Document:

EXHIBIT 10.9

                            TELEPLUS ENTERPRISES INC.
                            PLACEMENT AGENT AGREEMENT

                                                      Dated as of: June 25, 2004

Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309

Ladies and Gentlemen:

         The undersigned,  Teleplus  Enterprises Inc., a Nevada corporation (the
"Company"),  hereby agrees with Newbridge Securities Corporation (the "Placement
Agent") and Cornell Capital  Partners,  LP, a Delaware Limited  Partnership (the
"Investor"), as follows:

         1.       Offering.  The Company hereby  engages the Placement  Agent to
act as its  exclusive  placement  agent in  connection  with the Standby  Equity
Distribution  Agreement dated the date hereof (the "Standby Equity  Distribution
Agreement"), pursuant to which the Company shall issue and sell to the Investor,
from  time to time,  and the  Investor  shall  purchase  from the  Company  (the
"Offering") up to Ten Million U.S. Dollars ($10,000,000) of the Company's common
stock (the  "Commitment  Amount"),  par value  US$0.01  per share  (the  "Common
Stock"), at price per share equal to the Purchase Price, as that term is defined
in the Standby Equity Distribution Agreement. The Placement Agent services shall
consist of reviewing the terms of the Standby Equity Distribution  Agreement and
advising the Company with respect to those terms.

         All  capitalized  terms used herein and not  otherwise  defined  herein
shall  have  the  same  meaning  ascribed  to  them  as in  the  Standby  Equity
Distribution Agreement. The Investor will be granted certain registration rights
with  respect  to the Common  Stock as more fully set forth in the  Registration
Rights Agreement between the Company and the Investor dated the date hereof (the
"Registration Rights Agreement").  The documents to be executed and delivered in
connection  with the  Offering,  including,  but not limited,  to the  Company's
latest  Quarterly  Report  on Form  10-QSB  as  filed  with  the  United  States
Securities  and  Exchange  Commission,   this  Agreement,   the  Standby  Equity
Distribution  Agreement,  the  Registration  Rights  Agreement,  and the  Escrow
Agreement  dated the date  hereof  (the  "Escrow  Agreement"),  are  referred to
sometimes  hereinafter  collectively as the "Offering  Materials." The Company's
Common Stock  purchased by the Investor  hereunder or to be issued in connection
with the conversion of any  debentures are sometimes  referred to hereinafter as
the  "Securities."  The  Placement  Agent  shall  not be  obligated  to sell any
Securities.

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         2.       Compensation.

                  A.       Upon the  execution  of this  Agreement,  the Company
shall  issue to the  Placement  Agent or its  designee  shares of the  Company's
Common Stock in an amount equal to Ten Thousand U.S. Dollars (US$10,000) divided
by the volume weighted average price of the Company's Common Stock, as quoted by
Bloomberg,  L.P.,  on the date  hereof (the  "Placement  Agent's  Shares").  The
Placement Agent shall be entitled to  "piggy-back"  registration  rights,  which
shall be  triggered  upon  registration  of any  shares of  Common  Stock by the
Investor  with  respect  to  the  Placement   Agent's  Shares  pursuant  to  the
Registration Rights Agreement dated the date hereof.

         3.       Representations,  Warranties  and  Covenants of the  Placement
                  Agent.

                  A.       The   Placement   Agent   represents,   warrants  and
covenants as follows:

                           (i)      The Placement  Agent has the necessary power
to enter into this  Agreement and to consummate  the  transactions  contemplated
hereby.

                           (ii)     The  execution and delivery by the Placement
Agent of this Agreement and the  consummation of the  transactions  contemplated
herein  will  not  result  in any  violation  of,  or be in  conflict  with,  or
constitute a default  under,  any agreement or instrument to which the Placement
Agent is a party or by which the Placement Agent or its properties are bound, or
any judgment, decree, order or, to the Placement Agent's knowledge, any statute,
rule or regulation  applicable  to the  Placement  Agent.  This  Agreement  when
executed and delivered by the Placement Agent, will constitute the legal,  valid
and binding  obligations of the Placement Agent,  enforceable in accordance with
their respective terms, except to the extent that (a) the enforceability  hereof
or thereof may be limited by bankruptcy, insolvency, reorganization,  moratorium
or  similar  laws  from  time to time in  effect  and  affecting  the  rights of
creditors  generally,  (b) the  enforceability  hereof or  thereof is subject to
general  principles of equity, or (c) the  indemnification  provisions hereof or
thereof may be held to be in violation of public policy.

                           (iii)    Upon   receipt   and   execution   of   this
Agreement, the Placement Agent will promptly forward copies of this Agreement to
the Company or its counsel and the Investor or its counsel.

                           (iv)     The Placement  Agent will not  intentionally
take any action that it reasonably  believes would cause the Offering to violate
the provisions of the  Securities Act of 1933, as amended (the "1933 Act"),  the
Securities  Exchange  Act of 1934 (the "1934  Act"),  the  respective  rules and
regulations  promulgated  thereunder (the "Rules and Regulations") or applicable
"Blue Sky" laws of any state or jurisdiction.

                           (v)      The  Placement  Agent  is a  member  of  the
National  Association  of  Securities  Dealers,  Inc.,  and  is a  broker-dealer
registered  as such  under  the 1934 Act and under  the  securities  laws of the
states in which the  Securities  will be offered or sold by the Placement  Agent
unless an exemption  for such state  registration  is available to the Placement
Agent.  The  Placement  Agent  is in  material  compliance  with the  rules  and
regulations  applicable to the Placement  Agent  generally and applicable to the
Placement Agent's participation in the Offering.

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         4.       Representations and Warranties of the Company.

                  A.       The Company represents and warrants as follows:

                           (i)      The execution,  delivery and  performance of
each of this Agreement,  the Standby Equity Distribution  Agreement,  the Escrow
Agreement,  and the  Registration  Rights Agreement has been or will be duly and
validly authorized by the Company and is, or with respect to this Agreement, the
Standby  Equity   Distribution   Agreement,   the  Escrow  Agreement,   and  the
Registration  Rights  Agreement,  will be a valid and binding  agreement  of the
Company,  enforceable  in accordance  with its respective  terms,  except to the
extent  that  (a)  the  enforceability  hereof  or  thereof  may be  limited  by
bankruptcy, insolvency, reorganization,  moratorium or similar laws from time to
time in  effect  and  affecting  the  rights  of  creditors  generally,  (b) the
enforceability  hereof or thereof is subject to general  principles of equity or
(c)  the  indemnification  provisions  hereof  or  thereof  may be held to be in
violation  of  public  policy.  The  Securities  to be  issued  pursuant  to the
transactions  contemplated by this Agreement and the Standby Equity Distribution
Agreement have been duly  authorized and, when issued and paid for in accordance
with  this  Agreement,   the  Standby  Equity  Distribution  Agreement  and  the
certificates/instruments representing such Securities, will be valid and binding
obligations  of the Company,  enforceable  in accordance  with their  respective
terms,  except to the extent that (1) the enforceability  thereof may be limited
by bankruptcy, insolvency, reorganization,  moratorium or similar laws from time
to time in effect and affecting the rights of creditors  generally,  and (2) the
enforceability thereof is subject to general principles of equity. All corporate
action  required  to be taken for the  authorization,  issuance  and sale of the
Securities has been duly and validly taken by the Company.

                           (ii)     The  Company has a duly  authorized,  issued
and  outstanding  capitalization  as set forth herein and in the Standby  Equity
Distribution  Agreement.  The  Company  is  not a  party  to  or  bound  by  any
instrument, agreement or other arrangement providing for it to issue any capital
stock, rights, warrants, options or other securities, except for this Agreement,
the  agreements  described  herein  and  as  described  in  the  Standby  Equity
Distribution  Agreement,  dated the date  hereof  and the  agreements  described
therein.  All issued and outstanding  securities of the Company,  have been duly
authorized and validly issued and are fully paid and non-assessable; the holders
thereof have no rights of rescission or preemptive  rights with respect  thereto
and are not subject to  personal  liability  solely by reason of being  security
holders;  and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company.

                           (iii)    The Common Stock to be issued in  accordance
with this Agreement and the Standby Equity Distribution  Agreement has been duly
authorized  and, when issued and paid for in accordance  with this Agreement and
the  Standby  Equity  Distribution   Agreement,   the   certificates/instruments
representing   such  Common  Stock  will  be  validly  issued,   fully-paid  and
non-assessable;  the holders  thereof will not be subject to personal  liability
solely by reason of being such holders;  such Securities are not and will not be
subject to the preemptive rights of any holder of any security of the Company.

                           (iv)     The  Company has good and  marketable  title
to,  or valid  and  enforceable  leasehold  estates  in,  all  items of real and
personal  property  necessary  to  conduct  its  business  (including,   without

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limitation, any real or personal property stated in the Offering Materials to be
owned or leased by the  Company),  free and  clear of all  liens,  encumbrances,
claims, security interests and defects of any material nature whatsoever,  other
than those set forth in the Offering  Materials  and liens for taxes not yet due
and payable.

                           (v)      There  is  no  litigation  or   governmental
proceeding  pending  or,  to the  best of the  Company's  knowledge,  threatened
against,  or involving the properties or business of the Company,  except as set
forth in the Offering Materials.

                           (vi)     The Company has been duly  organized  and is
validly  existing as a corporation  in good standing under the laws of the State
of Nevada.  Except as set forth in the Offering Materials,  the Company does not
own or control,  directly or indirectly,  an interest in any other  corporation,
partnership,  trust, joint venture or other business entity. The Company is duly
qualified  or licensed  and in good  standing as a foreign  corporation  in each
jurisdiction   in  which  the   character  of  its   operations   requires  such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite corporate power and
authority,  and all material and necessary  authorizations,  approvals,  orders,
licenses,  certificates  and  permits  of and from all  governmental  regulatory
officials  and bodies  (domestic  and  foreign) to conduct its  businesses  (and
proposed  business) as described in the Offering  Materials.  Any disclosures in
the Offering  Materials  concerning the effects of foreign,  federal,  state and
local  regulation  on the  Company's  businesses  as currently  conducted and as
contemplated  are correct in all  material  respects  and do not omit to state a
material fact.  The Company has all corporate  power and authority to enter into
this Agreement,  the Standby Equity  Distribution  Agreement,  the  Registration
Rights  Agreement,  and the Escrow  Agreement,  to carry out the  provisions and
conditions hereof and thereof, and all consents,  authorizations,  approvals and
orders  required in connection  herewith and therewith  have been  obtained.  No
consent,  authorization  or order of, and no filing with, any court,  government
agency  or  other  body is  required  by the  Company  for the  issuance  of the
Securities  or  execution  and  delivery of the  Offering  Materials  except for
applicable federal and state securities laws. The Company,  since its inception,
has not incurred any liability  arising under or as a result of the  application
of any of the  provisions  of the  1933  Act,  the  1934  Act or the  Rules  and
Regulations.

                           (vii)    There has been no material adverse change in
the  condition or prospects of the  Company,  financial or  otherwise,  from the
latest dates as of which such  condition  or  prospects,  respectively,  are set
forth in the Offering Materials,  and the outstanding debt, the property and the
business of the Company  conform in all  material  respects to the  descriptions
thereof contained in the Offering Materials.

                           (viii)   Except   as  set   forth  in  the   Offering
Materials,  the  Company is not in breach of, or in default  under,  any term or
provision of any material indenture,  mortgage, deed of trust, lease, note, loan
or Standby  Equity  Distribution  Agreement or any other  material  agreement or
instrument  evidencing an obligation for borrowed  money,  or any other material
agreement  or  instrument  to  which  it is a party or by which it or any of its
properties  may be bound or  affected.  The Company is not in  violation  of any
provision of its charter or by-laws or in violation of any  franchise,  license,
permit, judgment, decree or order, or in violation of any material statute, rule
or regulation.  Neither the execution and delivery of the Offering Materials nor
the issuance and sale or delivery of the Securities, nor the consummation of any
of the transactions contemplated in the Offering Materials nor the compliance by

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the Company with the terms and provisions hereof or thereof, has conflicted with
or will conflict  with, or has resulted in or will result in a breach of, any of
the terms and  provisions of, or has  constituted  or will  constitute a default
under,  or has resulted in or will result in the creation or  imposition  of any
lien,  charge or  encumbrance  upon any  property  or assets of the  Company  or
pursuant to the terms of any indenture,  mortgage,  deed of trust, note, loan or
any other  agreement or instrument  evidencing an obligation for borrowed money,
or any other  agreement  or  instrument  to which the Company may be bound or to
which any of the  property or assets of the Company is subject  except (a) where
such default,  lien,  charge or  encumbrance  would not have a material  adverse
effect on the Company and (b) as described in the Offering  Materials;  nor will
such action  result in any  violation  of the  provisions  of the charter or the
by-laws of the Company or,  assuming the due  performance by the Placement Agent
of its obligations  hereunder,  any material statute or any material order, rule
or regulation applicable to the Company of any court or of any foreign, federal,
state or other regulatory authority or other government body having jurisdiction
over the Company.

                           (ix)     Subsequent   to  the   dates   as  of  which
information is given in the Offering  Materials,  and except as may otherwise be
indicated or contemplated  herein or therein and the securities offered pursuant
to the Securities  Purchase Agreement dated the date hereof, the Company has not
(a) issued any  securities  or incurred any liability or  obligation,  direct or
contingent,  for borrowed money, or (b) entered into any transaction  other than
in the ordinary course of business, or (c) declared or paid any dividend or made
any  other  distribution  on or in  respect  of its  capital  stock.  Except  as
described in the Offering Materials,  the Company has no outstanding obligations
to any officer or director of the Company.

                           (x)      There  are no  claims  for  services  in the
nature of a finder's or  origination  fee with respect to the sale of the Common
Stock or any other  arrangements,  agreements or understandings  that may affect
the Placement Agent's compensation, as determined by the National Association of
Securities Dealers, Inc.

                           (xi)     The  Company  owns or  possesses,  free  and
clear of all liens or  encumbrances  and  rights  thereto  or  therein  by third
parties,  the requisite licenses or other rights to use all trademarks,  service
marks, copyrights,  service names, trade names, patents, patent applications and
licenses necessary to conduct its business (including,  without limitation,  any
such  licenses or rights  described in the Offering  Materials as being owned or
possessed by the Company)  and,  except as set forth in the Offering  Materials,
there is no claim or action by any person pertaining to, or proceeding,  pending
or threatened, which challenges the exclusive rights of the Company with respect
to any  trademarks,  service  marks,  copyrights,  service  names,  trade names,
patents,  patent  applications and licenses used in the conduct of the Company's
businesses (including, without limitation, any such licenses or rights described
in the Offering Materials as being owned or possessed by the Company) except any
claim or action that would not have a material  adverse  effect on the  Company;
the Company's  current  products,  services or processes do not infringe or will
not infringe on the patents currently held by any third party.

                           (xii)    Except   as   described   in  the   Offering
Materials,  the Company is not under any  obligation to pay royalties or fees of
any kind whatsoever to any third party with respect to any  trademarks,  service
marks,  copyrights,  service names, trade names,  patents,  patent applications,
licenses or  technology  it has  developed,  uses,  employs or intends to use or
employ, other than to their respective licensors.

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<PAGE>

                           (xiii)   Subject to the  performance by the Placement
Agent  of its  obligations  hereunder  the  offer  and  sale  of the  Securities
complies,  and will  continue  to  comply,  in all  material  respects  with the
requirements  of Rule 506 of Regulation D promulgated by the SEC pursuant to the
1933 Act and any other applicable federal and state laws, rules, regulations and
executive orders. Neither the Offering Materials nor any amendment or supplement
thereto  nor any  documents  prepared  by the  Company  in  connection  with the
Offering  will contain any untrue  statement of a material fact or omit to state
any  material  fact  required  to be stated  therein  or  necessary  to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.  All statements of material facts in the Offering  Materials are
true and correct as of the date of the Offering Materials.

                           (xiv)    All material taxes which are due and payable
from the Company have been paid in full or adequate  provision has been made for
such taxes on the books of the Company,  except for those taxes disputed in good
faith by the Company

                           (xv)     None of the Company nor any of its officers,
directors,  employees or agents,  nor any other  person  acting on behalf of the
Company, has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary
course of business) to any customer,  supplier,  employee or agent of a customer
or   supplier,   or  official  or  employee  of  any   governmental   agency  or
instrumentality  of any government  (domestic or foreign) or any political party
or candidate  for office  (domestic or foreign) or other person who is or may be
in a position  to help or hinder the  business  of the  Company (or assist it in
connection with any actual or proposed  transaction) which (A) might subject the
Company  to any  damage  or  penalty  in any  civil,  criminal  or  governmental
litigation  or  proceeding,  or (B) if not given in the past,  might  have had a
materially  adverse effect on the assets,  business or operations of the Company
as  reflected  in any of the  financial  statements  contained  in the  Offering
Materials,  or (C) if not continued in the future,  might  adversely  affect the
assets, business, operations or prospects of the Company in the future.

         5.       Representations, Warranties and Covenants of the Investor.

                  A.       The Investor  represents,  warrants and  covenants as
follows:

                           (i)      The  Investor  has the  necessary  power  to
enter  into this  Agreement  and to  consummate  the  transactions  contemplated
hereby.

                           (ii)     The  execution  and delivery by the Investor
of this Agreement and the consummation of the transactions  contemplated  herein
will not result in any  violation  of, or be in conflict  with,  or constitute a
default  under,  any agreement or instrument to which the Investor is a party or
by which the Investor or its  properties  are bound,  or any  judgment,  decree,
order  or,  to  the  Investor's  knowledge,  any  statute,  rule  or  regulation
applicable to the Investor.  This  Agreement  when executed and delivered by the
Investor,  will  constitute  the legal,  valid and  binding  obligations  of the
Investor,  enforceable in accordance with their respective terms,  except to the
extent  that  (a)  the  enforceability  hereof  or  thereof  may be  limited  by
bankruptcy, insolvency, reorganization,  moratorium or similar laws from time to

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time in  effect  and  affecting  the  rights  of  creditors  generally,  (b) the
enforceability  hereof or thereof is subject to general principles of equity, or
(c)  the  indemnification  provisions  hereof  or  thereof  may be held to be in
violation of public policy.

                           (iii)    The Investor will promptly forward copies of
any  and  all due  diligence  questionnaires  compiled  by the  Investor  to the
Placement Agent.

                           (iv)     The Investor is an  Accredited  Investor (as
 defined under the 1933 Act).

                           (v)      The Investor is acquiring the Securities for
the  Inventor's  own  account  as  principal,  not as a nominee  or  agent,  for
investment  purposes only, and not with a view to, or for, resale,  distribution
or  fractionalization  thereof  in whole or in part  and no other  person  has a
direct or indirect beneficial interest in such Securities. Further, the Investor
does not have any  contract,  undertaking,  agreement  or  arrangement  with any
person to sell, transfer or grant  participations to such person or to any third
person, with respect to any of the Securities.

                           (vi)     The  Investor  acknowledges  the  Investor's
understanding  that the  offering and sale of the  Securities  is intended to be
exempt  from  registration  under the 1933 Act by virtue of Section  3(b) of the
1933 Act and the provisions of Regulation D promulgated thereunder  ("Regulation
D"). In furtherance thereof, the Investor represents and warrants as follows:

                                    (a)      The  Investor  has  the   financial
ability to bear the economic  risk of the  Investor's  investment,  has adequate
means for providing for the Inventor's current needs and personal  contingencies
and has no need for liquidity with respect to the  Investor's  investment in the
Company; and

                                    (b)      The Investor has such knowledge and
experience in financial and business  matters as to be capable of evaluating the
merits and risks of the prospective investment.  The Inventor also represents it
has not been organized for the purpose of acquiring the Securities.

                           (vii)    The Investor has been given the  opportunity
for a reasonable  time prior to the date hereof to ask questions of, and receive
answers  from,  the  Company  or its  representatives  concerning  the terms and
conditions of the Offering, and other matters pertaining to this investment, and
has been given the opportunity for a reasonable time prior to the date hereof to
obtain such  additional  information in connection with the Company in order for
the Investor to evaluate the merits and risks of purchase of the Securities,  to
the extent the  Company  possesses  such  information  or can acquire it without
unreasonable  effort or expense.  The  Investor is not relying on the  Placement
Agent or any of its affiliates  with respect to the accuracy or  completeness of
the  Offering  Materials  or for any  economic  considerations  involved in this
investment.

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         6.       Certain Covenants and Agreements of the Company.

         The Company covenants and agrees at its expense and without any expense
to the Placement Agent as follows:

                  A.       To advise the Placement Agent and the Investor of any
material  adverse  change in the  Company's  financial  condition,  prospects or
business or of any  development  materially  affecting  the Company or rendering
untrue or misleading any material statement in the Offering Materials  occurring
at any time as soon as the Company is either informed or becomes aware thereof.

                  B.       To use its commercially  reasonable  efforts to cause
the Common Stock  issuable in connection  with the Standby  Equity  Distribution
Agreement to be qualified or registered for sale on terms  consistent with those
stated in the  Registration  Rights  Agreement and under the securities  laws of
such  jurisdictions  as the Placement  Agent and the Investor  shall  reasonably
request. Qualification,  registration and exemption charges and fees shall be at
the sole cost and expense of the Company.

                  C.       Upon  written  request,  to provide  and  continue to
provide the Placement Agent and the Investor  copies of all quarterly  financial
statements and audited annual financial  statements  prepared by or on behalf of
the Company,  other  reports  prepared by or on behalf of the Company for public
disclosure and all documents delivered to the Company's stockholders.

                  D.       To  deliver,  during the  registration  period of the
Standby  Equity  Distribution  Agreement,  to the Investor  upon the  Investor's
request,  within  forty five (45) days,  a statement of its income for each such
quarterly  period,  and  its  balance  sheet  and  a  statement  of  changes  in
stockholders'  equity as of the end of such quarterly period,  all in reasonable
detail,  certified by its principal financial or accounting officer; (ii) within
ninety (90) days after the close of each fiscal  year,  its balance  sheet as of
the close of such fiscal year,  together with a statement of income, a statement
of changes in stockholders'  equity and a statement of cash flow for such fiscal
year,  such  balance  sheet,  statement  of  income,  statement  of  changes  in
stockholders'  equity and statement of cash flow to be in reasonable  detail and
accompanied  by a copy of the  certificate  or  report  thereon  of  independent
auditors if audited financial  statements are prepared;  and (iii) a copy of all
documents,  reports and  information  furnished to its  stockholders at the time
that such documents, reports and information are furnished to its stockholders.

                  E.       To comply with the terms of the Offering Materials.

                  F.       To ensure that any transactions  between or among the
Company,  or any of its  officers,  directors  and  affiliates  be on terms  and
conditions  that  are no less  favorable  to the  Company,  than the  terms  and
conditions  that would be available  in an "arm's  length"  transaction  with an
independent third party.

         7.       Indemnification and Limitation of Liability.

                  A.       The Company  hereby agrees that it will indemnify and
hold the Placement Agent and each officer,  director,  shareholder,  employee or
representative of the Placement Agent and each person controlling, controlled by

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or under common  control with the Placement  Agent within the meaning of Section
15 of the  1933  Act or  Section  20 of the  1934  Act or the  SEC's  Rules  and
Regulations promulgated thereunder (the "Rules and Regulations"),  harmless from
and  against  any  and all  loss,  claim,  damage,  liability,  cost or  expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other  expenses and  disbursements  incurred in connection  with  investigating,
preparing to defend or defending any action,  suit or proceeding,  including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing  or  preparing  for  appearance  as a witness in any  action,  suit or
proceeding,  including any inquiry, investigation or pretrial proceeding such as
a deposition)  to which the Placement  Agent or such  indemnified  person of the
Placement  Agent may become  subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation,  common law or
otherwise,  arising  out of or based  upon (i) any untrue  statement  or alleged
untrue  statement  of a  material  fact  contained  in  (a)  Section  4 of  this
Agreement,  (b) the Offering Materials (except those written statements relating
to the Placement Agent given by the Placement Agent for inclusion therein),  (c)
any  application  or other  document  or written  communication  executed by the
Company or based upon written information  furnished by the Company filed in any
jurisdiction  in order to qualify  the Common  Stock under the  securities  laws
thereof,  or any state  securities  commission  or agency;  (ii) the omission or
alleged omission from documents  described in clauses (a), (b) or (c) above of a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading;  or (iii) the breach of any  representation,  warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an  indemnified  person,  at any time or from time to
time, it will promptly  reimburse such indemnified  person for any loss,  claim,
damage,  liability,  cost  or  expense  actually  and  reasonably  paid  by  the
indemnified  person as to which the Company has indemnified such person pursuant
hereto.  Notwithstanding  the foregoing  provisions of this Paragraph  7(A), any
such payment or reimbursement by the Company of fees,  expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent  jurisdiction  (after all appeals or the expiration of time
to appeal) is entered  against the Placement  Agent or such  indemnified  person
based upon specific finding of fact that the Placement Agent or such indemnified
person's gross negligence or willful  misfeasance will be promptly repaid to the
Company.

                  B.       The  Placement  Agent  hereby  agrees  that  it  will
indemnify and hold the Company and each officer, director, shareholder, employee
or representative of the Company, and each person controlling,  controlled by or
under common  control  with the Company  within the meaning of Section 15 of the
1933 Act or  Section 20 of the 1934 Act or the Rules and  Regulations,  harmless
from and against any and all loss,  claim,  damage,  liability,  cost or expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other  expenses and  disbursements  incurred in connection  with  investigating,
preparing to defend or defending any action,  suit or proceeding,  including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing  or  preparing  for  appearance  as a witness in any  action,  suit or
proceeding,  including any inquiry, investigation or pretrial proceeding such as
a deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based upon (i) the material  breach of any  representation,  warranty,
covenant or agreement made by the Placement Agent in this Agreement, or (ii) any
false or misleading information provided to the Company in writing by one of the
Placement Agent's indemnified persons specifically for inclusion in the Offering
Materials.

                                       9
<PAGE>

                  C.       The Investor hereby agrees that it will indemnify and
hold the Placement Agent and each officer,  director,  shareholder,  employee or
representative of the Placement Agent, and each person  controlling,  controlled
by or under  common  control  with the  Placement  Agent  within the  meaning of
Section  15 of the 1933 Act or  Section  20 of the  1934  Act or the  Rules  and
Regulations,  harmless  from  and  against  any and  all  loss,  claim,  damage,
liability,  cost or expense whatsoever  (including,  but not limited to, any and
all  reasonable  legal fees and other  expenses  and  disbursements  incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation,  commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action,  suit or  proceeding,  including  any inquiry,  investigation  or
pretrial  proceeding  such as a deposition) to which the Placement Agent or such
indemnified person of the Placement Agent may become subject under the 1933 Act,
the 1934 Act, the Rules and  Regulations,  or any other  federal or state law or
regulation,  common  law or  otherwise,  arising  out of or  based  upon (i) the
conduct of the Investor or its  officers,  employees or  representatives  in its
acting  as the  Investor  for the  Offering,  (ii) the  material  breach  of any
representation,  warranty,  covenant or  agreement  made by the  Investor in the
Offering Materials, or (iii) any false or misleading information provided to the
Placement Agent by one of the Investor's indemnified persons.

                  D.       The  Placement  Agent  hereby  agrees  that  it  will
indemnify  and  hold  the  Investor  and each  officer,  director,  shareholder,
employee  or  representative  of the  Investor,  and  each  person  controlling,
controlled  by or under common  control with the Investor  within the meaning of
Section  15 of the 1933 Act or  Section  20 of the  1934  Act or the  Rules  and
Regulations,  harmless  from  and  against  any and  all  loss,  claim,  damage,
liability,  cost or expense whatsoever  (including,  but not limited to, any and
all  reasonable  legal fees and other  expenses  and  disbursements  incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation,  commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action,  suit or  proceeding,  including  any inquiry,  investigation  or
pretrial  proceeding  such  as a  deposition)  to  which  the  Investor  or such
indemnified  person of the Investor may become  subject  under the 1933 Act, the
1934 Act,  the  Rules and  Regulations,  or any  other  federal  or state law or
regulation,  common law or otherwise,  arising out of or based upon the material
breach  of any  representation,  warranty,  covenant  or  agreement  made by the
Placement Agent in this Agreement.

                  E.       Promptly  after  receipt by an  indemnified  party of
notice of  commencement  of any action covered by Section 7(A), (B), (C) or (D),
the party to be indemnified  shall,  within five (5) business  days,  notify the
indemnifying  party  of the  commencement  thereof;  the  omission  by  one  (1)
indemnified  party to so notify the  indemnifying  party  shall not  relieve the
indemnifying  party of its obligation to indemnify any other  indemnified  party
that has given such notice and shall not relieve the  indemnifying  party of any
liability outside of this indemnification if not materially  prejudiced thereby.
In the event that any action is  brought  against  the  indemnified  party,  the
indemnifying party will be entitled to participate therein and, to the extent it
may desire,  to assume and control the defense thereof with counsel chosen by it
which is reasonably  acceptable to the indemnified  party. After notice from the

                                       10
<PAGE>

indemnifying  party to such  indemnified  party of its election to so assume the
defense thereof,  the indemnifying  party will not be liable to such indemnified
party under such Section 7(A),  (B), (C), or (D) for any legal or other expenses
subsequently  incurred by such indemnified  party in connection with the defense
thereof, but the indemnified party may, at its own expense,  participate in such
defense by counsel chosen by it, without,  however,  impairing the  indemnifying
party's  control of the  defense.  Subject to the proviso of this  sentence  and
notwithstanding  any other  statement  to the  contrary  contained  herein,  the
indemnified  party or  parties  shall  have the right to choose its or their own
counsel  and  control  the  defense  of any  action,  all at the  expense of the
indemnifying  party  if (i) the  employment  of such  counsel  shall  have  been
authorized in writing by the  indemnifying  party in connection with the defense
of  such  action  at  the  expense  of  the  indemnifying  party,  or  (ii)  the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
such  indemnified  party to have charge of the  defense of such action  within a
reasonable  time  after  notice of  commencement  of the  action,  or (iii) such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses available to it or them which are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such  fees  and  expenses  of one  additional  counsel  shall  be  borne  by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially  similar or related
actions in the same jurisdiction  arising out of the same general allegations or
circumstance,  be liable for the  reasonable  fees and expenses of more than one
separate  firm of attorneys  at any time for all such  indemnified  parties.  No
settlement of any action or  proceeding  against an  indemnified  party shall be
made without the consent of the indemnifying party.

                  F.       In  order   to   provide   for  just  and   equitable
contribution  in  circumstances  in which the  indemnification  provided  for in
Section 7(A) or 7(B) is due in  accordance  with its terms but is for any reason
held by a court to be unavailable on grounds of policy or otherwise, the Company
and the  Placement  Agent shall  contribute  to the  aggregate  losses,  claims,
damages and liabilities  (including legal or other expenses  reasonably incurred
in  connection  with the  investigation  or defense of same) which the other may
incur in such  proportion so that the Placement  Agent shall be responsible  for
such percent of the aggregate of such losses, claims, damages and liabilities as
shall equal the percentage of the gross proceeds paid to the Placement Agent and
the Company shall be responsible  for the balance;  provided,  however,  that no
person  guilty of  fraudulent  misrepresentation  within the  meaning of Section
11(f) of the 1933 Act shall be entitled to contribution  from any person who was
not guilty of such  fraudulent  misrepresentation.  For purposes of this Section
7(F),  any person  controlling,  controlled by or under common  control with the
Placement Agent, or any partner, director, officer, employee,  representative or
any agent of any  thereof,  shall have the same  rights to  contribution  as the
Placement  Agent and each  person  controlling,  controlled  by or under  common
control  with the  Company  within the  meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each officer of the Company and each  director of
the Company shall have the same rights to contribution as the Company. Any party
entitled to contribution will,  promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for  contribution  may be made against the other party under this Section  7(D),
notify such party from whom  contribution may be sought,  but the omission to so
notify  such party shall not  relieve  the party from whom  contribution  may be
sought from any  obligation  they may have  hereunder  or otherwise if the party
from whom contribution may be sought is not materially prejudiced thereby.

                                       11
<PAGE>

                  G.       The indemnity and contribution  agreements  contained
in this Section 7 shall remain operative and in full force and effect regardless
of any  investigation  made by or on  behalf  of any  indemnified  person or any
termination of this Agreement.

                  H.       The Company  hereby  waives,  to the  fullest  extent
permitted by law, any right to or claim of any punitive, exemplary,  incidental,
indirect,   special,   consequential  or  other  damages   (including,   without
limitation,  loss of profits)  against  the  Placement  Agent and each  officer,
director,  shareholder,  employee or  representative  of the placement agent and
each  person  controlling,  controlled  by or  under  common  control  with  the
Placement  Agent  within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations arising out of any cause whatsoever
(whether such cause be based in contract,  negligence,  strict liability,  other
tort or otherwise).  Notwithstanding  anything to the contrary contained herein,
the  aggregate  liability of the  Placement  Agent and each  officer,  director,
shareholder,  employee or  representative of the Placement Agent and each person
controlling,  controlled  by or under common  control with the  Placement  Agent
within  the  meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
or the Rules and Regulations  shall not exceed the compensation  received by the
Placement Agent pursuant to Section 2 hereof. This limitation of liability shall
apply  regardless of the cause of action,  whether  contract,  tort  (including,
without  limitation,  negligence)  or breach of  statute  or any other  legal or
equitable obligation.

         8.       Payment of Expenses.

         The Company  hereby  agrees to bear all of the  expenses in  connection
with the Offering,  including,  but not limited to the  following:  filing fees,
printing and duplicating  costs,  advertisements,  postage and mailing  expenses
with respect to the transmission of Offering  Materials,  registrar and transfer
agent fees,  escrow agent fees and expenses,  fees of the Company's  counsel and
accountants, issue and transfer taxes, if any.

         9.       Conditions of Closing.

         The  Closing  shall  be  held at the  offices  of the  Investor  or its
counsel.  The  obligations of the Placement  Agent hereunder shall be subject to
the continuing accuracy of the representations and warranties of the Company and
the  Investor  herein as of the date  hereof and as of the Date of Closing  (the
"Closing Date") with respect to the Company or the Investor, as the case may be,
as if it had been made on and as of such Closing Date; the accuracy on and as of
the Closing Date of the  statements of the officers of the Company made pursuant
to the provisions hereof; and the performance by the Company and the Investor on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:

                  A.       Upon the  effectiveness  of a registration  statement
covering  the  Standby  Equity  Distribution  Agreement,  the  Investor  and the
Placement Agent shall receive the opinion of Counsel to the Company, dated as of
the date  thereof,  which  opinion  shall be in form  and  substance  reasonably
satisfactory to the Investor, their counsel and the Placement Agent.

                  B.       At or  prior to the  Closing,  the  Investor  and the
Placement  Agent shall have been  furnished  such  documents,  certificates  and
opinions as it may reasonably require for the purpose of enabling them to review
or pass  upon  the  matters  referred  to in  this  Agreement  and the  Offering
Materials, or in order to evidence the accuracy, completeness or satisfaction of
any of the representations, warranties or conditions herein contained.

                                       12
<PAGE>

                  C.       At and prior to the  Closing,  (i) there  shall  have
been no material adverse change nor development  involving a prospective  change
in  the  condition  or  prospects  or  the  business  activities,  financial  or
otherwise,  of the Company from the latest  dates as of which such  condition is
set forth in the Offering Materials;  (ii) there shall have been no transaction,
not in the ordinary course of business except the  transactions  pursuant to the
Securities  Purchase  Agreement  entered  into by the Company on the date hereof
which has not been disclosed in the Offering Materials or to the Placement Agent
in writing;  (iii)  except as set forth in the Offering  Materials,  the Company
shall not be in default  under any provision of any  instrument  relating to any
outstanding  indebtedness for which a waiver or extension has not been otherwise
received; (iv) except as set forth in the Offering Materials,  the Company shall
not have issued any securities (other than those to be issued as provided in the
Offering Materials) or declared or paid any dividend or made any distribution of
its  capital  stock of any class and there shall not have been any change in the
indebtedness  (long or short term) or  liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material  amount of the
assets of the Company shall have been pledged or mortgaged,  except as indicated
in the Offering Materials;  and (v) no action, suit or proceeding,  at law or in
equity,  against the Company or affecting  any of its  properties  or businesses
shall be  pending  or  threatened  before  or by any court or  federal  or state
commission,  board or other administrative agency, domestic or foreign,  wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.

                  D.       If   requested   at  Closing  the  Investor  and  the
Placement  Agent  shall  receive  a  certificate  of the  Company  signed  by an
executive  officer  and  chief  financial  officer,  dated as of the  applicable
Closing,  to the effect that the conditions set forth in subparagraph  (C) above
have been satisfied and that, as of the applicable closing,  the representations
and warranties of the Company set forth herein are true and correct.

                  E.       The  Placement  Agent  shall  have no  obligation  to
insure that (x) any check,  note, draft or other means of payment for the Common
Stock will be honored,  paid or  enforceable  against the Investor in accordance
with its terms,  or (y)  subject to the  performance  of the  Placement  Agent's
obligations  and the  accuracy  of the  Placement  Agent's  representations  and
warranties  hereunder,   (1)  the  Offering  is  exempt  from  the  registration
requirements  of the 1933 Act or any applicable  state "Blue Sky" law or (2) the
Investor is an Accredited Investor.

         10.      Termination.

         This Agreement  shall be co-terminus  with, and terminate upon the same
terms and  conditions  as those set forth in, the  Standby  Equity  Distribution
Agreement.  The rights of the Investor and the  obligations of the Company under
the Registration Rights Agreement, and the rights of the Placement Agent and the
obligations  of the Company  shall  survive the  termination  of this  Agreement
unabridged.

                                       13
<PAGE>

         11.      Miscellaneous.

                  A.       This  Agreement  may be  executed  in any  number  of
counterparts,  each of which  shall be deemed to be an  original,  but all which
shall be deemed to be one and the same instrument.

                  B.       Any  notice   required  or   permitted  to  be  given
hereunder shall be given in writing and shall be deemed effective when deposited
in the United  States mail,  postage  prepaid,  or when  received if  personally
delivered or faxed (upon confirmation of receipt received by the sending party),
addressed as follows to such other address of which  written  notice is given to
the others):

If to Placement Agent, to: Newbridge Securities Corporation
                           1451 Cypress Creek Road, Suite 204
                           Fort Lauderdale, Florida 33309
                           Attention:  Doug Aguililla
                           Telephone:  (954) 334-3450
                           Facsimile:  (954) 229-9937

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

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

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

                                       14
<PAGE>

                  C.       This Agreement  shall be governed by and construed in
all  respects  under the laws of the State of Nevada,  without  reference to its
conflict of laws rules or principles. Any suit, action, proceeding or litigation
arising out of or relating to this Agreement  shall be brought and prosecuted in
such federal or state court or courts  located within the State of New Jersey as
provided by law. The parties hereby irrevocably and  unconditionally  consent to
the  jurisdiction  of each such court or courts  located within the State of New
Jersey and to service of process by registered or certified mail, return receipt
requested,  or by any other  manner  provided  by  applicable  law,  and  hereby
irrevocably and unconditionally  waive any right to claim that any suit, action,
proceeding  or litigation  so commenced  has been  commenced in an  inconvenient
forum.

                  D.       This  Agreement and the other  agreements  referenced
herein contain the entire  understanding  between the parties hereto and may not
be modified or amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is sought.

                  E.       If any provision of this  Agreement  shall be held to
be invalid or  unenforceable,  such  invalidity  or  unenforceability  shall not
affect any other provision of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

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

                                              COMPANY:
                                              TELEPLUS ENTERPRISES INC.

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

                                              PLACEMENT AGENT:
                                              NEWBRIDGE SECURITIES CORPORATION

                                              By:  /s/ Guy S. Amico
                                                --------------------------------
                                              Name:  Guy S. Amico
                                              Title: President

                                              INVESTOR:
                                              CORNELL CAPITAL PARTNERS, LP

                                              BY:  YORKVILLE ADVISORS, LLC
                                              ITS: GENERAL PARTNER

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

                                       16EXHIBIT 10.10

                          SECURITIES PURCHASE AGREEMENT

         THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of June
25, 2004, by and among TELEPLUS  ENTERPRISES  INC., a Nevada  corporation,  with
headquarters  located at 465 St. Jean, Suite 601, Montreal,  Quebec H2Y 2R6 (the
"Company"), and the Buyers listed on Schedule I attached hereto (individually, a
"Buyer" or collectively "Buyers").

                                   WITNESSETH:

         WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation  D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");

         WHEREAS,  the parties  desire  that,  upon the terms and subject to the
conditions  contained herein,  the Company shall issue and sell to the Buyer(s),
as provided  herein,  and the Buyer(s) shall purchase up to One Million  Dollars
($1,000,000) of 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") of which Four
Hundred Thousand Dollars  ($400,000) shall be funded on the fifth (5th) business
day  following  the date hereof (the "First  Closing"),  Four  Hundred and Fifty
Thousand  Dollars  ($450,000)  shall be funded on the fifth (5th)  business  day
following the date the registration statement (the "Registration  Statement") is
filed,  pursuant  the  Investor  Registration  Rights  Agreement  dated the date
hereof,  with the United States  Securities and Exchange  Commission (the "SEC")
(the "Second  Closing"),  and One Hundred and Fifty Thousand Dollars  ($150,000)
shall be  funded  on the  fifth  (5th)  business  day  following  on he date the
Registration  Statement is declared  effective by the SEC (the "Third  Closing")
(individually  referred  to as a  "Closing"  collectively  referred  to  as  the
"Closings"),   for  a  total  purchase  price  of  up  to  One  Million  Dollars
($1,000,000),  (the  "Purchase  Price")  in the  respective  amounts  set  forth
opposite each Buyer(s) name on Schedule I (the "Subscription Amount"); and

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement  substantially in the form attached hereto as Exhibit A (the "Investor
Registration  Rights  Agreement")  pursuant  to which the  Company has agreed to
provide  certain  registration  rights  under  the  1933 Act and the  rules  and
regulations promulgated there under, and applicable state securities laws; and

         WHEREAS,  the  aggregate  proceeds  of  the  sale  of  the  Convertible
Debentures  contemplated hereby shall be held in escrow pursuant to the terms of
an escrow agreement  substantially in the form of the Escrow Agreement  attached
hereto as Exhibit B.

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement,  the parties hereto are executing and delivering Irrevocable Transfer
Agent  Instructions  substantially in the form attached hereto as Exhibit C (the
"Irrevocable Transfer Agent Instructions").

<PAGE>

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement,  the parties hereto are executing and delivering a Security Agreement
substantially   in  the  form  attached  hereto  as  Exhibit  D  (the  "Security
Agreement")  pursuant  to which the  Company  has agreed to provide  the Buyer a
security interest in Pledged Collateral (as this term is defined in the Security
Agreement  dated the date  hereof) to secure  Company's  obligations  under this
Agreement,   the  Convertible   Debenture,   the  Investor  Registration  Rights
Agreement,  the Irrevocable Transfer Agent Instructions,  the Security Agreement
or any other obligations of the Company to the Investor; and

         NOW,  THEREFORE,  in  consideration  of the mutual  covenants and other
agreements  contained in this Agreement the Company and the Buyer(s)hereby agree
as follows:

         1.       PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

                  (a)  Purchase  of  Convertible  Debentures.   Subject  to  the
satisfaction  (or waiver) of the terms and  conditions of this  Agreement,  each
Buyer  agrees,  severally  and not  jointly,  to purchase at Closing (as defined
herein below) and the Company agrees to sell and issue to each Buyer,  severally
and not jointly,  at Closing,  Convertible  Debentures in amounts  corresponding
with the Subscription  Amount set forth opposite each Buyer's name on Schedule I
hereto.  Upon  execution  hereof by a Buyer,  the Buyer shall wire  transfer the
Subscription  Amount set forth opposite his name on Schedule I in same-day funds
or a check  payable  to  "Butler  Gonzalez  LLP,  as Escrow  Agent for  Teleplus
Enterprises Inc. /Cornell Capital Partners, LP", which Subscription Amount shall
be held in escrow pursuant to the terms of the Escrow  Agreement (as hereinafter
defined) and disbursed in accordance therewith.

                  (b)      Closing  Date.  The First Closing of the purchase and
sale of the  Convertible  Debentures  shall  take  place at 10:00  a.m.  Eastern
Standard Time on the fifth (5th) business day following the date hereof, subject
to notification of satisfaction of the conditions to the First Closing set forth
herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed
to by the  Company and the  Buyer(s))  (the "First  Closing  Date"),  the Second
Closing of the purchase and sale of the Convertible  Debentures shall take place
at 10:00 a.m.  Eastern  Standard Time on the fifth (5th)  business day following
the  date  the  Registration  Statement  is  filed  with  the  SEC,  subject  to
notification  of  satisfaction of the conditions to the Second Closing set forth
herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed
to by the Company and the Buyer(s))  (the "Second  Closing  Date") and the Third
Closing of the purchase and sale of the Convertible  Debentures shall take place
at 10:00 a.m.  Eastern  Standard Time on the fifth (5th)  business day following
the date the Registration Statement is declared effective by the SEC, subject to
notification  of  satisfaction of the conditions to the Second Closing set forth
herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed
to by the Company and the Buyer(s))  (the "Third  Closing  Date")  (collectively
referred to a the "Closing  Dates").  The Closing shall occur on the  respective
Closing Dates at the offices of Butler Gonzalez,  LLP, 1416 Morris Avenue, Suite
207,  Union,  NJ 07083  (or such  other  place as is  mutually  agreed to by the
Company and the Buyer(s)).

                  (c)      Escrow Arrangements;  Form of Payment. Upon execution
hereof by Buyer(s) and pending the Closings,  the aggregate proceeds of the sale
of the Convertible  Debentures to Buyer(s) pursuant hereto shall be deposited in
a non-interest  bearing escrow account with Butler Gonzalez LLP, as escrow agent

                                       2
<PAGE>

(the "Escrow Agent"),  pursuant to the terms of an escrow agreement  between the
Company,  the  Buyer(s)  and the  Escrow  Agent in the form  attached  hereto as
Exhibit B (the "Escrow Agreement"). Subject to the satisfaction of the terms and
conditions of this Agreement,  on the Closing Dates,  (i) the Escrow Agent shall
deliver to the Company in accordance with the terms of the Escrow Agreement such
aggregate proceeds for the Convertible  Debentures to be issued and sold to such
Buyer(s),  minus the fees and  expenses of Butler  Gonzalez  LLP of Ten Thousand
Dollars  ($10,000) shall be paid directly from the gross proceeds held in escrow
of the First  Closing and the  retainer of  Kirkpatrick  & Lockhart LLP of which
Twelve Thousand Five Hundred  Dollars  ($12,500) shall be paid directly from the
gross  proceeds of the First Closing and Twelve  Thousand  Five Hundred  Dollars
($12,500)  shall be paid directly from the gross  proceeds of the Second Closing
by wire transfer of immediately available funds in accordance with the Company's
written wire  instructions,  and (ii) the Company  shall  deliver to each Buyer,
Convertible  Debentures  which such Buyer(s) is purchasing in amounts  indicated
opposite  such  Buyer's  name on  Schedule  I,  duly  executed  on behalf of the
Company.

         2.       BUYER'S REPRESENTATIONS AND WARRANTIES.

         Each Buyer represents and warrants, severally and not jointly, that:

                  (a)      Investment  Purpose.  Each  Buyer  is  acquiring  the
Convertible Debentures and, upon conversion of Convertible Debentures, the Buyer
will  acquire  the  Conversion  Shares  then  issuable,  for its own account for
investment only and not with a view towards,  or for resale in connection  with,
the public sale or distribution thereof,  except pursuant to sales registered or
exempted   under  the  1933  Act;   provided,   however,   that  by  making  the
representations  herein,  such  Buyer  reserves  the  right  to  dispose  of the
Conversion  Shares at any time in  accordance  with or pursuant to an  effective
registration statement covering such Conversion Shares or an available exemption
under the 1933 Act.

                  (b)      Accredited   Investor   Status.   Each  Buyer  is  an
"Accredited Investor" as that term is defined in Rule 501(a)(3) of Regulation D.

                  (c)      Reliance on Exemptions.  Each Buyer  understands that
the  Convertible  Debentures  are being  offered  and sold to it in  reliance on
specific exemptions from the registration  requirements of United States federal
and state securities laws and that the Company is relying in part upon the truth
and  accuracy  of,  and  such  Buyer's  compliance  with,  the  representations,
warranties,  agreements,  acknowledgments  and  understandings of such Buyer set
forth herein in order to determine the  availability  of such exemptions and the
eligibility of such Buyer to acquire such securities.

                  (d)      Information. Each Buyer and its advisors (and his or,
its counsel),  if any, have been  furnished  with all materials  relating to the
business,  finances  and  operations  of the Company and  information  he deemed
material to making an informed investment decision regarding his purchase of the
Convertible  Debentures and the Conversion Shares,  which have been requested by
such  Buyer.  Each  Buyer  and its  advisors,  if any,  have been  afforded  the
opportunity  to ask  questions of the Company and its  management.  Neither such
inquiries nor any other due diligence  investigations conducted by such Buyer or
its advisors,  if any, or its representatives shall modify, amend or affect such

                                       3
<PAGE>

Buyer's right to rely on the Company's  representations and warranties contained
in  Section  3  below.  Each  Buyer  understands  that  its  investment  in  the
Convertible Debentures and the Conversion Shares involves a high degree of risk.
Each Buyer is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables such Buyer
to obtain information from the Company in order to evaluate the merits and risks
of this investment. Each Buyer has sought such accounting, legal and tax advice,
as it has  considered  necessary to make an informed  investment  decision  with
respect to its  acquisition  of the  Convertible  Debentures  and the Conversion
Shares.

                  (e)      No Governmental  Review.  Each Buyer understands that
no United States federal or state agency or any other government or governmental
agency  has  passed  on  or  made  any  recommendation  or  endorsement  of  the
Convertible  Debentures or the Conversion Shares, or the fairness or suitability
of the investment in the Convertible  Debentures or the Conversion  Shares,  nor
have such authorities  passed upon or endorsed the merits of the offering of the
Convertible Debentures or the Conversion Shares.

                  (f)      Transfer  or  Resale.  Each  Buyer  understands  that
except as  provided  in the  Investor  Registration  Rights  Agreement:  (i) the
Convertible Debentures have not been and are not being registered under the 1933
Act or any  state  securities  laws,  and may not be  offered  for  sale,  sold,
assigned or transferred unless (A) subsequently  registered  thereunder,  or (B)
such Buyer  shall have  delivered  to the  Company an opinion of  counsel,  in a
generally  acceptable  form,  to the  effect  that such  securities  to be sold,
assigned or  transferred  may be sold,  assigned or  transferred  pursuant to an
exemption from such registration requirements;  (ii) any sale of such securities
made in reliance on Rule 144 under the 1933 Act (or a  successor  rule  thereto)
("Rule  144")  may be made  only in  accordance  with the  terms of Rule 144 and
further,  if Rule 144 is not  applicable,  any resale of such  securities  under
circumstances  in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC  thereunder;  and (iii) neither the Company nor any other
person is under any obligation to register such securities under the 1933 Act or
any state  securities  laws or to comply  with the terms and  conditions  of any
exemption  thereunder.  The Company  reserves  the right to place stop  transfer
instructions against the shares and certificates for the Conversion Shares.

                  (g)      Legends. Each Buyer understands that the certificates
or  other  instruments  representing  the  Convertible  Debentures  and  or  the
Conversion Shares shall bear a restrictive legend in substantially the following
form (and a stop  transfer  order may be placed  against  transfer of such stock
certificates):

                  THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE
                  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
                  AS AMENDED,  OR APPLICABLE STATE SECURITIES LAWS. THE
                  SECURITIES  HAVE BEEN ACQUIRED  SOLELY FOR INVESTMENT
                  PURPOSES  AND NOT WITH A VIEW  TOWARD  RESALE AND MAY
                  NOT  BE  OFFERED  FOR  SALE,  SOLD,   TRANSFERRED  OR
                  ASSIGNED IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION

                                       4
<PAGE>

                  STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
                  OF 1933, AS AMENDED,  OR APPLICABLE  STATE SECURITIES
                  LAWS,  OR  AN  OPINION  OF  COUNSEL,  IN A  GENERALLY
                  ACCEPTABLE  FORM,  THAT  REGISTRATION IS NOT REQUIRED
                  UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

The  legend set forth  above  shall be removed  and the  Company  within two (2)
business days shall issue a certificate without such legend to the holder of the
Conversion  Shares upon which it is stamped,  if, unless  otherwise  required by
state securities laws, (i) in connection with a sale  transaction,  provided the
Conversion Shares are registered under the 1933 Act or (ii) in connection with a
sale  transaction,  after such holder  provides  the Company  with an opinion of
counsel,  which  opinion  shall be in form,  substance  and scope  customary for
opinions  of counsel in  comparable  transactions,  to the effect  that a public
sale,  assignment  or  transfer  of the  Conversion  Shares may be made  without
registration under the 1933 Act.

                  (h)      Authorization,  Enforcement.  This Agreement has been
duly and validly authorized,  executed and delivered on behalf of such Buyer and
is a valid and binding  agreement of such Buyer  enforceable in accordance  with
its terms, except as such enforceability may be limited by general principles of
equity  or  applicable  bankruptcy,  insolvency,   reorganization,   moratorium,
liquidation  and other  similar laws  relating to, or affecting  generally,  the
enforcement of applicable creditors' rights and remedies.

                  (i)      Receipt  of  Documents.  Each  Buyer  and  his or its
counsel has received and read in their  entirety:  (i) this  Agreement  and each
representation,  warranty and covenant set forth herein, the Security Agreement,
the  Investor  Registration  Rights  Agreement,  the Escrow  Agreement,  and the
Irrevocable  transfer  Agent  Instructions;  (ii) all due  diligence  and  other
information   necessary  to  verify  the  accuracy  and   completeness  of  such
representations,  warranties and covenants;  (iii) the Company's Form 10-KSB for
the fiscal year ended December 31, 2003;  (iv) the Company's Form 10-QSB for the
fiscal  quarter ended March 31, 2004 and (v) answers to all questions each Buyer
submitted to the Company regarding an investment in the Company;  and each Buyer
has relied on the information  contained  therein and has not been furnished any
other documents, literature, memorandum or prospectus.

                  (j)      Due Formation of Corporate  and Other Buyers.  If the
Buyer(s) is a  corporation,  trust,  partnership  or other entity that is not an
individual  person,  it has been  formed  and  validly  exists  and has not been
organized for the specific purpose of purchasing the Convertible  Debentures and
is not prohibited from doing so.

                  (k)      No  Legal  Advice  From  the   Company.   Each  Buyer
acknowledges,  that it had the  opportunity  to review  this  Agreement  and the
transactions  contemplated  by this  Agreement with his or its own legal counsel
and  investment  and tax advisors.  Each Buyer is relying solely on such counsel
and advisors and not on any statements or  representations of the Company or any
of its  representatives  or agents  for legal,  tax or  investment  advice  with
respect to this investment,  the transactions  contemplated by this Agreement or
the securities laws of any jurisdiction.

                                       5
<PAGE>

         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company  represents and warrants to each of the Buyers that, except
as set forth in the SEC Documents (as defined herein):

                  (a)      Organization and  Qualification.  The Company and its
subsidiaries  are  corporations  duly  organized  and  validly  existing in good
standing under the laws of the jurisdiction in which they are incorporated,  and
have the requisite corporate power to own their properties and to carry on their
business as now being  conducted.  Each of the Company and its  subsidiaries  is
duly  qualified as a foreign  corporation to do business and is in good standing
in every  jurisdiction in which the nature of the business conducted by it makes
such  qualification  necessary,  except to the extent  that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.

                  (b)      Authorization,  Enforcement,  Compliance  with  Other
Instruments.  (i) The Company has the requisite corporate power and authority to
enter into and perform  this  Agreement,  the Security  Agreement,  the Investor
Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable  Transfer
Agent  Instructions,  and any related  agreements,  and to issue the Convertible
Debentures  and the  Conversion  Shares in accordance  with the terms hereof and
thereof,  (ii) the  execution  and  delivery  of this  Agreement,  the  Security
Agreement, the Investor Registration Rights Agreement, the Escrow Agreement, the
Irrevocable  Transfer  Agent  Instructions  (as defined  herein) and any related
agreements  by the  Company  and  the  consummation  by it of  the  transactions
contemplated hereby and thereby, including,  without limitation, the issuance of
the  Convertible  Debentures  the  Conversion  Shares  and the  reservation  for
issuance and the issuance of the Conversion  Shares  issuable upon conversion or
exercise thereof,  have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) this Agreement, the Security Agreement, the
Investor  Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable
Transfer Agent  Instructions and any related  agreements have been duly executed
and delivered by the Company, (iv) this Agreement,  the Security Agreement,  the
Investor  Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable
Transfer Agent Instructions and any related agreements  constitute the valid and
binding obligations of the Company enforceable against the Company in accordance
with  their  terms,  except as such  enforceability  may be  limited  by general
principles  of  equity or  applicable  bankruptcy,  insolvency,  reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors'  rights and remedies.  The  authorized  officer of the
Company  executing  this  Agreement,   the  Security  Agreement,   the  Investor
Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable  Transfer
Agent Instructions and any related agreements knows of no reason why the Company
cannot  file  the   registration   statement  as  required  under  the  Investor
Registration  Rights Agreement or perform any of the Company's other obligations
under such documents.

                  (c)      Capitalization.  The authorized  capital stock of the
Company  consists of  150,000,000  shares of Common  Stock,  par value $0.01 per
share and no shares of Preferred  Stock. As of the date hereof,  the Company has
66,122,500  shares  of  Common  Stock  issued  and  outstanding.   All  of  such
outstanding   shares   have  been   validly   issued  and  are  fully  paid  and
nonassessable.  Except as disclosed in the SEC  Documents (as defined in Section
3(f)),  no shares of Common Stock are subject to preemptive  rights or any other

                                       6
<PAGE>

similar  rights  or any  liens or  encumbrances  suffered  or  permitted  by the
Company.  Except  as  disclosed  in the SEC  Documents,  as of the  date of this
Agreement,  (i) there are no outstanding  options,  warrants,  scrip,  rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company or any of its subsidiaries, or contracts, commitments, understandings or
arrangements  by which the Company or any of its  subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
subsidiaries  or options,  warrants,  scrip,  rights to  subscribe  to, calls or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
subsidiaries, (ii) there are no outstanding debt securities and (iii) except for
an agreement to register one million  (1,000,000)  shares of Common Stock, there
are  no  agreements  or  arrangements  under  which  the  Company  or any of its
subsidiaries is obligated to register the sale of any of their  securities under
the 1933 Act (except  pursuant to the  Registration  Rights  Agreement) and (iv)
there are no  outstanding  registration  statements and there are no outstanding
comment  letters  from the SEC or any  other  regulatory  agency.  There  are no
securities or instruments  containing  anti-dilution or similar  provisions that
will be triggered by the issuance of the Convertible  Debentures as described in
this  Agreement.  The Company has furnished to the Buyer true and correct copies
of the Company's  Certificate of  Incorporation,  as amended and as in effect on
the date hereof (the "Certificate of Incorporation"), and the Company's By-laws,
as in effect on the date hereof (the "By-laws"), and the terms of all securities
convertible  into or exercisable for Common Stock and the material rights of the
holders  thereof in respect thereto other than stock options issued to employees
and consultants.

                  (d)      Issuance of Securities.  The  Convertible  Debentures
are duly  authorized  and, upon  issuance in  accordance  with the terms hereof,
shall be duly  issued,  fully paid and  nonassessable,  are free from all taxes,
liens and charges  with  respect to the issue  thereof.  The  Conversion  Shares
issuable upon conversion of the Convertible Debentures have been duly authorized
and reserved for issuance.  Upon  conversion or exercise in accordance  with the
Convertible Debentures the Conversion Shares will be duly issued, fully paid and
nonassessable.

                  (e)      No   Conflicts.   Except  as  disclosed  in  the  SEC
Documents,  the  execution,  delivery and  performance  of this  Agreement,  the
Security  Agreement,  the Investors  Registration  Rights Agreement,  the Escrow
Agreement and the Irrevocable Transfer Agent Instructions by the Company and the
consummation by the Company of the transactions contemplated hereby will not (i)
result in a violation  of the  Articles of  Incorporation,  any  certificate  of
designations of any outstanding  series of preferred stock of the Company or the
By-laws or (ii)  conflict  with or  constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of  termination,  amendment,  acceleration  or  cancellation  of, any
agreement,  indenture  or  instrument  to  which  the  Company  or  any  of  its
subsidiaries is a party, or result in a violation of any law, rule,  regulation,
order,  judgment  or decree  (including  federal and state  securities  laws and
regulations  and the  rules  and  regulations  of The  National  Association  of
Securities  Dealers  Inc.'s  OTC  Bulletin  Board on which the  Common  Stock is
quoted)  applicable  to the Company or any of its  subsidiaries  or by which any
property  or  asset  of the  Company  or any of its  subsidiaries  is  bound  or
affected. Except as disclosed in the SEC Documents,  neither the Company nor its
subsidiaries  is in violation of any term of or in default under its Certificate
of  Incorporation  or  By-laws  or  their  organizational  charter  or  by-laws,
respectively,  or any  material  contract,  agreement,  mortgage,  indebtedness,

                                       7
<PAGE>

indenture,  instrument,  judgment,  decree  or  order  or any  statute,  rule or
regulation  applicable to the Company or its  subsidiaries.  The business of the
Company and its subsidiaries is not being conducted,  and shall not be conducted
in violation of any material law,  ordinance,  or regulation of any governmental
entity.  Except as  specifically  contemplated by this Agreement and as required
under the 1933 Act and any applicable  state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental  agency in order for it to execute,
deliver  or  perform  any of its  obligations  under  or  contemplated  by  this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof or thereof.  Except as  disclosed  in the SEC  Documents,  all  consents,
authorizations,  orders, filings and registrations which the Company is required
to obtain  pursuant to the preceding  sentence have been obtained or effected on
or prior to the date hereof. The Company and its subsidiaries are unaware of any
facts or circumstance, which might give rise to any of the foregoing.

                  (f)      SEC Documents: Financial Statements. Since January 1,
2003, the Company has filed all reports,  schedules, forms, statements and other
documents  required  to be  filed by it with  the SEC  under  of the  Securities
Exchange Act of 1934,  as amended (the "1934 Act") (all of the  foregoing  filed
prior to the date  hereof or  amended  after the date  hereof  and all  exhibits
included  therein and financial  statements and schedules  thereto and documents
incorporated by reference  therein,  being  hereinafter  referred to as the "SEC
Documents").  The Company has delivered to the Buyers or their  representatives,
or made  available  through the SEC's website at  http://www.sec.gov.,  true and
complete  copies  of the  SEC  Documents.  As of  their  respective  dates,  the
financial  statements  of the  Company  disclosed  in  the  SEC  Documents  (the
"Financial  Statements")  complied  as to form  in all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the SEC with respect  thereto.  Such financial  statements have been prepared in
accordance with generally accepted accounting principles,  consistently applied,
during the periods  involved  (except (i) as may be otherwise  indicated in such
Financial  Statements  or the notes  thereto,  or (ii) in the case of  unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or  summary  statements)  and,  fairly  present  in all  material  respects  the
financial position of the Company as of the dates thereof and the results of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited   statements,   to  normal  year-end  audit  adjustments).   No  other
information  provided  by or on behalf of the  Company to the Buyer which is not
included  in the  SEC  Documents,  including,  without  limitation,  information
referred to in this Agreement,  contains any untrue statement of a material fact
or omits to state any material  fact  necessary in order to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading.

                  (g)      10(b)-5.  The SEC Documents do not include any untrue
statements  of  material  fact,  nor do they  omit to state  any  material  fact
required to be stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not misleading.

                  (h)      Absence of Litigation. Except as disclosed in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency,  self-regulatory  organization
or body pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would

                                       8
<PAGE>

have a material  adverse  effect on the  transactions  contemplated  hereby (ii)
adversely affect the validity or enforceability  of, or the authority or ability
of the Company to perform its  obligations  under,  this Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents,  have  a  material  adverse  effect  on  the  business,   operations,
properties,  financial condition or results of operations of the Company and its
subsidiaries taken as a whole.

                  (i)      Acknowledgment  Regarding  Buyer's  Purchase  of  the
Convertible Debentures. The Company acknowledges and agrees that the Buyer(s) is
acting solely in the capacity of an arm's length  purchaser with respect to this
Agreement  and  the  transactions   contemplated  hereby.  The  Company  further
acknowledges that the Buyer(s) is not acting as a financial advisor or fiduciary
of the Company (or in any similar  capacity)  with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Buyer(s) or any
of their respective  representatives or agents in connection with this Agreement
and the transactions  contemplated  hereby is merely  incidental to such Buyer's
purchase of the  Convertible  Debentures or the Conversion  Shares.  The Company
further  represents to the Buyer that the Company's  decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

                  (j)      No General Solicitation. Neither the Company, nor any
of its affiliates,  nor any person acting on its or their behalf, has engaged in
any form of general  solicitation or general  advertising (within the meaning of
Regulation  D under  the 1933 Act) in  connection  with the offer or sale of the
Convertible Debentures or the Conversion Shares.

                  (k)      No Integrated Offering.  Neither the Company, nor any
of its affiliates, nor any person acting on its or their behalf has, directly or
indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  under  circumstances  that would require  registration of the
Convertible Debentures or the Conversion Shares under the 1933 Act or cause this
offering of the Convertible Debentures or the Conversion Shares to be integrated
with prior offerings by the Company for purposes of the 1933 Act.

                  (l)      Employee  Relations.  Neither  the Company nor any of
its  subsidiaries  is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries,  is any such dispute threatened. None of the
Company's or its subsidiaries'  employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

                  (m)      Intellectual  Property  Rights.  The  Company and its
subsidiaries  own or possess  adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations,  service names, patents,
patent  rights,  copyrights,   inventions,  licenses,  approvals,   governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  The Company and its  subsidiaries  do not have any
knowledge of any  infringement by the Company or its  subsidiaries of trademark,
trade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,
service names, service marks, service mark registrations,  trade secret or other
similar  rights of others,  and, to the  knowledge  of the  Company  there is no
claim,  action or proceeding being made or brought against,  or to the Company's
knowledge,  being threatened against, the Company or its subsidiaries  regarding
trademark,  trade name, patents, patent rights, invention,  copyright,  license,
service names, service marks, service mark registrations,  trade secret or other
infringement;  and the Company and its  subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

                                       9
<PAGE>

                  (n)      Environmental  Laws. The Company and its subsidiaries
are (i) in compliance with any and all applicable  foreign,  federal,  state and
local  laws and  regulations  relating  to the  protection  of human  health and
safety,  the environment or hazardous or toxic substances or wastes,  pollutants
or contaminants ("Environmental Laws"), (ii) have received all permits, licenses
or other  approvals  required  of them under  applicable  Environmental  Laws to
conduct their  respective  businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval.

                  (o)      Title.  Any real property and  facilities  held under
lease  by the  Company  and its  subsidiaries  are  held by  them  under  valid,
subsisting and  enforceable  leases with such exceptions as are not material and
do not interfere  with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.

                  (p)      Insurance.  The Company and each of its  subsidiaries
are insured by insurers of  recognized  financial  responsibility  against  such
losses and risks and in such amounts as management of the Company believes to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
subsidiaries  are engaged.  Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such  subsidiary has any reason to believe that it will not be able to renew
its existing  insurance  coverage as and when such coverage expires or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its subsidiaries, taken as a whole.

                  (q)      Regulatory Permits.  The Company and its subsidiaries
possess all  material  certificates,  authorizations  and permits  issued by the
appropriate  federal,  state or  foreign  regulatory  authorities  necessary  to
conduct  their  respective  businesses,  and  neither  the  Company nor any such
subsidiary has received any notice of proceedings  relating to the revocation or
modification of any such certificate, authorization or permit.

                  (r)      Internal Accounting Controls. The Company and each of
its subsidiaries maintain a system of internal accounting controls sufficient to
provide  reasonable  assurance that (i)  transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
conformity with generally accepted  accounting  principles and to maintain asset
accountability,  and (iii) the recorded  amounts for assets is compared with the
existing  assets at reasonable  intervals and  appropriate  action is taken with
respect to any differences.

                  (s)      No  Material  Adverse  Breaches,  etc.  Except as set
forth in the SEC Documents,  neither the Company nor any of its  subsidiaries is
subject to any charter,  corporate or other legal restriction,  or any judgment,
decree,  order,  rule or  regulation  which in the  reasonable  judgment  of the
Company's  officers has or is expected in the future to have a material  adverse

                                       10
<PAGE>

effect on the business, properties,  operations, financial condition, results of
operations or prospects of the Company or its subsidiaries.  Except as set forth
in the SEC  Documents,  neither the Company  nor any of its  subsidiaries  is in
breach of any  contract  or  agreement  which  breach,  in the  judgment  of the
Company's officers,  has or is expected to have a material adverse effect on the
business, properties,  operations, financial condition, results of operations or
prospects of the Company or its subsidiaries.

                  (t)      Tax Status. Except as set forth in the SEC Documents,
the  Company  and each of its  subsidiaries  has made and filed all  federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction  to which it is subject and (unless and only to the extent that the
Company  and each of its  subsidiaries  has set  aside on its  books  provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other  governmental  assessments  and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except  those  being  contested  in good  faith  and has set  aside on its books
provision  reasonably  adequate  for  the  payment  of  all  taxes  for  periods
subsequent to the periods to which such returns,  reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction,  and the officers of the Company know of no basis
for any such claim.

                  (u)      Certain Transactions.  Except as set forth in the SEC
Documents,  and  except  for arm's  length  transactions  pursuant  to which the
Company  makes  payments in the ordinary  course of business  upon terms no less
favorable  than the Company  could obtain from third  parties and other than the
grant of stock  options  disclosed in the SEC  Documents,  none of the officers,
directors,  or employees of the Company is presently a party to any  transaction
with the Company (other than for services as employees, officers and directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the
furnishing  of  services  to or by,  providing  for  rental of real or  personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such employee or, to the knowledge of the Company,  any corporation,
partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

                  (v)      Fees and Rights of First Refusal.  The Company is not
obligated to offer the securities  offered hereunder on a right of first refusal
basis or otherwise to any third parties  including,  but not limited to, current
or former shareholders of the Company,  underwriters,  brokers,  agents or other
third parties.

         4.       COVENANTS.

                  (a)      Best  Efforts.  Each party shall use its best efforts
timely to satisfy  each of the  conditions  to be satisfied by it as provided in
Sections 6 and 7 of this Agreement.

                  (b)      Form  D.  The  Company  agrees  to file a Form D with
respect to the Conversion Shares as required under Regulation D and to provide a
copy thereof to each Buyer promptly after such filing.  The Company shall, on or
before the  Closing  Date,  take such  action as the  Company  shall  reasonably
determine is necessary to qualify the Conversion  Shares, or obtain an exemption
for the Conversion Shares for sale to the Buyers at the Closing pursuant to this
Agreement  under  applicable  securities or "Blue Sky" laws of the states of the
United  States,  and shall  provide  evidence of any such action so taken to the
Buyers on or prior to the Closing Date.

                                       11
<PAGE>

                  (c)      Reporting  Status.  Until the earlier of (i) the date
as of  which  the  Buyer(s)  may  sell  all of  the  Conversion  Shares  without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto),  or (ii) the date on which (A) the  Buyer(s)  shall  have sold all the
Conversion  Shares and (B) none of the  Convertible  Debentures are  outstanding
(the  "Registration  Period"),  the  Company  shall file in a timely  manner all
reports  required  to be  filed  with the SEC  pursuant  to the 1934 Act and the
regulations  of the SEC  thereunder,  and the Company  shall not  terminate  its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act  or the  rules  and  regulations  thereunder  would  otherwise  permit  such
termination.

                  (d)      Use of  Proceeds.  The Company  will use the proceeds
from the sale of the  Convertible  Debentures for general  corporate and working
capital purposes.

                  (e)      Reservation  of Shares.  The  Company  shall take all
action  reasonably  necessary to at all times have authorized,  and reserved for
the  purpose  of  issuance,  such  number of shares of Common  Stock as shall be
necessary to effect the issuance of the  Conversion  Shares.  If at any time the
Company does not have  available  such shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all of the  Conversion  Shares
of the Company shall call and hold a special meeting of the shareholders  within
sixty  (60) days of such  occurrence,  for the sole  purpose of  increasing  the
number of shares  authorized.  The Company's  management  shall recommend to the
shareholders to vote in favor of increasing the number of shares of Common Stock
authorized.  Management shall also vote all of its shares in favor of increasing
the number of authorized shares of Common Stock.

                  (f)      Listings or  Quotation.  The Company  shall  promptly
secure the listing or  quotation  of the  Conversion  Shares upon each  national
securities  exchange,  automated quotation system or The National Association of
Securities  Dealers Inc.'s  Over-The-Counter  Bulletin Board  ("OTCBB") or other
market,  if any,  upon which  shares of Common  Stock are then  listed or quoted
(subject  to  official  notice of  issuance)  and shall use its best  efforts to
maintain,  so long as any other shares of Common Stock shall be so listed,  such
listing of all  Conversion  Shares from time to time issuable under the terms of
this Agreement.  The Company shall maintain the Common Stock's authorization for
quotation on the OTCBB.

                  (g)      Fees  and  Expenses.  Each  of the  Company  and  the
Buyer(s)  shall pay all costs and expenses  incurred by such party in connection
with the negotiation, investigation, preparation, execution and delivery of this
Agreement, the Escrow Agreement, the Investor Registration Rights Agreement, the
Security Agreement and the Irrevocable Transfer Agent Instructions. The Buyer(s)
shall be entitled to a ten percent (10%) discount on the Purchase Price.

                  (h)      The costs and  expenses  of the  Buyer(s)  and Butler
Gonzalez LLP of Ten Thousand  Dollars  ($10,000) shall be paid directly from the
proceeds of the First Closing and the retainer of  Kirkpatrick & Lockhart LLP of
Twelve Thousand Five Hundred Dollars  ($12,500) shall be paid for by the Company
directly from the gross  proceeds of the First Closing and Twelve  Thousand Five
Hundred  Dollars  ($12,500)  shall be paid for by the Company  directly from the
proceeds of the Second Closing.

                                       12
<PAGE>

                  (i)      Corporate   Existence.   So   long   as  any  of  the
Convertible  Debentures  remain  outstanding,  the Company shall not directly or
indirectly  consummate  any  merger in which the  Company  is not the  survivor,
reorganization, restructuring, reverse stock split consolidation, sale of all or
substantially all of the Company's assets or any similar  transaction or related
transactions (each such transaction,  an "Organizational  Change") unless, prior
to the consummation an  Organizational  Change,  the Company obtains the written
consent of each  Buyer.  In any such case,  the  Company  will make  appropriate
provision with respect to such holders'  rights and interests to insure that the
provisions of this Section 4(h) will thereafter be applicable to the Convertible
Debentures.

                  (j)      Transactions   With   Affiliates.   So  long  as  any
Convertible  Debentures are outstanding,  the Company shall not, and shall cause
each of its subsidiaries  not to, enter into,  amend,  modify or supplement,  or
permit any subsidiary to enter into, amend,  modify or supplement any agreement,
transaction,  commitment,  or  arrangement  with any of its or any  subsidiary's
officers,  directors,  person who were  officers or directors at any time during
the previous two (2) years,  stockholders who beneficially own five percent (5%)
or more of the  Common  Stock,  or  Affiliates  (as  defined  below) or with any
individual  related by blood,  marriage,  or adoption to any such  individual or
with any entity in which any such entity or individual  owns a five percent (5%)
or more beneficial  interest (each a "Related Party"),  except for (a) customary
employment  arrangements  and benefit  programs  on  reasonable  terms,  (b) any
investment  in an  Affiliate  of the Company,  (c) any  agreement,  transaction,
commitment,  or arrangement  on an arms-length  basis on terms no less favorable
than  terms  which  would  have been  obtainable  from a person  other than such
Related Party, (d) any agreement transaction,  commitment,  or arrangement which
is approved by a majority of the  disinterested  directors of the  Company,  for
purposes  hereof,  any  director  who is also an officer  of the  Company or any
subsidiary of the Company shall not be a disinterested  director with respect to
any such agreement,  transaction,  commitment,  or arrangement.  "Affiliate" for
purposes hereof means,  with respect to any person or entity,  another person or
entity that, directly or indirectly,  (i) has a ten percent (10%) or more equity
interest  in that person or entity,  (ii) has ten  percent  (10%) or more common
ownership with that person or entity,  (iii) controls that person or entity,  or
(iv) shares common  control with that person or entity.  "Control" or "controls"
for  purposes  hereof  means that a person or entity  has the  power,  direct or
indirect, to conduct or govern the policies of another person or entity.

                  (k)      Transfer  Agent.  The  Company  covenants  and agrees
that,  in the event that the  Company's  agency  relationship  with the transfer
agent should be terminated for any reason prior to a date which is two (2) years
after the Closing  Date,  the Company shall  immediately  appoint a new transfer
agent and shall  require  that the new  transfer  agent  execute and agree to be
bound by the terms of the Irrevocable  Transfer Agent  Instructions  (as defined
herein).

                  (l)      Restriction on Issuance of the Capital Stock. So long
as any  Convertible  Debentures  are  outstanding  and  except  for the sales of
restricted  stock,  the Company shall not,  without the prior written consent of
the  Buyer(s),  issue or sell  shares of  Common  Stock or  Preferred  Stock (i)
without  consideration or for a consideration  per share less than the Bid Price

                                       13
<PAGE>

of the Common  Stock  determined  immediately  prior to its  issuance,  (ii) any
warrant,  option, right,  contract,  call, or other security instrument granting
the holder thereof,  the right to acquire Common Stock without  consideration or
for a  consideration  less than such Common  Stock's Bid Price value  determined
immediately  prior to it's  issuance,  (iii) enter into any security  instrument
granting the holder a security interest in any and all assets of the Company, or
(iv) file any  registration  statement  on Form S-8  except  for a  registration
statement on Form S-8 registering up to Two Million (2,000,000) shares of Common
Stock under an Employee Stock Option Plan.

         5.       TRANSFER AGENT INSTRUCTIONS.

         The Company shall issue the Irrevocable  Transfer Agent Instructions to
its transfer agent  irrevocably  appointing Butler Gonzalez LLP as its agent for
purpose of having certificates issued, registered in the name of the Buyer(s) or
its respective  nominee(s),  for the Conversion Shares representing such amounts
of Convertible  Debentures as specified from time to time by the Buyer(s) to the
Company  upon  conversion  of the  Convertible  Debentures,  for  interest  owed
pursuant to the Convertible  Debenture,  and for any and all Liquidated  Damages
(as this term is defined in the Investor Registration Rights Agreement).  Butler
Gonzalez LLP shall be paid a cash fee of Fifty Dollars ($50) for every  occasion
they act pursuant to the Irrevocable  Transfer Agent  Instructions.  The Company
shall not change its transfer agent without the express  written  consent of the
Buyer(s),  which may be withheld by the Buyer(s) in its sole  discretion  unless
the  successor  transfer  agent has  executed  the  Irrevocable  Transfer  Agent
Instructions. Prior to registration of the Conversion Shares under the 1933 Act,
all such  certificates  shall bear the restrictive  legend  specified in Section
2(g) of this Agreement.  The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions  referred to in this Section 5, and stop
transfer  instructions to give effect to Section 2(g) hereof (in the case of the
Conversion  Shares prior to registration of such shares under the 1933 Act) will
be given by the Company to its  transfer  agent and that the  Conversion  Shares
shall  otherwise be freely  transferable on the books and records of the Company
as and to the extent  provided in this  Agreement and the Investor  Registration
Rights Agreement.  Nothing in this Section 5 shall affect in any way the Buyer's
obligations  and agreement to comply with all  applicable  securities  laws upon
resale of  Conversion  Shares.  If the  Buyer(s)  provides  the Company  with an
opinion of counsel,  in form,  scope and  substance  customary  for  opinions of
counsel in comparable  transactions to the effect that  registration of a resale
by the Buyer(s) of any of the  Conversion  Shares is not required under the 1933
Act, the Company shall within two (2) business days instruct its transfer  agent
to issue  one or more  certificates  in such name and in such  denominations  as
specified  by the Buyer.  The  Company  acknowledges  that a breach by it of its
obligations  hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the  transaction  contemplated  hereby.  Accordingly,  the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this Section 5 will be inadequate and agrees,  in the event of a breach or
threatened  breach by the Company of the  provisions of this Section 5, that the
Buyer(s) shall be entitled,  in addition to all other available remedies,  to an
injunction restraining any breach and requiring immediate issuance and transfer,
without the  necessity  of showing  economic  loss and without any bond or other
security being required.

         6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

                                       14
<PAGE>

         The  obligation  of  the  Company  hereunder  to  issue  and  sell  the
Convertible  Debentures  to the  Buyer(s)  at the  Closings  is  subject  to the
satisfaction,  at or  before  the  Closing  Dates,  of  each  of  the  following
conditions,  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

                  (a)      Each Buyer shall have  executed this  Agreement,  the
Security  Agreement,  the Escrow Agreement and the Investor  Registration Rights
Agreement and the Irrevocable Transfer Agent Instructions and delivered the same
to the Company.

                  (b)      The Buyer(s) shall have delivered to the Escrow Agent
the Purchase Price for Convertible Debentures in respective amounts as set forth
next to each Buyer as  outlined  on  Schedule  I attached  hereto and the Escrow
Agent shall have  delivered  the net proceeds to the Company by wire transfer of
immediately  available U.S. funds pursuant to the wire instructions  provided by
the Company.

                  (c)      The  representations  and  warranties of the Buyer(s)
shall be true and correct in all material  respects as of the date when made and
as of the Closing Dates as though made at that time (except for  representations
and warranties  that speak as of a specific  date),  and the Buyer(s) shall have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Buyer(s) at or prior to the Closing Dates.

                  (d)      The Company shall have filed a form UCC-1 with regard
to the Pledged  Property  and  Pledged  Collateral  as detailed in the  Security
Agreement  dated  the date  hereof  and  provided  proof of such  filing  to the
Buyer(s).

         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

         The  obligation of the Buyer(s)  hereunder to purchase the  Convertible
Debentures  at the  Closing  is subject  to the  satisfaction,  at or before the
Closing Date, of each of the following conditions:

                  (a)      The Company shall have executed this  Agreement,  the
Security  Agreement,  the  Convertible  Debenture,  the  Escrow  Agreement,  the
Irrevocable   Transfer   Instructions  and  the  Investor   Registration  Rights
Agreement, and delivered the same to the Buyer(s).

                  (b)      The Common Stock shall be authorized for quotation on
the OTCBB,  trading in the Common  Stock shall not have been  suspended  for any
reason  and  all  of the  Conversion  Shares  issuable  upon  conversion  of the
Convertible Debentures shall be approved the OTCBB.

                  (c)      The  representations  and  warranties  of the Company
shall be true and correct in all  material  respects  (except to the extent that
any  of  such   representations  and  warranties  is  already  qualified  as  to
materiality  in  Section  3  above,  in which  case,  such  representations  and
warranties  shall be true and correct without further  qualification)  as of the
date when made and as of the Closing  Dates as though made at that time  (except
for  representations  and  warranties  that speak as of a specific date) and the
Company shall have  performed,  satisfied and complied in all material  respects

                                       15
<PAGE>

with the covenants,  agreements and conditions  required by this Agreement to be
performed,  satisfied or complied with by the Company at or prior to the Closing
Dates.  If requested by the Buyer,  the Buyer shall have received a certificate,
executed by the President of the Company,  dated as of the Closing Dates, to the
foregoing effect and as to such other matters as may be reasonably  requested by
the Buyer  including,  without  limitation  an update  as of the  Closing  Dates
regarding the representation contained in Section 3(c) above.

                  (d)      The Company  shall have executed and delivered to the
Buyer(s) the Convertible Debentures in the respective amounts set forth opposite
each Buyer(s) name on Schedule I attached hereto.

                  (e)      The  Buyer(s)  shall  have  received  an  opinion  of
counsel from Kirkpatrick & Lockhart, LLP in a form satisfactory to the Buyer(s).

                  (f)      The Company  shall have  provided  to the  Buyer(s) a
certificate of good standing from the secretary of state from the state in which
the company is incorporated.

                  (g)      As of  the  Closing  Date,  the  Company  shall  have
reserved out of its authorized and unissued Common Stock, solely for the purpose
of effecting the  conversion  of the  Convertible  Debentures,  shares of Common
Stock to effect the conversion of all of the Conversion Shares then outstanding.

                  (h)      The Irrevocable Transfer Agent Instructions,  in form
and  substance  satisfactory  to the  Buyer,  shall have been  delivered  to and
acknowledged in writing by the Company's transfer agent.

                  (i)      The Company  shall have  provided to the  Investor an
acknowledgement,  to the satisfaction of the Investor, from Melone & Bailey PLLC
as to  its  ability  to  provide  all  consents  required  in  order  to  file a
registration statement in connection with this transaction.

                  (j)      The  Company  shall  have  filed a form UCC-1 or such
other forms as may be  required  to perfect the Buyer's  interest in the Pledged
Property and Pledged  Collateral as detailed in the Security Agreement dated the
date hereof and provided proof of such filing to the Buyer(s).

         8.       INDEMNIFICATION.

                  (a)      In  consideration   of  the  Buyer's   execution  and
delivery of this  Agreement  and acquiring the  Convertible  Debentures  and the
Conversion  Shares  hereunder,  and in  addition to all of the  Company's  other
obligations under this Agreement,  the Company shall defend, protect,  indemnify
and  hold  harmless  the  Buyer(s)  and each  other  holder  of the  Convertible
Debentures  and the Conversion  Shares,  and all of their  officers,  directors,
employees  and  agents  (including,   without  limitation,   those  retained  in
connection with the transactions  contemplated by this Agreement) (collectively,
the "Buyer Indemnitees") from and against any and all actions, causes of action,
suits, claims,  losses,  costs,  penalties,  fees,  liabilities and damages, and
expenses  in  connection  therewith  (irrespective  of  whether  any such  Buyer
Indemnitee  is a party to the  action  for which  indemnification  hereunder  is
sought),  and  including  reasonable  attorneys'  fees  and  disbursements  (the

                                       16
<PAGE>

"Indemnified Liabilities"),  incurred by the Buyer Indemnitees or any of them as
a result of, or arising  out of, or  relating  to (a) any  misrepresentation  or
breach of any  representation or warranty made by the Company in this Agreement,
the Convertible  Debentures or the Investor Registration Rights Agreement or any
other certificate,  instrument or document  contemplated hereby or thereby,  (b)
any breach of any covenant,  agreement or obligation of the Company contained in
this  Agreement,  or the  Investor  Registration  Rights  Agreement or any other
certificate,  instrument or document  contemplated hereby or thereby, or (c) any
cause of action,  suit or claim  brought or made  against  such  Indemnitee  and
arising  out of or  resulting  from  the  execution,  delivery,  performance  or
enforcement  of this  Agreement or any other  instrument,  document or agreement
executed pursuant hereto by any of the Indemnities,  any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Convertible  Debentures or the status of the Buyer or holder
of the Convertible  Debentures the Conversion  Shares, as a Buyer of Convertible
Debentures in the Company.  To the extent that the foregoing  undertaking by the
Company may be unenforceable for any reason,  the Company shall make the maximum
contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities, which is permissible under applicable law.

                  (b)      In  consideration  of  the  Company's  execution  and
delivery  of  this  Agreement,  and in  addition  to all  of the  Buyer's  other
obligations under this Agreement, the Buyer shall defend, protect, indemnify and
hold  harmless the Company and all of its  officers,  directors,  employees  and
agents  (including,  without  limitation,  those retained in connection with the
transactions  contemplated  by  this  Agreement)  (collectively,   the  "Company
Indemnitees") from and against any and all Indemnified  Liabilities  incurred by
the Indemnitees or any of them as a result of, or arising out of, or relating to
(a) any  misrepresentation  or breach of any  representation or warranty made by
the Buyer(s) in this Agreement,  , instrument or document contemplated hereby or
thereby  executed by the Buyer,  (b) any breach of any  covenant,  agreement  or
obligation  of  the  Buyer(s)   contained  in  this   Agreement,   the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby  executed  by the  Buyer,  or (c) any cause of
action,  suit or claim brought or made against such Company  Indemnitee based on
material  misrepresentations  or due to a material  breach and arising out of or
resulting  from the  execution,  delivery,  performance  or  enforcement of this
Agreement,  the Investor  Registration Rights Agreement or any other instrument,
document  or  agreement   executed   pursuant  hereto  by  any  of  the  Company
Indemnities.  To the extent that the foregoing  undertaking by each Buyer may be
unenforceable for any reason, each Buyer shall make the maximum  contribution to
the payment and  satisfaction of each of the Indemnified  Liabilities,  which is
permissible under applicable law.

         9.       GOVERNING LAW: MISCELLANEOUS.

                  (a)      Governing  Law. 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.

                                       17
<PAGE>

                  (b)      Counterparts.  This  Agreement may be executed in two
or more  identical  counterparts,  all of which shall be considered  one and the
same agreement and shall become effective when  counterparts have been signed by
each party and delivered to the other party.  In the event any signature page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof.

                  (c)      Headings.  The  headings  of this  Agreement  are for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Agreement.

                  (d)      Severability.  If any  provision  of  this  Agreement
shall be  invalid or  unenforceable  in any  jurisdiction,  such  invalidity  or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability of any provision of this Agreement in any other jurisdiction.

                  (e)      Entire   Agreement,    Amendments.   This   Agreement
supersedes all other prior oral or written agreements between the Buyer(s),  the
Company, their affiliates and persons acting on their behalf with respect to the
matters  discussed  herein,  and this Agreement and the  instruments  referenced
herein  contain  the entire  understanding  of the parties  with  respect to the
matters covered herein and therein and, except as specifically  set forth herein
or  therein,  neither  the  Company  nor any  Buyer  makes  any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

                  (f)      Notices.  Any notices,  consents,  waivers,  or other
communications  required  or  permitted  to be  given  under  the  terms of this
Agreement  must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon confirmation of receipt, when sent
by  facsimile;  (iii)  three (3) days after being sent by U.S.  certified  mail,
return  receipt  requested,  or (iv) one (1) 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.
                                   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

                                       18
<PAGE>

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

With Copy 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 Buyer(s),  to its address and facsimile number on Schedule I,
with copies to the Buyer's  counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written  notice to the other party of any change in
address or facsimile number.

                  (g)      Successors  and  Assigns.  This  Agreement  shall  be
binding  upon and inure to the  benefit  of the  parties  and  their  respective
successors  and  assigns.  Neither the  Company nor any Buyer shall  assign this
Agreement  or any rights or  obligations  hereunder  without  the prior  written
consent of the other party hereto.

                  (h)      No  Third  Party  Beneficiaries.  This  Agreement  is
intended for the benefit of the parties  hereto and their  respective  permitted
successors  and  assigns,  and is not for the benefit of, nor may any  provision
hereof be enforced by, any other person.

                  (i)      Survival.  Unless this Agreement is terminated  under
Section 9(l), the representations and warranties of the Company and the Buyer(s)
contained  in  Sections  2 and 3, the  agreements  and  covenants  set  forth in
Sections 4, 5 and 9, and the indemnification  provisions set forth in Section 8,
shall  survive the Closing for a period of two (2) years  following  the date on
which the  Convertible  Debentures  are converted in full. The Buyer(s) shall be
responsible  only  for  its  own  representations,  warranties,  agreements  and
covenants hereunder.

                  (j)      Publicity.  The Company and the  Buyer(s)  shall have
the right to approve,  before  issuance  any press  release or any other  public
statement  with  respect to the  transactions  contemplated  hereby  made by any
party; provided,  however, that the Company shall be entitled, without the prior
approval of the Buyer(s),  to issue any press release or other public disclosure
with respect to such transactions  required under applicable securities or other
laws or  regulations  (the  Company  shall use its best  efforts to consult  the
Buyer(s) in connection  with any such press  release or other public  disclosure
prior to its release and  Buyer(s)  shall be provided  with a copy  thereof upon
release thereof).

                  (k)      Further Assurances.  Each party shall do and perform,
or cause to be done and performed,  all such further acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents,  as the other party may reasonably  request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

                                       19
<PAGE>

                  (l)      Termination.  In the event that the Closing shall not
have  occurred  with respect to the Buyers on or before five (5)  business  days
from the date hereof due to the Company's or the Buyer's  failure to satisfy the
conditions  set forth in Sections 6 and 7 above (and the  non-breaching  party's
failure to waive such unsatisfied  condition(s)),  the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of  business  on such date  without  liability  of any party to any
other party;  provided,  however,  that if this  Agreement is terminated  due to
breach by the  Company the Company  shall  remain  obligated  to  reimburse  the
Buyer(s) for the fees and expenses of Butler Gonzalez  described in Section 4(g)
above.

                  (m)      No Strict  Construction.  The  language  used in this
Agreement  will be deemed to be the  language  chosen by the  parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>

         IN WITNESS  WHEREOF,  the  Buyers  and the  Company  have  caused  this
Securities  Purchase  Agreement to be duly executed as of the date first written
above.

                                              COMPANY:
                                              TELEPLUS ENTERPRISES INC.

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

                                       21
<PAGE>

                                                                       EXHIBIT A

                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                                                       EXHIBIT B

                            FORM OF ESCROW AGREEMENT

<PAGE>

                                                                       EXHIBIT C

                           TRANSFER AGENT INSTRUCTIONS

<PAGE>

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>

                                                                                 ADDRESS/FACSIMILE           AMOUNT OF
               NAME                              SIGNATURE                        NUMBER OF BUYER          SUBSCRIPTION
----------------------------       ---------------------------------     -----------------------------     -------------
<S>                                <C>                                   <C>                               <C>
Cornell Capital Partners, LP        By:      Yorkville Advisors, LLC     101 Hudson Street - Suite 3700    $  1,000,000
                                    Its:     General Partner             Jersey City, NJ  07303
                                                                         Facsimile:  (201) 985-8266

                                    By:_________________________
                                       Name: Mark A. Angelo
                                       Its:  Portfolio Manager

</TABLE>

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