EXHIBIT 10.12

                                WARRANT AGREEMENT

Mr. Arne Dunhem will, upon the completion of an application by Ariel Way, Inc to
become a public company or of an acquisition or merger of Ariel Way, Inc. with a
public corporate  entity making the surviving  company a public company with the
Ariel Way, Inc.'s shareholders controlling at least eighty five percent (85%) of
the surviving company,  be granted a warrant,  assuming that the total number of
outstanding public shares of the Company is twenty million  (20,000,000)  shares
of Common Stock, to acquire 1,150,000 shares of the Company's common stock at an
exercise  price of $0.010 per share (the  "Warrant  Shares") to vest as follows:
(i) 60,000  Warrant  Shares shall vest  monthly each of the first twelve  months
during the term of an Employment Agreement with Mr. Dunhem or immediately if Mr.
Dunhem's  employment is terminated  without cause or for good reason or due to a
change in control,  sale of a majority of the common stock or substantially  all
of the  assets of the  Company  or merger of the  Company  into or with  another
company  (unless  such  company  is less than  fifty  percent  (50%) of the size
(measured  by market  value) of the  Company)  or reverse  merger  with  another
company;  and (ii) 430,000 Warrant Shares will vest immediately upon the Company
achieving a $25 million market cap for ten (10)  consecutive  trading days and a
price per share of not less than $0.50.  The Warrant  Shares  granted  hereunder
must be  exercised by the tenth  anniversary  of the date of vesting or shall be
forfeited by Mr.  Dunhem.  All Warrant  Shares  granted  hereunder  shall have a
"cashless" exercise provision,  which enables Mr. Dunhem to give up a portion of
his Warrant Shares in order to exercise others without paying cash for them. The
number of warrant shares shall be prorate  adjusted if the  assumption  that the
initial  total  number  of  outstanding  shares of  public  Common  Stock of the
surviving Company is different from twenty million (20,000,000) shares of Common
Stock.  Further,  the number,  kind and strike price of the stock Warrant Shares
granted hereunder shall be appropriately  and equitably  adjusted to reflect any
stock dividend, stock split, spin-off,  split-off,  extraordinary cash dividend,
recapitalization, reclassification or other major corporate action affecting the
stock of the Company to the end that after such event Mr. Dunhem's proportionate
interest in the Company  shall be  maintained  as before the  occurrence of such
event.  Mr.  Dunhem  shall also  receive  payment of any cash  dividend or stock
dividend declared and paid by the Company as if Mr. Dunhem had already exercised
all of his Warrant Shares, including unvested Warrant Shares.

Date:             August 1, 2004

Grantee:          ___________________________

                  Arne Dunhem

ARIEL WAY, INC.

-----------------------------
Arne Dunhem
President & CEO


<PAGE>

                                WARRANT AGREEMENT
                                 AMENDMENT NO. 1

Mr. Arne Dunhem will be granted a warrant,  to acquire  1,150,000  shares of the
Company's  common stock at an exercise  price of $0.010 per share (the  "Warrant
Shares") to vest as follows:  (i) 60,000  Warrant Shares shall vest monthly each
of the  first  twelve  months  from  February  2,  2005  through  the term of an
Employment  Agreement with Mr. Dunhem or immediately if Mr. Dunhem's  employment
is  terminated  without  cause or for good reason or due to a change in control,
sale of a majority of the common stock or substantially all of the assets of the
Company or merger of the  Company  into or with  another  company  (unless  such
company is less than fifty percent (50%) of the size  (measured by market value)
of the Company) or reverse merger with another company; and (ii) 430,000 Warrant
Shares will vest immediately upon the Company achieving a $20 million market cap
for ten (10)  consecutive  trading  days and a price  per share of not less than
$0.50.  The Warrant  Shares  granted  hereunder  must be  exercised by the tenth
anniversary  of the date of vesting or shall be  forfeited  by Mr.  Dunhem.  All
Warrant Shares granted  hereunder  shall have a "cashless"  exercise  provision,
which enables Mr. Dunhem to give up a portion of his Warrant  Shares in order to
exercise  others without  paying cash for them.  Further,  the number,  kind and
strike  price  of  the  stock  Warrant   Shares  granted   hereunder   shall  be
appropriately and equitably adjusted to reflect any stock dividend, stock split,
spin-off,    split-off,    extraordinary   cash   dividend,    recapitalization,
reclassification  or other major  corporate  action  affecting  the stock of the
Company to the end that after such event Mr. Dunhem's  proportionate interest in
the Company  shall be maintained  as before the  occurrence  of such event.  Mr.
Dunhem  shall  also  receive  payment  of any cash  dividend  or stock  dividend
declared and paid by the Company as if Mr.  Dunhem had already  exercised all of
his Warrant Shares,  including  unvested  Warrant  Shares.  The Company shall at
earliest opportunity include the warrants in a proper registration statement.

Date:             March 21, 2005

Grantee:          ___________________________

                  Arne Dunhem

NETFRAN DEVELOPMENT CORP.

-----------------------------
Arne Dunhem
President & CEO