Document:

Exhibit 4.5

 

EXECUTION VERSION

 

WARRANT

 

NEITHER THIS
WARRANT NOR ANY SECURITY INTO WHICH IT IS CONVERTIBLE HAS BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), NOR UNDER ANY APPLICABLE
STATE SECURITIES LAWS.  THIS WARRANT HAS
BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS WARRANT NOR ANY SECURITY INTO
WHICH IT IS CONVERTIBLE MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE ACT OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT.  NEITHER THIS
WARRANT NOR ANY SECURITY INTO WHICH IT IS CONVERTIBLE MAY BE TRANSFERRED
EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT AND THE SECURITIES
PURCHASE AGREEMENT, DATED AS OF EVEN DATE HEREWITH, AND NO TRANSFER OF THIS
WARRANT OR ANY SECURITY INTO WHICH IT IS CONVERTIBLE SHALL BE VALID OR
EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.  THE TRANSFERABILITY OF THIS WARRANT AND ANY
SECURITY INTO WHICH IT IS CONVERTIBLE IS SUBJECT TO THE TRANSFER RESTRICTIONS
SET FORTH HEREIN AND IN THE PURCHASE AGREEMENT.

 

WARRANT

TO
PURCHASE COMMON STOCK OF

IT &
E INTERNATIONAL GROUP

 

THIS WARRANT IS
MADE AND DELIVERED PURSUANT TO A CERTAIN SECURITIES PURCHASE AGREEMENT, DATED
AS OF EVEN DATE HEREWITH, AND SUBJECT TO THE TERMS AND CONDITIONS THEREOF.

 

	
  Certificate No.        

  	
   

  	
  Date of Issuance: November 9, 2005

  
	
   

  	
   

  	
  Expiration Date: November 9, 2009

  

 

This Warrant is issued to [                                         ]
(the “Holder”) by IT & E INTERNATIONAL GROUP, a Nevada corporation
(the “Company”) , pursuant to the terms of that certain Securities Purchase
Agreement (the “Purchase Agreement”) of even date herewith, in connection with
the Company’s issuance to the Holder of this Warrant, a Senior Secured Note or
the Preferred Shares, as the case may be, for an aggregate purchase price of [                               
($                        )],
in reliance upon an exemption from registration pursuant to Section 4(2) of
the Securities Act;

 

THIS CERTIFIES THAT, for value received, the receipt
and sufficiency of which is hereby acknowledged:

 

Subject to the conditions set forth herein and in the
Purchase Agreement, the Holder, with an address at [                                         ],
is entitled, upon surrender of this Warrant at the principal office of the
Company, to subscribe for and purchase from the Company, for a

 

 

period of four (4) years
after the date hereof and ending at 5:00 p.m. Eastern Standard Time on November 9,
2009 (the “Exercise Period”), up to [                  ]
shares of Common Stock at the Per Share Exercise Price (the “Warrant Shares”).  All capitalized terms used but not defined
herein shall have the meaning set forth in the Purchase Agreement.

 

This Warrant is subject to the following provisions,
terms and conditions:

 

1.                                       Definitions.

 

1.1 “Business Day” means
any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by Law to be closed in The City of New York.

 

1.2 “Common Stock” shall mean the shares of
common stock, par value $0.001, of the Company.

 

1.3 “Commission” shall mean the U.S. Securities
and Exchange Commission or any other governmental authority at the time
administering the Securities Act.

 

1.4 “Company” shall have the meaning specified
in the introduction to this Warrant, and shall include any corporation or
business entity resulting from the merger, consolidation or conversion of the
Company.

 

1.5 “Current Price per Share” shall mean the
average of the closing sales prices, if available, or the average of the bid
and asked prices for the Warrant Shares, Common Stock or Marketable Securities,
as the case may be (or their successors) on the principal market therefor for
the five (5) full Trading Days preceding the day which is two (2) Business
Days prior to the day of exercise, or if no such price is available, then a
price that is mutually agreed upon by the Holder and the Company.  If the Holder and the Company cannot agree
upon a mutually acceptable price, then such price shall be determined by a
written appraisal of a recognized firm of investment bankers who shall be
selected by the Company and shall be reasonably acceptable to the holders of a
majority of the Warrants.  The determination
of such independent appraiser shall be conclusive and binding on the Holder and
the Company.

 

1.6 “Exempt Issuance” means the issuance of (a) shares
of Common Stock options or shares of Common Stock issued upon the exercise of
any such options to employees, officers or directors of the Company pursuant to
any stock or option plan duly adopted by a majority of the non-employee members
of the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose, (b) securities
upon the exercise of or conversion of any convertible securities, options or
warrants issued and outstanding as of the date hereof, provided that such
securities have not been amended since the date hereof, (c) the securities
issued or issuable hereunder, or pursuant to the Securities Purchase Agreement
between the Company and the Holder, dated as of the date hereof, (d) issuances
in connection with mergers, acquisitions, joint ventures or other transactions
with an unrelated third party in a bona fide transaction the purpose of which
is not fundraising, or (e) issuances at fair market value to the Company’s
suppliers, consultants and other providers of services and goods not to exceed
$100,000 to any one Person, and not to

 

 

exceed an
aggregate of $250,000 in any fiscal year without the prior written consent of
the Holder.

 

1.7 “Fair Market Price per Share” shall mean
the fair value, as determined by a majority of the full Board of Directors of
the Company in good faith, which determination shall be described in a duly
adopted board resolution certified by the Company’s Secretary or Assistant
Secretary, of any potential dilutive issuance described in Section 5(c).

 

1.8 “Marketable Securities” shall mean
securities of a corporation subject to the informational and reporting
requirements of the Securities Exchange Act of 1934, as amended, that are
listed and actively traded on a nationally-recognized stock exchange or
inter-dealer quotation system in the United States.

 

1.9 “Per Share Exercise Price” shall be $0.10,
as may be adjusted in accordance with Section 5 hereof.

 

1.10 “Registration Statement” shall be (i) any
registration statement that the Company shall file with the Commission in
accordance with Section 2(a) of the Registration Rights Agreement,
covering all or part of the Shares and Warrant Shares, or (ii) the
registration statement that the Company may file (or has filed) with the
Commission in accordance with Section 2(b) of the Registration Rights
Agreement, covering all or a part of the Shares and the Warrant Shares so long
as such registration statement is declared effective prior to the time the
registration statement contemplated by Section 2(a) of the
Registration Rights Agreement is declared effective; provided, however, that if
any registration statement filed under Section 2(b) of the
Registration Rights Agreement covers only a portion of the Shares and the
Warrant Shares, then “Registration Statement” shall mean both registration
statements described in subparagraphs (i) and (ii) above.

 

1.11 “Securities Act” shall mean the Securities
Act of 1933, as amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.  Reference to a particular section of
the Securities Act shall include a reference to the comparable section, if any,
of any such similar or successor federal statute.

 

1.12 “Warrant” shall mean and include this
Warrant and any Warrant or Warrants hereafter issued as a consequence of the
exercise or transfer of this Warrant in whole or in part.

 

1.13 “Trading Days” shall mean any days during
the course of which the Company’s Common Stock is listed and traded with the
OTC Electronic Bulletin Board or such similar organization if the OTC
Electronic Bulletin Board is no longer reporting such information.

 

2.                                       Payment
upon Exercise; Issuance of Certificates; No Fractional Shares.

 

(a)                                  This
Warrant may be exercised during the Exercise Period, in whole or in part, by
the surrender of this Warrant with the election at the end hereof (the “Election”)
duly executed to the Company, during normal business hours on any Business Day,
at the address and

 

 

in the manner set forth in Section 11 hereof, or
at such other place as is designated in writing by the Company.  Such executed Election must be accompanied by
payment in an amount equal to the applicable Per Share Exercise Price
multiplied by the number of Warrant Shares for which this Warrant is being
exercised. Such payment may be made by check payable to the order of the
Company.  The Company agrees that the
Warrant Shares so purchased shall be and are deemed to be issued to the Holder
or its designee (subject to the transfer restrictions applicable to this Warrant)
as the record owner of such Warrant Shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment shall have
been made as aforesaid.

 

(b)                                 Certificates
for the Warrant Shares so purchased, representing the aggregate number of
securities specified in the Election, shall be delivered to the Holder or its
designee within a reasonable time, not exceeding ten (10) Business Days
after this Warrant shall have been duly exercised.  The stock certificate or certificates so
delivered shall be in such denominations as may be requested by the Holder and
shall be registered in the name of the Holder or such other name as shall be
designated by the Holder (subject to the transfer restrictions applicable to
this Warrant).  The Company shall pay all
expenses and charges payable in connection with the preparation, execution and
delivery of stock certificates pursuant to this Section 2, except that, in
case such stock certificates shall be registered in a name or names other than
the Holder or the Holder’s designee, funds sufficient to pay all stock transfer
taxes which shall be payable in connection with the execution and delivery of
such stock certificates shall be paid by the Holder to the Company at the time
of delivery of such stock certificates by the Company.

 

(c)                                  This
Warrant shall be exercisable only for a whole number of Warrant Shares.  No fractions of such securities, or scrip for
any such fraction of securities, shall be issued upon the exercise of this
Warrant.  The Company shall pay a cash
adjustment in respect of such fractional interest in an amount equal to the
Current Price per Share of one share of Warrant Shares at the time of such
exercise multiplied by such fraction computed to the nearest whole cent.

 

3.                                       Cashless
Exercise.  At any time during the
Exercise Period, the Company agrees that:

 

(a)                                  The
Holder may exercise this Warrant by surrendering it to the Company and
receiving, in exchange therefor, the number of shares of Common Stock then
purchasable upon exercise of that portion of the Warrant to be exercised less
the number of shares of Common Stock equal to the quotient of the aggregate Per
Share Exercise Price of all such shares underlying that portion of the Warrant
to be exercised divided by the Current Price per Share.

 

(b)                                 Concurrent
with the occurrence of any event described in Section 5(a) for cash,
the Holder may exercise this Warrant by surrendering it to the Company in
exchange for the amount of cash per share the Holder would be entitled to receive
after the happening of such event if this Warrant had been exercised
immediately prior to the close of business on such record date or effective
date, as applicable, less the applicable Per Share Exercise Price.

 

(c)                                  Concurrent
with the occurrence of any event described in Section 5(a) for
Marketable Securities, the Holder may exercise this Warrant by surrendering it
to the Company

 

 

in exchange for the applicable amount of such
Marketable Securities the Holder would be entitled to receive after the happening
of such event if this Warrant had been exercised immediately prior to the close
of business on such record date or effective date, as applicable, less the
number of such Marketable Securities equal to the quotient of the aggregate Per
Share Exercise Price of all shares underlying this Warrant divided by the
Current Price per Share of such Marketable Securities.

 

4.                                       Redemption

 

(a)                                  The
Company shall have the right, upon the affirmative vote of a majority of the
independent non-employee members of the Board of Directors, as “independent” is
defined in Rule 10A-3 of the Exchange Act of 1934, approving the Warrant
Redemption subject to the prior satisfaction of the conditions precedent set
forth in Section (b), upon delivery of written notice to the Holder or its
assigns (“Redemption Notice”), to redeem any then unexercised portion, in whole
or in part, of this Warrant (a “Warrant Redemption).  The Warrant Redemption may be exercised by
the Company by delivering the payment of the Warrant Redemption Price (as
defined below) for the number of Warrant Shares issuable upon exercise of the
Warrant being redeemed to the Holder of its assigns at the address of the
Holder or its assigns provided to the Company, together with the Redemption Form attached
hereto, duly completed and signed.  The
Warrant Shares issuable upon exercise of the Warrant being redeemed under this Section (a) shall
be and are deemed to be redeemed by the Company as of the close of business on
the latest date on which the Redemption Form is delivered to the Holder or
its assigns (which must be at least five business days after the Redemption
Notice is given) and payment made therefor. 
Upon receipt of the payment and the duly completed and signed Redemption
Form, the holder shall deliver this Warrant to the Company within three
business days thereafter for cancellation of that number of Warrants being
redeemed.  The Warrant Redemption Price
shall mean $.001 per Warrant Share issuable upon exercise of the Warrant being
redeemed.

 

(b)                                 The
Company’s right to redeem this Warrant as described above is subject to the
satisfaction of the following conditions:

 

(i)                                     The
closing price of the Common Stock is at least $0.30 for twenty (20) consecutive
trading days immediately preceding the date on which the Redemption Notice is
delivered to the Holder or its assigns.

 

(ii)                                  The
Company has achieved pre-tax income per share of Common Stock (calculated on a
fully-diluted basis after giving effect to the issuance of the Common Stock
underlying the Series D Preferred Stock and using the Treasury Method for
options and warrants) of at least $.015 per share for the prior trailing four
quarters (excluding any non-recurring extraordinary expenses).

 

(iii)                               The
number of Warrants that may be called by the Company during any thirty (30) day
period shall not be exercisable for a number of shares of Common Stock that
exceeds the average weekly trading volume during the prior four (4) weeks.

 

 

5.                                       Adjustment
Provisions.  The Per Share Exercise
Price and number and kind of shares or other securities to be issued upon
conversion determined pursuant to this Warrant shall be subject to adjustment
from time to time upon the happening of certain events while this conversion
right remains outstanding, as follows:

 

(a)                                  Reclassification.  If the Company at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Warrant shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the
result of such change with respect to the Common Stock (i) immediately
prior to, or (ii) immediately after, such reclassification or other change
at the sole election of the Holder.

 

(b)                                 Stock
Splits, Combinations and Dividends. 
If the shares of Common Stock are subdivided or combined into a greater
or smaller number of shares of Common Stock, or if a dividend is paid on the
Common Stock or any preferred stock issued by the Company in shares of Common
Stock, the Per Share Exercise Price shall be proportionately reduced in case of
subdivision of shares or stock dividend or proportionately increased in the
case of combination of shares, in each such case by the ratio which the total
number of shares of Common Stock outstanding immediately after such event bears
to the total number of shares of Common Stock outstanding immediately prior to
such event.

 

(c)                                  Anti-Dilution
Provisions.  The Per Share Exercise
Price shall be subject to adjustment from time to time as provided in this Section 5.  In the event that any adjustment of the Per
Share Exercise Price as required herein results in a fraction of a cent, such
Per Share Exercise Price shall be rounded up or down to the nearest cent.

 

(i)                                     Adjustment
of the Per Share Exercise Price.  If
and whenever the Company issues or sells, or in accordance with Section 5(c) hereof
is deemed to have issued or sold, any shares of Common Stock for an effective
consideration per share of less than the then Per Share Exercise Price or for
no consideration (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”), then, the Per Share
Exercise Price shall be reduced to equal such Base Share Price.  Such adjustment shall be made whenever shares
of Common Stock or an instrument convertible into Common Stock (“Common
Stock Equivalents”) are issued.

 

(ii)                                  Effect
on Exercise Price of Certain Events. 
For purposes of determining the adjusted Exercise Price under Section 5(c) hereof,
the following will be applicable:

 

(A)                              Issuance
of Rights or Options.  If the Company
in any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or (such
warrants, rights and options to purchase Common Stock or Common Stock
Equivalents are hereinafter referred to as “Options”) and the effective
price per share for which Common Stock is issuable upon the exercise of such
Options is less than the Per Share Exercise Price (“Below Base Price Options”),
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Below Base Price

 

 

Options (assuming full exercise, conversion or
exchange of Common Stock Equivalents, if applicable) will, as of the date of
the issuance or grant of such Below Base Price Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share and the maximum consideration payable to the Company upon such exercise
(assuming full exercise, conversion or exchange of Common Stock Equivalents, if
applicable) will be deemed to have been received by the Company.  For purposes of the preceding sentence, the “effective
price per share for which Common Stock is issuable upon the exercise of such
Below Base Price Options” is determined by dividing (i) the total amount,
if any, received or receivable by the Company as consideration for the issuance
or granting of all such Below Base Price Options, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
exercise of all such Below Base Price Options, plus, in the case of Common
Stock Equivalents issuable upon the exercise of such Below Base Price Options,
the minimum aggregate amount of additional consideration payable upon the
exercise, conversion or exchange thereof at the time such Common Stock
Equivalents first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of
all such Below Base Price Options (assuming full conversion of Common Stock
Equivalents, if applicable).  No further
adjustment to the Exercise Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Below Base Price Options or upon the
exercise, conversion or exchange of Common Stock Equivalents issuable upon
exercise of such Below Base Price Options.

 

(B)                                Issuance
of Common Stock Equivalents. If the Company in any manner issues or sells
any Common Stock Equivalents, whether or not immediately convertible (other
than where the same are issuable upon the exercise of Options) and the
effective price per share for which Common Stock is issuable upon such
exercise, conversion or exchange is less than the Exercise Price, then the
maximum total number of shares of Common Stock issuable upon the exercise,
conversion or exchange of all such Common Stock Equivalents will, as of the
date of the issuance of such Common Stock Equivalents, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share and
the maximum consideration payable to the Company upon such exercise (assuming
full exercise, conversion or exchange of Common Stock Equivalents, if
applicable) will be deemed to have been received by the Company.  For the purposes of the preceding sentence,
the “effective price per share for which Common Stock is issuable upon such
exercise, conversion or exchange” is determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for the
issuance or sale of all such Common Stock Equivalents, plus the minimum
aggregate amount of additional consideration, if any, payable to the

 

 

Company upon the exercise, conversion or exchange
thereof at the time such Common Stock Equivalents first become exercisable,
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise, conversion or exchange of all such
Common Stock Equivalents.  No further
adjustment to the Exercise Price will be made upon the actual issuance of such
Common Stock upon exercise, conversion or exchange of such Common Stock
Equivalents.

 

(C)                                If,
at any time after any adjustment of the Exercise Price shall have been made
pursuant to Section 5(c)(ii)(A) or 5(c)(ii)(B) as the result of
any issuance of warrants, rights or convertible securities, and either (1) such
warrants or rights, or the rights of conversion or exchange in such other
convertible securities, shall expire, and all or a portion of such warrants or
rights, or the right of conversion or exchange with respect to all or a portion
of such other convertible securities, as the case may be, shall not have been
exercised, or (2) the consideration per share for which shares of Common
Stock are issuable pursuant to such warrants or rights, or such other
convertible securities, shall be increased or decreased by virtue of provisions
therein contained, then such previous adjustments shall be rescinded and
annulled and the additional shares of Common Stock which were deemed to have
been issued by virtue of the computation made in connection with the adjustment
so rescinded and annulled shall no longer be deemed to have been issued by
virtue of such computation.  Thereunpon,
a recomputation shall be made of the effect of such rights or options or other
convertible securities on the then outstanding Warrants, but not on any then
outstanding Warrant Shares, on the basis of (x) treating the number of
additional shares of Common Stock or other property, if any, theretofore
actually issued or issuable pursuant to the previous exercise of any such
warrants or rights or any such right of conversion or exchange, as having been
issued on the date or dates of any such exercise and for the consideration
actually received and receivable therefor, and (y) treating any such warrants
or rights or any such other convertible securities which then remain
outstanding as having been granted or issued immediately after the time of such
increase or decrease of the consideration per share for which shares of Common
Stock or other property are issuable under such warrants or rights or other
convertible securities.

 

(D)                               Change
in Option Price or Conversion Rate. 
If there is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any Options; (ii) the
amount of additional consideration, if any, payable to the Company upon the
exercise, conversion or exchange of any Common Stock Equivalents; or (iii) the
rate at which any Common Stock Equivalents are convertible into or exchangeable
for Common Stock (in each such case, other than under or by reason of
provisions designed to protect against dilution), the

 

 

Exercise Price in effect at the time of such change
will be readjusted to the Exercise Price which would have been in effect at
such time had such Options or Common Stock Equivalents still outstanding
provided for such changed additional consideration or changed conversion rate,
as the case may be, at the time initially granted, issued or sold.

 

(E)                                 Calculation
of Consideration Received.  If any
Common Stock, Options or Common Stock Equivalents are issued, granted or sold
for cash, the consideration received therefor for purposes of this Warrant will
be the amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or
sale.  In case any Common Stock, Options
or Common Stock Equivalents are issued or sold for a consideration part or all
of which shall be other than cash, the amount of the consideration other than
cash received by the Company will be the fair market value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Company will be the fair
market value (closing bid price, if traded on any market) thereof as of the
date of receipt.  In case any Common
Stock, Options or Common Stock Equivalents are issued in connection with any
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair market value of
such portion of the net assets and business of the non-surviving corporation as
is attributable to such Common Stock, Options or Common Stock Equivalents, as
the case may be.  The fair market value
of any consideration other than cash or securities will be determined in good
faith by an investment banker or other appropriate expert of national
reputation selected by the Company and reasonably acceptable to the holder
hereof, with the costs of such appraisal to be borne by the Company.

 

(iii)                               Exceptions to
Adjustment of Exercise Price. 
Notwithstanding the foregoing, no adjustment will be made under this Section 5
in respect of an Exempt Issuance.

 

(d)                                 Written
Notice.  The Company shall give
written notice to the Holder within ten (10) days following the
consummation of any transaction within the scope of this Section 5 and
provide in such written notice a brief description of the terms and conditions
of such transaction.

 

(e)                                  Minimal
Adjustments.  No adjustment in a Per
Share Exercise Price need be made if such adjustment would result in a change
in such Per Share Exercise Price of less than one cent ($0.01).  Any adjustment of less than one cent ($0.01)
which is not made shall be carried forward and shall be made at the time of and
together with any subsequent adjustment which, on a cumulative basis, amounts
to an adjustment of one cent ($0.01) or more in a Per Share Exercise Price.

 

 

6.                                       Issue
Tax.  The issuance of certificates
for the Warrant Shares upon the exercise of this Warrant shall be made without
charge to the Holder for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder .

 

7.                                       Transferability
and Assignment.  Except as set forth
in this Section 6 hereof and subject to compliance with applicable federal
and state securities laws, and to the extent applicable, the parties may not
assign their rights and obligations under this Warrant except in accordance
with Section 5.8 of the Purchase Agreement.  In the event the Holder proposes to effect an
assignment, the Holder must present this Warrant to the Company for transfer,
accompanied by a duly completed and executed Form of Assignment (as provided
at the end hereof), the transferee must agree to be bound by the terms of this
Warrant as if such transferee were an original holder of this Warrant, and the
Holder must deliver to the Company an opinion of counsel of the Holder in form
reasonably satisfactory to the Company that the transfer may be properly made
under an exemption from registration under the Securities Act and applicable
state securities laws.  Upon any
registration of transfer, the Company shall execute and deliver a new Warrant
certificate to the person entitled thereto. 
In the event the Warrant is transferred, the subsequent holder shall
have no greater rights than those afforded the Holder hereunder.  Any transfer made in violation of this Section 6
shall be void.

 

8.                                       Reservation
of Warrant Shares.  The Company
shall, at all times when this Warrant shall be outstanding, reserve and keep
available out of its authorized but unissued stock, for the purpose of
effecting the exercise of this Warrant, such number of its duly authorized shares
of capital stock as shall from time to time be sufficient to effect the
exercise of this Warrant. Alternatively, the Company shall take all action
necessary to cause it to be authorized to issue all necessary shares issuable
upon exercise of this Warrant.  All
shares of capital stock which may be issued in connection with the exercise of
this Warrant will, upon issuance by the Company, be validly issued, fully paid
and non-assessable.

 

9.                                       Mutilated
or Missing Warrant Certificate.  In
case the certificate evidencing this Warrant shall be mutilated, lost, stolen
or destroyed, the Company shall, at the request of the Holder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate, or in lieu of and in substitution for the certificate lost, stolen
or destroyed, a new Warrant certificate of like tenor and representing the
equivalent rights and interests, but only upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction of such Warrant.  Applicants for such substitute Warrant
certificate shall also comply with such other reasonable requirements and pay
such other reasonable charges as the Company may prescribe.  The Holder shall pay all taxes and all other
expenses and charges payable in connection with the preparation, execution and
delivery of Warrants pursuant to this Section 8.

 

10.                                 No
Rights as a Shareholder.  Nothing
contained herein shall be construed as conferring upon the Holder or its
transferees any rights as a shareholder of the Company, including the right to
vote, receive dividends, consent or receive notices as a shareholder in respect
of any meeting of shareholders for the election of directors of the Company or
any other matter.

 

 

11.                                 Legend.  The Warrant Shares issued upon exercise of
this Warrant shall be subject to a stop transfer order and the certificate or
certificates evidencing such Warrant Shares shall bear the following legend:

 

“THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE SECURITIES ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A CERTAIN SECURITIES PURCHASE AGREEMENT, A CERTAIN LOCK-UP
AGREEMENT AND A CERTAIN REGISTRATION RIGHTS AGREEMENT, ALL OF WHICH ARE DATED NOVEMBER 9,
2005 AND ARE AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY.”

 

12.                                 Notices.  Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or by Federal Express, Express Mail
or similar overnight delivery or courier service or delivered (in person or by
telecopy, telex or similar telecommunications equipment) against receipt to the
party to whom it is to be given, (i) if to the Company, addressed to IT &
E International Group, Inc., 505 Lomas Sante Fe Drive, Suite 200,
Solana Beach, California 92075, Attention: Chief Financial Officer, Facsmile No. (858)
366-0961, with copies to: Foley & Lardner, LLP, 402 W. Broadway, Suite 2300,
San Diego, California 92101, Attn:  Adam
C. Lenain, Facsimile No. (619) 234-3510 (ii) if to the Holder, at the
address set forth above, or (iii) in either case, to such other address as
the party shall have furnished in writing in accordance with the provisions of
this Section 11.  Notice to the
estate of any party shall be sufficient if addressed to the party as provided
in this Section 11.  Any notice or
other communication given by certified mail shall be deemed given at the time
of certification thereof, except for a notice changing a party’s address which
shall be deemed given at the time of receipt thereof.  Any notice given by other means permitted by
this Section 11 shall be deemed given at the time of receipt thereof.

 

13.                                 Governing
Law.  This Warrant shall be construed
in accordance with the laws of the State of New York, without regard to
principles governing conflicts of law. 
Any action or proceeding arising out of or relating to this Warrant
shall be commenced in a federal or state court having competent jurisdiction in
the State of New York, and for the purpose of any such action or proceeding,
each of the Company and the Holder and any assignee of the Holder submits to
the personal jurisdiction of the State of New York The parties hereby
irrevocably

 

 

consent to the
exclusive jurisdiction of any state or federal court for New York County in the
State of New York or the Southern District of New York.  The parties hereby waive any objection to
venue and any objection based on a more convenient forum in any action
instituted under this Warrant.

 

14.                                 Remedies.  The Company stipulates that the remedies at
law of the Holder in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

 

5.                                       Amendments;
Waivers.  The terms and provisions of
this Warrant may be amended, modified, waived or altered only in writing signed
by the Company and the Holder, and any such amendment effected pursuant to this
Section 15 shall be binding upon the successors and assigns of the
parties.

 

16.                                 Headings.  The descriptive headings of the several
sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.

 

[Signature Page to
Warrant]

 

 

Dated:
 November    , 2005

 

	
   

  	
  IT &
  E INTERNATIONAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND
  ACCEPTED:

  	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

 

FORM OF
ASSIGNMENT

 

(To be executed by
the registered holder if such holder desires to transfer the attached Warrant.)

 

FOR VALUE RECEIVED,                                          
hereby sells, assigns, and transfers unto                                          
Warrants to purchase                         
shares of                                     
of IT & E International Group (the “Company”), together with all
right, title, and interest therein, and does hereby irrevocably constitute and
appoint                                                            
attorney to transfer such Warrant on the books of the Company, with full power
of substitution.

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  

 

 

NOTICE

 

The signature on the foregoing Assignment must
correspond to the name as written upon the face of this Warrant in every
particular, without alteration or enlargement or any change whatsoever.

 

 

To:                              IT &
E International Group

505 Lomas Santa Fe Drive, Suite 200

Solana Beach, California 92075

 

ELECTION
TO EXERCISE

 

The undersigned hereby exercises his or its rights to
purchase               
Warrant Shares covered by the within Warrant certificate and tenders payment
herewith in the amount of $
                          
in accordance with the terms thereof, and requests that certificates for such
securities be issued in the name of, and delivered to:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
   

  

(Print
Name, Address and Social Security or Tax Identification Number)

 

The undersigned also hereby represents that the
representations and warranties provided by the undersigned in Section 3.2
of the Purchase Agreement are true and correct in all material respects as if
made on and as of the date hereof.

 

	
   

  	
  Signature:Exhibit 10.4

 

AMENDMENT

 

This Amendment
(this “Amendment”), dated as of November 9,
2005, is entered into by and between IT&E INTERNATIONAL GROUP, a Nevada
corporation (the “Company”), and
LAURUS MASTER FUND, LTD., a Cayman Islands company (“Laurus”), for the
purpose of amending the terms of (i) the Common Stock Purchase Warrant,
issued by the Company to Laurus on October 18, 2004 (as amended, modified
and/or supplemented from time to time, the “Warrant”)
and (ii) the Registration Rights Agreement, dated as of October 18,
2004 between the Company and Laurus (as amended, modified and/or supplemented
from time to time, the “Registration Rights
Agreement” together with the Securities Purchase Agreement (as
defined below) and the Related Agreements referred to therein, the “Loan Documents”).  Capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the Securities
Purchase Agreement, dated as of October 18, 2004 between the Company and
Laurus (as amended, modified and/or supplemented from time to time, the “Securities Purchase Agreement”).

 

WHEREAS, on October 25,
2005, the Company issued to Laurus a notice of its intention to redeem in full
on November 4, 2005 the outstanding principal, interest and fees
outstanding under the Secured Convertible Term Note, dated as of October 18,
2004 issued by the Company to Laurus (as amended, modified and/or supplemented
from time to time, the “Note”);

 

WHEREAS,
notwithstanding the required prepayment penalty incurred by the Company as a
result of such proposed redemption as more fully described in Section 2.3
of the Note (the “Prepayment Penalty”),
in addition to the repayment on November 4, 2005 of principal, interest
and fees outstanding under the Note at such time (the “Repayment Amount”), the Company and Laurus
have agreed that the payment to Laurus of an additional $650,000 in excess of
the Repayment Amount will satisfy in full the Prepayment Penalty thereunder;

 

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

 

1.                                       On
the Amendment Effective Date, in further consideration of the settlement of the
Prepayment Penalty as described in the recitals set forth above, and upon
delivery to the Company of the Warrant for cancellation, the Company shall
amend and restate the Warrant in the form attached hereto as Exhibit A
(as amended and restated, amended, modified and/or supplemented from time to
time, the “Amended and Restated Warrant”).

 

2.                                       Laurus
and the Company hereby agree that notwithstanding anything to the contrary in
the Note or any Related Agreement that the amount of $650,000 satisfies in full
any Prepayment Penalty and that upon payment of the Repayment Amount, plus such
$650,000, the Company will have no further payment obligation to Laurus under
the Note, but shall continue to be obligated to Laurus for indemnification and
any other obligations under the Note that survive repayment thereof.  Upon receipt of the Repayment Amount, plus
such $650,000, Laurus shall promptly deliver the original Note along with any
original amendments thereto to the Company for cancellation.

 

 

3.                                       Laurus
and the Company hereby agree that, notwithstanding any prior agreement to the
contrary, the shares of Common Stock issuable upon exercise of the Warrant
shall be registered in the Company’s next registration statement on Form SB-2
(or such other appropriate form, excluding a Form S-8); provided, however,
that the Company shall register such shares on a date no later than December 31,
2005 (the “Filing Date”); provided,
further, that the Filing Date shall be deemed to be a “Filing Date” as
defined in Section 1 of the Registration Rights Agreement.

 

4.                                       Laurus
understands that the Company has an affirmative obligation to make prompt
public disclosure of material agreements and material amendments to such
agreements.  The Company hereby covenants
that it shall file this Amendment on a Form 8-K with four (4) business
days of the date hereof, in accordance with the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder.

 

5.                                       Each
amendment set forth herein shall be effective as of the date first above
written (the “Amendment Effective Date”)
on the date when each of the Company and Laurus shall have executed and the
Company shall have delivered to Laurus its respective counterpart to this
Amendment.

 

6.                                       Except
as specifically set forth in this Amendment, there are no other amendments or
modifications to the Loan Documents, and all of the other forms, terms and
provisions of the Loan Documents remain in full force and effect.

 

7.                                       The
Company hereby represents and warrants to Laurus that (i) it has
authorized and reserved a sufficient number of shares of Common Stock for the
full exercise of the Warrants after giving effect to this Amendment, (ii) no
Event of Default exists on the date hereof, (iii) on the date hereof, all
representations, warranties and covenants made by the Company in connection
with the Loan Documents are true, correct and complete and (iv) on the
date hereof, all of the Company’s and its Subsidiaries’ covenant requirements
have been met.

 

8.                                       From
and after the Amendment Effective Date, all references in the Loan Documents
and in the other Related Agreements to the Warrant and/or the Registration
Rights Agreement shall be deemed to be references to the Warrant and/or the
Registration Rights Agreement, as the case may be, as modified hereby.

 

9.                                       This
Amendment shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of and be
enforceable by each of the parties hereto and their respective successors and
permitted assigns.  THIS
AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. 
This Amendment may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK]

 

2

 

IN
WITNESS WHEREOF, each of the Company and Laurus has
caused this Amendment to the Loan Documents to be signed in its name effective
as of the date first above written.

 

 

	
   

  	
  IT&E INTERNATIONAL GROUP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Vandertie

  	
   

  
	
   

  	
  Name:

  	
  David Vandertie

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LAURUS MASTER FUND, LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eugene Grin

  	
   

  
	
   

  	
  Name:

  	
  Eugene Grin

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
					

 

3

 

Exhibit A

 

AMENDED AND RESTATED WARRANT

 

 

 

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

 

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

IT&E International Group

(subject to adjustment as provided herein)

 

AMENDED AND
RESTATED

COMMON STOCK PURCHASE WARRANT

 

	
  No.

  	
                                                  

  	
  Issue
  Date:  November     ,
  2005

  

 

IT&E INTERNATIONAL GROUP, a corporation organized under the laws of
the State of Nevada (“IT&E International Group”), hereby certifies that,
for value received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company
(as defined herein) from and after the Issue Date of this Amended and Restated
Warrant (this “Warrant”) and at any time or from time to time before 5:00 p.m.,
New York time, through the close of business October 18, 2011 (the “Expiration
Date”), up to 1,924,000 fully paid and nonassessable shares of Common Stock (as
hereinafter defined), $0.01 par value per share, at the applicable Exercise
Price per share (as defined below).  The
number and character of such shares of Common Stock and the applicable Exercise
Price per share are subject to adjustment as provided herein.  This Amended and Restated Warrant amends,
restates and supersedes in its entirety that certain Common Stock Purchase
Warrant dated October 18, 2004 between the parties hereto which is no
longer of any force or effect.

 

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

 

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

 

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

 

 

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

 

(d)                                 The
“Exercise Price” applicable under this Warrant shall be $0.22.

 

1.                                       Exercise of Warrant.

 

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

 

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

 

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

 

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

 

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

 

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

 

1.3                                 Company
Acknowledgment.  The Company will, at
the time of the exercise of the Warrant, upon the request of the Holder hereof
acknowledge in writing its

 

2

 

continuing
obligation to afford to such Holder any rights to which such Holder shall
continue to be entitled after such exercise in accordance with the provisions
of this Warrant. If the Holder shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to afford to
such Holder any such rights.

 

1.4                                 Trustee
for Warrant Holders.  In the event
that a bank or trust company shall have been appointed as trustee for the
Holders pursuant to Subsection 3.2, such bank or trust company shall have
all the powers and duties of a warrant agent (as hereinafter described) and
shall accept, in its own name for the account of the Company or such successor
person as may be entitled thereto, all amounts otherwise payable to the Company
or such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.

 

2.                                       Procedure for Exercise.

 

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

 

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

 

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

 

3.1                                 Reorganization,
Consolidation, Merger, Etc.  In case
at any time or from time to time, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person, or (c) transfer
all or substantially all of its properties or assets to any other person under
any plan or arrangement contemplating the dissolution of the Company, then, in
each such case, as a condition to the consummation of such a transaction,
proper and adequate provision shall be made by the Company whereby the Holder,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger

 

3

 

or the
effective date of such dissolution, as the case may be, shall receive, in lieu
of the Common Stock (or Other Securities) issuable on such exercise prior to
such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

14.                                 Miscellaneous.  This Warrant and any term hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Warrant shall be governed by and
construed in accordance with the laws of State of New York without regard to
principles of conflicts of laws.  Any
action brought concerning the transactions contemplated by this Warrant shall
be brought only in the state courts of New York or in the federal courts
located in the state of New York; provided, however, that the Holder may choose
to waive this provision and bring an action outside the state of New York.  The individuals executing this Warrant on
behalf of the Company agree to submit to the jurisdiction of such courts and
waive trial by jury.  The prevailing
party shall be entitled to recover from the other party its reasonable attorney’s
fees and costs.  In the event that any
provision of this Warrant is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. 
Any such provision which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision of
this Warrant.  The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the

 

6

 

terms hereof.  The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. 
The Company acknowledges that legal counsel participated in the
preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party.

 

[BALANCE OF PAGE
INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS.]

 

7

 

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

 

	
   

  	
  IT&E INTERNATIONAL GROUP

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					

 

8

 

EXHIBIT A

 

FORM OF
SUBSCRIPTION
(To
Be Signed Only On Exercise Of Amended and Restated Warrant)

 

TO:                            IT&E
International Group

 

 

 

Attention:                                         Chief
Financial Officer

 

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

 

	
   

  	
   

  	
                   
  shares of the Common Stock covered by such Amended and Restated Warrant; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  the maximum number of shares of Common Stock covered by such Amended
  and Restated Warrant pursuant to the cashless exercise procedure set forth in
  Section 2.

  

 

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

 

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

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-1

 

EXHIBIT B

 

FORM OF
TRANSFEROR ENDORSEMENT
(To
Be Signed Only On Transfer Of Amended and Restated Warrant)

 

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

 

	
  Transferees

  	
   

  	
  Address

  	
   

  	
  Percentage

  Transferred

  	
   

  	
  Number

  Transferred

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  SIGNED IN THE PRESENCE OF:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
  ACCEPTED AND AGREED:

  	
   

  
	
  [TRANSFEREE]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  

 

B-1

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