Document:

CLASS A WARRANTS
                            TO PURCHASE COMMON STOCK
                                       OF
                                 CNE GROUP, INC.

          THESE WARRANTS ARE ISSUED  PURSUANT TO AN EXEMPTION FROM THE
          REGISTRATION  PROVISIONS OF THE  SECURITIES ACT OF 1933 (THE
          "SECURITIES ACT") AND QUALIFICATION PROVISIONS OF APPLICABLE
          STATE SECURITIES LAWS. NEITHER THEY NOR THE SHARES OF COMMON
          STOCK  FOR  WHICH  THEY  CAN  BE  EXERCISED   MAY  BE  SOLD,
          HYPOTHECATED  OR  OTHERWISE  TRANSFERRED  UNLESS  REGISTERED
          PURSUANT  TO  THE   SECURITIES   ACT  AND  QUALIFIED   UNDER
          APPLICABLE  STATE LAW OR, IN THE  OPINION  OF COUNSEL TO THE
          COMPANY, AN EXEMPTION THEREFROM IS AVAILABLE.

WHEREAS,  at a  meeting  of the  Board of  Directors  of CNE  Group,  Inc.  (the
"Company")  duly  called  and held on April , 2003,  the  Board  authorized  the
granting  __________Class  A Redeemable  Warrants  (the "A  Warrants"),  each to
purchase,  initially,  one  share  of the  Company's  Common  Stock,  par  value
$0.00001,  (the  "Common  Stock")  to  ________________(the  "Holder"),  with an
address at ______________in accordance with the terms set forth herein; and

WHEREAS,  these A  Warrants  are part of a series of A Warrants  (the  "Series A
Warrants"),  all with the same terms and  conditions  as those set forth herein,
which may be issued by the Company  exercisable for up to an aggregate 1,697,961
shares of Common Stock; and

WHEREAS,  the Series A Warrants  are being  issued  together  with shares of the
Company's Class A Preferred Stock (the "A Preferred Stock") having an aggregated
Liquidation  Preference  of  $1,697,961  and are not  detachable  or  separately
transferrable  from the A  Preferred  Stock  prior to  _____________,  2008 (the
"Exercise Commencement Date"); and

WHEREAS,  each A Warrant permits the holder thereof, for a period commencing the
Exercise  Commencement Date and terminating on ____________,  2013 unless sooner
terminated as otherwise provided herein, to purchase one share (collectively the
"A Warrant Shares") of Common Stock, initially, at $1.00 per share; and

WHEREAS,  the Company  desires to set forth the terms of the A Warrants  and the
Holder desires to accept such terms;

NOW,  THEREFORE,  in consideration of the premises,  the parties hereto agree as
follows:

1.  Grant of Warrants.
    ------------------

<PAGE>

The  Company  hereby  grants to the Holder the right to  purchase  one A Warrant
Share  for each A Warrant  granted  hereby  for a price of $1.00 as  hereinafter
adjusted (the  "Exercise  Price").  The A Warrants may be  exercised,  except as
otherwise  provided  herein,  in whole or in part at any time  commencing on the
Exercise  Commencement  Date and  terminating  at 5:00 P.M.,  New York time,  on
_________ , 2013 (the "Expiration Date").

2.  Manner of Exercise.
    -------------------

The A Warrants  underlying this A Warrant Agreement may be exercised in whole or
in part by surrender of this A Warrant Agreement,  with the form of subscription
at the end hereof duly  executed by the Holder,  to the Company at its principal
office,  accompanied by payment in full in cash or by certified or official bank
check to the order of the  Company  of the  Exercise  Price of the  shares to be
purchased.  As soon as practicable,  but in no event more than 15 days after the
Holder has given the aforesaid  written  notice and made the aforesaid  payment,
the Company shall, without charging stock issue or transfer taxes to the Holder,
issue the number of shares of duly  authorized  Common Stock  issuable upon such
exercise,  which shall be duly issued, fully paid and non-assessable,  and shall
deliver to the Holder a certificate or certificates therefor,  registered in the
Holder's name. In the event of a partial  exercise of this A Warrant  Agreement,
the Company shall also issue and deliver to the Holder a new A Warrant Agreement
of like tenor,  in the name of the Holder,  for the  exercise of the number of A
Warrant Shares for which such A Warrant Agreement may still be exercised.

3.  Investment Representation.
    --------------------------

The Holder  acknowledges that the A Warrants underlying this A Warrant Agreement
as well as the A Warrant  Shares for which  these A Warrants  may be  exercised,
have not been and, except as otherwise  provided herein,  will not be registered
under the Securities Act of 1933 (the "Act") or qualified under applicable state
securities  laws and that  the  transferability  thereof  is  restricted  by the
registration  provisions  of the  Act as well as such  state  laws.  The  Holder
represents  that he is  acquiring  the A Warrants and will acquire the A Warrant
Shares for his own account,  for investment purposes only and not with a view to
resale  or  other  distribution  thereof,  nor with the  intention  of  selling,
transferring  or otherwise  disposing of all or any part of such  securities for
any particular event or circumstance,  except selling, transferring or disposing
of them upon full  compliance  with all  applicable  provisions  of the Act, the
Securities  Exchange Act of 1934 (the "Exchange Act"), the Rules and Regulations
promulgated  by  the  Securities  and  Exchange  Commission  (the  "Commission")
thereunder,  and any  applicable  state  securities  laws.  The  Holder  further
understands  and agrees that (i) neither the A Warrants nor the A Warrant Shares
may be sold unless they are subsequently  registered under the Act and qualified
under any applicable  state  securities laws or, in the opinion of the Company's
counsel,  an exemption from such  registration  and  qualification is available;
(ii) any routine  sales of the Company's  securities  made in reliance upon Rule
144  promulgated  by the  Commission  under the Act, can be effected only in the
amounts set forth in and pursuant to the other terms and  conditions,  including
applicable  holding  periods,  of that Rule;  and (iii) except as otherwise  set
forth  herein,  the Company is under no obligation to register the A Warrants

                                       -2-

<PAGE>

or the A Warrant  Shares on his  behalf or to assist him in  complying  with any
exemption  from  registration  under  the  Act.  The  Holder  agrees  that  each
certificate  representing  any A Warrant  Shares for which the A Warrants may be
exercised will bear on its face a legend in substantially the following form:

       These   securities  have  not  been  registered   under  the
       Securities  Act  of  1933  or  qualified   under  any  state
       securities  laws.  They  may not be  sold,  hypothecated  or
       otherwise   transferred  in  the  absence  of  an  effective
       registration statement under that Act or qualification under
       applicable   state   securities   laws  without  an  opinion
       acceptable to counsel to the Company that such  registration
       and qualification are not required.

4.  Holder Not Deemed Stockholder.
    ------------------------------

The Holder  shall not,  as holder of the A  Warrants,  be entitled to vote or to
receive  dividends,  except as may be provided in Section 5 below,  or be deemed
the holder of Common Stock that may at any time be issuable upon exercise of the
A Warrants for any purpose  whatsoever,  nor shall anything  contained herein be
construed  to confer  upon the Holder,  as holder of the A Warrants,  any of the
rights of a stockholder  of the Company or any right to vote for the election of
directors or upon any matter  submitted to stockholders at any meeting  thereof,
or to give or  withhold  consent  to any  corporate  action  (whether  upon  any
recapitalization,  issue or  reclassification  of stock,  change of par value or
change  of  stock  to no par  value,  consolidation,  merger  or  conveyance  or
otherwise),  or to  receive  notice of  meetings,  or to  receive  dividends  or
subscription  rights,  until the Holder shall have  exercised the A Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.

5.  Warrant Adjustments.
    --------------------

The Exercise Price and the number of shares  purchasable  upon exercise of the A
Warrants  shall be subject to  adjustment  with respect to events after the date
hereof as follows:

     (a) Adjustment for Change in Capital Stock. Except as provided in Paragraph
5 (k) below,  if the Company  shall (i)  declare a dividend  on its  outstanding
Common Stock in shares of its capital  stock,  (ii)  subdivide  its  outstanding
Common Stock,  (iii) combine its outstanding  Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by  reclassification of
its Common Stock  (including  any such  reclassification  in  connection  with a
consolidation  or merger in which the  Company is the  continuing  corporation),
then in each such case the Exercise  Price in effect  immediately  prior to such
action shall be adjusted so that if the A Warrants are thereafter exercised, the
Holder  may  receive  the  number  and kind of shares  which he would have owned
immediately following such action if he had exercised the A Warrants immediately
prior to such action.  Such adjustment shall be made successively  whenever such
an event shall occur. The adjustment shall become  effective  immediately  after
the record date in the case of a dividend or distribution and immediately  after
the   effective   date  in  the   case   of  a   subdivision,   combination   or
reclassification. If after an adjustment the Holder upon

                                      -3-

<PAGE>

exercise of the A Warrants may receive  shares of two or more classes of capital
stock of the Company,  the  Company's  Board of Directors  shall  determine  the
allocation of the adjusted  Exercise Price between the classes of capital stock.
After such  allocation,  the Exercise Price of each class of capital stock shall
thereafter be subject to adjustment on terms  comparable to those  applicable to
Common Stock in this Section 5.

     (b) Subscription Offerings. In case the Company shall issue to stockholders
or otherwise  rights,  options,  or warrants  entitling  the holders  thereof to
subscribe  for or  purchase  Common  Stock (or  securities  convertible  into or
exchangeable  for  Common  Stock) at a price per share (or  having a  conversion
price per share, in the case of a security  convertible into or exchangeable for
Common  Stock)  less than the lower of the then  Exercise  Price or the  Current
Market  Price per share (as defined in Paragraph 5 (d) below) on the record date
for the  determination  of  stockholders  entitled to receive  such  rights,  or
otherwise on the granting  date,  as the case may be, then in each such case the
Exercise  Price shall be adjusted by  multiplying  the Exercise  Price in effect
immediately  prior to such  record or  granting  date,  as the case may be, by a
fraction,  of which the numerator  shall be the number of shares of Common Stock
outstanding  on such record or granting date plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock  so to be  offered  (or the  aggregate  initial  conversion  price  of the
convertible  securities so to be offered)  would purchase at such Exercise Price
or Current Market Price, as the case may be, and of which the denominator  shall
be the number of shares of Common Stock  outstanding  on such record or granting
date plus the number of  additional  shares of Common  Stock to be  offered  for
subscription  or  purchase  (or  into  which  the  convertible  or  exchangeable
securities so to be offered are initially  convertible  or  exchangeable).  Such
adjustment  shall become  effective at the close of business on such record date
or granting date, as the case may be; provided, however, that, to the extent the
shares of Common  Stock (or  securities  convertible  into or  exchangeable  for
shares  of  Common  Stock)  are not  delivered,  the  Exercise  Price  shall  be
readjusted after the expiration of such rights,  options,  or warrants (but only
to the extent that the A Warrants are not exercised after such  expiration),  to
the Exercise Price which would then be in effect had the  adjustments  made upon
the issuance of such rights or warrants  been made upon the basis of delivery of
only the number of shares of Common  Stock (or  securities  convertible  into or
exchangeable  for  shares  of  Common  Stock)  actually  issued.   In  case  any
subscription  price may be paid in a consideration part or all of which shall be
in a form  other  than  cash,  the  value  of  such  consideration  shall  be as
determined in good faith by the Company's  Board of Directors.  Shares of Common
Stock  owned by or held for the  account of the  Company  or any  majority-owned
subsidiary  shall  not be  deemed  outstanding  for  the  purpose  of  any  such
computation.

     (c)  Other  Rights to  Acquire  Common  Stock.  In case the  Company  shall
distribute to all holders of its Common Stock  evidences of its  indebtedness or
assets (excluding cash dividends or distributions paid from retained earnings of
Maker) or rights or warrants to  subscribe or purchase  Common Stock  (excluding
those  referred to in Paragraph (b) above),  then in each such case the Exercise
Price shall be adjusted  so that the same shall  equal the price  determined  by
multiplying the Exercise Price in effect  immediately  prior to the date of such
distribution by a fraction of which the numerator

                                      -4-

<PAGE>

shall be the Current  Market Price per share (as defined in Paragraph (d) below)
of the Common Stock on the Record Date mentioned below less the then fair market
value (as determined by the Board of Directors of the Company) of the portion of
the assets or  evidences of  indebtedness  so  distributed  or of such rights or
warrants  applicable to one share of Common Stock, and the denominator  shall be
the Current Market Price per share of the Common Stock.  Such  adjustment  shall
become  effective  immediately  after the Record Date for the  determination  of
shareholders entitled to receive such distribution.

     (d)  Current  Market  Price.  For  the  purpose  of any  computation  under
Paragraphs  (b) and (c) of this Section 5, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily  closing
prices for the 30  consecutive  trading days  commencing  45 trading days before
such date. The closing price for each day shall be the last reported sales price
regular  way or, in case no such  reported  sale  takes  place on such day,  the
closing  bid  price  regular  way,  in  either  case on the  principal  national
securities  exchange on which the Common  Stock is listed or admitted to trading
or, if the Common  Stock is not listed or  admitted  to trading on any  national
securities exchange, the highest reported bid price as furnished by the National
Association of Securities Dealers,  Inc. through NASDAQ or similar  organization
if NASDAQ is no longer  reporting  such  information,  or by the National  Daily
Quotation Bureau or similar  organization if the Common Stock is not then quoted
on an inter-dealer quotation system. If on any such date the Common Stock is not
quoted by any such  organization,  the fair  value of the  Common  Stock on such
date, as determined by the Company's Board of Directors, shall be used.

     (e) Action to Permit  Valid  Issuance of Common  Stock.  Before  taking any
action which would cause an  adjustment  reducing  the Exercise  Price below the
then par value,  if any, of the shares of Common Stock issuable upon exercise of
the A Warrants,  the Company  will take all  corporate  action which may, in the
opinion of its  counsel,  be necessary in order that the Company may validly and
legally issue shares of such Common Stock at such adjusted Exercise Price.

     (f)  Minimum  Adjustment.  No  adjustment  in the  Exercise  Price shall be
required if such  adjustment  is less than $0.05;  provided,  however,  that any
adjustments,  which by reason of this  Paragraph  5 (f) are not  required  to be
made,  shall be  carried  forward  and  taken  into  account  in any  subsequent
adjustment.  All calculations  under this Section 5 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything to
the  contrary  notwithstanding,  the  Company  shall be  entitled  to make  such
reductions  in the  conversion  price,  in  addition  to those  required by this
Paragraph 5 (f), as it in its  discretion  shall  determine  to be  advisable in
order that any stock dividends, subdivision of shares, distribution of rights to
purchase stock or securities,  or distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its  stockholders  shall
not be taxable.

     (g)  Referral  of  Adjustment.  In any case in which  this  Section 5 shall
require  that an  adjustment  in the  Exercise  Price be made  effective as of a
record date for a specified  event,  if the A Warrants shall have been exercised
after such record date the

                                      -5-

<PAGE>

Company may elect to defer  until the  occurrence  of such event  issuing to the
Holder  the  shares,  if any,  issuable  upon such  exercise  over and above the
shares,  if any,  issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment;  provided,  however,  that the Company shall
deliver to the Holder a due bill or other appropriate  instrument evidencing the
Holder's  right to receive such  additional  shares upon the  occurrence  of the
event requiring such adjustment.

     (h) Number of  Shares.  Upon each  adjustment  of the  Exercise  Price as a
result of the calculations made in Paragraphs (a) through (c) of this Section 5,
the A Warrants shall thereafter evidence the right to purchase,  at the adjusted
Exercise  Price,  that number of shares  (calculated to the nearest  thousandth)
obtained by  dividing  (i) the product  obtained  by  multiplying  the number of
shares  purchasable  upon exercise of the A Warrants  prior to adjustment of the
number of shares by the  Exercise  Price in effect  prior to  adjustment  of the
Exercise Price by (ii) the Exercise Price in effect after such adjustment of the
Exercise Price.

     (i) Transactions Not Requiring Adjustments.  No adjustment need be made for
a transaction referred to in Paragraphs (a) through (c) of this Section 5 if the
Holder  is  permitted  to  participate  in the  transaction  on a basis  no less
favorable  than any other party and at a level which would preserve the Holder's
percentage  equity  participation  in the Common  Stock upon  exercise  of the A
Warrants.  No  adjustment  need be made for sales of Common Stock  pursuant to a
Company plan for reinvestment of dividends or interest,  the granting of options
and/or the exercise of options  outstanding under any of the Company's currently
existing stock option plans, the exercise of currently  existing incentive stock
options or incentive  stock options  which may be granted in the future,  or the
exercise  of any  other  of the  Company's  currently  outstanding  options.  No
adjustment  need be made for a change  in the par  value or no par  value of the
Common  Stock.  If the A  Warrants  become  exercisable  solely  into  cash,  no
adjustment need be made thereafter. Interest will not accrue on the cash.

     (j) Notice of  Adjustments.  Whenever the Exercise  Price is adjusted,  the
Company shall  promptly mail to the Holder a notice of the  adjustment  together
with a certificate  from the Company's Chief  Financial  Officer briefly stating
(i) the facts requiring the adjustment, (ii) the adjusted Exercise Price and the
manner of  computing  it;  and (iii) the date on which such  adjustment  becomes
effective.  The certificate shall be prima facia evidence that the adjustment is
correct, absent manifest error.

     (k) Reorganization of Company.  If the Company and/or the holders of Common
Stock are parties to a merger,  consolidation  or a transaction in which (i) the
Company transfers or leases  substantially  all of its assets;  (ii) the Company
reclassifies or changes its outstanding  Common Stock; or (iii) the Common Stock
is  exchanged  for  securities,  cash or other  assets;  the  person  who is the
transferee or lessee of such assets or is obligated to deliver such  securities,
cash or other assets shall assume the terms of the A Warrants.  If the issuer of
securities  deliverable  upon  exercise of the A Warrants is an affiliate of the
surviving,  transferee  or lessee  corporation,  that issuer  shall join in such
assumption.  The assumption agreement shall provide that the Holder may exercise
the A

                                      -6-

<PAGE>

Warrants into the kind and amount of securities, cash or other assets that
he would have owned immediately after the consolidation, merger, transfer, lease
or exchange if he had exercised the A Warrants  immediately before the effective
date of the transaction.  The assumption agreement shall provide for adjustments
that  shall be as  nearly  equivalent  as may be  practical  to the  adjustments
provided for in this Section 5. The successor company shall mail to the Holder a
notice briefly describing the assumption  agreement.  If this Paragraph applies,
Paragraph 5 (a) above does not apply.

     (l)  Voluntary  Reduction.  The  Company  from time to time may  reduce the
Exercise Price by any amount for any period of time if the period is at least 20
days and if the  reduction  is  irrevocable  during  the  period.  Whenever  the
Exercise Price is reduced,  the Company shall mail to the Holder a notice of the
reduction.  The  Company  shall mail the notice at least 15 days before the date
the reduced  Exercise  Price takes  effect.  The notice  shall state the reduced
Exercise Price and the period it will be in effect.  A reduction of the Exercise
Price does not  change or adjust  the  Exercise  Price  otherwise  in effect for
purposes of Paragraphs 5 (a) through (c) above.

     (m)  Dissolution,  Liquidation.  In the event of the  dissolution  or total
liquidation  of the  Company,  then  after the  effective  date  thereof,  the A
Warrants and all rights thereunder shall expire.

     (n)  Notices.  If (i) the Company  takes any action  that would  require an
adjustment in the Exercise  Price pursuant to this Section 5; or (ii) there is a
liquidation or dissolution of the Company,  the Company shall mail to the Holder
a notice stating the proposed  record date for a distribution  or effective date
of a reclassification,  consolidation,  merger, transfer,  lease, liquidation or
dissolution.  The  Company  shall mail the notice at least 15 days  before  such
date.  Failure  to mail the  notice or any  defect in it shall  not  affect  the
validity of the transaction.

     (o) Determination by Company Conclusive. Any determination that the Company
or its  Board  of  Directors  must  make  pursuant  to this  Section  5 shall be
conclusive, absent manifest error.

6.  Fractional Shares.
    ------------------

If the  number  of A  Warrant  Shares  purchasable  upon the  exercise  of the A
Warrants  is  adjusted   pursuant  to  Section  5  hereof,   the  Company  shall
nevertheless not be required to issue fractions of shares upon exercise of the A
Warrants or otherwise,  or to distribute  certificates that evidence  fractional
shares. Instead the Company will round any fractional share to the nearest share
so that if the  fraction  is less than 0.5 no share  shall be issued  and if the
fraction is 0.5 or higher the Company shall issue one full share.

7.  Inclusion of A Warrant and A Warrant Shares in Registration Statement;
    ----------------------------------------------------------------------
    Right to Registration.
    ----------------------

     (a) Holder's Right to Registration. Commencing on the Exercise

                                      -7-

<PAGE>

Commencement  Date and  through  one year  after  the date on which all of the A
Warrants  have  expired  and/or  been  exercised,  upon  receipt of notice  (the
"Registration Request Notice") requesting  registration under the Securities Act
of the A  Warrants  and the A Warrant  Shares  (collectively  the  "Registerable
Securities")  from the holders of the majority of the  Registerable  Securities,
the Company will offer to the Holder the opportunity to include his Registerable
Securities in such  registration.  The Company will use its best efforts to file
with the Commission as promptly as practicable but in no event later than thirty
(30) days after its receipt of the  Registration  Request Notice, a registration
statement (the "Demand Registration  Statement"),  and will use its best efforts
to  have  the  Demand  Registration  Statement  declared  effective  and  remain
effective  until the  earliest  of two years  thereafter,  the date that all the
Registerable  Securities registered thereby have been sold or, in the reasonable
opinion  of the  Company's  counsel,  the  Registerable  Securities  may be sold
publicly  without  registration.  The Company  will also use its best efforts to
qualify the Registerable Securities under the securities laws of the state where
the Holder  resides  provided  the Company is not  required to execute a general
consent to service or to qualify to do business in such state. This offer to the
Holder shall be made within 10 days after the Company  receives the Registration
Request Notice.  This Demand  Registration right may be exercised one time only.
If the  Holder  elects to  include  his  Registerable  Securities  in the Demand
Registration  Statement,  he will, in a timely fashion,  provide the Company and
its counsel with such  information  and execute such  documents as the Company's
counsel may  reasonably  require to prepare and process the Demand  Registration
Statement.  If the Holder elects not to include his  Registerable  Securities in
the  "Demand  Registration  Statement,"  he shall have no further  rights to the
registration of his Registerable Securities under this Paragraph 7 (a).

     (b) "Piggy  Back"  Registration  Rights.  If at any time after the Exercise
Commencement  Date, the Company proposes to file a Registration  Statement under
the Act with respect to any of its  securities  (except one relating to employee
benefit  plans or a merger or similar  transaction)  (a "Public  Offering"),  it
shall give written  notice of its  intention to effect such filing to the Holder
at least 30 days prior to filing such  Registration  Statement (the  "Piggy-Back
Registration Statement").  If the Holder's Registerable Securities have not been
previously  registered  as  provided  in Section 7 (a) above,  and he desires to
include his Registerable Securities in the Piggy-Back Registration Statement, he
shall notify the Company in writing  within 15 days after receipt of such notice
from the  Company,  in which  event  the  Company  shall  include  the  Holder's
Registerable  Securities in the Piggy-Back Registration Statement. If the Holder
elects to include his  Registerable  Securities in the  Piggy-Back  Registration
Statement  as set forth  herein,  he shall,  in a timely  fashion,  provide  the
Company and its counsel with such  information and execute such documents as its
counsel  may   reasonably   require  to  prepare  and  process  the   Piggy-Back
Registration Statement.

     (c) Copies of Registration  Statements and  Prospectuses.  The Company will
provide  the  Holder  with  a copy  of  the  Demand  Registration  Statement  or
Piggy-Back  Registration  Statement,  as the  case  may be,  and any  amendments
thereto,  and copies of the final prospectus included therein in such quantities
as may  reasonably  be  required  to permit the Holder to sell his  Registerable
Securities after the Demand  Registration

                                       -8-

<PAGE>

Statement or Piggy-Back  Registration Statement, as the case may be, is declared
effective by the Commission (the "Effective Date").

     (d) The Company's Obligation to Bear Expenses of Registration.  The Company
will bear all expenses (except  underwriting  discounts and commission,  if any,
and the legal fees and expenses, if any, of counsel to the Holder) necessary and
incidental to the performance of its obligations under this Section 7.

     (e)   Indemnification.   The  Company  and  the  Holder,  if  the  Holder's
Registerable  Securities  are included in a Registration  Statement  pursuant to
this  Section 7,  shall  provide  appropriate  cross  indemnities  to each other
covering the  information  supplied by the  indemnifying  party for inclusion in
such Registration Statement.

     (f)  Restriction  on  Registration  Rights.  Anything to the  contrary  not
withstanding,  the Company  shall not be required to register  any  Registerable
Securities that, in the reasonable opinion of the Company's counsel, may be sold
pursuant to the exemption from registration  provided by Section (k) of Rule 144
promulgated under the Act.

8.  Covenants of the Company.
    -------------------------

The Company  covenants  that it will at all times reserve and keep available out
of its authorized Common Stock, solely for the purpose of issue upon exercise of
Warrants,  such number of shares of Common Stock as shall then be issuable  upon
the exercise of all outstanding Warrants.  The Company covenants that all shares
of Common Stock which shall be issuable upon exercise of the Warrants  shall, at
the time of  delivery  thereof,  be duly and  validly  issued and fully paid and
nonassessable and free from all preemptive or similar rights,  taxes,  liens and
charges with respect to the issue  thereof,  and that upon  issuance such shares
shall be listed on each securities  exchange,  if any, on which the other shares
of outstanding Common Stock of the Company are then listed.

9.  Detachability; Termination.
    ---------------------------

The Holder's A Warrants  underlying this A Warrant Agreement are being issued to
the Holder together with ______the  shares (the "A Shares") of A Preferred Stock
represented by  certificate(s)  #(s)______ also being issued to the Holder as of
the date hereof.  The Holder's A Warrants  shall not  detachable  or  separately
transferrable  from  the A  Shares  prior  to the  Exercise  Commencement  Date.
Anything to the contrary not with  standing,  in the event that the A Shares are
redeemed by the Company prior to the Exercise  Commencement Date, the A Warrants
represented  by this  Warrant  Agreement  shall  terminate  on the  date of such
redemption.

10. Amendments.
    -----------

This Agreement shall not be amended, modified or revoked except by agreement in
writing, signed by the Company and the Holder.

                                       -9-

<PAGE>

11. Governing Law.
    --------------

The A Warrants shall be governed by the laws of the State of New York.

IN WITNESS WHEREOF, the Company has caused these A Warrants to be executed on
its behalf by an officer thereunto duly authorized and the Holder has executed
this Agreement as of the date above written.

CNE Group, Inc.                                   ______________________________

By: ____________________________            By:   ______________________________

    George W. Benoit, Chairman of the Board

                                      -10-

<PAGE>

                                SUBSCRIPTION FORM

                          To Be Executed by the Holder
                         in Order to Exercise A Warrants

The undersigned Holder hereby irrevocably elects to exercise the A Warrants, and
to purchase  the  _______  shares of Common  Stock  issuable  upon the  exercise
thereof,  and requests that  certificates for such shares shall be issued in the
name of

           [PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER]

       __________________________________________________________________

       __________________________________________________________________

       __________________________________________________________________
                     [please print or type name and address]

and be delivered to

       __________________________________________________________________

       __________________________________________________________________

       __________________________________________________________________
                     [please print or type name and address]

and if such  number  of  shares of  Common  Stock  shall  not be all the  shares
issuable  upon the exercise of the A Warrants,  that new A Warrants  exercisable
for the balance of the shares  issuable  upon the  exercise of the A Warrants be
delivered to the Holder at the address stated below.

Dated:                                      X
        -------------------                  -----------------------------------

                                             -----------------------------------

                                             -----------------------------------
                                                           Address

                                             -----------------------------------
                                                Taxpayer Identification Number

                                             -----------------------------------
                                                      Signature Guaranteed

                                             -----------------------------------

                                      -11-CLASS B WARRANTS
                            TO PURCHASE COMMON STOCK
                                       OF
                                 CNE GROUP, INC.

          THESE WARRANTS ARE ISSUED  PURSUANT TO AN EXEMPTION FROM THE
          REGISTRATION  PROVISIONS OF THE  SECURITIES ACT OF 1933 (THE
          "SECURITIES ACT") AND QUALIFICATION PROVISIONS OF APPLICABLE
          STATE SECURITIES LAWS. NEITHER THEY NOR THE SHARES OF COMMON
          STOCK  FOR  WHICH  THEY  CAN  BE  EXERCISED   MAY  BE  SOLD,
          HYPOTHECATED  OR  OTHERWISE  TRANSFERRED  UNLESS  REGISTERED
          PURSUANT  TO  THE   SECURITIES   ACT  AND  QUALIFIED   UNDER
          APPLICABLE  STATE LAW OR, IN THE  OPINION  OF COUNSEL TO THE
          COMPANY, AN EXEMPTION THEREFROM IS AVAILABLE.

WHEREAS,  at a  meeting  of the  Board of  Directors  of CNE  Group,  Inc.  (the
"Company")  duly  called  and held on April , 2003,  the  Board  authorized  the
granting of Class B Warrants (the "B  Warrants"),  each to purchase,  initially,
one share of the  Company's  Common  Stock,  par value  $0.00001,  (the  "Common
Stock") to (the  "Holder"),  with an address at in accordance with the terms set
forth herein; and

WHEREAS,  these B Warrants are part of a series of B Warrants, all with the same
terms  and  conditions  as those set  forth  herein,  which may be issued by the
Company exercisable for up to an aggregate 5,207,250 shares of Common Stock; and

WHEREAS,  the B Warrants  are a part of an  offering  by the Company of up to 25
units (the "Units") each  consisting  of (i) one 10% Secured  Subordinated  Note
(collectively the "Notes") in the principal amount of $50,000;  and (ii) 208,290
B Warrants; and

WHEREAS,  each B Warrant permits the holder thereof,  for a period commencing on
the date hereof and terminating on April 30, 2013, to purchase,  initially,  one
share  (collectively the "B Warrant Shares") of Common Stock at $0.50 per share;
and

WHEREAS,  the Company  desires to set forth the terms of the B Warrants  and the
Holder desires to accept such terms;

NOW,  THEREFORE,  in consideration of the premises,  the parties hereto agree as
follows:

1. Grant of Warrants.
   ------------------

The Company hereby grants to the Holder the right to purchase one B Warrant
Share for each B Warrant granted hereby for a price of $0.50 as hereinafter
adjusted (the "Exercise Price"). The B Warrants may be exercised, except as
otherwise provided herein, in whole or in part at any time commencing upon the
date hereof and terminating at 5:00 P.M., New

<PAGE>

York time, on April 30, 2013 (the "Expiration Date").

2. Manner of Exercise.
   -------------------

(a) Cash Exercise.  The B Warrants  underlying  this B Warrant  Agreement may be
exercised in whole or in part by surrender of this B Warrant Agreement, with the
form of  subscription  at the end hereof duly  executed  by the  Holder,  to the
Company at its  principal  office,  and,  except as provided in  Paragraph 2 (b)
below,  accompanied  by payment in full in cash or by certified or official bank
check to the order of the  Company  of the  Exercise  Price of the  shares to be
purchased.  As soon as practicable,  but in no event more than 15 days after the
Holder has given the aforesaid  written  notice and made the aforesaid  payment,
the Company shall, without charging stock issue or transfer taxes to the Holder,
issue the number of shares of duly  authorized  Common Stock  issuable upon such
exercise,  which shall be duly issued, fully paid and non-assessable,  and shall
deliver to the Holder a certificate or certificates therefor,  registered in the
Holder's name. In the event of a partial  exercise of this B Warrant  Agreement,
the Company shall also issue and deliver to the Holder a new B Warrant Agreement
of like tenor,  in the name of the Holder,  for the  exercise of the number of B
Warrant Shares for which such B Warrant Agreement may still be exercised.

(b)  Cashless  Exercise.   Notwithstanding  anything  contained  herein  to  the
contrary,  the Holder may, at his  election  exercised  in his sole  discretion,
exercise  the B Warrants  underlying  this B Warrant  Agreement,  in whole or in
part, and, in lieu of making the cash payment otherwise  contemplated to be made
to the  Company  upon such  exercise  in payment of the  Exercise  Price,  elect
instead to receive upon such exercise the "Net Number" of shares of Common Stock
determined according to the following formula (a "Cashless Exercise"):

                  Net Number = (A x B) - (A x C)
                                ---------------
                                       B

For purposes of the foregoing formula:

                    A = the total  number of shares  with  respect to which this
                    Warrant is then being exercised.

                    B = the  Closing  Sale  Price  of the  Common  Stock  on the
                    trading day  immediately  preceding the date of the Exercise
                    Notice.

                    C = the  Warrant  Exercise  Price  then  in  effect  for the
                    applicable Warrant Shares at the time of such exercise.

3. Investment Representation.
   --------------------------

The Holder acknowledges that the B Warrants underlying this B Warrant Agreement
as

                                      -2-

<PAGE>

well as the B Warrant  Shares for which these B Warrants may be exercised,  have
not been and, except as otherwise provided herein,  will not be registered under
the  Securities  Act of 1933 (the "Act") or  qualified  under  applicable  state
securities  laws and that  the  transferability  thereof  is  restricted  by the
registration  provisions  of the  Act as well as such  state  laws.  The  Holder
represents  that he is  acquiring  the B Warrants and will acquire the B Warrant
Shares for his own account,  for investment purposes only and not with a view to
resale  or  other  distribution  thereof,  or with  the  intention  of  selling,
transferring  or otherwise  disposing of all or any part of such  securities for
any particular event or circumstance,  except selling, transferring or disposing
of them upon full  compliance  with all  applicable  provisions  of the Act, the
Securities  Exchange Act of 1934 (the "Exchange Act"), the Rules and Regulations
promulgated  by  the  Securities  and  Exchange  Commission  (the  "Commission")
thereunder,  and any  applicable  state  securities  laws.  The  Holder  further
understands  and agrees that (i) neither the B Warrants nor the B Warrant Shares
may be sold unless they are subsequently  registered under the Act and qualified
under any applicable  state  securities laws or, in the opinion of the Company's
counsel,  an exemption from such  registration  and  qualification is available;
(ii) any routine  sales of the Company's  securities  made in reliance upon Rule
144  promulgated  by the  Commission  under the Act, can be effected only in the
amounts set forth in and pursuant to the other terms and  conditions,  including
applicable  holding  periods,  of that Rule;  and (iii) except as otherwise  set
forth  herein,  the Company is under no obligation to register the B Warrants or
the B Warrant  Shares  on his  behalf or to  assist  him in  complying  with any
exemption  from  registration  under  the  Act.  The  Holder  agrees  that  each
certificate  representing  any B Warrant  Shares for which the B Warrants may be
exercised will bear on its face a legend in substantially the following form:

        These   securities  have  not  been  registered   under  the
        Securities  Act  of  1933  or  qualified   under  any  state
        securities  laws.  They  may not be  sold,  hypothecated  or
        otherwise   transferred  in  the  absence  of  an  effective
        registration statement under that Act or qualification under
        applicable   state   securities   laws  without  an  opinion
        acceptable to counsel to the Company that such  registration
        and qualification are not required.

4.  Holder Not Deemed Stockholder.
    ------------------------------

The Holder  shall not, as holder of the BB  Warrants,  be entitled to vote or to
receive  dividends,  except as may be provided in Section 5 below,  or be deemed
the holder of Common Stock that may at any time be issuable upon exercise of the
B Warrants for any purpose  whatsoever,  nor shall anything  contained herein be
construed  to confer  upon the Holder,  as holder of the B Warrants,  any of the
rights of a stockholder  of the Company or any right to vote for the election of
directors or upon any matter  submitted to stockholders at any meeting  thereof,
or to give or  withhold  consent  to any  corporate  action  (whether  upon  any
recapitalization,  issue or  reclassification  of stock,  change of par value or
change  of  stock  to no par  value,  consolidation,  merger  or  conveyance  or
otherwise),  or to  receive  notice of  meetings,  or to  receive  dividends  or
subscription  rights,  until the Holder shall have  exercised the B Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.

                                      -3-
<PAGE>

5.  Warrant Adjustments.
    --------------------

The Exercise Price and the number of shares  purchasable  upon exercise of the B
Warrants  shall be subject to  adjustment  with respect to events after the date
hereof as follows:

     (a) Adjustment for Change in Capital Stock. Except as provided in Paragraph
5 (l) below,  if the Company  shall (i)  declare a dividend  on its  outstanding
Common Stock in shares of its capital  stock,  (ii)  subdivide  its  outstanding
Common Stock,  (iii) combine its outstanding  Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by  reclassification of
its Common Stock  (including  any such  reclassification  in  connection  with a
consolidation  or merger in which the  Company is the  continuing  corporation),
then in each such case the Exercise  Price in effect  immediately  prior to such
action shall be adjusted so that if the B Warrants are thereafter exercised, the
Holder  may  receive  the  number  and kind of shares  which he would have owned
immediately following such action if he had exercised the B Warrants immediately
prior to such action.  Such adjustment shall be made successively  whenever such
an event shall occur. The adjustment shall become  effective  immediately  after
the record date in the case of a dividend or distribution and immediately  after
the   effective   date  in  the   case   of  a   subdivision,   combination   or
reclassification.  If after an  adjustment  the Holder  upon  exercise  of the B
Warrants  may  receive  shares of two or more  classes of  capital  stock of the
Company,  the Company's Board of Directors shall determine the allocation of the
adjusted  Exercise  Price  between  the  classes  of capital  stock.  After such
allocation,  the Exercise Price of each class of capital stock shall  thereafter
be subject to adjustment on terms comparable to those applicable to Common Stock
in this Section 5.

     (b) Subscription Offerings. In case the Company shall issue to stockholders
or otherwise  rights,  options,  or warrants  entitling  the holders  thereof to
subscribe  for or  purchase  Common  Stock (or  securities  convertible  into or
exchangeable  for  Common  Stock) at a price per share (or  having a  conversion
price per share, in the case of a security  convertible into or exchangeable for
Common  Stock)  less than the lower of the then  Exercise  Price or the  Current
Market  Price per share (as defined in Paragraph 5 (d) below) on the record date
for the  determination  of  stockholders  entitled to receive  such  rights,  or
otherwise on the granting  date,  as the case may be, then in each such case the
Exercise  Price shall be adjusted by  multiplying  the Exercise  Price in effect
immediately  prior to such  record or  granting  date,  as the case may be, by a
fraction,  of which the numerator  shall be the number of shares of Common Stock
outstanding  on such record or granting date plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock  so to be  offered  (or the  aggregate  initial  conversion  price  of the
convertible  securities so to be offered)  would purchase at such Exercise Price
or Current Market Price, as the case may be, and of which the denominator  shall
be the number of shares of Common Stock  outstanding  on such record or granting
date plus the number of  additional  shares of Common  Stock to be  offered  for
subscription  or  purchase  (or  into  which  the  convertible  or  exchangeable
securities so to be offered are initially  convertible  or  exchangeable).  Such
adjustment  shall become  effective at the close of business on such record date
or granting date, as the case may be; provided,

                                      -4-

<PAGE>

however,  that,  to the  extent  the  shares  of  Common  Stock  (or  securities
convertible  into or exchangeable for shares of Common Stock) are not delivered,
the Exercise  Price shall be  readjusted  after the  expiration  of such rights,
options,  or  warrants  (but  only to the  extent  that the B  Warrants  are not
exercised after such  expiration),  to the Exercise Price which would then be in
effect had the  adjustments  made upon the  issuance  of such rights or warrants
been  made  upon the basis of  delivery  of only the  number of shares of Common
Stock (or  securities  convertible  into or  exchangeable  for  shares of Common
Stock)  actually  issued.  In  case  any  subscription  price  may be  paid in a
consideration part or all of which shall be in a form other than cash, the value
of such  consideration  shall be as  determined  in good faith by the  Company's
Board of  Directors.  Shares of Common Stock owned by or held for the account of
the Company or any majority-owned subsidiary shall not be deemed outstanding for
the purpose of any such computation.

     (c)  Other  Rights to  Acquire  Common  Stock.  In case the  Company  shall
distribute to all holders of its Common Stock  evidences of its  indebtedness or
assets (excluding cash dividends or distributions paid from retained earnings of
Maker) or rights or warrants to  subscribe or purchase  Common stock  (excluding
those  referred to in Paragraph (b) above),  then in each such case the Exercise
Price shall be adjusted  so that the same shall  equal the price  determined  by
multiplying the Exercise Price in effect  immediately  prior to the date of such
distribution  by a fraction of which the numerator  shall be the Current  Market
Price per share (as defined in  Paragraph  (d) below) of the Common Stock on the
Record Date  mentioned  below less the then fair market value (as  determined by
the Board of Directors of the Company) of the portion of the assets or evidences
of indebtedness  so distributed or of such rights or warrants  applicable to one
share of Common Stock, and the denominator shall be the Current Market Price per
share of the Common Stock.  Such adjustment shall become  effective  immediately
after the Record Date for the determination of shareholders  entitled to receive
such distribution.

     (d)  Current  Market  Price.  For  the  purpose  of any  computation  under
Paragraphs  (b) and (c) of this Section 5, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily  closing
prices for the 30  consecutive  trading days  commencing  45 trading days before
such date. The closing price for each day shall be the last reported sales price
regular  way or, in case no such  reported  sale  takes  place on such day,  the
closing  bid  price  regular  way,  in  either  case on the  principal  national
securities  exchange on which the Common  Stock is listed or admitted to trading
or, if the Common  Stock is not listed or  admitted  to trading on any  national
securities exchange, the highest reported bid price as furnished by the National
Association of Securities Dealers,  Inc. through NASDAQ or similar  organization
if NASDAQ is no longer  reporting  such  information,  or by the National  Daily
Quotation Bureau or similar  organization if the Common Stock is not then quoted
on an inter-dealer quotation system. If on any such date the Common Stock is not
quoted by any such  organization,  the fair  value of the  Common  Stock on such
date, as determined by the Company's Board of Directors, shall be used.

     (e) Retention of interest in Company.  Notwithstanding  anything  contained
herein to the contrary,  until such time as the notes shall be paid in full,

                                      -5-

<PAGE>

in no event shall the  aggregate  number of B Warrant  Shares  issuable upon the
exercise of all B Warrants, if all 25 Units are sold by the Company,  equal less
than 18.75% of the shares of Common  Stock that shall be  outstanding  after the
exercise  of these  Warrants,  reduced  pro rata to the extent that less than 25
units are sold.

     (f) Action to Permit  Valid  Issuance of Common  Stock.  Before  taking any
action which would cause an  adjustment  reducing  the Exercise  Price below the
then par value,  if any, of the shares of Common Stock issuable upon exercise of
the B Warrants,  the Company  will take all  corporate  action which may, in the
opinion of its  counsel,  be necessary in order that the Company may validly and
legally issue shares of such Common Stock at such adjusted Exercise Price.

     (g)  Minimum  Adjustment.  No  adjustment  in the  Exercise  Price shall be
required if such  adjustment  is less than $0.05;  provided,  however,  that any
adjustments,  which by reason of this  Paragraph  5 (g) are not  required  to be
made,  shall be  carried  forward  and  taken  into  account  in any  subsequent
adjustment.  All calculations  under this Section 5 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything to
the  contrary  notwithstanding,  the  Company  shall be  entitled  to make  such
reductions  in the  conversion  price,  in  addition  to those  required by this
Paragraph 5 (g), as it in its  discretion  shall  determine  to be  advisable in
order that any stock dividends, subdivision of shares, distribution of rights to
purchase stock or securities,  or distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its  stockholders  shall
not be taxable.

     (h)  Referral  of  Adjustment.  In any case in which  this  Section 5 shall
require  that an  adjustment  in the  Exercise  Price be made  effective as of a
record date for a specified  event,  if the B Warrants shall have been exercised
after such record date the  Company may elect to defer until the  occurrence  of
such event issuing to the Holder the shares, if any, issuable upon such exercise
over and above the shares,  if any,  issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment;  provided,  however, that
the  Company  shall  deliver  to the  Holder  a due  bill or  other  appropriate
instrument  evidencing the Holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.

     (i) Number of  Shares.  Upon each  adjustment  of the  Exercise  Price as a
result of the calculations made in Paragraphs (a) through (c) of this Section 5,
the B Warrants shall thereafter evidence the right to purchase,  at the adjusted
Exercise  Price,  that number of shares  (calculated to the nearest  thousandth)
obtained by  dividing  (i) the product  obtained  by  multiplying  the number of
shares  purchasable  upon exercise of the B Warrants  prior to adjustment of the
number of shares by the  Exercise  Price in effect  prior to  adjustment  of the
Exercise Price by (ii) the Exercise Price in effect after such adjustment of the
Exercise Price.

     (j) Transactions Not Requiring Adjustments.  No adjustment need be made for
a transaction referred to in Paragraphs (a) through (c) of this Section 5 if the
Holder  is

                                      -6-

<PAGE>

permitted to  participate  in the  transaction on a basis no less favorable than
any other party and at a level  which would  preserve  the  Holder's  percentage
equity  participation  in the Common Stock upon  exercise of the B Warrants.  No
adjustment need be made for sales of Common Stock pursuant to a Company plan for
reinvestment  of  dividends  or  interest,  the  granting of options  and/or the
exercise of options  outstanding under any of the Company's  currently  existing
stock option plans, the exercise of currently  existing  incentive stock options
or incentive  stock options which may be granted in the future,  or the exercise
of any other of the Company's currently  outstanding options. No adjustment need
be made for a change in the par value or no par value of the  Common  Stock.  If
the B Warrants become  exercisable  solely into cash, no adjustment need be made
thereafter. Interest will not accrue on the cash.

     (k) Notice of  Adjustments.  Whenever the Exercise  Price is adjusted,  the
Company shall  promptly mail to the Holder a notice of the  adjustment  together
with a certificate  from the Company's Chief  Financial  Officer briefly stating
(i) the facts requiring the adjustment, (ii) the adjusted Exercise Price and the
manner of  computing  it;  and (iii) the date on which such  adjustment  becomes
effective.  The certificate shall be prima facia evidence that the adjustment is
correct, absent manifest error.

     (l) Reorganization of Company.  If the Company and/or the holders of Common
Stock are parties to a merger,  consolidation  or a transaction in which (i) the
Company transfers or leases  substantially  all of its assets;  (ii) the Company
reclassifies or changes its outstanding  Common Stock; or (iii) the Common Stock
is  exchanged  for  securities,  cash or other  assets;  the  person  who is the
transferee or lessee of such assets or is obligated to deliver such  securities,
cash or other assets shall assume the terms of the B Warrants.  If the issuer of
securities  deliverable  upon  exercise of the B Warrants is an affiliate of the
surviving,  transferee  or lessee  corporation,  that issuer  shall join in such
assumption.  The assumption agreement shall provide that the Holder may exercise
the B Warrants into the kind and amount of securities, cash or other assets that
he would have owned immediately after the consolidation, merger, transfer, lease
or exchange if he had exercised the B Warrants  immediately before the effective
date of the transaction.  The assumption agreement shall provide for adjustments
that  shall be as  nearly  equivalent  as may be  practical  to the  adjustments
provided for in this Section 5. The successor company shall mail to the Holder a
notice briefly describing the assumption  agreement.  If this Paragraph applies,
Paragraph 5 (a) above does not apply.

     (m)  Voluntary  Reduction.  The  Company  from time to time may  reduce the
Exercise Price by any amount for any period of time if the period is at least 20
days and if the  reduction  is  irrevocable  during  the  period.  Whenever  the
Exercise Price is reduced,  the Company shall mail to the Holder a notice of the
reduction.  The  Company  shall mail the notice at least 15 days before the date
the reduced  Exercise  Price takes  effect.  The notice  shall state the reduced
Exercise  Price  and the  period  it will be in  effect.  Any  reduction  of the
Exercise Price does not change or adjust the Exercise Price  otherwise in effect
for purposes of Paragraphs 5 (a) through (c) above.

     (n)  Dissolution,  Liquidation.  In the event of the  dissolution  or total
liquidation

                                      -7-

<PAGE>

of the Company,  then after the effective  date thereof,  the B Warrants and all
rights thereunder shall expire.

     (o)  Notices.  If (i) the Company  takes any action  that would  require an
adjustment in the Exercise  Price pursuant to this Section 5; or (ii) there is a
liquidation or dissolution of the Company,  the Company shall mail to the Holder
a notice stating the proposed  record date for a distribution  or effective date
of a reclassification,  consolidation,  merger, transfer,  lease, liquidation or
dissolution.  The  Company  shall mail the notice at least 15 days  before  such
date.  Failure  to mail the  notice or any  defect in it shall  not  affect  the
validity of the transaction.

     (p) Determination by Company Conclusive. Any determination that the Company
or its  Board  of  Directors  must  make  pursuant  to this  Section  5 shall be
conclusive, absent manifest error.

6.  Fractional Shares.
    ------------------

If the  number  of B  Warrant  Shares  purchasable  upon the  exercise  of the B
Warrants  is  adjusted   pursuant  to  Section  5  hereof,   the  Company  shall
nevertheless not be required to issue fractions of shares upon exercise of the B
Warrants or otherwise,  or to distribute  certificates that evidence  fractional
shares. Instead the Company will round any fractional share to the nearest share
so that if the  fraction  is less than 0.5 no share  shall be issued  and if the
fraction is 0.5 or higher the Company shall issue one full share.

7.  Inclusion of B Warrant and B Warrant Shares in Registration Statement; Right
    ----------------------------------------------------------------------------
to Registration.
---------------

     (a)  Holder's  Right to  Registration.  Commencing  on the date  hereof and
through  one year  after the date on which all of the B  Warrants  have  expired
and/or  been  exercised,  upon  receipt  of notice  (the  "Registration  Request
Notice") requesting  registration under the Securities Act of the B Warrants and
the B Warrant  Shares  (collectively  the  "Registerable  Securities")  from the
holders of the majority of the Registerable  Securities,  the Company will offer
to the Holder the  opportunity  to include his  Registerable  Securities in such
registration.  The Company will use its best efforts to file with the Commission
as promptly as practicable but in no event later than thirty (30) days after its
receipt of the  Registration  Request  Notice,  a  registration  statement  (the
"Demand  Registration  Statement"),  and will use its best  efforts  to have the
Demand Registration  Statement declared effective and remain effective until the
earliest of two years thereafter,  the date that all the Registerable Securities
registered thereby have been sold or, in the reasonable opinion of the Company's
counsel, the Registerable  Securities may be sold publicly without registration.
The  Company  will  also  use its  best  efforts  to  qualify  the  Registerable
Securities  under the  securities  laws of the state  where the  Holder  resides
provided the Company is not required to execute a general  consent to service or
to qualify to do business in such state.  This offer to the Holder shall be made
within 10 days after the Company receives the Registration  Request Notice. This
Demand  Registration  right may be exercised one time only. If the Holder elects
to include his Registerable  Securities in the Demand Registration Statement, he
will,  in a timely  fashion,  provide  the  Company  and its  counsel  with such
information  and execute such documents as the Company's  counsel may reasonably
require to prepare and process the Demand Registration  Statement. If the Holder
elects not to include his  Registerable

                                      -8-

<PAGE>

Securities  in the  "Demand  Registration  Statement,"  he shall have no further
rights to the registration of his Registerable Securities under this Paragraph 7
(a).

     (b) "Piggy Back" Registration Rights. If at any time after the date hereof,
the Company proposes to file a Registration Statement under the Act with respect
to any of its  securities  (except one relating to employee  benefit  plans or a
merger or similar  transaction)  (a "Public  Offering"),  it shall give  written
notice of its  intention  to effect  such  filing to the Holder at least 30 days
prior to  filing  such  Registration  Statement  (the  "Piggy-Back  Registration
Statement").  If the Holder's  Registerable  Securities have not been previously
registered  as  provided  in Section 7 (a) above,  and he desires to include his
Registerable  Securities  in the  Piggy-Back  Registration  Statement,  he shall
notify the Company in writing  within 15 days after  receipt of such notice from
the Company, in which event the Company shall include the Holder's  Registerable
Securities in the  Piggy-Back  Registration  Statement.  If the Holder elects to
include his Registerable  Securities in the Piggy-Back Registration Statement as
set forth herein,  he shall,  in a timely  fashion,  provide the Company and its
counsel  with such  information  and execute  such  documents as its counsel may
reasonably require to prepare and process the Piggy-Back Registration Statement.

     (c) Copies of Registration  Statements and  Prospectuses.  The Company will
provide  the  Holder  with  a copy  of  the  Demand  Registration  Statement  or
Piggy-Back  Registration  Statement,  as the  case  may be,  and any  amendments
thereto,  and copies of the final prospectus included therein in such quantities
as may  reasonably  be  required  to permit the Holder to sell his  Registerable
Securities after the Demand  Registration  Statement or Piggy-Back  Registration
Statement,  as the case may be, is declared  effective  by the  Commission  (the
"Effective Date").

     (d) The Company's Obligation to Bear Expenses of Registration.  The Company
will bear all expenses (except  underwriting  discounts and commission,  if any,
and the legal fees and expenses, if any, of counsel to the Holder) necessary and
incidental to the performance of its obligations under this Section 7.

     (e)   Indemnification.   The  Company  and  the  Holder,  if  the  Holder's
Registerable  Securities  are included in a Registration  Statement  pursuant to
this  Section 7,  shall  provide  appropriate  cross  indemnities  to each other
covering the  information  supplied by the  indemnifying  party for inclusion in
such Registration Statement.

     (f)  Restriction  on  Registration  Rights.  Anything to the  contrary  not
withstanding,  the Company  shall not be required to register  any  Registerable
Securities that, in the reasonable opinion of the Company's counsel, may be sold
pursuant to the exemption from registration  provided by Section (k) of Rule 144
promulgated under the Act.

                                      -9-

<PAGE>

8.  Covenants of the Company.
    ------------------------

The Company  covenants  that it will at all times reserve and keep available out
of its authorized Common Stock, solely for the purpose of issue upon exercise of
Warrants,  such number of shares of Common Stock as shall then be issuable  upon
the exercise of all outstanding Warrants.  The Company covenants that all shares
of Common Stock which shall be issuable upon exercise of the Warrants  shall, at
the time of  delivery  thereof,  be duly and  validly  issued and fully paid and
nonassessable and free from all preemptive or similar rights,  taxes,  liens and
charges with respect to the issue  thereof,  and that upon  issuance such shares
shall be listed on each securities  exchange,  if any, on which the other shares
of outstanding Common Stock of the Company are then listed.

9.  Amendments.
    ----------

This Agreement shall not be amended,  modified or revoked except by agreement in
writing, signed by the Company and the Holder.

10. Governing Law.
    -------------

The B Warrants shall be governed by the laws of the State of New York.

IN WITNESS  WHEREOF,  the Company has caused  these B Warrants to be executed on
its behalf by an officer  thereunto duly  authorized and the Holder has executed
this Agreement as of the date above written.

CNE Group, Inc.                              ___________________________________

By: ____________________________             By:  ______________________________
    George W. Benoit, Chairman of the Board
                                                  ______________________________

                                      -10-

<PAGE>

                                SUBSCRIPTION FORM

                          To Be Executed by the Holder
                         in Order to Exercise B Warrants

The undersigned Holder hereby irrevocably elects to exercise the B Warrants, and
to purchase the shares of Common Stock issuable upon the exercise  thereof,  and
requests that certificates for such shares shall be issued in the name of

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

              ____________________________________________________

              ____________________________________________________

              ____________________________________________________
                     [please print or type name and address]

and be delivered to

              ____________________________________________________

              ____________________________________________________

              ____________________________________________________
                     [please print or type name and address]

and if such  number  of  shares of  Common  Stock  shall  not be all the  shares
issuable  upon the exercise of the B Warrants,  that new B Warrants  exercisable
for the balance of the shares  issuable  upon the  exercise of the B Warrants be
delivered to the Holder at the address stated below.

Dated:                                       X
        -------------------                   ----------------------------------

                                              ----------------------------------

                                              ----------------------------------
                                                            Address

                                              ----------------------------------
                                                Taxpayer Identification Number

                                              ----------------------------------
                                                     Signature Guaranteed

                                              ----------------------------------

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