Exhibit 4.1 - 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.


                         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 subject to amortizing
payments pursuant to Section 1.2 hereof  is  hereinafter  referred  to  as  the
"AMORTIZING  PRINCIPAL  AMOUNT"  and the remaining original principal amount of
this Note is hereinafter referred to as the "NON-AMORTIZING PRINCIPAL AMOUNT."

      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 principal amount of this Note  that  is  contained  in the Restricted
Account  (as  defined in the Restricted Account Agreement referred  to  in  the
Purchase Agreement) on the date of the issuance of this Note is $2,500,000.

      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 thereafter  (each,  a  "REPAYMENT
DATE") and on the Maturity Date, whether by acceleration or otherwise.  Accrued
interest  on  the  Non-Amortizing Principal Amount shall be payable only on the
Maturity Date or, in  the  event  of the redemption or conversion of all or any
portion of the Non-Amortizing Principal  Amount, accrued interest on the amount
so redeemed or converted shall be paid on the date of redemption or conversion,
as the case may be.

      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  not contained in the Restricted
Account (as defined in the Restricted Account Agreement)  shall begin on May 1,
2005  and  shall recur on each succeeding Repayment Date thereafter  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
$83,333.33 (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"); provided that,  following  a  release  of an amount of funds from the
Restricted Account  (as defined in the Restricted  Account  Agreement)  for the
purposes  set  forth  in  the  Restricted  Account Side Letter (other than with
respect to a release that occurs as a result  of  a conversion of any Principal
Amount) (each, a "RELEASE AMOUNT") each Monthly Principal  Amount  due  on  any
Repayment Date following any such release shall be increased by an amount equal
to  (x)  such  Release  Amount  divided  by  (y)  the  sum of (I) the number of
Repayment  Dates  remaining until the Maturity Date plus (II)  one  (1).    Any
Principal Amount that remains outstanding on the Maturity Date shall be due and
payable on the Maturity Date.

                                  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 the lesser of  $1.00 or an amount equal to 100% of the
average closing price  of  the  Common  Stock  for  the  ten  (10) trading days
immediately  prior to the date of this Note.  Notwithstanding  the  immediately
foregoing, in no event shall the  Fixed Conversion Price set on the date hereof
exceed one hundred  five  percent   (105%)  of  the closing price of the Common
Stock on the last trading day prior to the date hereof.

            (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, (iii) third,  accrued  interest on
the  Non-Amortizing  Principal Amount and (iv) fourth, 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 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   Optional  Redemption  of  Non-Amortizing  Principal   Amount.   The
Company  will  have  the  option  of  repaying  the  outstanding Non-Amortizing
Principal Amount ("OPTIONAL NON-AMORTIZING REDEMPTION"),  in  whole or in part,
by  paying  the  Purchaser a sum of money equal to one hundred fifteen  percent
(115%) of the Non-Amortizing  Principal  Amount  to  be redeemed, together with
accrued but unpaid interest thereon (the "NON-AMORTIZING REDEMPTION AMOUNT") on
the  Non-Amortizing  Redemption  Date (as defined below).   The  Company  shall
deliver to the Purchaser a written  notice  of  redemption (the "NOTICE OF NON-
AMORTIZING  REDEMPTION") specifying the date for such  Optional  Non-Amortizing
Redemption (the "NON-AMORTIZING REDEMPTION DATE"), which date shall be not less
than seven (7)  business  days  after  the date of the Notice of Non-Amortizing
Redemption  (the  "NON-AMORTIZING  REDEMPTION   PERIOD").   A  Notice  of  Non-
Amortizing Redemption shall not be effective with respect to any portion of the
Non-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 Non-Amortizing  Redemption Period.
The Non-Amortizing Redemption Amount shall be determined as if  the Purchaser's
conversion elections had been completed immediately prior to the  date  of  the
Notice  of  Non-Amortizing  Redemption.  On the Non-Amortizing Redemption Date,
the Non-Amortizing Redemption  Amount  shall  be  paid (i) in good funds to the
Purchaser, (ii) by furnishing the Purchaser written  direction  to  notify  the
bank  holding the Restricted Account to release from the Restricted Account and
deliver  to the Purchaser a sum of money equal to the Non-Amortizing Redemption
Amount, or  (iii)  if  the  amount on deposit in the Restricted Account is less
than the Non-Amortizing Redemption  Amount, by furnishing the Purchaser written
direction to notify the bank holding  the  Restricted  Account  to  release all
amounts on deposit in the Restricted Account to the Purchaser and delivering to
the  Purchaser  good  funds  in  an  amount  equal  to  the balance of the Non-
Amortizing Redemption Amount.

      2.5   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 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 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,  (ii) then of
the accrued interest on the Non-Amortizing  Principal  Amount,   (iii)  then of
outstanding  Amortizing Principal Amount, by applying the conversion amount  to
Monthly Principal  Amounts  for  the remaining Repayment Dates in chronological
order and (iv) then, of outstanding Non-Amortizing Principal Amount.

            (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.

                  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 and (ii)
115%  of   the  outstanding  Non-Amortizing  Principal  Amount  of  the   Note,
respectively,  ( each 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 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).

      1.1        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.

      1.2        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 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  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  the date hereof.

      0.1         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.

      0.2         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 18th day of October, 2004.

                                           IT&E INTERNATIONAL GROUP, INC.


                                           By:  /s/ Peter R. Sollenne
                                           -------------------------------
                                           Name:    Peter R. Sollenne
                                           Title:   Chief Executive Officer







<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 Convertible Term Note issued by IT&E
INTERNATIONAL GROUP, INC. dated October __, 2004 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:______________________________



<PAGE>