Document:

Exhibit 10.2

                                                           DATED:  JULY 28, 2006

      NEITHER THIS  DEBENTURE NOR THE  SECURITIES  INTO WHICH THIS  DEBENTURE IS
      CONVERTIBLE   HAVE  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.

No. TPLE-4                                                            $3,000,000

                           TELEPLUS ENTERPRISES, INC.

                          SECURED CONVERTIBLE DEBENTURE

                               DUE: JULY 28, 2009

      This Secured Convertible Debenture (the "Debenture") is issued by TELEPLUS
ENTERPRISES,  INC., a Nevada  corporation  (the  "Company"),  to CORNELL CAPITAL
PARTNERS,  LP (the  "Holder"),  pursuant  to that  certain  Securities  Purchase
Agreement (the "Securities Purchase Agreement") dated July 28, 2006.

      FOR VALUE  RECEIVED,  the Company hereby  promises to pay to the Holder or
its  successors  and  assigns  the  principal  sum  of  Three  Million   Dollars
($3,000,000)  together  with  accrued but unpaid  interest on or before July 28,
2009 (the "Maturity Date") in accordance with the following terms:

      Section 1. General Terms

      (a) Interest.  Interest shall accrue on the outstanding  principal balance
hereof  at an  annual  rate  equal  to ten  percent  (10%).  Interest  shall  be
calculated on the basis of a 365-day year and the actual number of days elapsed,
to the extent permitted by applicable law.  Interest  hereunder shall be paid on
the Maturity  Date (or sooner as provided  herein) to the Holder or its assignee
in whose  name this  Debenture  is  registered  on the  records  of the  Company
regarding  registration  and  transfers of Debentures in cash or in Common Stock
(valued at the Closing Bid Price on the  Trading  Day  immediately  prior to the
date paid) at the option of the Company.

<PAGE>

      (b)  Security.  This  Debenture  is secured by a Second  Pledge and Escrow
Agreement (the "Pledge  Agreement")  dated July 28, 2006 among the Company,  the
Holder,  the Escrow Agent, a Second Amended and Restated Security Agreement (the
"Security  Agreement")  dated July 28, 2006  between the Company and the Holder,
and  the  Second   Amended   and   Restated   Subsidiary   Security   Agreements
(collectively,  the "Subsidiary Security  Agreements") dated July 28, 2006 among
the Company, the Holder, the three (3) subsidiaries of the Company.

      Section 2. Events of Default.

      (a) An "Event of  Default",  wherever  used  herein,  means any one of the
following  events  (whatever  the reason and  whether it shall be  voluntary  or
involuntary or effected by operation of law or pursuant to any judgment,  decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) Any default in the payment of the principal  of,  interest on or
other charges in respect of this Debenture,  free of any claim of subordination,
as and when the same  shall  become due and  payable  whether  upon a  Mandatory
Redemption (as defined in Section 3(b)),  an Optional  Redemption (as defined in
Section 3(a)),  or a Conversion  Date or the Maturity Date or by acceleration or
otherwise;

            (ii) The Company or any subsidiary of the Company shall commence, or
there shall be commenced  against the Company or any  subsidiary  of the Company
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any  successor  thereto,  or the  Company or any  subsidiary  of the  Company
commences any other proceeding under any reorganization, arrangement, adjustment
of debt,  relief of debtors,  dissolution,  insolvency or liquidation or similar
law of any  jurisdiction  whether  now or  hereafter  in effect  relating to the
Company or any  subsidiary  of the  Company or there is  commenced  against  the
Company or any  subsidiary  of the Company any such  bankruptcy,  insolvency  or
other  proceeding  which  remains  undismissed  for a period of 61 days;  or the
Company or any subsidiary of the Company is  adjudicated  insolvent or bankrupt;
or any order of relief or other order  approving  any such case or proceeding is
entered; or the Company or any subsidiary of the Company suffers any appointment
of any custodian,  private or court appointed receiver or the like for it or any
substantial part of its property which continues  undischarged or unstayed for a
period of sixty one (61) days;  or the Company or any  subsidiary of the Company
makes a general  assignment for the benefit of creditors;  or the Company or any
subsidiary of the Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay,  its debts  generally as they become due; or the
Company or any  subsidiary  of the Company shall call a meeting of its creditors
with a view to  arranging a  composition,  adjustment  or  restructuring  of its
debts;  or the  Company or any  subsidiary  of the  Company  shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the  foregoing;  or any corporate or other action is taken by the Company
or any  subsidiary  of the  Company  for the  purpose  of  effecting  any of the
foregoing;

            (iii) The Company or any  subsidiary of the Company shall default in
any of its  obligations  under  any  other  debenture  or any  mortgage,  credit
agreement or other facility,  indenture agreement,  factoring agreement or other
instrument under which there may be issued,  or by which there may be secured or
evidenced any  indebtedness  for borrowed money or money due under any long term
leasing or factoring arrangement of the Company or any subsidiary of the Company
in an amount exceeding  $100,000,  whether such indebtedness now exists or shall
hereafter be created and such default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would  otherwise
become due and payable;

            (iv) The  Common  Stock  shall  cease to be quoted  for  trading  or
listing  for trading on any of (a) the  American  Stock  Exchange,  (b) New York
Stock Exchange,  (c) the Nasdaq National Market,  (d) the Nasdaq Capital Market,
or (e) the NASD OTC Bulletin Board ("OTC") (each, a "Primary  Market") and shall
not again be quoted or listed for trading on any Primary  Market within five (5)
Trading Days of such delisting;

            (v) The Company or any subsidiary of the Company shall be a party to
any Change of Control Transaction (as defined in Section 6);

                                       2
<PAGE>

            (vi)  The  Company  shall  fail  to  file  the   Underlying   Shares
Registration Statement (as defined in Section 6) with the Commission (as defined
in Section 6), or the Underlying  Shares  Registration  Statement shall not have
been declared effective by the Commission,  in each case within the time periods
set forth in the Investor  Registration Rights Agreement  ("Registration  Rights
Agreement") dated July 28, 2006 between the Company and the Holder;

            (vii) If the  effectiveness  of the Underlying  Shares  Registration
Statement  lapses for any reason or the Holder  shall not be permitted to resell
the shares of Common Stock underlying this Debenture under the Underlying Shares
Registration  Statement,  in either  case,  for more  than five (5)  consecutive
Trading  Days  or an  aggregate  of  eight  Trading  Days  (which  need  not  be
consecutive Trading Days);

            (viii) The Company shall fail for any reason to deliver Common Stock
certificates to a Holder prior to the fifth (5th) Trading Day after a Conversion
Date or after a Redemption  Date if the Company is eligible and elects to settle
a Mandatory  Redemption in shares of Common Stock,  or the Company shall provide
notice to the Holder,  including by way of public announcement,  at any time, of
its intention not to comply with requests for  conversions,  or  settlements  of
Mandatory  Redemptions in shares of Common Stock,  in accordance  with the terms
hereof

            (ix) The Company shall fail for any reason to deliver the payment in
cash pursuant to a Buy-In (as defined herein) within three (3) days after notice
is claimed delivered hereunder;

            (x) The Company shall fail to observe or perform any other covenant,
agreement or warranty contained in, or otherwise commit any breach or default of
any  provision of this  Debenture  (except as may be covered by Section  2(a)(i)
through 2(a)(ix)  hereof) or any Transaction  Document (as defined in Section 6)
which is not cured with in the time prescribed, or an Event of Default under any
other debenture issued to the Holder in connection with the Securities  Purchase
Agreement shall occur;

      (b) During the time that any portion of this Debenture is outstanding,  if
any Event of Default has occurred,  the full principal amount of this Debenture,
together with interest and other amounts owing in respect  thereof,  to the date
of  acceleration  shall become at the  Holder's  election,  immediately  due and
payable in cash,  provided  however,  the Holder may request  (but shall have no
obligation  to request)  payment of such amounts in Common Stock of the Company.
If an Event of  Default  shall  occur,  at the sole  option of the  Holder,  the
Conversion  Price  shall be reduced to $0.05.  Furthermore,  in  addition to any
other  remedies,  the Holder  shall have the right (but not the  obligation)  to
convert  this  Debenture  at any time  after (x) an Event of  Default or (y) the
Maturity  Date at the  Conversion  Price then  in-effect.  The  Holder  need not
provide and the Company hereby waives any presentment,  demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any
grace period  enforce any and all of its rights and remedies  hereunder  and all
other remedies  available to it under  applicable  law. Such  declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder. No such
rescission or annulment  shall affect any subsequent  Event of Default or impair
any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any
other provision of this Debenture or any Transaction Document,  the Holder shall
have no obligation to comply with or adhere to any  limitations,  if any, on the
conversion of this Debenture or the sale of the Underlying Shares.

      Section 3. Redemptions.

      (a) Company's  Optional Cash  Redemption.  The Company at its option shall
have the right to  redeem  ("Optional  Redemption")  a  portion  or all  amounts
outstanding  under this Debenture prior to the Maturity Date provided that as of
the date of the Holder's receipt of a Redemption  Notice (as defined herein) (i)
the Closing Bid Price of the of the Common Stock, as reported by Bloomberg,  LP,
is less than the Fixed Conversion  Price, (ii) and (iii) no Event of Default has
occurred.  The Company shall pay an amount equal to the  principal  amount being
redeemed plus a redemption premium ("Redemption  Premium") equal to five percent
(5%) of the principal  amount being  redeemed  (collectively  referred to as the
"Redemption  Amount").  In order to make a  redemption,  the Company shall first
provide  written notice to the Holder of its intention to make a redemption (the
"Redemption Notice") setting forth the amount of principal it desires to redeem.
After receipt of the Redemption  Notice the Holder shall have three (3) business
days to elect to convert  all or any portion of this  Debenture,  subject to the
limitations  set forth in Section 4(b).  On the fourth (4th)  business day after
the  Redemption  Notice,  the Company shall deliver to the Holder the Redemption
Amount with respect to the  principal  amount  redeemed  after giving  effect to
conversions effected during the three (3) business day period.

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<PAGE>

      (b) Mandatory  Redemptions.  Beginning on March 1, 2007, and continuing on
the first Trading Day of each calendar month thereafter,  the Company shall make
mandatory  redemptions  ("Mandatory   Redemptions")  consisting  of  outstanding
principal.  The principal amount of each Mandatory  Redemption shall be equal to
$100,000  ("Mandatory  Redemption Amount") per calendar month, until all amounts
owed under this Debenture have been paid in full.

      The  Company  shall  transmit  a copy of a  Redemption  Notice in the form
attached hereto as Exhibit A (the  "Redemption  Notice") via facsimile (or other
delivery)  for  receipt  on or prior to 5:00 pm New York  City time at least one
Trading Day prior to the due date of such Mandatory  Redemption (the "Redemption
Date") which shall (i) indicate the applicable Mandatory Redemption Amount, (ii)
indicate the Company's choice of settlement  options  (pursuant to Section 3(c))
with respect to such Redemption Notice, and (iii) be signed by an officer of the
Company.  The Company  shall settle all Mandatory  Redemptions  within 5 Trading
Days of the Redemption Date (the "Settlement  Date").  The Holder shall have the
absolute right, in its sole discretion,  to suspend the Company's obligations to
make Mandatory  Redemptions by providing the Company with written notice of such
election  ("Suspension  Notice") prior to the Redemption  Date. The Holder shall
have no  obligation  to accept any  Mandatory  Redemptions  made by the  Company
during any suspension period specified in a Suspension Notice after the Holder's
submission  of such  Suspension  Notice.  The  obligation of the Company to make
Mandatory  Redemptions  shall  resume  on the  first  Trading  Day of the  month
following the  expiration  of the  suspension  period  specified in a Suspension
Notice.

      (c)  Company's  Settlement of Mandatory  Redemptions.  The Company has the
option,  in its sole discretion,  to settle Mandatory  Redemptions by (i) paying
the Holder cash in an amount equal to the Mandatory  Redemption  Amount plus the
Redemption  Premium,  or (ii) issuing to the Holder a number of shares of Common
Stock (the "Redemption Shares") equal to the Mandatory Redemption Amount divided
by ninety  percent  (90%) of the lowest  Volume  Weighted  Average  Price of the
Common  Stock  during the twenty (20) trading  days  immediately  preceding  the
Conversion Date as quoted by Bloomberg,  LP (the "Redemption  Conversion Price")
provided  that in order for the Company to choose  option  (ii) of this  Section
3(c), (A) the Underlying Share  Registration  Statement shall have been declared
effective and shall remain  effective on the  Redemption  Date,  (B) no Event of
Default shall have occurred,  and (C) the Closing Bid Price for the Common Stock
shall be greater than the Redemption Conversion Price as of the Redemption Date.

                                       4
<PAGE>

      (d) Special Instructions  Regarding Settlement of Mandatory Redemptions in
Shares of Common Stock. In the event that the Company chooses (if such option is
available) to settle a Mandatory  Redemption in shares of Common Stock  pursuant
to option (ii) of Section  3(c),  upon  notice to the Holder of such  settlement
selection  option,  the  Redemption  Notice  shall  be  treated  the  same  as a
Conversion  Notice  submitted by the Holder and processed in accordance with the
provisions  for  Conversion  Notices set forth in Section.  The  limitations  on
Conversions  set forth in  Section  4(b))  hereof  shall  apply to any shares of
Common Stock issued pursuant to this Section 3.

      Section 4. Conversion.

      (a) Conversion at Option of Holder.

            (i) This Debenture shall be convertible  into shares of Common Stock
at the  option of the  Holder,  in whole or in part at any time and from time to
time,  after the  Original  Issue Date (as defined in Section 6) (subject to the
limitations  on  conversion  set forth in Section  4(b)  hereof).  The number of
shares of Common Stock issuable upon a conversion  hereunder equals the quotient
obtained  by  dividing  (x)  the  outstanding  amount  of this  Debenture  to be
converted  by (y) the  Conversion  Price (as  defined in Section  4(c)(i)).  The
Company shall deliver Common Stock certificates to the Holder prior to the Fifth
(5th) Trading Day after a Conversion Date.

            (ii)  Notwithstanding  anything to the contrary contained herein, if
on any  Conversion  Date:  (1) the number of shares of Common  Stock at the time
authorized, unissued and unreserved for all purposes, or held as treasury stock,
is  insufficient  to pay  principal  and interest  hereunder in shares of Common
Stock; (2) the Common Stock is not listed or quoted for trading on the OTC or on
a Primary Market;  or (3) the Company has failed to timely satisfy a conversion;
then, at the option of the Holder, the Company,  in lieu of delivering shares of
Common  Stock  pursuant to Section  4(a)(i),  shall  deliver,  within  three (3)
Trading Days of each applicable  Conversion Date, an amount in cash equal to the
product  of the  outstanding  principal  amount to be  converted  divided by the
applicable  Conversion Price, and multiplied by the highest Closing Bid Price of
the  stock  from  date of the  conversion  notice  till the date  that such cash
payment is made.

      Further,  if the Company shall not have  delivered any cash due in respect
of  conversion  of this  Debenture  by the  fifth  (5th)  Trading  Day after the
Conversion  Date, the Holder may, by notice to the Company,  require the Company
to issue shares of Common Stock  pursuant to Section 4(c),  except that for such
purpose  the  Conversion  Price  applicable  thereto  shall be the lesser of the
Conversion  Price on the Conversion Date and the Conversion Price on the date of
such Holder  demand.  Any such shares will be subject to the  provisions of this
Section.

            (iii) The Holder  shall  effect  conversions  by  delivering  to the
Company  a  completed  notice  in the  form  attached  hereto  as  Exhibit  B (a
"Conversion Notice").  The date on which a Conversion Notice is delivered is the
"Conversion  Date." Unless the Holder is converting the entire  principal amount
outstanding  under this  Debenture,  the Holder is not  required  to  physically
surrender  this  Debenture  to the  Company  in  order  to  effect  conversions.
Conversions  hereunder  shall  have  the  effect  of  lowering  the  outstanding
principal  amount of this Debenture plus all accrued and unpaid interest thereon
in an amount  equal to the  applicable  conversion.  The Holder and the  Company
shall maintain  records showing the principal  amount  converted and the date of
such conversions. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error.

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<PAGE>

(b) Certain Conversion Restrictions.

             (i) A Holder may not convert  this Debenture  or receive  shares of
Common Stock as payment of interest  hereunder to the extent such  conversion or
receipt of such interest  payment would result in the Holder,  together with any
affiliate thereof, beneficially owning (as determined in accordance with Section
13(d) of the Exchange  Act and the rules  promulgated  thereunder)  in excess of
4.99% of the then  issued  and  outstanding  shares of Common  Stock,  including
shares  issuable upon  conversion of, and payment of interest on, this Debenture
held by such Holder after application of this Section. Since the Holder will not
be  obligated  to report to the Company the number of shares of Common  Stock it
may hold at the time of a conversion  hereunder,  unless the conversion at issue
would result in the issuance of shares of Common Stock in excess of 4.99% of the
then outstanding shares of Common Stock without regard to any other shares which
may be  beneficially  owned by the Holder or an  affiliate  thereof,  the Holder
shall have the authority and  obligation  to determine  whether the  restriction
contained in this Section will limit any particular  conversion hereunder and to
the extent that the Holder  determines  that the  limitation  contained  in this
Section applies,  the  determination of which portion of the principal amount of
this Debenture is convertible shall be the  responsibility and obligation of the
Holder.  If the Holder has delivered a Conversion  Notice for a principal amount
of this  Debenture  that,  without regard to any other shares that the Holder or
its affiliates may  beneficially  own, would result in the issuance in excess of
the permitted amount hereunder, the Company shall notify the Holder of this fact
and shall honor the conversion for the maximum  principal amount permitted to be
converted on such Conversion  Date in accordance  with the periods  described in
Section  4(a)(i) and, at the option of the Holder,  either  retain any principal
amount tendered for conversion in excess of the permitted  amount  hereunder for
future  conversions or return such excess  principal  amount to the Holder.  The
provisions  of this Section may be waived by a Holder (but only as to itself and
not to any other Holder) upon not less than 65 days prior notice to the Company.
Other Holders shall be unaffected by any such waiver.

      (c) Conversion Price and Adjustments to Conversion Price.

            (i) The conversion  price in effect on any Conversion Date shall be,
at the sole  option of the Holder,  equal to either  $0.20 per share (the "Fixed
Conversion  Price") or (b) ninety  percent (90%) of the lowest  Volume  Weighted
Average  Price  of  the  Common  Stock  during  the  twenty  (20)  trading  days
immediately  preceding  the  Conversion  Date as  quoted by  Bloomberg,  LP (the
"Market Conversion Price"). The Fixed Conversion Price and the Market Conversion
Price are  collectively  referred to as the  "Conversion  Price." The Conversion
Price may be adjusted pursuant to the other terms of this Debenture.

            (ii)  If  the  Company,   at  any  time  while  this   Debenture  is
outstanding,  shall (a) pay a stock dividend or otherwise make a distribution or
distributions  on  shares  of its  Common  Stock or any  other  equity or equity
equivalent   securities  payable  in  shares  of  Common  Stock,  (b)  subdivide
outstanding  shares of Common Stock into a larger number of shares,  (c) combine
(including  by way of reverse  stock split)  outstanding  shares of Common Stock
into a smaller number of shares, or (d) issue by  reclassification  of shares of
the  Common  Stock any shares of capital  stock of the  Company,  then the Fixed
Conversion  Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common  Stock  (excluding  treasury  shares,  if any)
outstanding  before such event and of which the denominator  shall be the number
of shares of Common Stock  outstanding  after such event.  Any  adjustment  made
pursuant to this Section  shall become  effective  immediately  after the record
date for the determination of stockholders  entitled to receive such dividend or
distribution and shall become effective  immediately after the effective date in
the case of a subdivision, combination or re-classification.

                                       6
<PAGE>

            (iii)  If  the  Company,   at  any  time  while  this  Debenture  is
outstanding,  shall issue  rights,  options or warrants to all holders of Common
Stock (and not to the Holder) entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the Fixed Conversion  Price, then
the Fixed  Conversion  Price shall be  multiplied  by a  fraction,  of which the
denominator  shall be the  number  of  shares  of the  Common  Stock  (excluding
treasury  shares,  if any) outstanding on the date of issuance of such rights or
warrants  (plus the number of  additional  shares of Common  Stock  offered  for
subscription  or purchase),  and of which the  numerator  shall be the number of
shares of the Common Stock (excluding  treasury  shares,  if any) outstanding on
the date of issuance of such rights or warrants, plus the number of shares which
the  aggregate  offering  price of the total  number of shares so offered  would
purchase at the Fixed Conversion  Price.  Such adjustment shall be made whenever
such rights or warrants are issued, and shall become effective immediately after
the record date for the  determination of stockholders  entitled to receive such
rights,  options or warrants.  However,  upon the  expiration of any such right,
option or warrant to purchase  shares of the Common  Stock the issuance of which
resulted  in an  adjustment  in the  Fixed  Conversion  Price  pursuant  to this
Section,  if any such right,  option or warrant  shall expire and shall not have
been  exercised,   the  Fixed  Conversion  Price  shall  immediately  upon  such
expiration  be  recomputed  and effective  immediately  upon such  expiration be
increased  to the  price  which it would  have been  (but  reflecting  any other
adjustments  in the Fixed  Conversion  Price made pursuant to the  provisions of
this Section after the issuance of such rights or warrants)  had the  adjustment
of the Fixed Conversion Price made upon the issuance of such rights,  options or
warrants  been made on the basis of offering for  subscription  or purchase only
that number of shares of the Common Stock  actually  purchased upon the exercise
of such rights, options or warrants actually exercised.

            (iv) If the Company or any subsidiary thereof, as applicable, at any
time while this Debenture is outstanding,  shall issue shares of Common Stock or
rights, warrants,  options or other securities or debt that are convertible into
or  exchangeable  for  shares  of  Common  Stock  ("Common  Stock  Equivalents")
entitling  any Person to acquire  shares of Common  Stock,  at a price per share
less  than the Fixed  Conversion  Price (if the  holder of the  Common  Stock or
Common Stock  Equivalent  so issued  shall at any time,  whether by operation of
purchase price adjustments, reset provisions,  floating conversion,  exercise or
exchange  prices or otherwise,  or due to warrants,  options or rights per share
which is issued in connection with such issuance,  be entitled to receive shares
of Common  Stock at a price per  share  which is less than the Fixed  Conversion
Price,  such  issuance  shall be deemed to have occurred for less than the Fixed
Conversion Price),  then, at the sole option of the Holder, the Fixed Conversion
Price shall be adjusted to mirror the conversion, exchange or purchase price for
such Common Stock or Common Stock  Equivalents  (including any reset  provisions
thereof) at issue.  Such adjustment  shall be made whenever such Common Stock or
Common  Stock  Equivalents  are issued.  The Company  shall notify the Holder in
writing, no later than one (1) business day following the issuance of any Common
Stock or Common Stock Equivalent subject to this Section, indicating therein the
applicable  issuance  price,  or of  applicable  reset  price,  exchange  price,
conversion price and other pricing terms. No adjustment under this Section shall
be made as a result of issuances of Excluded Securities.

            (v) If the Company, at any time while this Debenture is outstanding,
shall  distribute  to all  holders  of  Common  Stock  (and  not to the  Holder)
evidences of its  indebtedness  or assets or rights or warrants to subscribe for
or purchase any security,  then in each such case the Fixed  Conversion Price at
which this  Debenture  shall  thereafter be  convertible  shall be determined by
multiplying the Fixed Conversion Price in effect immediately prior to the record
date  fixed  for   determination  of  stockholders   entitled  to  receive  such
distribution  by a fraction  of which the  denominator  shall be the Closing Bid
Price  determined  as of the  record  date  mentioned  above,  and of which  the
numerator shall be such Closing Bid Price on such record date less the then fair
market  value at such  record  date of the portion of such assets or evidence of
indebtedness so distributed  applicable to one  outstanding  share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments  shall be  described  in a  statement  provided to the Holder of the
portion  of  assets  or  evidences  of   indebtedness  so  distributed  or  such
subscription  rights  applicable to one share of Common Stock.  Such  adjustment
shall be made whenever any such  distribution is made and shall become effective
immediately after the record date mentioned above.

            (vi) In case of any  reclassification  of the  Common  Stock  or any
compulsory  share exchange  pursuant to which the Common Stock is converted into
other securities,  cash or property,  the Holder shall have the right thereafter
to, at its option, (A) convert the then outstanding  principal amount,  together
with all accrued but unpaid  interest and any other amounts then owing hereunder
in respect of this Debenture into the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of the Common Stock
following  such  reclassification  or share  exchange,  and the  Holder  of this
Debenture  shall  be  entitled  upon  such  event  to  receive  such  amount  of
securities,  cash or property  as the shares of the Common  Stock of the Company
into which the then outstanding principal amount,  together with all accrued but
unpaid  interest and any other  amounts then owing  hereunder in respect of this
Debenture could have been converted  immediately prior to such  reclassification
or share exchange would have been entitled, or (B) require the Company to prepay
the outstanding principal amount of this Debenture,  plus all interest and other
amounts due and payable  thereon.  The entire  prepayment price shall be paid in
cash. This provision shall  similarly apply to successive  reclassifications  or
share exchanges.

                                       7
<PAGE>

            (vii) Whenever the Conversion Price is adjusted  pursuant to Section
4 hereof,  the Company shall  promptly mail to the Holder a notice setting forth
the Conversion  Price after such  adjustment and setting forth a brief statement
of the facts requiring such adjustment.

            (viii) If (A) the  Company  shall  declare a dividend  (or any other
distribution)  on the Common  Stock;  (B) the  Company  shall  declare a special
nonrecurring  cash  dividend on or a  redemption  of the Common  Stock;  (C) the
Company  shall  authorize the granting to all holders of the Common Stock rights
or warrants to  subscribe  for or  purchase  any shares of capital  stock of any
class or of any  rights;  (D) the  approval of any  stockholders  of the Company
shall be required in connection with any  reclassification  of the Common Stock,
any  consolidation  or  merger  to which  the  Company  is a party,  any sale or
transfer  of all or  substantially  all of the  assets  of the  Company,  of any
compulsory  share  exchange  whereby the Common  Stock is  converted  into other
securities,  cash or property;  or (E) the Company shall authorize the voluntary
or  involuntary  dissolution,  liquidation  or winding up of the  affairs of the
Company;  then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture,  and shall
cause to be mailed to the Holder at its last address as it shall appear upon the
stock books of the  Company,  at least  twenty (20)  calendar  days prior to the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such  dividend,  distributions,   redemption,  rights  or  warrants  are  to  be
determined  or (y)  the  date on  which  such  reclassification,  consolidation,
merger,  sale,  transfer or share  exchange is expected to become  effective  or
close,  and the date as of which it is expected that holders of the Common Stock
of record  shall be entitled to exchange  their  shares of the Common  Stock for
securities,  cash or other  property  deliverable  upon  such  reclassification,
consolidation,  merger,  sale,  transfer or share exchange,  provided,  that the
failure to mail such  notice or any defect  therein  or in the  mailing  thereof
shall not affect the validity of the corporate  action  required to be specified
in such  notice.  The Holder is entitled to convert  this  Debenture  during the
20-day calendar period  commencing the date of such notice to the effective date
of the event triggering such notice.

            (ix) In case of any (1) merger or  consolidation  of the  Company or
any  subsidiary of the Company with or into another  Person,  or (2) sale by the
Company or any  subsidiary of the Company of more than one-half of the assets of
the Company in one or a series of related transactions,  a Holder shall have the
right to (A) exercise any rights under Section  2(b),  (B) convert the aggregate
amount of this  Debenture  then  outstanding  into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled  upon such event or series of related  events to receive such amount
of  securities,  cash and property as the shares of Common Stock into which such
aggregate   principal  amount  of  this  Debenture  could  have  been  converted
immediately  prior to such  merger,  consolidation  or  sales  would  have  been
entitled, or (C) in the case of a merger or consolidation, require the surviving
entity to issue to the Holder a convertible  Debenture  with a principal  amount
equal to the  aggregate  principal  amount of this  Debenture  then held by such
Holder,  plus all accrued and unpaid  interest and other amounts owing  thereon,
which such  newly  issued  convertible  Debenture  shall  have  terms  identical
(including with respect to conversion) to the terms of this Debenture, and shall
be entitled to all of the rights and  privileges of the Holder of this Debenture
set forth  herein and the  agreements  pursuant  to which this  Debentures  were
issued. In the case of clause (C), the conversion price applicable for the newly
issued shares of convertible preferred stock or convertible  Debentures shall be
based upon the amount of securities, cash and property that each share of Common
Stock  would  receive in such  transaction  and the  Conversion  Price in effect
immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger,  sale or consolidation  shall include such terms so as
to  continue to give the Holder the right to receive  the  securities,  cash and
property set forth in this Section upon any  conversion or redemption  following
such event. This provision shall similarly apply to successive such events.

                                       8
<PAGE>

      (d) Other Provisions.

            (i) The Company shall at all times reserve and keep available out of
its  authorized  Common Stock the full number of shares of Common Stock issuable
upon  conversion of all  outstanding  amounts under this  Debenture;  and within
three (3)  Business  Days  following  the  receipt by the  Company of a Holder's
notice that such minimum  number of  Underlying  Shares is not so reserved,  the
Company shall promptly reserve a sufficient  number of shares of Common Stock to
comply with such requirement.

            (ii) All  calculations  under this  Section 4 shall be rounded up to
the nearest $0.0001 or whole share.

            (iii) The Company  covenants  that it will at all times  reserve and
keep available out of its authorized and unissued  shares of Common Stock solely
for the purpose of issuance  upon  conversion  of this  Debenture and payment of
interest on this Debenture, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall (subject to any
additional  requirements  of the  Company as to  reservation  of such shares set
forth in this  Debenture or in the  Transaction  Documents) be issuable  (taking
into  account  the  adjustments  and  restrictions  set forth  herein)  upon the
conversion of the outstanding  principal amount of this Debenture and payment of
interest  hereunder.  The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly and validly  authorized,  issued
and  fully  paid,  nonassessable  and,  if the  Underlying  Shares  Registration
Statement has been declared  effective under the Securities Act,  registered for
public sale in accordance with such Underlying Shares Registration Statement.

            (iv) Upon a conversion  hereunder  the Company shall not be required
to issue  stock  certificates  representing  fractions  of shares of the  Common
Stock,  but may if  otherwise  permitted,  make a cash payment in respect of any
final  fraction of a share  based on the Closing Bid Price at such time.  If the
Company elects not, or is unable, to make such a cash payment,  the Holder shall
be  entitled  to receive,  in lieu of the final  fraction of a share,  one whole
share of Common Stock.

            (v) The issuance of  certificates  for shares of the Common Stock on
conversion of this Debenture  shall be made without charge to the Holder thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such  certificate,  provided  that the Company shall not be
required to pay any tax that may be payable in respect of any transfer  involved
in the issuance and delivery of any such  certificate  upon conversion in a name
other than that of the Holder of such  Debenture  so  converted  and the Company
shall not be required to issue or deliver such certificates  unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the  amount of such tax or shall have  established  to the  satisfaction  of the
Company that such tax has been paid.

            (vi) Nothing  herein shall limit a Holder's  right to pursue  actual
damages  or declare  an Event of  Default  pursuant  to Section 2 herein for the
Company 's failure to deliver  certificates  representing shares of Common Stock
upon conversion  within the period  specified  herein and such Holder shall have
the right to pursue all remedies  available to it at law or in equity including,
without limitation,  a decree of specific  performance and/or injunctive relief,
in each case  without  the need to post a bond or provide  other  security.  The
exercise  of any such  rights  shall not  prohibit  the Holder  from  seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

                                       9
<PAGE>

            (vii) In addition to any other rights  available  to the Holder,  if
the Company  fails to deliver to the Holder  such  certificate  or  certificates
pursuant to Section  4(a)(i) by the fifth (5th) Trading Day after the Conversion
Date, and if after such fifth (5th) Trading Day the Holder purchases (in an open
market  transaction or otherwise)  Common Stock to deliver in  satisfaction of a
sale by such  Holder  of the  Underlying  Shares  which the  Holder  anticipated
receiving upon such  conversion (a "Buy-In"),  then the Company shall (A) pay in
cash to the Holder (in addition to any  remedies  available to or elected by the
Holder) the amount by which (x) the Holder's  total  purchase  price  (including
brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the
product of (1) the  aggregate  number of shares of Common Stock that such Holder
anticipated  receiving from the conversion at issue multiplied by (2) the market
price of the Common  Stock at the time of the sale giving rise to such  purchase
obligation  and (B) at the option of the Holder,  either  reissue a Debenture in
the principal amount equal to the principal  amount of the attempted  conversion
or deliver  to the  Holder the number of shares of Common  Stock that would have
been issued had the Company timely complied with its delivery requirements under
Section  4(a)(i).  For example,  if the Holder  purchases  Common Stock having a
total  purchase  price of $11,000 to cover a Buy-In with respect to an attempted
conversion  of  Debentures  with  respect  to  which  the  market  price  of the
Underlying  Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence,  the Company shall be required to pay
the  Holder  $1,000.  The  Holder  shall  provide  the  Company  written  notice
indicating the amounts payable to the Holder in respect of the Buy-In.

      Section 5. Notices. Any notices, consents, waivers or other communications
required or  permitted to be given under the terms hereof must be in writing and
will be  deemed  to have  been  delivered:  (i)  upon  receipt,  when  delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) one (1) Trading Day after  deposit  with a nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

If to the Company, to:          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

If to the Holder:               Cornell Capital Partners, LP
                                101 Hudson Street, Suite 3700
                                Jersey City, NJ 07303
                                Attention:        Mark Angelo
                                Telephone:        (201) 985-8300

                                       10
<PAGE>

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

or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party three (3)  business  days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (i) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (ii)  mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (iii) provided by a nationally  recognized  overnight  delivery
service, shall be rebuttable evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

      Section 6. Definitions. For the purposes hereof, the following terms shall
have the following meanings:

      "Approved  Stock Plan" means a stock option plan that has been approved by
the  Board of  Directors  of the  Company  prior  to the date of the  Securities
Purchase  Agreement,  pursuant to which the Company's  securities  may be issued
only to any employee, officer or director for services provided to the Company.

      "Business  Day"  means any day except  Saturday,  Sunday and any day which
shall be a federal  legal holiday in the United States or a day on which banking
institutions  are  authorized or required by law or other  government  action to
close.

      "Change of Control Transaction" means the occurrence of (a) an acquisition
after the date hereof by an  individual or legal entity or "group" (as described
in Rule  13d-5(b)(1)  promulgated  under the Exchange Act) of effective  control
(whether through legal or beneficial  ownership of capital stock of the Company,
by  contract or  otherwise)  of in excess of fifty  percent  (50%) of the voting
securities of the Company (except that the  acquisition of voting  securities by
the Holder  shall not  constitute a Change of Control  Transaction  for purposes
hereof), (b) a replacement at one time or over time of more than one-half of the
members of the board of  directors  of the  Company  which is not  approved by a
majority of those  individuals  who are members of the board of directors on the
date hereof (or by those  individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was approved by
a majority of the members of the board of directors  who are members on the date
hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of
the assets of the Company or any subsidiary of the Company in one or a series of
related  transactions  with or into another entity,  or (d) the execution by the
Company of an agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (a), (b) or (c).

                                       11
<PAGE>

      "Closing Bid Price" means the price per share in the last  reported  trade
of the  Common  Stock on a Primary  Market or on the  exchange  which the Common
Stock is then listed as quoted by Bloomberg, LP.

      "Commission" means the Securities and Exchange Commission.

      "Common  Stock" means the common stock,  par value $0.001,  of the Company
and stock of any other class into which such shares may  hereafter be changed or
reclassified.

      "Conversion  Date"  shall mean the date upon  which the  Holder  gives the
Company  notice of their  intention to effectuate a conversion of this Debenture
into shares of the Company's Common Stock as outlined herein.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Excluded  Securities"  means,  (a)  shares  issued or deemed to have been
issued by the Company  pursuant  to an Approved  Stock Plan (b) shares of Common
Stock issued or deemed to be issued by the Company upon the conversion, exchange
or exercise of any right, option, obligation or security outstanding on the date
prior to date of the Securities Purchase  Agreement,  provided that the terms of
such right, option, obligation or security are not amended or otherwise modified
on or after the date of the Securities Purchase Agreement, and provided that the
conversion price,  exchange price, exercise price or other purchase price is not
reduced, adjusted or otherwise modified and the number of shares of Common Stock
issued or issuable is not  increased  (whether by operation of, or in accordance
with, the relevant governing documents or otherwise) on or after the date of the
Securities  Purchase  Agreement,  and (c) the shares of Common  Stock  issued or
deemed to be issued by the Company upon conversion of this Debenture.

      "Original  Issue Date"  shall mean the date of the first  issuance of this
Debenture  regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Debenture.

      "Person" means a corporation, an association, a partnership, organization,
a business,  an individual,  a government or political  subdivision thereof or a
governmental agency.

      "Securities  Act" means the  Securities  Act of 1933, as amended,  and the
rules and regulations promulgated thereunder.

      "Trading  Day" means a day on which the shares of Common  Stock are quoted
on the OTC or quoted or traded  on such  Primary  Market on which the  shares of
Common  Stock are then  quoted or listed;  provided,  that in the event that the
shares of Common  Stock are not listed or quoted,  then Trading Day shall mean a
Business Day.

      "Transaction  Documents"  means the Securities  Purchase  Agreement or any
other agreement  delivered in connection with the Securities Purchase Agreement,
including, without limitation, the Pledge Agreement, the Security Agreement, the
Subsidiary Security Agreements, the Irrevocable Transfer Agent Instructions, and
the Registration Rights Agreement.

                                       12
<PAGE>

      "Underlying  Shares"  means  the  shares  of Common  Stock  issuable  upon
conversion of this  Debenture or as payment of interest in  accordance  with the
terms hereof.

      "Underlying Shares Registration  Statement" means a registration statement
meeting  the  requirements  set  forth  in the  Registration  Rights  Agreement,
covering among other things the resale of the  Underlying  Shares and naming the
Holder as a "selling stockholder" thereunder.

      Section 7. Except as  expressly  provided  herein,  no  provision  of this
Debenture  shall  alter or impair  the  obligations  of the  Company,  which are
absolute and unconditional,  to pay the principal of, interest and other charges
(if any) on, this  Debenture at the time,  place,  and rate,  and in the coin or
currency,  herein  prescribed.  This  Debenture  is a direct  obligation  of the
Company.  This  Debenture  ranks  pari passu  with all other  Debentures  now or
hereafter issued under the terms set forth herein.  As long as this Debenture is
outstanding,  the Company shall not and shall cause their  subsidiaries  not to,
without the consent of the Holder,  (i) amend its certificate of  incorporation,
bylaws or other  charter  documents so as to adversely  affect any rights of the
Holder;  (ii)  repay,  repurchase  or offer to repay,  repurchase  or  otherwise
acquire shares of its Common Stock or other equity  securities  other than as to
the Underlying  Shares to the extent permitted or required under the Transaction
Documents;  or  (iii)  enter  into  any  agreement  with  respect  to any of the
foregoing.

      Section  8. This  Debenture  shall not  entitle  the  Holder to any of the
rights of a stockholder of the Company,  including without limitation, the right
to vote, to receive dividends and other distributions,  or to receive any notice
of, or to attend,  meetings  of  stockholders  or any other  proceedings  of the
Company,  unless  and to the extent  converted  into  shares of Common  Stock in
accordance with the terms hereof.

      Section 9. If this Debenture is mutilated,  lost, stolen or destroyed, the
Company shall  execute and deliver,  in exchange and  substitution  for and upon
cancellation of the mutilated Debenture,  or in lieu of or in substitution for a
lost, stolen or destroyed Debenture, a new Debenture for the principal amount of
this Debenture so mutilated,  lost, stolen or destroyed but only upon receipt of
evidence  of such  loss,  theft or  destruction  of such  Debenture,  and of the
ownership hereof, and indemnity,  if requested,  all reasonably  satisfactory to
the Company.

      Section 10. No  indebtedness of the Company is senior to this Debenture in
right of payment, whether with respect to interest,  damages or upon liquidation
or dissolution or otherwise.  Without the Holder's consent, the Company will not
and will not permit any of their subsidiaries to, directly or indirectly,  enter
into, create,  incur, assume or suffer to exist any indebtedness of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired
or any  interest  therein or any income or profits  there from that is senior in
any respect to the obligations of the Company under this Debenture.

      Section  11.  This  Debenture  shall  be  governed  by  and  construed  in
accordance  with the laws of the State of New Jersey,  without  giving effect to
conflicts of laws thereof.  Each of the parties  consents to the jurisdiction of
the Superior  Courts of the State of New Jersey  sitting in Hudson  County,  New
Jersey and the U.S.  District  Court for the  District of New Jersey  sitting in
Newark,  New Jersey in connection  with any dispute arising under this Debenture
and hereby  waives,  to the maximum  extent  permitted  by law,  any  objection,
including  any  objection  based on forum non  conveniens to the bringing of any
such proceeding in such jurisdictions.

                                       13
<PAGE>

      Section 12. If the Company fails to strictly comply with the terms of this
Debenture,  then the Company shall  reimburse the Holder  promptly for all fees,
costs and expenses, including, without limitation,  attorneys' fees and expenses
incurred  by the  Holder  in any  action  in  connection  with  this  Debenture,
including, without limitation, those incurred: (i) during any workout, attempted
workout,  and/or in  connection  with the  rendering  of legal  advice as to the
Holder's rights, remedies and obligations, (ii) collecting any sums which become
due  to the  Holder,  (iii)  defending  or  prosecuting  any  proceeding  or any
counterclaim to any proceeding or appeal;  or (iv) the protection,  preservation
or enforcement of any rights or remedies of the Holder.

      Section 13. Any waiver by the Holder of a breach of any  provision of this
Debenture  shall  not  operate  as or be  construed  to be a waiver of any other
breach  of such  provision  or of any  breach  of any  other  provision  of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of this Debenture on one or more  occasions  shall not be considered a waiver or
deprive that party of the right  thereafter  to insist upon strict  adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

      Section 14. If any  provision  of this  Debenture  is invalid,  illegal or
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance,  it shall  nevertheless
remain applicable to all other persons and  circumstances.  If it shall be found
that any interest or other amount deemed  interest due  hereunder  shall violate
applicable laws governing  usury,  the applicable rate of interest due hereunder
shall  automatically be lowered to equal the maximum permitted rate of interest.
The Company  covenants  (to the extent that it may lawfully do so) that it shall
not at any time insist upon,  plead, or in any manner  whatsoever  claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would  prohibit  or forgive  the  Company  from paying all or any portion of the
principal of or interest on this  Debenture  as  contemplated  herein,  wherever
enacted,  now or at any time  hereafter  in  force,  or  which  may  affect  the
covenants or the performance of this  indenture,  and the Company (to the extent
it may lawfully do so) hereby  expressly waives all benefits or advantage of any
such law,  and  covenants  that it will not, by resort to any such law,  hinder,
delay or impeded the  execution of any power herein  granted to the Holder,  but
will  suffer and permit  the  execution  of every such as though no such law has
been enacted.

      Section 15.  Whenever any payment or other  obligation  hereunder shall be
due on a day other than a Business  Day,  such payment shall be made on the next
succeeding Business Day.

      Section  16.  This  Debenture  is  exchangeable  for  an  equal  aggregate
principal  amount  of  Debentures  of  different  authorized  denominations,  as
requested by the Holder  surrendering  the same. No service  charge will be made
for such registration of transfer or exchange.

      Section 17. THE PARTIES HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY
WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS
AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF
DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS
PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS
AGREEMENT.

                   [REMAINDER OF PAGE INTENTIONLLY LEFT BLANK]

                                       14
<PAGE>

      IN WITNESS  WHEREOF,  the  Company  has caused  this  Secured  Convertible
Debenture to be duly  executed by a duly  authorized  officer as of the date set
forth above.

                                             COMPANY:
                                             TELEPLUS ENTERPRISES, INC.

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

                                       15
<PAGE>

                                    EXHIBIT A
                                    ---------

                                REDEMPTION NOTICE
                                -----------------

REDEMPTION DATE: _____________        MANDATORY REDEMPTION AMOUNT: _____________

                           SETTLEMENT IN COMMON STOCK

MANDATORY REDEMPTION AMOUNT:                 $__________________________________
REDEMPTION CONVERSION PRICE:                 $__________________________________
NUMBER OF SHARES OF COMMON STOCK TO BE
ISSUED:                                      ___________________________________

PLEASE  ISSUE  THE  SHARES  OF  COMMON  STOCK IN THE  FOLLOWING  NAME AND TO THE
FOLLOWING ADDRESS:

ISSUE TO:                            Cornell Capital Partners, LP
                                     101 Hudson Street, Suite 3700
                                     Jersey City, NJ  07083
                                     Tel:  (201) 985-8300
                                     Fax:  (201) 985-8266
BROKER DTC PARTICIPANT CODE:         0158
ACCOUNT NUMBER:                      622 000 07

                               SETTLEMENT IN CASH

MANDATORY REDEMPTION AMOUNT:                 $__________________________________
REDEMPTION PREMIUM:                          $__________________________________
TOTAL CASH SETTLEMENT:                       $__________________________________

                        NOTIFICATION OF SETTLEMENT OPTION

|_| SETTLEMENT IN COMMON STOCK                           |_| SETTLEMENT IN CASH

_______________________________________
TELEPLUS ENTERPRISES, INC.
BY:
ITS:

 **THIS REDEMPTION NOTICE MUST BE SIGNED & RETURNED VIA FACSIMILE TO THE HOLDER
    AT (201) 946-0851 NO LATER THAN 5:00 N.Y.C. TIME ON THE DAY PRIOR TO THE
                               REDEMPTION DATE**

                                       16
<PAGE>

                                    EXHIBIT B
                                    ---------

                                CONVERSION NOTICE
                                -----------------

        (TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)

TO:

      The undersigned  hereby  irrevocably  elects to convert $ of the principal
amount  of  the  above  Debenture  into  Shares  of  Common  Stock  of  TELEPLUS
ENTERPRISES,  INC.,  according  to  the  conditions  stated  therein,  as of the
Conversion Date written below.

CONVERSION DATE:                          ______________________________________
AMOUNT TO BE CONVERTED:                   $_____________________________________
CONVERSION PRICE:                         $_____________________________________
NUMBER OF SHARES OF COMMON STOCK TO BE
ISSUED:                                   ______________________________________
AMOUNT OF DEBENTURE
UNCONVERTED:                              $_____________________________________

PLEASE  ISSUE  THE  SHARES  OF  COMMON  STOCK IN THE  FOLLOWING  NAME AND TO THE
FOLLOWING ADDRESS:

ISSUE TO:                            Cornell Capital Partners, LP
                                     101 Hudson Street, Suite 3700
                                     Jersey City, NJ  07083
                                     Tel:  (201) 985-8300
                                     Fax:  (201) 985-8266

AUTHORIZED SIGNATURE: __________________________________________________________
NAME:                 __________________________________________________________
TITLE:                __________________________________________________________
BROKER DTC PARTICIPANT CODE:         0158
ACCOUNT NUMBER:                      622 000 07

                                       17Exhibit 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

                                       2
<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.

                                       7
<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

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