Document:

EXHIBIT 10.13

                               SECURITY AGREEMENT

         THIS SECURITY  AGREEMENT  (the  "Agreement"),  is entered into and made
effective as of June 25, 2004, by and between  TELEPLUS  ENTERPRISES  INC., (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  shall issue and sell to the  Secured  Party,  as
provided in the Securities  Purchase  Agreement  dated the date hereof,  and the
Secured  Party shall  purchase up to One Million  Dollars  ($1,000,000)  of five
percent (5%) secured  convertible  debentures  (the  "Convertible  Debentures"),
which shall be convertible  into shares of the Company's common stock, par value
$0.01 (the "Common Stock") (as converted,  the "Conversion Shares"), for a total
purchase  price of up to One Million  Dollars  ($1,000,000),  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 Secured  Convertible
Debenture,  the Investor Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions,  and the Escrow Agreement  (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  premises  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.

         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
the  Securities  Purchase  Agreement,  the Secured  Convertible  Debenture,  the
Investor   Registration   Rights   Agreement  and  Irrevocable   Transfer  Agent
Instructions,  and any other amounts now or hereafter  owed to the Secured Party
by the Company thereunder or hereunder (collectively, the "Obligations").

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                                   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,

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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

                           (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)      Each  of the  following  events  shall  constitute  a
default under this Agreement (each an "Event of Default"):

                           (i)      any  default,  whether  in whole or in part,
shall occur in the payment to the Secured Party of principal,  interest or other
item  comprising  the  Obligations  as and when due or with respect to any other
debt or obligation of the Company to a party other than the Secured Party;

                           (ii)     any  default,  whether  in whole or in part,
shall occur in the due  observance or  performance  of any  obligations or other
covenants,  terms or  provisions  to be  performed  under this  Agreement or the
Transaction Documents;

                           (iii)    the  Company  shall:   (1)  make  a  general
assignment  for the  benefit of its  creditors;  (2) apply for or consent to the
appointment  of  a  receiver,   trustee,  assignee,   custodian,   sequestrator,
liquidator or similar  official for itself or any of its assets and  properties;
(3)  commence a voluntary  case for relief as a debtor  under the United  States
Bankruptcy Code; (4) file with or otherwise submit to any governmental authority
any petition,  answer or other  document  seeking:  (A)  reorganization,  (B) an
arrangement  with  creditors or (C) to take  advantage  of any other  present or
future  applicable  law  respecting  bankruptcy,   reorganization,   insolvency,
readjustment of debts, relief of debtors,  dissolution or liquidation;  (5) file
or otherwise submit any answer or other document admitting or failing to contest
the  material  allegations  of a petition or other  document  filed or otherwise
submitted  against it in any proceeding under any such applicable law, or (6) be
adjudicated a bankrupt or insolvent by a court of competent jurisdiction; or

                           (iv)     any case,  proceeding  or other action shall
be  commenced  against the Company  for the purpose of  effecting,  or an order,
judgment  or decree  shall be  entered  by any court of  competent  jurisdiction
approving  (in  whole or in part)  anything  specified  in  Section  2.2(c)(iii)
hereof, or any receiver, trustee, assignee, custodian, sequestrator,  liquidator
or other official  shall be appointed  with respect to the Company,  or shall be

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appointed to take or shall otherwise  acquire  possession or control of all or a
substantial  part of the assets and  properties  of the Company,  and any of the
foregoing  shall  continue  unstayed and in effect for any period of thirty (30)
days.

                                   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 the security  interest created
by this Agreement.

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                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

         Section 5.1.      Default and Remedies.

                  (a)      If an Event of Default described in Section 2.2(c)(i)
and (ii)  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  described in Sections  2.2(c)(iii)  or
(iv)  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 of the 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  shall in any  event 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.

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                           (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.

                           (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.

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                                   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.

         Section 6.2.      Financial Statements and Reports.

         The Company shall furnish to the Secured Party such  financial  data as
the Secured Party may reasonably  request.  Without limiting the foregoing,  the
Company  shall  furnish to the Secured  Party (or cause to be  furnished  to the
Secured Party) the following:

                  (a)      as soon as practicable and in any event within ninety
(90) days after the end of each fiscal year of the Company, the balance sheet of
the Company as of the close of such 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;

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                  (b)      within  thirty (30) days of the end of each  calendar
month,  a  balance  sheet of the  Company  as of the  close of such  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)      promptly   upon  receipt   thereof,   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 $15,000 (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 $15,000,  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.

         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,  and upon reasonable notice 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.

         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.

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                  (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.

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         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 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.

         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
$50,000,  instituted by any persons against the Company, or 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.      Indebtedness.

         The Company shall not directly or  indirectly  permit,  create,  incur,
assume, permit to exist,  increase,  renew or extend on or after the date hereof
any indebtedness on its part,  including  commitments,  contingencies and credit
availabilities, or apply for or offer or agree to do any of the foregoing.

         Section 7.2.      Liens and Encumbrances.

         Except as otherwise  provided herein, 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

                                       10
<PAGE>

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 7.3.      Articles   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 Articles of Incorporation or By-Laws;  (b) be a
party to any merger,  consolidation  or corporate  reorganization,  or (c) sell,
transfer,  convey,  grant a security interest in or lease all or any substantial
part of its assets.

         Section 7.4.      Management, Ownership.

         The  Company  shall  not  materially  change  its  ownership,   overall
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 7.5.      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.

         Section 7.6.      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 7.7.      Debt.

         Except for leases in connection with the additional store locations and
secured  debt  incurred to  purchase  inventory,  the Company  shall not create,
incur,  assume or suffer to exist any  additional  secured  indebtedness  of any
description  whatsoever in an aggregate  amount in excess of $25,000  (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).

                                       11
<PAGE>

         Section 7.8.      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 7.9.      Places of Business.

         The location of the Company's  chief place of business is 465 St. Jean,
Suite 601, Montreal,  Quebec, H2Y 2R6. 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

         With a copy to:              Butler Gonzalez LLP
                                      1416 Morris Avenue - Suite 207
                                      Union, New Jersey  07083
                                      Attention:  David Gonzalez, Esq.
                                      Telephone:  (908) 810-8588
                                      Facsimile:  (908) 810-0973

                                       12
<PAGE>

         And if to the Company:       Transfer Online
                                      227 S.W. Pine Street - Suite 300
                                      Portland, Oregon 97204
                                      Telephone:  (503) 227-2950
                                      Facsimile:  (503) 227-6874

         With a copy to:              Kirkpatrick & Lockhart LLP
                                      201 South Biscayne Boulevard-Suite 2000
                                      Miami, Florida  33131-2399
                                      Attention:  Clayton E. Parker, Esq.
                                      Telephone:  (305) 539-3300
                                      Facsimile:  (305) 358-7095

         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.

                                       13
<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 Nevada  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]

                                       14
<PAGE>

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

                                              COMPANY:
                                              TELEPLUS ENTERPRISES INC.

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

                                              SECURED PARTY:
                                              CORNELL CAPITAL PARTNERS, LP

                                              BY:  YORKVILLE ADVISORS, LLC
                                              ITS: GENERAL PARTNER

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

                                       15
<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.

                                      A-1EXHIBIT 10.14

                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
June 25, 2004, by and among TELEPLUS ENTERPRISES INC., a Nevada corporation (the
"Company");  the Buyer(s) listed on the Securities Purchase Agreement, dated the
date hereof (also referred to as the "Investor(s)"),  and BUTLER GONZALEZ,  LLP,
as Escrow Agent hereunder (the "Escrow Agent").

                                   BACKGROUND

         WHEREAS, the Company and the Investor(s) have entered into a Securities
Purchase Agreement (the "Securities Purchase  Agreement"),  dated as of the date
hereof,  pursuant to which the  Company  proposes  to sell  secured  convertible
debentures (the  "Convertible  Debentures")  which shall be convertible into the
Company's Common Stock,  par value US$0.01 per share (the "Common Stock"),  at a
price per share  equal to the  Purchase  Price,  as that term is  defined in the
Securities Purchase  Agreement.  The Securities Purchase Agreement provides that
the Investor(s) shall deposit the purchase amount in a segregated escrow account
to be held by Escrow Agent in order to effectuate a disbursement  to the Company
at a closing to be held as set forth in the Securities  Purchase  Agreement (the
"Closing").

         WHEREAS,  the  Company  intends  to sell  Convertible  Securities  (the
"Offering").

         WHEREAS,  Escrow  Agent has agreed to accept,  hold,  and  disburse the
funds deposited with it in accordance with the terms of this Agreement.

         WHEREAS,  in order to  establish  the escrow of funds and to effect the
provisions of the Securities Purchase Agreement, the parties hereto have entered
into this Agreement.

         NOW THEREFORE,  in consideration of the foregoing,  it is hereby agreed
as follows:

         1.       DEFINITIONS.  The  following  terms  shall have the  following
meanings when used herein:

                  a.       "Escrow  Funds" shall mean the funds  deposited  with
Escrow Agent pursuant to this Agreement.

                  b.       "Joint  Written   Direction"  shall  mean  a  written
direction  executed by the Investor(s) and the Company directing Escrow Agent to
disburse  all or a portion of the Escrow Funds or to take or refrain from taking
any action pursuant to this Agreement.

                  c.       "Escrow Period" shall begin with the  commencement of
the  Offering  and shall  terminate  upon the earlier to occur of the  following
dates:

                           (i)      The date upon which  Escrow  Agent  confirms
that it has  received in the Escrow  Account all of the  proceeds of the sale of
the Convertible Debentures;

<PAGE>

                           (ii)     The  expiration of twenty (20) days from the
date  of  commencement  of the  Offering  (unless  extended  by  mutual  written
agreement  between the Company and the Investor(s) with a copy of such extension
to Escrow Agent); or

                           (iii)    The date upon which a determination  is made
by the Company and the  Investor(s)  to terminate the Offering prior to the sale
of all the Convertible Debentures.

         During the Escrow  Period,  the Company and the  Investor(s)  are aware
that they are not  entitled  to any funds  received  into  escrow and no amounts
deposited in the Escrow  Account shall become the property of the Company or the
Investor(s)  or any other  entity,  or be subject to the debts of the Company or
the Investor(s) or any other entity.

         2.       APPOINTMENT OF AND ACCEPTANCE BY ESCROW AGENT. The Investor(s)
and the Company hereby appoint Escrow Agent to serve as Escrow Agent  hereunder.
Escrow Agent hereby accepts such  appointment and, upon receipt by wire transfer
of the Escrow Funds in accordance with Section 3 below,  agrees to hold,  invest
and disburse the Escrow Funds in accordance with this Agreement.

                  a.       The Company hereby acknowledges that the Escrow Agent
is counsel to the Investor(s) in connection with the  transactions  contemplated
and referred herein. The Company agrees that in the event of any dispute arising
in connection  with this Escrow  Agreement or otherwise in  connection  with any
transaction  or agreement  contemplated  and referred  herein,  the Escrow Agent
shall be permitted to continue to represent the Investor(s) and the Company will
not seek to disqualify such counsel.

         3.       CREATION  OF  ESCROW  FUNDS.  On or  prior  to the date of the
commencement of the Offering, the parties shall establish an escrow account with
the Escrow Agent,  which escrow  account shall be entitled as follows:  Teleplus
Enterprises  Inc./Cornell Capital Partners, LP Escrow Account for the deposit of
the Escrow Funds. The Investor(s) will instruct subscribers to wire funds to the
account of the Escrow Agent as follows:

BANK:                     Wachovia, N.A. of New Jersey
ROUTING #:                031201467
ACCOUNT #:                2020000659170
NAME ON ACCOUNT:          Butler Gonzalez LLP as Escrow Agent
NAME ON SUB-ACCOUNT:      Teleplus Enterprises Inc./Cornell Capital Partners, LP
                          Escrow account

         4.       DEPOSITS INTO THE ESCROW ACCOUNT.  The Investor(s) agrees that
they shall promptly deliver funds for the payment of the Convertible  Debentures
to Escrow Agent for deposit in the Escrow Account.

                                       2
<PAGE>

         5.       DISBURSEMENTS FROM THE ESCROW ACCOUNT.

                  a.       The  Escrow  Agent will  continue  to hold such funds
until Cornell  Capital  Partners,  LP on behalf of the  Investor(s)  and Company
execute a Joint  Written  Direction  directing  the Escrow Agent to disburse the
Escrow Funds pursuant to Joint Written  Direction  signed by the Company and the
Investor(s).  In disbursing such funds,  Escrow Agent is authorized to rely upon
such Joint Written Direction from the Company and the Investor(s) and may accept
any signatory  from the Company  listed on the signature  page to this Agreement
and any  signature  from the  Investor(s)  that the Escrow Agent  already has on
file.

                  b.       In the event Escrow Agent does not receive the amount
of the Escrow Funds from the Investor(s),  Escrow Agent shall notify the Company
and the  Investor(s).  Upon  receipt of payment  instructions  from the Company,
Escrow  Agent  shall  refund to each  subscriber  without  interest  the  amount
received from each Investor(s),  without deduction,  penalty,  or expense to the
subscriber.  The purchase  money returned to each  subscriber  shall be free and
clear of any and all  claims of the  Company,  the  Investor(s)  or any of their
creditors.

                  c.       In the event  Escrow Agent does receive the amount of
the Escrow Funds prior to expiration of the Escrow Period,  in no event will the
Escrow Funds be released to the Company  until such amount is received by Escrow
Agent in collected  funds.  For purposes of this Agreement,  the term "collected
funds" shall mean all funds  received by Escrow Agent which have cleared  normal
banking channels and are in the form of cash.

         6.       COLLECTION  PROCEDURE.  Escrow Agent is hereby  authorized  to
deposit the proceeds of each wire in the Escrow Account.

         7.       SUSPENSION OF PERFORMANCE:  DISBURSEMENT INTO COURT. If at any
time, there shall exist any dispute between the Company and the Investor(s) with
respect to  holding or  disposition  of any  portion of the Escrow  Funds or any
other  obligations of Escrow Agent hereunder,  or if at any time Escrow Agent is
unable to determine, to Escrow Agent's sole satisfaction, the proper disposition
of any portion of the Escrow Funds or Escrow Agent's proper actions with respect
to its obligations hereunder, or if the parties have not within thirty (30) days
of the furnishing by Escrow Agent of a notice of resignation pursuant to Section
9 hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:

                  a.       suspend  the  performance  of any of its  obligations
(including  without  limitation any disbursement  obligations) under this Escrow
Agreement  until  such  dispute or  uncertainty  shall be  resolved  to the sole
satisfaction  of  Escrow  Agent  or  until a  successor  Escrow  Agent  shall be
appointed (as the case may be); provided however, Escrow Agent shall continue to
invest the Escrow Funds in accordance with Section 8 hereof; and/or

                  b.       petition (by means of an  interpleader  action or any
other  appropriate  method)  any court of  competent  jurisdiction  in any venue
convenient to Escrow  Agent,  for  instructions  with respect to such dispute or
uncertainty, and to the extent required by law, pay into such court, for holding
and  disposition in accordance with the  instructions  of such court,  all funds
held by it in the Escrow Funds,  after  deduction and payment to Escrow Agent of
all fees and expenses  (including  court costs and attorneys'  fees) payable to,
incurred  by, or  expected to be incurred  by Escrow  Agent in  connection  with
performance of its duties and the exercise of its rights hereunder.

                                       3
<PAGE>

                  c.       Escrow  Agent shall have no liability to the Company,
the  Investor(s),  or  any  person  with  respect  to  any  such  suspension  of
performance or disbursement into court,  specifically including any liability or
claimed  liability that may arise, or be alleged to have arisen,  out of or as a
result of any delay in the disbursement of funds held in the Escrow Funds or any
delay in with respect to any other action required or requested of Escrow Agent.

         8.       INVESTMENT  OF ESCROW  FUNDS.  Escrow Agent shall  deposit the
Escrow Funds in a non-interest bearing account.

         If Escrow Agent has not received a Joint Written  Direction at any time
that an investment decision must be made, Escrow Agent shall maintain the Escrow
Funds, or such portion thereof,  as to which no Joint Written Direction has been
received, in a non-interest bearing account.

         9.       RESIGNATION  AND  REMOVAL OF ESCROW  AGENT.  Escrow  Agent may
resign from the performance of its duties hereunder at any time by giving thirty
(30)  days'  prior  written  notice to the  parties or may be  removed,  with or
without cause,  by the parties,  acting  jointly,  by furnishing a Joint Written
Direction  to Escrow  Agent,  at any time by the giving of ten (10) days'  prior
written notice to Escrow Agent as provided herein below. Upon any such notice of
resignation or removal,  the  representatives of the Investor(s) and the Company
identified  in Sections  13a.(iv) and 13b.(iv),  below,  jointly shall appoint a
successor  Escrow  Agent  hereunder,  which shall be a  commercial  bank,  trust
company or other financial  institution  with a combined  capital and surplus in
excess of US$10,000,000.00. Upon the acceptance in writing of any appointment of
Escrow Agent hereunder by a successor Escrow Agent,  such successor Escrow Agent
shall  thereupon  succeed  to and become  vested  with all the  rights,  powers,
privileges  and duties of the retiring  Escrow  Agent,  and the retiring  Escrow
Agent  shall be  discharged  from its duties and  obligations  under this Escrow
Agreement,  but shall not be discharged  from any liability for actions taken as
Escrow Agent  hereunder  prior to such  succession.  After any  retiring  Escrow
Agent's  resignation or removal,  the provisions of this Escrow  Agreement shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent,  after making copies of
such records as the retiring  Escrow Agent deems  advisable and after  deduction
and payment to the retiring  Escrow  Agent of all fees and  expenses  (including
court costs and  attorneys'  fees)  payable to,  incurred  by, or expected to be
incurred by the retiring  Escrow Agent in connection with the performance of its
duties and the exercise of its rights hereunder.

         10.      LIABILITY OF ESCROW AGENT.

                  a.       Escrow Agent shall have no  liability  or  obligation
with respect to the Escrow Funds except for Escrow Agent's willful misconduct or
gross  negligence.   Escrow  Agent's  sole  responsibility   shall  be  for  the
safekeeping, investment, and disbursement of the Escrow Funds in accordance with
the terms of this  Agreement.  Escrow  Agent  shall  have no  implied  duties or

                                       4
<PAGE>

obligations  and shall not be charged  with  knowledge  or notice or any fact or
circumstance not  specifically set forth herein.  Escrow Agent may rely upon any
instrument,  not only as to its due execution,  validity and effectiveness,  but
also as to the truth and accuracy of any  information  contained  herein,  which
Escrow Agent shall in good faith  believe to be genuine,  to have been signed or
presented  by the person or parties  purporting  to sign the same and conform to
the provisions of this  Agreement.  In no event shall Escrow Agent be liable for
incidental,  indirect,  special,  and consequential or punitive damages.  Escrow
Agent shall not be obligated to take any legal action or commence any proceeding
in  connection  with the Escrow  Funds,  any account in which  Escrow  Funds are
deposited,  this Agreement or the Purchase Agreement, or to appear in, prosecute
or defend any such legal action or  proceeding.  Escrow Agent may consult  legal
counsel  selected  by  it  in  any  event  of  any  dispute  or  question  as to
construction  of any of the provisions  hereof or of any other  agreement or its
duties  hereunder,  or relating to any dispute  involving any party hereto,  and
shall  incur no  liability  and shall be fully  indemnified  from any  liability
whatsoever  in acting in  accordance  with the opinion or  instructions  of such
counsel.  The Company and the  Investor(s)  jointly and severally shall promptly
pay, upon demand, the reasonable fees and expenses of any such counsel.

                  b.       Escrow  Agent  is  hereby  authorized,  in  its  sole
discretion,  to comply with orders  issued or process  entered by any court with
respect to the  Escrow  Funds,  without  determination  by Escrow  Agent of such
court's jurisdiction in the matter. If any portion of the Escrow Funds is at any
time  attached,  garnished or levied upon under any court order,  or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order,  or in any case any order  judgment or
decree shall be made or entered by any court affecting such property or any part
thereof,  then and in any such event,  Escrow Agent is  authorized,  in its sole
discretion, to rely upon and comply with any such order, writ judgment or decree
which it is advised by legal counsel  selected by it,  binding upon it,  without
the need for appeal or other action;  and if Escrow Agent complies with any such
order,  writ,  judgment or decree,  it shall not be liable to any of the parties
hereto or to any other person or entity by reason of such compliance even though
such order,  writ  judgment or decree may be  subsequently  reversed,  modified,
annulled, set aside or vacated.

         11.      INDEMNIFICATION  OF ESCROW AGENT.  From and at all times after
the date of this  Agreement,  the parties  jointly and severally,  shall, to the
fullest extent permitted by law and to the extent provided herein, indemnify and
hold harmless Escrow Agent and each director, officer, employee, attorney, agent
and affiliate of Escrow Agent (collectively,  the "Indemnified Parties") against
any  and  all  actions,   claims  (whether  or  not  valid),  losses,   damages,
liabilities,  costs and  expenses  of any kind or nature  whatsoever  (including
without limitation  reasonable  attorney's fees, costs and expenses) incurred by
or  asserted  against  any of the  Indemnified  Parties  from and after the date
hereof,  whether direct,  indirect or  consequential,  as a result of or arising
from or in any way relating to any claim,  demand,  suit,  action, or proceeding
(including  any  inquiry or  investigation)  by any  person,  including  without
limitation  the parties to this  Agreement,  whether  threatened  or  initiated,
asserting a claim for any legal or equitable remedy against any person under any
statute or  regulation,  including,  but not  limited  to, any  federal or state
securities  laws,  or under any  common  law or  equitable  cause or  otherwise,
arising from or in  connection  with the  negotiation,  preparation,  execution,
performance  or failure of  performance  of this  Agreement  or any  transaction
contemplated herein, whether or not any such Indemnified Party is a party to any
such  action  or  proceeding,  suit  or  the  target  of  any  such  inquiry  or

                                       5
<PAGE>

investigation; provided, however, that no Indemnified Party shall have the right
to be  indemnified  hereunder  for  liability  finally  determined by a court of
competent jurisdiction,  subject to no further appeal, to have resulted from the
gross negligence or willful  misconduct of such  Indemnified  Party. If any such
action or claim shall be brought or asserted against any Indemnified Party, such
Indemnified  Party  shall  promptly  notify  the  Company  and  the  Investor(s)
hereunder  in writing,  and the  Investor(s)  and the Company  shall  assume the
defense  thereof,  including  the  employment  of counsel and the payment of all
expenses.  Such Indemnified Party shall, in its sole discretion,  have the right
to employ separate counsel (who may be selected by such Indemnified Party in its
sole discretion) in any such action and to participate and to participate in the
defense thereof, and the fees and expenses of such counsel shall be paid by such
Indemnified  Party,  except that the  Investor(s)  and/or the  Company  shall be
required  to pay such fees and  expense if (a) the  Investor(s)  or the  Company
agree to pay such fees and expenses,  or (b) the Investor(s)  and/or the Company
shall fail to assume the defense of such action or  proceeding or shall fail, in
the sole  discretion of such  Indemnified  Party,  to employ counsel  reasonably
satisfactory to the Indemnified Party in any such action or proceeding,  (c) the
Investor(s)  and the Company are the  plaintiff in any such action or proceeding
or (d)  the  named  or  potential  parties  to any  such  action  or  proceeding
(including  any  potentially  impleaded  parties)  include both the  Indemnified
Party,  the Company and/or the Investor(s) and the Indemnified  Party shall have
been advised by counsel that there may be one or more legal  defenses  available
to it which are different  from or additional to those  available to the Company
or the  Investor(s).  The  Investor(s)  and the  Company  shall be  jointly  and
severally  liable to pay fees and expenses of counsel  pursuant to the preceding
sentence, except that any obligation to pay under clause (a) shall apply only to
the party so agreeing.  All such fees and expenses payable by the Company and/or
the  Investor(s)  pursuant to the foregoing  sentence shall be paid from time to
time as  incurred,  both in advance of and after the final  disposition  of such
action or claim. The obligations of the parties under this section shall survive
any  termination  of this  Agreement,  and  resignation or removal of the Escrow
Agent shall be independent of any obligation of Escrow Agent.

         The  parties  agree  that  neither   payment  by  the  Company  or  the
Investor(s)  of any claim by Escrow Agent for  indemnification  hereunder  shall
impair,  limit,  modify,  or affect, as between the Investor(s) and the Company,
the respective  rights and obligations of Investor(s),  on the one hand, and the
Company, on the other hand.

         12.      EXPENSES  OF ESCROW  AGENT.  Except as set forth in Section 11
the Company shall reimburse Escrow Agent for all of its reasonable out-of-pocket
expenses,  including  attorneys' fees, travel expenses,  telephone and facsimile
transmission  costs,  postage  (including  express mail and  overnight  delivery
charges),   copying  charges  and  the  like.  All  of  the   compensation   and
reimbursement  obligations  set forth in this  Section  shall be  payable by the
Company,  upon demand by Escrow Agent. The obligations of the Company under this
Section shall survive any  termination of this Agreement and the  resignation or
removal of Escrow Agent.

         13.      WARRANTIES.

                  a.       The Investor(s)  makes the following  representations
and warranties to Escrow Agent:

                                       6
<PAGE>

                           (i)      The Investor(s) has full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.

                           (ii)     This Agreement has been duly approved by all
necessary  action of the  Investor(s),  including any necessary  approval of the
limited  partner  of  the  Investor(s)  or  necessary  corporate  approval,   as
applicable,  has been executed by duly authorized  officers of the  Investor(s),
enforceable in accordance with its terms.

                           (iii)    The execution,  delivery, and performance of
the  Investor(s) of this  Agreement will not violate,  conflict with, or cause a
default  under any  agreement  of  limited  partnership  of  Investor(s)  or the
certificate of incorporation  or bylaws of the Investor(s) (as applicable),  any
applicable law or regulation, any court order or administrative ruling or degree
to which the  Investor(s)  is a party or any of its property is subject,  or any
agreement, contract, indenture, or other binding arrangement.

                           (iv)     Mark Angelo has been duly  appointed  to act
as the  representative  of the  Investor(s)  hereunder  and has full  power  and
authority to execute, deliver, and perform this Escrow Agreement, to execute and
deliver any Joint Written Direction, to amend, modify, or waive any provision of
this  Agreement,  and to take any and all  other  actions  as the  Investor(s)'s
representative  under this  Agreement,  all without further consent or direction
form, or notice to, the Investor(s) or any other party.

                           (v)      No party other than the  parties  hereto and
the Investor(s)s  have, or shall have, any lien,  claim or security  interest in
the Escrow Funds or any part thereof.  No financing  statement under the Uniform
Commercial Code is on file in any jurisdiction  claiming a security  interest in
or describing  (whether  specifically or generally) the Escrow Funds or any part
thereof.

                           (vi)     All of the representations and warranties of
the Investor(s) contained herein are true and complete as of the date hereof and
will be true and complete at the time of any disbursement from the Escrow Funds.

                  b.       The Company makes the following  representations  and
warranties to the Escrow Agent:

                           (i)      The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada and
has full power and  authority  to execute  and  deliver  this  Agreement  and to
perform its obligations hereunder.

                           (ii)     This Agreement has been duly approved by all
necessary corporate action of the Company,  including any necessary  shareholder
approval,  has  been  executed  by  duly  authorized  officers  of the  Company,
enforceable in accordance with its terms.

                           (iii)    The execution,  delivery, and performance by
the Company of this  Agreement is in  accordance  with the  Securities  Purchase
Agreement  and will not violate,  conflict  with,  or cause a default  under the
certificate  of  incorporation  or bylaws of the Company,  any applicable law or
regulation,  any  court  order or  administrative  ruling or decree to which the
Company  is a  party  or any of  its  property  is  subject,  or any  agreement,
contract, indenture, or other binding arrangement,  including without limitation
to the Securities Purchase Agreement, to which the Company is a party.

                                       7
<PAGE>

                           (iv)     Marius  Silvasan has been duly  appointed to
act as the  representative  of the  Company  hereunder  and has full  power  and
authority  to execute,  deliver,  and  perform  this  Agreement,  to execute and
deliver any Joint Written Direction,  to amend, modify or waive any provision of
this  Agreement and to take all other  actions as the  Company's  Representative
under this  Agreement,  all without further consent or direction from, or notice
to, the Company or any other party.

                           (v)      No party other than the  parties  hereto and
the Investor(s)s  have, or shall have, any lien,  claim or security  interest in
the Escrow Funds or any part thereof.  No financing  statement under the Uniform
Commercial Code is on file in any jurisdiction  claiming a security  interest in
or describing  (whether  specifically or generally) the Escrow Funds or any part
thereof.

                           (vi)     All of the representations and warranties of
the  Company  contained  herein are true and  complete as of the date hereof and
will be true and complete at the time of any disbursement from the Escrow Funds.

         14.      CONSENT TO JURISDICTION AND VENUE. In the event that any party
hereto commences a lawsuit or other proceeding  relating to or arising from this
Agreement,  the parties  hereto agree that the United States  District Court for
the District of New Jersey shall have the sole and exclusive  jurisdiction  over
any  such   proceeding.   If  all  such  courts  lack  federal   subject  matter
jurisdiction,  the parties agree that the Superior Court Division of New Jersey,
Chancery  Division of Hudson County shall have sole and exclusive  jurisdiction.
Any of these  courts  shall be proper  venue for any such  lawsuit  or  judicial
proceeding and the parties hereto waive any objection to such venue. The parties
hereto consent to and agree to submit to the  jurisdiction  of any of the courts
specified  herein  and agree to accept the  service of process to vest  personal
jurisdiction over them in any of these courts.

         15.      NOTICE. All notices and other  communications  hereunder shall
be in  writing  and  shall be  deemed  to have  been  validly  served,  given or
delivered  five (5) days after deposit in the United States mails,  by certified
mail  with  return  receipt  requested  and  postage  prepaid,   when  delivered
personally,  one (1) day delivered to any overnight courier, or when transmitted
by facsimile  transmission and upon confirmation of receipt and addressed to the
party to be notified as follows:

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

                                       8
<PAGE>

If to Escrow Agent, to:    Butler Gonzalez LLP
                           1416 Morris Avenue, Suite 207
                           Union, NJ 07083
                           Attention:  David Gonzalez, Esq.
                           Telephone:  (908) 810-8588
                           Facsimile:  (908) 810-0973

If to the Company, to:     Teleplus Enterprises Inc.
                           465 St. Jean - Suite 601
                           Montreal Quebec H2Y 2R6
                           Attention:  Marius Silvasan, President
                           Telephone:  (514) 344-0778
                           Facsimile:  (514) 344-8675

With a copy to:            Kirkpatrick & Lockhart LLP
                           201 South Biscayne Boulevard - Suite 2000
                           Miami, FL  33131-2399
                           Attention:  Clayton E. Parker, Esq.
                           Telephone:  (305) 539-3300
                           Facsimile:  (305) 358-7095

Or to such other address as each party may designate for itself by like notice.

         16.      AMENDMENTS OR WAIVER.  This Agreement may be changed,  waived,
discharged  or terminated  only by a writing  signed by the parties  hereto.  No
delay or omission by any party in exercising any right with respect hereto shall
operate as waiver.  A waiver on any one occasion shall not be construed as a bar
to, or waiver of, any right or remedy on any future occasion.

         17.      SEVERABILITY. To the extent any provision of this Agreement is
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  to  the  extent  of  such  prohibition,   or  invalidity,   without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

         18.      GOVERNING   LAW.  This   Agreement   shall  be  construed  and
interpreted in accordance  with the internal laws of the State of Nevada without
giving effect to the conflict of laws principles thereof.

         19.      ENTIRE  AGREEMENT.   This  Agreement  constitutes  the  entire
Agreement  between  the  parties  relating  to  the  holding,   investment,  and
disbursement  of  the  Escrow  Funds  and  sets  forth  in  their  entirety  the
obligations and duties of the Escrow Agent with respect to the Escrow Funds.

         20.      BINDING EFFECT. All of the terms of this Agreement, as amended
from  time to time,  shall be  binding  upon,  inure  to the  benefit  of and be
enforceable by the respective heirs,  successors and assigns of the Investor(s),
the Company, or the Escrow Agent.

                                       9
<PAGE>

         21.      EXECUTION  OF  COUNTERPARTS.  This  Agreement  and  any  Joint
Written Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.

         22.      TERMINATION.  Upon the first to occur of the  disbursement  of
all amounts in the Escrow  Funds  pursuant to Joint  Written  Directions  or the
disbursement of all amounts in the Escrow Funds into court pursuant to Section 7
hereof,  this Agreement  shall  terminate and Escrow Agent shall have no further
obligation or liability  whatsoever with respect to this Agreement or the Escrow
Funds.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10
<PAGE>

         IN WITNESS  WHEREOF the parties have hereunto set their hands and seals
the day and year above set forth.

                                              TELEPLUS ENTERPRISES INC.

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

                                              CORNELL CAPITAL PARTNERS, LP

                                              BY:    YORKVILLE ADVISORS, LLC
                                              ITS:   GENERAL PARTNER

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

                                              BUTLER GONZALEZ LLP

                                              By:  /s/ David Gonzalez
                                                --------------------------------
                                              Name:  David Gonzalez, Esq.
                                              Title: Partner

                                       11

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