Document:

Exhibit 10.10

                                     WARRANT

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                               CITY NETWORK, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: HHF-001                                    Number of Shares: 25,000

Date of Issuance: August 17, 2005

City Network, Inc., a Nevada corporation (the "COMPANY"),  hereby certifies that
for good and valuable  consideration,  the receipt and  sufficiency of which are
hereby  acknowledged,  Highgate House Funds, Ltd.  ("Highgate"),  the registered
holder hereof or its permitted  assigns,  is entitled,  subject to the terms set
forth below, to purchase from the Company upon surrender of this Warrant, at any
time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time
on the Expiration Date (as defined  herein) Twenty Five Thousand  (25,000) fully
paid and nonassessable shares of Common Stock (as defined herein) of the Company
(the "WARRANT  SHARES") at the exercise price per share provided in Section 1(b)
below or as subsequently adjusted; provided, however, that in no event shall the
holder be entitled to exercise  this  Warrant for a number of Warrant  Shares in
excess of that  number of  Warrant  Shares  which,  upon  giving  effect to such
exercise,   would  cause  the  aggregate   number  of  shares  of  Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding  shares of the Common Stock  following such exercise,  except within
sixty (60) days of the Expiration  Date. For purposes of the foregoing  proviso,
the aggregate number of shares of Common Stock  beneficially owned by the holder
and its  affiliates  shall include the number of shares of Common Stock issuable
upon  exercise of this Warrant with respect to which the  determination  of such
proviso is being made,  but shall exclude  shares of Common Stock which would be
issuable upon (i) exercise of the remaining,  unexercised Warrants  beneficially
owned by the holder and its  affiliates  and (ii)  exercise or conversion of the
unexercised  or  unconverted  portion  of any other  securities  of the  Company
beneficially  owned  by  the  holder  and  its  affiliates  (including,  without
limitation, any convertible notes or preferred stock) subject to a limitation on
conversion or exercise analogous to the limitation  contained herein.  Except as

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set forth in the preceding sentence, for purposes of this paragraph,  beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.  For purposes of this Warrant,  in determining
the number of outstanding shares of Common Stock a holder may rely on the number
of  outstanding  shares of Common Stock as reflected in (1) the  Company's  most
recent Form 10-QSB or Form 10-KSB,  as the case may be, (2) a more recent public
announcement  by the  Company  or (3) any  other  notice by the  Company  or its
transfer  agent setting forth the number of shares of Common Stock  outstanding.
Upon the written request of any holder,  the Company shall  promptly,  but in no
event later than one (1)  Business  Day  following  the receipt of such  notice,
confirm in writing to any such holder the number of shares of Common  Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the exercise of Warrants (as defined below)
by such  holder and its  affiliates  since the date as of which  such  number of
outstanding shares of Common Stock was reported.

     Section 1.

     (a) This  Warrant is the common  stock  purchase  warrant  (the  "WARRANT")
issued  pursuant to the Securities  Purchase  Agreement dated the date hereof by
and between the Company and Highgate.

     (b)  DEFINITIONS.  The  following  words and terms as used in this  Warrant
shall have the following meanings:

         (i)  "APPROVED  STOCK PLAN" means any  employee  benefit plan which has
been  approved by the Board of Directors  of the Company,  pursuant to which the
Company's  securities  may be issued to any  employee,  officer or director  for
services provided to the Company.

         (ii) "BUSINESS DAY" means any day other than Saturday,  Sunday or other
day on which commercial banks in the City of New York are authorized or required
by law to remain closed.

         (iii)  "CLOSING  BID PRICE" means the closing bid price of Common Stock
as quoted on the Principal  Market (as reported by Bloomberg  Financial  Markets
("BLOOMBERG") through its "Volume at Price" function).

         (iv) "COMMON  STOCK" means (i) the Company's  common  stock,  par value
$0.001 per share,  and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

         (v) "CONVERTIBLE  SECURITIES"  shall mean any securities of the Company
convertible into Common Stock.

         (vi) "EXCLUDED SECURITIES" means, provided such security is issued at a
price which is greater  than or equal to the  arithmetic  average of the Closing
Bid  Prices  of the  Common  Stock  for the ten (10)  consecutive  trading  days
immediately  preceding  the  date of  issuance,  any of the  following:  (a) any
issuance by the Company of securities in connection with a strategic partnership
or a joint  venture  (the  primary  purpose  of  which  is not to  raise  equity

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capital),  (b) any issuance by the Company of securities as consideration  for a
merger or consolidation or the acquisition of a business,  product,  license, or
other assets of another  person or entity and (c) options to purchase  shares of
Common  Stock,  provided  (I) such  options  are  issued  after the date of this
Warrant to employees of the Company  within thirty (30) days of such  employee's
starting his  employment  with the Company,  and (II) the exercise price of such
options is not less than the Closing  Bid Price of the Common  Stock on the date
of issuance of such option.

         (vii)  "EXPIRATION  DATE"  means  the date  three  (3)  years  from the
Issuance  Date of this  Warrant or, if such date falls on a Saturday,  Sunday or
other day on which banks are required or  authorized to be closed in the City of
New York or the State of New York or on which trading does not take place on the
Principal  Exchange or automated  quotation  system on which the Common Stock is
traded (a "HOLIDAY"), the next date that is not a Holiday.

         (viii) "ISSUANCE DATE" means the date hereof.

         (ix) "OPTIONS"  means any rights,  warrants or options to subscribe for
or purchase Common Stock or Convertible Securities.

         (x) "OTHER  SECURITIES"  means (i) those  options  and  warrants of the
Company issued prior to, and  outstanding on, the Issuance Date of this Warrant,
(ii) the  shares of Common  Stock  issuable  on  exercise  of such  options  and
warrants,  provided such options and warrants are not amended after the Issuance
Date of this Warrant and (iii) the shares of Common Stock issuable upon exercise
of this Warrant.

         (xi) "PERSON"  means an  individual,  a limited  liability  company,  a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization and a government or any department or agency thereof.

         (xii)  "PRINCIPAL  MARKET"  means  the New  York  Stock  Exchange,  the
American Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
whichever  is at the time the  principal  trading  exchange  or market  for such
security,  or the  over-the-counter  market on the electronic bulletin board for
such  security as reported by  Bloomberg  or, if no bid or sale  information  is
reported for such security by  Bloomberg,  then the average of the bid prices of
each of the market  makers for such security as reported in the "pink sheets" by
the National Quotation Bureau, Inc.

         (xiii) "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (xiv) "WARRANT" means this Warrant and all Warrants issued in exchange,
transfer or replacement thereof.

         (xv)  "WARRANT  EXERCISE  PRICE"  shall be  $0.001  or as  subsequently
adjusted as provided in Section 8 hereof.

         (xvi) "WARRANT SHARES" means the shares of Common Stock issuable at any
time upon exercise of this Warrant.

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     (c) Other Definitional Provisions.

         (i) Except as otherwise  specified herein, all references herein (A) to
the Company shall be deemed to include the Company's  successors  and (B) to any
applicable law defined or referred to herein shall be deemed  references to such
applicable law as the same may have been or may be amended or supplemented  from
time to time.

         (ii)  When used in this  Warrant,  the words  "HEREIN",  "HEREOF",  and
"HEREUNDER" and words of similar import,  shall refer to this Warrant as a whole
and not to any provision of this Warrant,  and the words "SECTION",  "SCHEDULE",
and  "EXHIBIT"  shall refer to Sections of, and  Schedules and Exhibits to, this
Warrant unless otherwise specified.

         (iii) Whenever the context so requires,  the neuter gender includes the
masculine or feminine,  and the singular  number  includes the plural,  and vice
versa.

     Section 2. EXERCISE OF WARRANT. Subject to the terms and conditions hereof,
this Warrant may be exercised by the holder hereof then  registered on the books
of the Company,  pro rata as hereinafter  provided,  at any time on any Business
Day on or after the opening of business on such  Business Day,  commencing  with
the first day after the date hereof, and prior to 11:59 P.M. Eastern Time on the
Expiration  Date,  by (i)  delivery  of a  written  notice,  in the  form of the
subscription  notice  attached as EXHIBIT A hereto (the "EXERCISE  NOTICE"),  of
such holder's election to exercise this Warrant,  which notice shall specify the
number of Warrant  Shares to be  purchased,  (ii)  payment to the  Company of an
amount equal to the Warrant Exercise  Price(s)  applicable to the Warrant Shares
being  purchased,  multiplied by the number of Warrant Shares (at the applicable
Warrant  Exercise  Price) as to which this Warrant is being  exercised (plus any
applicable issue or transfer taxes) (the "AGGREGATE  EXERCISE PRICE") in cash or
wire  transfer of  immediately  available  funds and (iii) the surrender of this
Warrant (or an  indemnification  undertaking with respect to this Warrant in the
case of its  loss,  theft or  destruction)  to a common  carrier  for  overnight
delivery to the Company as soon as practicable following such date. In the event
of any exercise of the rights  represented  by this Warrant in  compliance  with
this Section 2, the Company shall on the fifth (5th)  Business Day following the
date of receipt of the Exercise  Notice,  the Aggregate  Exercise Price and this
Warrant (or an  indemnification  undertaking with respect to this Warrant in the
case of its loss, theft or destruction)  and the receipt of the  representations
of the holder  specified  in Section 6 hereof,  if requested by the Company (the
"EXERCISE DELIVERY  DOCUMENTS"),  and if the Common Stock is DTC eligible credit
such  aggregate  number of shares of Common  Stock to which the holder  shall be
entitled to the holder's or its designee's  balance  account with The Depository
Trust  Company;  provided,  however,  if the holder who  submitted  the Exercise
Notice requested  physical delivery of any or all of the Warrant Shares,  or, if
the Common Stock is not DTC eligible  then the Company  shall,  on or before the
fifth (5th) Business Day following receipt of the Exercise  Delivery  Documents,
issue and surrender to a common  carrier for  overnight  delivery to the address
specified in the Exercise Notice,  a certificate,  registered in the name of the
holder,  for the number of shares of Common  Stock to which the holder  shall be
entitled  pursuant to such  request.  Upon  delivery of the Exercise  Notice and
Aggregate  Exercise  Price  referred  to in clause (ii) above the holder of this
Warrant shall be deemed for all corporate  purposes to have become the holder of
record of the  Warrant  Shares  with  respect  to which  this  Warrant  has been
exercised.  In the case of a  dispute  as to the  determination  of the  Warrant

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Exercise  Price,  the Closing  Bid Price or the  arithmetic  calculation  of the
Warrant  Shares,  the Company shall  promptly  issue to the holder the number of
Warrant Shares that is not disputed and shall submit the disputed determinations
or arithmetic  calculations to the holder via facsimile  within one (1) Business
Day of receipt of the holder's  Exercise  Notice.  If the holder and the Company
are unable to agree upon the  determination  of the  Warrant  Exercise  Price or
arithmetic calculation of the Warrant Shares within one (1) day of such disputed
determination or arithmetic  calculation being submitted to the holder, then the
Company shall immediately submit via facsimile (i) the disputed determination of
the Warrant Exercise Price or the Closing Bid Price to an independent, reputable
investment  banking  firm or (ii) the  disputed  arithmetic  calculation  of the
Warrant Shares to its independent,  outside accountant.  The Company shall cause
the investment  banking firm or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the holder of the
results no later than  forty-eight  (48)  hours  from the time it  receives  the
disputed  determinations  or  calculations.  Such  investment  banking firm's or
accountant's  determination or calculation,  as the case may be, shall be deemed
conclusive absent manifest error.

     (a) Unless the rights  represented  by this  Warrant  shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than five (5) Business  Days after any exercise and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall  represent  rights to  purchase  the  number of  Warrant  Shares
purchasable  immediately  prior to such exercise  under this Warrant  exercised,
less the  number of  Warrant  Shares  with  respect  to which  such  Warrant  is
exercised.

     (b) No  fractional  Warrant  Shares  are to be  issued  upon  any pro  rata
exercise of this  Warrant,  but rather the number of Warrant  Shares issued upon
such  exercise of this Warrant  shall be rounded up or down to the nearest whole
number.

     (c) If the Company or its  Transfer  Agent shall fail for any reason or for
no reason to issue to the holder within ten (10) days of receipt of the Exercise
Delivery Documents,  a certificate for the number of Warrant Shares to which the
holder is entitled or to credit the holder's balance account with The Depository
Trust Company for such number of Warrant  Shares to which the holder is entitled
upon the holder's  exercise of this Warrant,  the Company shall,  in addition to
any other remedies under this Warrant or otherwise available to such holder, pay
as  additional  damages in cash to such holder on each day the  issuance of such
certificate  for Warrant Shares is not timely effected an amount equal to 0.025%
of the product of (A) the sum of the number of Warrant  Shares not issued to the
holder  on a timely  basis  and to which the  holder  is  entitled,  and (B) the
Closing Bid Price of the Common Stock for the trading day immediately  preceding
the last  possible date which the Company could have issued such Common Stock to
the holder without violating this Section 2.

     (d) If within ten (10) days  after the  Company's  receipt of the  Exercise
Delivery Documents, the Company fails to deliver a new Warrant to the holder for
the  number of Warrant  Shares to which  such  holder is  entitled  pursuant  to
Section 2 hereof,  then, in addition to any other available  remedies under this
Warrant,  or  otherwise  available  to such  holder,  the  Company  shall pay as
additional  damages in cash to such  holder on each day after such tenth  (10th)
day that such  delivery of such new Warrant is not timely  effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares represented by

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the portion of this Warrant which is not being exercised and (B) the Closing Bid
Price of the Common  Stock for the trading day  immediately  preceding  the last
possible  date which the Company  could have  issued such  Warrant to the holder
without violating this Section 2.

     Section 3. COVENANTS AS TO COMMON STOCK.  The Company hereby  covenants and
agrees as follows:

     (a) This  Warrant  is,  and any  Warrants  issued  in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

     (b) All Warrant  Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

     (c) During the period within which the rights  represented  by this Warrant
may be exercised,  the Company will at all times have authorized and reserved at
least one hundred  percent (100%) of the number of shares of Common Stock needed
to provide for the exercise of the rights then  represented  by this Warrant and
the par  value of said  shares  will at all  times be less  than or equal to the
applicable  Warrant  Exercise  Price. If at any time the Company does not have a
sufficient  number of shares of Common Stock authorized and available,  then the
Company shall call and hold a special meeting of its  stockholders  within sixty
(60)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

     (d) If at  any  time  after  the  date  hereof  the  Company  shall  file a
registration statement, the Company shall include the Warrant Shares issuable to
the holder, pursuant to the terms of this Warrant and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all Warrant
Shares from time to time  issuable  upon the exercise of this  Warrant;  and the
Company  shall  so  list on  each  national  securities  exchange  or  automated
quotation  system,  as the case may be, and shall  maintain such listing of, any
other shares of capital stock of the Company  issuable upon the exercise of this
Warrant if and so long as any  shares of the same class  shall be listed on such
national securities exchange or automated quotation system.

     (e) The Company will not, by amendment of its Articles of  Incorporation or
through  any  reorganization,   transfer  of  assets,   consolidation,   merger,
dissolution,  issue or sale of securities,  or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed  or  performed  by it  hereunder,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other  impairment,  consistent with the tenor and purpose of
this  Warrant.  The  Company  will not  increase  the par value of any shares of
Common Stock  receivable  upon the  exercise of this  Warrant  above the Warrant
Exercise  Price  then in effect,  and (ii) will take all such  actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and  nonassessable  shares of Common  Stock upon the exercise of this
Warrant.

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     (f) This Warrant will be binding upon any entity  succeeding to the Company
by merger,  consolidation  or  acquisition  of all or  substantially  all of the
Company's assets.

     Section 4.  TAXES.  The  Company  shall pay any and all  taxes,  except any
applicable  withholding,  which may be payable  with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

     Section 5.  WARRANT  HOLDER NOT DEEMED A  STOCKHOLDER.  Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled  to vote or  receive  dividends  or be deemed  the  holder of shares of
capital stock of the Company for any purpose,  nor shall  anything  contained in
this Warrant be construed to confer upon the holder hereof,  as such, any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the  issuance to the holder of this  Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant.  In addition,  nothing  contained in this Warrant shall be construed as
imposing  any  liabilities  on such  holder to  purchase  any  securities  (upon
exercise of this  Warrant or  otherwise)  or as a  stockholder  of the  Company,
whether  such  liabilities  are  asserted by the Company or by  creditors of the
Company.  Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other  information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

     Section 6.  REPRESENTATIONS OF HOLDER.  The holder of this Warrant,  by the
acceptance hereof,  represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment  only and not with a view towards,  or
for resale in connection  with, the public sale or  distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided,  however,  that by making the representations  herein,
the holder does not agree to hold this Warrant or any of the Warrant  Shares for
any minimum or other  specific  term and  reserves  the right to dispose of this
Warrant and the Warrant  Shares at any time in accordance  with or pursuant to a
registration  statement or an exemption  under the Securities Act. The holder of
this Warrant further  represents,  by acceptance hereof,  that, as of this date,
such  holder  is an  "accredited  investor"  as  such  term is  defined  in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange  Commission
under the  Securities  Act (an  "ACCREDITED  INVESTOR").  Upon  exercise of this
Warrant the holder shall, if requested by the Company,  confirm in writing, in a
form satisfactory to the Company, that the Warrant Shares so purchased are being
acquired  solely for the holder's own account and not as a nominee for any other
party,  for  investment,  and not with a view toward  distribution or resale and
that such holder is an  Accredited  Investor.  If such  holder  cannot make such
representations  because  they  would  be  factually  incorrect,  it  shall be a
condition to such  holder's  exercise of this  Warrant that the Company  receive
such other  representations  as the Company  considers  reasonably  necessary to
assure the Company that the  issuance of its  securities  upon  exercise of this
Warrant shall not violate any United States or state securities laws.

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     Section 7. OWNERSHIP AND TRANSFER.

     (a) The Company shall maintain at its principal  executive offices (or such
other  office or  agency of the  Company  as it may  designate  by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

     Section 8. ADJUSTMENT OF WARRANT  EXERCISE PRICE AND NUMBER OF SHARES.  The
Warrant  Exercise  Price and the number of shares of Common Stock  issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

     (a) ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES UPON ISSUANCE
OF COMMON STOCK.  If and whenever on or after the Issuance Date of this Warrant,
the Company issues or sells,  or is deemed to have issued or sold, any shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than the current market price at the time of
such issuance (the "APPLICABLE PRICE"), then the Warrant Exercise Price shall be
adjusted  immediately  thereafter so that it shall equal the price determined by
multiplying the Warrant Exercise Price in effect  immediately prior thereto by a
fraction,  the  numerator  of which  shall be the sum of the number of shares of
Common Stock  outstanding  immediately  prior to the issuance of such additional
shares  and  the  number  of  shares  of  Common   Stock  which  the   aggregate
consideration received for the issuance of such additional shares would purchase
at such current market price per share of Common Stock,  and the  denominator of
which  shall be the  number of shares of Common  Stock  outstanding  immediately
after the  issuance  of such  additional  shares.  Upon each  adjustment  of the
Warrant  Exercise Price  pursuant to this Section 8(a), the Warrant  outstanding
prior to the making of the  adjustment  in the Exercise  Price shall  thereafter
evidence the right to receive upon  payment of the Warrant  Exercise  Price that
number of shares of Common Stock (calculated to the nearest hundredth)  obtained
from the following formula:

     N'       =        N        x       E/E'

where:

     N' = the adjusted  number of Warrant  Shares  issuable  upon  exercise of a
Warrant by payment of the adjusted Exercise Price.

     N = the number of Warrant  Shares  previously  issuable  upon exercise of a
Warrant by payment of the Exercise Price prior to adjustment.

     E'       =        the adjusted Exercise Price.

     E        =        the Exercise Price prior to adjustment.

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     (b) EFFECT ON WARRANT  EXERCISE  PRICE OF CERTAIN  EVENTS.  For purposes of
determining the adjusted  Warrant  Exercise Price under Section 8(a) above,  the
following shall be applicable:

         (i) ISSUANCE OF OPTIONS.  If after the date hereof,  the Company in any
manner  grants any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion
or exchange of any  Convertible  Securities  issuable  upon exercise of any such
Option is less than the Applicable  Price, then such share of Common Stock shall
be deemed to be  outstanding  and to have been issued and sold by the Company at
the time of the  granting or sale of such  Option for such price per share.  For
purposes of this Section 8(b)(i), the lowest price per share for which one share
of Common Stock is issuable upon exercise of such Options or upon  conversion or
exchange of such Convertible  Securities shall be equal to the sum of the lowest
amounts of  consideration  (if any)  received or  receivable by the Company with
respect  to any one  share of  Common  Stock  upon the  granting  or sale of the
Option,  upon  exercise  of the Option or upon  conversion  or  exchange  of any
convertible   security  issuable  upon  exercise  of  such  Option.  No  further
adjustment of the Warrant  Exercise Price shall be made upon the actual issuance
of such Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual  issuance of such  Common  Stock upon  conversion  or
exchange of such Convertible Securities.

         (ii) ISSUANCE OF CONVERTIBLE  SECURITIES.  If the Company in any manner
issues or sells any  Convertible  Securities  and the lowest price per share for
which one share of Common  Stock is  issuable  upon the  conversion  or exchange
thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be  outstanding  and to have been issued and sold by the Company at
the time of the issuance or sale of such  Convertible  Securities for such price
per share.  For the  purposes of this  Section  8(b) (ii),  the lowest price per
share for which one share of Common Stock is issuable  upon such  conversion  or
exchange  shall be equal to the sum of the lowest amounts of  consideration  (if
any)  received or  receivable by the Company with respect to one share of Common
Stock upon the issuance or sale of the convertible  security and upon conversion
or exchange of such convertible  security.  No further adjustment of the Warrant
Exercise Price shall be made upon the actual  issuance of such Common Stock upon
conversion or exchange of such Convertible Securities,  and if any such issue or
sale of such  Convertible  Securities  is made upon  exercise of any Options for
which  adjustment  of the  Warrant  Exercise  Price  had  been or are to be made
pursuant to other provisions of this Section 8(b), no further  adjustment of the
Warrant Exercise Price shall be made by reason of such issue or sale.

         (iii)  CHANGE IN OPTION  PRICE OR RATE OF  CONVERSION.  If the purchase
price provided for in any Options, the additional consideration, if any, payable
upon the issue,  conversion or exchange of any  Convertible  Securities,  or the
rate at which any Convertible  Securities are  convertible  into or exchangeable
for Common Stock changes at any time,  the Warrant  Exercise  Price in effect at
the time of such change  shall be adjusted to the Warrant  Exercise  Price which

                                       9
<PAGE>
would  have  been in  effect  at such  time  had  such  Options  or  Convertible
Securities provided for such changed purchase price, additional consideration or
changed  conversion  rate,  as the case may be, at the time  initially  granted,
issued or sold and the number of Warrant  Shares  issuable upon exercise of this
Warrant  shall be  correspondingly  readjusted.  For  purposes  of this  Section
8(b)(iii),  if  the  terms  of any  Option  or  convertible  security  that  was
outstanding  as of the  Issuance  Date of this Warrant are changed in the manner
described in the immediately preceding sentence, then such Option or convertible
security and the Common Stock  deemed  issuable  upon  exercise,  conversion  or
exchange  thereof  shall be deemed  to have  been  issued as of the date of such
change.  No  adjustment  pursuant  to this  Section  8(b)  shall be made if such
adjustment  would  result in an increase of the Warrant  Exercise  Price then in
effect.

     (c) EFFECT ON WARRANT  EXERCISE  PRICE OF CERTAIN  EVENTS.  For purposes of
determining  the adjusted  Warrant  Exercise Price under Sections 8(a) and 8(b),
the following shall be applicable:

         (i) CALCULATION OF CONSIDERATION RECEIVED. If any Common Stock, Options
or  Convertible  Securities  are issued or sold or deemed to have been issued or
sold for cash, the consideration received thereof will be the gross sales price.
If any Common Stock, Options or Convertible  Securities are issued or sold for a
consideration other than cash, the amount of such consideration  received by the
Company  will  be the  fair  value  of such  consideration,  except  where  such
consideration  consists of  marketable  securities,  in which case the amount of
consideration  received  by  the  Company  will  be the  market  price  of  such
securities  on the date of receipt  of such  securities.  If any  Common  Stock,
Options or Convertible  Securities are issued to the owners of the non-surviving
entity in  connection  with any  merger in which the  Company  is the  surviving
entity,  the  amount of  consideration  therefore  will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving entity
as is attributable to such Common Stock, Options or Convertible  Securities,  as
the  case  may be.  The  fair  value of any  consideration  other  than  cash or
securities will be determined jointly by the Company and the holders of Warrants
representing  at  least  two-thirds  (b) of the  Warrant  Shares  issuable  upon
exercise of the Warrants then  outstanding.  If such parties are unable to reach
agreement  within  ten (10) days  after  the  occurrence  of an event  requiring
valuation (the "VALUATION EVENT"),  the fair value of such consideration will be
determined  within five (5) Business  Days after the tenth (10th) day  following
the Valuation Event by an independent,  reputable  appraiser jointly selected by
the Company and the holders of Warrants  representing at least two-thirds (b) of
the Warrant Shares issuable upon exercise of the Warrants then outstanding.  The
determination  of such appraiser shall be final and binding upon all parties and
the fees and expenses of such  appraiser  shall be borne  jointly by the Company
and the holders of Warrants.

         (ii)  INTEGRATED  TRANSACTIONS.   In  case  any  Option  is  issued  in
connection with the issue or sale of other  securities of the Company,  together
comprising one  integrated  transaction  in which no specific  consideration  is
allocated to such Options by the parties thereto,  the Options will be deemed to
have been issued for a consideration of $.01.

         (iii) TREASURY SHARES. The number of shares of Common Stock outstanding
at any given time does not include shares owned or held by or for the account of

                                       10
<PAGE>
the  Company,  and the  disposition  of any  shares  so  owned  or held  will be
considered an issue or sale of Common Stock.

         (iv)  RECORD  DATE.  If the  Company  takes a record of the  holders of
Common  Stock for the  purpose of  entitling  them (1) to receive a dividend  or
other distribution payable in Common Stock, Options or in Convertible Securities
or (2) to  subscribe  for or  purchase  Common  Stock,  Options  or  Convertible
Securities,  then such record date will be deemed to be the date of the issue or
sale of the shares of Common  Stock  deemed to have been issued or sold upon the
declaration  of such  dividend or the making of such other  distribution  or the
date of the granting of such right of subscription or purchase,  as the case may
be.

     (d) ADJUSTMENT OF WARRANT EXERCISE PRICE UPON SUBDIVISION OR COMBINATION OF
COMMON  STOCK.  If the  Company at any time after the date of  issuance  of this
Warrant  subdivides (by any stock split,  stock  dividend,  recapitalization  or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
greater number of shares, any Warrant Exercise Price in effect immediately prior
to such subdivision will be proportionately  reduced and the number of shares of
Common Stock  obtainable  upon exercise of this Warrant will be  proportionately
increased;  provided that the Warrant  Exercise Price shall not be reduced below
the par value of the Common Stock.  If the Company at any time after the date of
issuance  of this  Warrant  combines  (by  combination,  reverse  stock split or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately  increased and the number of Warrant
Shares issuable upon exercise of this Warrant will be proportionately decreased.
Any  adjustment  under this Section 8(d) shall become  effective at the close of
business on the date the subdivision or combination becomes effective.

     (e)  DISTRIBUTION  OF  ASSETS.  If the  Company  shall  declare or make any
dividend or other  distribution  of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without  limitation,  any  distribution  of cash,  stock  or  other  securities,
property or options by way of a dividend, spin off, reclassification,  corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the  issuance  of this  Warrant,  then,  in each such  case:  any  Warrant
Exercise  Price in  effect  immediately  prior to the close of  business  on the
record date fixed for the  determination  of holders of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the close of business
on such record date, to a price  determined by multiplying such Warrant Exercise
Price by a fraction of which (A) the  numerator  shall be the Closing Sale Price
of the Common Stock on the trading day  immediately  preceding  such record date
minus  the  value  of the  Distribution  (as  determined  in good  faith  by the
Company's Board of Directors)  applicable to one share of Common Stock,  and (B)
the  denominator  shall be the  Closing  Sale Price of the  Common  Stock on the
trading day  immediately  preceding such record date;  provided that the Warrant
Exercise Price shall not be reduced below the par value of the Common Stock.

     (f) CERTAIN  EVENTS.  If any event occurs of the type  contemplated  by the
provisions of this Section 8 but not expressly  provided for by such  provisions
(including,  without  limitation,  the  granting of stock  appreciation  rights,
phantom stock rights or other rights with equity  features),  then the Company's
Board of Directors will make an appropriate  adjustment in the Warrant  Exercise
Price and the number of shares of Common Stock  obtainable upon exercise of this

                                       11
<PAGE>
Warrant so as to protect  the rights of the holders of the  Warrants;  provided,
except as set forth in section 8(d),  that no such  adjustment  pursuant to this
Section 8(f) will increase the Warrant  Exercise Price or decrease the number of
shares of Common  Stock  obtainable  as  otherwise  determined  pursuant to this
Section 8; provided that the Warrant  Exercise  Price shall not be reduced below
the par value of the Common Stock.

     (g) NOTICES.

         (i) Immediately  upon any adjustment of the Warrant Exercise Price, the
Company will give written notice thereof to the holder of this Warrant,  setting
forth in reasonable detail, and certifying, the calculation of such adjustment.

         (ii) The Company will give written notice to the holder of this Warrant
at least ten (10) days prior to the date on which the  Company  closes its books
or takes a record (A) with  respect to any  dividend  or  distribution  upon the
Common Stock, (B) with respect to any pro rata subscription  offer to holders of
Common Stock or (C) for  determining  rights to vote with respect to any Organic
Change (as  defined  below),  dissolution  or  liquidation,  provided  that such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such holder.

         (iii) The Company will also give  written  notice to the holder of this
Warrant at least ten (10) days prior to the date on which any Organic Change (as
defined below),  dissolution or liquidation will take place,  provided that such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such holder.

     (h)  Limitations.  Notwithstanding  the above provisions of this Section 8,
the number of shares of Common  Stock  issuable  upon  exercise of this  Warrant
shall in no event be  increased  to an amount  such  that the Total  Transaction
Shares shall be equal to or greater than 5,500,000 shares,  until the holders of
Common  Stock  approve the  issuance  of the Total  Transaction  Shares.  "Total
Transaction  Shares"  shall mean, in the  aggregate,  the shares of Common Stock
issued to Highgate or its affiliates,  and transferees,  subsequent transferees,
or any other party  pursuant to the Securities  Purchase  Agreement of even date
herewith among the Company and Highgate, the Pledge and Escrow Agreement of even
date herewith between the Company and Highgate (the "Pledge Agreement"), and the
Placement Agent Agreement dated as of even date herewith between the Company and
Monitor Capital,  Inc., together with the Warrant Shares, shares of Common Stock
issued as  Liquidated  Damages (as defined in the Investor  Registration  Rights
Agreement dated as of the date herewith  between the Company and Highgate),  and
the Initial  Investor's  Shares (as defined in the Standby  Equity  Distribution
Agreement dated as of even date herewith  between Cornell Capital  Partners,  LP
and the Company).

     Section   9.    PURCHASE    RIGHTS;    REORGANIZATION,    RECLASSIFICATION,
CONSOLIDATION, MERGER OR SALE.

     (a) In addition to any  adjustments  pursuant to Section 8 above, if at any
time the Company grants, issues or sells any Options,  Convertible Securities or

                                       12
<PAGE>
rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the "PURCHASE  RIGHTS"),  then upon
the  exercise  of this  Warrant the holder of this  Warrant  will be entitled to
acquire,  upon the terms  applicable  to such  Purchase  Rights,  the  aggregate
Purchase  Rights which such holder  could have  acquired if such holder had held
the  number of  shares  of  Common  Stock  acquired  pursuant  to such  exercise
immediately  before the date on which a record is taken for the grant,  issuance
or sale of such Purchase Rights,  or, if no such record is taken, the date as of
which the record  holders of Common  Stock are to be  determined  for the grant,
issue or sale of such Purchase Rights.

     (b) Any recapitalization,  reorganization, reclassification, consolidation,
merger,  sale of all or  substantially  all of the  Company's  assets to another
Person or other  transaction  in each case which is  effected in such a way that
holders  of Common  Stock are  entitled  to  receive  (either  directly  or upon
subsequent  liquidation)  stock,  securities  or assets  with  respect  to or in
exchange for Common Stock is referred to herein as an "ORGANIC CHANGE." Prior to
the  consummation of any (i) sale of all or  substantially  all of the Company's
assets to an acquiring  Person or (ii) other Organic Change  following which the
Company is not a  surviving  entity,  the  Company  will  secure from the Person
purchasing  such assets or the successor  resulting from such Organic Change (in
each case,  the "ACQUIRING  ENTITY") a written  agreement (in form and substance
satisfactory to the holders of Warrants  representing at least  two-thirds (iii)
of the Warrant Shares  issuable upon exercise of the Warrants then  outstanding)
to deliver to each holder of Warrants in exchange for such Warrants,  a security
of the Acquiring Entity evidenced by a written instrument  substantially similar
in form and  substance  to this Warrant and  satisfactory  to the holders of the
Warrants  (including an adjusted  warrant  exercise price equal to the value for
the Common Stock reflected by the terms of such  consolidation,  merger or sale,
and exercisable for a corresponding  number of shares of Common Stock acquirable
and receivable  upon exercise of the Warrants  without regard to any limitations
on  exercise,  if the value so  reflected  is less than any  Applicable  Warrant
Exercise Price immediately prior to such  consolidation,  merger or sale). Prior
to the  consummation  of any  other  Organic  Change,  the  Company  shall  make
appropriate  provision  (in form and  substance  satisfactory  to the holders of
Warrants representing a majority of the Warrant Shares issuable upon exercise of
the  Warrants  then  outstanding)  to  insure  that each of the  holders  of the
Warrants will  thereafter have the right to acquire and receive in lieu of or in
addition  to (as the case may be) the  Warrant  Shares  immediately  theretofore
issuable and  receivable  upon the exercise of such holder's  Warrants  (without
regard to any  limitations  on  exercise),  such shares of stock,  securities or
assets  that would  have been  issued or payable  in such  Organic  Change  with
respect to or in exchange for the number of Warrant Shares which would have been
issuable and  receivable  upon the exercise of such  holder's  Warrant as of the
date of such Organic  Change  (without  taking into account any  limitations  or
restrictions on the exercisability of this Warrant).

     Section 10. LOST, STOLEN,  MUTILATED OR DESTROYED WARRANT.  If this Warrant
is lost, stolen,  mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification  undertaking (or, in the case of a mutilated Warrant,  the
Warrant),  issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

     Section 11. NOTICE. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be  deemed  to have  been  delivered  (i) upon  receipt,  when
delivered  personally  or by a  nationally  recognized  overnight  or world wide

                                       13
<PAGE>
courier; (ii) upon confirmation of receipt, when sent by facsimile; or (iii) ten
(10) days after being sent by U.S. certified mail, return receipt requested,  in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be::

If to Highgate:         Highgate House Funds, Ltd.
                        101 Hudson Street - Suite 3700
                        Jersey City, NJ  07302
                        Attention: Mark A. Angelo
                        Telephone: (201) 985-8300
                        Facsimile: (201) 985-8266

With Copy to:           David Gonzalez, Esq.
                        101 Hudson Street - Suite 3700
                        Jersey City, NJ 07302
                        Telephone: (201) 985-8300
                        Facsimile: (201) 985-8266

If to the Company, to:  City Network, Inc
                        6F-3, No.16, Jian Ba Road
                        Jhonghe City, Taipei County, 235
                        Taiwan, ROC F5 235
                        Attention: Mr Tiao-Tsan Lai
                        Telephone: 886-2-8226-5566
                        Facsimile: 886-2-8226-8585

With a copy to:         Loeb & Loeb, LLP
                        345 Park Avenue
                        New York, NY 10154-0037
                        Attention: Mitchell Nussbaum, Esq.
                        Telephone: (212) 407-4159
                        Facsimile: (212) 407-4990

Each party shall provide five days' prior  written  notice to the other party of
any change in address or facsimile number.  Written  confirmation of receipt (A)
given by the  recipient  of such  notice,  consent,  facsimile,  waiver or other
communication,  (or (B) provided by a nationally  recognized  overnight delivery
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

     Section 12.  DATE.  The date of this Warrant is set forth on page 1 hereof.
This  Warrant,  in all events,  shall be wholly void and of no effect  after the
close of business on the Expiration Date, except that  notwithstanding any other
provisions  hereof,  the provisions of Section 8(b) shall continue in full force
and effect after such date as to any Warrant Shares or other  securities  issued
upon the exercise of this Warrant.

                                       14
<PAGE>
     Section 13. AMENDMENT AND WAIVER.  Except as otherwise provided herein, the
provisions  of the  Warrants  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Warrants  representing  at least  two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then  outstanding;  provided  that,  except for Section
8(d),  no such action may  increase the Warrant  Exercise  Price or decrease the
number of shares  or class of stock  obtainable  upon  exercise  of any  Warrant
without the written consent of the holder of such Warrant.

     Section 14. DESCRIPTIVE  HEADINGS;  GOVERNING LAW. The descriptive headings
of the  several  sections  and  paragraphs  of this  Warrant  are  inserted  for
convenience  only and do not  constitute a part of this  Warrant.  The corporate
laws of the State of Nevada  shall  govern all issues  concerning  the  relative
rights of the Company and its stockholders.  All other questions  concerning the
construction,  validity,  enforcement and interpretation of this Agreement shall
be governed by the  internal  laws of the State of New  Jersey,  without  giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions  other than the State of New Jersey. Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal courts sitting in Hudson County and the United States District Court for
the District of New Jersey,  for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding,  any claim that it is not personally  subject to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

     Section 15. WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT FOR EACH PARTY
HERETO TO ENTER INTO THIS WARRANT,  THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR
ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   [REMAINDER OF PAGE INTENTIALLY LEFT BLANK]

                                       15
<PAGE>
     IN WITNESS WHEREOF,  the Company has caused this Warrant to be signed as of
the date first set forth above.

                                       CITY NETWORK, INC.

                                       By: /s/ Tiao-Tsan Lai
                                          ------------------------------
                                       Name:  Mr Tiao-Tsan Lai
                                       Title: Chief Executive Officer

                                       16
<PAGE>
                              EXHIBIT A TO WARRANT

                                 EXERCISE NOTICE

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                               CITY NETWORK, INC.

     The   undersigned   holder   hereby   exercises   the  right  to   purchase
______________ of the shares of Common Stock ("WARRANT SHARES") of City Network,
Inc., a Nevada  corporation (the  "COMPANY"),  evidenced by the attached Warrant
(the "WARRANT").  Capitalized  terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.

     1. FORM OF WARRANT  EXERCISE PRICE.  The Holder intends that payment of the
Warrant  Exercise  Price  shall  be  made  on  a  cash  basis  with  respect  to
______________ Warrant Shares.

     2.  PAYMENT  OF WARRANT  EXERCISE  PRICE.  The holder  shall pay the sum of
$______________ to the Company in accordance with the terms of the Warrant.

     3.  DELIVERY OF WARRANT  SHARES.  The Company  shall  deliver to the holder
_________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:
Name:
Title:

                                       17Exhibit 10.11

                           REGISTRATION RIGHTS AGREEMENT

     REGISTRATION  RIGHTS AGREEMENT (this  "Agreement"),  dated as of August 10,
2005 by and between CITY NETWORK, INC a Nevada corporation (the "COMPANY"),  and
CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the "INVESTOR").

     WHEREAS:

     A. In  connection  with the Standby  Equity  Distribution  Agreement by and
between  the  parties  hereto  of  even  date  herewith  (the  "STANDBY   EQUITY
DISTRIBUTION AGREEMENT"),  the Company has agreed, upon the terms and subject to
the conditions of the Standby Equity Distribution  Agreement,  to issue and sell
to the Investor that number of shares of the Company's  common stock,  par value
$.001 per share (the "COMMON  STOCK"),  which can be  purchased  pursuant to the
terms of the Standby  Equity  Distribution  Agreement for an aggregate  purchase
price of up to Fifteen  Million  Dollars  ($15,000,000).  Capitalized  terms not
defined  herein  shall have the meaning  ascribed to them in the Standby  Equity
Distribution Agreement.

     B. To induce the  Investor  to  execute  and  deliver  the  Standby  Equity
Distribution  Agreement,  the Company has agreed to provide certain registration
rights  under  the  Securities  Act of  1933,  as  amended,  and the  rules  and
regulations  thereunder,  or any similar  successor statute  (collectively,  the
"SECURITIES ACT"), and applicable state securities laws.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency  of which are hereby  acknowledged,  the  Company  and the  Investor
hereby agree as follows:

     1. DEFINITIONS.

     As used in this  Agreement,  the  following  terms shall have the following
meanings:

     a.  "PERSON"  means  a  corporation,   a  limited  liability  company,   an
association,  a partnership,  an  organization,  a business,  an  individual,  a
governmental or political subdivision thereof or a governmental agency.

     b. "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer to a registration
effected by preparing and filing one or more Registration Statements (as defined
below) in compliance  with the Securities Act and pursuant to Rule 415 under the
Securities  Act or any successor  rule  providing  for offering  securities on a
continuous  or delayed basis ("RULE 415"),  and the  declaration  or ordering of
effectiveness of such Registration  Statement(s) by the United States Securities
and Exchange Commission (the "SEC").

     c. "REGISTRABLE  SECURITIES" means the Investor's Shares, as defined in the
Standby Equity Distribution Agreement and shares of Common Stock issuable to the
Investor pursuant to the Standby Equity Distribution Agreement.
<PAGE>
     d.  "REGISTRATION  STATEMENT"  means a  registration  statement  under  the
Securities Act which covers the Registrable Securities.

     2. REGISTRATION.

     a. MANDATORY REGISTRATION.  The Company shall prepare and file with the SEC
a  Registration  Statement  on  Form  S-1,  SB-2  or on  such  other  form as is
available.  The Company shall use commercially  reasonable efforts to cause such
Registration Statement to be declared effective by the SEC.

     b.  SUFFICIENT  NUMBER OF  SHARES  REGISTERED.  In the event the  number of
shares  available under a Registration  Statement filed pursuant to Section 2(a)
is insufficient to cover all of the  Registrable  Securities  which the Investor
has purchased pursuant to the Standby Equity Distribution Agreement, the Company
shall amend the Registration Statement, or file a new Registration Statement (on
the short form available therefore, if applicable),  or both, so as to cover all
of such Registrable  Securities which the Investor has purchased pursuant to the
Standby Equity Distribution  Agreement as soon as practicable,  but in any event
not later than  fifteen  (15) days after the  necessity  therefore  arises.  The
Company shall use commercially reasonable efforts to cause such amendment and/or
new Registration  Statement to become effective as soon as practicable following
the filing  thereof.  For  purposes of the  foregoing  provision,  the number of
shares available under a Registration Statement shall be deemed "insufficient to
cover  all  of  the  Registrable  Securities"  if at  any  time  the  number  of
Registrable  Securities  issuable on an Advance  Notice Date is greater than the
number of shares available for resale under such Registration Statement.

     3. RELATED OBLIGATIONS.

     a. The Company shall keep the Registration  Statement effective pursuant to
Rule 415 at all times until the date on which the  Investor  shall have sold all
the  Registrable   Securities  covered  by  such  Registration   Statement  (the
"REGISTRATION  PERIOD"),  which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein,  or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.

     b.  The  Company  shall  prepare  and file  with  the SEC  such  amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under  the  Securities  Act,  as may be  necessary  to  keep  such  Registration
Statement  effective at all times during the  Registration  Period,  and, during
such period,  comply with the  provisions of the  Securities Act with respect to
the  disposition of all  Registrable  Securities of the Company  covered by such
Registration  Statement  until such time as all of such  Registrable  Securities
shall  have  been  disposed  of in  accordance  with  the  intended  methods  of
disposition by the seller or sellers  thereof as set forth in such  Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section  3(b)) by reason of the  Company's  filing a report on Form 10-KSB,
Form 10-QSB or Form 8-K or any analogous  report under the  Securities  Exchange

                                       2
<PAGE>
Act  of  1934,  as  amended  (the  "EXCHANGE   ACT"),  the  Company  shall  have
incorporated  such  report by  reference  into the  Registration  Statement,  if
applicable,  or shall file such  amendments or  supplements  with the SEC on the
same day on which the Exchange Act report is filed which created the requirement
for the Company to amend or supplement the Registration Statement.

     c. The Company shall furnish to the Investor  without charge,  (i) at least
one copy of such Registration Statement as declared effective by the SEC and any
amendment(s)  thereto,   including  financial  statements  and  schedules,   all
documents  incorporated therein by reference,  all exhibits and each preliminary
prospectus,  (ii) ten (10)  copies  of the  final  prospectus  included  in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may  reasonably  request) and (iii) such other
documents as such Investor may reasonably  request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such Investor.

     d. The Company  shall use its best  efforts to (i) register and qualify the
Registrable  Securities  covered by a  Registration  Statement  under such other
securities or "blue sky" laws of such  jurisdictions in the United States as the
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments  (including  post-effective   amendments)  and  supplements  to  such
registrations   and   qualifications   as  may  be  necessary  to  maintain  the
effectiveness  thereof  during the  Registration  Period,  (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times  during  the  Registration  Period,  and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable  Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required  in  connection  therewith  or as a  condition  thereto to (w) make any
change to its  certificate  of  incorporation  or  by-laws,  (x)  qualify  to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d),  (y) subject  itself to general  taxation in any such
jurisdiction,  or (z) file a general  consent  to service of process in any such
jurisdiction.  The Company shall promptly  notify the Investor of the receipt by
the  Company  of  any  notification  with  respect  to  the  suspension  of  the
registration  or  qualification  of any of the  Registrable  Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the  initiation  or threat of any  proceeding
for such purpose.

     e. As  promptly  as  practicable  after  becoming  aware  of such  event or
development,  the Company  shall notify the Investor in writing of the happening
of any event as a result  of which the  prospectus  included  in a  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission 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  (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such  supplement or amendment to each  Investor.  The
Company shall also promptly notify the Investor in writing (i) when a prospectus
or any prospectus  supplement or  post-effective  amendment has been filed,  and
when  a  Registration  Statement  or any  post-effective  amendment  has  become
effective (notification of such effectiveness shall be delivered to the Investor
by facsimile on the same day of such effectiveness),  (ii) of any request by the

                                       3
<PAGE>
SEC for  amendments  or  supplements  to a  Registration  Statement  or  related
prospectus  or  related  information,  and  (iii)  of the  Company's  reasonable
determination that a post-effective  amendment to a Registration Statement would
be appropriate.

     f. The Company  shall use its best  efforts to prevent the  issuance of any
stop order or other suspension of effectiveness of a Registration  Statement, or
the suspension of the  qualification  of any of the  Registrable  Securities for
sale in any  jurisdiction  within the United  States of America  and, if such an
order or  suspension  is  issued,  to obtain  the  withdrawal  of such  order or
suspension  at the  earliest  possible  moment and to notify the Investor of the
issuance  of such  order and the  resolution  thereof  or its  receipt of actual
notice of the initiation or threat of any proceeding for such purpose.

     g. At the reasonable request of the Investor,  the Company shall furnish to
the Investor, on the date of the effectiveness of the Registration Statement and
thereafter  from  time to time on such  dates  as the  Investor  may  reasonably
request (i) a letter, dated such date, from the Company's  independent certified
public  accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
and (ii) an opinion,  dated as of such date, of counsel representing the Company
for purposes of such Registration  Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the Investor.

     h. The Company shall make  available for inspection by (i) the Investor and
(ii)  one  firm  of  accountants  or  other  agents  retained  by  the  Investor
(collectively,  the "INSPECTORS") all pertinent financial and other records, and
pertinent corporate documents and properties of the Company  (collectively,  the
"RECORDS"), as shall be reasonably deemed necessary by each Inspector, and cause
the Company's officers,  directors and employees to supply all information which
any Inspector may reasonably  request;  provided,  however,  that each Inspector
shall agree,  and the Investor hereby agrees,  to hold in strict  confidence and
shall not make any  disclosure  (except to an  Investor) or use of any Record or
other information which the Company determines in good faith to be confidential,
and of which  determination  the  Inspectors  are so  notified,  unless  (a) the
disclosure  of such Records is necessary to avoid or correct a  misstatement  or
omission  in any  Registration  Statement  or is  otherwise  required  under the
Securities Act, (b) the release of such Records is ordered  pursuant to a final,
non-appealable  subpoena or order from a court or  government  body of competent
jurisdiction,  or (c) the  information  in such Records has been made  generally
available  to the public  other than by  disclosure  in violation of this or any
other  agreement of which the  Inspector  and the Investor  has  knowledge.  The
Investor agrees that it shall,  upon learning that disclosure of such Records is
sought  in or by a court  or  governmental  body of  competent  jurisdiction  or
through other means, give prompt notice to the Company and allow the Company, at
its expense,  to undertake  appropriate  action to prevent  disclosure of, or to
obtain a protective order for, the Records deemed confidential.

     i. The Company  shall hold in  confidence  and not make any  disclosure  of
information   concerning  the  Investor  provided  to  the  Company  unless  (i)
disclosure  of such  information  is  necessary  to comply with federal or state
securities  laws, (ii) the disclosure of such  information is necessary to avoid
or correct a misstatement or omission in any Registration  Statement,  (iii) the
release of such  information  is ordered  pursuant to a subpoena or other final,

                                       4
<PAGE>
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  the  Investor  is  sought  in  or by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice  to the  Investor  and  allow the  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

     j.  The  Company  shall  use its  best  efforts  either  to  cause  all the
Registrable  Securities covered by a Registration  Statement (i) to be listed on
each securities  exchange on which securities of the same class or series issued
by the Company  are then  listed,  if any,  if the  listing of such  Registrable
Securities is then  permitted  under the rules of such exchange or to secure the
inclusion for quotation on the National Association of Securities Dealers,  Inc.
OTC Bulletin Board for such  Registrable  Securities.  The Company shall pay all
fees and  expenses in  connection  with  satisfying  its  obligation  under this
Section 3(j).

     k. The Company shall cooperate with the Investor to the extent  applicable,
to facilitate the timely  preparation and delivery of certificates  (not bearing
any restrictive  legend)  representing the Registrable  Securities to be offered
pursuant to a Registration  Statement and enable such certificates to be in such
denominations  or amounts,  as the case may be, as the Investor  may  reasonably
request and registered in such names as the Investor may request.

     l.  The  Company  shall  use its best  efforts  to  cause  the  Registrable
Securities  covered by the  applicable  Registration  Statement to be registered
with or approved by such other  governmental  agencies or  authorities as may be
necessary to consummate the disposition of such Registrable Securities.

     m. The Company shall make  generally  available to its security  holders as
soon as  practical,  but not later than  ninety (90) days after the close of the
period  covered  thereby,  an earnings  statement  (in form  complying  with the
provisions of Rule 158 under the Securities Act) covering a twelve-month  period
beginning  not later than the first day of the  Company's  fiscal  quarter  next
following the effective date of the Registration Statement.

     n. The  Company  shall  otherwise  use its best  efforts to comply with all
applicable  rules and regulations of the SEC in connection with any registration
hereunder.

     o. Within two (2) business days after a Registration Statement which covers
Registrable  Securities  is ordered  effective  by the SEC,  the  Company  shall
deliver,  and shall  cause legal  counsel  for the  Company to  deliver,  to the
transfer  agent for such  Registrable  Securities  (with copies to the Investor)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as EXHIBIT A.

     p. The  Company  shall  take all  other  reasonable  actions  necessary  to
expedite and facilitate  disposition  by the Investor of Registrable  Securities
pursuant to a Registration Statement.

                                       5
<PAGE>
     4. OBLIGATIONS OF THE INVESTOR.

     The Investor  agrees  that,  upon receipt of any notice from the Company of
the  happening  of any event of the kind  described in Section 3(f) or the first
sentence of 3(e),  the Investor  will  immediately  discontinue  disposition  of
Registrable  Securities pursuant to any Registration  Statement(s) covering such
Registrable  Securities  until  the  Investor's  receipt  of the  copies  of the
supplemented  or amended  prospectus  contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required.  Notwithstanding anything to
the contrary,  the Company shall cause its transfer agent to deliver  unlegended
certificates  for shares of Common  Stock to a  transferee  of the  Investor  in
accordance  with the  terms of the  Standby  Equity  Distribution  Agreement  in
connection  with any sale of  Registrable  Securities  with respect to which the
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section  3(f) or the first  sentence of 3(e) and for which the  Investor has not
yet settled.

     5. EXPENSES OF REGISTRATION.

     All  expenses  incurred  in  connection  with  registrations,   filings  or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration,  listing and qualifications fees,  printers,  legal and accounting
fees shall be paid by the Company.

     6. INDEMNIFICATION.

     With respect to Registrable Securities which are included in a Registration
Statement under this Agreement:

     a. To the fullest  extent  permitted by law, the Company  will,  and hereby
does, indemnify, hold harmless and defend the Investor, the directors, officers,
partners,  employees,  agents,  representatives of, and each Person, if any, who
controls the Investor  within the meaning of the  Securities Act or the Exchange
Act (each,  an  "INDEMNIFIED  PERSON"),  against  any losses,  claims,  damages,
liabilities,  judgments, fines, penalties, charges, costs, reasonable attorneys'
fees,  amounts paid in settlement or expenses,  joint or several  (collectively,
"Claims") incurred in investigating,  preparing or defending any action,  claim,
suit, inquiry,  proceeding,  investigation or appeal taken from the foregoing by
or before any court or governmental,  administrative or other regulatory agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or alleged  untrue  statement  of a  material  fact in a
Registration Statement or any post-effective  amendment thereto or in any filing
made in connection with the  qualification  of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("BLUE SKY  FILING"),  or the  omission or alleged  omission to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final  prospectus (as amended or  supplemented,
if the Company files any amendment  thereof or supplement  thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein,  in light of the circumstances  under which

                                       6
<PAGE>
the  statements  therein were made,  not  misleading;  or (iii) any violation or
alleged  violation by the Company of the  Securities  Act, the Exchange Act, any
other law, including,  without limitation, any state securities law, or any rule
or  regulation  there  under  relating  to the offer or sale of the  Registrable
Securities  pursuant to a  Registration  Statement (the matters in the foregoing
clauses (i)  through  (iii)  being,  collectively,  "VIOLATIONS")  except to the
extent  that such  Violation  occurs in  reliance  upon and in  conformity  with
written  information  furnished to the Company by the Investor or the  Placement
Agent pursuant to the Placement  Agent  Agreement dated as of the date hereof by
and among the  Company,  the  Investor  and the  Placement  Agent named  therein
expressly for use in connection with such  Registration  Statement.  The Company
shall reimburse the Investor and each such  controlling  person promptly as such
expenses are incurred and are due and payable,  for any reasonable legal fees or
disbursements or other reasonable  expenses  incurred by them in connection with
investigating  or  defending  any such  Claim.  Notwithstanding  anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section 6(a):  (x) shall not apply to a Claim by an  Indemnified  Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by such Indemnified Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement or any such amendment thereof or supplement thereto;  (y) shall not be
available  to the extent  such Claim is based on a failure  of the  Investor  to
deliver  or to  cause to be  delivered  the  prospectus  made  available  by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(e); and (z) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the Indemnified Person.

     b. In connection  with a  Registration  Statement,  the Investor  agrees to
indemnify,  hold harmless and defend,  to the same extent and in the same manner
as is set forth in Section 6(a), the Company, each of its directors, each of its
officers  who signs the  Registration  Statement  and each  Person,  if any, who
controls the Company  within the meaning of the  Securities  Act or the Exchange
Act (each an "INDEMNIFIED  PARTY"),  against any Claim or Indemnified Damages to
which any of them may become subject, under the Securities Act, the Exchange Act
or otherwise,  insofar as such Claim or  Indemnified  Damages arise out of or is
based upon any  Violation,  in each case to the extent,  and only to the extent,
that such  Violation  occurs in reliance  upon and in  conformity  with  written
information  furnished  to the Company by the  Investor or the  Placement  Agent
pursuant to the  Placement  Agent  Agreement  dated as of the date hereof by and
among the Company,  the Investor and the Placement Agent named therein expressly
for use in connection with such Registration Statement;  and, subject to Section
6(d),  the  Investor  will  reimburse  any  reasonable  legal or other  expenses
reasonably  incurred by them in connection with  investigating  or defending any
such Claim;  provided,  however,  that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in Section
7 shall not apply to amounts paid in settlement of any Claim if such  settlement
is effected  without the prior written  consent of the  Investor,  which consent
shall  not be  unreasonably  withheld;  provided,  further,  however,  that  the
Investor shall be liable under this Section 6(b) for only that amount of a Claim
or Indemnified  Damages as does not exceed the net proceeds to the Investor as a
result  of the sale of  Registrable  Securities  pursuant  to such  Registration
Statement.  Such indemnity  shall remain in full force and effect  regardless of
any   investigation   made  by  or  on   behalf  of  such   Indemnified   Party.
Notwithstanding  anything to the contrary contained herein, the  indemnification

                                       7
<PAGE>
agreement  contained in this Section 6(b) with respect to any  prospectus  shall
not inure to the benefit of any  Indemnified  Party if the untrue  statement  or
omission of material fact contained in the prospectus was corrected and such new
prospectus  was  delivered to the Investor  prior to the  Investor's  use of the
prospectus to which the Claim relates.

     c. Promptly  after receipt by an Indemnified  Person or  Indemnified  Party
under this Section 6 of notice of the  commencement  of any action or proceeding
(including  any  governmental  action or  proceeding)  involving  a Claim,  such
Indemnified  Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any  indemnifying  party under this Section 6, deliver to the
indemnifying  party  a  written  notice  of the  commencement  thereof,  and the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,  to assume  control  of the  defense  thereof  with  counsel
mutually  satisfactory to the indemnifying  party and the Indemnified  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel  with the fees  and  expenses  of not  more  than one  counsel  for such
Indemnified  Person or Indemnified  Party to be paid by the indemnifying  party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented  by such counsel in such  proceeding.  The  Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with any  negotiation  or defense of any such action or claim by the
indemnifying  party and shall furnish to the indemnifying  party all information
reasonably  available  to the  Indemnified  Party or  Indemnified  Person  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  No
indemnifying  party shall be liable for any  settlement of any action,  claim or
proceeding effected without its prior written consent,  provided,  however, that
the indemnifying party shall not unreasonably  withhold,  delay or condition its
consent.  No indemnifying party shall,  without the prior written consent of the
Indemnified  Party or  Indemnified  Person,  consent to entry of any judgment or
enter into any  settlement  or other  compromise  which  does not  include as an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
Indemnified  Party or  Indemnified  Person of a release  from all  liability  in
respect to such claim or litigation.  Following  indemnification as provided for
hereunder,  the  indemnifying  party  shall be  subrogated  to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations  relating to the matter for which indemnification has been made.
The  failure  to  deliver  written  notice to the  indemnifying  party  within a
reasonable  time of the  commencement  of any such action shall not relieve such
indemnifying  party of any liability to the  Indemnified  Person or  Indemnified
Party under this Section 6, except to the extent that the indemnifying  party is
prejudiced in its ability to defend such action.

     d. The indemnification required by this Section 6 shall be made by periodic
payments  of the  amount  thereof  during  the  course of the  investigation  or
defense, as and when bills are received or Indemnified Damages are incurred.

                                       8
<PAGE>
     e. The indemnity  agreements  contained  herein shall be in addition to (i)
any cause of action or similar  right of the  Indemnified  Party or  Indemnified
Person against the  indemnifying  party or others,  and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

     7. CONTRIBUTION.

     To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying  party agrees to make the maximum  contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no seller
of Registrable  Securities  guilty of fraudulent  misrepresentation  (within the
meaning  of  Section  11(f)  of  the  Securities   Act)  shall  be  entitled  to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds  received by
such seller from the sale of such Registrable Securities.

     8. REPORTS UNDER THE EXCHANGE ACT.

     With a view to making  available  to the  Investor the benefits of Rule 144
promulgated  under the  Securities  Act or any similar rule or regulation of the
SEC that may at any time permit the Investors to sell  securities of the Company
to the public without registration ("RULE 144") the Company agrees to:

     a.  make  and  keep  public  information  available,  as  those  terms  are
understood and defined in Rule 144;

     b. file with the SEC in a timely  manner all  reports  and other  documents
required of the Company under the Securities Act and the Exchange Act so long as
the Company  remains  subject to such  requirements  (it being  understood  that
nothing  herein shall limit the Company's  obligations  under Section 6.3 of the
Standby Equity Distribution  Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

     c.  furnish  to the  Investor  so long  as the  Investor  owns  Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied with the reporting  requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly  report
of the Company and such other reports and documents so filed by the Company, and
(iii)  such  other  information  as may be  reasonably  requested  to permit the
Investor to sell such securities pursuant to Rule 144 without registration.

     9. AMENDMENT OF REGISTRATION RIGHTS.

     Provisions of this Agreement may be amended and the observance  thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only by a written  agreement  between  the  Company and the
Investor.  Any amendment or waiver  effected in  accordance  with this Section 9
shall be binding upon the Investor and the Company.  No  consideration  shall be

                                       9
<PAGE>
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of this  Agreement  unless the same  consideration  also is
offered to all of the parties to this Agreement.

     10. MISCELLANEOUS.

     a. A Person is deemed to be a holder  of  Registrable  Securities  whenever
such Person owns or is deemed to own of record such Registrable  Securities.  If
the Company receives conflicting instructions,  notices or elections from two or
more Persons with respect to the same Registrable Securities,  the Company shall
act upon  the  basis of  instructions,  notice  or  election  received  from the
registered owner of such Registrable Securities.

     b. Any notices,  consents,  waivers,  or other  communications  required or
permitted to be given under the terms of this  Agreement  must be in writing and
will be  deemed  to  have  been  delivered  (i)  upon  receipt,  when  delivered
personally or by a nationally  recognized overnight or world wide courier;  (ii)
upon  confirmation  of receipt,  when sent by facsimile;  or (iii) ten (10) days
after being sent by U.S. certified mail, return receipt requested,  in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be::

If to the Company, to:      City Network, Inc
                            6F-3, No.16, Jian Ba Road
                            Jhonghe City, Taipei County, 235
                            Taiwan, ROC F5 235
                            Attention: Mr Tiao-Tsan Lai
                            Telephone: 886-2-8226-5566
                            Facsimile: 886-2-8226-8585

With a copy to:             Loeb & Loeb, LLP
                            345 Park Avenue
                            New York, NY 10154-0037
                            Attention: Mitchell Nussbaum, Esq.
                            Telephone: (212) 407-4159
                            Facsimile: (212) 407-4990

If to the Investor, to:     Cornell Capital Partners, LP
                            101 Hudson Street - Suite 3700
                            Jersey City, New Jersey 07302
                            Attention: Mark Angelo
                                       Portfolio Manager
                            Telephone: (201) 985-8300
                            Facsimile: (201) 985-8266

                                       10
<PAGE>
With a copy to:             David Gonzalez, Esq.
                            101 Hudson Street - Suite 3700
                            Jersey City, NJ 07302
                            Telephone: (201) 985-8300
                            Facsimile: (201) 985-8266

Any party may  change  its  address  by  providing  written  notice to the other
parties  hereto at least five days prior to the  effectiveness  of such  change.
Written  confirmation  of receipt  (A) given by the  recipient  of such  notice,
consent,  waiver or other  communication,  (B)  mechanically  or  electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and an image of the first  page of such  transmission  or (C)
provided by a courier or overnight courier service shall be rebuttable  evidence
of  personal  service,  receipt  by  facsimile  or  receipt  from  a  nationally
recognized  overnight  delivery  service in accordance  with clause (i), (ii) or
(iii) above, respectively.

     c.  Failure  of any  party to  exercise  any  right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     d. This Agreement  shall be governed by and  interpreted in accordance with
the laws of the State of New Jersey without regard to the principles of conflict
of laws.  The parties  further agree that any action between them shall be heard
in Hudson County,  New Jersey,  and expressly  consent to the  jurisdiction  and
venue of the  Superior  Court of New  Jersey,  sitting in Hudson  County and the
United States  District  Court for the District of New Jersey sitting in Newark,
New Jersey for the  adjudication of any civil action  asserted  pursuant to this
Paragraph.  EACH PARTY  HEREBY  IRREVOCABLY  WAIVES  ANY RIGHT IT MAY HAVE,  AND
AGREES  NOT TO  REQUEST,  A JURY  TRIAL  FOR  THE  ADJUDICATION  OF ANY  DISPUTE
HEREUNDER  OR IN  CONNECTION  HEREWITH OR ARISING OUT OF THIS  AGREEMENT  OR ANY
TRANSACTION CONTEMPLATED HEREBY.

     e. This Agreement,  the Standby Equity Distribution  Agreement,  the Escrow
Agreement,  and the Placement  Agent Agreement  constitute the entire  agreement
among the parties  hereto with respect to the subject matter hereof and thereof.
There are no  restrictions,  promises,  warranties or  undertakings,  other than
those set forth or referred to herein and therein.  This Agreement,  the Standby
Equity  Distribution  Agreement,  the Escrow Agreement,  and the Placement Agent
Agreement  supersede all prior agreements and  understandings  among the parties
hereto with respect to the subject matter hereof and thereof.

     f. This  Agreement  shall inure to the  benefit of and be binding  upon the
permitted successors and assigns of each of the parties hereto.

     g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

     h. This Agreement may be executed in identical counterparts,  each of which
shall be deemed an original but all of which shall  constitute  one and the same
agreement.  This  Agreement,  once executed by a party,  may be delivered to the

                                       11
<PAGE>
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

     i. Each party shall do and perform, or cause to be done and performed,  all
such  further  acts and  things,  and shall  execute  and deliver all such other
agreements,  certificates,  instruments  and  documents,  as the other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

     j. The language  used in this  Agreement  will be deemed to be the language
chosen by the  parties to  express  their  mutual  intent and no rules of strict
construction will be applied against any party.

     k. This  Agreement  is intended  for the benefit of the parties  hereto and
their respective  permitted  successors and assigns,  and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       12
<PAGE>
     IN WITNESS  WHEREOF,  the  parties  have caused  this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

                                COMPANY:
                                CITY NETWORK, INC

                                By: /s/ Tiao-Tsan Lai
                                   -------------------------------------
                                Name:    Mr Tiao-Tsan Lai
                                Title:   Chief Executive Officer

                                INVESTOR:
                                CORNELL CAPITAL PARTNERS, LP

                                By: Yorkville Advisors, LLC
                                Its: General Partner

                                By: /s/ Mark Angelo
                                   -------------------------------------
                                Name:  Mark Angelo
                                Title: Portfolio Manager

                                       13
<PAGE>
                                    EXHIBIT A
                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

Attention:

     Re: CITY NETWORK, INC

Ladies and Gentlemen:

     We are counsel to City Network,  Inc (the "Company"),  and have represented
the  Company  in  connection  with  that  certain  Standby  Equity  Distribution
Agreement  (the "STANDBY  EQUITY  DISTRIBUTION  AGREEMENT")  entered into by and
between the Company and Cornell Capital Partners,  LP (the "INVESTOR")  pursuant
to which the Company  issued to the  Investor  shares of its Common  Stock,  par
value $.001 per share (the  "COMMON  STOCK").  Pursuant  to the  Standby  Equity
Distribution Agreement,  the Company also has entered into a Registration Rights
Agreement with the Investor (the "REGISTRATION  RIGHTS  AGREEMENT")  pursuant to
which the Company  agreed,  among other  things,  to  register  the  Registrable
Securities  (as  defined  in  the  Registration   Rights  Agreement)  under  the
Securities Act of 1933, as amended (the  "SECURITIES  ACT").  In connection with
the  Company's   obligations  under  the  Registration   Rights  Agreement,   on
____________  ____, the Company filed a Registration  Statement on Form ________
(File No.  333-_____________) (the "REGISTRATION STATEMENT") with the Securities
and Exchange Commission (the "SEC") relating to the Registrable Securities which
names the Investor as a selling stockholder thereunder.

     In connection with the foregoing,  we advise you that a member of the SEC's
staff has advised us by  telephone  that the SEC has entered an order  declaring
the Registration  Statement effective under the Securities Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,  after
telephonic  inquiry  of a  member  of the  SEC's  staff,  that  any  stop  order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and the  Registrable
Securities  are  available for resale under the  Securities  Act pursuant to the
Registration Statement.

                                 Very truly yours,

                                 By:

cc: Cornell Capital Partners, LP

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