Exhibit 10.3


                 SECOND AMENDED AND RESTATED SECURITY AGREEMENT


      THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement"),  is
entered into and made  effective as of July 28,  2006,  by and between  TELEPLUS
ENTERPRISES,  INC., a Nevada  corporation  with its principal  place of business
located  at 7575  TransCanada  - Suite  305,  St-Laurent,  Quebec  H4T 1V6  (the
"Company"),  and the  BUYER(S)  listed on Schedule I attached to the  Securities
Purchase Agreement dated the date hereof (the "Secured Party").

      WHEREAS,  the  Company  issued to the  Secured  Party,  as provided in the
Securities  Purchase  Agreement  dated December 13, 2005 between the Company and
the  Secured  Party,  and the  Secured  Party  purchased  Nine  Million  Dollars
($9,000,000)   of  secured   convertible   debenture  (the  "Prior   Convertible
Debenture").  This  Agreement  shall amend and restate  the  Security  Agreement
between the Company and the Secured Party dated December 13, 2005;

      WHEREAS,  the Company has requested  the Secured Party to make  additional
financing available to the Company;

      WHEREAS, the Secured Party is willing to provide such additional financing
on the condition that such additional  financing is secured  hereunder and under
the UCC-1 filed on August 3, 2005  (#2005024163-4)  filed in connection with the
Securities Purchase Agreement dated July 15, 2005;

      WHEREAS,  the  Company  shall  issue  and sell to the  Secured  Party,  as
provided in the Securities  Purchase Agreement of even date herewith between the
Company and the Secured Party (the  "Securities  Purchase  Agreement"),  and the
Secured Party shall purchase up to Three Million Dollars ($3,000,000) of secured
convertible   debentures  (the   "Convertible   Debentures"),   which  shall  be
convertible  into shares of the Company's  common  stock,  par value $0.001 (the
"Common  Stock") (as  converted,  the  "Conversion  Shares")  in the  respective
amounts  set forth  opposite  each  Buyer(s)  name on Schedule I attached to the
Securities Purchase Agreement;

      WHEREAS,  to  induce  the  Secured  Party  to enter  into the  transaction
contemplated by the Securities Purchase Agreement,  the Convertible  Debentures,
the Investor  Registration  Rights  Agreement of even date herewith  between the
Company and the Secured Party (the "Investor  Registration  Rights  Agreement"),
the  Second  Amended  and  Restated  Pledge and  Escrow  Agreement  of even date
herewith among the Company,  the Secured Party, the Pledgors and David Gonzalez,
Esq. (the "Pledge  Agreement"),  and the Irrevocable Transfer Agent Instructions
among the Company, the Secured Party,  Transfer Agent, and David Gonzalez,  Esq.
(the  "Transfer   Agent   Instructions")   (collectively   referred  to  as  the
"Transaction  Documents"),  the Company  hereby  grants to the  Secured  Party a
security interest in and to the pledged property  identified on Exhibit A hereto
(collectively  referred to as the "Pledged  Property") until the satisfaction of
the Obligations, as defined herein below.

      NOW, THEREFORE,  in consideration of the promises and the mutual covenants
herein contained,  and for other good and valuable  consideration,  the adequacy
and receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                   ARTICLE 1.

                         DEFINITIONS AND INTERPRETATIONS

SECTION 1.1. RECITALS.

      The above recitals are true and correct and are  incorporated  herein,  in
their entirety, by this reference.

<PAGE>

SECTION 1.2. INTERPRETATIONS.

      Nothing  herein  expressed or implied is intended or shall be construed to
confer upon any person other than the Secured  Party any right,  remedy or claim
under or by reason hereof.

SECTION 1.3. OBLIGATIONS SECURED.

      The obligations  secured hereby are any and all obligations of the Company
now  existing or  hereinafter  incurred to the Secured  Party,  whether  oral or
written  and whether  arising  before,  on or after the date  hereof  including,
without limitation,  those obligations of the Company to the Secured Party under
this Agreement,  the Transaction Documents, the Prior Convertible Debenture, and
any other  amounts now or  hereafter  owed to the  Secured  Party by the Company
thereunder or hereunder (collectively, the "Obligations").

                                   ARTICLE 2.

                PLEDGED COLLATERAL, ADMINISTRATION OF COLLATERAL
                      AND TERMINATION OF SECURITY INTEREST

SECTION 2.1. PLEDGED PROPERTY.

(a)  Company  hereby  pledges to the Secured  Party,  and creates in the Secured
Party for its benefit,  a security  interest for such time until the Obligations
are paid in full,  in and to all of the  property of the Company as set forth in
Exhibit "A" attached hereto (collectively, the "Pledged Property"):

      The Pledged Property, as set forth in Exhibit "A" attached hereto, and the
products thereof and the proceeds of all such items are hereinafter collectively
referred to as the "Pledged Collateral."

(b)  Simultaneously  with the  execution  and  delivery of this  Agreement,  the
Company  shall  make,  execute,  acknowledge,  file,  record and  deliver to the
Secured Party any documents reasonably requested by the Secured Party to perfect
its security interest in the Pledged Property. Simultaneously with the execution
and delivery of this Agreement, the Company shall make, execute, acknowledge and
deliver to the Secured Party such documents and instruments,  including, without
limitation, financing statements, certificates,  affidavits and forms as may, in
the Secured Party's reasonable judgment, be necessary to effectuate, complete or
perfect, or to continue and preserve, the security interest of the Secured Party
in the Pledged  Property,  and the Secured  Party shall hold such  documents and
instruments  as secured  party,  subject to the terms and  conditions  contained
herein.

SECTION 2.2. RIGHTS; INTERESTS; ETC.

(a) So long as no Event of Default (as hereinafter  defined) shall have occurred
and be continuing:

(i) the Company  shall be entitled to exercise any and all rights  pertaining to
the Pledged Property or any part thereof for any purpose not  inconsistent  with
the terms hereof; and

(ii) the Company  shall be  entitled to receive and retain any and all  payments
paid or made in respect of the Pledged Property.

(b) Upon the occurrence and during the continuance of an Event of Default:

(i) All rights of the Company to exercise the rights which it would otherwise be
entitled  to  exercise  pursuant  to  Section  2.2(a)(i)  hereof  and to receive
payments which it would  otherwise be authorized to receive and retain  pursuant
to Section  2.2(a)(ii)  hereof  shall be  suspended,  and all such rights  shall
thereupon  become vested in the Secured Party who shall  thereupon have the sole
right to exercise such rights and to receive and hold as Pledged Collateral such
payments; provided, however, that if the Secured Party shall become entitled and
shall elect to exercise its right to realize on the Pledged Collateral  pursuant
to Article 5 hereof,  then all cash sums received by the Secured Party,  or held
by  Company  for the  benefit of the  Secured  Party and paid over  pursuant  to
Section 2.2(b)(ii) hereof, shall be applied against any outstanding Obligations;
and


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<PAGE>

(ii) All interest,  dividends, income and other payments and distributions which
are  received by the Company  contrary to the  provisions  of Section  2.2(b)(i)
hereof shall be received in trust for the benefit of the Secured Party, shall be
segregated  from other  property of the Company and shall be forthwith paid over
to the Secured Party; or

(iii) The Secured Party in its sole  discretion  shall be authorized to sell any
or all of the Pledged  Property at public or private sale in order to recoup all
of  the  outstanding  principal  plus  accrued  interest  owed  pursuant  to the
Convertible Debenture as described herein

(c) An Event of  Default  hereunder  shall be deemed  to occur  upon an Event of
Default under the Convertible Debentures.

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE

SECTION 3.1. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.

      Upon the occurrence of an Event of Default,  the Company  hereby  appoints
the Secured Party as its attorney-in-fact,  with full authority in the place and
stead of the Company and in the name of the Company or  otherwise,  from time to
time in the  Secured  Party's  discretion  to take any action and to execute any
instrument  which the Secured Party may reasonably  deem necessary to accomplish
the purposes of this Agreement,  including,  without limitation,  to receive and
collect all instruments made payable to the Company representing any payments in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.  The  Secured  Party may demand,  collect,  receipt  for,  settle,
compromise,  adjust, sue for,  foreclose,  or realize on the Pledged Property as
and when the Secured Party may determine. To facilitate collection,  the Secured
Party may notify account debtors and obligors on any Pledged Property or Pledged
Collateral to make payments directly to the Secured Party.

SECTION 3.2. SECURED PARTY MAY PERFORM.

      If the  Company  fails to perform  any  agreement  contained  herein,  the
Secured Party, at its option, may itself perform,  or cause performance of, such
agreement,  and  the  expenses  of the  Secured  Party  incurred  in  connection
therewith shall be included in the Obligations secured hereby and payable by the
Company under Section 8.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES

SECTION 4.1. AUTHORIZATION; ENFORCEABILITY.

      Each of the parties  hereto  represents and warrants that it has taken all
action  necessary to authorize the execution,  delivery and  performance of this
Agreement  and the  transactions  contemplated  hereby;  and upon  execution and
delivery,  this Agreement shall constitute a valid and binding obligation of the
respective party, subject to applicable bankruptcy, insolvency,  reorganization,
moratorium  and similar laws  affecting  creditors'  rights or by the principles
governing the availability of equitable remedies.

SECTION 4.2. OWNERSHIP OF PLEDGED PROPERTY.

      The Company  warrants and  represents  that it is the legal and beneficial
owner of the Pledged  Property  free and clear of any lien,  security  interest,
option or other  charge  or  encumbrance  except  for that  grant of a  security
interest  in and to all  undertakings,  property  and  assets  made by  Teleplus
Connect Corp., a subsidiary of the Company,  in favor of Steve Kerekes,  Melanie
Kerekes,  Jim Oattes, Grace Debrabandere,  Jim Reddon,  Monica Reddon, Tom Davis
and Jane Davis pursuant to that certain General Security Agreement dated May 11,
2005,  and  except  for  that  grant  of a  security  interest  in  and  to  all
undertakings,  property and assets made by Telizon  Inc.,  a  subsidiary  of the
Company,  in favor of James R.  Fairhead  In Trust,  Tom  Hards In Trust,  Steve
Kerekes In Trust,  Paul Chapman In Trust,  Jacques Pilon In Trust,  Tom Davis In
Trust,  Alan R. Purser In Trust and Arnold  McAuley In Trust  (collectively  the
"Vendors")  and a pledge to the  Vendors of all of the  shares of  Telizon  Inc.
purchased  by Teleplus  Connect  Corp.,  a subsidiary  of the Company,  from the
Vendors  pursuant to the General  Security  Agreement and Share Pledge Agreement
among Teleplus Connect, Corp., Telizon Inc. and the Vendors.


                                       3
<PAGE>

                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

SECTION 5.1. DEFAULT AND REMEDIES.

(a) If an Event of Default occurs,  then in each such case the Secured Party may
declare  the  Obligations  to be due and  payable  immediately,  by a notice  in
writing to the Company,  and upon any such  declaration,  the Obligations  shall
become  immediately  due and  payable.  If an Event  of  Default  occurs  and is
continuing  for the  period  set  forth  therein,  then  the  Obligations  shall
automatically  become  immediately due and payable without  declaration or other
act on the part of the Secured Party.

(b) Upon the occurrence of an Event of Default,  the Secured Party shall: (i) be
entitled to receive all  distributions  with respect to the Pledged  Collateral,
(ii) to  cause  the  Pledged  Property  to be  transferred  into the name of the
Secured Party or its nominee, (iii) to dispose of the Pledged Property, and (iv)
to realize  upon any and all  rights in the  Pledged  Property  then held by the
Secured Party.

SECTION 5.2. METHOD OF REALIZING UPON THE PLEDGED PROPERTY: OTHER REMEDIES.

      Upon the occurrence of an Event of Default,  in addition to any rights and
remedies  available at law or in equity,  the following  provisions shall govern
the Secured Party's right to realize upon the Pledged Property:

(a) Any item ofthe  Pledged  Property may be sold for cash or other value in any
number of lots at brokers board,  public auction or private sale and may be sold
without  demand,  advertisement  or notice  (except that the Secured Party shall
give the Company ten (10) days' prior written notice of the time and place or of
the time  after  which a private  sale may be made (the "Sale  Notice")),  which
notice period is hereby  agreed to be  commercially  reasonable.  At any sale or
sales of the Pledged Property, the Company may bid for and purchase the whole or
any part of the Pledged  Property  and, upon  compliance  with the terms of such
sale, may hold,  exploit and dispose of the same without further  accountability
to the Secured  Party.  The Company  will  execute and  deliver,  or cause to be
executed and  delivered,  such  instruments,  documents,  assignments,  waivers,
certificates,  and  affidavits  and supply or cause to be supplied  such further
information and take such further action as the Secured Party  reasonably  shall
require in connection with any such sale.

(b) Any cash being held by the Secured Party as Pledged  Collateral and all cash
proceeds  received by the Secured Party in respect of, sale of, collection from,
or other  realization  upon all or any part of the Pledged  Collateral  shall be
applied as follows:

(i) to the  payment  of all  amounts  due the  Secured  Party  for the  expenses
reimbursable to it hereunder or owed to it pursuant to Section 8.3 hereof;

(ii) to the payment of the Obligations then due and unpaid.

(iii) the balance, if any, to the person or persons entitled thereto, including,
without limitation, the Company.

(c) In addition to all of the rights and  remedies  which the Secured  Party may
have pursuant to this Agreement,  the Secured Party shall have all of the rights
and remedies provided by law,  including,  without  limitation,  those under the
Uniform Commercial Code.


                                       4
<PAGE>

(i) If the Company fails to pay such amounts due upon the occurrence of an Event
of Default which is continuing,  then the Secured Party may institute a judicial
proceeding for the collection of the sums so due and unpaid,  may prosecute such
proceeding  to  judgment or final  decree and may  enforce the same  against the
Company and  collect the monies  adjudged or decreed to be payable in the manner
provided by law out of the property of Company, wherever situated.

(ii) The  Company  agrees  that it  shall be  liable  for any  reasonable  fees,
expenses and costs incurred by the Secured Party in connection with enforcement,
collection and  preservation of the Transaction  Documents,  including,  without
limitation, reasonable legal fees and expenses, and such amounts shall be deemed
included as  Obligations  secured hereby and payable as set forth in Section 8.3
hereof.

SECTION 5.3. PROOFS OF CLAIM.

In  case  of  the  pendency  of  any  receivership,   insolvency,   liquidation,
bankruptcy,  reorganization,   arrangement,  adjustment,  composition  or  other
judicial proceeding relating to the Company or the property of the Company or of
such other obligor or its creditors,  the Secured Party (irrespective of whether
the  Obligations  shall  then be due and  payable  as  therein  expressed  or by
declaration  or otherwise  and  irrespective  of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), subject
to the rights of Previous Security Holders, shall be entitled and empowered,  by
intervention in such proceeding or otherwise:

(i) to file and  prove a claim for the whole  amount of the  Obligations  and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Secured  Party  (including  any claim for the  reasonable
legal fees and expenses and other expenses paid or incurred by the Secured Party
permitted   hereunder  and  of  the  Secured  Party  allowed  in  such  judicial
proceeding), and

(ii) to collect and receive any monies or other property  payable or deliverable
on any such claims and to  distribute  the same;  and any  custodian,  receiver,
assignee,  trustee,  liquidator,  sequestrator or other similar  official in any
such judicial  proceeding is hereby authorized by the Secured Party to make such
payments  to the Secured  Party and,  in the event that the Secured  Party shall
consent to the making of such payments  directed to the Secured Party, to pay to
the Secured Party any amounts for expenses due it hereunder.

SECTION 5.4. DUTIES REGARDING PLEDGED COLLATERAL.

      The Secured Party shall have no duty as to the collection or protection of
the Pledged  Property  or any income  thereon or as to the  preservation  of any
rights pertaining thereto, beyond the safe custody and reasonable care of any of
the Pledged Property actually in the Secured Party's possession.

                                   ARTICLE 6.

                              AFFIRMATIVE COVENANTS

      The Company  covenants and agrees that, from the date hereof and until the
Obligations  have been fully paid and satisfied,  unless the Secured Party shall
consent otherwise in writing (as provided in Section 8.4 hereof):

SECTION 6.1. EXISTENCE, PROPERTIES, ETC.

(a) The Company shall do, or cause to be done,  all things,  or proceed with due
diligence  with any  actions  or  courses  of  action,  that  may be  reasonably
necessary (i) to maintain  Company's due organization,  valid existence and good
standing under the laws of its state of incorporation,  and (ii) to preserve and
keep in full force and effect all qualifications,  licenses and registrations in
those  jurisdictions in which the failure to do so could have a Material Adverse
Effect (as  defined  below);  and (b) the  Company  shall not do, or cause to be
done, any act impairing the Company's  corporate power or authority (i) to carry
on the Company's business as now conducted,  and (ii) to execute or deliver this
Agreement or any other  document  delivered in connection  herewith,  including,
without limitation, any UCC-1 Financing Statements required by the Secured Party
to which it is or will be a party, or perform any of its  obligations  hereunder
or thereunder. For purpose of this Agreement, the term "Material Adverse Effect"
shall mean any material and adverse affect as determined by Secured Party in its
sole  discretion,  whether  individually  or in  the  aggregate,  upon  (a)  the
Company's assets, business,  operations,  properties or condition,  financial or
otherwise;  (b) the Company's to make payment as and when due of all or any part
of the Obligations; or (c) the Pledged Property.


                                       5
<PAGE>

SECTION 6.2. FINANCIAL STATEMENTS AND REPORTS.

      The Company shall  furnish to the Secured  Party within a reasonable  time
such  financial  data as the Secured Party may  reasonably  request,  including,
without limitation, the following:

(a) The balance  sheet of the Company as of the close of each fiscal  year,  the
statement of earnings  and  retained  earnings of the Company as of the close of
such fiscal  year,  and  statement of cash flows for the Company for such fiscal
year, all in reasonable  detail,  prepared in accordance with generally accepted
accounting principles consistently applied, certified by the chief executive and
chief  financial  officers  of  the  Company  as  being  true  and  correct  and
accompanied by a certificate of the chief executive and chief financial officers
of the  Company,  stating  that the Company has kept,  observed,  performed  and
fulfilled each covenant, term and condition of this Agreement during such fiscal
year and that no Event of Default  hereunder has occurred and is continuing,  or
if an Event of Default has occurred and is continuing,  specifying the nature of
same,  the period of  existence  of same and the action the Company  proposes to
take in connection therewith;

(b) A balance sheet of the Company as of the close of each month,  and statement
of earnings and retained  earnings of the Company as of the close of such month,
all  in  reasonable  detail,  and  prepared  substantially  in  accordance  with
generally accepted accounting principles consistently applied,  certified by the
chief  executive and chief  financial  officers of the Company as being true and
correct; and

(c)  Copies of all  accountants'  reports  and  accompanying  financial  reports
submitted to the Company by  independent  accountants  in  connection  with each
annual examination of the Company.

SECTION 6.3. ACCOUNTS AND REPORTS.

      The Company shall  maintain a standard  system of accounting in accordance
with generally accepted accounting principles  consistently applied and provide,
at its sole expense, to the Secured Party the following:

(a) as soon as available,  a copy of any notice or other communication  alleging
any nonpayment or other material breach or default,  or any foreclosure or other
action  respecting any material  portion of its assets and properties,  received
respecting any of the  indebtedness  of the Company in excess of $100,000 (other
than the  Obligations),  or any demand or other  request for  payment  under any
guaranty,  assumption,  purchase  agreement or similar  agreement or arrangement
respecting  the  indebtedness  or  obligations  of others in excess of $100,000,
including  any received from any person acting on behalf of the Secured Party or
beneficiary thereof; and

(b) within  fifteen (15) days after the making of each  submission or filing,  a
copy of any  report,  financial  statement,  notice or other  document,  whether
periodic  or  otherwise,  submitted  to  the  shareholders  of the  Company,  or
submitted to or filed by the Company with any governmental  authority  involving
or affecting (i) the Company that could have a Material Adverse Effect; (ii) the
Obligations;  (iii)  any  part of the  Pledged  Collateral;  or (iv)  any of the
transactions contemplated in this Agreement or the Loan Instruments.

SECTION 6.4. MAINTENANCE OF BOOKS AND RECORDS; INSPECTION.

      The Company shall  maintain its books,  accounts and records in accordance
with generally accepted accounting  principles  consistently applied, and permit
the Secured Party, its officers and employees and any  professionals  designated
by the  Secured  Party in  writing,  at any time to visit and inspect any of its
properties  (including but not limited to the collateral  security  described in
the  Transaction  Documents  and/or the Loan  Instruments),  corporate books and
financial  records,  and to discuss its accounts,  affairs and finances with any
employee, officer or director thereof.


                                       6
<PAGE>

SECTION 6.5. MAINTENANCE AND INSURANCE.

(a) The Company shall  maintain or cause to be  maintained,  at its own expense,
all of its assets and properties in good working order and condition, making all
necessary repairs thereto and renewals and replacements thereof.

(b) The Company shall  maintain or cause to be  maintained,  at its own expense,
insurance in form,  substance  and amounts  (including  deductibles),  which the
Company deems reasonably  necessary to the Company's  business,  (i) adequate to
insure all assets and properties of the Company, which assets and properties are
of a  character  usually  insured  by  persons  engaged  in the same or  similar
business  against loss or damage  resulting from fire or other risks included in
an extended coverage policy; (ii) against public liability and other tort claims
that may be incurred by the Company; (iii) as may be required by the Transaction
Documents  and/or  applicable  law and (iv) as may be  reasonably  requested  by
Secured Party, all with adequate, financially sound and reputable insurers.

SECTION 6.6. CONTRACTS AND OTHER COLLATERAL.

      The Company shall perform all of its obligations  under or with respect to
each  instrument,  receivable,  contract  and other  intangible  included in the
Pledged  Property  to which the Company is now or  hereafter  will be party on a
timely basis and in the manner therein required,  including, without limitation,
this Agreement.

SECTION 6.7. DEFENSE OF COLLATERAL, ETC.

      The Company shall defend and enforce its right,  title and interest in and
to any part of: (a) the Pledged  Property;  and (b) if not  included  within the
Pledged  Property,  those assets and properties whose loss could have a Material
Adverse Effect,  the Company shall defend the Secured  Party's right,  title and
interest in and to each and every part of the Pledged Property, each against all
manner of claims and demands on a timely  basis to the full extent  permitted by
applicable law.

SECTION 6.8. PAYMENT OF DEBTS, TAXES, ETC.

      The Company shall pay, or cause to be paid,  all of its  indebtedness  and
other liabilities and perform, or cause to be performed,  all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or cause
to be paid or discharged,  all taxes, assessments and other governmental charges
and levies  imposed upon it, upon any of its assets and  properties on or before
the last day on which the same may be paid without  penalty,  as well as pay all
other  lawful  claims  (whether  for  services,  labor,  materials,  supplies or
otherwise) as and when due.

SECTION 6.9. TAXES AND ASSESSMENTS; TAX INDEMNITY.

      The  Company  shall (a) file all tax  returns  and  appropriate  schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency,  (b) pay and  discharge  all taxes,  assessments  and  governmental
charges or levies imposed upon the Company,  upon its income and profits or upon
any  properties  belonging  to it, prior to the date on which  penalties  attach
thereto,  and (c) pay all taxes,  assessments and governmental charges or levies
that,  if  unpaid,  might  become a lien or charge  upon any of its  properties;
provided,  however,  that the  Company in good faith may  contest  any such tax,
assessment,  governmental  charge or levy described in the foregoing clauses (b)
and (c) so long as appropriate reserves are maintained with respect thereto.

SECTION 6.10. COMPLIANCE WITH LAW AND OTHER AGREEMENTS.

      The Company shall  maintain its business  operations and property owned or
used in  connection  therewith in material  compliance  with (a) all  applicable
federal,  state  and local  laws,  regulations  and  ordinances  governing  such
business  operations  and the use and  ownership of such  property,  and (b) all
agreements, licenses, franchises,  indentures and mortgages to which the Company
is a party or by which the Company or any of its  properties  is bound.  Without
limiting the foregoing,  the Company shall pay all of its indebtedness  promptly
in accordance with the terms thereof.


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<PAGE>

SECTION 6.11. NOTICE OF DEFAULT.

      The  Company  shall  give  written  notice  to the  Secured  Party  of the
occurrence  of any  default  or Event  of  Default  under  this  Agreement,  the
Transaction  Documents or any other Loan  Instrument  or any other  agreement of
Company for the payment of money, promptly upon the occurrence thereof.  SECTION

6.12. NOTICE OF LITIGATION.

      The Company shall give notice, in writing, to the Secured Party of (a) any
actions,  suits or  proceedings  wherein  the  amount  at issue is in  excess of
$100,000, instituted by any persons against the Company, or materially affecting
any of the assets of the  Company,  and (b) any  dispute,  not  resolved  within
fifteen (15) days of the  commencement  thereof,  between the Company on the one
hand and any  governmental  or  regulatory  body on the other hand,  which might
reasonably  be  expected  to have a  Material  Adverse  Effect  on the  business
operations or financial condition of the Company.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS

      The Company  covenants  and agrees  that,  from the date hereof  until the
Obligations  have been fully paid and satisfied,  the Company shall not,  unless
the Secured Party shall consent otherwise in writing:

SECTION 7.1. LIENS AND ENCUMBRANCES.

      The Company shall not directly or indirectly make, create,  incur,  assume
or permit to exist any assignment, transfer, pledge, mortgage, security interest
or other lien or  encumbrance  of any  nature in, to or against  any part of the
Pledged Property or of the Company's  capital stock, or offer or agree to do so,
or own or acquire or agree to acquire  any asset or  property  of any  character
subject to any of the foregoing  encumbrances  (including any  conditional  sale
contract or other title retention  agreement),  or assign,  pledge or in any way
transfer or encumber  its right to receive any income or other  distribution  or
proceeds from any part of the Pledged  Property or the Company's  capital stock;
or enter into any  sale-leaseback  financing  respecting any part of the Pledged
Property as lessee,  or cause or assist the inception or  continuation of any of
the foregoing.

SECTION 7.2.  CERTIFICATE OF INCORPORATION,  BY-LAWS,  MERGERS,  CONSOLIDATIONS,
ACQUISITIONS AND SALES.

      Without  the prior  express  written  consent of the  Secured  Party,  the
Company shall not: (a) Amend its Certificate of  Incorporation  or By-Laws;  (b)
issue  or sell its  stock,  stock  options,  bonds,  notes  or  other  corporate
securities or obligations,  except as otherwise permitted in Section 4(k) of the
Securities  Purchase  Agreement  of even  date  herewith;  (c) be a party to any
merger,  consolidation  or corporate  reorganization,  (d) purchase or otherwise
acquire all or  substantially  all of the assets or stock of, or any partnership
or joint  venture  interest  in, any other  person,  firm or  entity,  (e) sell,
transfer,  convey,  grant a security interest in or lease all or any substantial
part of its assets, nor (f) create any subsidiaries nor convey any of its assets
to any subsidiary.

SECTION 7.3. MANAGEMENT, OWNERSHIP.

      The Company shall not materially change its ownership,  executive staff or
management  without  the  prior  written  consent  of  the  Secured  Party.  The
ownership, executive staff and management of the Company are material factors in
the Secured Party's willingness to institute and maintain a lending relationship
with the Company.

SECTION 7.4. DIVIDENDS, ETC.

      The Company  shall not declare or pay any dividend of any kind, in cash or
in property, on any class of its capital stock, nor purchase,  redeem, retire or
otherwise  acquire for value any shares of such stock, nor make any distribution
of any kind in respect thereof,  nor make any return of capital to shareholders,
nor make any payments in respect of any  pension,  profit  sharing,  retirement,
stock option,  stock bonus,  incentive  compensation  or similar plan (except as
required  or  permitted  hereunder),  without the prior  written  consent of the
Secured Party.


                                       8
<PAGE>

SECTION 7.5. GUARANTIES; LOANS.

      The  Company  shall not  guarantee  nor be liable in any  manner,  whether
directly or  indirectly,  or become  contingently  liable after the date of this
Agreement in connection  with the  obligations or  indebtedness of any person or
persons,  except  for  (i)  the  indebtedness  currently  secured  by the  liens
identified on the Pledged  Property  identified on Exhibit A hereto and (ii) the
endorsement  of  negotiable  instruments  payable to the  Company for deposit or
collection  in the ordinary  course of business.  The Company shall not make any
loan,  advance or  extension  of credit to any  person  other than in the normal
course of its business.

SECTION 7.6. DEBT.

      The  Company  shall  not  create,  incur,  assume  or  suffer to exist any
additional  indebtedness of any description whatsoever in an aggregate amount in
excess of $100,000  (excluding  any  indebtedness  of the Company to the Secured
Party,  trade  accounts  payable and accrued  expenses  incurred in the ordinary
course of business and the endorsement of negotiable  instruments payable to the
Company,  respectively  for  deposit or  collection  in the  ordinary  course of
business).

SECTION 7.7. CONDUCT OF BUSINESS.

      The  Company  will  continue to engage,  in an  efficient  and  economical
manner, in a business of the same general type as conducted by it on the date of
this Agreement.

SECTION 7.8. PLACES OF BUSINESS.

      The location of the Company's chief place of business is 7575  TransCanada
- Suite  305,  St-Laurent,  Quebec  H4T 1V6.  The  Company  shall not change the
location of its chief place of business,  chief executive office or any place of
business disclosed to the Secured Party or move any of the Pledged Property from
its current  location  without  thirty (30) days'  prior  written  notice to the
Secured Party in each instance.

                                   ARTICLE 8.

                                  MISCELLANEOUS

SECTION 8.1. NOTICES.

      All  notices or other  communications  required or  permitted  to be given
pursuant to this  Agreement  shall be in writing and shall be considered as duly
given on:  (a) the date of  delivery,  if  delivered  in person,  by  nationally
recognized  overnight  delivery  service or (b) five (5) days  after  mailing if
mailed from within the  continental  United  States by  certified  mail,  return
receipt requested to the party entitled to receive the same:

If to the Secured Party:     Cornell Capital Partners, LP
                             101 Hudson Street-Suite 3700
                             Jersey City, New Jersey 07302
                             Attention: Mark Angelo
                                        Portfolio Manager
                             Telephone: (201) 986-8300
                             Facsimile: (201) 985-8266


                                       9
<PAGE>

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

And if to the Company:       Teleplus Enterprises, Inc.
                             7575 TransCanada - Suite 305
                             St-Laurent, Quebec H4T 1V6
                             Attention: Marius Silvasan, CEO
                             Telephone: (514) 344-0778
                             Facsimile: (514) 344-8675

With a copy to:              Kirkpatrick & Lockhart Nicholson Graham, LLP
                             201 South Biscayne Boulevard, Suite 2000
                             Miami, Florida 33131
                             Attention: Clayton E. Parker, Esq.
                             Telephone: (305) 539-3306
                             Facsimile: (305) 328-7095

      Any party may  change  its  address  by giving  notice to the other  party
stating its new address.  Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.

SECTION 8.2. SEVERABILITY.

      If any provision of this Agreement shall be held invalid or unenforceable,
such  invalidity  or  unenforceability  shall attach only to such  provision and
shall not in any  manner  affect or render  invalid or  unenforceable  any other
severable  provision of this Agreement,  and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.

SECTION 8.3. EXPENSES.

      In the event of an Event of Default,  the Company  will pay to the Secured
Party the amount of any and all  reasonable  expenses,  including the reasonable
fees  and  expenses  of its  counsel,  which  the  Secured  Party  may  incur in
connection  with: (i) the custody or  preservation  of, or the sale,  collection
from, or other realization upon, any of the Pledged Property;  (ii) the exercise
or enforcement of any of the rights of the Secured Party  hereunder or (iii) the
failure by the Company to perform or observe any of the provisions hereof.

SECTION 8.4. WAIVERS, AMENDMENTS, ETC.

      The Secured  Party's  delay or failure at any time or times  hereafter  to
require  strict  performance  by  Company  of any  undertakings,  agreements  or
covenants shall not waiver,  affect,  or diminish any right of the Secured Party
under this Agreement to demand strict compliance and performance  herewith.  Any
waiver by the  Secured  Party of any Event of Default  shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto and whether of the same or a different type.  None of the  undertakings,
agreements  and  covenants of the Company  contained in this  Agreement,  and no
Event of Default,  shall be deemed to have been waived by the Secured Party, nor
may this  Agreement  be  amended,  changed  or  modified,  unless  such  waiver,
amendment,  change or  modification  is  evidenced by an  instrument  in writing
specifying  such waiver,  amendment,  change or  modification  and signed by the
Secured Party.


                                       10
<PAGE>

SECTION 8.5. CONTINUING SECURITY INTEREST.

      This Agreement shall create a continuing  security interest in the Pledged
Property and shall: (i) remain in full force and effect until payment in full of
the  Obligations;  and (ii) be binding upon the Company and its  successors  and
heirs and (iii) inure to the benefit of the Secured Party and its successors and
assigns.  Upon the  payment  or  satisfaction  in full of the  Obligations,  the
Company shall be entitled to the return, at its expense,  of such of the Pledged
Property as shall not have been sold in  accordance  with  Section 5.2 hereof or
otherwise applied pursuant to the terms hereof.

SECTION 8.6. INDEPENDENT REPRESENTATION.

      Each party hereto  acknowledges and agrees that it has received or has had
the opportunity to receive  independent legal counsel of its own choice and that
it has been sufficiently apprised of its rights and responsibilities with regard
to the substance of this Agreement.

SECTION 8.7. APPLICABLE LAW: JURISDICTION.

      This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New Jersey  without regard to the principles of conflict of
laws.  The parties  further agree that any action between them shall be heard in
Hudson County,  New Jersey,  and expressly consent to the jurisdiction and venue
of the  Superior  Court of New Jersey,  sitting in Hudson  County and the United
States  District  Court for the  District of New Jersey  sitting in Newark,  New
Jersey  for the  adjudication  of any civil  action  asserted  pursuant  to this
Paragraph.

SECTION 8.8. WAIVER OF JURY TRIAL.

      AS A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND TO MAKE THE  FINANCIAL  ACCOMMODATIONS  TO THE COMPANY,  THE COMPANY  HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING  RELATED IN ANY WAY TO
THIS AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

SECTION 8.9. ENTIRE AGREEMENT.

      This  Agreement  constitutes  the entire  agreement  among the parties and
supersedes any prior agreement or  understanding  among them with respect to the
subject matter hereof.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       11
<PAGE>

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


                                        COMPANY:
                                        TELEPLUS ENTERPRISES, INC.

                                        By: /s/ Marius Silvasan
                                            --------------------------------
                                        Name:   Marius Silvasan
                                        Title:  CEO


                                        SECURED PARTY:
                                        CORNELL CAPITAL PARTNERS, LP

                                        BY: YORKVILLE ADVISORS, LLC
                                        ITS: GENERAL PARTNER

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



                                       12
<PAGE>

                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY

      For the purpose of securing prompt and complete payment and performance by
the  Company  of  all  of  the  Obligations,  the  Company  unconditionally  and
irrevocably hereby grants to the Secured Party a continuing security interest in
and to, and lien upon, the following Pledged Property of the Company:

(a)  all  goods  of  the  Company,  including,  without  limitation,  machinery,
equipment,  furniture,  furnishings,  fixtures,  signs,  lights,  tools,  parts,
supplies  and motor  vehicles of every kind and  description,  now or  hereafter
owned by the Company or in which the Company may have or may  hereafter  acquire
any interest,  and all replacements,  additions,  accessions,  substitutions and
proceeds  thereof,  arising  from the sale or  disposition  thereof,  and  where
applicable,  the proceeds of insurance  and of any tort claims  involving any of
the foregoing;

(b) all  inventory  of the  Company,  including,  but not limited to, all goods,
wares, merchandise,  parts, supplies, finished products, other tangible personal
property, including such inventory as is temporarily out of Company's custody or
possession  and  including  any returns  upon any  accounts  or other  proceeds,
including insurance  proceeds,  resulting from the sale or disposition of any of
the foregoing;

(c) all  contract  rights and general  intangibles  of the  Company,  including,
without limitation,  goodwill,  trademarks, trade styles, trade names, leasehold
interests,   partnership  or  joint  venture   interests,   patents  and  patent
applications,  copyrights,  deposit  accounts  whether  now  owned or  hereafter
created;

(d) all  documents,  warehouse  receipts,  instruments  and chattel paper of the
Company whether now owned or hereafter created;

(e)  all  accounts  and  other  receivables,   instruments  or  other  forms  of
obligations and rights to payment of the Company (herein  collectively  referred
to as "Accounts"),  together with the proceeds thereof, all goods represented by
such  Accounts  and  all  such  goods  that  may be  returned  by the  Company's
customers,  and all  proceeds  of any  insurance  thereon,  and all  guarantees,
securities  and liens  which the  Company  may hold for the  payment of any such
Accounts  including,  without  limitation,  all rights of  stoppage  in transit,
replevin and reclamation and as an unpaid vendor and/or lienor, all of which the
Company  represents  and warrants will be bona fide and existing  obligations of
its respective customers, arising out of the sale of goods by the Company in the
ordinary course of business;

(f) to the extent assignable,  all of the Company's rights under all present and
future  authorizations,  permits,  licenses and franchises  issued or granted in
connection with the operations of any of its facilities;

(g)  all  products  and  proceeds  (including,  without  limitation,   insurance
proceeds) from the above-described Pledged Property.


                                       13