Document:

Exhibit
      10.3

    

     

    ESCROW
      AGREEMENT

     

    This
      Escrow Agreement (this “Agreement”),
      entered into as of this _____ day of June, 2007, is by and among China Agritech,
      Inc., a Delaware corporation (the “Company”),
      the
      Investors listed in Exhibit
      A
      hereto
      (“Investors”)
      and
      Securities Transfer Corporation (hereinafter referred to as the “Escrow
      Agent”).
      All
      capitalized terms used but not defined herein shall have the meanings assigned
      them in the Purchase Agreement (as hereinafter defined).

     

    BACKGROUND

     

    The
      Company and the Investors have entered into a Securities Purchase Agreement
      (the
“Purchase
      Agreement”)
      pursuant to which each Investor has agreed to purchase from the Company, and
      the
      Company has agreed to sell to each Investor, the number of shares of common
      stock, par value $0.001 per share, of the Company identified therein (the
“Shares”).
      The
      Company and the Investors have agreed to establish an escrow on the terms and
      conditions set forth in this Agreement. Roth Capital Partners, LLC has acted
      as
      placement agent in connection with the transactions contemplated by the Purchase
      Agreement. The Escrow Agent has agreed to act as escrow agent pursuant to the
      terms and conditions of this Agreement. 

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the promises of the parties and the terms and
      conditions hereof, the parties hereby agree as follows:

     

    1. Appointment
      of Escrow Agent.
      The
      Company and Roth hereby appoint the Escrow Agent as escrow agent to act in
      accordance with the Purchase Agreement and the terms and conditions set forth
      in
      this Agreement, and the Escrow Agent hereby accepts such appointment and agrees
      to act in accordance with such terms and conditions.

     

    2. Establishment
      of Escrow.
      All
      amounts instructed in the funds flow memorandum attached hereto as Exhibit
      C
      to be
      provided to the Escrow Agent shall be deposited with the Escrow Agent in
      immediately available funds by federal wire transfer or cashiers check to the
      account set forth in Exhibit
      B
      to this
      Agreement, such funds being referred to herein as the “Escrow
      Funds”.

     

    3. Segregation
      of Escrow Funds.
      The
      Escrow Funds shall be segregated from the assets of the Escrow Agent and held
      in
      trust for the benefit of the Company and the Investors in accordance
      herewith.

     

    4. Receipt
      and Investment of Funds.

     

    (a) The
      Escrow Agent agrees to place the Escrow Funds in a non-interest bearing and
      federally insured depository account. At the Company’s direction, the Company
      may request, and the Escrow Agent shall, upon the completion of appropriate
      documentation by the Company, move the Escrow Funds to an interest bearing
      and
      federally insured depository account (all interest earned on the interest
      bearing account shall be disbursed with the Escrow Funds in accordance with
      this
      Agreement). Subject to Section 7(c) hereof, the Escrow Agent shall have no
      liability for any loss resulting from the deposit of the Escrow
      Funds.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) The
      Escrow Agent shall cause to be prepared all income and other tax returns and
      reports as the Escrow Agent, in its sole discretion, deems necessary or
      advisable in order to comply with all tax and other laws, rules and regulations
      applicable to the Escrow Funds.

     

    5. Disbursement
      of the Escrow Funds.

     

    (a) The
      Escrow Agent shall continue to hold the Escrow Funds delivered for deposit
      hereunder by the Investors until the earlier of: (1) receipt of a joint written
      notice from the Company and Roth, evidencing termination under Section 6.5(a)
      of
      the Purchase Agreement, (2) receipt of a written notice from the Company or
      Roth
      evidencing termination under Section 6.5(b) of the Purchase Agreement (each
      of
      (1) and (2), a “Termination
      Election”)
      or (3)
      receipt of a joint written notice from the Company and Roth that the conditions
      to closing under the Purchase Agreement have been satisfied and to disburse
      the
      Escrow Funds in accordance with Section 5(b) below.

     

    (b) If
      the
      Escrow Agent receives a Termination Election prior to its receipt of the notice
      contemplated under Section 5(a)(3), then the Escrow Agent shall return the
      Escrow Funds delivered by the Investors as directed by the Investors. If the
      Escrow Agent receives the notice contemplated under Section 5(a)(3) prior to
      a
      Termination Election, then the Escrow Agent shall disburse the Escrow Funds
      in
      accordance with the funds flow memorandum attached hereto as Exhibit
      C.
      

     

    (c) Following
      the Closing, if any, the Holdback Escrow Amount (as hereinafter defined) (which
      shall form a part of the Escrow Funds) shall continue to be held in the escrow
      account following disbursement of the balance of the Escrow Funds in accordance
      with Exhibit
      C
      to this
      Escrow Agreement. An amount of $2,000,000.00 shall be released by the Escrow
      Agent to the Company upon the Escrow Agent’s receipt of joint
      written notice from the Company and Roth Capital Partners, LLC that the Company
      has complied with both Section 4.11 and Section 4.15 of the Purchase
      Agreement
      (the
“Holdback
      Escrow Amount”).
      If
      for any reason, or for no reason whatsoever, the Escrow Agent does not receive
      the joint written notice relating to the Holdback Escrow Amount prior to the
      six
      month anniversary of the Closing Date, then such Holdback Escrow Amount shall
      remain in the escrow account until such time as the Escrow Agent receives a
      joint written notice from the Company and Roth Capital Partners, LLC that the
      Company has complied with both Section 4.11 and Section 4.15 of the Purchase
      Agreement.

     

    (d) This
      Escrow Agreement shall terminate and be of no further force or effect on the
      disbursement of all Escrow Funds.

     

    (e) Each
      of
      the Investors represents, as to itself or himself only, that, except as
      otherwise provided in Section 5(b), (i) any amounts placed into escrow under
      this Escrow Agreement or in accordance with the Purchase Agreement are not
      refundable to such Investor, (ii) such Investor does not have any control or
      discretion over the release of the funds in the escrow account established
      by
      this Escrow Agreement, and (iii) such Investor has not been issued, or will
      not
      be entitled to, a refund or repayment of any amounts held in escrow under this
      Escrow Agreement.

     

    
      
        
        

      

      
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    6. Interpleader.
      Should
      any controversy arise among the parties hereto with respect to this Agreement
      or
      with respect to the right to receive the Escrow Funds, the Escrow Agent shall
      have the right to consult counsel and/or to institute an appropriate
      interpleader action to determine the rights of the parties. The Escrow Agent
      is
      also hereby authorized to institute an appropriate interpleader action upon
      receipt of a written letter of direction executed by the parties so directing
      the Escrow Agent. If the Escrow Agent is directed to institute an appropriate
      interpleader action, it shall institute such action not prior to thirty (30)
      days after receipt of such letter of direction and not later than sixty (60)
      days after such date. Any interpleader action instituted in accordance with
      this
      Section 6 shall be filed in any court of competent jurisdiction in New York,
      New
      York, and the portion of the Escrow Funds in dispute shall be deposited with
      the
      court and in such event the Escrow Agent shall be relieved of and discharged
      from any and all obligations and liabilities under and pursuant to this
      Agreement with respect to that portion of the Escrow Funds.

     

    7. Exculpation,
      Indemnification and Compensation of Escrow Agent.

     

    (a) The
      Escrow Agent is not a party to, and is not bound by or charged with notice
      of
      any agreement out of which this escrow may arise. The Escrow Agent acts under
      this Agreement as a depositary only and is not responsible or liable in any
      manner whatsoever for the sufficiency, correctness, genuineness or validity
      of
      the subject matter of the escrow, or any part thereof, or for the form or
      execution of any notice given by any other party hereunder, or for the identity
      or authority of any person executing any such notice or depositing the Escrow
      Funds. The Escrow Agent will have no duties or responsibilities other than
      those
      expressly set forth herein. The Escrow Agent will be under no liability to
      anyone by reason of any failure on the part of any party hereto (other than
      the
      Escrow Agent) or any maker, endorser or other signatory of any document to
      perform such person’s or entity’s obligations hereunder or under any such
      document. Except for this Agreement and instructions to the Escrow Agent
      pursuant to the terms of this Agreement, the Escrow Agent will not be obligated
      to recognize any agreement between or among any or all of the persons or
      entities referred to herein, notwithstanding its knowledge thereof.

     

    (b) The
      Escrow Agent will not be liable for any action taken or omitted by it, or any
      action suffered by it to be taken or omitted, in good faith and in the exercise
      of its own best judgment, and may rely conclusively on, and will be protected
      in
      acting upon, any order, notice, demand, certificate, or opinion or advice of
      counsel (including counsel chosen by the Escrow Agent), statement, instrument,
      report or other paper or document (not only as to its due execution and the
      validity and effectiveness of its provisions, but also as to the truth and
      acceptability of any information therein contained) which is reasonably believed
      by the Escrow Agent to be genuine and to be signed or presented by the proper
      person or persons. The duties and responsibilities of the Escrow Agent hereunder
      shall be determined solely by the express provisions of this Agreement and
      no
      other or further duties or responsibilities shall be implied, including, but
      not
      limited to, any obligation under or imposed by any laws of the State of New
      York
      upon fiduciaries.

     

    
      
        
        

      

      
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    (c) The
      Escrow Agent will be indemnified and held harmless by the Company from and
      against any expenses, including reasonable attorneys’ fees and disbursements,
      damages or losses suffered by the Escrow Agent in connection with any claim
      or
      demand, which, in any way, directly or indirectly, arises out of or relates
      to
      this Agreement or the services of the Escrow Agent hereunder; except, that
      if
      the Escrow Agent is guilty of willful misconduct, fraud or gross negligence
      under this Agreement, then the Escrow Agent will bear all losses, damages and
      expenses arising as a result of such willful misconduct, fraud or gross
      negligence. For this purpose, the term “attorneys' fees” includes fees payable
      to any counsel retained by the Escrow Agent in connection with its services
      under this Agreement and, with respect to any matter arising under this
      Agreement as to which the Escrow Agent performs legal services, its standard
      hourly rates and charges then in effect. Promptly after the receipt by the
      Escrow Agent of notice of any such demand or claim or the commencement of any
      action, suit or proceeding relating to such demand or claim, the Escrow Agent
      will notify the other parties hereto in writing. For the purposes hereof, the
      terms “expense”
and
      “loss”
will
      include all amounts paid or payable to satisfy any such claim or demand, or
      in
      settlement of any such claim, demand, action, suit or proceeding settled with
      the express written consent of the parties hereto, and all costs and expenses,
      including, but not limited to, reasonable attorneys’ fees and disbursements,
      paid or incurred in investigating or defending against any such claim, demand,
      action, suit or proceeding. The provisions of this Section 7 shall survive
      the
      termination of this Agreement.

     

    (d) Compensation
      of Escrow Agent. The Company will pay Escrow Agent $3,000 for
      all
      services rendered by Escrow Agent hereunder.

     

    8. Resignation
      of Escrow Agent.
      At any
      time, upon ten (10) days’ written notice to the parties hereto, the Escrow Agent
      may resign and be discharged from its duties as Escrow Agent hereunder. As
      soon
      as practicable after its resignation, the Escrow Agent will promptly turn over
      to a successor escrow agent appointed by the parties hereto all monies and
      property held hereunder upon presentation of a document appointing the new
      escrow agent and evidencing its acceptance thereof. If, by the end of the 10-day
      period following the giving of notice of resignation by the Escrow Agent, the
      parties hereto shall have failed to appoint a successor escrow agent, the Escrow
      Agent may interplead the Escrow Funds into the registry of any court having
      jurisdiction.

     

    9. Method
      of Distribution by Escrow Agent.
      All
      disbursements by the Escrow Agent pursuant to this Agreement will be made by
      wire transfer of immediately available funds in accordance with the funds flow
      memorandum attached hereto as Exhibit
      C.

     

    10. Records.
      The
      Escrow Agent shall maintain accurate records of all transactions hereunder.
      Promptly after the termination of this Agreement or as may reasonably be
      requested by the parties hereto from time to time before such termination,
      the
      Escrow Agent shall provide the parties hereto, as the case may be, with a
      complete copy of such records, certified by the Escrow Agent to be a complete
      and accurate account of all such transactions. The authorized representatives
      of
      each of the parties hereto shall have access to such books and records at all
      reasonable times during normal business hours upon reasonable notice to the
      Escrow Agent.

     

    
      
        
        

      

      
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    11. Matters
      Relating to Roth.
      The
      Company agrees to indemnify Roth to the same extent that they indemnify the
      Escrow Agent hereunder. Furthermore, Roth shall be entitled to the same
      exculpatory provisions applicable to the Escrow Agent, as set forth more
      specifically in Section 7 herein.

     

    12. Notice.
      All
      notices, requests, demands and other communications under this Agreement shall
      be in writing and shall be deemed to have been duly given (a) on the date of
      service if served personally on the party to whom notice is to be given, (b)
      on
      the day of transmission if sent by facsimile/email
      transmission to the facsimile number/email address given below, and telephonic
      confirmation of receipt is obtained promptly after completion of transmission,
      (c) on the day after delivery to Federal Express or similar overnight courier
      or
      the Express Mail service maintained by the United States Postal Service or
      (d)
      on the fifth day after mailing, if mailed to the party to whom notice is to
      be
      given, by first class mail, registered or certified, postage prepaid, and
      properly addressed, return receipt requested, to the party as
      follows:

     

    
      	
            	If
              to the Escrow Agent:	
              Securities
                Transfer Corporation 

            

    

    2591
      Dallas Parkway, Suite 102

    Frisco,
      TX 75034

    Facsimile:
      (469)-633-0088

    Attn.:
      Kevin B. Halter, Jr.

     

    
      	
            	If
              to the Company:	
              China
                Agritech, Inc.

            

    

    A#
      Room
      0706-0707, The Spaces International Center 

    No.
      8,
      Dongdaqiao Road 

    Chaoyang
      District, Beijing 100020 

    People's
      Republic of China

    Facsimile:
      86 10 5870 2108

    Attention:
      President

    

    
      	
            	If
              to an Investor:	
              To
                the address set forth under such Investor’s name on Exhibit
                A
                hereto;

            

    

    

    or
      to
      such other address and to the attention of such other person as any of the
      above
      may have furnished to the other parties in writing and delivered in accordance
      with the provisions set forth above.

     

    13. Execution
      in Counterparts; Facsimile Execution.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together shall constitute one and the same
      instrument. Facsimile execution and delivery of this Agreement is legal, valid
      and binding for all purposes.

     

    14. Assignment
      and Modification.
      This
      Agreement and the rights and obligations hereunder of any of the parties hereto
      may not be assigned without the prior written consent of the other parties
      hereto. Subject to the foregoing, this Agreement will be binding upon and inure
      to the benefit of each of the parties hereto and their respective successors
      and
      permitted assigns. No other person will acquire or have any rights under, or
      by
      virtue of, this Agreement. No portion of the Escrow Funds shall be subject
      to
      interference or control by any creditor of any party hereto, or be subject
      to
      being taken or reached by any legal or equitable process in satisfaction of
      any
      debt or other liability of any such party hereto prior to the disbursement
      thereof to such party hereto in accordance with the provisions of this
      Agreement. This Agreement may be changed or modified only in writing signed
      by
      all of the parties hereto.

     

    
      
        
        

      

      
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    15. APPLICABLE
      LAW.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF NEW YORK, USA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN.
      THE PARTIES EXPRESSLY WAIVE SUCH DUTIES AND LIABILITIES, IT BEING THEIR INTENT
      TO CREATE SOLELY AN AGENCY RELATIONSHIP AND HOLD THE ESCROW AGENT LIABLE ONLY
      IN
      THE EVENT OF ITS WILLFUL MISCONDUCT, FRAUD, OR GROSS NEGLIGENCE. ANY LITIGATION
      CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE EXCLUSIVELY PROSECUTED
      IN THE COURTS OF NEW YORK COUNTY, NEW YORK, USA, AND ALL PARTIES CONSENT TO
      THE
      EXCLUSIVE JURISDICTION AND VENUE OF THOSE COURTS.

     

    16. Headings.
      The
      headings contained in this Agreement are for convenience of reference only
      and
      shall not affect the construction of this Agreement. 

     

    17. Attorneys’
      Fees.
      If any
      action at law or in equity, including an action for declaratory relief, is
      brought to enforce or interpret the provisions of this Agreement, the prevailing
      party shall be entitled to recover reasonable attorneys’ fees from the other
      party (unless such other party is the Escrow Agent), which fees may be set
      by
      the court in the trial of such action or may be enforced in a separate action
      brought for that purpose, and which fees shall be in addition to any other
      relief that may be awarded.

     

    [Signature
      Page Follows]

     

     

    
      
        
        

      

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

    
 

    
      
        	
                The
                  Company:

              	
                CHINA
                  AGRITECH, INC.

              
	 	 
	 	
                By:
                  ________________________________

              
	 	
                Name:
                  Yu Chang

              
	 	
                Title:
                  Chief Executive Officer

              
	 	 
	 	 
	
                Escrow
                  Agent:

              	
                SECURITIES
                  TRANSFER CORPORATION

              
	 	 
	 	
                By:
                  _______________________________

              
	 	
                Name:
                  

              
	 	
                Title:

              
	 	 
	 	
                Investors:

              
	
                 

              	 
	
                 

              	
                ___________________________________

              
	 	 
	 	
                By:
                  ________________________________

              
	 	
                Name:
                  

              
	 	
                Title:

              
	 	 
	 	
                Address
                  for notice:

              
	 	 
	 	 
	 	 
	 	
                ___________________________________SECURITIES
      PURCHASE AGREEMENT

    

    THIS SECURITIES
      PURCHASE AGREEMENT
      (this
“Agreement”),
      dated
      as of July 3, 2007, by and among TELEPLUS
      WORLD, CORP.,
      a Nevada
      corporation (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 “Securities
      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 Three Million Dollars ($3,000,000) of
      secured convertible debentures (the “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value $0.001
      (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”),
      which
      shall be funded on the fifth (5th)
      business day following the date hereof (the “Closing”),
      for a
      total purchase price of up to Three Million Dollars ($3,000,000), (the
“Purchase
      Price”)
      in the
      respective amounts set forth opposite each Buyer(s) name on Schedule I (the
      “Subscription
      Amount”);
      

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering an Investor 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 Securities Act and the rules and regulations promulgated there under,
      and applicable state securities laws; 

     

    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
      B
      (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) to secure the Company’s obligations under this Agreement, the
      Convertible Debenture, the Investor Registration Rights Agreement, the
      Irrevocable Transfer Agent Instructions, the Security Agreement, the Pledge
      and
      Escrow Agreement or any other obligations of the Company to the
      Buyer;

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering a Second Amended and Restated Pledge and
      Escrow Agreement substantially in the form attached hereto as Exhibit
      C
      (the
“Pledge
      and Escrow Agreement”)
      pursuant to which the Company has agreed to provide the Buyer a security
      interest in the Pledged Shares (as this term is defined in the Pledge and Escrow
      Agreement) to secure the Company’s obligations under this Agreement, the
      Convertible Debenture, the Investor Registration Rights Agreement, the
      Irrevocable Transfer Agent Instructions, the Security Agreement, the Pledge
      and
      Escrow Agreement or any other obligations of the Company to the Buyer;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering an Irrevocable Transfer Agent Instructions
      substantially in the form attached hereto as Exhibit
      D
      (the
“Irrevocable
      Transfer Agent Instructions”);
      and

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering a Third Amended and Restated Security
      Agreement by and among the Company, the Buyer and TelePlus Connect Corp, an
      Ontario corporation and a wholly owned subsidiary of the Company (a
“Subsidiary”),
      and a
      Third Amended and Restated Security Agreement by and among the Company, the
      Buyer and TelePlus Wireless Corp., a Nevada corporation and a wholly owned
      subsidiary of the Company (a “Subsidiary”),
      substantially in the form attached hereto as Exhibit
      E
      (collectively, the “Subsidiary
      Security Agreements”)
      pursuant to which the Company and the Subsidiary have agreed to provide the
      Buyer a security interest in Pledged Collateral (as this term is defined in
      the
      Subsidiary Security Agreements) to secure the Company’s obligations under this
      Agreement, the Convertible Debenture, the Investor Registration Rights
      Agreement, the Irrevocable Transfer Agent Instructions, the Security Agreement,
      the Subsidiary Security Agreements, the Pledge and Escrow Agreement or any
      other
      obligations of the Company to the Buyer.

     

    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 the Closing and the Company agrees to sell and issue to each
      Buyer, severally and not jointly, at the Closing, Convertible Debentures in
      amounts corresponding with the Subscription Amount set forth opposite each
      Buyer’s name on Schedule I hereto. 

     

    (b) Closing
      Date. The Closing of the purchase and sale of the Convertible Debentures shall
      take place at 10:00 a.m. Eastern Standard Time within two (2) business day
      following the date hereof, subject to notification of satisfaction of the
      conditions to the 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
      “Closing Date”). The Closing shall occur on the Closing Date at the offices of
      Yorkville Advisors, LLC, 101 Hudson Street, Suite 3700, Jersey City, New Jersey
      07302 (or such other place as is mutually agreed to by the Company and the
      Buyer(s)). 

     

    (c) Form
      of
      Payment. Subject to the satisfaction of the terms and conditions of this
      Agreement, on the Closing Date, (i) the Buyers shall deliver to the Company
      such
      aggregate proceeds for the Convertible Debentures to be issued and sold to
      such
      Buyer(s), minus the fees to be paid directly from the proceeds of the Closing
      as
      set forth herein, 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. 

     

    
      
        
        

      

      
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    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 Securities 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 (the “Registration
      Statement”) covering such Conversion Shares or an available exemption under the
      Securities 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 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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (f) Transfer
      or Resale. Each Buyer understands that except as provided in the Registration
      Rights Agreement: (i) the Securities have not been and are not being registered
      under the Securities Act or any state securities laws, and may not be offered
      for sale, sold, assigned or transferred unless (A) subsequently registered
      thereunder, (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, or (C) such Buyer provides
      the Company with reasonable assurances (in the form of seller and broker
      representation letters) that such Securities can be sold, assigned or
      transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
      the Securities Act, as amended (or a successor rule thereto) (collectively,
      “Rule
      144”),
      in
      each case following the applicable holding period set forth therein; (ii) any
      sale of the Securities made in reliance on 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 the 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 Securities Act) may require
      compliance with some other exemption under the Securities 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 the Securities under the Securities
      Act or any state securities laws or to comply with the terms and conditions
      of
      any exemption thereunder. 

     

    (g) Legends.
      Each Buyer agrees to the imprinting, so long as is required by this Section
      2(g), of a restrictive legend in substantially the following form:

     

    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 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. 

     

    Certificates
      evidencing the Conversion Shares or Warrant Shares shall not contain any legend
      (including the legend set forth above), (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, (ii) following any sale of such Conversion
      Shares or Warrant Shares pursuant to Rule 144, (iii) if such Conversion Shares
      or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such
      legend is not required under applicable requirements of the Securities Act
      (including judicial interpretations and pronouncements issued by the staff
      of
      the SEC). The Company shall cause its counsel to issue a legal opinion to the
      Company’s transfer agent promptly after the effective date (the “Effective
      Date”)
      of a
      Registration Statement if required by the Company’s transfer agent to effect the
      removal of the legend hereunder. If all or any portion of the Convertible
      Debentures or Warrants are exercised by a Buyer that is not an Affiliate of
      the
      Company (a “Non-Affiliated
      Buyer”)
      at a
      time when there is an effective registration statement to cover the resale
      of
      the Conversion Shares or the Warrant Shares, such Conversion Shares or Warrant
      Shares shall be issued free of all legends. The Company agrees that following
      the Effective Date or at such time as such legend is no longer required under
      this Section 2(g), it will, no later than three (3) Trading Days following
      the
      delivery by a Non-Affiliated Buyer to the Company or the Company’s transfer
      agent of a certificate representing Conversion Shares or Warrant Shares, as
      the
      case may be, issued with a restrictive legend (such third Trading Day, the
      “Legend
      Removal Date”),
      deliver or cause to be delivered to such Non-Affiliated Buyer a certificate
      representing such shares that is free from all restrictive and other legends.
      The Company may not make any notation on its records or give instructions to
      any
      transfer agent of the Company that enlarge the restrictions on transfer set
      forth in this Section. Each Buyer acknowledges that the Company’s agreement
      hereunder to remove all legends from Conversion Shares or Warrant Shares is
      not
      an affirmative statement or representation that such Conversion Shares or
      Warrant Shares are freely tradable. Each Buyer, severally and not jointly with
      the other Buyers, agrees that the removal of the restrictive legend from
      certificates representing Securities as set forth in this Section 3(g) is
      predicated upon the Company’s reliance that the buyer will sell any Securities
      pursuant to either the registration requirements of the Securities Act,
      including any applicable prospectus delivery requirements, or an exemption
      therefrom, and that if Securities are sold pursuant to a Registration Statement,
      they will be sold in compliance with the plan of distribution set forth
      therein.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (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 Irrevocable Transfer Agent Agreement, and the Pledge and Escrow
      Agreement; (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, 2006;
      (iv) the Company’s Form 10-QSB for the fiscal quarter ended March 31, 2007 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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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. 

     

    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 Subsidiary Security Agreements, the
      Investor Registration Rights Agreement, the Irrevocable Transfer Agent
      Agreement, the Pledge and Escrow Agreement, and any related agreements
      (collectively the “Transaction Documents”) and to issue the Convertible
      Debentures and the Conversion Shares in accordance with the terms hereof and
      thereof, (ii) the execution and delivery of the Transaction Documents 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) the Transaction Documents have been duly executed and
      delivered by the Company, (iv) the Transaction Documents 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 the Transaction Documents 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. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c) Capitalization.
      As of the date hereof, the authorized capital stock of the Company consists
      of
      600,000,000 shares of Common Stock, par value $0.001 per share and 10,000,000
      shares of Preferred Stock, $0.001 par value per share (“Preferred Stock”), of
      which 141,459,741 shares of Common Stock and no shares of Preferred Stock were
      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 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) 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 Securities 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 Articles of Incorporation, as
      amended and as in effect on the date hereof (the “Articles 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 the Transaction Documents by the Company and the consummation
      by
      the Company of the transactions contemplated hereby will not (i) result in
      a
      material violation of the Certificate 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 Articles
      of
      Incorporation or By-laws or their organizational charter or by-laws,
      respectively, or any material contract, agreement, mortgage, indebtedness,
      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 Securities 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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (f) SEC
      Documents: Financial Statements. Since January 1, 2004, 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 “Exchange 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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (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 and the Disclosure
      Schedule (the “Disclosure Schedule”) attached hereto as Exhibit F, 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 (i)
      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 Securities 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 Securities 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 Securities
      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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (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 judgment of the Company’s officers has or is expected in
      the future to have a material adverse 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.

     

    
      
        
        

      

      
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    4. COVENANTS.

     

    (a) Best
      Efforts. Each party shall use its best efforts to timely 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.

     

    (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 Securities 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 Exchange 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 Exchange Act even if the Exchange 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 to repay the outstanding obligations to the former shareholders
      of
      Telizon Inc. in the principal amount of CDN$1,631,776.00 (the “Telizon Payment”)
      and to repay the outstanding obligations to the former shareholders of 1500536
      ONTARIO INC (One Bill) in the principal amount of CDN$168,224.28 for a total
      CDN$1,800,000.28 and 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, the Company shall call and hold
      a
      special meeting of the shareholders within thirty (30) 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.

     

    
      
        
        

      

      
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    (g) Fees
      and
      Expenses. 

     

    (i) 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 the Transaction Documents. The Company shall pay Yorkville
      Advisors LLC a fee equal to ten percent (10%) of the Purchase Price.

     

    (ii) The
      Company shall pay a structuring fee to Investor’s legal counsel, Sichenzia Ross
      Friedman Ference, LLP, of Twenty Thousand Dollars ($20,000), which shall be
      paid
      directly from the proceeds of the Closing. 

     

    (iii) Warrants. Upon
      the
      execution of this Agreement, the Company shall issue to the Investor warrants
      (the “Warrants”)
      to
      purchase in the aggregate of Eighty Million (80,000,000) shares of the Company’s
      Common Stock as follows: (A) a warrant to purchase Fifty Million (50,000,000)
      shares of the Company’s Common Stock for a period of five (5) years at an
      exercise price of $0.03 per share; and (B) a warrant to purchase Thirty Million
      (30,000,000) shares of the Company’s Common Stock for a period of five (5)
      years at an exercise price of $0.05 per share (the shares of Common Stock
      underlying the above Warrants shall collectively be referred to as the
“Warrant
      Shares”).
      The
      Warrant Shares shall have “piggy-back” and demand registration
      rights.

     

    (iv) The
      Company shall pay Yorkville Advisors, LLC a non-refundable due diligence fee
      of
      Five Thousand Dollars ($5,000) which shall be paid directly from the proceeds
      of
      the Closing

     

    (v) Upon
      the
      execution of this Agreement, the Company shall issue to the Buyer Four Million
      (4,000,000) shares of the Company’s Common Stock (the “Commitment
      Shares”).
      The
      Commitment Shares shall be deemed fully earned on the date hereof and shall
      have
“piggy-back” and demand registration rights.

     

    (h) Corporate
      Existence. So long as any of the Convertible Debentures remain outstanding,
      the
      Company shall not directly or indirectly consummate any merger, 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.

     

    (i) 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.

     

    
      
        
        

      

      
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    (j) 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).

     

    (k) Restriction
      on Issuance of the Capital Stock. So long as any Convertible Debentures are
      outstanding, the Company shall not, without the prior written consent of the
      Buyer(s) which shall not be unreasonably withheld, (i) issue or sell shares
      of
      Common Stock or Preferred Stock without or without consideration (ii) issue
      any
      warrant, option, right, contract, call, or other security instrument granting
      the holder thereof, the right to acquire Common Stock with or without
      consideration, (iii) enter into any security instrument granting the holder
      a
      security interest in any and all assets of the Company except as otherwise
      provided in the Security Agreement of even date between the Company and the
      Buyers, 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.
      The
      foregoing restriction shall exclude options granted and outstanding before
      July
      3, 2007 under the Company’s bona fide Employee Stock Option Plan, and any
      options, warrants or other securities convertible or exchangeable into shares
      of
      Common Stock of the Company (as outlined in the Disclosure Schedule) that were
      granted and outstanding prior to July 3, 2007. In addition, the foregoing
      restriction shall exclude the issuance of restricted shares of Common Stock
      of
      the Company in connection with an acquisition of another business or equity
      financing up to Two Million (2,000,000) shares of Common Stock in the
      aggregate.

     

    (l) Neither
      the Buyer(s) nor any of its affiliates have an open short position in the Common
      Stock of the Company, and the Buyer(s) agrees that it shall not, and that it
      will cause its affiliates not to, engage in any short sales of or hedging
      transactions with respect to the Common Stock as long as any Convertible
      Debenture or warrants to purchase the Warrant Shares shall remain outstanding.
      

     

    
      
        
        

      

      
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    (m) Rights
      of
      First Refusal. For a period of eighteen (18) months from the date hereof,
if
      the
      Company intends to raise additional capital by the issuance or sale of capital
      stock of the Company, including without limitation shares of any class of common
      stock, any class of preferred stock, options, warrants or any other securities
      convertible or exercisable into shares of common stock (whether the offering
      is
      conducted by the Company, underwriter, placement agent or any third party)
      the
      Company shall be obligated to offer to the Buyers such issuance or sale of
      capital stock, by providing in writing the principal amount of capital it
      intends to raise and outline of the material terms of such capital raise, prior
      to the offering such issuance or sale of capital stock  to any third
      parties including, but not limited to, current or former officers or directors,
      current or former shareholders and/or investors of the obligor, underwriters,
      brokers, agents or other third parties.  The Buyers shall have ten (10)
      business days from receipt of such notice of the sale or issuance of capital
      stock to accept or reject such capital raising offer. The Buyer’s acceptance
      shall be made in writing and shall be on the same terms as the issuance or
      sale
      presented by the Company to the Buyer.

     

    (n) Post-Effective
      Amendment. The
      Company shall use its best efforts to have the Post-Effective Amendment filed
      with the SEC on June 25, 2007 declared effective by September 1, 2007. In the
      event that the Post-Effective Amendment is not declared effective by October
      1,
      2007 at the Buyer’s Option, the exercise price of Warrants CCP-001, CCP-002,
      CCP-003, and CCP-004 shall reset to $0.023 (or subsequently adjusted as provided
      in each of the Warrants), and the Fixed Conversion Price (as defined in the
      Debenture issued pursuant to the Securities Purchase Agreement dated December
      13, 2005) shall be reset from $0.275 to $0.03, the interest rate shall reset
      to
      14% and the discount to market will reset to 10%. If the Post effective is
      declared effective by September 1, 2007 the Company shall immediately amend
      the
      registration statement to reflect the reset of Warrants CCP-001, CCP-002,
      CCP-003, and CCP-004 to $0.023 and can force Investor to exercise these warrants
      so long as TLPE shares maintain a minimum bid of $.05 cents and trade a minimum
      of 750,000 shares for 10 consecutive trading days as reported by Bloomberg
      prior
      to forced exercise and to the extent that the forced exercise doesn’t not put
      the investor over 9.99% holder of TLPE shares.

     

    (o) Liens.
      The
      Company hereby acknowledges, confirms and agrees that Buyer has and shall
      continue to have valid, enforceable and perfected first-priority liens upon
      and
      security interests in the Pledged Property and the Pledged Shares as further
      detailed in the Transaction Documents and new subsidiaries heretofore granted
      pursuant to any
      and
      all security agreements or otherwise granted to or held by Buyer. 

     

    (p) Increase
      in Authorized Capital. The Company shall take all actions necessary to increase
      its authorized shares of common stock to 1,500,000,000 within one hundred and
      twenty (120) days hereof. The Company shall furnish to each Buyer and its legal
      counsel promptly before the same is filed with the SEC, one copy of the proxy
      or
      information statement and any amendment thereto, and shall deliver to each
      Buyer
      promptly each letter written by or on behalf of the Company to the SEC or the
      staff of the SEC, and each item of correspondence from the SEC or the staff
      of
      the SEC, in each case relating to such proxy or information statement (other
      than any portion thereof which contains information for which the Company has
      sought confidential treatment). The Company will promptly respond to any and
      all
      comments received from the SEC (which comments shall promptly be made available
      to each Buyer). The Company shall comply with the filing and disclosure
      requirements of Section 14 under the 1934 Act in connection with obtaining
      the
      approval of the Company’s stockholders to increase its authorized shares of
      common stock. The Company represents and warrants that its Board of Directors
      has approved the proposal contemplated by this Section 4(p) and shall indicate
      such approval in the proxy or information statement used in connection with
      the
      Stockholder Approval.

     

    
      
        
        

      

      
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    (q) Cash
      Flow
      Monitor. So long as any amounts remain outstanding under the Debentures, the
      Company shall provide the Buyer an estimate of the monthly cash flow, accounts
      receivable and payable statements on or before fourteen (14) days following
      the
      end of each month with final monthly cash flow, accounts receivable and payable
      statements on or before the end of such month. 

     

    (r) Targets.
      The Company covenants and agrees to: (i) achieve no less than 80% of the
      milestones set forth on the attached Schedule 4(q) (the “Targets”) which shall
      be monitored by the Buyer on a quarterly and annual basis. So long as any
      amounts remain outstanding under the Convertible Debentures, if the Company
      shall fail to make the Mandatory Redemption payments as outlined in the
      Convertible Debenture issued simultaneously herewith (the “July 2007 Debenture)
      or fails to both
      (i) make
      the Mandatory Redemption payments as outlined in the July 2007 Debenture and
      (ii) achieve at least 80% of Targets, the Buyer shall be entitled to the
      following: (a) upon the first occurrence, the Buyer shall have the right to
      receive stock certificate # 2189 dated November 16, 2005 in the amount of
      6,412,500 shares of the Company, stock certificate #2009 dated December 30,
      2003
      in the amount of 13,750,000 shares of the Company, and stock certificate #
      2008
      dated December 17, 2003 in the amount of 10,000,000 share of the Company
      registered to Visioneer Holdings Group, Inc.; (b) upon the second occurrence,
      the Buyer shall have the option to require the officers of the Company to
      promptly submit their resignations as officers of the Company and forego any
      compensation or severance that they may be entitled to. The foregoing shall
      not
      apply to any directors or officers joining the Company after July 3,
      2007.

     

    (s) Obligations.
      Company covenants and agrees that all amounts owed, together with interest
      accrued and accruing thereon, and fees, costs, expenses and other charges
      (collectively, the “Obligations”)
      now or
      hereafter payable by the Company to Buyer under the Convertible Debentures
      and
      all other agreements, contracts, instruments or other items delivered in
      connection therewith (collectively, along with this Agreement and the agreements
      executed in connection herewith, shall be referenced herein as the “Transaction
      Documents”)
      are
      unconditionally owing by the Company to Buyer, without offset, setoff, defense
      or counterclaim of any kind, nature or description whatsoever. All terms of
      the
      Transaction Documents not modified by this Agreement shall remain in full force
      and effect. An event of default under any of the Transaction Document shall
      constitute an Event of Default on all other Transaction Documents.

     

    5. TRANSFER
      AGENT INSTRUCTIONS.

     

    
      
        
        

      

      
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    (a) The
      Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
      agent, and any subsequent transfer agent, irrevocably appointing David Gonzalez,
      Esq. as the Company’s agent for purpose instructing its transfer agent to issue
      certificates or credit shares to the applicable balance accounts at The Deposity
      Trust Company (“DTC”),
      registered in the name of each Buyer or its respective nominee(s), for the
      Conversion Shares and the Warrant Shares issued upon conversion of the
      Convertible Debentures or exercise of the Warrants as specified from time to
      time by each Buyer to the Company upon conversion of the Convertible Debentures
      or exercise of the Warrants. The Company shall not change its transfer agent
      without the express written consent of the Buyers, which may be withheld by
      the
      Buyers in their sole discretion. 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 or Warrant Shares prior to registration of such
      shares under the Securities Act) will be given by the Company to its transfer
      agent, and that the Securities shall otherwise be freely transferable on the
      books and records of the Company as and to the extent provided in this Agreement
      and the other Transaction Documents. If a Buyer effects a sale, assignment
      or
      transfer of the Securities in accordance with Section 2(f), the Company shall
      promptly instruct its transfer agent to issue one or more certificates or credit
      shares to the applicable balance accounts at DTC in such name and in such
      denominations as specified by such Buyer to effect such sale, transfer or
      assignment and, with respect to any transfer, shall permit the transfer. In
      the
      event that such sale, assignment or transfer involves Conversion Shares or
      Warrant Shares sold, assigned or transferred pursuant to an effective
      registration statement or pursuant to Rule 144, the transfer agent shall issue
      such Securities to the Buyer, assignee or transferee, as the case may be,
      without any restrictive legend. 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. 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.

     

    The
      obligation of the Company hereunder to issue and sell the Convertible Debentures
      to the Buyer(s) at the Closing is subject to the satisfaction, at or before
      the
      Closing Date, 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 the Transaction Documents and delivered them 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.

     

    
      
        
        

      

      
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    (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 Date 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 Date. 

     

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

     

    (a) 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:

     

    (i) The
      Company shall have executed the Transaction Documents and delivered the same
      to
      the Buyer(s).

     

    (ii) 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 the
      Conversion Shares issuable upon the conversion of the Convertible Debentures
      shall be approved by the OTCBB. 

     

    (iii) 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 Date
      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 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 Date. If requested by the Buyer, the Buyer
      shall have received a certificate, executed by the President of the Company,
      dated as of the Closing Date, 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 Date regarding the representation
      contained in Section 3(c) above.

     

    (iv) 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.

     

    (v) The
      Buyer(s) shall have received an opinion of counsel from Arnstein
      & Lehr LLP
      in a
      form satisfactory to the Buyer(s).

     

    (vi) 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.

     

    
      
        
        

      

      
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    (vii) The
      Company shall have delivered to the Escrow Agent the Pledged Shares as well
      executed and medallion guaranteed stock bond powers as required pursuant to
      the
      Pledge and Escrow Agreement.

     

    (viii) The
      Company shall have provided to the Buyer an acknowledgement, to the satisfaction
      of the Buyer, from the Company’s independent certified public accountants as to
      its ability to provide all consents required in order to file a registration
      statement in connection with this transaction.

     

    (ix) 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. 

     

    (x) 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.

     

    (xi) The
      Company shall have reset the exercise price of Warrants TLPE-005, TLPE-006,
      TLPE-007, TLPE-008 to an exercise price of $0.03 (or subsequently adjusted
      as
      provided in Section 8 of each of the warrants). Buyers shall continue to have
      “piggy back” registration rights with respect to the shares of common stock
      underlying the warrants and the right to demand the registration of the shares
      underlying the warrants by providing the Company with thirty (30) days advance
      written notice of such request in accordance with the Investor Registration
      Rights Agreement between Cornell and the Company dated July 28, 2006.

     

    (xii) The
      Company shall have reset the Fixed Conversion Price (as defined in the Debenture
      issued pursuant to the Securities Purchase Agreement between Cornell and the
      Company dated July 28, 2006 (the “July Debenture”) of $0.20 to $0.035 and the
      interest rate shall be reset to 14% (or as subsequently adjusted pursuant to
      the
      terms of the July Debenture). In connection herewith, the Buyers agree to waive
      its right to receive the Mandatory Redemption Amount (as such term is defined
      in
      the July Debenture) pursuant to the July Debenture. Said Mandatory Redemption
      payments shall resume on February 2nd
      2009.

     

    (xiii) The
      Company shall have delivered to the Buyer a statements of it’s cash position as
      of the date of Closing. 

     

    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 “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 parties
      hereto, 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.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (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:

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to the Company, to:

            	
              Teleplus
                World Corp. 

            
	 	
              6101
                Blue Lagoon Drive, Suite 450

            
	 	
              Miami,
                Florida 33126

            
	 	
              Attention: Marius
                Silvasan, CEO

            
	 	
              Telephone: (786)
                594-3939

            
	 	
              Facsimile: (786
                ) 594-3920 

            
	 	 
	
              With
                a copy to:

            	
              Arnstein
                & Lehr LLP

            
	 	
              120
                South Riverside Plaza, Suite 1200 

            
	 	
              Chicago,
                Illinois 60606-3910

            
	 	
              Attention: Jerold
                N. Siegan, Esq.

            
	 	
              Telephone: (312)
                876-7874

            
	 	
              Facsimile: (312)
                876-6274

            
	 	 

    

    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.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (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 by the Company pursuant to this Section 9(l),
      the Company shall remain obligated to reimburse the Buyer(s) for the fees and
      expenses of Yorkville Advisors Management, LLC 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]

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

    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
                WORLD, CORP. 

            
	 	 
	 	
              By:

              
                
      

            
	 	
              Name: Marius
                Silvasan

            
	 	
              Title: CEO

            
	 	 

    

    

    

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    FORM
      OF INVESTOR REGISTRATION RIGHTS AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    SECURITY
      AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

    PLEDGE
      AND ESCROW AGREEMENT

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    IRREVOCABLE
      TRANSFER AGENT INSTRUCTIONS

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      E

    

    SUBSIDIARY
      SECURITY AGREEMENTS

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      F

    

    DISCLOSURE
      SCHEDULE

     

    Proposed
      Tax Assessment:
      3577996
      Canada, Inc. which the Company had acquired substantially all of their assets,
      is involved in proceedings with the Minister of Revenue of Quebec (“MRQ”). The
      MRQ has proposed an assessment for the Goods and Services Tax (“GST”) and Quebec
      Sales Tax (“QST”) of approximately $642,000 (CND $) and penalties of
      approximately $110,000 (CND $). The proposed tax assessment including penalties
      is for $322,000 (CND $) for QST and $320,000 (CND $) for GST. In mid to late
      2006, the MRQ issued Amended Reassessments after the Company contested. These
      amounts were reduced (including penalties) to approximately QST $350,000 (CND
      $)
      and GST $308,000 (CND $). The Company again contested these Amended
      Reassessments and believes that certain deductions initially disallowed by
      the
      MRQ for the QST are deductible and is in the process of compiling the deductions
      to the MRQ. 

    

    Wrongful
      Dismissal:
      A
      former employee of a subsidiary of the Company, has instigated a claim in Quebec
      Superior Court in the amount of $90,000 (CND $) against the Company for wrongful
      dismissal. The Company does not believe the claim to be founded and intends
      to
      vigorously contest such claim. The parties are in the discovery stages with
      no
      further action exisitng. 

    

    Wrongful
      Dismissal:
      There
      is a claim from three individuals in British Columbia in the amount of
      approximately $147,000 and the issuance of 510,00 shares of common stock for
      which a letter of demand has been served to the Company. The Company does not
      believe the claim to be founded and intends to vigorously contest such claim.
      No
      court proceedings have been instituted and the Company has been in discussions
      with the aforementioned individuals; the individuals have not been responsive
      to
      offers of settlement.

    

    Consulting
      Fee:
      On
      April 13, 2005, a lawsuit was filed in the United States District Court,
      District of New Jersey (Newark) (Case No. 05-2058) by Howard Salamon d/b/a
      “Salamon Brothers” (as the plaintiff) against the Company. This matter arises
      out of an alleged agreement between the plaintiff and the Company. The plaintiff
      is seeking specific performance of the alleged agreement, monetary damages
      and a
      declaratory judgment for the payment of a commission allegedly due to the
      plaintiff in an amount equal to 10% of all funds received by the Company from
      Cornell. The Company has filed a counterclaim against the plaintiff seeking
      rescission of the alleged agreement and a refund of $100,000 paid by the Company
      to the plaintiff. The Company believes that this lawsuit is without merit,
      that
      the plaintiff’s claims are unfounded and that the Company has good defenses
      against the claims asserted by the plaintiff. The Company also believes that
      it
      has good claims for the rescission of the alleged agreement and for the refund
      of the amount paid to the plaintiff and is vigorously defending the case. The
      parties are in the process of discovery. 

    

    Breach
      of contract: Former
      landlord of leased office space in Montreal, Quebec has filed lawsuit in
      Montreal, Quebec against the Company. The Company effectively terminated the
      lease March 31, 2007 and is reviewing the merits of said lawsuit and will
      vigorously defend the case. 

    

    The
      following claim has been instigated by the Company:

    

    A
      subsidiary of the Company has instigated a claim against Wal-Mart Canada Corp.
      on September 23, 2004 in the Ontario Superior Court of Justice in Toronto,
      Ontario, Canada in the amount of approximately $7,000,000 (CDN $) for breach
      of
      an agreement between the parties. The parties are attempting to settle the
      matter.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    On
      February 1, 2007 the Company’s subsidiary, Teleplus Wireless, Corp. d/b/a
      Liberty Wireless (“Liberty”) filed a lawsuit against Mobile Technology Services,
      LLC (“MTS”) alleging that MTS had breached a number of provisions of the Mobile
      Virtual Network Enabler (“MVNE Agreement”) Services Agreement between Liberty
      and MTS, despite repeated attempts by Liberty requesting that MTS cure all
      the
      breaches under the MVNE Agreement. The lawsuit was filed in the U.S. District
      Court for the Southern District of Florida. Currently, Liberty has alleged
      damages in the amount of approximately $975,000. MTS has since filed a
      counterclaim alleging breach of the MVNE Agreement for failure to pay invoices
      that have been contested by Liberty.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYERS 

    

    
      	
              Name

            	
              Signature

            	
              Address/Facsimile
                

              Number
                of Buyer

            	
              Amount
                of Subscription

            
	 	 	 	 
	 	 	 	 
	
              Cornell
                Capital Partners, LP

            	
              By: Yorkville
                Advisors, LLC

            	
              101
                Hudson Street - Suite 3700

            	
              $3,000,000

            
	 	
              Its: General
                Partner

            	
              Jersey
                City, NJ 07303

            	 
	 	 	
              Facsimile: (201)
                985-8266

            	 
	 	 	 	 
	 	
              By: 

              
                
  

            	 	 
	 	
              Name: Mark
                Angelo

            	 	 
	 	
              Its: Portfolio
                Manager

            	 	 
	 	 	 	 
	
              With
                a copy to: 

            	
              David
                Gonzalez, Esq.

            	
              101
                Hudson Street - Suite 3700

            	 
	 	 	
              Jersey
                City, NJ 07302

            	 
	 	 	
              Facsimile:
                (201) 985-8266

            	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      4(q)

    

    TARGETS
      SCHEDULE

    

    

    1.
      Operating Income as outlined in the Company’s K and Qs plus depreciation and
      amortization:

    A.
      $18,490 of 2nd
      Quarter
      2007

    B.
      $107,632 of 3rd
      Qtr 2007

    C.
      $198,398 of 4th
      Qtr 2007

    D.
      $67,065 of 1st
      Qtr
      2008

    E.
      $448,126 of 2nd
      Qtr
      2008

    F.
      $668,339 of 3rd
      Qtr
      2008

    G.
      $861,350 of 4th
      Qtr
      2008

    

    2.
      Cash
      Provided by (Used in) Operating Activities as outlined in the Company’s K and
      Qs:

    A.
      ($314,491) of 2nd
      Quarter
      2007

    B.
      ($296,099) of 3rd
      Qtr 2007

    C.
      ($12,471) of 4th
      Qtr 2007

    D.
      $213,776 of 1st
      Qtr
      2008

    E.
      $392,047 of 2nd
      Qtr
      2008

    F.
      $615,593 of 3rd
      Qtr
      2008

    G.
      $572,915 of 4th
      Qtr
      2008

    

    
      
        
        

      

      
        2

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