Document:

form-sb2_021113

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

     Intellectual  Property Security  Agreement (this  "Agreement")  dated as of
February 6, 2003, by and among iDial Networks,  Inc., a Nevada  corporation (the
"Company"),  and the  secured  parties  signatory  hereto  and their  respective
endorsees, transferees and assigns (collectively, the "Secured Party").

                              W I T N E S S E T H :

     WHEREAS, pursuant to a Securities Purchase Agreement,  dated as of February
6, 2003  between  Company  and the  Secured  Party (the  "Purchase  Agreement"),
Company  has  agreed to issue to the  Secured  Party and the  Secured  Party has
agreed to purchase  from Company  certain of Company's  12% Secured  Convertible
Debentures,  due one year from the date of issue (the  "Debentures"),  which are
convertible  into shares of Company's  Common  Stock,  par value $.005 per share
(the "Common Stock"). In connection  therewith,  Company shall issue the Secured
Party  certain  Common Stock  purchase  warrants  dated as of the date hereof to
purchase  the number of shares of Common  Stock  indicated  below  each  Secured
Party's name on the Purchase Agreement (the "Warrants"); and

     WHEREAS,  in order to induce the Secured Party to purchase the  Debentures,
Company has agreed to execute and  deliver to the Secured  Party this  Agreement
for the  benefit  of the  Secured  Party  and to  grant  to it a first  priority
security interest in certain Intellectual Property (defined below) of Company to
secure the prompt payment, performance and discharge in full of all of Company's
obligations under the Debentures and exercise and discharge in full of Company's
obligations under the Warrants; and

     NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable  consideration,  the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

1.   Defined Terms. Unless otherwise defined herein,  terms which are defined in
     the Purchase  Agreement and used herein are so used as so defined;  and the
     following terms shall have the following meanings:

     "Software Intellectual Property" shall mean:

     (a)  all software programs  (including all source code, object code and all
          related  applications  and data files),  whether now owned,  upgraded,
          enhanced,  licensed or leased or  hereafter  acquired by the  Company,
          above;

     (b)  all computers and  electronic  data  processing  hardware and firmware
          associated therewith;

     (c)  all  documentation  (including flow charts,  logic diagrams,  manuals,
          guides and specifications) with respect to such software, hardware and
          firmware described in the preceding clauses (a) and (b); and

     (d)  all rights with respect to all of the  foregoing,  including,  without
          limitation, any and all upgrades, modifications, copyrights, licenses,
          options, warranties, service contracts, program services, test rights,
          maintenance rights, support rights, improvement rights, renewal rights
          and indemnifications and substitutions,  replacements,  additions,  or
          model conversions of any of the foregoing.

     "Copyrights" shall mean (a) all copyrights,  registrations and applications
     for registration,  issued or filed,  including any reissues,  extensions or
     renewals  thereof,  by or with the United  States  Copyright  Office or any
     similar  office or agency of the United States,  any state thereof,  or any
     other country or political  subdivision  thereof, or otherwise,  including,
     all rights in and to the material  constituting the subject matter thereof,
     including,  without  limitation,  any referred to in Schedule B hereto, and
     (b) any rights in any material which is copyrightable or which is protected
     by common law,  United States  copyright laws or similar laws or any law of
     any State,  including,  without  limitation,  any  thereof  referred  to in
     Schedule B hereto.

     "Copyright  License" shall mean any agreement,  written or oral,  providing
for a grant by the  Company of any right in any  Copyright,  including,  without
limitation, any thereof referred to in Schedule B hereto.

     "Intellectual   Property"   shall   means,   collectively,   the   Software
Intellectual Property, Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks, Trademark Licenses and Trade Secrets.

     "Obligations"  means all of the Company's  obligations under this Agreement
and the Debentures,  in each case, whether now or hereafter existing,  voluntary
or  involuntary,  direct or  indirect,  absolute or  contingent,  liquidated  or
unliquidated,  whether or not jointly owed with others,  and whether or not from
time to time decreased or extinguished and later decreased, created or incurred,
and all or any portion of such  obligations or liabilities that are paid, to the
extent  all or any part of such  payment is avoided  or  recovered  directly  or
indirectly  from the  Secured  Party as a  preference,  fraudulent  transfer  or
otherwise as such obligations may be amended, supplemented,  converted, extended
or modified from time to time.

     "Patents"  shall mean (a) all  letters  patent of the United  States or any
other  country  or any  political  subdivision  thereof,  and all  reissues  and
extensions thereof,  including,  without limitation,  any thereof referred to in
Schedule B hereto,  and (b) all  applications  for letters  patent of the United
States and all divisions, continuations and continuations-in-part thereof or any
other country or any political subdivision,  including,  without limitation, any
thereof referred to in Schedule B hereto.

     "Patent  License"  shall  mean all  agreements,  whether  written  or oral,
providing for the grant by the Company of any right to manufacture,  use or sell
any invention covered by a Patent,  including,  without limitation,  any thereof
referred to in Schedule B hereto.

     "Security  Agreement" shall mean the a Security  Agreement,  dated the date
hereof between Company and the Secured Party.

     "Trademarks" shall mean (a) all trademarks,  trade names,  corporate names,
company names, business names,  fictitious business names, trade styles, service
marks,  logos  and  other  source  or  business  identifiers,  and the  goodwill
associated  therewith,  now  existing  or  hereafter  adopted or  acquired,  all
registrations  and  recordings  thereof,  and  all  applications  in  connection
therewith,  whether in the United States  Patent and Trademark  Office or in any
similar  office or agency of the United  States,  any state thereof or any other
country or any political subdivision thereof, or otherwise,  including,  without
limitation,  any thereof referred to in Schedule B hereto, and (b) all reissues,
extensions or renewals thereof.

     "Trademark  License" shall mean any agreement,  written or oral,  providing
for the  grant by the  Company  of any  right to use any  Trademark,  including,
without limitation, any thereof referred to in Schedule B hereto.

     "Trade  Secrets" shall mean common law and statutory  trade secrets and all
other  confidential  or  proprietary  or  useful  information  and all  know-how
obtained by or used in or  contemplated  at any time for use in the  business of
the Company (all of the foregoing being  collectively  called a "Trade Secret"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form,  including all documents and things embodying,  incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule B hereto,  and including the right to sue
for  and to  enjoin  and  to  collect  damages  for  the  actual  or  threatened
misappropriation  of any Trade Secret and for the breach or  enforcement  of any
such Trade Secret license.

2.   Grant of Security Interest. In accordance with Section 3(m) of the Security
     Agreement,  to secure the  complete  and timely  payment,  performance  and
     discharge  in  full,  as the case may be,  of all of the  Obligations,  the
     Company  hereby,  unconditionally  and  irrevocably,  pledges,  grants  and
     hypothecates  to the Secured  Party, a continuing  security  interest in, a
     continuing  first  lien  upon,  an  unqualified  right  to  possession  and
     disposition of and a right of set-off against,  in each case to the fullest
     extent permitted by law, all of the Company's right,  title and interest of
     whatsoever  kind  and  nature  in  and to the  Intellectual  Property  (the
     "Security Interest").

3.   Representations and Warranties. The Company hereby represents and warrants,
     and covenants and agrees with, the Secured Party as follows:

     (a)  The Company has the requisite  corporate  power and authority to enter
          into  this  Agreement  and  otherwise  to  carry  out its  obligations
          thereunder. The execution,  delivery and performance by the Company of
          this  Agreement  and the filings  contemplated  therein have been duly
          authorized by all  necessary  action on the part of the Company and no
          further action is required by the Company.  This Agreement constitutes
          a legal,  valid and binding  obligation of the Company  enforceable in
          accordance with its terms,  except as enforceability may be limited by
          bankruptcy,  insolvency,  reorganization,  moratorium  or similar laws
          affecting the enforcement of creditor's rights generally.

     (b)  The Company  represents  and warrants that it has no place of business
          or offices where its respective  books of account and records are kept
          (other  than   temporarily   at  the  offices  of  its   attorneys  or
          accountants)  or places where the  Intellectual  Property is stored or
          located, except as set forth on Schedule A attached hereto;

     (c)  The Company is the sole owner of the Intellectual Property (except for
          non-exclusive  licenses  granted by the Company in the ordinary course
          of  business),  free  and  clear  of any  liens,  security  interests,
          encumbrances,  rights or claims,  and is fully authorized to grant the
          Security Interest in and to pledge the Intellectual Property. There is
          not on file in any  governmental  or regulatory  authority,  agency or
          recording office an effective financing statement, security agreement,
          license or transfer or any notice of any of the foregoing  (other than
          those that have been filed in favor of the Secured  Party  pursuant to
          this  Agreement)   covering  or  affecting  any  of  the  Intellectual
          Property.  So long as this Agreement  shall be in effect,  the Company
          shall not execute and shall not knowingly  permit to be on file in any
          such office or agency any such  financing  statement or other document
          or instrument  (except to the extent filed or recorded in favor of the
          Secured Party pursuant to the terms of this  Agreement),  except for a
          financing  statement covering assets acquired by the Company after the
          date  hereof,  provided  that the value of the  Intellectual  Property
          covered by this Agreement along with the Collateral (as defined in the
          Security Agreement) is equal to at least 150% of the Obligations.

     (d)  The  Company  shall at all times  maintain  its books of  account  and
          records relating to the  Intellectual  Property at its principal place
          of business and its  Intellectual  Property at the locations set forth
          on  Schedule A  attached  hereto  and may not  relocate  such books of
          account and records  unless it delivers to the Secured  Party at least
          30 days prior to such relocation (i) written notice of such relocation
          and the new location  thereof (which must be within the United States)
          and (ii)  evidence that the  necessary  documents  have been filed and
          recorded  and other  steps  have been taken to  perfect  the  Security
          Interest to create in favor of the Secured Party valid,  perfected and
          continuing  first priority liens in the  Intellectual  Property to the
          extent they can be perfected through such filings.

     (e)  This Agreement  creates in favor of the Secured Party a valid security
          interest  in  the  Intellectual  Property  securing  the  payment  and
          performance of the Obligations  and, upon making the filings  required
          hereunder,  a  perfected  first  priority  security  interest  in such
          Intellectual  Property to the extent that it can be perfected  through
          such filings.

     (f)  Upon  request of the  Secured  Party,  the Company  shall  execute and
          deliver any and all agreements,  instruments, documents, and papers as
          the Secured Party may request to evidence the Secured Party's security
          interest in the  Intellectual  Property  and the  goodwill and general
          intangibles of the Company  relating  thereto or represented  thereby,
          and the Company hereby appoints the Secured Party its attorney-in-fact
          to execute and file all such writings for the foregoing purposes,  all
          acts of such attorney being hereby ratified and confirmed;  such power
          being coupled with an interest is  irrevocable  until the  Obligations
          have been fully satisfied and are paid in full.

     (g)  The  execution,  delivery and  performance  of this Agreement does not
          conflict  with or cause a breach or default,  or an event that with or
          without the passage of time or notice,  shall  constitute  a breach or
          default,  under any  agreement  to which the  Company is a party or by
          which the Company is bound. No consent (including, without limitation,
          from stock  holders or  creditors  of the Company) is required for the
          Company to enter into and perform its obligations hereunder.

     (h)  The  Company  shall at all  times  maintain  the  liens  and  Security
          Interest  provided for hereunder as valid and perfected first priority
          liens and  security  interests  in the  Intellectual  Property  to the
          extent they can be perfected  by filing in favor of the Secured  Party
          until  this  Agreement  and  the  Security  Interest  hereunder  shall
          terminate  pursuant to Section 11. The Company hereby agrees to defend
          the same against any and all persons.  The Company shall safeguard and
          protect  all  Intellectual  Property  for the  account of the  Secured
          Party.  Without limiting the generality of the foregoing,  the Company
          shall pay all fees, taxes and other amounts  necessary to maintain the
          Intellectual  Property and the Security  Interest  hereunder,  and the
          Company  shall  obtain and furnish to the  Secured  Party from time to
          time, upon demand,  such releases and/or  subordinations of claims and
          liens which may be required to maintain  the  priority of the Security
          Interest hereunder.

     (i)  The Company will not transfer, pledge, hypothecate,  encumber, license
          (except  for  non-exclusive  licenses  granted  by the  Company in the
          ordinary course of business),  sell or otherwise dispose of any of the
          Intellectual Property without the prior written consent of the Secured
          Party.

     (j)  The  Company  shall,  within  ten  (10)  days of  obtaining  knowledge
          thereof,  advise the Secured Party promptly,  in sufficient detail, of
          any  substantial  change  in  the  Intellectual  Property,  and of the
          occurrence of any event which would have a material  adverse effect on
          the  value of the  Intellectual  Property  or on the  Secured  Party's
          security interest therein.

     (k)  The Company shall permit the Secured Party and its representatives and
          agents to inspect the  Intellectual  Property at any time, and to make
          copies of records  pertaining to the  Intellectual  Property as may be
          requested by the Secured Party from time to time.

     (l)  The Company will take all steps  reasonably  necessary  to  diligently
          pursue and seek to preserve,  enforce and collect any rights,  claims,
          causes  of  action  and   accounts   receivable   in  respect  of  the
          Intellectual Property.

     (m)  The Company  shall  promptly  notify the Secured  Party in  sufficient
          detail upon becoming aware of any attachment,  garnishment,  execution
          or other legal process levied against any Intellectual Property and of
          any other  information  received  by the Company  that may  materially
          affect the value of the Intellectual  Property,  the Security Interest
          or the rights and remedies of the Secured Party hereunder.

     (n)  All  information  heretofore,  herein  or  hereafter  supplied  to the
          Secured  Party by or on  behalf of the  Company  with  respect  to the
          Intellectual  Property  is  accurate  and  complete  in  all  material
          respects as of the date furnished.

     (o)  Schedule A attached hereto contains a list of all of the  subsidiaries
          of Company.

     (p)  Schedule B attached hereto includes all Licenses,  and all Patents and
          Patent  Licenses,  if any,  owned by the Company in its own name as of
          the  date  hereof.  Schedule  B hereto  includes  all  Trademarks  and
          Trademark Licenses, if any, owned by the Company in its own name as of
          the  date  hereof.  Schedule  B hereto  includes  all  Copyrights  and
          Copyright Licenses, if any, owned by the Company in its own name as of
          the date  hereof.  Schedule B hereto  includes  all Trade  Secrets and
          Trade  Secret  Licenses,  if any,  owned by the Company as of the date
          hereof. To the best of the Company's knowledge,  each License, Patent,
          Trademark, Copyright and Trade Secret is valid, subsisting, unexpired,
          enforceable  and  has not  been  abandoned.  Except  as set  forth  in
          Schedule B, none of such Licenses, Patents, Trademarks, Copyrights and
          Trade Secrets is the subject of any licensing or franchise  agreement.
          To the  best of the  Company's  knowledge,  no  holding,  decision  or
          judgment has been rendered by any Governmental Body which would limit,
          cancel or question  the validity of any  License,  Patent,  Trademark,
          Copyright  and Trade  Secrets . No action or proceeding is pending (i)
          seeking to limit,  cancel or question  the  validity  of any  License,
          Patent,  Trademark,  Copyright  or Trade  Secret,  or (ii)  which,  if
          adversely  determined,  would  have a material  adverse  effect on the
          value of any License,  Patent,  Trademark,  Copyright or Trade Secret.
          The Company has used and will continue to use for the duration of this
          Agreement,  proper  statutory notice in connection with its use of the
          Patents, Trademarks and Copyrights and consistent standards of quality
          in  products  leased  or  sold  under  the  Patents,   Trademarks  and
          Copyrights.

     (q)  With respect to any Intellectual Property:

          (i)  such  Intellectual  Property  is  subsisting  and  has  not  been
               adjudged invalid or unenforceable, in whole or in part;

          (ii) such Intellectual Property is valid and enforceable;

          (iii)the Company has made all necessary  filings and  recordations  to
               protect its interest in such  Intellectual  Property,  including,
               without  limitation,  recordations of all of its interests in the
               Patents,  Patent Licenses,  Trademarks and Trademark  Licenses in
               the   United   States   Patent  and   Trademark   Office  and  in
               corresponding  offices throughout the world and its claims to the
               Copyrights and Copyright  Licenses in the United States Copyright
               Office and in corresponding offices throughout the world;

          (iv) other  than as set  forth  in  Schedule  B,  the  Company  is the
               exclusive owner of the entire and unencumbered  right,  title and
               interest in and to such  Intellectual  Property  and no claim has
               been made that the use of such Intellectual Property infringes on
               the asserted rights of any third party; and

          (v)  the Company has  performed  and will continue to perform all acts
               and has paid all  required  fees and taxes to  maintain  each and
               every  item of  Intellectual  Property  in full  force and effect
               throughout the world, as applicable.

     (r)  Except with respect to any  Trademark  or  Copyright  that the Company
          shall  reasonably  determine is of  negligible  economic  value to the
          Company, the Company shall

          (i)  maintain each Trademark and Copyright in full force free from any
               claim of  abandonment  for  non-use,  maintain as in the past the
               quality of products and services  offered under such Trademark or
               Copyright;   employ  such   Trademark  or   Copyright   with  the
               appropriate  notice  of  registration;  not adopt or use any mark
               which is  confusingly  similar or a colorable  imitation  of such
               Trademark  or Copyright  unless the Secured  Party shall obtain a
               perfected  security  interest  in  such  mark  pursuant  to  this
               Agreement;  and not (and not permit any  licensee or  sublicensee
               thereof  to) do any act or  knowingly  omit to do any act whereby
               any Trademark or Copyright may become invalidated;

          (ii) not,  except with respect to any Patent that it shall  reasonably
               determine is of negligible  economic  value to it, do any act, or
               omit to do any act,  whereby any Patent may become  abandoned  or
               dedicated; and

          (iii)notify the Secured Party  immediately if it knows,  or has reason
               to know,  that any  application or  registration  relating to any
               Patent, Trademark or Copyright may become abandoned or dedicated,
               or  of  any  adverse  determination  or  development  (including,
               without limitation, the institution of, or any such determination
               or development in, any proceeding in the United States Patent and
               Trademark Office,  United States Copyright Office or any court or
               tribunal in any country)  regarding  its ownership of any Patent,
               Trademark  or  Copyright  or its right to register the same or to
               keep and maintain the same.

(s)  Whenever  the  Company,  either by itself or through  any agent,  employee,
     licensee or designee, shall file an application for the registration of any
     Patent,  Trademark or Copyright with the United States Patent and Trademark
     Office,  United States  Copyright Office or any similar office or agency in
     any other country or any political subdivision thereof or acquire rights to
     any new Patent,  Trademark or Copyright  whether or not registered,  report
     such filing to the Secured  Party within five  business days after the last
     day of the fiscal quarter in which such filing occurs.

(t)  The Company  shall take all  reasonable  and  necessary  steps,  including,
     without  limitation,  in any proceeding before the United States Patent and
     Trademark  Office,  United States Copyright Office or any similar office or
     agency  in any other  country  or any  political  subdivision  thereof,  to
     maintain  and  pursue  each   application   (and  to  obtain  the  relevant
     registration) and to maintain each registration of the Patents,  Trademarks
     and Copyrights,  including, without limitation,  filing of applications for
     renewal, affidavits of use and affidavits of incontestability.

(u)  In the event  that any  Patent,  Trademark  or  Copyright  included  in the
     Intellectual  Property is infringed,  misappropriated or diluted by a third
     party, promptly notify the Secured Party after it learns thereof and shall,
     unless  it shall  reasonably  determine  that  such  Patent,  Trademark  or
     Copyright is of negligible  economic  value to it, which  determination  it
     shall promptly report to the Secured Party,  promptly sue for infringement,
     misappropriation  or dilution,  to seek injunctive relief where appropriate
     and to recover any and all damages for such infringement,  misappropriation
     or  dilution,  or take  such  other  actions  as it shall  reasonably  deem
     appropriate  under the  circumstances to protect such Patent,  Trademark or
     Copyright. If the Company lacks the financial resources to comply with this
     Section  3(t),  the  Company  shall so notify the  Secured  Party and shall
     cooperate fully with any enforcement action undertaken by the Secured Party
     on behalf of the Company.

4.   Defaults. The following events shall be "Events of Default":

     (a)  The  occurrence of an Event of Default (as defined in the  Debentures)
          under the Debentures;

     (b)  Any  representation or warranty of the Company in this Agreement or in
          the  Security  Agreement  shall  prove to have been  incorrect  in any
          material respect when made;

     (c)  The  failure  by  the  Company  to  observe  or  perform  any  of  its
          obligations  hereunder or in the Security  Agreement for ten (10) days
          after  receipt  by the  Company  of  notice of such  failure  from the
          Secured Party; and

     (d)  Any breach of, or default under, the Warrants.

5.   Duty To Hold In Trust.  Upon the  occurrence of any Event of Default and at
     any time thereafter,  the Company shall, upon receipt by it of any revenue,
     income or other sums  subject to the  Security  Interest,  whether  payable
     pursuant to the  Debentures or  otherwise,  or of any check,  draft,  note,
     trade  acceptance or other  instrument  evidencing an obligation to pay any
     such sum, hold the same in trust for the Secured Party and shall  forthwith
     endorse and transfer any such sums or instruments,  or both, to the Secured
     Party for application to the satisfaction of the Obligations.

6.   Rights and Remedies Upon Default.  Upon  occurrence of any Event of Default
     and at any time  thereafter,  the  Secured  Party  shall  have the right to
     exercise all of the remedies conferred  hereunder and under the Debentures,
     and the Secured  Party shall have all the rights and  remedies of a secured
     party under the UCC and/or any other  applicable law (including the Uniform
     Commercial Code of any jurisdiction in which any  Intellectual  Property is
     then  located).  Without  limitation,  the  Secured  Party  shall  have the
     following rights and powers:

     (a)  The  Secured  Party  shall  have the right to take  possession  of the
          Intellectual  Property and, for that purpose,  enter, with the aid and
          assistance  of  any  person,   any  premises  where  the  Intellectual
          Property,  or any part  thereof,  is or may be placed  and  remove the
          same,  and the Company shall  assemble the  Intellectual  Property and
          make it  available  to the Secured  Party at places  which the Secured
          Party shall reasonably  select,  whether at the Company's  premises or
          elsewhere,  and make available to the Secured Party, without rent, all
          of the Company's respective premises and facilities for the purpose of
          the  Secured  Party  taking  possession  of,  removing  or putting the
          Intellectual Property in saleable or disposable form.

     (b)  The Secured  Party shall have the right to operate the business of the
          Company  using the  Intellectual  Property and shall have the right to
          assign,  sell,  lease or  otherwise  dispose of and deliver all or any
          part of the  Intellectual  Property,  at  public  or  private  sale or
          otherwise,  either with or without special conditions or stipulations,
          for cash or on  credit  or for  future  delivery,  in such  parcel  or
          parcels  and at such time or times and at such  place or  places,  and
          upon  such  terms  and  conditions  as  the  Secured  Party  may  deem
          commercially  reasonable,  all without (except as shall be required by
          applicable statute and cannot be waived)  advertisement or demand upon
          or notice to the Company or right of redemption of the Company,  which
          are hereby expressly waived. Upon each such sale, lease, assignment or
          other transfer of Intellectual Property, the Secured Party may, unless
          prohibited by applicable  law which cannot be waived,  purchase all or
          any  part of the  Intellectual  Property  being  sold,  free  from and
          discharged of all trusts,  claims, right of redemption and equities of
          the Company, which are hereby waived and released.

7.   Applications  of Proceeds.  The  proceeds of any such sale,  lease or other
     disposition of the Intellectual  Property hereunder shall be applied first,
     to the expenses of retaking, holding, storing, processing and preparing for
     sale, selling, and the like (including, without limitation, any taxes, fees
     and other  costs  incurred in  connection  therewith)  of the  Intellectual
     Property,  to the reasonable  attorneys' fees and expenses  incurred by the
     Secured  Party in enforcing its rights  hereunder  and in  connection  with
     collecting, storing and disposing of the Intellectual Property, and then to
     satisfaction  of the  Obligations,  and to the payment of any other amounts
     required by applicable  law, after which the Secured Party shall pay to the
     Company  any  surplus  proceeds.  If,  upon  the  sale,  license  or  other
     disposition  of  the  Intellectual   Property,  the  proceeds  thereof  are
     insufficient  to pay all  amounts  to which the  Secured  Party is  legally
     entitled,  the Company  will be liable for the  deficiency,  together  with
     interest  thereon,  at the rate of 15% per annum (the "Default Rate"),  and
     the  reasonable  fees of any  attorneys  employed by the  Secured  Party to
     collect such  deficiency.  To the extent  permitted by applicable  law, the
     Company  waives all claims,  damages and demands  against the Secured Party
     arising  out  of  the  repossession,  removal,  retention  or  sale  of the
     Intellectual  Property,  unless  due to the  gross  negligence  or  willful
     misconduct of the Secured Party.

8.   Costs and Expenses. The Company agrees to pay all out-of-pocket fees, costs
     and expenses  incurred in connection  with any filing  required  hereunder,
     including  without  limitation,  any  financing  statements,   continuation
     statements,  partial releases and/or termination statements related thereto
     or any expenses of any searches  reasonably  required by the Secured Party.
     The  Company  shall  also pay all other  claims  and  charges  which in the
     reasonable  opinion  of the  Secured  Party  might  prejudice,  imperil  or
     otherwise  affect  the  Intellectual  Property  or  the  Security  Interest
     therein.  The Company will also, upon demand,  pay to the Secured Party the
     amount of any and all reasonable  expenses,  including the reasonable  fees
     and  expenses of its  counsel  and of any  experts  and  agents,  which the
     Secured  Party may incur in  connection  with (i) the  enforcement  of this
     Agreement,  (ii) the custody or preservation of, or the sale of, collection
     from, or other realization upon, any of the Intellectual Property, or (iii)
     the exercise or enforcement of any of the rights of the Secured Party under
     the Debentures. Until so paid, any fees payable hereunder shall be added to
     the  principal  amount of the  Debentures  and shall bear  interest  at the
     Default Rate.

9.   Responsibility   for  Intellectual   Property.   The  Company  assumes  all
     liabilities  and   responsibility   in  connection  with  all  Intellectual
     Property,  and the  obligations  of the  Company  hereunder  or  under  the
     Debentures  and the Warrants  shall in no way be affected or  diminished by
     reason of the loss, destruction, damage or theft of any of the Intellectual
     Property or its unavailability for any reason.

10.  Security  Interest  Absolute.  All  rights  of the  Secured  Party  and all
     Obligations of the Company hereunder,  shall be absolute and unconditional,
     irrespective  of:  (a)  any  lack of  validity  or  enforceability  of this
     Agreement,  the Debentures,  the Warrants or any agreement  entered into in
     connection  with the foregoing,  or any portion hereof or thereof;  (b) any
     change in the time, manner or place of payment or performance of, or in any
     other term of, all or any of the  Obligations,  or any other  amendment  or
     waiver of or any consent to any departure from the Debentures, the Warrants
     or any other agreement  entered into in connection with the foregoing;  (c)
     any exchange, release or nonperfection of any of the Intellectual Property,
     or any release or amendment  or waiver of or consent to departure  from any
     other  Intellectual  Property for, or any guaranty,  or any other security,
     for all or any of the  Obligations;  (d) any action by the Secured Party to
     obtain,  adjust,  settle and cancel in its sole  discretion  any  insurance
     claims or  matters  made or  arising in  connection  with the  Intellectual
     Property;  or (e) any other circumstance  which might otherwise  constitute
     any legal or equitable defense available to the Company,  or a discharge of
     all  or any  part  of the  Security  Interest  granted  hereby.  Until  the
     Obligations  shall have been paid and performed in full,  the rights of the
     Secured  Party shall  continue even if the  Obligations  are barred for any
     reason,  including,  without  limitation,  the  running  of the  statute of
     limitations  or  bankruptcy.  The  Company  expressly  waives  presentment,
     protest,  notice of protest,  demand,  notice of nonpayment  and demand for
     performance. In the event that at any time any transfer of any Intellectual
     Property or any payment  received by the Secured Party  hereunder  shall be
     deemed by final order of a court of competent  jurisdiction  to have been a
     voidable  preference  or  fraudulent  conveyance  under the  bankruptcy  or
     insolvency  laws of the United  States,  or shall be deemed to be otherwise
     due to any party other than the Secured Party, then, in any such event, the
     Company's   obligations   hereunder  shall  survive  cancellation  of  this
     Agreement,  and shall not be  discharged  or satisfied by any prior payment
     thereof and/or cancellation of this Agreement, but shall remain a valid and
     binding obligation  enforceable in accordance with the terms and provisions
     hereof.  The  Company  waives all right to  require  the  Secured  Party to
     proceed  against  any other  person or to apply any  Intellectual  Property
     which the Secured Party may hold at any time, or to marshal  assets,  or to
     pursue any other remedy.  The Company waives any defense  arising by reason
     of the application of the statute of limitations to any obligation  secured
     hereby.

11.  Term of Agreement. This Agreement and the Security Interest shall terminate
     on the date on which all payments  under the  Debentures  have been made in
     full and all other  Obligations  have been  paid or  discharged.  Upon such
     termination,  the Secured  Party,  at the request and at the expense of the
     Company,  will join in executing any termination  statement with respect to
     any financing statement executed and filed pursuant to this Agreement.

12.  Power of Attorney; Further Assurances.

     (a)  The Company  authorizes  the  Secured  Party,  and does  hereby  make,
          constitute  and  appoint  it,  and its  respective  officers,  agents,
          successors  or  assigns  with  full  power  of  substitution,  as  the
          Company's  true and lawful  attorney-in-fact,  with power,  in its own
          name or in the name of the  Company,  to,  after  the  occurrence  and
          during the continuance of an Event of Default,  (i) endorse any notes,
          checks,   drafts,  money  orders,  or  other  instruments  of  payment
          (including  payments  payable  under or in  respect  of any  policy of
          insurance) in respect of the Intellectual  Property that may come into
          possession  of the  Secured  Party;  (ii) to sign and  endorse any UCC
          financing  statement or any invoice,  freight or express bill, bill of
          lading,  storage  or  warehouse  receipts,   drafts  against  debtors,
          assignments,  verifications  and notices in connection  with accounts,
          and other documents  relating to the Intellectual  Property;  (iii) to
          pay  or  discharge   taxes,   liens,   security   interests  or  other
          encumbrances at any time levied or placed on or threatened against the
          Intellectual  Property;   (iv)  to  demand,   collect,   receipt  for,
          compromise,   settle  and  sue  for  monies  due  in  respect  of  the
          Intellectual Property; and (v) generally,  to do, at the option of the
          Secured Party, and at the Company's expense, at any time, or from time
          to time,  all acts and things which the Secured Party deems  necessary
          to protect,  preserve and realize upon the  Intellectual  Property and
          the Security Interest granted therein in order to effect the intent of
          this  Agreement,  the  Debentures  and the Warrants,  all as fully and
          effectually  as the Company might or could do; and the Company  hereby
          ratifies all that said attorney  shall lawfully do or cause to be done
          by virtue  hereof.  This power of attorney is coupled with an interest
          and shall be irrevocable for the term of this Agreement and thereafter
          as long as any of the Obligations shall be outstanding.

     (b)  On a continuing  basis, the Company will make,  execute,  acknowledge,
          deliver, file and record, as the case may be, in the proper filing and
          recording places in any jurisdiction,  including,  without limitation,
          the jurisdictions  indicated on Schedule C, attached hereto,  all such
          instruments,  and take all such  action  as may  reasonably  be deemed
          necessary  or  advisable,  or as  reasonably  requested by the Secured
          Party,  to  perfect  the  Security   Interest  granted  hereunder  and
          otherwise to carry out the intent and purposes of this  Agreement,  or
          for  assuring  and  confirming  to the  Secured  Party  the  grant  or
          perfection of a security interest in all the Intellectual Property.

     (c)  The Company  hereby  irrevocably  appoints  the  Secured  Party as the
          Company's attorney-in-fact, with full authority in the place and stead
          of the  Company and in the name of the  Company,  from time to time in
          the Secured Party's discretion,  to take any action and to execute any
          instrument  which the Secured Party may deem necessary or advisable to
          accomplish the purposes of this  Agreement,  including the filing,  in
          its  sole  discretion,  of  one  or  more  financing  or  continuation
          statements and amendments thereto, relative to any of the Intellectual
          Property without the signature of the Company where permitted by law.

13.  Notices. All notices,  requests, demands and other communications hereunder
     shall be in writing, with copies to all the other parties hereto, and shall
     be deemed  to have been duly  given  when (i) if  delivered  by hand,  upon
     receipt,  (ii) if sent by  facsimile,  upon  receipt  of proof  of  sending
     thereof,  (iii) if sent by nationally recognized overnight delivery service
     (receipt requested), the next business day or (iv) if mailed by first-class
     registered or certified mail,  return receipt  requested,  postage prepaid,
     four days after posting in the U.S. mails, in each case if delivered to the
     following addresses:

      If to the Company:      iDial Networks, Inc.
                              10800 East Bethany Drive
                              Suite 380
                              Denver, Colorado 80014
                              Attention:  Mark T. Wood
                              Telephone:  281-465-3100
                              Facsimile:  281-292-8083

      With copies to:         Sichenzia Ross Friedman Ference LLP
                              1065 Avenue of the Americas, 21st Floor
                              New York, New York 10018
                              Attention:  Gregory Sichenzia, Esq.
                              Telephone:  (212) 930-9700
                              Facsimile:   (212) 930-9725
                              Email:  GSichenzia@srfllp.net

      If to the Secured Party:______________________________AJW Partners, LLC
                              AJW Offshore, Ltd.
                              AJW Qualified Partners, LLC
                              1044 Northern Boulevard
                              Suite 302
                              Roslyn, New York  11576
                              Attention:  Corey Ribotsky
                              Facsimile:  516-739-7115

      With copies to:         Ballard Spahr Andrews & Ingersoll, LLP
                              1735 Market Street, 51st Floor
                              Philadelphia, Pennsylvania  19103
                              Attention:  Gerald J. Guarcini, Esquire
                              Facsimile:  215-864-8999

14.  Other  Security.  To the extent that the  Obligations  are now or hereafter
     secured  by  property  other  than  the  Intellectual  Property  or by  the
     guarantee,  endorsement or property of any other person, firm,  corporation
     or other entity,  then the Secured Party shall have the right,  in its sole
     discretion, to pursue,  relinquish,  subordinate,  modify or take any other
     action with respect thereto,  without in any way modifying or affecting any
     of the Secured Party's rights and remedies hereunder.

15.  Miscellaneous.

     (a)  No course of dealing  between the Company and the Secured  Party,  nor
          any failure to exercise,  nor any delay in exercising,  on the part of
          the Secured Party,  any right,  power or privilege  hereunder or under
          the Debentures shall operate as a waiver thereof; nor shall any single
          or partial  exercise of any right,  power or  privilege  hereunder  or
          thereunder  preclude  any other or  further  exercise  thereof  or the
          exercise of any other right, power or privilege.

     (b)  All of the rights and  remedies of the Secured  Party with  respect to
          the  Intellectual  Property,  whether  established  hereby  or by  the
          Debentures or by any other agreements,  instruments or documents or by
          law shall be cumulative and may be exercised singly or concurrently.

     (c)  This  Agreement  and the  Security  Agreement  constitute  the  entire
          agreement of the parties with respect to the subject matter hereof and
          is intended to supersede all prior  negotiations,  understandings  and
          agreements with respect  thereto.  Except as specifically set forth in
          this  Agreement,  no  provision of this  Agreement  may be modified or
          amended except by a written agreement  specifically  referring to this
          Agreement and signed by the parties hereto.

     (d)  In the  event  that  any  provision  of this  Agreement  is held to be
          invalid,  prohibited  or  unenforceable  in any  jurisdiction  for any
          reason,  unless such  provision is narrowed by judicial  construction,
          this Agreement shall, as to such jurisdiction, be construed as if such
          invalid,  prohibited or unenforceable provision had been more narrowly
          drawn  so as not  to be  invalid,  prohibited  or  unenforceable.  If,
          notwithstanding the foregoing, any provision of this Agreement is held
          to be invalid,  prohibited or unenforceable in any jurisdiction,  such
          provision, as to such jurisdiction, shall be ineffective to the extent
          of  such   invalidity,   prohibition   or   unenforceability   without
          invalidating  the  remaining  portion of such  provision  or the other
          provisions  of this  Agreement  and without  affecting the validity or
          enforceability  of such  provision  or the  other  provisions  of this
          Agreement in any other jurisdiction.

     (e)  No waiver of any breach or default or any right  under this  Agreement
          shall be  considered  valid  unless in writing and signed by the party
          giving such waiver, and no such waiver shall be deemed a waiver of any
          subsequent breach or default or right,  whether of the same or similar
          nature or otherwise.

     (f)  This Agreement  shall be binding upon and inure to the benefit of each
          party hereto and its successors and assigns.

     (g)  Each party shall take such further action and execute and deliver such
          further documents as may be necessary or appropriate in order to carry
          out the provisions and purposes of this Agreement.

     (h)  This Agreement  shall be construed in accordance  with the laws of the
          State of New York,  except to the extent the  validity,  perfection or
          enforcement  of a  security  interest  hereunder  in  respect  of  any
          particular  Intellectual Property which are governed by a jurisdiction
          other than the State of New York in which case such law shall  govern.
          Each  of the  parties  hereto  irrevocably  submit  to  the  exclusive
          jurisdiction  of any New York  State or United  States  Federal  court
          sitting in Manhattan county over any action or proceeding  arising out
          of or  relating  to this  Agreement,  and the  parties  hereto  hereby
          irrevocably  agree  that all  claims  in  respect  of such  action  or
          proceeding  may be heard  and  determined  in such  New York  State or
          Federal  court.  The parties hereto agree that a final judgment in any
          such action or proceeding  shall be conclusive  and may be enforced in
          other  jurisdictions  by suit on the  judgment or in any other  manner
          provided by law. The parties  hereto  further  waive any  objection to
          venue  in the  State of New York and any  objection  to an  action  or
          proceeding  in the  State  of New  York  on the  basis  of  forum  non
          conveniens.

     (i)  EACH PARTY HERETO  HEREBY AGREES TO WAIVE ITS  RESPECTIVE  RIGHTS TO A
          JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION  BASED UPON OR ARISING  OUT
          OF THIS  AGREEMENT.  THE SCOPE OF THIS  WAIVER IS  INTENDED  TO BE ALL
          ENCOMPASSING  OF ANY DISPUTES  THAT MAY BE FILED IN ANY COURT AND THAT
          RELATE  TO THE  SUBJECT  MATER OF THIS  AGREEMENT,  INCLUDING  WITHOUT
          LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL
          OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES
          THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO
          A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS ALREADY  RELIED ON THIS
          WAIVER IN  ENTERING  INTO THIS  AGREEMENT  AND THAT  EACH  PARTY  WILL
          CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
          PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
          WITH ITS  LEGAL  COUNSEL,  AND  THAT  SUCH  PARTY  HAS  KNOWINGLY  AND
          VOLUNTARILY   WAIVES  ITS  RIGHTS  TO  A  JURY  TRIAL  FOLLOWING  SUCH
          CONSULTATION.    THIS   WAIVER   IS    IRREVOCABLE,    MEANING   THAT,
          NOTWITHSTANDING  ANYTHING  HEREIN  TO  THE  CONTRARY,  IT  MAY  NOT BE
          MODIFIED  EITHER ORALLY OR IN WRITING,  AND THIS WAIVER SHALL APPLY TO
          ANY SUBSEQUENT  AMENDMENTS,  RENEWALS AND SUPPLEMENTS OR MODIFICATIONS
          TO THIS AGREEMENT. IN THE EVENT OF A LITIGATION, THIS AGREEMENT MAY BE
          FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     (j)  This Agreement may be executed in any number of counterparts,  each of
          which when so executed  shall be deemed to be an original  and, all of
          which taken together shall  constitute one and the same Agreement.  In
          the event that any  signature is delivered by facsimile  transmission,
          such  signature  shall create a valid binding  obligation of the party
          executing  (or on whose behalf such  signature  is executed)  the same
          with the same force and effect as if such facsimile signature were the
          original thereof.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed on the day and year first above written.

                                       IDIAL NETWORKS, INC.

                                       By:__________________________________
                                          Mark T. Wood
                                          Chief Executive Officer

                                       AJW PARTNERS, LLC
                                       By: SMS Group, LLC

                                       By:____________________________________
                                          Corey S. Ribotsky
                                          Manager

                                       AJW OFFSHORE, LTD.
                                       By:  First Street Manager II, LLC

                                       By:__________________________________
                                          Corey S. Ribotsky
                                          Manager

                                       AJW QUALIFIED PARTNERS, LLC
                                       By:  AJW Manager, LLC

                                       By:____________________________________
                                          Corey S. Ribotsky
                                          Manager

                                  SCHEDULE A
                                  ----------

Principal Place of Business of the Company:
-------------------------------------------

10800 E. Bethany Dr. Suite 380, Denver, CO 80014

Locations Where Intellectual Property is Located or Stored:
-----------------------------------------------------------

10800 E. Bethany Dr. Suite 380, Denver, CO 80014

List of Subsidiaries of the Company:
------------------------------------

o     IDNW Carrier Services, Inc. - Delaware Corp.

o     IDNW, Inc. - Delaware Corp.

o     Global Dollar, Inc. - Delaware Corp.

o     Dibz, Inc. - Delaware, Corp.

o     2Sendit, Inc. - Colorado Corp.

o     Adelant Telecom, Inc. - Nevada Corp.

                                  SCHEDULE B
                                  ----------

A.    Licenses, Patents and Patent Licenses
      -------------------------------------

Registration or
      Patent            Application or Registration No.     Country
      ------            -------------------------------     -------
                                                      Filing Date
                                                      -----------

      None.

B.    Trademarks and Trademark Licenses
      ---------------------------------

Registration or
      Trademark         Application or Registration No.     Country
      ---------         -------------------------------     -------
                                                      Filing Date
                                                      -----------

      Dibz, Inc         76-414755                     USA         11/09/2002

C.    Copyrights and Copyright Licenses
      ---------------------------------

Registration or
      Name              Application or Registration No.     Country
      ----              -------------------------------     -------
                                                      Filing Date
                                                      -----------

      None.

D.    Trade Secrets and Trade Secret Licenses
      ---------------------------------------

Registration or
      Name              Application or Registration No.     Country
      ----              -------------------------------     -------
                                                      Filing Date
                                                      -----------

      None.

                                  SCHEDULE C
                                  ----------
Jurisdictions:
-------------

Coloradoform-sb2_021113

                          REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (this  "Agreement"),  dated as of February 6,
2003,  by and  among  iDial  Networks,  Inc.,  a  Nevada  corporation  with  its
headquarters  located at 10800 East Bethany Drive,  Suite 380, Denver,  Colorado
80014  (the  "Company"),  and  each  of the  undersigned  (together  with  their
respective  affiliates and any assignee or transferee of all of their respective
rights hereunder, the "Initial Investors").

     WHEREAS:

A.   In  connection  with the  Securities  Purchase  Agreement  by and among the
     parties hereto of even date herewith (the "Securities Purchase Agreement"),
     the  Company  has  agreed,  upon the terms and  subject  to the  conditions
     contained  therein,  to  issue  and  sell  to  the  Initial  Investors  (i)
     convertible  debentures  in the aggregate  principal  amount of up to Seven
     Hundred Fifty  Thousand  Dollars  ($750,000)  (the  "Debentures")  that are
     convertible into shares of the Company's common stock (the "Common Stock"),
     upon the terms and subject to the  limitations  and conditions set forth in
     such Debentures and (ii) warrants (the  "Warrants") to acquire an aggregate
     of 2,250,000  shares of Common  Stock,  upon the terms and  conditions  and
     subject to the  limitations  and conditions set forth in the Warrants dated
     February 6, 2003; and

B.   To induce the Initial  Investors  to execute  and  deliver  the  Securities
     Purchase 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
     "1933 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 each of the
Initial Investors hereby agree as follows:

1.   DEFINITIONS.

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

          (i)  "Investors"  means the Initial  Investors  and any  transferee or
               assignee  who agrees to become  bound by the  provisions  of this
               Agreement in accordance with Section 9 hereof.

          (ii) "register,"   "registered,"   and   "registration"   refer  to  a
               registration  effected  by  preparing  and filing a  Registration
               Statement  or  Statements  in  compliance  with  the 1933 Act and
               pursuant  to Rule 415  under the 1933 Act or any  successor  rule
               providing for offering  securities  on a continuous  basis ("Rule
               415"),  and the declaration or ordering of  effectiveness of such
               Registration  Statement  by  the  United  States  Securities  and
               Exchange Commission (the "SEC").

          (iii)"Registrable  Securities"  means the Conversion  Shares issued or
               issuable upon conversion or otherwise  pursuant to the Debentures
               and Additional  Debentures (as defined in the Securities Purchase
               Agreement)  including,  without  limitation,  Damages  Shares (as
               defined in the  Debentures)  issued or  issuable  pursuant to the
               Debentures,  shares of Common Stock issued or issuable in payment
               of the  Standard  Liquidated  Damages  Amount (as  defined in the
               Securities  Purchase  Agreement),  shares  issued or  issuable in
               respect  of  interest  or in  redemption  of  the  Debentures  in
               accordance  with the terms thereof) and Warrant Shares  issuable,
               upon   exercise  or  otherwise   pursuant  to  the  Warrants  and
               Additional  Warrants  (as  defined  in  the  Securities  Purchase
               Agreement), and any shares of capital stock issued or issuable as
               a dividend on or in exchange for or otherwise with respect to any
               of the foregoing.

          (iv) "Registration  Statement"  means a registration  statement of the
               Company under the 1933 Act.

     b.   Capitalized  terms used herein and not otherwise  defined herein shall
          have the  respective  meanings  set forth in the  Securities  Purchase
          Agreement or the Convertible Debenture.

2.   REGISTRATION.

     a.   Mandatory Registration. The Company shall prepare, and, on or prior to
          thirty  (30)  days  from  the  date  of  Closing  (as  defined  in the
          Securities  Purchase Agreement) (the "Filing Date"), file with the SEC
          a  Registration  Statement  on Form S-3  (or,  if Form S-3 is not then
          available, on such form of Registration Statement as is then available
          to effect a registration of the Registrable Securities, subject to the
          consent  of  the  Initial   Investors,   which  consent  will  not  be
          unreasonably   withheld)   covering  the  resale  of  the  Registrable
          Securities  underlying the Debentures and Warrants  issued or issuable
          pursuant to the  Securities  Purchase  Agreement,  which  Registration
          Statement,  to the extent  allowable  under the 1933 Act and the rules
          and regulations  promulgated  thereunder  (including Rule 416),  shall
          state that such Registration  Statement also covers such indeterminate
          number of  additional  shares of Common  Stock as may become  issuable
          upon  conversion  of or  otherwise  pursuant  to  the  Debentures  and
          exercise of the  Warrants  to prevent  dilution  resulting  from stock
          splits, stock dividends or similar transactions.  The number of shares
          of Common  Stock  initially  included in such  Registration  Statement
          shall be no less than an amount  equal to two (2) times the sum of the
          number of Conversion  Shares that are then issuable upon conversion of
          the  Debentures  and  Additional  Debentures  (based  on the  Variable
          Conversion  Price as would then be in effect and assuming the Variable
          Conversion Price is the Conversion Price at such time), and the number
          of  Warrant  Shares  that  are  then  issuable  upon  exercise  of the
          Warrants,  without regard to any limitation on the Investor's  ability
          to convert  the  Debentures  or  exercise  the  Warrants.  The Company
          acknowledges  that the  number of  shares  initially  included  in the
          Registration Statement represents a good faith estimate of the maximum
          number of shares  issuable upon  conversion of the Debentures and upon
          exercise of the Warrants.

     b.   Underwritten  Offering.  If any  offering  pursuant to a  Registration
          Statement  pursuant to Section  2(a) hereof  involves an  underwritten
          offering,  the  Investors  who  hold a  majority  in  interest  of the
          Registrable Securities subject to such underwritten offering, with the
          consent of a majority-in-interest of the Initial Investors, shall have
          the right to select  one legal  counsel  and an  investment  banker or
          bankers  and manager or managers to  administer  the  offering,  which
          investment   banker  or  bankers  or  manager  or  managers  shall  be
          reasonably satisfactory to the Company.

     c.   Payments by the  Company.  The Company  shall use its best  efforts to
          obtain  effectiveness  of  the  Registration   Statement  as  soon  as
          practicable.   If  (i)  the  Registration  Statement(s)  covering  the
          Registrable Securities required to be filed by the Company pursuant to
          Section  2(a)  hereof  is not  filed by the  Filing  Date or  declared
          effective  by the SEC on or prior to one  hundred  (100) days from the
          date of Closing (as defined in the Securities Purchase Agreement),  or
          (ii) after the Registration  Statement has been declared  effective by
          the SEC,  sales of all of the  Registrable  Securities  cannot be made
          pursuant to the Registration  Statement,  or (iii) the Common Stock is
          not listed or included  for  quotation on the Nasdaq  National  Market
          ("Nasdaq"),  the Nasdaq SmallCap Market ("Nasdaq  SmallCap"),  the New
          York Stock  Exchange (the "NYSE") or the American  Stock Exchange (the
          "AMEX") after being so listed or included for  quotation,  or (iv) the
          Common  Stock  ceases to be traded  on the  Over-the-Counter  Bulletin
          Board (the "OTCBB") or any  equivalent  replacement  exchange prior to
          being  listed or included for  quotation on one of the  aforementioned
          markets,  then the Company will make payments to the Investors in such
          amounts  and at such  times as shall be  determined  pursuant  to this
          Section  2(c) as partial  relief for the damages to the  Investors  by
          reason of any such delay in or reduction of their  ability to sell the
          Registrable  Securities  (which  remedy  shall not be exclusive of any
          other remedies  available at law or in equity).  The Company shall pay
          to each holder of the Debentures or  Registrable  Securities an amount
          equal to the then outstanding principal amount of the Debentures (and,
          in the case of holders of Registrable Securities, the principal amount
          of Debentures from which such  Registrable  Securities were converted)
          ("Outstanding   Principal  Amount"),   multiplied  by  the  Applicable
          Percentage  (as  defined  below)  times the sum of:  (i) the number of
          months  (prorated for partial months) after the Filing Date or the end
          of the  aforementioned  one hundred  (100) day period and prior to the
          date the  Registration  Statement  is declared  effective  by the SEC,
          provided,  however,  that there shall be excluded from such period any
          delays  which are  solely  attributable  to  changes  required  by the
          Investors in the  Registration  Statement  with respect to information
          relating to the Investors,  including, without limitation,  changes to
          the  plan of  distribution,  or to the  failure  of the  Investors  to
          conduct their review of the Registration Statement pursuant to Section
          3(h) below in a reasonably  prompt  manner;  (ii) the number of months
          (prorated  for partial  months)  that sales of all of the  Registrable
          Securities cannot be made pursuant to the Registration Statement after
          the  Registration  Statement has been declared  effective  (including,
          without  limitation,  when  sales  cannot  be  made by  reason  of the
          Company's  failure  to  properly  supplement  or amend the  prospectus
          included  therein in accordance with the terms of this Agreement,  but
          excluding  any days  during an  Allowed  Delay (as  defined in Section
          3(f));  and (iii) the number of months  (prorated for partial  months)
          that the Common Stock is not listed or included  for  quotation on the
          OTCBB, Nasdaq,  Nasdaq SmallCap,  NYSE or AMEX or that trading thereon
          is  halted  after  the   Registration   Statement  has  been  declared
          effective.  The term  "Applicable  Percentage"  means  two  hundredths
          (.02). (For example,  if the Registration  Statement becomes effective
          one (1)  month  after  the end of such  one  hundred-day  period,  the
          Company  would pay $5,000 for each $250,000 of  Outstanding  Principal
          Amount.  If  thereafter,  sales  could  not be  made  pursuant  to the
          Registration  Statement for an additional period of one (1) month, the
          Company  would  pay  an   additional   $5,000  for  each  $250,000  of
          Outstanding  Principal Amount.) Such amounts shall be paid in cash or,
          at each  Investor's  option,  in shares of Common  Stock priced at the
          Conversion Price (as defined in the Debentures) on such payment date.

     d.   Piggy-Back Registrations. Subject to the last sentence of this Section
          2(d),  if at any time  prior  to the  expiration  of the  Registration
          Period (as  hereinafter  defined) the Company shall  determine to file
          with the SEC a Registration  Statement relating to an offering for its
          own account or the account of others  under the 1933 Act of any of its
          equity  securities  (other  than on Form S-4 or Form S-8 or their then
          equivalents  relating  to equity  securities  to be  issued  solely in
          connection  with any  acquisition  of any entity or business or equity
          securities  issuable  in  connection  with stock  option or other bona
          fide, employee benefit plans), the Company shall send to each Investor
          who is entitled to registration rights under this Section 2(d) written
          notice of such  determination  and, if within  fifteen (15) days after
          the effective  date of such notice,  such Investor shall so request in
          writing, the Company shall include in such Registration  Statement all
          or any part of the Registrable Securities such Investor requests to be
          registered, except that if, in connection with any underwritten public
          offering  for the account of the Company the  managing  underwriter(s)
          thereof  shall impose a  limitation  on the number of shares of Common
          Stock which may be included in the Registration  Statement because, in
          such underwriter(s)' judgment, marketing or other factors dictate such
          limitation is necessary to facilitate  public  distribution,  then the
          Company shall be obligated to include in such  Registration  Statement
          only such limited portion of the  Registrable  Securities with respect
          to which  such  Investor  has  requested  inclusion  hereunder  as the
          underwriter  shall  permit.  Any exclusion of  Registrable  Securities
          shall  be made  pro  rata  among  the  Investors  seeking  to  include
          Registrable  Securities  in  proportion  to the number of  Registrable
          Securities sought to be included by such Investors; provided, however,
          that the Company shall not exclude any Registrable  Securities  unless
          the Company has first excluded all outstanding securities, the holders
          of which are not  entitled to  inclusion  of such  securities  in such
          Registration  Statement or are not entitled to pro rata inclusion with
          the Registrable  Securities;  and provided,  further,  however,  that,
          after  giving  effect  to  the  immediately   preceding  proviso,  any
          exclusion  of  Registrable  Securities  shall be made  pro  rata  with
          holders  of  other  securities   having  the  right  to  include  such
          securities  in  the  Registration  Statement  other  than  holders  of
          securities   entitled  to  inclusion  of  their   securities  in  such
          Registration  Statement by reason of demand  registration  rights.  No
          right to  registration  of Registrable  Securities  under this Section
          2(d)  shall be  construed  to limit any  registration  required  under
          Section  2(a)  hereof.  If an  offering  in  connection  with which an
          Investor is entitled to  registration  under this  Section  2(d) is an
          underwritten offering, then each Investor whose Registrable Securities
          are included in such  Registration  Statement shall,  unless otherwise
          agreed by the Company,  offer and sell such Registrable  Securities in
          an  underwritten  offering using the same  underwriter or underwriters
          and,  subject to the provisions of this  Agreement,  on the same terms
          and  conditions  as other  shares of  Common  Stock  included  in such
          underwritten  offering.  Notwithstanding  anything to the contrary set
          forth herein,  the  registration  rights of the Investors  pursuant to
          this  Section  2(d) shall only be  available  in the event the Company
          fails to timely file, obtain  effectiveness or maintain  effectiveness
          of any Registration  Statement to be filed pursuant to Section 2(a) in
          accordance with the terms of this Agreement.

     e.   Eligibility  for Form S-3,  SB-2 or S-1;  Conversion  to Form S-3. The
          Company represents and warrants that it meets the requirements for the
          use of  Form  S-3,  SB-2 or S-1 for  registration  of the  sale by the
          Initial   Investors  and  any  other   Investors  of  the  Registrable
          Securities.  The  Company  agrees to file all  reports  required to be
          filed by the Company  with the SEC in a timely  manner so as to remain
          eligible or become  eligible,  as the case may be, and  thereafter  to
          maintain its  eligibility,  for the use of Form S-3. If the Company is
          not  currently  eligible  to use Form  S-3,  not  later  than five (5)
          business  days  after  the  Company   first  meets  the   registration
          eligibility and transaction  requirements  for the use of Form S-3 (or
          any  successor  form)  for  registration  of the offer and sale by the
          Initial  Investors and any other Investors of Registrable  Securities,
          the Company shall file a  Registration  Statement on Form S-3 (or such
          successor form) with respect to the Registrable  Securities covered by
          the  Registration  Statement  on Form SB-2 or Form S-1,  whichever  is
          applicable,  filed  pursuant  to  Section  2(a) (and  include  in such
          Registration  Statement on Form S-3 the  information  required by Rule
          429 under the 1933 Act) or convert the Registration  Statement on Form
          SB-2 or Form S-1,  whichever is applicable,  filed pursuant to Section
          2(a) to a Form S-3  pursuant  to Rule 429 under the 1933 Act and cause
          such  Registration  Statement  (or  such  amendment)  to  be  declared
          effective  no later than  forty-five  (45) days after  filing.  In the
          event of a breach by the  Company of the  provisions  of this  Section
          2(e),  the  Company  will be  required  to make  payments  pursuant to
          Section 2(c) hereof.

3.   OBLIGATIONS OF THE COMPANY.

     In connection  with the  registration of the  Registrable  Securities,  the
Company shall have the following obligations:

     a.   The Company  shall prepare  promptly,  and file with the SEC not later
          than the Filing Date,  a  Registration  Statement  with respect to the
          number  of  Registrable  Securities  provided  in  Section  2(a),  and
          thereafter use its best efforts to cause such  Registration  Statement
          relating to  Registrable  Securities  to become  effective  as soon as
          possible  after  such  filing but in no event  later than one  hundred
          (100)  days  from the  date of  Closing),  and  keep the  Registration
          Statement  effective pursuant to Rule 415 at all times until such date
          as is the  earlier  of (i) the  date on which  all of the  Registrable
          Securities  have been sold and (ii) the date on which the  Registrable
          Securities (in the opinion of counsel to the Initial Investors) may be
          immediately  sold to the public  without  registration  or restriction
          (including  without  limitation  as to volume by each holder  thereof)
          under the 1933 Act (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  not
          misleading.

     b.   The  Company  shall  prepare  and file  with  the SEC such  amendments
          (including   post-effective   amendments)   and   supplements  to  the
          Registration Statements and the prospectus used in connection with the
          Registration  Statements as may be necessary to keep the  Registration
          Statements effective at all times during the Registration Period, and,
          during such period,  comply with the  provisions  of the 1933 Act with
          respect  to the  disposition  of  all  Registrable  Securities  of the
          Company covered by the Registration  Statements until such time as all
          of such  Registrable  Securities  have been  disposed of in accordance
          with the  intended  methods  of  disposition  by the seller or sellers
          thereof as set forth in the Registration Statements.  In the event the
          number  of  shares  available  under a  Registration  Statement  filed
          pursuant  to  this  Agreement  is  insufficient  to  cover  all of the
          Registrable  Securities  issued or  issuable  upon  conversion  of the
          Debentures  and exercise of the Warrants,  the Company shall amend the
          Registration  Statement,  or file a new Registration Statement (on the
          short form available therefor, if applicable), or both, so as to cover
          all  of  the  Registrable  Securities,   in  each  case,  as  soon  as
          practicable,  but in any event  within  fifteen  (15)  days  after the
          necessity  therefor  arises  (based on the market  price of the Common
          Stock and other  relevant  factors  on which  the  Company  reasonably
          elects to rely).  The Company shall use its best efforts to cause such
          amendment  and/or new  Registration  Statement to become  effective as
          soon as  practicable  following the filing  thereof,  but in any event
          within thirty (30) days after the date on which the Company reasonably
          first  determines  (or  reasonably  should have  determined)  the need
          therefor.  The  provisions  of Section 2(c) above shall be  applicable
          with  respect  to such  obligation,  with the one  hundred  (100) days
          running  from the day the  Company  reasonably  first  determines  (or
          reasonably should have determined) the need therefor.

     c.   The  Company  shall  furnish  to  each  Investor   whose   Registrable
          Securities  are  included in a  Registration  Statement  and its legal
          counsel (i) promptly (but in no event more than two (2) business days)
          after the same is prepared  and publicly  distributed,  filed with the
          SEC,  or  received  by the  Company,  one  copy of  each  Registration
          Statement and any amendment thereto,  each preliminary  prospectus and
          prospectus and each amendment or supplement thereto,  and, in the case
          of the Registration Statement referred to in Section 2(a), each letter
          written by or on behalf of the  Company to the SEC or the staff of the
          SEC, and each item of correspondence  from the SEC or the staff of the
          SEC, in each case relating to such Registration  Statement (other than
          any portion of any thereof which  contains  information  for which the
          Company has sought confidential treatment),  and (ii) promptly (but in
          no event  more than two (2)  business  days)  after  the  Registration
          Statement is declared effective by the SEC, such number of copies of a
          prospectus, including a preliminary prospectus, and all amendments and
          supplements  thereto and such other  documents  as such  Investor  may
          reasonably  request  in order to  facilitate  the  disposition  of the
          Registrable  Securities  owned  by such  Investor.  The  Company  will
          immediately  notify each Investor by facsimile of the effectiveness of
          each  Registration  Statement  or any  post-effective  amendment.  The
          Company  will  promptly  (but in no event more than five (5)  business
          days)  respond to any and all  comments  received  from the SEC (which
          comments  shall  promptly  be made  available  to the  Investors  upon
          request),  with a view towards causing each Registration  Statement or
          any amendment  thereto to be declared  effective by the SEC as soon as
          practicable,  shall promptly file an  acceleration  request as soon as
          practicable  (but  in no  event  more  than  two  (2)  business  days)
          following  the  resolution  or  clearance  of all SEC  comments or, if
          applicable,   following   notification   by  the  SEC  that  any  such
          Registration Statement or any amendment thereto will not be subject to
          review and shall promptly file with the SEC a final prospectus as soon
          as  practicable  (but in no event  more  than two (2)  business  days)
          following  receipt by the Company  from the SEC of an order  declaring
          the Registration Statement effective.  In the event of a breach by the
          Company of the  provisions of this Section  3(c),  the Company will be
          required to make payments pursuant to Section 2(c) hereof.

     d.   The Company shall use  reasonable  efforts to (i) register and qualify
          the  Registrable  Securities  covered by the  Registration  Statements
          under such other  securities or "blue sky" laws of such  jurisdictions
          in the United  States as the Investors who hold a majority in interest
          of the Registrable  Securities being offered reasonably request,  (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 (a) qualify to do business in
          any  jurisdiction  where it would not otherwise be required to qualify
          but for this Section 3(d), (b) subject  itself to general  taxation in
          any such  jurisdiction,  (c) file a  general  consent  to  service  of
          process in any such  jurisdiction,  (d) provide any undertakings  that
          cause the Company undue  expense or burden,  or (e) make any change in
          its charter or bylaws,  which in each case the Board of  Directors  of
          the Company  determines  to be contrary to the best  interests  of the
          Company and its shareholders.

     e.   In  the  event  Investors  who  hold  a  majority-in-interest  of  the
          Registrable  Securities  being  offered  in  the  offering  (with  the
          approval of a  majority-in-interest  of the Initial  Investors) select
          underwriters  for the  offering,  the  Company  shall  enter  into and
          perform its obligations under an underwriting  agreement, in usual and
          customary   form,    including,    without    limitation,    customary
          indemnification and contribution obligations, with the underwriters of
          such offering.

     f.   As promptly as practicable  after  becoming  aware of such event,  the
          Company shall notify each  Investor of the happening of any event,  of
          which the Company has  knowledge,  as a result of which the prospectus
          included in any 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 not misleading, and use its best efforts promptly to prepare a
          supplement or amendment to any Registration  Statement to correct such
          untrue  statement  or  omission,  and deliver such number of copies of
          such  supplement  or amendment to each  Investor as such  Investor may
          reasonably  request;  provided  that,  for  not  more  than  ten  (10)
          consecutive  trading  days (or a total of not more  than  twenty  (20)
          trading days in any twelve (12) month  period),  the Company may delay
          the  disclosure  of material  non-public  information  concerning  the
          Company (as well as prospectus or Registration Statement updating) the
          disclosure  of which at the time is not, in the good faith  opinion of
          the  Company,  in the  best  interests  of the  Company  (an  "Allowed
          Delay"); provided, further, that the Company shall promptly (i) notify
          the Investors in writing of the existence of (but in no event, without
          the prior written consent of an Investor,  shall the Company  disclose
          to such investor any of the facts or circumstances regarding) material
          non-public information giving rise to an Allowed Delay and (ii) advise
          the  Investors  in writing to cease all sales under such  Registration
          Statement  until the end of the Allowed Delay.  Upon expiration of the
          Allowed Delay,  the Company shall again be bound by the first sentence
          of this  Section  3(f) with  respect to the  information  giving  rise
          thereto.

     g.   The Company  shall use its best efforts to prevent the issuance of any
          stop order or other  suspension of  effectiveness  of any Registration
          Statement,  and, if such an order is issued,  to obtain the withdrawal
          of such  order at the  earliest  possible  moment  and to notify  each
          Investor who holds Registrable Securities being sold (or, in the event
          of  an  underwritten  offering,  the  managing  underwriters)  of  the
          issuance of such order and the resolution thereof.

     h.   The Company  shall permit a single firm of counsel  designated  by the
          Initial  Investors  to  review  such  Registration  Statement  and all
          amendments  and  supplements  thereto  (as  well as all  requests  for
          acceleration  or  effectiveness  thereof) a reasonable  period of time
          prior to their  filing  with the SEC,  and not file any  document in a
          form to which such  counsel  reasonably  objects  and will not request
          acceleration of such  Registration  Statement  without prior notice to
          such counsel.  The sections of such  Registration  Statement  covering
          information with respect to the Investors,  the Investor's  beneficial
          ownership  of  securities  of the  Company or the  Investors  intended
          method of disposition of Registrable  Securities  shall conform to the
          information provided to the Company by each of the Investors.

     i.   The Company shall make generally  available to its security holders as
          soon as  practicable,  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 1933 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.

     j.   At the request of any Investor, the Company shall furnish, on the date
          that Registrable  Securities are delivered to an underwriter,  if any,
          for sale in  connection  with any  Registration  Statement or, if such
          securities  are not  being  sold  by an  underwriter,  on the  date of
          effectiveness  thereof  (i) an  opinion,  dated as of such date,  from
          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 underwriters,  if any,
          and the  Investors  and  (ii) 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,
          addressed to the underwriters, if any, and the Investors.

     k.   The Company shall make  available for  inspection by (i) any Investor,
          (ii) any underwriter  participating  in any disposition  pursuant to a
          Registration  Statement,  (iii) one firm of attorneys  and one firm of
          accountants or other agents  retained by the Initial  Investors,  (iv)
          one firm of  attorneys  and one firm of  accountants  or other  agents
          retained  by all  other  Investors,  and  (v) one  firm  of  attorneys
          retained by all such underwriters (collectively, the "Inspectors") all
          pertinent  financial  and  other  records,   and  pertinent  corporate
          documents and properties of the Company, including without limitation,
          records of  conversions  by other  holders of  convertible  securities
          issued  by the  Company  and the  issuance  of stock  to such  holders
          pursuant to the conversions (collectively, the "Records"), as shall be
          reasonably deemed necessary by each Inspector to enable each Inspector
          to exercise its due diligence responsibility,  and cause the Company's
          officers,  directors and employees to supply all information which any
          Inspector may  reasonably  request for purposes of such due diligence;
          provided,  however,  that each Inspector  shall hold in confidence and
          shall not make any disclosure (except to an Investor) 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,  (b) the release of such  Records is ordered  pursuant to a
          subpoena or other 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.  The Company  shall not be
          required to disclose any  confidential  information in such Records to
          any Inspector  until and unless such Inspector shall have entered into
          confidentiality  agreements (in form and substance satisfactory to the
          Company) with the Company with respect  thereto,  substantially in the
          form of this Section 3(k).  Each 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.
          Nothing herein (or in any other confidentiality  agreement between the
          Company  and any  Investor)  shall be deemed  to limit the  Investor's
          ability to sell Registrable  Securities in a manner which is otherwise
          consistent with applicable laws and regulations.

     l.   The Company  shall hold in confidence  and not make any  disclosure of
          information  concerning an 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  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 or any other  agreement.  The Company
          agrees  that  it  shall,   upon  learning  that   disclosure  of  such
          information  concerning  an  Investor  is  sought  in or by a court or
          governmental  body of competent  jurisdiction  or through other means,
          give prompt notice to such Investor  prior to making such  disclosure,
          and allow the  Investor,  at its  expense,  to  undertake  appropriate
          action to prevent  disclosure of, or to obtain a protective order for,
          such information.

     m.   The Company shall (i) cause all the Registrable  Securities covered by
          the  Registration  Statement to be listed on each national  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 (ii)
          to the extent the  securities of the same class or series are not then
          listed on a national securities  exchange,  secure the designation and
          quotation,   of  all  the  Registrable   Securities   covered  by  the
          Registration  Statement on Nasdaq or, if not  eligible for Nasdaq,  on
          Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap,  on
          the OTCBB and,  without  limiting the generality of the foregoing,  to
          arrange for at least two market  makers to register  with the National
          Association of Securities Dealers,  Inc. ("NASD") as such with respect
          to such Registrable Securities.

     n.   The Company shall provide a transfer agent and registrar, which may be
          a single  entity,  for the  Registrable  Securities not later than the
          effective date of the Registration Statement.

     o.   The Company shall  cooperate  with the Investors who hold  Registrable
          Securities being offered and the managing underwriter or underwriters,
          if  any,  to  facilitate  the  timely   preparation  and  delivery  of
          certificates  (not  bearing  any  restrictive  legends)   representing
          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  managing   underwriter  or
          underwriters,  if any, or the  Investors  may  reasonably  request and
          registered in such names as the managing  underwriter or underwriters,
          if any, or the Investors may request,  and,  within three (3) business
          days  after  a  Registration   Statement  which  includes  Registrable
          Securities is ordered effective by the SEC, the Company shall deliver,
          and shall cause legal counsel  selected by the Company to deliver,  to
          the transfer agent for the Registrable  Securities (with copies to the
          Investors   whose   Registrable   Securities   are  included  in  such
          Registration  Statement) an instruction in the form attached hereto as
          Exhibit 1 and an opinion of such counsel in the form  attached  hereto
          as Exhibit 2.

     p.   At  the  request  of  the  holders  of a  majority-in-interest  of the
          Registrable  Securities,  the Company  shall prepare and file with the
          SEC  such  amendments   (including   post-effective   amendments)  and
          supplements  to a Registration  Statement and any  prospectus  used in
          connection  with the  Registration  Statement  as may be  necessary in
          order  to  change  the  plan  of   distribution   set  forth  in  such
          Registration Statement.

     q.   From and after the date of this Agreement,  the Company shall not, and
          shall not agree to, allow the holders of any securities of the Company
          to include any of their securities in any Registration Statement under
          Section  2(a) hereof or any  amendment  or  supplement  thereto  under
          Section  3(b)  hereof   without  the  consent  of  the  holders  of  a
          majority-in-interest of the Registrable Securities.

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

4. OBLIGATIONS OF THE INVESTORS.

     In connection  with the  registration of the  Registrable  Securities,  the
Investors shall have the following obligations:

     a.   It shall be a condition precedent to the obligations of the Company to
          complete the  registration  pursuant to this Agreement with respect to
          the Registrable Securities of a particular Investor that such Investor
          shall furnish to the Company such information  regarding  itself,  the
          Registrable   Securities  held  by  it  and  the  intended  method  of
          disposition  of the  Registrable  Securities  held by it as  shall  be
          reasonably  required to effect the  registration  of such  Registrable
          Securities  and shall execute such  documents in connection  with such
          registration as the Company may reasonably request. At least three (3)
          business  days  prior  to the  first  anticipated  filing  date of the
          Registration Statement,  the Company shall notify each Investor of the
          information the Company requires from each such Investor.

     b.   Each  Investor,  by  such  Investor's  acceptance  of the  Registrable
          Securities,  agrees  to  cooperate  with  the  Company  as  reasonably
          requested by the Company in connection with the preparation and filing
          of the  Registration  Statements  hereunder,  unless such Investor has
          notified the Company in writing of such Investor's election to exclude
          all of such Investor's  Registrable  Securities from the  Registration
          Statements.

     c.   In  the  event  Investors  holding  a   majority-in-interest   of  the
          Registrable  Securities  being  registered  (with the  approval of the
          Initial Investors) determine to engage the services of an underwriter,
          each  Investor  agrees  to enter  into  and  perform  such  Investor's
          obligations  under an underwriting  agreement,  in usual and customary
          form,  including,  without limitation,  customary  indemnification and
          contribution  obligations,  with  the  managing  underwriter  of  such
          offering  and take such other  actions as are  reasonably  required in
          order to expedite or facilitate  the  disposition  of the  Registrable
          Securities,  unless such  Investor has notified the Company in writing
          of  such  Investor's  election  to  exclude  all  of  such  Investor's
          Registrable Securities from such Registration Statement.

     d.   Each 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
          3(g),  such  Investor  will  immediately  discontinue  disposition  of
          Registrable Securities pursuant to the Registration Statement covering
          such  Registrable  Securities  until  such  Investor's  receipt of the
          copies of the  supplemented  or  amended  prospectus  contemplated  by
          Section 3(f) or 3(g) and, if so directed by the Company, such Investor
          shall  deliver  to the  Company  (at the  expense of the  Company)  or
          destroy (and deliver to the Company a certificate of destruction)  all
          copies in such Investor's possession,  of the prospectus covering such
          Registrable Securities current at the time of receipt of such notice.

     e.   No Investor may participate in any underwritten registration hereunder
          unless such  Investor (i) agrees to sell such  Investor's  Registrable
          Securities on the basis provided in any  underwriting  arrangements in
          usual and customary  form entered into by the Company,  (ii) completes
          and executes  all  questionnaires,  powers of  attorney,  indemnities,
          underwriting  agreements and other documents reasonably required under
          the terms of such underwriting  arrangements,  and (iii) agrees to pay
          its pro rata share of all  underwriting  discounts and commissions and
          any  expenses in excess of those  payable by the  Company  pursuant to
          Section 5 below.

5. EXPENSES OF REGISTRATION.

          All  reasonable  expenses,   other  than  underwriting  discounts  and
     commissions,   incurred  in  connection  with  registrations,   filings  or
     qualifications pursuant to Sections 2 and 3, including, without limitation,
     all registration,  listing and qualification  fees, printers and accounting
     fees,  the fees and  disbursements  of  counsel  for the  Company,  and the
     reasonable fees and  disbursements  of one counsel  selected by the Initial
     Investors  pursuant to Sections  2(b) and 3(h) hereof shall be borne by the
     Company.

6. INDEMNIFICATION.

     In the event any  Registrable  Securities  are  included in a  Registration
Statement under this Agreement:

     a.   To the extent  permitted  by law,  the Company  will  indemnify,  hold
          harmless  and defend  (i) each  Investor  who holds  such  Registrable
          Securities, (ii) the directors,  officers, partners, employees, agents
          and each person who controls  any  Investor  within the meaning of the
          1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
          Act"),  if any, (iii) any underwriter (as defined in the 1933 Act) for
          the Investors, and (iv) the directors,  officers,  partners, employees
          and each person who controls any such  underwriter  within the meaning
          of the  1933  Act or the  1934  Act,  if any  (each,  an  "Indemnified
          Person"),  against  any  joint or  several  losses,  claims,  damages,
          liabilities   or  expenses   (collectively,   together  with  actions,
          proceedings  or  inquiries  by  any   regulatory  or   self-regulatory
          organization,  whether  commenced or threatened,  in respect  thereof,
          "Claims")  to which any of them may  become  subject  insofar  as such
          Claims  arise out of or are based upon:  (i) any untrue  statement  or
          alleged  untrue  statement  of  a  material  fact  in  a  Registration
          Statement  or the  omission  or alleged  omission  to state  therein a
          material  fact  required  to  be  stated  or  necessary  to  make  the
          statements  therein  not  misleading;  (ii) any  untrue  statement  or
          alleged  untrue   statement  of  a  material  fact  contained  in  any
          preliminary  prospectus  if used prior to the  effective  date of such
          Registration  Statement,  or  contained  in the 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 the statements
          therein were made, not  misleading;  or (iii) any violation or alleged
          violation by the Company of the 1933 Act, the 1934 Act, any other law,
          including,  without limitation,  any state securities law, or any rule
          or  regulation  thereunder  relating  to  the  offer  or  sale  of the
          Registrable  Securities  (the  matters in the  foregoing  clauses  (i)
          through  (iii)  being,  collectively,  "Violations").  Subject  to the
          restrictions  set forth in Section  6(c) with respect to the number of
          legal counsel,  the Company shall  reimburse the  Indemnified  Person,
          promptly as such  expenses are  incurred and are due and payable,  for
          any reasonable  legal fees 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):  (i) shall
          not apply to a Claim  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 any Indemnified Person or underwriter for
          such  Indemnified  Person  expressly  for use in  connection  with the
          preparation  of such  Registration  Statement  or any  such  amendment
          thereof or  supplement  thereto,  if such  prospectus  was timely made
          available by the Company  pursuant to Section 3(c) hereof;  (ii) 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; and (iii)
          with  respect to any  preliminary  prospectus,  shall not inure to the
          benefit of any Indemnified  Person if the untrue statement or omission
          of material fact contained in the preliminary prospectus was corrected
          on a timely basis in the prospectus,  as then amended or supplemented,
          such  corrected  prospectus  was timely made  available by the Company
          pursuant  to  Section  3(c)  hereof,  and the  Indemnified  Person was
          promptly advised in writing not to use the incorrect  prospectus prior
          to the use giving rise to a  Violation  and such  Indemnified  Person,
          notwithstanding  such advice,  used it. Such indemnity shall remain in
          full force and effect  regardless of any  investigation  made by or on
          behalf of the Indemnified Person and shall survive the transfer of the
          Registrable Securities by the Investors pursuant to Section 9.

     b.   In connection with any Registration  Statement in which an Investor is
          participating,  each such Investor agrees severally and not jointly to
          indemnify,  hold  harmless  and defend,  to the same extent and in the
          same  manner  set forth in  Section  6(a),  the  Company,  each of its
          directors,  each of its officers who signs the Registration Statement,
          each person,  if any,  who controls the Company  within the meaning of
          the  1933  Act  or  the  1934  Act,  any  underwriter  and  any  other
          shareholder selling securities pursuant to the Registration  Statement
          or any of its  directors or officers or any person who  controls  such
          shareholder or  underwriter  within the meaning of the 1933 Act or the
          1934 Act  (collectively  and together with an Indemnified  Person,  an
          "Indemnified  Party"),  against  any  Claim to  which  any of them may
          become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
          as such Claim  arises out of or is based  upon any  Violation  by such
          Investor,  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 such  Investor  expressly for
          use in connection  with such  Registration  Statement;  and subject to
          Section 6(c) such Investor will  reimburse any legal or other expenses
          (promptly  as such  expenses  are  incurred  and are due and  payable)
          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) shall not apply to amounts
          paid in settlement of any Claim if such settlement is effected without
          the prior written consent of such Investor, which consent shall not be
          unreasonably withheld;  provided,  further, however, that the Investor
          shall be liable under this Agreement  (including this Section 6(b) and
          Section 7) for only that amount as does not exceed the net proceeds to
          such  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 and shall survive the transfer of the
          Registrable  Securities  by  the  Investors  pursuant  to  Section  9.
          Notwithstanding   anything  to  the  contrary  contained  herein,  the
          indemnification  agreement contained in this Section 6(b) with respect
          to any  preliminary  prospectus  shall not inure to the benefit of any
          Indemnified Party if the untrue statement or omission of material fact
          contained  in the  preliminary  prospectus  was  corrected on a timely
          basis in the prospectus, as then amended or supplemented.

     c.   Promptly after receipt by an Indemnified  Person or Indemnified  Party
          under  this  Section  6 of notice of the  commencement  of any  action
          (including  any  governmental  action),  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 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 indemnifying party
          shall pay for only one  separate  legal  counsel  for the  Indemnified
          Persons or the  Indemnified  Parties,  as  applicable,  and such legal
          counsel shall be selected by Investors holding a  majority-in-interest
          of the Registrable  Securities included in the Registration  Statement
          to   which   the   Claim    relates    (with   the   approval   of   a
          majority-in-interest  of the Initial Investors),  if the Investors are
          entitled to indemnification  hereunder, or the Company, if the Company
          is entitled to indemnification  hereunder, as applicable.  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 actually  prejudiced in its ability to
          defend such  action.  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 such expense,  loss, damage
          or liability is incurred and is due and payable.

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
contribution  shall be made under  circumstances  where the maker would not have
been liable for  indemnification  under the fault standards set forth in Section
6,  (ii)  no   seller   of   Registrable   Securities   guilty   of   fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of such fraudulent  misrepresentation,  and (iii) contribution  (together
with any  indemnification  or other  obligations  under this  Agreement)  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 1934 ACT.

     With a view to making  available to the  Investors the benefits of Rule 144
promulgated  under the 1933 Act or any other  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 1933 Act and the 1934 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 4(c) of the Securities  Purchase  Agreement) and the filing of
          such  reports  and other  documents  is  required  for the  applicable
          provisions of Rule 144; and

     c.   furnish to each  Investor so long as such  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 1933 Act and the 1934  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  Investors  to sell such
          securities pursuant to Rule 144 without registration.

9. ASSIGNMENT OF REGISTRATION RIGHTS.

     The rights under this Agreement  shall be  automatically  assignable by the
Investors to any transferee of all or any portion of Registrable  Securities if:
(i) the  Investor  agrees in writing with the  transferee  or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such assignment,  (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such  transferee or assignee,  and (b) the  securities  with
respect to which such  registration  rights are being  transferred  or assigned,
(iii)  following  such transfer or assignment,  the further  disposition of such
securities by the  transferee  or assignee is restricted  under the 1933 Act and
applicable  state  securities  laws,  (iv) at or  before  the time  the  Company
receives the written notice  contemplated  by clause (ii) of this sentence,  the
transferee or assignee  agrees in writing with the Company to be bound by all of
the  provisions  contained  herein,  (v) such  transfer  shall have been made in
accordance  with  the  applicable   requirements  of  the  Securities   Purchase
Agreement,  and (vi) such transferee  shall be an "accredited  investor" as that
term defined in Rule 501 of Regulation D promulgated under the 1933 Act.

10. 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 with written consent of the Company, each of the Initial
Investors  (to  the  extent  such  Initial   Investor  still  owns   Registrable
Securities)  and  Investors  who hold a  majority  interest  of the  Registrable
Securities.  Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company.

11. MISCELLANEOUS.

     a.   A person or entity is deemed to be a holder of Registrable  Securities
          whenever  such  person  or  entity  owns of  record  such  Registrable
          Securities. If the Company receives conflicting instructions,  notices
          or elections  from two or more persons or entities 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  required or  permitted to be given under the terms hereof
          shall  be  sent  by  certified  or  registered  mail  (return  receipt
          requested)  or  delivered   personally  or  by  courier  (including  a
          recognized  overnight  delivery  service) or by facsimile and shall be
          effective  five days  after  being  placed  in the mail,  if mailed by
          regular United States mail, or upon receipt,  if delivered  personally
          or by courier  (including a recognized  overnight delivery service) or
          by  facsimile,  in each case  addressed to a party.  The addresses for
          such communications shall be:

                  If to the Company:

                  iDial Networks, Inc.
                  10800 East Bethany Drive
                  Suite 380
                  Denver, Colorado 80014
                  Attention:  Mark T. Wood
                  Telephone:  281-465-3100
                  Facsimile:  281-292-8083

                  With copies to:

                  Sichenzia Ross Friedman Ference LLP
                  1065 Avenue of the Americas, 21st Floor
                  New York, New York 10018
                  Attention:  Gregory Sichenzia, Esq.
                  Telephone:  (212) 930-9700
                  Facsimile:   (212) 930-9725
                  Email:  GSichenzia@srfllp.net

If to an Investor:  to the address set forth  immediately  below such Investor's
name on the signature pages to the Securities Purchase Agreement.

                  With a copy to:

                  Ballard Spahr Andrews & Ingersoll, LLP
                  1735 Market Street
                  51st Floor
                  Philadelphia, Pennsylvania  19103
                  Attention:  Gerald J. Guarcini, Esq.
                  Telephone:  215-865-8625
                  Facsimile:  215-864-8999
                  Email:  guarcini@ballardspahr.com

     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  ENFORCED,  GOVERNED  BY AND  CONSTRUED  IN
          ACCORDANCE  WITH THE  LAWS OF THE  STATE  OF NEW  YORK  APPLICABLE  TO
          AGREEMENTS  MADE  AND TO BE  PERFORMED  ENTIRELY  WITHIN  SUCH  STATE,
          WITHOUT  REGARD TO THE  PRINCIPLES  OF CONFLICT  OF LAWS.  THE PARTIES
          HERETO  HEREBY  SUBMIT TO THE  EXCLUSIVE  JURISDICTION  OF THE  UNITED
          STATES  FEDERAL  COURTS LOCATED NEW YORK, NEW YORK WITH RESPECT TO ANY
          DISPUTE ARISING UNDER THIS AGREEMENT,  THE AGREEMENTS  ENTERED INTO IN
          CONNECTION  HEREWITH  OR  THE  TRANSACTIONS   CONTEMPLATED  HEREBY  OR
          THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
          FORUM TO THE  MAINTENANCE  OF SUCH SUIT OR  PROCEEDING.  BOTH  PARTIES
          FURTHER  AGREE THAT  SERVICE OF PROCESS  UPON A PARTY  MAILED BY FIRST
          CLASS  MAIL  SHALL BE DEEMED IN EVERY  RESPECT  EFFECTIVE  SERVICE  OF
          PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN
          SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
          PERMITTED  BY LAW.  BOTH  PARTIES  AGREE  THAT A FINAL  NON-APPEALABLE
          JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
          ENFORCED  IN OTHER  JURISDICTIONS  BY SUIT ON SUCH  JUDGMENT OR IN ANY
          OTHER LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE
          ARISING UNDER THIS  AGREEMENT  SHALL BE  RESPONSIBLE  FOR ALL FEES AND
          EXPENSES,  INCLUDING ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY
          IN CONNECTION WITH SUCH DISPUTE.

     e.   In the event  that any  provision  of this  Agreement  is  invalid  or
          unenforceable  under any applicable  statute or rule of law, then such
          provision  shall  be  deemed  inoperative  to the  extent  that it may
          conflict  therewith and shall be deemed  modified to conform with such
          statute or rule of law. Any  provision  hereof which may prove invalid
          or  unenforceable  under any law  shall not  affect  the  validity  or
          enforceability of any other provision hereof.

     f.   This  Agreement,  the Warrants and the Securities  Purchase  Agreement
          (including all schedules and exhibits  thereto)  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  and  the  Securities   Purchase  Agreement
          supersede all prior  agreements and  understandings  among the parties
          hereto with respect to the subject matter hereof and thereof.

     g.   Subject to the requirements of Section 9 hereof,  this Agreement shall
          be  binding  upon and inure to the  benefit of the  parties  and their
          successors and assigns.

     h.   The headings in this  Agreement are for  convenience of reference only
          and shall not form part of, or  affect  the  interpretation  of,  this
          Agreement.

     i.   This  Agreement may be executed in two or more  counterparts,  each of
          which  shall be deemed an original  but all of which shall  constitute
          one  and  the  same   agreement  and  shall  become   effective   when
          counterparts have been signed by each party and delivered to the other
          party.  This Agreement,  once executed by a party, may be delivered to
          the other party  hereto by  facsimile  transmission  of a copy of this
          Agreement  bearing  the  signature  of the  party so  delivering  this
          Agreement.

     j.   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.

     k.   Except  as  otherwise   provided   herein,   all  consents  and  other
          determinations to be made by the Investors  pursuant to this Agreement
          shall be made by  Investors  holding  a  majority  of the  Registrable
          Securities,   determined  as  if  the  all  of  the  Debentures   then
          outstanding have been converted into for Registrable Securities.

     l.   The  Company  acknowledges  that a  breach  by it of  its  obligations
          hereunder  will cause  irreparable  harm to each Investor by vitiating
          the  intent  and  purpose  of the  transactions  contemplated  hereby.
          Accordingly,  the  Company  acknowledges  that the  remedy  at law for
          breach of its obligations  under this Agreement will be inadequate and
          agrees,  in the event of a breach or threatened  breach by the Company
          of any of the  provisions  under this  Agreement,  that each  Investor
          shall be entitled,  in addition to all other available remedies in law
          or in equity,  and in addition to the penalties  assessable herein, to
          an injunction  or  injunctions  restraining,  preventing or curing any
          breach of this  Agreement  and to enforce  specifically  the terms and
          provisions hereof,  without the necessity of showing economic loss and
          without any bond or other security being required.

     m.   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.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     IN WITNESS WHEREOF,  the Company and the undersigned Initial Investors have
caused this Agreement to be duly executed as of the date first above written.

IDIAL NETWORKS, INC.

--------------------------------------
Mark T. Wood
Chief Executive Officer

AJW PARTNERS, LLC
By:  SMS Group, LLC

--------------------------------------
Corey S. Ribotsky
Manager

AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC

--------------------------------------
Corey S. Ribotsky
Manager

AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

------------------------------------
Corey S. Ribotsky
Manager

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