business on such  Business Day,  commencing  with
the first day after the date hereof, and prior to 11:59 P.M. Eastern Time on the
Expiration  Date,  by (i)  delivery  of a  written  notice,  in the  form of the
subscription  notice  attached as EXHIBIT A hereto (the "EXERCISE  NOTICE"),  of
such holder's election to exercise this Warrant,  which notice shall specify the
number of Warrant  Shares to be  purchased,  (ii)  payment to the  Company of an
amount equal to the Warrant Exercise  Price(s)  applicable to the Warrant Shares
being  purchased,  multiplied by the number of Warrant Shares (at the applicable
Warrant  Exercise  Price) as to which this Warrant is being  exercised (plus any
applicable issue or transfer taxes) (the "AGGREGATE  EXERCISE PRICE") in cash or
wire  transfer of  immediately  available  funds and (iii) the surrender of this
Warrant (or an  indemnification  undertaking with respect to this Warrant in the
case of its  loss,  theft or  destruction)  to a common  carrier  for  overnight
delivery to the Company as soon as practicable following such date. In the event
of any exercise of the rights  represented  by this Warrant in  compliance  with
this Section 2, the Company shall on the fifth (5th)  Business Day following the
date of receipt of the Exercise  Notice,  the Aggregate  Exercise Price and this
Warrant (or an  indemnification  undertaking with respect to this Warrant in the
case of its loss, theft or destruction)  and the receipt of the  representations
of the holder  specified  in Section 6 hereof,  if requested by the Company (the
"EXERCISE DELIVERY  DOCUMENTS"),  and if the Common Stock is DTC eligible credit
such  aggregate  number of shares of Common  Stock to which the holder  shall be
entitled to the holder's or its designee's  balance  account with The Depository
Trust  Company;  provided,  however,  if the holder who  submitted  the Exercise
Notice requested  physical delivery of any or all of the Warrant Shares,  or, if
the Common Stock is not DTC eligible  then the Company  shall,  on or before the
fifth (5th) Business Day following receipt of the Exercise  Delivery  Documents,
issue and surrender to a common  carrier for  overnight  delivery to the address
specified in the Exercise Notice,  a certificate,  registered in the name of the
holder,  for the number of shares of Common  Stock to which the holder  shall be
entitled  pursuant to such  request.  Upon  delivery of the Exercise  Notice and
Aggregate  Exercise  Price  referred  to in clause (ii) above the holder of this
Warrant shall be deemed for all corporate  purposes to have become the holder of
record of the  Warrant  Shares  with  respect  to which  this  Warrant  has been
exercised.  In the case of a  dispute  as to the  determination  of the  Warrant

                                       4
<PAGE>
Exercise  Price,  the Closing  Bid Price or the  arithmetic  calculation  of the
Warrant  Shares,  the Company shall  promptly  issue to the holder the number of
Warrant Shares that is not disputed and shall submit the disputed determinations
or arithmetic  calculations to the holder via facsimile  within one (1) Business
Day of receipt of the holder's  Exercise  Notice.  If the holder and the Company
are unable to agree upon the  determination  of the  Warrant  Exercise  Price or
arithmetic calculation of the Warrant Shares within one (1) day of such disputed
determination or arithmetic  calculation being submitted to the holder, then the
Company shall immediately submit via facsimile (i) the disputed determination of
the Warrant Exercise Price or the Closing Bid Price to an independent, reputable
investment  banking  firm or (ii) the  disputed  arithmetic  calculation  of the
Warrant Shares to its independent,  outside accountant.  The Company shall cause
the investment  banking firm or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the holder of the
results no later than  forty-eight  (48)  hours  from the time it  receives  the
disputed  determinations  or  calculations.  Such  investment  banking firm's or
accountant's  determination or calculation,  as the case may be, shall be deemed
conclusive absent manifest error.

     (a) Unless the rights  represented  by this  Warrant  shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than five (5) Business  Days after any exercise and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall  represent  rights to  purchase  the  number of  Warrant  Shares
purchasable  immediately  prior to such exercise  under this Warrant  exercised,
less the  number of  Warrant  Shares  with  respect  to which  such  Warrant  is
exercised.

     (b) No  fractional  Warrant  Shares  are to be  issued  upon  any pro  rata
exercise of this  Warrant,  but rather the number of Warrant  Shares issued upon
such  exercise of this Warrant  shall be rounded up or down to the nearest whole
number.

     (c) If the Company or its  Transfer  Agent shall fail for any reason or for
no reason to issue to the holder within ten (10) days of receipt of the Exercise
Delivery Documents,  a certificate for the number of Warrant Shares to which the
holder is entitled or to credit the holder's balance account with The Depository
Trust Company for such number of Warrant  Shares to which the holder is entitled
upon the holder's  exercise of this Warrant,  the Company shall,  in addition to
any other remedies under this Warrant or otherwise available to such holder, pay
as  additional  damages in cash to such holder on each day the  issuance of such
certificate  for Warrant Shares is not timely effected an amount equal to 0.025%
of the product of (A) the sum of the number of Warrant  Shares not issued to the
holder  on a timely  basis  and to which the  holder  is  entitled,  and (B) the
Closing Bid Price of the Common Stock for the trading day immediately  preceding
the last  possible date which the Company could have issued such Common Stock to
the holder without violating this Section 2.

     (d) If within ten (10) days  after the  Company's  receipt of the  Exercise
Delivery Documents, the Company fails to deliver a new Warrant to the holder for
the  number of Warrant  Shares to which  such  holder is  entitled  pursuant  to
Section 2 hereof,  then, in addition to any other available  remedies under this
Warrant,  or  otherwise  available  to such  holder,  the  Company  shall pay as
additional  damages in cash to such  holder on each day after such tenth  (10th)
day that such  delivery of such new Warrant is not timely  effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares represented by

                                       5
<PAGE>
the portion of this Warrant which is not being exercised and (B) the Closing Bid
Price of the Common  Stock for the trading day  immediately  preceding  the last
possible  date which the Company  could have  issued such  Warrant to the holder
without violating this Section 2.

     Section 3. COVENANTS AS TO COMMON STOCK.  The Company hereby  covenants and
agrees as follows:

     (a) This  Warrant  is,  and any  Warrants  issued  in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

     (b) All Warrant  Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

     (c) During the period within which the rights  represented  by this Warrant
may be exercised,  the Company will at all times have authorized and reserved at
least one hundred  percent (100%) of the number of shares of Common Stock needed
to provide for the exercise of the rights then  represented  by this Warrant and
the par  value of said  shares  will at all  times be less  than or equal to the
applicable  Warrant  Exercise  Price. If at any time the Company does not have a
sufficient  number of shares of Common Stock authorized and available,  then the
Company shall call and hold a special meeting of its  stockholders  within sixty
(60)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

     (d) If at  any  time  after  the  date  hereof  the  Company  shall  file a
registration statement, the Company shall include the Warrant Shares issuable to
the holder, pursuant to the terms of this Warrant and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all Warrant
Shares from time to time  issuable  upon the exercise of this  Warrant;  and the
Company  shall  so  list on  each  national  securities  exchange  or  automated
quotation  system,  as the case may be, and shall  maintain such listing of, any
other shares of capital stock of the Company  issuable upon the exercise of this
Warrant if and so long as any  shares of the same class  shall be listed on such
national securities exchange or automated quotation system.

     (e) The Company will not, by amendment of its Articles of  Incorporation or
through  any  reorganization,   transfer  of  assets,   consolidation,   merger,
dissolution,  issue or sale of securities,  or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed  or  performed  by it  hereunder,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other  impairment,  consistent with the tenor and purpose of
this  Warrant.  The  Company  will not  increase  the par value of any shares of
Common Stock  receivable  upon the  exercise of this  Warrant  above the Warrant
Exercise  Price  then in effect,  and (ii) will take all such  actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and  nonassessable  shares of Common  Stock upon the exercise of this
Warrant.

                                       6
<PAGE>
     (f) This Warrant will be binding upon any entity  succeeding to the Company
by merger,  consolidation  or  acquisition  of all or  substantially  all of the
Company's assets.

     Section 4.  TAXES.  The  Company  shall pay any and all  taxes,  except any
applicable  withholding,  which may be payable  with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

     Section 5.  WARRANT  HOLDER NOT DEEMED A  STOCKHOLDER.  Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled  to vote or  receive  dividends  or be deemed  the  holder of shares of
capital stock of the Company for any purpose,  nor shall  anything  contained in
this Warrant be construed to confer upon the holder hereof,  as such, any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the  issuance to the holder of this  Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant.  In addition,  nothing  contained in this Warrant shall be construed as
imposing  any  liabilities  on such  holder to  purchase  any  securities  (upon
exercise of this  Warrant or  otherwise)  or as a  stockholder  of the  Company,
whether  such  liabilities  are  asserted by the Company or by  creditors of the
Company.  Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other  information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

     Section 6.  REPRESENTATIONS OF HOLDER.  The holder of this Warrant,  by the
acceptance hereof,  represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment  only and not with a view towards,  or
for resale in connection  with, the public sale or  distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided,  however,  that by making the representations  herein,
the holder does not agree to hold this Warrant or any of the Warrant  Shares for
any minimum or other  specific  term and  reserves  the right to dispose of this
Warrant and the Warrant  Shares at any time in accordance  with or pursuant to a
registration  statement or an exemption  under the Securities Act. The holder of
this Warrant further  represents,  by acceptance hereof,  that, as of this date,
such  holder  is an  "accredited  investor"  as  such  term is  defined  in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange  Commission
under the  Securities  Act (an  "ACCREDITED  INVESTOR").  Upon  exercise of this
Warrant the holder shall, if requested by the Company,  confirm in writing, in a
form satisfactory to the Company, that the Warrant Shares so purchased are being
acquired  solely for the holder's own account and not as a nominee for any other
party,  for  investment,  and not with a view toward  distribution or resale and
that such holder is an  Accredited  Investor.  If such  holder  cannot make such
representations  because  they  would  be  factually  incorrect,  it  shall be a
condition to such  holder's  exercise of this  Warrant that the Company  receive
such other  representations  as the Company  considers  reasonably  necessary to
assure the Company that the  issuance of its  securities  upon  exercise of this
Warrant shall not violate any United States or state securities laws.

                                       7
<PAGE>
     Section 7. OWNERSHIP AND TRANSFER.

     (a) The Company shall maintain at its principal  executive offices (or such
other  office or  agency of the  Company  as it may  designate  by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

     Section 8. ADJUSTMENT OF WARRANT  EXERCISE PRICE AND NUMBER OF SHARES.  The
Warrant  Exercise  Price and the number of shares of Common Stock  issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

     (a) ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES UPON ISSUANCE
OF COMMON STOCK.  If and whenever on or after the Issuance Date of this Warrant,
the Company issues or sells,  or is deemed to have issued or sold, any shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than the current market price at the time of
such issuance (the "APPLICABLE PRICE"), then the Warrant Exercise Price shall be
adjusted  immediately  thereafter so that it shall equal the price determined by
multiplying the Warrant Exercise Price in effect  immediately prior thereto by a
fraction,  the  numerator  of which  shall be the sum of the number of shares of
Common Stock  outstanding  immediately  prior to the issuance of such additional
shares  and  the  number  of  shares  of  Common   Stock  which  the   aggregate
consideration received for the issuance of such additional shares would purchase
at such current market price per share of Common Stock,  and the  denominator of
which  shall be the  number of shares of Common  Stock  outstanding  immediately
after the  issuance  of such  additional  shares.  Upon each  adjustment  of the
Warrant  Exercise Price  pursuant to this Section 8(a), the Warrant  outstanding
prior to the making of the  adjustment  in the Exercise  Price shall  thereafter
evidence the right to receive upon  payment of the Warrant  Exercise  Price that
number of shares of Common Stock (calculated to the nearest hundredth)  obtained
from the following formula:

     N'       =        N        x       E/E'

where:

     N' = the adjusted  number of Warrant  Shares  issuable  upon  exercise of a
Warrant by payment of the adjusted Exercise Price.

     N = the number of Warrant  Shares  previously  issuable  upon exercise of a
Warrant by payment of the Exercise Price prior to adjustment.

     E'       =        the adjusted Exercise Price.

     E        =        the Exercise Price prior to adjustment.

                                       8
<PAGE>
     (b) EFFECT ON WARRANT  EXERCISE  PRICE OF CERTAIN  EVENTS.  For purposes of
determining the adjusted  Warrant  Exercise Price under Section 8(a) above,  the
following shall be applicable:

         (i) ISSUANCE OF OPTIONS.  If after the date hereof,  the Company in any
manner  grants any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion
or exchange of any  Convertible  Securities  issuable  upon exercise of any such
Option is less than the Applicable  Price, then such share of Common Stock shall
be deemed to be  outstanding  and to have been issued and sold by the Company at
the time of the  granting or sale of such  Option for such price per share.  For
purposes of this Section 8(b)(i), the lowest price per share for which one share
of Common Stock is issuable upon exercise of such Options or upon  conversion or
exchange of such Convertible  Securities shall be equal to the sum of the lowest
amounts of  consideration  (if any)  received or  receivable by the Company with
respect  to any one  share of  Common  Stock  upon the  granting  or sale of the
Option,  upon  exercise  of the Option or upon  conversion  or  exchange  of any
convertible   security  issuable  upon  exercise  of  such  Option.  No  further
adjustment of the Warrant  Exercise Price shall be made upon the actual issuance
of such Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual  issuance of such  Common  Stock upon  conversion  or
exchange of such Convertible Securities.

         (ii) ISSUANCE OF CONVERTIBLE  SECURITIES.  If the Company in any manner
issues or sells any  Convertible  Securities  and the lowest price per share for
which one share of Common  Stock is  issuable  upon the  conversion  or exchange
thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be  outstanding  and to have been issued and sold by the Company at
the time of the issuance or sale of such  Convertible  Securities for such price
per share.  For the  purposes of this  Section  8(b) (ii),  the lowest price per
share for which one share of Common Stock is issuable  upon such  conversion  or
exchange  shall be equal to the sum of the lowest amounts of  consideration  (if
any)  received or  receivable by the Company with respect to one share of Common
Stock upon the issuance or sale of the convertible  security and upon conversion
or exchange of such convertible  security.  No further adjustment of the Warrant
Exercise Price shall be made upon the actual  issuance of such Common Stock upon
conversion or exchange of such Convertible Securities,  and if any such issue or
sale of such  Convertible  Securities  is made upon  exercise of any Options for
which  adjustment  of the  Warrant  Exercise  Price  had  been or are to be made
pursuant to other provisions of this Section 8(b), no further  adjustment of the
Warrant Exercise Price shall be made by reason of such issue or sale.

         (iii)  CHANGE IN OPTION  PRICE OR RATE OF  CONVERSION.  If the purchase
price provided for in any Options, the additional consideration, if any, payable
upon the issue,  conversion or exchange of any  Convertible  Securities,  or the
rate at which any Convertible  Securities are  convertible  into or exchangeable
for Common Stock changes at any time,  the Warrant  Exercise  Price in effect at
the time of such change  shall be adjusted to the Warrant  Exercise  Price which

                                       9
<PAGE>
would  have  been in  effect  at such  time  had  such  Options  or  Convertible
Securities provided for such changed purchase price, additional consideration or
changed  conversion  rate,  as the case may be, at the time  initially  granted,
issued or sold and the number of Warrant  Shares  issuable upon exercise of this
Warrant  shall be  correspondingly  readjusted.  For  purposes  of this  Section
8(b)(iii),  if  the  terms  of any  Option  or  convertible  security  that  was
outstanding  as of the  Issuance  Date of this Warrant are changed in the manner
described in the immediately preceding sentence, then such Option or convertible
security and the Common Stock  deemed  issuable  upon  exercise,  conversion  or
exchange  thereof  shall be deemed  to have  been  issued as of the date of such
change.  No  adjustment  pursuant  to this  Section  8(b)  shall be made if such
adjustment  would  result in an increase of the Warrant  Exercise  Price then in
effect.

     (c) EFFECT ON WARRANT  EXERCISE  PRICE OF CERTAIN  EVENTS.  For purposes of
determining  the adjusted  Warrant  Exercise Price under Sections 8(a) and 8(b),
the following shall be applicable:

         (i) CALCULATION OF CONSIDERATION RECEIVED. If any Common Stock, Options
or  Convertible  Securities  are issued or sold or deemed to have been issued or
sold for cash, the consideration received thereof will be the gross sales price.
If any Common Stock, Options or Convertible  Securities are issued or sold for a
consideration other than cash, the amount of such consideration  received by the
Company  will  be the  fair  value  of such  consideration,  except  where  such
consideration  consists of  marketable  securities,  in which case the amount of
consideration  received  by  the  Company  will  be the  market  price  of  such
securities  on the date of receipt  of such  securities.  If any  Common  Stock,
Options or Convertible  Securities are issued to the owners of the non-surviving
entity in  connection  with any  merger in which the  Company  is the  surviving
entity,  the  amount of  consideration  therefore  will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving entity
as is attributable to such Common Stock, Options or Convertible  Securities,  as
the  case  may be.  The  fair  value of any  consideration  other  than  cash or
securities will be determined jointly by the Company and the holders of Warrants
representing  at  least  two-thirds  (b) of the  Warrant  Shares  issuable  upon
exercise of the Warrants then  outstanding.  If such parties are unable to reach
agreement  within  ten (10) days  after  the  occurrence  of an event  requiring
valuation (the "VALUATION EVENT"),  the fair value of such consideration will be
determined  within five (5) Business  Days after the tenth (10th) day  following
the Valuation Event by an independent,  reputable  appraiser jointly selected by
the Company and the holders of Warrants  representing at least two-thirds (b) of
the Warrant Shares issuable upon exercise of the Warrants then outstanding.  The
determination  of such appraiser shall be final and binding upon all parties and
the fees and expenses of such  appraiser  shall be borne  jointly by the Company
and the holders of Warrants.

         (ii)  INTEGRATED  TRANSACTIONS.   In  case  any  Option  is  issued  in
connection with the issue or sale of other  securities of the Company,  together
comprising one  integrated  transaction  in which no specific  consideration  is
allocated to such Options by the parties thereto,  the Options will be deemed to
have been issued for a consideration of $.01.

         (iii) TREASURY SHARES. The number of shares of Common Stock outstanding
at any given time does not include shares owned or held by or for the account of

                                       10
<PAGE>
the  Company,  and the  disposition  of any  shares  so  owned  or held  will be
considered an issue or sale of Common Stock.

         (iv)  RECORD  DATE.  If the  Company  takes a record of the  holders of
Common  Stock for the  purpose of  entitling  them (1) to receive a dividend  or
other distribution payable in Common Stock, Options or in Convertible Securities
or (2) to  subscribe  for or  purchase  Common  Stock,  Options  or  Convertible
Securities,  then such record date will be deemed to be the date of the issue or
sale of the shares of Common  Stock  deemed to have been issued or sold upon the
declaration  of such  dividend or the making of such other  distribution  or the
date of the granting of such right of subscription or purchase,  as the case may
be.

     (d) ADJUSTMENT OF WARRANT EXERCISE PRICE UPON SUBDIVISION OR COMBINATION OF
COMMON  STOCK.  If the  Company at any time after the date of  issuance  of this
Warrant  subdivides (by any stock split,  stock  dividend,  recapitalization  or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
greater number of shares, any Warrant Exercise Price in effect immediately prior
to such subdivision will be proportionately  reduced and the number of shares of
Common Stock  obtainable  upon exercise of this Warrant will be  proportionately
increased;  provided that the Warrant  Exercise Price shall not be reduced below
the par value of the Common Stock.  If the Company at any time after the date of
issuance  of this  Warrant  combines  (by  combination,  reverse  stock split or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately  increased and the number of Warrant
Shares issuable upon exercise of this Warrant will be proportionately decreased.
Any  adjustment  under this Section 8(d) shall become  effective at the close of
business on the date the subdivision or combination becomes effective.

     (e)  DISTRIBUTION  OF  ASSETS.  If the  Company  shall  declare or make any
dividend or other  distribution  of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without  limitation,  any  distribution  of cash,  stock  or  other  securities,
property or options by way of a dividend, spin off, reclassification,  corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the  issuance  of this  Warrant,  then,  in each such  case:  any  Warrant
Exercise  Price in  effect  immediately  prior to the close of  business  on the
record date fixed for the  determination  of holders of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the close of business
on such record date, to a price  determined by multiplying such Warrant Exercise
Price by a fraction of which (A) the  numerator  shall be the Closing Sale Price
of the Common Stock on the trading day  immediately  preceding  such record date
minus  the  value  of the  Distribution  (as  determined  in good  faith  by the
Company's Board of Directors)  applicable to one share of Common Stock,  and (B)
the  denominator  shall be the  Closing  Sale Price of the  Common  Stock on the
trading day  immediately  preceding such record date;  provided that the Warrant
Exercise Price shall not be reduced below the par value of the Common Stock.

     (f) CERTAIN  EVENTS.  If any event occurs of the type  contemplated  by the
provisions of this Section 8 but not expressly  provided for by such  provisions
(including,  without  limitation,  the  granting of stock  appreciation  rights,
phantom stock rights or other rights with equity  features),  then the Company's
Board of Directors will make an appropriate  adjustment in the Warrant  Exercise
Price and the number of shares of Common Stock  obtainable upon exercise of this

                                       11
<PAGE>
Warrant so as to protect  the rights of the holders of the  Warrants;  provided,
except as set forth in section 8(d),  that no such  adjustment  pursuant to this
Section 8(f) will increase the Warrant  Exercise Price or decrease the number of
shares of Common  Stock  obtainable  as  otherwise  determined  pursuant to this
Section 8; provided that the Warrant  Exercise  Price shall not be reduced below
the par value of the Common Stock.

     (g) NOTICES.

         (i) Immediately  upon any adjustment of the Warrant Exercise Price, the
Company will give written notice thereof to the holder of this Warrant,  setting
forth in reasonable detail, and certifying, the calculation of such adjustment.

         (ii) The Company will give written notice to the holder of this Warrant
at least ten (10) days prior to the date on which the  Company  closes its books
or takes a record (A) with  respect to any  dividend  or  distribution  upon the
Common Stock, (B) with respect to any pro rata subscription  offer to holders of
Common Stock or (C) for  determining  rights to vote with respect to any Organic
Change (as  defined  below),  dissolution  or  liquidation,  provided  that such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such holder.

         (iii) The Company will also give  written  notice to the holder of this
Warrant at least ten (10) days prior to the date on which any Organic Change (as
defined below),  dissolution or liquidation will take place,  provided that such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such holder.

     (h)  Limitations.  Notwithstanding  the above provisions of this Section 8,
the number of shares of Common  Stock  issuable  upon  exercise of this  Warrant
shall in no event be  increased  to an amount  such  that the Total  Transaction
Shares shall be equal to or greater than 5,500,000 shares,  until the holders of
Common  Stock  approve the  issuance  of the Total  Transaction  Shares.  "Total
Transaction  Shares"  shall mean, in the  aggregate,  the shares of Common Stock
issued to Highgate or its affiliates,  and transferees,  subsequent transferees,
or any other party  pursuant to the Securities  Purchase  Agreement of even date
herewith among the Company and Highgate, the Pledge and Escrow Agreement of even
date herewith between the Company and Highgate (the "Pledge Agreement"), and the
Placement Agent Agreement dated as of even date herewith between the Company and
Monitor Capital,  Inc., together with the Warrant Shares, shares of Common Stock
issued as  Liquidated  Damages (as defined in the Investor  Registration  Rights
Agreement dated as of the date herewith  between the Company and Highgate),  and
the Initial  Investor's  Shares (as defined in the Standby  Equity  Distribution
Agreement dated as of even date herewith  between Cornell Capital  Partners,  LP
and the Company).

     Section   9.    PURCHASE    RIGHTS;    REORGANIZATION,    RECLASSIFICATION,
CONSOLIDATION, MERGER OR SALE.

     (a) In addition to any  adjustments  pursuant to Section 8 above, if at any
time the Company grants, issues or sells any Options,  Convertible Securities or

                                       12
<PAGE>
rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the "PURCHASE  RIGHTS"),  then upon
the  exercise  of this  Warrant the holder of this  Warrant  will be entitled to
acquire,  upon the terms  applicable  to such  Purchase  Rights,  the  aggregate
Purchase  Rights which such holder  could have  acquired if such holder had held
the  number of  shares  of  Common  Stock  acquired  pursuant  to such  exercise
immediately  before the date on which a record is taken for the grant,  issuance
or sale of such Purchase Rights,  or, if no such record is taken, the date as of
which the record  holders of Common  Stock are to be  determined  for the grant,
issue or sale of such Purchase Rights.

     (b) Any recapitalization,  reorganization, reclassification, consolidation,
merger,  sale of all or  substantially  all of the  Company's  assets to another
Person or other  transaction  in each case which is  effected in such a way that
holders  of Common  Stock are  entitled  to  receive  (either  directly  or upon
subsequent  liquidation)  stock,  securities  or assets  with  respect  to or in
exchange for Common Stock is referred to herein as an "ORGANIC CHANGE." Prior to
the  consummation of any (i) sale of all or  substantially  all of the Company's
assets to an acquiring  Person or (ii) other Organic Change  following which the
Company is not a  surviving  entity,  the  Company  will  secure from the Person
purchasing  such assets or the successor  resulting from such Organic Change (in
each case,  the "ACQUIRING  ENTITY") a written  agreement (in form and substance
satisfactory to the holders of Warrants  representing at least  two-thirds (iii)
of the Warrant Shares  issuable upon exercise of the Warrants then  outstanding)
to deliver to each holder of Warrants in exchange for such Warrants,  a security
of the Acquiring Entity evidenced by a written instrument  substantially similar
in form and  substance  to this Warrant and  satisfactory  to the holders of the
Warrants  (including an adjusted  warrant  exercise price equal to the value for
the Common Stock reflected by the terms of such  consolidation,  merger or sale,
and exercisable for a corresponding  number of shares of Common Stock acquirable
and receivable  upon exercise of the Warrants  without regard to any limitations
on  exercise,  if the value so  reflected  is less than any  Applicable  Warrant
Exercise Price immediately prior to such  consolidation,  merger or sale). Prior
to the  consummation  of any  other  Organic  Change,  the  Company  shall  make
appropriate  provision  (in form and  substance  satisfactory  to the holders of
Warrants representing a majority of the Warrant Shares issuable upon exercise of
the  Warrants  then  outstanding)  to  insure  that each of the  holders  of the
Warrants will  thereafter have the right to acquire and receive in lieu of or in
addition  to (as the case may be) the  Warrant  Shares  immediately  theretofore
issuable and  receivable  upon the exercise of such holder's  Warrants  (without
regard to any  limitations  on  exercise),  such shares of stock,  securities or
assets  that would  have been  issued or payable  in such  Organic  Change  with
respect to or in exchange for the number of Warrant Shares which would have been
issuable and  receivable  upon the exercise of such  holder's  Warrant as of the
date of such Organic  Change  (without  taking into account any  limitations  or
restrictions on the exercisability of this Warrant).

     Section 10. LOST, STOLEN,  MUTILATED OR DESTROYED WARRANT.  If this Warrant
is lost, stolen,  mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification  undertaking (or, in the case of a mutilated Warrant,  the
Warrant),  issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

     Section 11. NOTICE. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be  deemed  to have  been  delivered  (i) upon  receipt,  when
delivered  personally  or by a  nationally  recognized  overnight  or world wide

                                       13
<PAGE>
courier; (ii) upon confirmation of receipt, when sent by facsimile; or (iii) ten
(10) days after being sent by U.S. certified mail, return receipt requested,  in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be::

If to Highgate:         Highgate House Funds, Ltd.
                        101 Hudson Street - Suite 3700
                        Jersey City, NJ  07302
                        Attention: Mark A. Angelo
                        Telephone: (201) 985-8300
                        Facsimile: (201) 985-8266

With Copy to:           David Gonzalez, Esq.
                        101 Hudson Street - Suite 3700
                        Jersey City, NJ 07302
                        Telephone: (201) 985-8300
                        Facsimile: (201) 985-8266


If to the Company, to:  City Network, Inc
                        6F-3, No.16, Jian Ba Road
                        Jhonghe City, Taipei County, 235
                        Taiwan, ROC F5 235
                        Attention: Mr Tiao-Tsan Lai
                        Telephone: 886-2-8226-5566
                        Facsimile: 886-2-8226-8585

With a copy to:         Loeb & Loeb, LLP
                        345 Park Avenue
                        New York, NY 10154-0037
                        Attention: Mitchell Nussbaum, Esq.
                        Telephone: (212) 407-4159
                        Facsimile: (212) 407-4990

Each party shall provide five days' prior  written  notice to the other party of
any change in address or facsimile number.  Written  confirmation of receipt (A)
given by the  recipient  of such  notice,  consent,  facsimile,  waiver or other
communication,  (or (B) provided by a nationally  recognized  overnight delivery
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

     Section 12.  DATE.  The date of this Warrant is set forth on page 1 hereof.
This  Warrant,  in all events,  shall be wholly void and of no effect  after the
close of business on the Expiration Date, except that  notwithstanding any other
provisions  hereof,  the provisions of Section 8(b) shall continue in full force
and effect after such date as to any Warrant Shares or other  securities  issued
upon the exercise of this Warrant.

                                       14
<PAGE>
     Section 13. AMENDMENT AND WAIVER.  Except as otherwise provided herein, the
provisions  of the  Warrants  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Warrants  representing  at least  two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then  outstanding;  provided  that,  except for Section
8(d),  no such action may  increase the Warrant  Exercise  Price or decrease the
number of shares  or class of stock  obtainable  upon  exercise  of any  Warrant
without the written consent of the holder of such Warrant.

     Section 14. DESCRIPTIVE  HEADINGS;  GOVERNING LAW. The descriptive headings
of the  several  sections  and  paragraphs  of this  Warrant  are  inserted  for
convenience  only and do not  constitute a part of this  Warrant.  The corporate
laws of the State of Nevada  shall  govern all issues  concerning  the  relative
rights of the Company and its stockholders.  All other questions  concerning the
construction,  validity,  enforcement and interpretation of this Agreement shall
be governed by the  internal  laws of the State of New  Jersey,  without  giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions  other than the State of New Jersey. Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal courts sitting in Hudson County and the United States District Court for
the District of New Jersey,  for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding,  any claim that it is not personally  subject to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

     Section 15. WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT FOR EACH PARTY
HERETO TO ENTER INTO THIS WARRANT,  THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR
ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.


                   [REMAINDER OF PAGE INTENTIALLY LEFT BLANK]

                                       15
<PAGE>
     IN WITNESS WHEREOF,  the Company has caused this Warrant to be signed as of
the date first set forth above.

                                       CITY NETWORK, INC.

                                       By: /s/ Tiao-Tsan Lai
                                          ------------------------------
                                       Name:  Mr Tiao-Tsan Lai
                                       Title: Chief Executive Officer

                                       16
<PAGE>
                              EXHIBIT A TO WARRANT

                                 EXERCISE NOTICE

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                               CITY NETWORK, INC.

     The   undersigned   holder   hereby   exercises   the  right  to   purchase
______________ of the shares of Common Stock ("WARRANT SHARES") of City Network,
Inc., a Nevada  corporation (the  "COMPANY"),  evidenced by the attached Warrant
(the "WARRANT").  Capitalized  terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.

     1. FORM OF WARRANT  EXERCISE PRICE.  The Holder intends that payment of the
Warrant  Exercise  Price  shall  be  made  on  a  cash  basis  with  respect  to
______________ Warrant Shares.

     2.  PAYMENT  OF WARRANT  EXERCISE  PRICE.  The holder  shall pay the sum of
$______________ to the Company in accordance with the terms of the Warrant.

     3.  DELIVERY OF WARRANT  SHARES.  The Company  shall  deliver to the holder
_________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______


Name of Registered Holder

By:
Name:
Title:

                                       17