Document:

Note:  This exhibit amends exhibit 99.1, as previously filed with the
-----  Commission on October 22, 2004, in a Current Report on Form 8-K.
       This document contains all of the exhibits pages, not included in
       the original filing.

Exhibit 10.5 -  SECURITIES PURCHASE AGREEMENT

                        IT&E INTERNATIONAL GROUP, INC.

                         SECURITIES PURCHASE AGREEMENT

                               OCTOBER 18, 2004

<PAGE>

                               TABLE OF CONTENTS
                                                                           PAGE

1.    Agreement to Sell and Purchase.........................................1

2.    Fees and Warrant.......................................................1

3.    Closing, Delivery and Payment..........................................2
      3.1    Closing.........................................................2
      3.2    Delivery........................................................2

4.    Representations and Warranties of the Company..........................3
      4.1    Organization, Good Standing and Qualification...................3
      4.2    Subsidiaries....................................................3

      4.3    Capitalization; Voting Rights...................................3
      4.4    Authorization; Binding Obligations..............................4
      4.5    Liabilities.....................................................5
      4.6    Agreements; Action..............................................5
      4.7    Obligations to Related Parties..................................5
      4.8    Changes.........................................................6
      4.9    Title to Properties and Assets; Liens, Etc......................7
      4.10   Intellectual Property...........................................7
      4.11   Compliance with Other Instruments...............................8
      4.12   Litigation......................................................8
      4.13   Tax Returns and Payments........................................9
      4.14   Employees.......................................................9
      4.15   Registration Rights and Voting Rights...........................9
      4.16   Compliance with Laws; Permits..................................10
      4.17   Environmental and Safety Laws..................................10
      4.18   Valid Offering.................................................10

      4.19   Full Disclosure................................................10
      4.20   Insurance......................................................11
      4.21   SEC Reports....................................................11
      4.22   Listing........................................................11
      4.23   No Integrated Offering.........................................11
      4.24   Stop Transfer..................................................11
      4.25   Dilution.......................................................12

5.    Representations and Warranties of the Purchaser.......................12
      5.1    No Shorting....................................................12
      5.2    Requisite Power and Authority..................................12
      5.3    Investment Representations.....................................13
      5.4    Purchaser Bears Economic Risk..................................13
      5.5    Acquisition for Own Account....................................13
      5.6    Purchaser Can Protect Its Interest.............................13
      5.7    Accredited Investor............................................13
      5.8    Legends........................................................14

6.    Covenants of the Company..............................................15
      6.1    Stop-Orders....................................................15
      6.2    Listing........................................................15
      6.3    Market Regulations.............................................15
      6.4    Reporting Requirements.........................................15
      6.5    Use of Funds...................................................15
      6.6    Access to Facilities...........................................15
      6.7    Taxes..........................................................16
      6.8    Insurance......................................................16
      6.9    Intellectual Property..........................................17
      6.10   Properties.....................................................17
      6.11   Confidentiality................................................17
      6.12   Required Approvals.............................................17
      6.13   Reissuance of Securities.......................................18
      6.14   Opinion........................................................18
      6.15   Margin Stock...................................................18
      6.16   Restricted Cash Disclosure.....................................18
      6.17   Financing Right of First Refusal...............................18

7.    Covenants of the Purchaser............................................20
      7.1    Confidentiality................................................20
      7.2    Non-Public Information.........................................20

8.    Covenants of the Company and Purchaser Regarding Indemnification......20
      8.1    Company Indemnification........................................20
      8.2    Purchaser's Indemnification....................................20

9.    Conversion of Convertible Note........................................20
      9.1    Mechanics of Conversion........................................20

10.   Registration Rights...................................................22
      10.1   Registration Rights Granted....................................22

      10.2   Offering Restrictions..........................................22

11.   Miscellaneous.........................................................22
      11.1   Governing Law..................................................22
      11.2   Survival.......................................................23
      11.3   Successors.....................................................23
      11.4   Entire Agreement...............................................23
      11.5   Severability...................................................23
      11.6   Amendment and Waiver...........................................23
      11.7   Delays or Omissions............................................24
      11.8   Notices........................................................24
      11.9   Attorneys' Fees................................................25
      11.10  Titles and Subtitles...........................................25
      11.11  Facsimile Signatures; Counterparts.............................25
      11.12  Broker's Fees..................................................25
      11.13  Construction...................................................25

                               LIST OF EXHIBITS
Form of Convertible Term Note........................................Exhibit A
Form of Warrant......................................................Exhibit B
Form of Opinion......................................................Exhibit C
Form of Escrow Agreement.............................................Exhibit D

<PAGE>

                         SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered
into  as  of October 18, 2004, by and between IT&E INTERNATIONAL GROUP, INC., a
Nevada corporation  (the  "Company"),  and  Laurus  Master Fund, Ltd., a Cayman
Islands company (the "Purchaser").

                                   RECITALS

      WHEREAS,  the  Company  has authorized the sale to  the  Purchaser  of  a
Secured Convertible Term Note in the aggregate principal amount of Five Million
Dollars ($5,000,000) (as amended,  modified  or supplemented from time to time,
the  "Note"), which Note is convertible into shares  of  the  Company's  common
stock,  $0.01  par  value  per  share  (the "Common Stock") at an initial fixed
conversion price of $ .75 per share of Common Stock ("Fixed Conversion Price");

      WHEREAS,  the Company wishes to issue  a  warrant  to  the  Purchaser  to
purchase up to 1,924,000  shares  of  the  Company's  Common  Stock (subject to
adjustment  as set forth therein)  in connection with Purchaser's  purchase  of
the Note;

      WHEREAS,  Purchaser  desires  to  purchase  the  Note and the Warrant (as
defined in Section 2) on the terms and conditions set forth herein; and

      WHEREAS, the Company desires to issue and sell the  Note  and  Warrant to
Purchaser on the terms and conditions set forth herein.

                                   AGREEMENT

      NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises,  representations, warranties and covenants hereinafter set forth  and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

1. Agreement to Sell and Purchase

      .  Pursuant  to  the terms and conditions set forth in this Agreement, on
the Closing Date (as defined  in  Section 3), the Company agrees to sell to the
Purchaser, and the Purchaser hereby  agrees to purchase from the Company a Note
in the aggregate principal amount of $5,000,000  convertible in accordance with
the terms thereof into shares of the Company's Common  Stock in accordance with
the terms of the Note and this Agreement. The sale of the Note purchased on the
Closing Date shall be known as the "Offering." A form of  the  Note  is annexed
hereto  as Exhibit A. The Note will mature on the Maturity Date (as defined  in
the Note).  Collectively,  the  Note  and Warrant  and Common Stock issuable in
payment of the Note, upon conversion of  the  Note  and  upon  exercise  of the
Warrant are referred to as the "Securities."

2. Fees and Warrant.

         On the Closing Date:

            (a)   The Company will issue and deliver to the Purchaser a Warrant
                  to  purchase  up  to  1,924,000  shares  of  Common  Stock in
                  connection   with  the  Offering  (as  amended,  modified  or
                  supplemented from  time  to  time, the "Warrant") pursuant to
                  Section  1  hereof. The Warrant  must  be  delivered  on  the
                  Closing Date.  A form of Warrant is annexed hereto as Exhibit
                  B.   All   the   representations,    covenants,   warranties,
                  undertakings, and indemnification, and  other  rights made or
                  granted to or for the benefit of the Purchaser by the Company
                  are  hereby  also made and granted in respect of the  Warrant
                  and, upon issuance  thereof,  in  respect  of  shares  of the
                  Company's  Common Stock issuable upon exercise of the Warrant
                  (the "Warrant Shares").

            (b)   Subject to the terms of Section 2(d) below, the Company shall
                  pay to Laurus  Capital Management, LLC, manager of Purchaser,
                  a closing payment  in  an  amount equal to three and one-half
                  percent  (3.50%) of the aggregate  principal  amount  of  the
                  Note. The foregoing fee is referred to herein as the "Closing
                  Payment."

            (c)   The Company  shall reimburse the Purchaser for its reasonable
                  expenses (including  legal  fees  and  expenses not to exceed
                  $27,000)  incurred  in  connection with the  preparation  and
                  negotiation of this Agreement  and the Related Agreements (as
                  hereinafter  defined), and expenses  not  to  exceed  $17,500
                  incurred in connection  with  the  Purchaser's  due diligence
                  review  of  the  Company and its Subsidiaries (as defined  in
                  Section 6.8) and all  related matters. Amounts required to be
                  paid under this Section 2(c) will be paid on the Closing Date
                  and shall be no more than  $39,500 for such expenses referred
                  to in this Section 2(c).

            (d)   The  Closing Payment and the  expenses  referred  to  in  the
                  preceding  clause (c) (net of deposits previously paid by the
                  Company) shall  be paid at closing out of funds held pursuant
                  to the Escrow Agreement (as defined below) and a disbursement
                  letter (the "Disbursement Letter").

3. Closing, Delivery and Payment.

      3.1   Closing.

               Subject to the terms  and  conditions herein, the closing of the
transactions contemplated hereby (the "Closing"),  shall take place on the date
hereof, at such time or place as the Company and Purchaser  may  mutually agree
(such date is hereinafter referred to as the "Closing Date").

      3.2   Delivery.

               Pursuant to the Escrow Agreement, at the Closing on  the Closing
Date, the Company will deliver to the Purchaser, among other things,  a Note in
the  form attached as Exhibit A representing the principal amount of $5,000,000
and a  Warrant  in  the  form  attached  as  Exhibit  B in the Purchaser's name
representing 1,924,000 Warrant Shares and the Purchaser  will  deliver  to  the
Company,  among  other things, the amounts set forth in the Disbursement Letter
by certified funds or wire transfer (it being understood that $2,500,000 of the
proceeds of the Note  shall  be placed in the Restricted Account (as defined in
the Restricted Account Agreement referred to below)).

4. Representations and Warranties of the Company.

         The Company hereby represents and warrants to the Purchaser as follows
(which representations and warranties  are supplemented by, and subject to, the
Company's filings under the Securities Exchange  Act  of 1934 made prior to the
date of this Agreement (collectively, the "Exchange Act  Filings"),  copies  of
which have been provided to the Purchaser:

      4.1   Organization, Good Standing and Qualification.

                The  Company  is a corporation duly organized, validly existing
and in good standing under the  laws  of  its jurisdiction of organization. The
Company has the corporate power and authority to own and operate its properties
and assets, to execute and deliver this (i)  this  Agreement, (ii) the Note and
the Warrant to be issued in connection with this Agreement,  (iii)  the  Master
Security  Agreement  dated  as  of  the date hereof between the Company and the
Purchaser (as amended, modified or supplemented  from time to time, the "Master
Security Agreement"), (iv) the Registration Rights  Agreement  relating  to the
Securities  dated  as  of the date hereof between the Company and the Purchaser
(as amended, modified or  supplemented  from  time  to  time, the "Registration
Rights Agreement"), (v) the Funds Escrow Agreement dated  as of the date hereof
among  the  Company,  the Purchaser and the escrow agent referred  to  therein,
substantially  in the form  of  Exhibit  D  hereto  (as  amended,  modified  or
supplemented from  time  to  time, the "Escrow Agreement"), (vi) the Restricted
Account Agreement dated as of  the date hereof among the Company, the Purchaser
and North Fork Bank (as amended,  modified  or  supplemented from time to time,
the "Restricted Account Agreement"), (vii) the Restricted  Account  Side Letter
related to the Restricted Account Agreement dated as of the date hereof between
the  Company and the Purchaser (as amended, modified or supplemented from  time
to time,  the "Restricted Account Side Letter") and (viii) all other agreements
related to  this  Agreement  and the Note and referred to herein (the preceding
clauses (ii) through (viii), collectively,  the "Related Agreements"), to issue
and sell the Note and the shares of Common Stock  issuable  upon  conversion of
the  Note  (the  "Note Shares"), to issue and sell the Warrant and the  Warrant
Shares, and to carry  out  the  provisions  of  this  Agreement and the Related
Agreements and to carry on its business as presently conducted.  The Company is
duly qualified and is authorized to do business and is  in  good  standing as a
foreign  corporation  in  all jurisdictions, except for those jurisdictions  in
which the failure to do so  has not had, or could not reasonably be expected to
have, individually or in the  aggregate,  a  material  adverse  effect  on  the
business,  assets, liabilities, condition (financial or otherwise), properties,
operations or prospects of the Company (a "Material Adverse Effect").

      4.2   Subsidiaries.

                Each  direct and indirect Subsidiary of the Company, the direct
owner of such Subsidiary  and its percentage ownership thereof, is set forth on
Schedule 4.2.  For the purpose  of this Agreement, a "Subsidiary" of any person
or entity means (i) a corporation  or  other  entity  whose  shares of stock or
other  ownership interests having ordinary voting power (other  than  stock  or
other ownership  interests having such power only by reason of the happening of
a contingency) to  elect  a  majority  of the directors of such corporation, or
other  persons or entities performing similar  functions  for  such  person  or
entity,  are  owned, directly or indirectly, by such person or entity or (ii) a
corporation or  other  entity  in which such person or entity owns, directly or
indirectly, more than 50% of the equity interests at such time.

      4.3   Capitalization; Voting Rights.

            (a)   The authorized  capital  stock of the Company, as of the date
                  hereof, consists of 75,000,000  shares,  of  which 70,000,000
                  are  shares  of  Common  Stock,  par  value $0.01 per  share,
                  21,000,000 shares of which are issued and  outstanding,  [and
                  5,000,000_are  shares of preferred stock, par value $0.01 per
                  share, of which  2,820,000  shares  of  preferred  stock  are
                  issued and outstanding].

            (b)   Except  as  disclosed  on  Schedule 4.3, other than:  (i) the
                  shares reserved for issuance under the Company's stock option
                  plans; and (ii) shares which  may  be issued pursuant to this
                  Agreement   and  the  Related  Agreements,   there   are   no
                  outstanding options,  warrants,  rights (including conversion
                  or preemptive rights and rights of  first  refusal), proxy or
                  stockholder agreements, or arrangements or agreements  of any
                  kind for the purchase or acquisition from the Company of  any
                  of  its  securities.  Except  as  disclosed  on Schedule 4.3,
                  neither  the offer, issuance or sale of any of  the  Note  or
                  Warrant, or the issuance of any of the Note Shares or Warrant
                  Shares, nor  the consummation of any transaction contemplated
                  hereby will result  in a change in the price or number of any
                  securities of the Company outstanding, under anti-dilution or
                  other similar provisions  contained  in or affecting any such
                  securities.

            (c)   All  issued  and outstanding shares of the  Company's  Common
                  Stock:  (i) have  been duly authorized and validly issued and

                  are fully paid and  nonassessable;  and  (ii)  were issued in
                  compliance  with  all  applicable  state  and  federal   laws
                  concerning the issuance of securities.

            (d)   The  rights,  preferences, privileges and restrictions of the
                  shares of the Common  Stock  are  as  stated in the Company's
                  Certificate  of  Incorporation  (the  "Charter").   The  Note
                  Shares and Warrant Shares have been duly and validly reserved
                  for issuance. When issued in compliance  with  the provisions
                  of  this Agreement and the Company's Charter, the  Securities
                  will  be  validly  issued,  fully paid and nonassessable, and
                  will be free of any liens or encumbrances; provided, however,
                  that  the  Securities  may  be  subject  to  restrictions  on
                  transfer under state and/or federal  securities  laws  as set
                  forth  herein  or  as  otherwise required by such laws at the
                  time a transfer is proposed.

      4.4   Authorization; Binding Obligations.

               All corporate action on the  part  of  the Company, its officers
and directors necessary for the authorization of this Agreement and the Related
Agreements,  the  performance of all obligations of the Company  hereunder  and
under the Related Agreements  at  the  Closing  and,  the  authorization, sale,
issuance and delivery of the Note and Warrant has been taken  or  will be taken
prior to the Closing. This Agreement and the Related Agreements, when  executed
and  delivered  and  to  the  extent  it  is a party thereto, will be valid and
binding obligations of the Company enforceable  in accordance with their terms,
except:

            (a)   as    limited    by   applicable   bankruptcy,    insolvency,
                  reorganization,  moratorium   or   other   laws   of  general
                  application affecting enforcement of creditors' rights; and

            (b)   general  principles  of equity that restrict the availability
                  of equitable or legal remedies.

The sale of the Note and the subsequent conversion of the Note into Note Shares
are not and will not be subject to any preemptive  rights  or  rights  of first
refusal  that  have not been properly waived or complied with. The issuance  of
the Warrant and  the  subsequent exercise of the Warrant for Warrant Shares are
not and will not be subject to any preemptive rights or rights of first refusal
that have not been properly waived or complied with.

      4.5   Liabilities.

            The Company  does  not  have  any contingent liabilities, except
current liabilities incurred in the ordinary course of business and liabilities
disclosed in any Exchange Act Filings.

      4.6   Agreements; Action.

            Except as set forth on Schedule  4.6  or  as  disclosed  in  any
Exchange Act Filings:

            (a)   There   are   no   agreements,  understandings,  instruments,
                  contracts, proposed transactions, judgments, orders, writs or
                  decrees to which the  Company  is a party or to its knowledge
                  by  which  it  is  bound  which  involve:   (i)   obligations
                  (contingent or otherwise) of, or payments to, the Company  in
                  excess of $50,000 (other than obligations of, or payments to,
                  the  Company arising from purchase or sale agreements entered
                  into in  the  ordinary  course  of  business);  or  (ii)  the
                  transfer or license of any patent, copyright, trade secret or
                  other  proprietary  right  to or from the Company (other than
                  licenses arising from the purchase  of  "off  the  shelf"  or
                  other standard products); or (iii) provisions restricting the
                  development,  manufacture  or  distribution  of the Company's
                  products or services; or (iv) indemnification  by the Company
                  with respect to infringements of proprietary rights.

            (b)   Since  June  30, 2004, the Company has not:  (i) declared  or
                  paid any dividends,  or  authorized  or made any distribution
                  upon or with respect to any class or series  of  its  capital
                  stock;  (ii) incurred any indebtedness for money borrowed  or
                  any   other   liabilities   (other   than   ordinary   course
                  obligations)  individually  in  excess  of $50,000 or, in the
                  case  of  indebtedness  and/or liabilities individually  less
                  than $50,000, in excess of  $100,000  in the aggregate; (iii)
                  made  any  loans  or advances to any person  not  in  excess,
                  individually or in  the  aggregate,  of  $100,000, other than
                  ordinary  advances  for  travel  expenses;  or   (iv)   sold,
                  exchanged  or  otherwise  disposed  of  any  of its assets or
                  rights, other than the sale of its inventory in  the ordinary
                  course of business.

            (c)   For  the  purposes  of  subsections  (a)  and (b) above,  all
                  indebtedness,    liabilities,   agreements,   understandings,
                  instruments, contracts  and  proposed  transactions involving
                  the same person or entity (including persons  or entities the
                  Company has reason to believe are affiliated therewith) shall
                  be  aggregated  for  the  purpose  of  meeting the individual
                  minimum dollar amounts of such subsections.

      4.7   Obligations to Related Parties.

               Except as set forth on Schedule 4.7, there are no obligations of
the Company to officers, directors, stockholders or employees  of  the  Company
other than:

            (a)   for  payment  of  salary  for services rendered and for bonus
                  payments;

            (b)   reimbursement for reasonable  expenses  incurred on behalf of
                  the Company;

            (c)   for other standard employee benefits made generally available
                  to   all   employees   (including  stock  option   agreements
                  outstanding under any stock option plan approved by the Board
                  of Directors of the Company); and

            (d)   obligations listed in the  Company's  financial statements or
                  disclosed in any of its Exchange Act Filings.

Except as described above or set forth on Schedule 4.7, none  of  the officers,
directors  or,  to  the  best  of  the  Company's  knowledge, key employees  or
stockholders  of the Company or any members of their  immediate  families,  are
indebted to the Company, individually or in the aggregate, in excess of $50,000
or have any direct  or  indirect  ownership interest in any firm or corporation
with which the Company is affiliated  or  with which the Company has a business
relationship, or any firm or corporation which competes with the Company, other
than passive investments in publicly traded  companies  (representing less than
one percent (1%) of such company) which may compete with the Company. Except as
described above, no officer, director or stockholder, or  any  member  of their
immediate  families,  is,  directly  or  indirectly, interested in any material
contract  with  the  Company  and  no agreements,  understandings  or  proposed
transactions are contemplated between  the Company and any such person.  Except
as set forth on Schedule 4.7, the Company  is  not a guarantor or indemnitor of
any indebtedness of any other person, firm or corporation.

      4.8   Changes.

               Since June 30, 2004, except as disclosed  in  any  Exchange  Act
Filing  or  in  any  Schedule  to  this  Agreement  or  to  any  of the Related
Agreements, there has not been:

            (a)   any  change  in the business, assets, liabilities,  condition
                  (financial or otherwise), properties, operations or prospects
                  of the Company,  which, individually or in the aggregate, has
                  had or could reasonably  be  expected  to  have,  a  Material
                  Adverse Effect;

            (b)   any  resignation  or termination of any officer, key employee
                  or group of employees of the Company;

            (c)   any  material  change,  except  in  the  ordinary  course  of
                  business, in the contingent obligations of the Company by way
                  of guaranty, endorsement, indemnity, warranty or otherwise;

            (d)   any damage, destruction  or  loss,  whether or not covered by
                  insurance, which has had, or could reasonably  be expected to
                  have,  individually  or in the aggregate, a Material  Adverse
                  Effect;

            (e)   any  waiver by the Company  of  a  valuable  right  or  of  a
                  material debt owed to it;

            (f)   any direct  or indirect material loans made by the Company to

                  any  stockholder,   employee,  officer  or  director  of  the
                  Company, other than advances  made  in the ordinary course of
                  business;

            (g)   any change in any compensation arrangement  or agreement with
                  any  employee,  officer, director or stockholder  that  could
                  reasonably be expected to have a Material Adverse Effect;

            (h)   any  declaration  or   payment   of  any  dividend  or  other
                  distribution of the assets of the Company;

            (i)   to   the   best  of  the  Company's  knowledge,   any   labor
                  organization activity related to the Company;

            (j)   any  debt,  obligation  or  liability  incurred,  assumed  or
                  guaranteed  by  the  Company,  except  those  for  immaterial
                  amounts and for  current liabilities incurred in the ordinary
                  course of business;

            (k)   any sale, assignment  or transfer of any patents, trademarks,
                  copyrights, trade secrets or other intangible assets.

            (l)   any change in any material  agreement to which the Company is
                  a party or by which it is bound which, either individually or
                  in the aggregate, has had, or could reasonably be expected to
                  have, a Material Adverse Effect;

            (m)   any other event or condition  of  any  character that, either
                  individually  or  in  the  aggregate,  has  had,   or   could
                  reasonably  be  expected to have, a  Material Adverse Effect;
                  or

            (n)   any arrangement or commitment by the Company to do any of the
                  acts described in subsection (a) through (m) above.

      4.9   Title to Properties and Assets; Liens, Etc.

              Except as set forth on  Schedule  4.9,  the  Company has good and
marketable title to its properties and assets, and good title  to its leasehold
estates, in each case subject to no mortgage, pledge, lien, lease,  encumbrance
or charge, other than:

            (a)   those   resulting  from  taxes  which  have  not  yet  become
                  delinquent;

            (b)   minor liens  and encumbrances which do not materially detract
                  from the value  of the property subject thereto or materially
                  impair the operations of the Company; and

            (c)   those that have otherwise  arisen  in  the ordinary course of
                  business.

All facilities, machinery, equipment, fixtures, vehicles and  other  properties
owned, leased or used by the Company are in good operating condition and repair
and  are  reasonably  fit and usable for the purposes for which they are  being
used.  Except as set forth  on  Schedule 4.9, the Company is in compliance with
all material terms of each lease to which it is a party or is otherwise bound.

      4.10  Intellectual Property.

            (a)   The Company owns  or possesses sufficient legal rights to all
                  patents, trademarks,  service marks, trade names, copyrights,
                  trade secrets, licenses,  information  and  other proprietary
                  rights  and  processes  necessary  for  its business  as  now
                  conducted  and  to  the  Company's  knowledge   as  presently
                  proposed  to  be  conducted  (the  "Intellectual  Property"),
                  without  any  known  infringement  of  the  rights of others.
                  There are no outstanding options, licenses or  agreements  of
                  any kind relating to the foregoing proprietary rights, nor is
                  the  Company  bound by or a party to any options, licenses or
                  agreements  of  any   kind   with  respect  to  the  patents,
                  trademarks,  service marks, trade  names,  copyrights,  trade
                  secrets, licenses,  information  and other proprietary rights
                  and processes of any other person  or  entity other than such
                  licenses or agreements arising from the  purchase of "off the
                  shelf" or standard products.

            (b)   The Company has not received any communications alleging that
                  the  Company  has  violated  any of the patents,  trademarks,
                  service marks, trade names, copyrights  or  trade  secrets or
                  other  proprietary rights of any other person or entity,  nor
                  is the Company aware of any basis therefor.

            (c)   The Company  does  not  believe it is or will be necessary to
                  utilize  any  inventions,  trade   secrets   or   proprietary
                  information  of  any  of  its  employees  made prior to their
                  employment  by  the  Company,  except  for inventions,  trade
                  secrets or proprietary information that  have been rightfully
                  assigned to the Company.

      4.11  Compliance with Other Instruments.

              The Company is not in violation or default of  (x)  any  term of
its  Charter  or  Bylaws, or (y) of any provision of any indebtedness, mortgage
,indenture, contract,  agreement or instrument to which it is party or by which
it is bound or of any judgment,  decree,  order  or  writ,  which  violation or
default,  in  the  case  of  this  clause (y), has had, or could reasonably  be
expected to have, either individually  or  in the aggregate, a Material Adverse
Effect.  The execution, delivery and performance  of  and  compliance with this
Agreement and the Related Agreements to which it is a party,  and  the issuance
and  sale  of  the Note by the Company and the other Securities by the  Company
each pursuant hereto and thereto, will not, with or without the passage of time
or giving of notice,  result  in any such material violation, or be in conflict
with or constitute a default under any such term or provision, or result in the
creation of any mortgage, pledge,  lien,  encumbrance or charge upon any of the
properties or assets of the Company or the  suspension, revocation, impairment,
forfeiture  or  nonrenewal of any permit, license,  authorization  or  approval
applicable to the  Company,  its business or operations or any of its assets or
properties.

      4.12  Litigation.

              Except as set forth on Schedule 4.12 hereto, there is no action,
suit, proceeding or investigation  pending  or,  to  the  Company's  knowledge,
currently  threatened  against  the  Company  that  prevents  the  Company from
entering  into  this  Agreement or the Related Agreements, or from consummating
the transactions contemplated  hereby  or  thereby,  or which has had, or could
reasonably  be expected to have, either individually or  in  the  aggregate,  a
Material Adverse  Effect  or  could  result in any change in the current equity
ownership of the Company, nor is the Company  aware  that there is any basis to
assert  any of the foregoing.  The Company is not a party  or  subject  to  the
provisions  of  any order, writ, injunction, judgment or decree of any court or
government agency  or instrumentality.  There is no action, suit, proceeding or
investigation by the  Company currently pending or which the Company intends to
initiate.

      4.13  Tax Returns and Payments.

               The Company has timely filed all tax returns (federal, state and
local) required to be filed  by  it.   All taxes shown to be due and payable on
such returns, any assessments imposed, and  all  other taxes due and payable by
the Company on or before the Closing, have been paid  or  will be paid prior to
the  time  they become delinquent.  Except as set forth on Schedule  4.13,  the
Company has not been advised:

            (a)   that  any  of its returns, federal, state or other, have been
                  or are being audited as of the date hereof; or

            (b)   of any deficiency  in  assessment or proposed judgment to its
                  federal, state or other taxes.

The Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the date of this  Agreement  that  is not adequately
provided for.

      4.14  Employees.

                Except  as  set  forth  on  Schedule 4.14, the Company  has  no
collective bargaining agreements with any of  its employees.  There is no labor
union  organizing activity pending or, to the Company's  knowledge,  threatened
with respect  to  the Company.  Except as disclosed in the Exchange Act Filings
or on Schedule 4.14,  the  Company  is not a party to or bound by any currently
effective employment contract, deferred  compensation  arrangement, bonus plan,
incentive  plan, profit sharing plan, retirement agreement  or  other  employee
compensation plan or agreement.  To the Company's knowledge, no employee of the
Company, nor  any  consultant  with  whom  the  Company  has  contracted, is in
violation  of  any  term  of  any  employment contract, proprietary information
agreement or any other agreement relating  to  the right of any such individual
to be employed by, or to contract with, the Company  because  of  the nature of
the business to be conducted by the Company; and to the Company's knowledge the
continued  employment  by  the  Company  of  its  present  employees,  and  the
performance  of  the Company's contracts with its independent contractors, will
not result in any  such  violation.   The  Company is not aware that any of its
employees  is obligated under any contract (including  licenses,  covenants  or
commitments  of  any  nature)  or  other agreement, or subject to any judgment,
decree or order of any court or administrative  agency,  that  would  interfere
with  their  duties  to  the  Company.  The Company has not received any notice
alleging that any such violation has occurred.  Except for employees who have a
current effective employment agreement  with  the  Company,  no employee of the
Company has been granted the right to continued employment by the Company or to
any material compensation following termination of employment with the Company.
Except  as  set  forth  on  Schedule  4.14, the Company is not aware  that  any
officer, key employee or group of employees  intends  to  terminate his, her or
their  employment  with  the  Company,  nor  does  the Company have  a  present
intention to terminate the employment of any officer,  key employee or group of
employees.

      4.15  Registration Rights and Voting Rights.

              Except as set forth on Schedule 4.15 and  except as disclosed in
Exchange  Act Filings, the Company is presently not under any  obligation,  and
has not granted  any  rights,  to  register  any  of  the  Company's  presently
outstanding  securities  or any of its securities that may hereafter be issued.
Except as set forth on Schedule  4.15  and  except as disclosed in Exchange Act
Filings, to the Company's knowledge, no stockholder  of the Company has entered
into  any  agreement  with respect to the voting of equity  securities  of  the
Company.

      4.16  Compliance with Laws; Permits.

              The Company is not in violation of any applicable statute, rule,
regulation, order or restriction  of  any domestic or foreign government or any
instrumentality or agency thereof in respect  of the conduct of its business or
the ownership of its properties which has had,  or could reasonably be expected
to have, either individually or in the aggregate,  a  Material  Adverse Effect.
No governmental orders, permissions, consents, approvals or authorizations  are
required to be obtained and no registrations or declarations are required to be
filed  in  connection  with the execution and delivery of this Agreement or any
Related Agreement and the issuance of any of the Securities, except such as has
been duly and validly obtained  or  filed,  or with respect to any filings that
must  be made after the Closing, as will be filed  in  a  timely  manner.   The
Company  has  all  material  franchises,  permits,  licenses  and  any  similar
authority  necessary for the conduct of its business as now being conducted  by
it,  the lack  of  which  could,  either  individually  or  in  the  aggregate,
reasonably be expected to have a Material Adverse Effect.

      4.17  Environmental and Safety Laws.

               The  Company is not in violation of any applicable statute, law
or regulation relating  to  the  environment or occupational health and safety,
and to its knowledge, no material expenditures are or will be required in order
to comply with any such existing statute,  law  or  regulation.  Except  as set
forth  on Schedule 4.17, no Hazardous Materials (as defined below) are used  or
have been  used,  stored,  or  disposed  of by the Company or, to the Company's
knowledge, by any other person or entity on  any property owned, leased or used
by  the  Company.  For  the  purposes  of  the preceding  sentence,  "Hazardous
Materials" shall mean:

            (a)   materials  which  are  listed   or   otherwise   defined   as
                  "hazardous"  or  "toxic"  under  any applicable local, state,
                  federal and/or foreign laws and regulations  that  govern the
                  existence  and/or  remedy  of contamination on property,  the
                  protection of the environment from contamination, the control
                  of hazardous wastes, or other  activities involving hazardous
                  substances, including building materials; or

            (b)   any petroleum products or nuclear materials.

      4.18  Valid Offering.

              Assuming the accuracy of the representations  and  warranties of
the Purchaser contained in this Agreement, the offer, sale and issuance  of the
Securities  will be exempt from the registration requirements of the Securities
Act of 1933,  as  amended (the "Securities Act"), and will have been registered
or qualified (or are  exempt  from  registration  and  qualification) under the
registration,  permit  or  qualification requirements of all  applicable  state
securities laws.

      4.19  Full Disclosure.

               The Company has  provided  the  Purchaser  with  all information
requested by the Purchaser in connection with its decision to purchase the Note
and  Warrant,  including  all  information  the  Company believes is reasonably
necessary  to  make  such  investment decision.  Neither  this  Agreement,  the
Related Agreements nor the exhibits  and  schedules  hereto and thereto nor any
other document delivered by the Company to Purchaser or its attorneys or agents
in  connection  herewith  or  therewith  or with the transactions  contemplated
hereby or thereby, contain any untrue statement  of a material fact nor omit to
state  a  material  fact  necessary in order to make the  statements  contained
herein or therein, in light  of  the  circumstances in which they are made, not
misleading.  Any financial projections  and  other  estimates  provided  to the
Purchaser by the Company were based on the Company's experience in the industry
and  on  assumptions of fact and opinion as to future events which the Company,
at the date  of  the  issuance of such projections or estimates, believed to be
reasonable.

      4.20  Insurance.

              The Company  has general commercial, product liability, fire and

casualty insurance policies with  coverages  which  the  Company  believes  are
customary  for  companies  similarly  situated  to  the  Company in the same or
similar business.

      4.21  SEC Reports.

              Except as set forth on Schedule 4.21, the Company  has filed all
proxy statements, reports and other documents required to be filed  by it under
the Securities Exchange Act 1934, as amended (the "Exchange Act").  The Company
has furnished the Purchaser with copies of:  (i) its Annual Report on  Form 10-
KSB for the fiscal year ended December 31, 2003; and (ii) its Quarterly Reports
on Form 10-QSB for the fiscal quarters ended March 31, 2004 and June 30,  2004,
and  the Form 8-K filings which it has made during the fiscal year 2003 to date
(collectively,  the  "SEC Reports"). Except as set forth on Schedule 4.21, each
SEC Report was, at the  time  of its filing, in substantial compliance with the
requirements of its respective  form  and  none  of  the  SEC  Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their  respective  filing dates, contained any untrue statement of  a  material
fact or omitted to state  a  material  fact  required  to  be stated therein or
necessary  to make the statements therein, in light of the circumstances  under
which they were made, not misleading.

      4.22  Listing.

                The  Company's  Common  Stock  is  traded  on the NASD Over the
Counter  Bulletin  Board  ("OTCBB")  and  satisfies  all requirements  for  the
continuation of such trading.  The Company has not received any notice that its
Common Stock will be ineligible to trade on the OTCBB  or that its Common Stock
does not meet all requirements for such trading.

      4.23  No Integrated Offering.

               Neither the Company, nor any of its affiliates,  nor  any person
acting  on its or their behalf, has directly or indirectly made any offers   or
sales of  any  security  or  solicited  any  offers  to  buy any security under
circumstances that would cause the offering of the Securities  pursuant to this
Agreement or any Related Agreement to be integrated with prior offerings by the
Company for purposes of the Securities Act which would prevent the Company from
selling the Securities pursuant to Rule 506 under the Securities  Act,  or  any
applicable  exchange-related  stockholder  approval  provisions,  nor  will the
Company or any of its affiliates or subsidiaries take any action or steps  that
would  cause  the  offering  of  the  Securities  to  be  integrated with other
offerings.

      4.24  Stop Transfer.

              The Securities are restricted securities as  of the date of this
Agreement.  The Company will not issue any stop transfer order  or  other order
impeding  the  sale and delivery of any of the Securities at such time  as  the
Securities are registered  for public sale or an exemption from registration is
available, except as required by state and federal securities laws.

      4.25  Dilution.   The  Company   specifically   acknowledges   that   its
            obligation  to  issue the shares of Common Stock upon conversion of
            the Note and exercise  of  the  Warrant is binding upon the Company
            and enforceable regardless of the  dilution  such issuance may have
            on the ownership interests of other shareholders of the Company.

      4.26  Patriot Act.The Company certifies that, to the  best  of  Company's
            knowledge, the Company has not been designated, and is not owned or
            controlled,  by  a  "suspected  terrorist"  as defined in Executive
            Order 13224.  The Company hereby acknowledges  that  the  Purchaser
            seeks   to   comply  with  all  applicable  laws  concerning  money
            laundering  and   related  activities.   In  furtherance  of  those
            efforts, the Company  hereby  represents, warrants and agrees that:
            (i) none of the cash or property  that the Company will pay or will
            contribute to the Purchaser has been  or  shall be derived from, or
            related  to,  any  activity  that is deemed criminal  under  United
            States law; and (ii) no contribution  or  payment by the Company to
            the  Purchaser, to the extent that they are  within  the  Company's
            control  shall cause the Purchaser to be in violation of the United
            States Bank  Secrecy  Act,  the  United  States International Money
            Laundering Control Act of 1986 or the United  States  International
            Money  Laundering  Abatement  and Anti-Terrorist Financing  Act  of
            2001.  The Company shall promptly  notify  the  Purchaser if any of
            these representations ceases to be true and accurate  regarding the
            Company.    The   Company  agrees  to  provide  the  Purchaser  any
            additional information  regarding  the  Company  that the Purchaser
            deems  necessary  or  convenient  to  ensure  compliance  with  all
            applicable laws concerning money laundering and similar activities.
            The  Company  understands  and  agrees that if at any  time  it  is
            discovered that any of the foregoing representations are incorrect,
            or if otherwise required by applicable law or regulation related to
            money laundering similar activities,  the  Purchaser  may undertake
            appropriate  actions  to ensure compliance with applicable  law  or
            regulation,  including  but   not  limited  to  segregation  and/or
            redemption  of  the Purchaser's investment  in  the  Company.   The
            Company  further  understands   that   the  Purchaser  may  release
            confidential information about the Company  and, if applicable, any
            underlying  beneficial  owners,  to  proper  authorities   if   the
            Purchaser,  in  its  sole  discretion, determines that it is in the
            best interests of the Purchaser  in  light  of  relevant  rules and
            regulations under the laws set forth in subsection (ii) above.

5. Representations and Warranties of the Purchaser.

         The Purchaser hereby represents and warrants to the Company as follows
(such   representations   and   warranties   do   not  lessen  or  obviate  the
representations and warranties of the Company set forth in this Agreement)

      5.1   No Shorting.

               The Purchaser or any of its affiliates  and  investment partners
has not, will not and will not cause any person or entity, to  directly  engage
in  "short  sales"  of  the Company's Common Stock as long as the Note shall be
outstanding.

      5.2   Requisite Power and Authority.

               The Purchaser  has  all  necessary power and authority under all
applicable provisions of law to execute and  deliver  this  Agreement  and  the
Related  Agreements  and to carry out their provisions. All corporate action on
Purchaser's part required  for  the  lawful  execution  and  delivery  of  this
Agreement  and  the  Related  Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related  Agreements  will  be  valid  and  binding  obligations  of  Purchaser,
enforceable in accordance with their terms, except:

            (a)   as   limited   by    applicable    bankruptcy,    insolvency,
                  reorganization,   moratorium   or   other   laws  of  general
                  application affecting enforcement of creditors' rights; and

            (b)   as limited by general principles of equity that  restrict the
                  availability of equitable and legal remedies.

      5.3   Investment Representations.

              Purchaser understands that the Securities are being offered  and
sold pursuant to an exemption from registration contained in the Securities Act
based  in  part  upon  Purchaser's  representations contained in the Agreement,
including, without limitation, that the  Purchaser  is an "accredited investor"
within the meaning of Regulation D under the Securities Act of 1933, as amended
(the "Securities Act"). The Purchaser confirms that it  has received or has had
full  access to all the information it considers necessary  or  appropriate  to
make an  informed  investment decision with respect to the Note and the Warrant
to be purchased by it  under this Agreement and the Note Shares and the Warrant
Shares acquired by it upon  the  conversion of the Note and the exercise of the
Warrant, respectively. The Purchaser  further  confirms  that  it  has  had  an
opportunity to ask questions and receive answers from the Company regarding the
Company's  business,  management  and  financial  affairs  and  the  terms  and
conditions  of  the  Offering,  the Note, the Warrant and the Securities and to
obtain  additional  information (to  the  extent  the  Company  possessed  such
information  or could  acquire  it  without  unreasonable  effort  or  expense)
necessary to verify  any information furnished to the Purchaser or to which the
Purchaser had access.

      5.4   Purchaser Bears Economic Risk.

              The Purchaser  has  substantial  experience  in  evaluating  and
investing  in private placement transactions of securities in companies similar
to the Company  so that it is capable of evaluating the merits and risks of its
investment in the  Company  and  has the capacity to protect its own interests.
The  Purchaser  must  bear the economic  risk  of  this  investment  until  the
Securities are sold pursuant  to: (i) an effective registration statement under
the Securities Act; or (ii) an  exemption  from  registration is available with
respect to such sale.

      5.5   Acquisition for Own Account.

               The  Purchaser is acquiring the Securities,  including  without
limitation, the Note and Warrant and the Note Shares and the Warrant Shares for
the Purchaser's own account  for investment only, and not as a nominee or agent
and  not  with  a  view  towards  or   for  resale  in  connection  with  their
distribution.

      5.6   Purchaser Can Protect Its Interest.

              The Purchaser represents  that  by  reason  of  its,  or  of its
management's, business and financial experience, the Purchaser has the capacity
to evaluate the merits and risks of its investment in the Note, the Warrant and
the  other  Securities  and to protect its own interests in connection with the
transactions contemplated  in  this  Agreement,  and  the  Related  Agreements.
Further,  the  Purchaser  is  aware  of no publication of any advertisement  in
connection with the transactions contemplated  in  the Agreement or the Related
Agreements.

      5.7   Accredited Investor.

               Purchaser represents that it is an accredited  investor  within
the meaning of Regulation D under the Securities Act.

      5.8   Legends.

            (a)   The Note shall bear substantially the following legend:

            "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  APPLICABLE,  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 OR SUCH SHARES UNDER SAID ACT AND
            APPLICABLE STATE SECURITIES  LAWS  OR  AN  OPINION OF COUNSEL
            REASONABLY  SATISFACTORY  TO IT&E INTERNATIONAL  GROUP,  INC.
            THAT SUCH REGISTRATION IS NOT REQUIRED."

            (b)   The Note Shares and the Warrant Shares, if not issued by DWAC
                  system (as hereinafter  defined),  shall  bear a legend which
                  shall  be  in  substantially  the following form  until  such
                  shares  are  covered by an effective  registration  statement
                  filed with the SEC:

            "THE SHARES REPRESENTED  BY  THIS  CERTIFICATE  HAVE NOT BEEN
            REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR
            ANY APPLICABLE,  STATE  SECURITIES LAWS. THESE SHARES MAY NOT
            BE SOLD, OFFERED FOR SALE,  PLEDGED  OR  HYPOTHECATED  IN THE
            ABSENCE  OF  AN  EFFECTIVE  REGISTRATION STATEMENT UNDER SUCH
            SECURITIES ACT AND APPLICABLE  STATE  LAWS  OR  AN OPINION OF
            COUNSEL REASONABLY SATISFACTORY TO IT&E INTERNATIONAL  GROUP,
            INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

            (c)   The Warrant shall bear substantially the following legend:

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

6. Covenants of the Company.

        The Company covenants and agrees with the Purchaser as follows:

      6.1   Stop-Orders.

                The Company  will  advise  the  Purchaser,  promptly  after  it
receives notice of  issuance  by  the  Securities  and Exchange Commission (the
"SEC"), any state securities commission or any other  regulatory  authority  of
any  stop  order  or  of any order preventing or suspending any offering of any
securities of the Company,  or  of  the  suspension of the qualification of the
Common Stock of the Company for offering or  sale  in  any jurisdiction, or the
initiation of any proceeding for any such purpose.

      6.2   Listing.

                The  Company  shall promptly secure the trading   of  the  Note
Shares and Warrant Shares on the  OTCBB  (the  "Principal  Market")  upon which
shares of Common Stock are listed (subject to official notice of issuance)  and
shall  maintain  such listing so long as any other shares of Common Stock shall
be so listed. The  Company will maintain the listing of its Common Stock on the
Principal Market, and  will  comply in all material respects with the Company's
reporting, filing and other obligations  under  the  bylaws  or  rules  of  the
National  Association  of  Securities  Dealers  ("NASD") and such exchanges, as
applicable.

      6.3   Market Regulations.

                The Company shall notify the SEC,  NASD  and  applicable  state
authorities,  in  accordance  with  their  requirements,  of  the  transactions
contemplated by this  Agreement,  and shall take all other necessary action and
proceedings  as may be required and  permitted  by  applicable  law,  rule  and
regulation, for the legal and valid issuance of the Securities to the Purchaser
and promptly provide copies thereof to the Purchaser.

      6.4   Reporting Requirements.

                The  Company will timely file with the SEC all reports required
to be filed pursuant to  the  Exchange  Act  and  refrain  from terminating its
status  as  an  issuer required by the Exchange Act to file reports  thereunder
even if the Exchange  Act  or  the rules or regulations thereunder would permit
such termination.

      6.5   Use of Funds.

               The Company agrees  that it will use the proceeds of the sale of
the Note and Warrant as follows: (i)  $1,500,000  will  be  used  to  repay and
terminate  the Company's existing line of credit with Bank of Walnut Creek  and
(ii) for general  working  capital and subsidiary acquisition purposes only (it
being understood, however, that  $2,500,000 of the proceeds of the Note will be
deposited in the Restricted Account on the Closing Date and shall be subject to
the terms and conditions of the Restricted Account Agreement and the Restricted
Account Side Letter).

      6.6   Access to Facilities.

              The Company will permit  any  representatives  designated  by the
Purchaser  (or  any  successor  of the Purchaser), upon reasonable notice of at
least 24 hours and during normal  business  hours, at such person's expense and
accompanied by a representative of the Company, to:

            (a)   visit and inspect any of the properties of the Company;

            (b)   examine the corporate and financial  records  of  the Company
                  (unless  such examination is not permitted by federal,  state
                  or local law  or  by  contract)  and  make  copies thereof or
                  extracts therefrom; and

            (c)   discuss  the  affairs, finances and accounts of  the  Company
                  with the directors,  officers  and independent accountants of
                  the Company.

Notwithstanding the foregoing, the Company will not  provide any material, non-
public   information   to   the   Purchaser  unless  the  Purchaser   signs   a
confidentiality agreement and otherwise  complies with Regulation FD, under the
federal securities laws.

      6.7   Taxes.

               The Company will promptly pay and discharge, or cause to be paid
and  discharged,  when  due  and payable, all  lawful  taxes,  assessments  and
governmental charges or levies  imposed  upon  the income, profits, property or
business  of the Company; provided, however, that  any  such  tax,  assessment,
charge or levy  need  not  be  paid  if the validity thereof shall currently be
contested in good faith by appropriate  proceedings  and  if  the Company shall
have  set  aside  on  its  books  adequate  reserves with respect thereto,  and
provided,  further,  that the Company will pay  all  such  taxes,  assessments,
charges or levies forthwith  upon  the commencement of proceedings to foreclose
any lien which may have attached as security therefor.

      6.8   Insurance.

               The Company will keep  its  assets  which  are  of  an insurable
character insured by financially sound and reputable insurers against  loss  or
damage  by  fire,  explosion  and  other  risks  customarily insured against by
companies  in  similar  business similarly situated as  the  Company;  and  the
Company will maintain, with financially sound and reputable insurers, insurance
against other hazards and  risks  and  liability to persons and property to the
extent and in the manner which the Company reasonably believes is customary for
companies in similar business similarly  situated  as  the  Company  and to the
extent available on commercially reasonable terms. The Company and each  of its
Subsidiaries  will  jointly  and  severally bear the full risk of loss from any
loss  of any nature whatsoever with  respect  to  the  assets  pledged  to  the
Purchaser  as  security  for  its  obligations  hereunder and under the Related
Agreements. At the Company's own cost and expense  in amounts and with carriers
reasonably acceptable to Purchaser, the Company and  each  of  the Subsidiaries
shall (i) keep all its insurable properties and properties in which  it  has an
interest  insured  against the hazards of fire, flood, sprinkler leakage, those
hazards covered by extended  coverage insurance and such other hazards, and for
such amounts, as is customary  in  the  case of companies engaged in businesses
similar  to  the Company's or the respective  Subsidiary's  including  business
interruption insurance; (ii) maintain a bond in such amounts as is customary in
the case of companies  engaged  in  businesses  similar to the Company's or the
Subsidiary's  insuring  against  larceny,  embezzlement   or   other   criminal
misappropriation  of insured's officers and employees who may either singly  or
jointly with others  at  any  time  have  access  to the assets or funds of the
Company either directly or through governmental authority  to  draw  upon  such
funds  or  to  direct  generally the disposition of such assets; (iii) maintain
public and product liability  insurance  against  claims  for  personal injury,
death  or  property damage suffered by others; (iv) maintain all such  worker's
compensation  or  similar  insurance  as  may be required under the laws of any
state or jurisdiction in which the Company  or  the  Subsidiary  is  engaged in
business;  and  (v)  furnish  Purchaser  with  (x)  copies  of all policies and
evidence of the maintenance of such policies at least thirty  (30)  days before
any expiration date, (y) excepting the Company's workers' compensation  policy,
endorsements  to  such policies naming Purchaser as "co-insured" or "additional
insured" and appropriate  loss  payable  endorsements  in  form  and  substance
satisfactory  to  Purchaser,  naming  Purchaser as loss payee, and (z) evidence
that  as  to  Purchaser  the  insurance  coverage  shall  not  be  impaired  or
invalidated by any act or neglect of the Company  or  any  Subsidiary  and  the
insurer  will  provide Purchaser with at least thirty (30) days notice prior to
cancellation.  The  Company  and  each  Subsidiary shall instruct the insurance
carriers  that in the event of any loss thereunder,  the  carriers  shall  make
payment for  such  loss  to  the  Company  and/or  the Subsidiary and Purchaser
jointly.  In the event that as of the date of receipt  of  each  loss  recovery
upon  any  such  insurance,  the Purchaser has not declared an event of default
with respect to this Agreement  or  any  of  the  Related  Agreements, then the
Company  shall  be  permitted to direct the application of such  loss  recovery
proceeds toward investment in property, plant and equipment that would comprise
"Collateral" secured  by Purchaser's security interest pursuant to its security
agreement,  with  any surplus  funds  to  be  applied  toward  payment  of  the
obligations of the  Company  to  Purchaser.  In  the  event  that Purchaser has
properly declared an event of default with respect to this Agreement  or any of
the Related Agreements, then all loss recoveries received by Purchaser upon any
such  insurance  thereafter  may  be  applied to the obligations of the Company
hereunder and under the Related Agreements,  in such order as the Purchaser may
determine. Any surplus (following satisfaction  of  all  Company obligations to
Purchaser)  shall  be  paid by Purchaser to the Company or applied  as  may  be
otherwise required by law.  Any deficiency thereon shall be paid by the Company
or the Subsidiary, as applicable, to Purchaser, on demand.

      6.9   Intellectual Property.

                The Company  shall  maintain  in  full  force  and  effect  its
corporate existence, rights and franchises and all licenses and other rights to
use Intellectual  Property owned or possessed by it and reasonably deemed to be
necessary to the conduct of its business.

      6.10  Properties.

               The  Company  will  keep  its properties in good repair, working
order and condition, reasonable wear and tear  excepted,  and from time to time
make  all  needful  and proper repairs, renewals, replacements,  additions  and
improvements thereto;  and  the  Company  will  at  all  times comply with each
provision  of  all  leases  to which it is a party or under which  it  occupies
property if the breach of such provision could reasonably be expected to have a
Material Adverse Effect.

      6.11  Confidentiality.

               The Company agrees  that  it  will  not  disclose,  and will not
include in any public announcement, the name of the Purchaser, unless expressly
agreed  to by the Purchaser or unless and until such disclosure is required  by
law or applicable  regulation, and then only to the extent of such requirement.
The Company may disclose  Purchaser's  identity and the terms of this Agreement
to its current and prospective debt and equity financing sources.

      6.12  Required Approvals.

               For so long as twenty-five percent (25%) of the principal amount
of the Note is outstanding, the Company,  without  the prior written consent of
the Purchaser, shall not:

            (a)   (i)  directly or indirectly declare  or  pay  any  dividends,
                  other  than  (x)  dividends  paid  to any of its wholly-owned
                  Subsidiaries and (y) dividends paid  to  the  Purchaser  with
                  respect  to  the Common Stock, (ii) issue any preferred stock
                  that  is  manditorily   redeemable  prior  to  the  one  year
                  anniversary of Maturity Date  (as  defined  in  the  Note) or
                  (iii)  redeem  any  of  its  preferred  stock or other equity
                  interests;

            (b)   liquidate, dissolve or effect a material  reorganization  (it
                  being understood that in no event shall the Company dissolve,
                  liquidate  or  merge  with any other person or entity (unless
                  the Company is the surviving entity);

            (c)   become subject to (including,  without  limitation, by way of
                  amendment to or modification of) any agreement  or instrument
                  which  by its terms would (under any circumstances)  restrict
                  the  Company's  right  to  perform  the  provisions  of  this
                  Agreement or any of the agreements contemplated thereby;

            (d)   materially  alter  or change the scope of the business of the
                  Company;

            (e)   create, incur, assume  or  suffer  to  exist any indebtedness
                  (exclusive  of trade debt and debt incurred  to  finance  the
                  purchase of equipment (not in excess of five percent (5%) per
                  annum of the  fair  market  value  of  the  Company's assets)
                  whether  secured  or  unsecured other than (x) the  Company's
                  indebtedness to the Purchaser,  (y) indebtedness set forth on
                  Schedule 6.12(e) attached hereto  and  made a part hereof and
                  any refinancings or replacements thereof  on  terms  no  less
                  favorable to the Purchaser than the debt being refinanced  or
                  replaced,  and  (z)  any  indebtedness incurred in connection
                  with  the  purchase  of assets  in  the  ordinary  course  of
                  business, and any refinancings  or  replacements  thereof  on
                  terms   no   less   favorable   to  the  Purchaser  than  the
                  indebtedness being refinanced or  replaced;  (ii)  cancel any
                  indebtedness  owing  to  it  in  excess  of  $50,000  in  the
                  aggregate   during   any   12  month  period;  (iii)  assume,
                  guarantee,   endorse   or  otherwise   become   directly   or
                  contingently liable in connection with any obligations of any
                  other   Person,   except  the   endorsement   of   negotiable
                  instruments by the  Company  for  deposit  or  collection  or
                  similar transactions in the ordinary course of business; and

            (f)   make  investments  in,  make  any  loans  or  advances to, or
                  transfer assets to, any of its Subsidiaries, other  than  any
                  immaterial   investments,   loans,   advances   and/or  asset
                  transfers made in the ordinary course of business.

      6.13  Reissuance of Securities.

                The  Company  agrees  to reissue certificates representing  the
Securities without the legends set forth in Section 5.8 above at such time as:

            (a)   the holder thereof is permitted to dispose of such Securities
                  pursuant to Rule 144(k)  under  the  Securities  Act  and are
                  registered  or  qualified  or  exempt  from  registration  or
                  qualification under the registration, permit or qualification
                  requirements of all applicable state securities laws; or

            (b)   upon  resale  subject  to an effective registration statement
                  after such Securities are  registered  under  the  Securities
                  Act.

The  Company  agrees  to  cooperate  with the Purchaser in connection with  all
resales pursuant to Rule 144(d) and Rule  144(k)  and  provide  legal  opinions
necessary  to  allow  such resales provided the Company and its counsel receive
reasonably requested representations  from the selling Purchaser and broker, if
any.

      6.14  Opinion.

               On the Closing Date, the  Company  will deliver to the Purchaser
an opinion acceptable to the Purchaser from the Company's  legal  counsel.  The
Company  will  provide,  at the Company's expense, such other legal opinions in
the future as are reasonably  necessary  for  the  conversion  of  the Note and
exercise of the Warrant.

     6.15  Margin Stock.

             The Company will not permit any of the  proceeds of  the Note or
the Warrant to be used directly or indirectly to "purchase" or "carry" "margin
stock"  or  to  repay  indebtedness incurred to "purchase" or "carry" "margin
stock" within the respective  meanings  of  each  of the quoted terms  under
Regulation  U  of  the  Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect.

     6.16  Restricted Cash Disclosure.

            The Company agrees that, in connection with its filing of its 8-K
Report  with  the  SEC  concerning  the transactions   contemplated  by  this
Agreement  and  the  Related Agreements (such  report, the "Laurus Transaction
8-K") in a timely manner after the date  hereof,  it  will  disclose  in  such
Laurus Transaction  8-K  the amount of the proceeds of the Note issued  to the
Purchaser that has been placed in a restricted cash account and is subject to
the terms  and  conditions  of this Agreement and the Related Agreements.
Furthermore, the Company agrees to disclose in all public filings required by
the Commission  (where  appropriate) following  the filing of the Laurus
Transaction 8-K, the  existence of the restricted  cash  referred  to  in the
immediately preceding sentence, together with the amount thereof.

    6.17  Financing  Right of First Refusal.  (a)  The  Company  hereby
grants to the Purchaser a right  of  first  refusal  to  provide any Additional
Financing  (as  defined below) to be issued by the Company and/or  any  of  its
Subsidiaries, subject to the following terms and conditions. From and after the
date hereof,  prior to the incurrence of any additional indebtedness and/or the
sale or issuance  of  any  equity  interests  of  the  Company  or  any  of its
Subsidiaries (an "Additional Financing"), the Company and/or any Subsidiary  of
the Company, as the case may be, shall notify the Purchaser of its intention to
enter  into  such  Additional  Financing.  In connection therewith, the Company
and/or the applicable Subsidiary thereof shall  submit  a  fully  executed term
sheet  (a  "Proposed  Term  Sheet")  to the Purchaser setting forth the  terms,
conditions and pricing of any such Additional  Financing  (such financing to be
negotiated on "arm's length" terms and the terms thereof to  be  negotiated  in
good  faith) proposed to be entered into by the Company and/or such Subsidiary.
The Purchaser  shall have the right, but not the obligation, to deliver its own
proposed term sheet  (the  "Purchaser  Term Sheet") setting forth the terms and
conditions upon which Purchaser would be  willing  to  provide  such Additional
Financing to the Company and/or such Subsidiary. The Purchaser Term Sheet shall
contain  terms  no  less  favorable to the Company and/or such Subsidiary  than
those  outlined in Proposed  Term  Sheet.  The  Purchaser  shall  deliver  such
Purchaser Term Sheet  within ten business days of receipt of each such Proposed
Term Sheet.   If  the  provisions  of  the Purchaser Term Sheet are at least as
favorable to the Company and/or such Subsidiary,  as  the  case  may be, as the
provisions of the Proposed Term Sheet, the Company and/or such Subsidiary shall
enter into and consummate the Additional Financing transaction outlined  in the
Purchaser Term Sheet.

            (b) The Company will not, and will not permit its Subsidiaries  to,
agree,  directly  or  indirectly,  to any restriction with any person or entity
which limits the ability of the Purchaser to consummate an Additional Financing
with the Company or any of its Subsidiaries.

            6.18  Additional Investment.  The Company agrees that the Purchaser
shall have the right (at its sole option), on or prior to the date which is 270
days following the Closing Date, to  issue an additional note to the Company in
an  aggregate  principal amount of up to  $2,000,000  on  the  same  terms  and
conditions (including,  without  limitation,  the same interest rate, the Fixed
Conversion Price (as defined in the Note) then in effect, proportionate warrant
coverage (at the same exercise prices), a proportionate  amortization schedule,
etc.)  set  forth in, and pursuant to substantially similar  documentation  as,
this Agreement and the Related Agreements.

7. Covenants of the Purchaser.

         The Purchaser covenants and agrees with the Company as follows:

      7.1   Confidentiality.

                The  Purchaser  agrees  that it will not disclose, and will not
include in any public announcement, the name  of  the Company, unless expressly
agreed to by the Company or unless and until such disclosure is required by law
or applicable regulation, and then only to the extent of such requirement.

      7.2   Non-Public Information.

               The Purchaser agrees not to effect any  sales  in  the shares of
the  Company's  Common  Stock  while  in  possession  of  material,  non-public
information  regarding  the  Company  if  such  sales  would violate applicable
securities law.

8. Covenants of the Company and Purchaser Regarding Indemnification.

      8.1   Company Indemnification.

                The Company agrees to indemnify, hold harmless,  reimburse  and
defend Purchaser,  each of Purchaser's officers, directors, agents, affiliates,
control persons, and  principal shareholders, against any claim, cost, expense,
liability, obligation,  loss or damage (including reasonable legal fees) of any
nature, incurred by or imposed  upon the Purchaser which results, arises out of
or  is  based upon: (i) any misrepresentation  by  Company  or  breach  of  any
warranty by Company in this Agreement, any Related Agreement or in any exhibits
or schedules  attached  hereto  or  thereto;   or (ii) any breach or default in
performance  by  Company  of any covenant or undertaking  to  be  performed  by
Company hereunder, or any other  agreement  entered  into  by  the  Company and
Purchaser relating hereto.

      8.2   Purchaser's Indemnification.

                Purchaser  agrees  to  indemnify, hold harmless, reimburse  and
defend  the  Company  and each of the Company's  officers,  directors,  agents,
affiliates, control persons  and  principal  shareholders, at all times against
any  claim, cost, expense, liability, obligation,  loss  or  damage  (including
reasonable  legal  fees) of any nature, incurred by or imposed upon the Company
which results, arises  out  of  or is based upon:  (i) any misrepresentation by
Purchaser or breach of any warranty  by  Purchaser  in this Agreement or in any
exhibits or schedules attached hereto or any Related  Agreement;  or  (ii)  any
breach or default in performance by Purchaser of any covenant or undertaking to
be performed by Purchaser hereunder, or any other agreement entered into by the
Company and Purchaser relating hereto.

9. Conversion of Convertible Note.

      9.1   Mechanics of Conversion.

            (a)   Provided  the  Purchaser  has  notified  the  Company  of the
                  Purchaser's  intention  to  sell the Note Shares and the Note
                  Shares  are  (i)  included  in  an   effective   registration
                  statement  or  (ii)  are  otherwise  exempt from such federal
                  registration and are  registered or qualified  or exempt from
                  registration or qualification under the registration,  permit
                  or   qualification   requirements  of  all  applicable  state
                  securities laws when sold:   (A)  upon  the conversion of the
                  Note or part thereof, the Company shall,  at its own cost and
                  expense, take all necessary action (including the issuance of
                  an opinion of counsel reasonably acceptable  to the Purchaser
                  following  a  request  by the Purchaser) to assure  that  the
                  Company's transfer agent  shall issue shares of the Company's
                  Common Stock in the name of the Purchaser (or its nominee) or
                  such  other  persons  as  designated   by  the  Purchaser  in
                  accordance   with   Section   9.1(b)  hereof  and   in   such
                  denominations to be specified representing the number of Note
                  Shares issuable upon such conversion;  and  (B)   the Company
                  warrants  that  no instructions other than these instructions
                  have been or will  be  given  to  the  transfer  agent of the
                  Company's  Common  Stock  regarding the issuance of the  Note
                  Shares and that after the Effectiveness  Date  (as defined in
                  the  Registration  Rights  Agreement) the Note Shares  issued
                  will  be  freely  transferable   subject  to  the  prospectus
                  delivery  requirements  of  the  Securities   Act   and   the
                  provisions  of  this Agreement, and will not contain a legend
                  restricting the resale or transferability of the Note Shares.

            (b)   Purchaser will give  notice  of  its decision to exercise its
                  right to convert the Note or part  thereof  by telecopying or
                  otherwise delivering an executed and completed  notice of the
                  number of shares to be converted to the Company (the  "Notice
                  of  Conversion").  The  Purchaser  will  not  be  required to
                  surrender  the Note until the Purchaser receives a credit  to
                  the account  of the Purchaser's prime broker through the DWAC
                  system (as defined  below),  representing  the Note Shares or
                  until the Note has been fully satisfied.  Each  date on which
                  a  Notice  of  Conversion is telecopied or delivered  to  the
                  Company in accordance  with  the  provisions  hereof shall be
                  deemed  a  "Conversion Date."  Pursuant to the terms  of  the
                  Notice of Conversion,  the Company will issue instructions to
                  the  transfer agent accompanied  by  an  opinion  of  counsel
                  within  one  (1)  business day of the date of the delivery to
                  the Company of the  Notice of Conversion  and shall cause the
                  transfer agent to transmit  the certificates representing the
                  Note Shares to the Purchaser  by crediting the account of the
                  Purchaser's prime broker with the  Depository  Trust  Company
                  ("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").

            (c)   The Company understands  that  a delay in the delivery of the
                  Note Shares in the form required pursuant to Section 9 hereof
                  beyond the Delivery Date could result in economic loss to the
                  Purchaser.  In the event that the Company fails to direct its
                  transfer agent to deliver the Note  Shares  to  the Purchaser
                  via  the  DWAC  system  within  the  time frame set forth  in
                  Section 9.1(b) above and the Note Shares are not delivered to
                  the Purchaser by the Delivery Date, as  compensation  to  the
                  Purchaser  for  such  loss,  the  Company  agrees to pay late
                  payments  to  the  Purchaser for late issuance  of  the  Note
                  Shares in the form required pursuant to Section 9 hereof upon
                  conversion of the Note in the amount equal to the greater of:
                  (i) $500 per business  day  after  the Delivery Date; or (ii)
                  the Purchaser's actual damages from  such  delayed  delivery.
                  Notwithstanding  the foregoing, the Company will not owe  the
                  Purchaser any late  payments  if the delay in the delivery of
                  the Note Shares beyond the Delivery Date is solely out of the
                  control of the Company and the  Company is actively trying to
                  cure  the  cause of the delay.  The  Company  shall  pay  any
                  payments incurred under this Section in immediately available
                  funds  upon demand  and,  in  the  case  of  actual  damages,
                  accompanied by reasonable documentation of the amount of such
                  damages.   Such documentation shall show the number of shares
                  of Common Stock  the  Purchaser  is forced to purchase (in an
                  open  market  transaction)  which the  Purchaser  anticipated
                  receiving upon such conversion,  and  shall  be calculated as
                  the amount by which (A) the Purchaser's total  purchase price
                  (including customary brokerage commissions, if any)  for  the
                  shares of Common Stock so purchased exceeds (B) the aggregate
                  principal  and/or interest amount of the Note, for which such
                  Conversion Notice was not timely honored.

Nothing contained herein or in  any document referred to herein or delivered in
connection herewith 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 or dividends required
to be paid or other charges hereunder exceed the maximum  amount  permitted  by
such  law,  any  payments  in  excess of such maximum shall be credited against
amounts owed by the Company to a Purchaser and thus refunded to the Company.

10.  Registration Rights.

      10.1  Registration Rights Granted.

               The Company hereby  grants  registration rights to the Purchaser
pursuant to a Registration Rights Agreement  dated  as  of  even  date herewith
between the Company and the Purchaser.

      10.2  Offering Restrictions.

               Except  as  previously disclosed in the SEC Reports or  in  the
Exchange  Act  Filings,  or  stock  or  stock  options  granted  to  employees,
consultants or directors of the  Company (these exceptions hereinafter referred
to as the "Excepted Issuances"), the Company will not issue any securities with
a continuously variable/floating conversion  feature  which are or could be (by
conversion or registration) free-trading securities (i.e.  common stock subject
to a registration statement) prior to the full repayment or  conversion  of the
Note  (together  with  all accrued and unpaid interest and fees related thereto
(the "Exclusion Period"); provided, however, adjustments in conversion features
as a result of stock splits,  reorganizations,  reclassification or pursuant to
any  other  anti-dilution provisions shall not be deemed  a   variable/floating
conversion feature.

11.  Miscellaneous.

      11.1  Governing Law.

                THIS  AGREEMENT AND EACH RELATED AGREEMENT 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
AND  EACH  RELATED  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
AND THE INDIVIDUALS EXECUTING THIS  AGREEMENT  AND  THE  RELATED  AGREEMENTS ON
BEHALF  OF  THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS  AND
WAIVE TRIAL BY  JURY.  IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY
RELATED AGREEMENT  DELIVERED IN CONNECTION HEREWITH 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 ENFORCEABILITY  OF ANY OTHER PROVISION OF THIS AGREEMENT
OR ANY RELATED AGREEMENT.

      11.2  Survival.

               The representations, warranties,  covenants  and agreements made
herein shall survive any investigation made by the Purchaser and the closing of
the  transactions  contemplated  hereby  to  the  extent provided therein.  All
statements  as  to  factual  matters  contained  in  any certificate  or  other
instrument  delivered  by  or  on  behalf  of  the Company pursuant  hereto  in
connection with the transactions contemplated hereby  shall  be  deemed  to  be
representations  and  warranties by the Company hereunder solely as of the date
of such certificate or instrument.

      11.3  Successors.

               Except as  otherwise  expressly  provided herein, the provisions
hereof  shall  inure to the benefit of, and be binding  upon,  the  successors,
heirs, executors  and  administrators  of the parties hereto and shall inure to
the benefit of and be enforceable by each  person  who shall be a holder of the
Securities from time to time, other than the holders  of Common Stock which has
been  sold  by the Purchaser pursuant to Rule 144 or an effective  registration
statement. Purchaser may not assign its rights hereunder to a competitor of the
Company.

      11.4  Entire Agreement.

                This  Agreement,  the  Related  Agreements,  the  exhibits  and
schedules  hereto and thereto and the other documents delivered pursuant hereto
constitute the  full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other  in  any  manner   by  any  representations,  warranties,  covenants  and
agreements except as specifically set forth herein and therein.

      11.5  Severability.

               In case any provision of the Agreement shall be invalid, illegal
or unenforceable, the validity,  legality  and  enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

      11.6  Amendment and Waiver.

            (a)   This  Agreement  may be amended or  modified  only  upon  the
                  written consent of the Company and the Purchaser.

            (b)   The  obligations  of  the  Company  and  the  rights  of  the
                  Purchaser under this  Agreement  may  be waived only with the
                  written consent of the Purchaser.

            (c)   The  obligations  of  the  Purchaser and the  rights  of  the
                  Company under this Agreement  may  be  waived  only  with the
                  written consent of the Company.

      11.7  Delays or Omissions

            .   It  is  agreed that no delay or omission to exercise any right,
power  or  remedy  accruing   to   any  party,  upon  any  breach,  default  or
noncompliance by another party under  this Agreement or the Related Agreements,
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver  of  any  such  breach, default or noncompliance,  or  any  acquiescence
therein, or of or in any  similar  breach,  default or noncompliance thereafter
occurring.   All  remedies,  either  under  this  Agreement,   or  the  Related
Agreements, by law or otherwise afforded to any party, shall be  cumulative and
not alternative.

      11.8  Notices

            .  All notices required or permitted hereunder shall be  in writing
and shall be deemed effectively given:

            (a)   upon personal delivery to the party to be notified;

            (b)   when  sent  by  confirmed  facsimile  if  sent  during normal
                  business  hours  of the recipient, if not, then on  the  next
                  business day;

            (c)   three (3) business  days after having been sent by registered
                  or certified mail, return receipt requested, postage prepaid;
                  or

            (d)   one  (1)  day  after deposit  with  a  nationally  recognized
                  overnight courier, specifying next day delivery, with written
                  verification of receipt.

All communications shall be sent as follows:

If to the Company, to:  IT&E International Group, Inc.
                        505 Lomas Santa Fe Drive
                        Suite 200
                        Solana Beach, CA  92075

                        Attention:  Chief Financial Officer
                        Facsimile:  858-366-0961

                        with a copy to:
                        Pillsbury Winthrop LLP
                        2475 Hanover Street
                        Palo Alto, CA 94304

                        Attention: Richard S. Bebb, Esq.
                        Facsimile: (650) 233-4545

If to the Purchaser, to:Laurus Master Fund, Ltd.

                        c/o M&C Corporate Services Limited
                        P.O. Box 309 GT
                        Ugland House, George Town
                        South Church Street
                        Grand Cayman, Cayman Islands
                        Facsimile:  345-949-8080

                        with a copy to:

                        John E. Tucker , Esq.
                        825 Third Avenue 14th Floor
                        New York, NY 10022
                        Facsimile:  212-541-4434

or at such other address as the Company  or  the  Purchaser  may  designate  by
written notice to the other parties hereto given in accordance herewith.

      11.9  Attorneys' Fees.

                In  the  event that any suit or action is instituted to enforce
any provision in this Agreement,  the prevailing party in such dispute shall be
entitled to recover from the losing  party  all  fees,  costs  and  expenses of
enforcing  any  right  of  such prevailing party under or with respect to  this
Agreement, including, without  limitation, such reasonable fees and expenses of
attorneys and accountants, which  shall  include, without limitation, all fees,
costs and expenses of appeals.

      11.10 Titles and Subtitles.

               The titles of the sections  and subsections of the Agreement are
for convenience of reference only and are not  to  be  considered in construing
this Agreement.

      11.11 Facsimile Signatures; Counterparts.

               This Agreement may be executed by facsimile  signatures  and  in
any  number  of  counterparts,  each  of which shall be an original, but all of
which together shall constitute one instrument.

      11.12 Broker's Fees.

               Except as set forth on Schedule  11.12 hereof, Each party hereto
represents  and warrants that no agent, broker, investment  banker,  person  or
firm acting on behalf of or under the authority of such party hereto is or will
be entitled to any broker's or finder's fee or any other commission directly or
indirectly in connection with the transactions contemplated herein.  Each party
hereto further  agrees  to indemnify each other party for any claims, losses or
expenses incurred by such other party as a result of the representation in this
Section 11.12 being untrue.

      11.13 Construction.

               Each party  acknowledges  that its legal counsel participated in
the preparation of this Agreement and the  Related  Agreements  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
Agreement to favor any party against the other.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

<PAGE>

      IN WITNESS WHEREOF, the  parties  hereto  have  executed  the  SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                                PURCHASER:

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

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

<PAGE>

                                   EXHIBIT A

                                 FORM OF NOTE

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>

                                   EXHIBIT B

                                FORM OF WARRANT

                        COMMON STOCK PURCHASE WARRANT

      THIS  WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
      OF THIS  WARRANT  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND
      THE COMMON STOCK ISSUABLE  UPON EXERCISE OF THIS WARRANT MAY NOT BE
      SOLD, OFFERED FOR SALE, PLEDGED  OR  HYPOTHECATED IN THE ABSENCE OF
      AN EFFECTIVE REGISTRATION STATEMENT AS  TO  THIS WARRANT 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.

          Right to Purchase up to 1,924,000 Shares of Common Stock of

                        IT&E International Group, Inc.

                  (subject to adjustment as provided herein)

                         COMMON STOCK PURCHASE WARRANT

No. _________________Issue Date:  October 18, 2004

      IT&E INTERNATIONAL GROUP, INC., a corporation organized under the laws of
the State of Nevada ("IT&E International  Group, Inc."), hereby certifies that,
for value received, LAURUS MASTER FUND, LTD.,  or  assigns  (the  "Holder"), is
entitled,  subject  to the terms set forth below, to purchase from the  Company
(as defined herein) from  and  after  the Issue Date of this Warrant and at any
time or from time to time before 5:00 p.m., New York time, through the close of
business October 18, 2011 (the "Expiration  Date"),  up to 1,924,000 fully paid
and nonassessable shares of Common Stock (as hereinafter  defined),  $0.01  par
value per share, at the applicable Exercise Price per share (as defined below).
The  number  and  character  of  such shares of Common Stock and the applicable
Exercise Price per share are subject to adjustment as provided herein.

      As  used  herein  the  following  terms,  unless  the  context  otherwise
requires, have the following respective meanings:

            (a)   The term "Company"  shall  include  IT&E International Group,
      Inc. and any corporation which shall succeed, or  assume  the obligations
      of, IT&E International Group, Inc.  hereunder.

            (b)   The  term  "Common  Stock" includes (i) the Company's  Common
      Stock, par value $0.01 per share;  and  (ii)  any  other  securities into
      which  or  for  which  any  of  the  securities  described in (i) may  be
      converted   or   exchanged   pursuant  to  a  plan  of  recapitalization,
      reorganization, merger, sale of assets or otherwise.

            (c)   The term "Other Securities"  refers  to any stock (other than
      Common Stock) and other securities of the Company  or  any  other  person
      (corporate  or  otherwise) which the Holder at any time shall be entitled
      to receive, or shall  have  received,  on the exercise of the Warrant, in
      lieu of or in addition to Common Stock,  or  which  at  any time shall be
      issuable or shall have been issued in exchange for or in  replacement  of
      Common Stock or Other Securities pursuant to Section 4 or otherwise.

            (d)   The  "Exercise  Price" applicable under this Warrant shall be
      as follows:

                  (i)   a price of $.94 ,125% of the Fixed Conversion Price (as
            defined  in  the  Note) for  the   first  962,000  shares  acquired
            hereunder; and

                  (ii)  a price of $1.12 ,150% of the Fixed Conversion Price or
            the next 962,000 shares acquired hereunder

1. Exercise of Warrant.

      1.1   Number of Shares Issuable  upon  Exercise.  From and after the date
            hereof through and including the Expiration  Date, the Holder shall
            be entitled to receive, upon exercise of this  Warrant  in whole or
            in  part,  by  delivery  of  an original or fax copy of an exercise
            notice in the form attached hereto  as  Exhibit  A  (the  "Exercise
            Notice"),  shares  of  Common  Stock  of  the  Company,  subject to
            adjustment pursuant to Section 4.

      1.2   Fair Market Value.  For purposes hereof, the "Fair Market Value" of
            a share of Common Stock as of a particular date (the "Determination
            Date") shall mean:

            (a)   If the Company's Common Stock is traded on the American Stock
                  Exchange  or  another national exchange or is quoted  on  the
                  National or  SmallCap  Market  of  The  Nasdaq  Stock Market,
                  Inc.("Nasdaq"),   then   the  closing  or  last  sale  price,
                  respectively, reported for  the last business day immediately
                  preceding the Determination Date.

            (b)   If the Company's Common Stock  is  not traded on the American
                  Stock Exchange or another national exchange  or on the Nasdaq
                  but is traded on the NASD OTC Bulletin Board,  then  the mean
                  of  the  average of the closing bid and asked prices reported
                  for  the  last   business   day   immediately  preceding  the
                  Determination Date.

            (c)   Except  as  provided in clause (d) below,  if  the  Company's
                  Common Stock  is  not publicly traded, then as the Holder and
                  the  Company  agree  or   in  the  absence  of  agreement  by
                  arbitration in accordance with  the  rules  then in effect of
                  the  American  Arbitration  Association,  before   a   single
                  arbitrator to be chosen from a panel of persons qualified  by
                  education and training to pass on the matter to be decided.

            (d)   If  the  Determination  Date  is  the  date of a liquidation,
                  dissolution  or  winding  up, or any event  deemed  to  be  a
                  liquidation,  dissolution  or  winding  up  pursuant  to  the
                  Company's charter, then all  amounts  to be payable per share
                  to holders of the Common Stock pursuant to the charter in the
                  event of such liquidation, dissolution  or  winding  up, plus
                  all  other amounts to be payable per share in respect of  the
                  Common  Stock  in liquidation under the charter, assuming for
                  the purposes of  this  clause  (d)  that all of the shares of
                  Common Stock then issuable upon exercise  of  the Warrant are
                  outstanding at the Determination Date.

      1.3   Company  Acknowledgment.   The  Company  will, at the time  of  the
            exercise  of the Warrant, upon the request  of  the  Holder  hereof
            acknowledge  in writing its continuing obligation to afford to such
            Holder any rights  to  which  such  Holder  shall  continue  to  be
            entitled  after  such exercise in accordance with the provisions of
            this Warrant. If the  Holder  shall  fail to make any such request,
            such  failure  shall not affect the continuing  obligation  of  the
            Company to afford to such Holder any such rights.

      1.4   Trustee for Warrant  Holders.   In  the  event that a bank or trust
            company  shall  have  been  appointed as trustee  for  the  Holders
            pursuant to Subsection 3.2, such  bank  or trust company shall have
            all  the  powers  and  duties  of a warrant agent  (as  hereinafter
            described) and shall accept, in its own name for the account of the
            Company or such successor person  as  may  be entitled thereto, all
            amounts otherwise payable to the Company or  such successor, as the

            case may be, on exercise of this Warrant pursuant  to  this Section
            1.

2. Procedure for Exercise.

      2.1   Delivery  of  Stock  Certificates, Etc., on Exercise.  The  Company
            agrees that the shares  of  Common Stock purchased upon exercise of
            this Warrant shall be deemed  to  be  issued  to  the Holder as the
            record owner of such shares as of the close of business on the date
            on which this Warrant shall have been surrendered and  payment made
            for  such  shares  in  accordance herewith.  As soon as practicable
            after the exercise of this  Warrant  in full or in part, and in any
            event within three (3) business days thereafter, the Company at its
            expense (including the payment by it of any applicable issue taxes)
            will cause to be issued in the name of and delivered to the Holder,
            or as such Holder (upon payment by such  Holder  of  any applicable
            transfer  taxes)  may direct in compliance with applicable  federal
            and state securities  laws,  a  certificate or certificates for the
            number of duly and validly issued,  fully  paid  and  nonassessable
            shares  of Common Stock (or Other Securities) to which such  Holder
            shall be entitled on such exercise, plus, in lieu of any fractional
            share to  which such Holder would otherwise be entitled, cash equal
            to such fraction  multiplied  by  the then Fair Market Value of one
            full share, together with any other  stock  or other securities and
            property (including cash, where applicable) to which such Holder is
            entitled upon such exercise pursuant to Section 1 or otherwise.

      2.2   Exercise.  Payment may be made either in cash  or  by  certified or
            official  bank check payable to the order of the Company  equal  to
            the applicable  aggregate  Exercise Price, for the number of shares
            of Common Stock specified in such Exercise Notice (as such exercise
            number shall be adjusted to  reflect  any  adjustment  in the total
            number  of  shares of Common Stock issuable to the Holder  per  the
            terms of this  Warrant)  and the Holder shall thereupon be entitled
            to receive the number of duly  authorized,  validly  issued, fully-
            paid   and   non-assessable   shares  of  Common  Stock  (or  Other
            Securities) determined as provided herein.

3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

      3.1   Reorganization, Consolidation, Merger, Etc.  In case at any time or
            from time to time, the Company  shall  (a) effect a reorganization,
            (b)  consolidate  with  or  merge  into any other  person,  or  (c)
            transfer all or substantially all of  its  properties  or assets to
            any  other  person under any plan or arrangement contemplating  the
            dissolution of the Company, then, in each such case, as a condition
            to the consummation  of  such  a  transaction,  proper and adequate
            provision shall be made by the Company whereby the  Holder,  on the
            exercise  hereof  as  provided  in  Section 1 at any time after the
            consummation of such reorganization, consolidation or merger or the
            effective  date of such dissolution, as  the  case  may  be,  shall
            receive, in lieu of the Common Stock (or Other Securities) issuable
            on such exercise prior to such consummation or such effective date,
            the stock and  other  securities  and  property (including cash) to
            which such Holder would have been entitled  upon  such consummation
            or in connection with such dissolution, as the case may be, if such
            Holder  had  so exercised this Warrant, immediately prior  thereto,
            all subject to further adjustment thereafter as provided in Section
            4.

      3.2   Dissolution.   In  the  event  of  any  dissolution  of the Company
            following  the  transfer  of  all  or  substantially  all  of   its
            properties   or   assets,   the   Company,  concurrently  with  any
            distributions made to holders of its  Common  Stock,  shall  at its
            expense  deliver  or  cause to be delivered to the Holder the stock
            and  other  securities  and   property   (including   cash,   where
            applicable)  receivable  by the Holder pursuant to Section 3.1, or,
            if the Holder shall so instruct  the  Company,  to  a bank or trust
            company specified by the Holder and having its principal  office in
            New York, NY as trustee for the Holder (the "Trustee").

      3.3   Continuation  of  Terms.   Upon  any reorganization, consolidation,
            merger  or transfer (and any dissolution  following  any  transfer)
            referred  to in this Section 3, this Warrant shall continue in full
            force and effect  and  the  terms hereof shall be applicable to the
            shares of stock and other securities and property receivable on the
            exercise  of  this  Warrant  after   the   consummation   of   such
            reorganization,  consolidation  or  merger or the effective date of
            dissolution following any such transfer,  as  the  case may be, and
            shall  be  binding  upon  the  issuer  of  any such stock or  other
            securities, including, in the case of any such transfer, the person
            acquiring all or substantially all of the properties  or  assets of
            the  Company,  whether  or  not  such  person  shall have expressly
            assumed the terms of this Warrant as provided in Section 4.  In the
            event this Warrant does not continue in full force and effect after
            the consummation of the transactions described in  this  Section 3,
            then  the Company's securities and property (including cash,  where
            applicable)  receivable  by the Holders will be delivered to Holder
            or the Trustee as contemplated by Section 3.2.

4. Extraordinary Events Regarding Common  Stock.  In the event that the Company
      shall (a) issue additional shares of  the  Common  Stock as a dividend or
      other  distribution  on  outstanding  Common  Stock,  (b)  subdivide  its
      outstanding shares of Common Stock, or (c) combine its outstanding shares
      of the Common Stock into a smaller number of shares of  the Common Stock,
      then,  in each such event, the Exercise Price shall, simultaneously  with
      the happening of such event, be adjusted by multiplying the then Exercise
      Price by a fraction, the numerator of which shall be the number of shares
      of Common  Stock  outstanding  immediately  prior  to  such event and the
      denominator  of  which  shall  be  the  number of shares of Common  Stock
      outstanding immediately after such event,  and  the  product  so obtained
      shall  thereafter  be  the  Exercise  Price  then in effect. The Exercise
      Price, as so adjusted, shall be readjusted in  the  same  manner upon the
      happening  of  any  successive event or events described herein  in  this
      Section 4.  The number  of  shares  of Common Stock that the Holder shall
      thereafter, on the exercise hereof as  provided in Section 1, be entitled
      to receive shall be increased to a number  determined  by multiplying the
      number  of  shares  of  Common  Stock that would otherwise (but  for  the
      provisions of this Section 4) be  issuable on such exercise by a fraction
      of which (a) the numerator is the Exercise  Price  that  would  otherwise
      (but  for  the  provisions  of this Section 4) be in effect, and (b)  the
      denominator is the Exercise Price in effect on the date of such exercise.

5. Certificate  as  to  Adjustments.    In  each  case  of  any  adjustment  or
      readjustment in the shares of Common Stock (or Other Securities) issuable
      on the exercise of the Warrant, the  Company at its expense will promptly
      cause  its  Chief  Financial  Officer or other  appropriate  designee  to
      compute such adjustment or readjustment  in  accordance with the terms of
      the Warrant and prepare a certificate setting  forth  such  adjustment or
      readjustment  and showing in detail the facts upon which such  adjustment
      or readjustment  is based, including a statement of (a) the consideration
      received or receivable by the Company for any additional shares of Common
      Stock (or Other Securities)  issued or sold or deemed to have been issued
      or sold, (b) the number of shares  of  Common Stock (or Other Securities)
      outstanding or deemed to be outstanding,  and  (c) the Exercise Price and
      the number of shares of Common Stock to be received upon exercise of this
      Warrant, in effect immediately prior to such adjustment  or  readjustment
      and  as adjusted or readjusted as provided in this Warrant.  The  Company
      will forthwith mail a copy of each such certificate to the Holder and any
      Warrant agent of the Company (appointed pursuant to Section 11 hereof).

6. Reservation  of  Stock,  Etc., Issuable on Exercise of Warrant.  The Company
      will at all times reserve  and  keep  available,  solely for issuance and
      delivery on the exercise of the Warrant, shares of Common Stock (or Other
      Securities) from time to time issuable on the exercise of the Warrant.

7. Assignment;  Exchange  of  Warrant.  Subject to compliance  with  applicable
      securities laws, this Warrant,  and  the  rights evidenced hereby, may be
      transferred by any registered Holder hereof  (a "Transferor") in whole or
      in  part.   On  the  surrender  for exchange of this  Warrant,  with  the
      Transferor's endorsement in the form  of  Exhibit  B attached hereto (the
      "Transferor  Endorsement  Form")  and  together with evidence  reasonably
      satisfactory  to  the Company demonstrating  compliance  with  applicable
      securities laws, which  shall  include, without limitation, the provision
      of  a  legal  opinion from the Transferor's  counsel  (at  the  Company's
      expense) that such  transfer is exempt from the registration requirements
      of applicable securities  laws, and with payment by the Transferor of any
      applicable transfer taxes)  will  issue and deliver to or on the order of
      the Transferor thereof a new Warrant  of  like  tenor, in the name of the
      Transferor  and/or  the  transferee(s)  specified  in   such   Transferor
      Endorsement Form (each a "Transferee"), calling in the aggregate  on  the
      face or faces thereof for the number of shares of Common Stock called for
      on the face or faces of the Warrant so surrendered by the Transferor.

8. Replacement  of  Warrant.  On receipt of evidence reasonably satisfactory to
      the Company of the loss, theft, destruction or mutilation of this Warrant
      and, in the case  of any such loss, theft or destruction of this Warrant,
      on delivery of an indemnity agreement or security reasonably satisfactory
      in form and amount to the Company or, in the case of any such mutilation,
      on surrender and cancellation of this Warrant, the Company at its expense
      will execute and deliver, in lieu thereof, a new Warrant of like tenor.

9. Registration Rights.   The  Holder  has  been  granted  certain registration
      rights  by the Company.  These registration rights are  set  forth  in  a
      Registration  Rights  Agreement  entered  into  by the Company and Holder
      dated as of even date of this Warrant.

10.Maximum  Exercise.   [The  Holder  shall not be entitled  to  exercise  this
      Warrant on an exercise date, in connection  with that number of shares of
      Common Stock which would be in excess of the  sum  of  (i)  the number of
      shares  of  Common  Stock  beneficially  owned  by  the  Holder  and  its
      affiliates  on  an exercise date, and (ii) the number of shares of Common
      Stock issuable upon  the  exercise  of this Warrant with respect to which
      the determination of this proviso is  being  made  on  an  exercise date,
      which  would  result  in  beneficial  ownership  by  the  Holder and  its
      affiliates of more than 4.99% of the outstanding shares of  Common  Stock
      of  the  Company  on  such  date.  For the purposes of the proviso to the
      immediately preceding sentence,  beneficial ownership shall be determined
      in accordance with Section 13(d) of  the Securities Exchange Act of 1934,
      as  amended,  and  Regulation  13d-3  thereunder.    Notwithstanding  the
      foregoing,  the restriction described in this paragraph  may  be  revoked
      upon 75 days  prior  notice  from  the  Holder  to  the  Company  and  is
      automatically  null and void upon an Event of Default under the Note made
      by the Company to  the Holder dated the date hereof (as amended, modified
      or supplemented from time to time, the "Note").

11.Warrant Agent.  The Company may, by written notice to the Holder, appoint an
      agent for the purpose  of  issuing  Common Stock (or Other Securities) on
      the  exercise of this Warrant pursuant  to  Section  1,  exchanging  this
      Warrant  pursuant  to  Section  7, and replacing this Warrant pursuant to
      Section 8, or any of the foregoing,  and  thereafter  any  such issuance,
      exchange or replacement, as the case may be, shall be made at such office
      by such agent.

12.Transfer on the Company's Books.  Until this Warrant is transferred  on  the
      books  of the Company, the Company may treat the registered Holder hereof
      as the absolute owner hereof for all purposes, notwithstanding any notice
      to the contrary.

13.Notices, Etc.   All notices and other communications from the Company to the
      Holder shall be  mailed  by  first  class  registered  or certified mail,
      postage  prepaid,  at  such  address  as may have been furnished  to  the
      Company in writing by such Holder or, until  any such Holder furnishes to
      the Company an address, then to, and at the address  of,  the last Holder
      who has so furnished an address to the Company.

14.Miscellaneous.   This  Warrant  and any term hereof may be changed,  waived,
      discharged or terminated only  by  an instrument in writing signed by the
      party  against which enforcement of such  change,  waiver,  discharge  or
      termination is sought. This Warrant shall be governed by and construed in
      accordance  with  the  laws  of  State  of  New  York  without  regard to
      principles  of  conflicts  of  laws.   Any  action brought concerning the
      transactions contemplated by this Warrant shall  be  brought  only in the
      state courts of New York or in the federal courts located in the state of
      New  York;  provided,  however, that the Holder may choose to waive  this
      provision  and bring an action  outside  the  state  of  New  York.   The
      individuals  executing  this  Warrant  on  behalf of the Company agree to
      submit to the jurisdiction of such courts and  waive  trial by jury.  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  Warrant 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  enforceability of any other provision of this Warrant.  The
      headings in this  Warrant  are  for purposes of reference only, and shall
      not limit or otherwise affect any of the terms hereof.  The invalidity or
      unenforceability of any provision  hereof  shall  in  no  way  affect the
      validity  or  enforceability  of any other provision hereof.  The Company
      acknowledges that legal counsel  participated  in the preparation of this
      Warrant  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 Warrant to favor any party against
      the other party.

                  [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;

                           SIGNATURE PAGE FOLLOWS.]

<PAGE>

      IN WITNESS WHEREOF, the Company  has executed this Warrant as of the date
first written above.

        IT&E INTERNATIONAL GROUP, INC.

WITNESS:

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

<PAGE>

                             FORM OF SUBSCRIPTION

                  (To Be Signed Only On Exercise Of Warrant)

TO:   IT&E International Group, Inc.

      Attention:  Chief Financial Officer

      The undersigned, pursuant to the provisions  set  forth  in  the attached
Warrant  (No.____),  hereby  irrevocably  elects  to purchase (check applicable
box):

________ shares of the Common Stock covered by such Warrant; or
the maximum number of shares of Common Stock covered  by  such Warrant pursuant
to the cashless exercise procedure set forth in Section 2.

      The  undersigned  herewith  makes  payment  in lawful money of the United
States  of  the  full Exercise Price for such shares at  the  price  per  share
provided for in such Warrant, which is $___________.

      The undersigned  requests that the certificates for such shares be issued
in the name of, and delivered to ______________________________________________
whose                                 address                                is
___________________________________________________________________________.

      The undersigned represents and warrants  that all offers and sales by the
undersigned  of the securities issuable upon exercise  of  the  within  Warrant
shall be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act and any applicable state securities laws.

Dated:

       (Signature must conform to name of Holder as specified on the face of
the Warrant)

       Address:

<PAGE>

                        FORM OF TRANSFEROR ENDORSEMENT

                  (To Be Signed Only On Transfer Of Warrant)

      For value  received, the undersigned hereby sells, assigns, and transfers
unto the person(s)  named  below  under  the  heading  "Transferees"  the right
represented  by  the  within  Warrant to purchase the percentage and number  of
shares of Common Stock of IT&E International Group, Inc.  into which the within
Warrant  relates specified under  the  headings  "Percentage  Transferred"  and
"Number Transferred,"  respectively, opposite the name(s) of such person(s) and
appoints each such person  Attorney  to  transfer  its  respective right on the
books of IT&E International Group, Inc.  with full power of substitution in the
premises.

        Percentage Number Transferred   Transferees  Address  Transferred

Dated:

       (Signature must conform to name of Holder as specified on the face of
the Warrant)

       Address:

                    SIGNED IN THE PRESENCE OF:

                              (Name)
ACCEPTED AND AGREED:
[TRANSFEREE]

       (Name)

<PAGE>

                                 EXHIBIT C

                               FORM OF OPINION

       1.     The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Nevada and has all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted.

       2.     The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Agreement and the
Related Agreements.  All corporate action on the part of the Company and its
officers, directors and stockholders necessary has been taken for:  (i) the
authorization of the Agreement and the Related Agreements and the performance
of all obligations of the Company thereunder at the Closing; and (ii) the
authorization, sale, issuance and delivery of the Securities pursuant to the
Agreement and the Related Agreements.  The Note Shares and the Warrant Shares,
when issued pursuant to and in accordance with the terms of the Agreement and
the Related Agreements and upon delivery shall be validly issued and
outstanding, fully paid and non assessable.

       3.     The execution, delivery and performance of the Agreement, the
Note or the Related Agreements by the Company and the consummation of the
transactions on its part contemplated by any thereof, will not, with or without
the giving of notice or the passage of time or both:

             (a)  Violate the provisions of the Charter or bylaws of the
                  Company;

             (b)  Violate any judgment, decree, order or award of any court
                  binding upon the Company; or

             (c)  Violate any [Insert jurisdictions in which counsel is
                  qualified] or federal law.

       4.     The Agreement and the Related Agreements will constitute, valid
and legally binding obligations of the Company, and are enforceable against the
Company in accordance with their respective terms, except:

             (a)  as limited by applicable bankruptcy, insolvency,
                  reorganization, moratorium or other laws of general
                  application affecting enforcement of creditors' rights;
                  and

             (b)  general principles of equity that restrict the availability
                  of equitable or legal remedies.

       5.     To such counsel's knowledge, the sale of the Note and the
subsequent conversion of the Note into Note Shares are not subject to any
preemptive rights or rights of first refusal that have not been properly waived
or complied with.  To such counsel's knowledge, the sale of the Warrant and the
subsequent exercise of the Warrant for Warrant Shares are not subject to any
preemptive rights or, to such counsel's knowledge, rights of first refusal that
have not been properly waived or complied with.

                                   C-l
<PAGE>

       6.     Assuming the accuracy of the representations and warranties of
the Purchaser contained in the Agreement, the offer, sale and issuance of the
Securities on the Closing Date will be exempt from the registration
requirements of the Securities Act.  To such counsel's
knowledge, neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy and security under
circumstances that would cause the offering of the Securities pursuant to this
Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act which would prevent the Company from selling the Securities
pursuant to Rule 506 under the Securities Act, or any applicable exchange-
related stockholder approval provisions.

       7.     There is no action, suit, proceeding or investigation pending or,
to such counsel's knowledge, currently threatened against the Company that
prevents the right of the Company to enter into this Agreement or any of the
Related Agreements, or to consummate the transactions contemplated thereby.
The Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality; nor,
to such counsel's knowledge, is there any action, suit, proceeding or
investigation by the Company currently pending or which the Company intends to
initiate.

       8.     The terms and provisions of the Master Security Agreement create
a valid security interest in favor of the Purchaser, in the respective rights,
title and interests of the Company in and to the Collateral (as defined in the
Master Security Agreement). The UCC-1 Financing
Statement naming the Company as debtor and the Purchaser as secured party are
in proper form for filing and assuming that such UCC-1 Financing Statements
have been filed with the Secretary of State of [Delaware], the security
interest created under the Master Security
Agreement will constitute a perfected security interest under the Uniform
Commercial Code in favor of the Purchaser in respect of the Collateral that can
be perfected by filing a financing statement.

       9.    Assuming that North Fork Bank is a "bank" (as such term is defined
in Section 9-102(a)(8) of the UCC), and that the Restricted Account (as defined
in the Restricted Account Agreement) constitutes a "deposit account" (as such
term is defined in Section 9-102(a)(29) of
the UCC), under the Uniform Commercial Code, the due execution and delivery of
the Restricted Account Agreement perfects the Purchaser's security interest in
the Restricted Account.

                                   C-2
<PAGE>

                                   EXHIBIT D

                           FORM OF ESCROW AGREEMENT

                           FUNDS ESCROW AGREEMENT

       This Agreement (this "Agreement") is dated as of the day of October 18,
2004 among IT&E International Group, Inc. a Nevada corporation (the "Company"),
Laurus Master Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP (the "Escrow
Agent"):

                                 WITNESSETH:

       WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Company
and the Purchaser have entered into a Securities Purchase Agreement (the
"Purchase Agreement") for the sale by the Company to the Purchaser of a secured
convertible term note (the "Term Note"), (b) the Company has issued to the
Purchaser a common stock purchase warrant (the "Term Note Warrant") in
connection with the issuance of the Term Note, and (c) the Company and the
Purchaser have entered into a Registration Rights Agreement covering the
registration of the Company's common stock underlying the Term Note and the
Term Note Warrant (the "Term Note Registration Rights Agreement");

       WHEREAS, the Company and the Purchaser wish the Purchaser to deliver to
the Escrow Agent copies of the Documents (as hereafter defined) and the
Escrowed Payment (as hereafter defined) to be held and released by Escrow Agent
in accordance with the terms and conditions of this Agreement; and

       WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant
to the terms and conditions of this Agreement;

       NOW THEREFORE, the parties agree as follows:

                                 ARTICLE I

                              INTERPRETATION

       1.1.   Definitions. Whenever used in this Agreement, the following terms
shall have the meanings set forth below.

             (a)          "Agreement" means this Agreement, as amended,
             modified and/or supplemented from time to time by written
             agreement among the parties hereto.

             (b)          "Closing Payment" means the closing payment to be
             paid to Laurus Capital Management, LLC, the fund manager, as set
             forth on Schedule A hereto.

             (c)          "Disbursement Letter" means that certain letter
             delivered to the Escrow Agent by each of the Purchaser and the
             Company setting forth wire instructions and amounts to be
             funded at the Closing.

             (d)          "Documents" means copies of the Disbursement Letter,
             the Purchase Agreement, the Term Note, the Term Note Warrant, and
             the Term Note Registration Rights Agreement.

             (e)          "Escrowed Payment" means $5,000,000.

       1.2.   Entire Agreement.  This Agreement constitutes the entire
agreement among the parties hereto with respect to the matters contained herein
and supersedes all prior agreements, understandings, negotiations and
discussions of the parties, whether oral or written. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement.

       1.3.   Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.

       1.4.   Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, in each case only by a written instrument signed by all parties
hereto, or, in the case of a waiver, by the party waiving compliance. Except as
expressly stated herein, no
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party of any right, power or privilege hereunder preclude any other or
future exercise of any other right, power or privilege hereunder.

       1.5.   Headings.   The division of this Agreement into articles,
sections, subsections and paragraphs and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.

       1.6.   Law Governing this Agreement; Consent to Jurisdiction. This
Agreement 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. With
respect to any suit, action or proceeding relating to this Agreement or to the
transactions contemplated hereby ("Proceedings"), each party hereto irrevocably
submits to the exclusive jurisdiction of the courts of the County of New York,
State of New York and the United States District court located in the county of
New York in the State of New York.  Each party hereto hereby irrevocably and
unconditionally (a) waives trial by jury in any Proceeding relating to this
Agreement and for any related counterclaim and (b) waives any objection which
it may have at any time to the laying of venue of any Proceeding brought in any
such court, waives any claim that such Proceedings have been brought in an
inconvenient forum and further waives the right to object, with respect to such
Proceedings, that such court does not have jurisdiction over such party. As
between the Company and the Purchaser, the

                                      2

<PAGE>

prevailing party shall be entitled to recover from the other party its
reasonable attorneys' fees and costs. In the event that any provision of this
Agreement is determined by a court of competent jurisdiction to be invalid or
unenforceable, then the remainder of this
Agreement shall not be affected and shall remain in full force and effect.

       1.7.   Construction. Each party acknowledges that its legal counsel

participated in the preparation of this Agreement 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 Agreement to
favor any party against the other.

                              ARTICLE II

         APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT

       2.1.   Appointment.  The Company and the Purchaser hereby irrevocably
designate and appoint the Escrow Agent as their escrow agent for the purposes
set forth herein, and the Escrow Agent by its execution and delivery of this
Agreement hereby accepts such appointment under the terms and conditions set
forth herein.

       2.2.   Copies of Documents to Escrow Agent. On or about the date hereof,
the Purchaser shall deliver to the Escrow Agent copies of the Documents
executed by the Company to the extent it is a party thereto.

       2.3.   Delivery of Escrowed Payment to Escrow Agent. On or about the
date hereof, the Purchaser shall deliver to the Escrow Agent the Escrowed
Payment.

       2.4.   Intention to Create Escrow Over the Escrowed Payment. The
Purchaser and the Company intend that the Escrowed Payment shall be held in
escrow by the Escrow Agent and released from escrow by the Escrow Agent only in
accordance with the terms and conditions of this Agreement.

                              ARTICLE III

                           RELEASE OF ESCROW

       3.1.   Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Escrowed Payment from escrow as follows:

             (a)          Promptly following receipt by the Escrow Agent of (i)
       copies of the fully executed Documents and this Agreement, (ii) the

       Escrowed Payment in immediately available funds, (iii) joint written
       instructions ("Joint Instructions") executed by the Company and the
       Purchaser setting forth the payment direction instructions with respect
       to the Escrowed Payment and (iv) Escrow Agent's verbal instructions from
       David Grin and/or Eugene Grin (each of whom is a director of the
       Purchaser) indicating that all closing conditions relating to the
       Documents have been satisfied and directing that the Escrowed Payment be
       disbursed by the Escrow Agent in accordance with the Joint Instructions,
       then the Escrowed Payment shall be deemed released from escrow and shall
       be promptly disbursed in accordance with the Joint

                                    3
<PAGE>

Instructions. The Joint Instructions shall include, without limitation. Escrow
Agent's authorization to retain from the Escrowed Payment Escrow Agent's fee
for acting as Escrow Agent hereunder and the Closing Payment for delivery to
Laurus Capital Management, LLC in accordance with the Joint Instructions.

             (b)          Upon receipt by the Escrow Agent of a final and non-
 appealable judgment, order, decree or award of a court of competent
 jurisdiction (a "Court Order") relating to the Escrowed Payment, the Escrow
 Agent shall remit the Escrowed Payment in accordance with the Court Order. Any
 Court Order shall be accompanied by an opinion of counsel for the party
 presenting the Court Order to the Escrow Agent (which opinion shall be
 satisfactory to the Escrow Agent) to the effect that the court issuing the
 Court Order is a court of competent jurisdiction and that the Court Order is
 final and non-appealable.

       3.2.   Acknowledgement of Company and Purchaser; Disputes. The Company
and the Purchaser acknowledge that the only terms and conditions upon which the
Escrowed Payment are to be released from escrow are as set forth in Sections 3
and 4 of this Agreement. The Company and the Purchaser reaffirm their agreement
to abide by *the terms and conditions of this Agreement with respect to the
release of the Escrowed Payment. Any dispute with respect to the release of the
Escrowed Payment shall be resolved pursuant to Section 4.2 or by written
agreement between the Company and Purchaser.

                               ARTICLE IV

                       CONCERNING THE ESCROW AGENT

       4.1.   Duties and Responsibilities of the Escrow Agent. The Escrow
Agent's duties and responsibilities shall be subject to the following terms and
conditions:

             (a)          The Purchaser and the Company acknowledge and agree
       that the Escrow Agent (i) shall not be required to inquire into whether
       the Purchaser, the Company or any other party is entitled to receipt of

       any Document or all or any portion of the Escrowed Payment; (ii) shall
       not be called upon to construe or review any Document or any other
       document, instrument or agreement entered into in connection therewith;
       (iii) shall be obligated only for the performance of such duties as are
       specifically assumed by the Escrow Agent pursuant to this Agreement;
       (iv) may rely on and shall be protected in acting or refraining from
       acting upon any written notice, instruction, instrument, statement,
       request or document furnished to it hereunder and believed by the Escrow
       Agent in good faith to be genuine and to have been signed or presented
       by the proper person or party, without being required to determine the
       authenticity or correctness of any fact stated therein or the propriety
       or validity or the service thereof; (v) may assume that any person
       purporting to give notice or make any statement or execute any document
       in connection with the provisions hereof has been duly authorized to do
       so; (vi) shall not be responsible for the identity, authority or rights
       of any person, firm or company executing or delivering or purporting to
       execute or deliver this Agreement or any Document or any funds deposited
       hereunder or any endorsement thereon or assignment thereof; (vii) shall

                                      4
<PAGE>

not be under any duty to give the property held by Escrow Agent hereunder any
greater degree of care than Escrow Agent gives its own similar property; and
(viii) may consult counsel satisfactory to Escrow Agent (including, without
limitation, Loeb & Loeb, LLP or such other counsel of Escrow Agent's choosing);
the opinion of such counsel to be full and complete authorization and
protection in respect of any action taken, suffered or omitted by Escrow Agent
hereunder in good faith and in accordance with the opinion of such counsel.

             (b)          The Purchaser and the Company acknowledge that the
       Escrow Agent is acting solely as a stakeholder at their request and that
       the Escrow Agent shall not be liable for any action taken by Escrow
       Agent in good faith and believed by Escrow Agent to be authorized or
       within the rights or powers conferred upon Escrow Agent by this
       Agreement. The Purchaser and the Company hereby, jointly and severally,
       indemnify and hold harmless the Escrow Agent and any of Escrow Agent's
       partners, employees, agents and representatives from and against any and
       all actions taken or omitted to be taken by Escrow Agent or any of them
       hereunder and any and all claims, losses, liabilities, costs, damages
       and expenses suffered and/or incurred by the Escrow Agent arising in any
       manner whatsoever out of the transactions contemplated by this Agreement
       and/or any transaction related in any way hereto, including the fees of
       outside counsel and other costs and expenses of defending itself against
       any claims, losses, liabilities, costs, damages and expenses arising in
       any manner whatsoever out the transactions contemplated by this
       Agreement and/or any transaction related in any way hereto, except for
       such claims, losses, liabilities, costs, damages and expenses incurred
       by reason of the Escrow Agent's gross negligence or willful misconduct.
       The Escrow Agent shall owe a duty only to the Purchaser and Company
       under this Agreement and to no other person.

             (c)          The Purchaser and the Company shall jointly and
       severally reimburse the Escrow Agent for its reasonable out-of-pocket
       expenses (including counsel fees (which counsel may be Loeb & Loeb LLP
       or such other counsel of the Escrow Agent's choosing) incurred in
       connection with the performance of its duties and responsibilities
       hereunder, which shall not (subject to Section 4.1(b)) exceed $2,000.

             (d)          The Escrow Agent may at any time resign as Escrow
       Agent hereunder by giving five (5) business days prior written notice of
       resignation to the Purchaser and the Company. Prior to the effective
       date of resignation as specified in such notice, the Purchaser and
       Company will issue to the Escrow Agent a Joint Instruction authorizing
       delivery of the Documents and the Escrowed Payment to a substitute
       Escrow Agent selected by the Purchaser and the Company.. If no successor
       Escrow Agent is named by the Purchaser and the Company, the Escrow Agent
       may apply to a court of competent jurisdiction in the State of New York
       for appointment of a successor Escrow Agent, and deposit the Documents
       and the Escrowed Payment with the clerk of any such court and/or
       otherwise commence an interpleader or similar action for a determination
       of where to deposit the same.

                                      5
<PAGE>

             (e)          The Escrow Agent does not have and will not have any
       interest in the Documents and the Escrowed Payment, but is serving only
       as escrow agent, having only possession thereof.

             (f)           The Escrow Agent shall not be liable for any action
       taken or omitted by it in good faith and reasonably believed by it to be
       authorized hereby or within the rights or powers conferred upon it
       hereunder, nor for action taken or omitted by it in good faith, and in
       accordance with advice of counsel (which counsel may be Loeb & Loeb, LLP
       or such other counsel of the Escrow Agent's choosing), and shall not be
       liable for any mistake of fact or error of judgment or for any acts or
       omissions of any kind except to the extent any such liability arose from
       its own willful misconduct or gross negligence.

             (g)          This Agreement sets forth exclusively the duties of
       the Escrow Agent with respect to any and all matters pertinent thereto
       and no implied duties or obligations shall be read into this Agreement.

             (h)          The Escrow Agent shall be permitted to act as counsel
       for the Purchaser or the Company, as the case may be, in any dispute as
       to the disposition of the Documents and the Escrowed Payment, in any
       other dispute between the Purchaser and the Company, whether or not the
       Escrow Agent is then holding the Documents and/or the Escrowed Payment
       and continues to act as the Escrow Agent hereunder.

             (i)           The provisions of this Section 4.1 shall survive the
       resignation of the Escrow Agent or the termination of this Agreement.

       4.2.   Dispute Resolution; Judgments. Resolution of disputes arising
under this Agreement shall be subject to the following terms and conditions:

             (a)          If any dispute shall arise with respect to the
       delivery, ownership, right of possession or disposition of the Documents
       and/or the Escrowed Payment, or if the Escrow Agent shall in good faith
       be uncertain as to its duties or rights hereunder, the Escrow Agent
       shall be authorized, without liability to anyone, to (i) refrain from
       taking any action other than to continue to hold the Documents and the
       Escrowed Payment pending receipt of a Joint Instruction from the
       Purchaser and Company, (ii) commence an interpleader or similar action,
       suit or proceeding for the resolution of any such dispute; and/or (iii)
       deposit the Documents and the Escrowed Payment with any court of
       competent jurisdiction in the State of New York, in which event the
       Escrow Agent shall give written notice thereof to the Purchaser and the
       Company and shall thereupon be relieved and discharged from all further
       obligations pursuant to this Agreement.  The Escrow Agent may, but shall
       be under no duty to, institute or defend any legal proceedings which
       relate to the Documents and the Escrowed Payment.  The Escrow Agent
       shall have the right to retain counsel if it becomes involved in any
       disagreement, dispute or litigation on account of this Agreement or
       otherwise determines that it is necessary to consult counsel which such
       counsel may be Loeb & Loeb LLP or such other counsel of the Escrow
       Agent's choosing.

                                    6
<PAGE>

             (b)          The Escrow Agent is hereby expressly authorized to
       comply with and obey any Court Order. In case the Escrow Agent obeys or
       complies with a Court Order, the Escrow Agent shall not be liable to the
       Purchaser and Company or to any other person, firm, company or entity by
       reason of such compliance.

                                ARTICLE V

                             GENERAL MATTERS

       5.1.   Termination. This escrow shall terminate upon disbursement of the
Escrowed Payment in accordance with the terms of this Agreement or earlier upon
the agreement in writing of the Purchaser and Company or resignation of the
Escrow Agent in accordance with the terms hereof.

       5.2.   Notices.  All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given one (1) day after being sent by telecopy (with copy delivered
by overnight courier, regular or certified mail):

If to the Company, to: IT&E International Group, Inc.

505 Lomas Santa Fe Drive Suite 200
Solana Beach, CA 92075
Attention: Chief Financial Officer
Facsimile: 858-366-0961

With a copy to:

(b)    If to the Purchaser, 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

(c)    If to the Escrow Agent, to:

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Fax: (212)407-4990
Attention: Scott J. Giordano, Esq.

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

                                       7
<PAGE>

       5.3.   Interest. The Escrowed Payment shall not be held in an interest
bearing account nor will interest be payable in connection therewith.

       5.4.   Assignment; Binding Agreement.  Neither this Agreement nor any
right or obligation hereunder shall be assignable by any party without the
prior written consent of the other parties hereto.  This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
legal representatives, successors and assigns.

       5.5.   Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

       5.6.   Counterparts/Execution.  This Agreement may be executed in any
number of counterparts and by different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same agreement. This
Agreement may be executed by facsimile transmission.

                                      8
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

COMPANY:

IT&E INTERNATIONAL GROUP, INC.

By: /s/ Peter R. Sollenne
-------------------------
Name: Peter R. Sollenne
Title: CEO

PURCHASER:

LAURUS MASTER FUND, LTD
By:  David Grin
-------------------------
Name: David Grin
Title:  Director

ESCROW AGENT:

LOEB & LOEB LLP

By:________________________
Name:
Title:
                                    9

<PAGE>

              SCHEDULE A TO FUNDS ESCROW AGREEMENT

PURCHASER                                  PRINCIPAL NOTE AMOUNT
----------------------------------------------------------------------
LAURUS MASTER FUND, LTD.,                Term Note in an aggregate
                                         principal amount of
M&C Corporate Services Limited,          $5,000,000
P.O. Box 309 GT, Ugland House,
South Church Street, George Town,
Grand Cayman, Cayman Islands
Fax: 345-949-8080
----------------------------------------------------------------------
TOTAL                                    $5,000,000

=======================================================================
FUND MANAGER                                 CLOSING PAYMENT
----------------------------------------------------------------------

LAURUS CAPITAL MANAGEMENT, L.L.C.        Closing payment payable in
825 Third Avenue, 14th Floor             connection with investment by
New York, New York 10022                 Laurus Master Fund, Ltd. for
Fax: 212-541-4434                        which Laurus Capital
                                         Management, L.L.C. is the
                                         Manager.
----------------------------------------------------------------------
TOTAL                                    $175,000

=======================================================================
WARRANT RECIPIENT                        WARRANTS IN CONNECTION WITH
                                         OFFERING
----------------------------------------------------------------------

LAURUS MASTER FUND, LTD.                 Term Note Warrant exercisable
M&C Corporate Services Limited           into 1,924,000 shares of
P.O. Box 309 GT, Ugland House,           common stock of the
South Church Street, George              Company issuable in connection
Grand Cayman, Cayman Islands             with the Term Note.
Fax: 345-949-8080
----------------------------------------------------------------------
TOTAL                                    Warrants exercisable into
                                         1,924,000 shares of common
                                         stock of the Company

                                       10

<PAGE>

Disbursement Letter

                      IT&E International Group, Inc.
                          505 Lomas Santa Fe Drive
                                Suite 200
                         Solana Beach, CA 92075

                                             October 18,2004

Scott Giordano, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154

Dear Mr. Giordano:

RE:   IT&E International Group, Inc. (the "Company") - Escrow
      Release Gross Escrow Deposit: $5,000,000

These instructions are given to you pursuant to a Funds Escrow Agreement among
the Company, Laurus Master Fund, Ltd., and Loeb & Loeb LLP as Escrow Agent.
Subject to the terms set forth below, you are instructed to disburse or
allocate $5,000,000 of the investor's funds received by you to and on the
Company's behalf as follows:

       1.     $787,577.26 to the Company pursuant to the following wire
              instructions:
                    Bank         Bank of Walnut Creek
                                 1625 The Alameda, Suite 100, San Jose, CA
                                 95126
                                 [wire instructions omitted for this filing]
                    For Credit to: IT&E International Group, Inc.

       2.     $2,500,000.00 to North Fork Bank Restricted Account
              pursuant to the following wire instructions:
                    Bank:        North Fork Bank
                                 New York, NY 10022
                                 [wire instructions omitted for this filing]

                    For Credit to:    IT&E International Group, Inc.

       3.     $175,000.00 to Laurus Capital Management, L.L.C. (for
               management fees):
                    Bank:        North Fork Bank
                                 New York, NY 10022
                                 [wire instructions omitted for this filing]

                    For Credit to:     Laurus Capital Management, LL.C

       4.     $34,500.00 to Laurus Capital Management, L.L.C. (for payment
              in full for all due diligence and documentation fees owing by
              the Company),
                    Bank:           North Fork Bank
                                 New York, NY 10022
                                 [wire instructions omitted for this filing]

                    For Credit to:     Laurus Capital Management, LL.C.

       5.     $ 1,500,922.74 to Walnut Creek Bank pursuant to the following
              wire instructions:
                    Bank:        Bank of Walnut Creek
                                 1400 Civic Drive, Walnut Creek,
                                 CA  94596
                                 [wire instructions omitted for this filing]
                    For Credit to:    IT & E International

       6.     $2,000.00 to Loeb & Loeb LLP (for escrow agent fee).

Very truly yours,

IT&E INTERNATIONAL GROUP, INC.

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

Accepted and Agreed:

Laurus Master Fund, Ltd.
By:   David Grin
-------------------------
Name:  David Grin
Title:  Director

<PAGE>

                            LAURUS MASTER FUND, LTD.
                          825 Third Avenue, 14th Floor
                            New York, New York 10022
                                October 18, 2004

IT&E International Group, Inc.
505 Lomas Santa Fe Drive
Suite 200
Solana, CA 92075
Attn:  Chief Financial Officer

     Re: Restricted  Account:  Account Number  270-405-3574,  Account Name: IT&E
     International  Group, Inc.,  maintained at North Fork Bank (the "Restricted
     Account").

     Reference is made to (i) that certain Securities Purchase Agreement,  dated
as of 18th __________,  2004 (as amended,  modified or supplemented from time to
time, the "Purchase Agreement"),  by and between IT&E International Group, Inc.,
a Nevada  corporation  (the  "Company"),  and  Laurus  Master  Fund,  Ltd.  (the
"Purchaser") and (ii) that certain  Restricted  Account  Agreement,  dated as of
October 18, 2004 (as amended,  modified or  supplemented  from time to time, the
"Restricted Account Agreement"), by and among the Company, Laurus and North Fork
Bank (the "Bank").  Capitalized terms used but not defined herein shall have the
meanings  ascribed  them in the  Purchase  Agreement or the  Restricted  Account
Agreement, as applicable. Pursuant to the Section 3.2 of the Purchase Agreement,
the Company is required to place  $2,500,000  in the  Restricted  Account,  and,
subject to the provisions of this letter, the Purchase Agreement and any Related
Agreement,  maintain the Restricted  Account in accordance  with such agreements
for as long as the Purchaser  shall have any obligations  outstanding  under the
Note and to assign the  Restricted  Account for the benefit of the  Purchaser as
security for the performance of the Company's Obligations to the Purchaser.

     The Purchaser and the Company desire to clarify certain  aspects  regarding
the  use  of  funds   contained  in  the  Restricted   Account,   and  for  good
consideration,  the receipt and sufficiency of which are here acknowledged,  the
Company and the Purchaser agree that, so long as the Amortizing Principal Amount
(as defined in the Note) at such time has been reduced  (through  conversions or
otherwise)  to $0,  promptly  following any  conversion  of a Monthly  Principal
Amount (as  defined in the Note) or such other  Principal  Amounts  into  Common
Stock of the Company (such event, a  "Conversion"),  the Purchaser  shall direct
the Bank,  pursuant to a Release  Notice (as defined in the  Restricted  Account
Agreement),  to wire an amount of funds equal to the corresponding dollar amount
by which the aggregate Principal Amount of the Note has been reduced pursuant to
such a  Conversion  from the  Restricted  Account  to such bank  account  as the
Company may direct the Purchaser in writing.

     Additionally, the Company may request that the Purchaser direct the Bank to
release all or any portion of the amounts  contained in the  Restricted  Account
following (or in connection  with) the  consummation  of an  acquisition  by the
Company or any of its  Subsidiaries of CRO-SD for a consideration  consisting of
cash and stock (the  "Acquisition")  or the purchase of certain  assets.  Such a
release referred to in the immediately  preceding  sentence shall be subject (in
all respects) to the Purchaser's evaluation of all factors that it considers (in
its sole discretion)  relevant at the time of such requested release,  including
its  determination  (i) of the  relative  benefit  of  such  Acquisition  or the
purchase of certain assets to the Company and its  Subsidiaries  and (ii) of the
overall performance (financial or otherwise) of the Company and its Subsidiaries
at such time.  The  Purchaser  shall not be under any  obligation to release any
amount  pursuant to this  paragraph  and the release of such amounts shall be in
the  Purchaser's  sole and absolute  discretion.  Prior to any such  acquisition
referred to in this  paragraph,  the Purchaser shall comply with Section 6.12(f)
of the Purchase Agreement in all respects.

<PAGE>

     This letter may not be amended or waived except by an instrument in writing
signed by the  Company  and the  Purchaser.  This  letter may be executed in any
number of  counterparts,  each of which shall be an  original  and all of which,
when taken  together,  shall  constitute one agreement.  Delivery of an executed
signature  page of this letter by facsimile  transmission  shall be effective as
delivery of a manually executed  counterpart hereof or thereof,  as the case may
be. This letter shall be governed by, and construed in accordance with, the laws
of the State of New York.  This letter sets forth the entire  agreement  between
the parties  hereto as to the matters set forth herein and  supersede  all prior
communications, written or oral, with respect to the matters herein.

     If the foregoing meets with your approval please signify your acceptance of
the terms hereof by signing below.

                                          Signed,
                                          Laurus Master Fund, Ltd.
                                          By:           /s/
                                              ----------------------------------
                                          Name:
                                          Title:

Agreed and Accepted this 18th day of October, 2004
IT&E International Group, Inc.
By:      /s/ Peter Sollenne
   ----------------------------
Name: Peter Sollenne
Title: CEOEXHIBIT 4.1

 

FIRST SUPPLEMENTAL INDENTURE

 

FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”) dated as of July 12, 2005 by and among Corixa Corporation, a Delaware corporation (the “Company”), and Wells Fargo Bank, National Association as trustee (the “Trustee”).

WHEREAS, the Company has executed and delivered to the Trustee an Indenture (the “Indenture”), dated as of June 13, 2003, providing for the issuance from time to time of the Securities;

WHEREAS, the Company proposes in and by this First Supplemental Indenture to supplement and amend the Indenture in certain respects as it applies to the Company and the Securities;

WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of April 29, 2005, by and among the Company, SmithKline Beecham Corporation, a Pennsylvania corporation (“GSK”), and GSK Delaware Corp., the Company will become a wholly owned subsidiary of GSK effective on or about July 12, 2005 (the “Merger”) and each outstanding share of the Common Stock will be cancelled in exchange for a right to receive $4.40 in cash at the effective time of the Merger;

WHEREAS, the Merger complies with the provisions of Section 7.1 of the Indenture;

WHEREAS, the Company, as a wholly owned subsidiary of GSK following the Merger, desires to continue to be bound by the covenants and obligations of the Company as set forth in the Indenture and the Securities on the terms and conditions set forth herein;

WHEREAS, Section 12.11 of the Indenture requires the Company, as the surviving corporation in the Merger, to execute with the Trustee a supplemental indenture providing that each Security shall be convertible into the amount of cash receivable upon consummation of the Merger by a Holder of the number of shares of Common Stock issuable upon conversion of such Security immediately prior to the consummation of the Merger; and

WHEREAS, the Company has requested that the Trustee execute and deliver this First Supplemental Indenture.

NOW, THEREFORE, the Company and the Trustee hereby agree for the equal and ratable benefit of the Holders of the Securities:

Section 1.         Definitions.  Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.

Section 2.             Conversion of the Securities.  Pursuant to Section 12.11 of the Indenture, following and subject to the effectiveness of the Merger, the Securities shall be convertible, during the period specified in Section 12.1, only into the product of (x) $4.40, multiplied by (y) the number of shares (including fractional shares) of Common Stock issuable upon conversion of such Securities immediately prior to the Merger.

 

 

	
             
 	
            1
 	
             
 

 

 

 

 

Section 3.             Concerning the Trustee.  The Trustee accepts the provisions of this First Supplemental Indenture, but only upon the terms and conditions set forth in the Indenture as amended by this First Supplemental Indenture.  

Section 4.             Effectiveness and Operativeness.  This First Supplemental Indenture shall become effective, and the provisions provided for in this First Supplemental Indenture shall become operative, immediately upon consummation of the Merger.

Section 5.             Indenture Confirmed.  This First Supplemental Indenture shall be construed as supplemental to the Indenture and shall form a part of it, and the Indenture is hereby incorporated by reference herein and each is hereby ratified, approved and confirmed.  The Indenture shall continue in full force and effect in accordance with the terms thereof and as supplemented by this First Supplemental Indenture.

Section 6.             Governing Law.  This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, the United States of America.

Section 7.             Multiple Originals.  The parties may sign any number of copies of this First Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this First Supplemental Indenture.

Section 8.             Headings.  The headings of this First Supplemental Indenture are for reference only and shall not limit or otherwise affect the meaning hereof.

Section 9.             Severability.  In case any one or more of the provisions contained in this First Supplemental Indenture or in the Securities shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this First Supplemental Indenture or of the Securities, but this First Supplemental Indenture and the Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

Section 10.          Benefits of Indenture.  Nothing in this First Supplemental Indenture, express or implied, shall give to any person, other than the parties hereto, their successors hereunder, and the Holders, any benefit of any legal or equitable right, remedy or claim under this First Supplemental Indenture.

Section 11.          Successors and Assigns.  All agreements of the Company and the Trustee in this First Supplemental Indenture shall bind their respective successors and assigns.

 

	
             
 	
            2
 	
             
 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed all as of the day and year first above written.

 

CORIXA CORPORATION

	
            By:
 	
            /s/ Steven Gillis
 
	
            Name:
 	
            Steven Gillis
 	
             

	
            Title:
 	
            CEO
 	
             

				

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

	
            By:
 	
            /s/ Maddy Hall
 	
             

	
            Name:
 	
            Maddy Hall
 	
             

	
            Title:
 	
            Assistant Vice President
 
				

 

 

 

	
             
 	
            3

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