Document:

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

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

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

WHEREAS,  these C  Warrants  are part of a series of C Warrants  (the  "Series C
Warrants"),  all with the same terms and  conditions  as those set forth herein,
which may be issued by the Company  exercisable for up to an aggregate 9,735,875
shares of Common Stock; and

WHEREAS,  the Series C Warrants  are being  issued  together  with shares of the
Company's Class C Preferred Stock (the "C Preferred Stock") having an aggregated
Stated Value of $9,735,875  and are not  detachable or separately  transferrable
from the C Preferred Stock prior to , 2008 (the "Exercise  Commencement  Date");
and

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

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

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

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

<PAGE>

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

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

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

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

The Holder  acknowledges that the C Warrants underlying this C Warrant Agreement
as well as the C Warrant  Shares for which  these C Warrants  may be  exercised,
have not been and, except as otherwise  provided herein,  will not be registered
under the Securities Act of 1933 (the "Act") or qualified under applicable state
securities  laws and that  the  transferability  thereof  is  restricted  by the
registration  provisions  of the  Act as well as such  state  laws.  The  Holder
represents  that he is  acquiring  the C Warrants and will acquire the C Warrant
Shares for his own account,  for investment purposes only and not with a view to
resale  or  other  distribution  thereof,  nor with the  intention  of  selling,
transferring  or otherwise  disposing of all or any part of such  securities for
any particular event or circumstance,  except selling, transferring or disposing
of them upon full  compliance  with all  applicable  provisions  of the Act, the
Securities  Exchange Act of 1934 (the "Exchange Act"), the Rules and Regulations
promulgated  by  the  Securities  and  Exchange  Commission  (the  "Commission")
thereunder,  and any  applicable  state  securities  laws.  The  Holder  further
understands  and agrees that (i) neither the C Warrants nor the C Warrant Shares
may be sold unless they are subsequently  registered under the Act and qualified
under any applicable  state  securities laws or, in the opinion of the Company's
counsel,  an exemption from such  registration  and  qualification is available;
(ii) any routine  sales of the Company's  securities  made in reliance upon Rule
144  promulgated  by the  Commission  under the Act, can be effected only in the
amounts set forth in and pursuant to the other terms and  conditions,  including
applicable  holding  periods,  of that Rule;  and (iii) except as

                                      -2-

<PAGE>

otherwise set forth herein, the Company is under no obligation to register the C
Warrants  or the C Warrant  Shares on his behalf or to assist  him in  complying
with any exemption from registration  under the Act. The Holder agrees that each
certificate  representing  any C Warrant  Shares for which the C Warrants may be
exercised will bear on its face a legend in substantially the following form:

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

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

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

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

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

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

                                      -3-

<PAGE>

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

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

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

                                      -4-

<PAGE>

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

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

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

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

     (g)  Referral  of  Adjustment.  In any case in which  this  Section 5 shall
require  that an  adjustment  in the  Exercise  Price be made  effective as of a
record date for a

                                      -5-
<PAGE>

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

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

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

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

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

                                      -6-

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                      -8-
<PAGE>

permit  the  Holder  to  sell  his  Registerable  Securities  after  the  Demand
Registration Statement or Piggy-Back Registration Statement, as the case may be,
is declared effective by the Commission (the "Effective Date").

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

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

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

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

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

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

The Holder's C Warrants  underlying this C Warrant Agreement are being issued to
the Holder together with the ______shares  (the "C Shares") of C Preferred Stock
represented by  certificate(s)  #(s) _____also  being issued to the Holder as of
the date hereof.  The Holder's C Warrants  shall not  detachable  or  separately
transferrable from the C Shares until _________,  2008. Anything to the contrary
not with  standing,  in the event that the C Shares are  redeemed by the Company
prior to the Exercise  Commencement  Date,  the C Warrants  represented  by this
Warrant Agreement shall terminate on the date of such redemption.

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

This Agreement shall not be amended,  modified or revoked except by agreement in

                                      -9-

<PAGE>

writing, signed by the Company and the Holder.

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

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

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

CNE Group, Inc.                              ___________________________________

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

                                      -10-
<PAGE>
                                SUBSCRIPTION FORM

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

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

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

               _________________________________________________

               _________________________________________________

               _________________________________________________
                     [please print or type name and address]

and be delivered to

               _________________________________________________

               _________________________________________________

               _________________________________________________
                     [please print or type name and address]

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

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

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

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

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

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

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

                                      -11-Registered #
            ------------
                                 CNE GROUP, INC.
                              10% SUBORDINATED NOTE
                                 DUE      , 2004
                                    ------
$                                                                       __, 2003
 ---------

     THIS  NOTE  IS  ISSUED  PURSUANT  TO AN  EXEMPTION  FROM  THE  REGISTRATION
     PROVISIONS OF THE SECURITIES ACT OF 1933 (THE "ACT") AND THE  QUALIFICATION
     PROVISIONS OF APPLICABLE STATE  SECURITIES LAWS.  NEITHER IT NOR THE SHARES
     OF COMMON STOCK INTO WHICH IT CAN BE CONVERTED CAN BE SOLD, HYPOTHECATED OR
     OTHERWISE  TRANSFERRED UNLESS REGISTERED  PURSUANT TO THE ACT AND QUALIFIED
     UNDER  APPLICABLE  STATE LAW OR, IN THE  OPINION OF  COUNSEL  TO MAKER,  AN
     EXEMPTION THEREFROM IS AVAILABLE.

FOR VALUE RECEIVED,  the undersigned,  CNE GROUP,  INC., a Delaware  corporation
with  offices at 200 West 57th  Street,  Suite  1103,  New York,  New York 10019
("Maker"),  promises to pay to           with an address at           ("Payee"),
                              -----------                  -----------
           on , 2004 except as otherwise  provided herein (the "Maturity Date"),
-----------
 the principal  amount ($      ) Dollars in lawful money of the United States of
                         ------
America  (the  "Principal) together with all accrued interest.

This Note is one of a series of notes  (collectively the "Notes"),  all with the
same  terms and  conditions  as those set forth  herein,  which may be issued by
Maker up to the aggregate  principal amount of One Million Two Hundred and Fifty
($1,250,000) Dollars. Each Note is part of an offering (the "Offering") of up to
twenty five (25) units (the "Units") being  conducted by Maker on a best efforts
basis.  Each Unit consists of one Note in the principal amount of Fifty Thousand
($50,000.00) Dollars and such number of Class B Cashless Warrants  (collectively
the  "Warrants") to permit the holders thereof to purchase two hundred and eight
thousand,  three hundred and two (208,302)  shares of Maker's common stock,  par
value $0.00001 per share,  (the "Common  Stock") at $0.50 per share,  subject to
certain anti-dilution  provisions. If all of the Units are sold, an aggregate of
Five  Million,  Two  Hundred  and Seven  Thousand,  Five  Hundred  and Fifty One
(5,207,550) shares will be issuable upon exercise of the Warrants.

The Note is  subordinated to certain of Maker's  indebtedness  defined herein as
"Senior  Debt" and  "Senior  Bank  Debt" as set  forth  below.  It bears  simple
interest (the "Interest") at the annual rate of ten percent (10%),  payable,  in
arrears,  on the Interest  Payment Dates (as defined in Section 1 below),  until
the Principal and all accrued Interest thereon  (collectively the "Obligations")
shall be paid in full.

<PAGE>

1.   Interest.

Maker will pay  Interest  on the first day of each July,  October,  January  and
April (the "Interest Payment Dates") commencing on July 1, 2003. Interest on the
Note will accrue from the most recent date to which  interest  has been paid or,
if no interest  has been paid,  from the date of delivery of the Note.  Interest
will be computed on the basis of a 360-day year of twelve 30-day months.

2.   Method of Payment.

Maker will pay  Principal and Interest in money of the United States that at the
time of payment is legal  tender for the  payment of public and  private  debts.
Maker  may,  however,  pay  Principal  and  Interest  by its  check,  subject to
collection,  payable in such  money.  It may mail an  Interest  check to Payee's
address as it first  appears on this Note or such other  address as Payee  shall
give by notice to Maker.  Payee  must  surrender  this Note to Maker to  collect
Principal payments.

3.   Right to Registration.

(a)  Payee's  Demand  Right  to  Registration.   Upon  receipt  of  notice  (the
"Registration  Request  Notice")  requesting  registration  under the Act of the
Warrants and the shares of Common Stock (the "Underlying  Shares") issuable upon
exercise of the Warrants  (collectively the "Registerable  Securities") from any
Note holder, on only one occasion,  after the date hereof,  and through one year
after the date on which all of the  Warrants  have been  exercised  or  expired,
Maker will offer to Payee the opportunity to include his Registerable Securities
in such  registration.  Maker  will  use its  best  efforts  to  file  with  the
Securities and Exchange Commission (the "Commission") as promptly as practicable
but  in no  event  later  than  thirty  (30)  days  after  its  receipt  of  the
Registration Request Notice, a registration  statement (the "Demand Registration
Statement"),  and will  use its best  efforts  to have the  Demand  Registration
Statement  declared  effective  and remain  effective  until the earliest of two
years thereafter,  the date all the Registerable  Securities  registered thereby
have  been  sold,  or,  in  the  reasonable  opinion  of  Maker's  counsel,  the
Registerable  Securities may be sold publicly without  registration.  Maker will
also use its best  efforts  to qualify  the  Registerable  Securities  under the
securities laws of the state where Payee resides  provided Maker is not required
to execute a general  consent to  service or to qualify to do  business  in such
state.  This  offer to Payee  shall be made  within  ten (10) days  after  Maker
receives  the  Registration  Request  Notice.  If Payee  elects to  include  his
Registerable  Securities  in the Demand  Registration  Statement,  he will, in a
timely fashion,  provide Maker and its counsel with such information and execute
such documents as Maker's counsel may reasonably  require to prepare and process
the  Demand  Registration   Statement.  If  Payee  elects  not  to  include  his
Registerable Securities in the "Demand Registration Statement," he shall have no
further rights to the  registration of his  Registerable  Securities  under this
Paragraph 3 (a).

(b) Payee's  "Piggy  Back"  Registration  Rights.  If at any time after the date
hereof,  Maker  proposes  to file a  Registration  Statement  under the Act with
respect  to any of its

                                      -2-

<PAGE>

securities  (except  one  relating  to stock  option  or
employee  benefit  plans or a merger or similar  transaction),  Maker shall give
written  notice of its  intention to effect such filing to Payee at least thirty
(30)  days  prior  to  filing  such  Registration   Statement  (the  "Piggy-Back
Registration  Statement").  If  Payee's  Registerable  Securities  have not been
previously registered as provided in Paragraph 3 (a) above, and Payee desires to
include his Registerable Securities in the Piggy-Back Registration Statement, he
shall notify  Maker in writing  within  fifteen (15) days after  receipt of such
notice from Maker,  in which event  Maker  shall  include  Payee's  Registerable
Securities in the Piggy-Back  Registration Statement. If Payee elects to include
his  Registerable  Securities in the  Piggy-Back  Registration  Statement as set
forth herein, he shall, in a timely fashion,  provide Maker and its counsel with
such  information  and execute  such  documents  as its  counsel may  reasonably
require to prepare and process the Piggy-Back Registration Statement.

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

(d) Maker's  Obligation  to Bear Expenses of  Registration.  Maker will bear all
expenses (except  underwriting  discounts and commission,  if any, and the legal
fees and expenses,  if any, of counsel to Payee) necessary and incidental to the
performance of its obligations under this Section 3.

(e)  Indemnification.  Maker and Payee, if Payee's  Registerable  Securities are
included in a Registration  Statement  pursuant to this Section 3, shall provide
appropriate cross indemnities to each other covering the information supplied by
the indemnifying party for inclusion in the Registration Statement.

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

4.   Subordination  to Senior Debt;  Senior to other Debt; Pari Passu with other
     Notes.

(a) This Note is  subordinated  to Senior  Debt,  which is the  principal of and
premium, if any, and interest (including post-petition interest, if any) on, and
any  other  payment  due  pursuant  to the  terms  of  instruments  creating  or
evidencing debt  ("Indebtedness")  of Maker outstanding on the date of this Note
or Indebtedness thereafter created, incurred, assumed or guaranteed by Maker and
all renewals,  extensions and refundings  thereof,  which is payable to banks or
other traditional  long-term  institutional  lenders such as insurance companies
and  pension  funds,  unless  in the  instrument  creating  or  evidencing  such
Indebtedness,  it is not provided that such  Indebtedness  is senior in right of
payment

                                      -3-
<PAGE>

to this Note.  Notwithstanding the foregoing,  Senior Debt with respect to Maker
or any subsidiary thereof shall not include (i) any Indebtedness of Maker to any
such  subsidiary for money borrowed or advanced from such  subsidiary,  and (ii)
any  Indebtedness  representing  the  redemption  price of any preferred  stock.
"Indebtedness,"  as applied to any entity means any indebtedness,  contingent or
otherwise,  in respect of borrowed  money  (whether  or not the  recourse of the
lender  is to the  whole  of the  assets  of such  entity  or only to a  portion
thereof),  or evidenced by bonds,  notes,  debentures or similar  instruments or
letters  of credit,  or  representing  the  balance  deferred  and unpaid of the
purchase price of any property or interest therein, except any such balance that
constitutes a trade payable,  if and to the extent that such indebtedness  would
appear  as a  liability  upon a  balance  sheet  of such  entity  prepared  on a
consolidated basis in accordance with generally accepted accounting  principles.
Senior Debt must be paid in accordance  with the terms thereof  before this Note
may be paid.  Upon  request of Maker  Payee  shall  execute  such  subordination
agreements with holders of Senior Debt as shall be reasonably requested.

(b) Senior to Other  Indebtedness.  Anything to the contrary  not  withstanding,
this Note and the  Obligations  shall be senior  to all  Indebtedness  of Maker,
other than Senior  Debt,  outstanding  on the date of this Note or  Indebtedness
thereafter created,  incurred,  assumed or guaranteed by Maker and all renewals,
extensions  and  refundings  thereof,  including  but  not  limited  to  the  8%
Subordinated Notes in the aggregate principal amount of Two Million ($2,000,000)
Dollars issued by Maker relating to its merger transaction with Econo-Comm, Inc.
and the acquisition of certain patents in connection therewith. Maker agrees and
covenants  that it will  execute  and file  such  documentation  as Payee or his
counsel reasonably determines as necessary to effect the terms of this Paragraph
4 (b).

(c) Pari Passu with other  Notes.  This Note shall be paid on a pari passu basis
with all other Notes.

5.   Covenants.

Maker  covenants  and agrees  that from and after the date  hereof and until the
date of repayment in full of the  Obligations it shall comply with the following
conditions:

     (i)  Maintenance  of Existence  and Conduct of Business.  Maker shall,  and
     shall  cause  each of its  subsidiaries,  to (A) do or cause to be done all
     things  necessary  to  preserve  and  keep in full  force  and  effect  its
     corporate existence and rights; and (B) continue to conduct its business so
     that the business  carried on in  connection  therewith may be properly and
     advantageously conducted at all times.

     (ii)  Books  and  Records.  Maker  shall,  and  shall  cause  each  of  its
     subsidiaries, to keep adequate books and records of account with respect to
     its business activities.

     (iii) Insurance. Maker shall, and shall cause each of its subsidiaries,  to
     maintain insurance policies insuring such risks as are customarily  insured
     against by companies  engaged in  businesses  similar to those  operated by
     Maker or such

                                      -4-
<PAGE>

     subsidiaries,  as the case may be. All such policies are to be carried with
     reputable   insurance  carriers  and  shall  be  in  such  amounts  as  are
     customarily insured against by companies with similar assets and properties
     engaged in a similar business.

     (iv)  Compliance  with  Law.  Maker  shall,  and  shall  cause  each of its
     subsidiaries,  to comply in all material  respects with all federal,  state
     and local laws and regulations  applicable to it or such  subsidiaries,  as
     the case may be, which, if breached,  would have a material  adverse effect
     on Maker's or such subsidiaries', as the case may be, business or financial
     condition.

6.   Reorganization of Maker.

If Maker is party to a merger, consolidation or a transaction in which it is not
the surviving or continuing  entity or transfers or leases all or  substantially
all of its assets,  the person who is the surviving or  continuing  entity or is
the  transferee or lessee of such assets shall assume the terms of this Note and
the Obligations.

7.   Representations and Warranties of Maker.

Maker  represents  and warrants  that it: (i) is a corporation  duly  organized,
validly  existing and in good  standing  under the laws of the State of Delaware
and has all requisite  corporate power to carry on its business as now conducted
and to own its  properties  and assets it now owns;  (ii) is duly  qualified  or
licensed  to do  business  as a  foreign  corporation  in good  standing  in the
jurisdictions  in which  ownership  of property  or the conduct of its  business
requires such qualification except jurisdictions in which the failure to qualify
to do business will have no material adverse effect on its business,  prospects,
operations,  properties, assets or condition (financial or otherwise); (iii) has
full  power and  authority  to  execute  and  deliver  this  Note,  and that the
execution  and delivery of this Note will not result in the breach of or default
under,  with or without  the giving of notice  and/or the  passage of time,  any
other agreement,  arrangement or indenture to which it is a party or by which it
may be bound, or the violation of any law, statute,  rule,  decree,  judgment or
regulation  binding upon it; and (iv) has taken and will take all acts required,
including but not limited to authorizing  the signatory  hereof on its behalf to
execute this Note,  so that upon the  execution  and  delivery of this Note,  it
shall constitute the valid and legally binding  obligation of Maker  enforceable
in accordance with the terms thereof.

8.   Defaults and Remedies.

(a) Events of Default.  The  occurrence  or  existence of any one or more of the
following  events or  conditions  (regardless  of the  reasons  therefor)  shall
constitute an "Event of Default" hereunder:

     (i) Maker shall fail to make any payment of Principal or Interest  when due
     and payable or declared  due and payable  pursuant to the terms  hereof and
     such failure shall remain uncured for a period of five (5) days thereafter;

                                      -5-
<PAGE>

     (ii) Maker shall fail at any time to be in material  compliance with any of
     the  covenants  set forth in Section 5 of this  Note,  or shall fail at any
     time to be in  material  compliance  with or  neglect to  perform,  keep or
     observe any of the provisions of this Note to be complied with,  performed,
     kept or  observed  by Maker and such  failure  shall  remain  uncured for a
     period of thirty (30) days after notice  thereof has been given by Payee to
     Maker;

     (iii) Any  representation  or warranty  made in this Note by Maker shall be
     untrue or  incorrect  in any  material  respect as of the date when made or
     deemed made;

     (iv) A case or proceeding  shall have been commenced  against Maker, or any
     of its  material  subsidiaries,  in a court having  competent  jurisdiction
     seeking  a decree or order in  respect  of  Maker,  or any of its  material
     subsidiaries,  (A)  under  Title  11 of  the  United  States  Code,  as now
     constituted or hereafter amended, or any other applicable federal, state or
     foreign  bankruptcy  or other  similar  law;  (B)  appointing  a custodian,
     receiver,  liquidator,   assignee,  trustee  or  sequestrator  (or  similar
     official) of Maker,  or any of its material  subsidiaries,  or any of their
     respective properties; or (C) ordering the winding-up or liquidation of the
     affairs of Maker,  or any of its  material  subsidiaries,  and such case or
     proceeding shall remain unstayed or undismissed for a period of thirty (30)
     consecutive  days or such court shall enter a decree or order  granting the
     relief sought in such case or proceeding; or

     (v) Maker, or any of its material  subsidiaries,  shall (A) file a petition
     seeking relief under Title 11 of the United States Code, as now constituted
     or hereafter  amended,  or any other applicable  federal,  state or foreign
     bankruptcy  or other  similar  law;  or (B) consent to the  institution  of
     proceedings  thereunder  or to the  filing of any such  petition  or to the
     appointment  of or the  taking  of  possession  by a  custodian,  receiver,
     liquidator,  assignee,  trustee or  sequestrator  (or similar  official) of
     Maker,  or any of its  material  subsidiaries,  or any of their  respective
     properties.

(b) Remedies.  Upon the occurrence of an Event of Default specified in Paragraph
8 (a) above, all Obligations  then remaining unpaid hereunder shall  immediately
become due and payable without notice to Maker and without presentment,  demand,
protest  or notice of  protest,  all of which are hereby  waived by Maker.  Upon
acceleration as provided  herein,  the entire  Obligations then remaining unpaid
hereunder  shall become  immediately due and payable in full plus all reasonable
costs and expenses of the  collection and  enforcement  of this Note,  including
reasonable  attorney's  fees and  expenses,  all of which  shall be added to the
amount due under this Note. The rights, powers, privileges and remedies of Payee
pursuant  to the terms  hereof are  cumulative  and not  exclusive  of any other
rights, powers,  privileges and remedies which Payee may have under this Note or
any other instrument or agreement.

9.   Maker's Obligation to Prepay the Obligations.

Maker  shall  prepay  this Note and the  Obligations  in an amount  equal to one
hundred

                                      -6-
<PAGE>

(100%) percent of all financing,  whether equity, debt or a combination of both,
obtained by Maker, immediately upon receipt of such financing.

10.      Acknowledgment of Payee's Investment Representations.

By accepting this Note, Payee  acknowledges that this Note has not been and will
not be registered under the Act or qualified under any state securities laws and
that the transferability thereof is restricted by the registration provisions of
the  Act as  well as  such  state  laws.  Based  upon  the  representations  and
agreements  being made by him herein,  this Note is being issued to him pursuant
to an exemption from such registration  provided by Section 4 (2) of the Act and
applicable state securities law qualification exemptions.  Payee represents that
he is acquiring the Note for his own account,  for investment  purposes only and
not with a view to resale or other distribution  thereof,  or with the intention
of selling, transferring or otherwise disposing of all or any part of it for any
particular event or circumstance,  except selling,  transferring or disposing of
it only upon full  compliance  with all  applicable  provisions  of the Act, the
Securities  Exchange Act of 1934, the Rules and  Regulations  promulgated by the
Commission  thereunder,  and any applicable state securities laws. Payee further
understands  and agrees that no transfer of this Note shall be valid unless made
in  compliance  with  the  restrictions  set  forth on the  front of this  Note,
effected on Maker's books by the registered  holder  hereof,  in person or by an
attorney duly authorized in writing, and similarly noted hereon.

11.  Limitation of Liability.

A director,  officer, employee or stockholder,  as such, of Maker shall not have
any  liability  for any  obligations  of Maker  under this Note or for any claim
based on, in respect or by reason of such obligations or their creation.  Payee,
by accepting this Note,  waives and releases all such liability.  The waiver and
release are part of the consideration for the issuance of this Note.

12.  Limitation of Interest Payments.

Nothing contained in this Note or in any other agreement between Maker and Payee
requires  Maker to pay or Payee to  accept  Interest  in an  amount  that  would
subject Payee to any penalty or  forfeiture  under  applicable  law. In no event
shall the total of all charges payable hereunder, whether of Interest or of such
other  charges,  which may or might be  characterized  as  interest,  exceed the
maximum rate  permitted to be charged under the laws of the State of New York or
any other state in which Maker and/or any of its subsidiaries conducts business.
Should Payee receive any payment that is or would be in excess of that permitted
to be charged under such laws,  such payment shall have been and shall be deemed
to have been made in error and shall  automatically  be  applied  to reduce  the
Principal outstanding on this Note.

13.  Extension of Maturity Date.

Maker may extend the Maturity Date for one year beyond ,           2004 if,
                                                        ----------
prior to that

                                      -7-
<PAGE>

date,  it issues to Payee and all other  holders of the  Notes,  on a pari passu
basis,  cashless  warrants to purchase an  aggregate  number of shares of Common
Stock  which shall  equal five (5%)  percent of the shares of Common  Stock that
shall be outstanding after the exercise of such warrants.  The warrants shall be
exercisable at $0.50 per share, subject to certain anti-dilution  provisions. In
the event that Maker  extends the Maturity  Date as provided in this Section 14,
the Maturity Date shall be                  , 2005.
                          ------------------

14.  Miscellaneous.

(a)  Effect of  Forbearance.  No  forbearance,  indulgence,  delay or failure to
exercise any right or remedy by Payee with respect to this Note shall operate as
a waiver or as an acquiescence in any default.

(b) Effect of Single or Partial Exercise of Right. No single or partial exercise
of any right or remedy by Payee  shall  preclude  any other or further  exercise
thereof or any exercise of any other right or remedy by Payee.

(c) Governing Law. This Note shall be construed and enforced in accordance with,
and the rights of the parties  shall be governed  by, the  internal  laws of the
State of New York  applicable  to contracts  made and to be  performed  entirely
within such State. Maker agrees that any lawsuit brought to enforce or interpret
the provisions of this Note shall be instituted in state or federal  courts,  as
appropriate,  in New York  County,  New York,  and Maker agrees to submit to the
personal jurisdiction of such court.

(d) Headings. The headings and captions of the various paragraphs herein are for
convenience  of  reference  only and shall in no way  modify any of the terms or
provisions of this Note.

(e) Loss,  Theft,  Destruction or Mutilation.  Upon receipt by Maker of evidence
reasonably satisfactory to it of loss, theft,  destruction or mutilation of this
Note, Maker shall make and deliver or caused to be made and delivered to Payee a
new Note of like tenor in lieu of this Note.

(f)  Modification  of Note or  Waiver of Terms  Thereof  Relating  to Payee.  No
modification  or waiver of any of the provisions of this Note shall be effective
unless in  writing  and signed by Payee and then only to the extent set forth in
such writing,  or shall any such  modification or waiver be applicable except in
the  specific  instance for which it is given.  This Note may not be  discharged
orally but only in writing duly executed by Payee.

(g)  Notice.  All  offers,  acceptances,  notices,  requests,  demands and other
communications  under  this Note shall be in writing  and,  except as  otherwise
provided  herein,  shall be deemed to have been  given  only when  delivered  in
person,  via  facsimile  transmission  if receipt  thereof is  confirmed  by the
recipient,  or, if mailed,  when mailed by certified or registered mail prepaid,
to the parties at their  respective  addresses first set forth above, or at such
other address as may be given in writing in future by either party to the

                                      -9-
<PAGE>

 other.

(h)  Successors  and  Assigns.  This  Note  shall be  binding  upon  Maker,  its
successors,  assigns and  transferees,  and shall inure to the benefit of and be
enforceable by Payee and its successors and assigns.

(i)  Severability.  If one or more of the  provisions  or  portions of this Note
shall be deemed by any court or quasi-judicial  authority to be invalid, illegal
or unenforceable in any respect, the invalidity,  illegality or unenforceability
of the remaining  provisions,  or portions of provisions  contained herein shall
not in any way be affected or impaired thereby.

IN WITNESS  WHEREOF,  Maker has caused this Note to be executed on its behalf by
an officer thereunto duly authorized as of the date set forth above.

                                                 CNE Group, Inc.,
                                                 a Delaware corporation

                  [SEAL]

                                                 By: /s/ George W. Benoit
                                                    ----------------------------
                                                         George W. Benoit,
                                                         Chairman of the Board

ATTEST: /s/ Anthony S.Conigliaro
       -------------------------
       Anthony S. Conigliaro,
       Secretary

                                      -9-

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