Document:

Exhibit 10.4

                     INVESTOR REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION  RIGHTS AGREEMENT (this  "Agreement"),  dated as of July
28, 2006, by and among TELEPLUS  ENTERPRISES,  INC., a Nevada  corporation  (the
"Company"),  and the undersigned  investors listed on Schedule I attached hereto
(each, an "Investor" and collectively, the "Investors").

      WHEREAS:

      A. In connection with the Securities  Purchase  Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"),  the
Company  has  agreed,  upon the  terms  and  subject  to the  conditions  of the
Securities  Purchase  Agreement,  to  issue  and sell to the  Investors  secured
convertible debentures (the "Convertible Debentures") which shall be convertible
into that number of shares of the Company's  common stock,  par value $0.001 per
share (the "Common  Stock"),  pursuant to the terms of the  Securities  Purchase
Agreement  for an  aggregate  purchase  price  of up to  Three  Million  Dollars
($3,000,000).  Capitalized  terms not  defined  herein  shall  have the  meaning
ascribed to them in the Securities Purchase Agreement.

      B. To induce the Investors to execute and deliver the Securities  Purchase
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act of 1933, as amended,  and the rules and  regulations  there
under, or any similar successor statute  (collectively,  the "Securities  Act"),
and applicable state securities laws.

      NOW, THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency  of which are hereby  acknowledged,  the Company  and the  Investors
hereby agree as follows:

DEFINITIONS.
------------

      As used in this  Agreement,  the following  terms shall have the following
meanings:

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

"Register," "registered," and "registration" refer to a registration effected by
preparing and filing one or more  Registration  Statements (as defined below) in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule  providing for offering  securities on a continuous or
delayed basis ("Rule 415"),  and the declaration or ordering of effectiveness of
such  Registration  Statement(s)  by the United States  Securities  and Exchange
Commission (the "SEC").

"Registrable  Securities"  means  the  shares of Common  Stock  issuable  to the
Investors  upon  conversion  of  the  Convertible  Debentures  pursuant  to  the
Securities Purchase Agreement,  the Warrant Shares and the Commitment Shares, as
these  terms are defined in the  Securities  Purchase  Agreement  dated the date
hereof.

"Registration Statement" means a registration statement under the Securities Act
which covers the Registrable Securities.

<PAGE>

REGISTRATION.
-------------

Subject to the terms and conditions of this Agreement, the Company shall prepare
and file, no later than thirty (30) days from the date the Investors provide the
Company with a written demand (the  "Demand")  registration  of the  Registrable
Securities  (the  "Scheduled  Filing  Deadline"),  with  the SEC a  registration
statement on Form S-1 or SB-2 (or, if the Company is then eligible, on Form S-3)
under the Securities Act (the "Initial  Registration  Statement") for the resale
by  the  Investors  of the  Registrable  Securities,  which  includes  at  least
100,000,000  shares  of  Common  Stock  to be  issued  upon  conversion  of  the
Convertible  Debentures,  30,000,000  shares of Common  Stock to be issued  upon
exercise of the  Warrants  of even date  herewith  and 400,000  shares of Common
Stock as and for the Commitment Shares. The Company shall cause the Registration
Statement to remain effective until all of the Registrable  Securities have been
sold.  Prior to the  filing  of the  Registration  Statement  with the SEC,  the
Company  shall  furnish  a copy of the  Initial  Registration  Statement  to the
Investors for their review and comment.  The Investors shall furnish comments on
the Initial Registration  Statement to the Company within twenty-four (24) hours
of the receipt thereof from the Company.

Effectiveness of the Initial Registration  Statement.  The Company shall use its
best efforts (i) to have the Initial  Registration  Statement declared effective
by the SEC no later  than one  hundred  thirty  (130)  days from the date of the
Demand (the "Scheduled  Effective Deadline") and (ii) to insure that the Initial
Registration  Statement and any  subsequent  Registration  Statement  remains in
effect until all of the Registrable  Securities  have been sold,  subject to the
terms and conditions of this Agreement.  Following the Demand for  registration,
it shall be an event of default hereunder if the Initial Registration  Statement
is not filed by the  Scheduled  Filing Date or declared  effective by the SEC by
the Scheduled Effective Deadline.

Failure to File or Obtain  Effectiveness of the Registration  Statement.  In the
event the  Registration  Statement is not filed by the Scheduled Filing Deadline
or is not  declared  effective by the SEC on or before the  Scheduled  Effective
Deadline, or if after the Registration  Statement has been declared effective by
the SEC, sales cannot be made pursuant to the  Registration  Statement  (whether
because of a failure to keep the Registration  Statement  effective,  failure to
disclose such  information  as is necessary for sales to be made pursuant to the
Registration Statement, failure to register sufficient shares of Common Stock or
otherwise  then as partial  relief for the damages to any holder of  Registrable
Securities  by reason of any such delay in or  reduction  of its ability to sell
the  underlying  shares of Common Stock (which  remedy shall not be exclusive of
any other  remedies at law or in equity),  the  Company  will pay as  liquidated
damages (the "Liquidated Damages") to the holder, at the holder's option, either
a cash amount or shares of the Company's  Common Stock within three (3) business
days, after demand therefore,  equal to two percent (2%) of the liquidated value
of the Convertible  Debentures outstanding as Liquidated Damages for each thirty
(30) day period after the Scheduled  Filing Deadline or the Scheduled  Effective
Date as the case may be.

Liquidated  Damages.  The Company and the Investor hereto  acknowledge and agree
that the sums payable under  subsection 2(c) above shall  constitute  liquidated
damages  and not  penalties  and are in  addition  to all  other  rights  of the
Investor, including the right to call a default. The parties further acknowledge
that (i) the amount of loss or damages  likely to be incurred is incapable or is
difficult to precisely estimate,  (ii) the amounts specified in such subsections
bear  a   reasonable   relationship   to,   and  are  not   plainly  or  grossly
disproportionate  to, the probable loss likely to be incurred in connection with
any  failure  by the  Company  to  obtain or  maintain  the  effectiveness  of a
Registration  Statement,  (iii)  one of the  reasons  for  the  Company  and the
Investor  reaching an agreement as to such amounts was the  uncertainty and cost
of litigation regarding the question of actual damages, and (iv) the Company and
the Investor are  sophisticated  business  parties and have been  represented by
sophisticated  and able legal  counsel and  negotiated  this  Agreement at arm's
length.

RELATED OBLIGATIONS.
--------------------

The Company shall keep the Registration Statement effective pursuant to Rule 415
at all  times  until  the date on which  the  Investor  shall  have sold all the
Registrable Securities covered by such Registration Statement (the "Registration
Period"),  which Registration Statement (including any amendments or supplements
thereto  and  prospectuses  contained  therein)  shall not  contain  any  untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated  therein,  or necessary to make the statements  therein,  in light of the
circumstances in which they were made, not misleading.

The  Company  shall  prepare  and file with the SEC such  amendments  (including
post-effective  amendments) and supplements to a Registration  Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may
be necessary to keep such Registration  Statement  effective at all times during
the Registration Period, and, during such period,  comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration  Statement until such time as all of
such  Registrable  Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such  Registration  Statement.  In the case of amendments  and  supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including  pursuant to this Section 3(b)) by reason of the  Company's  filing a
report on Form 10-KSB, Form 10-QSB or Form 8-K or any analogous report under the
Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),  the Company
shall incorporate such report by reference into the Registration  Statement,  if
applicable,  or shall file such  amendments or  supplements  with the SEC on the
same day on which the Exchange Act report is filed which created the requirement
for the Company to amend or supplement the Registration Statement.

                                       2
<PAGE>

The Company shall  furnish to each Investor  whose  Registrable  Securities  are
included in any  Registration  Statement,  without charge,  (i) at least one (1)
copy of such  Registration  Statement  as declared  effective by the SEC and any
amendment(s)  thereto,   including  financial  statements  and  schedules,   all
documents  incorporated therein by reference,  all exhibits and each preliminary
prospectus,  (ii) ten (10)  copies  of the  final  prospectus  included  in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may  reasonably  request) and (iii) such other
documents as such Investor may reasonably  request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such Investor.

The  Company  shall  use its  best  efforts  to (i)  register  and  qualify  the
Registrable  Securities  covered by a  Registration  Statement  under such other
securities or "blue sky" laws of such  jurisdictions in the United States as any
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments  (including  post-effective   amendments)  and  supplements  to  such
registrations   and   qualifications   as  may  be  necessary  to  maintain  the
effectiveness  thereof  during the  Registration  Period,  (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times  during  the  Registration  Period,  and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable  Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required  in  connection  therewith  or as a  condition  thereto to (w) make any
change to its articles of incorporation  or by-laws,  (x) qualify to do business
in any jurisdiction  where it would not otherwise be required to qualify but for
this  Section  3(d),  (y)  subject  itself  to  general  taxation  in  any  such
jurisdiction,  or (z) file a general  consent  to service of process in any such
jurisdiction.  The  Company  shall  promptly  notify  each  Investor  who  holds
Registrable  Securities of the receipt by the Company of any  notification  with
respect to the suspension of the  registration  or  qualification  of any of the
Registrable  Securities  for sale under the securities or "blue sky" laws of any
jurisdiction  in the  United  States  or its  receipt  of  actual  notice of the
initiation or threat of any proceeding for such purpose.

As promptly as practicable  after  becoming aware of such event or  development,
the Company  shall notify each Investor in writing of the happening of any event
as a result of which the  prospectus  included in a Registration  Statement,  as
then in effect,  includes an untrue  statement of a material fact or omission to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading  (provided  that in no  event  shall  such  notice  contain  any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such  supplement or amendment to each  Investor.  The
Company  shall  also  promptly  notify  each  Investor  in  writing  (i)  when a
prospectus or any  prospectus  supplement or  post-effective  amendment has been
filed,  and when a Registration  Statement or any  post-effective  amendment has
become effective  (notification of such effectiveness shall be delivered to each
Investor  by  facsimile  on the  same  day of such  effectiveness),  (ii) of any
request by the SEC for amendments or supplements to a Registration  Statement or
related prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective  amendment to a Registration Statement would
be appropriate.

The Company shall use its best efforts to prevent the issuance of any stop order
or  other  suspension  of  effectiveness  of a  Registration  Statement,  or the
suspension of the qualification of any of the Registrable Securities for sale in
any  jurisdiction  within the United  States of America and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible moment and to notify each Investor who holds  Registrable
Securities  being sold of the issuance of such order and the resolution  thereof
or its receipt of actual notice of the  initiation  or threat of any  proceeding
for such purpose.

At the  reasonable  request of any  Investor,  the Company shall furnish to such
Investor,  on the date of the  effectiveness of the  Registration  Statement and
thereafter from time to time on such dates as an Investor may reasonably request
(i) a letter, dated such date, from the Company's  independent  certified public
accountants  in form  and  substance  as is  customarily  given  by  independent
certified public accountants to underwriters in an underwritten public offering,
and (ii) an opinion,  dated as of such date, of counsel representing the Company
for purposes of such Registration  Statement, in form, scope and substance as is
customarily  given  in  an  underwritten  public  offering,   addressed  to  the
Investors.

The Company shall make available for inspection by (i) any Investor and (ii) one
(1) firm of accountants or other agents retained by the Investors (collectively,
the  "Inspectors")  all  pertinent  financial and other  records,  and pertinent
corporate documents and properties of the Company (collectively, the "Records"),
as shall be  reasonably  deemed  necessary  by each  Inspector,  and  cause  the
Company's officers,  directors and employees to supply all information which any
Inspector may reasonably request;  provided,  however, that each Inspector shall
agree, and each Investor hereby agrees,  to hold in strict  confidence and shall
not make any  disclosure  (except  to an  Investor)  or use any  Record or other
information which the Company  determines in good faith to be confidential,  and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a  misstatement  or omission in
any  Registration  Statement or is otherwise  required under the Securities Act,
(b) the release of such Records is ordered  pursuant to a final,  non-appealable
subpoena or order from a court or government body of competent jurisdiction,  or
(c) the  information  in such Records has been made  generally  available to the
public other than by disclosure  in violation of this or any other  agreement of
which the Inspector and the Investor has knowledge. Each Investor agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, the Records deemed confidential.

                                       3
<PAGE>

The Company shall hold in confidence  and not make any disclosure of information
concerning  an Investor  provided to the Company  unless (i)  disclosure of such
information is necessary to comply with federal or state  securities  laws, (ii)
the  disclosure  of  such  information  is  necessary  to  avoid  or  correct  a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such   information   is  ordered   pursuant  to  a  subpoena  or  other   final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

The  Company  shall use its best  efforts  either  to cause all the  Registrable
Securities  covered  by a  Registration  Statement  (i)  to be  listed  on  each
securities  exchange on which  securities  of the same class or series issued by
the  Company  are  then  listed,  if any,  if the  listing  of such  Registrable
Securities  is then  permitted  under  the  rules of such  exchange  or (ii) the
inclusion for quotation on the National Association of Securities Dealers,  Inc.
OTC Bulletin Board for such  Registrable  Securities.  The Company shall pay all
fees and  expenses in  connection  with  satisfying  its  obligation  under this
Section 3(j).

The Company shall cooperate with the Investors who hold  Registrable  Securities
being  offered  and,  to  the  extent  applicable,   to  facilitate  the  timely
preparation  and delivery of certificates  (not bearing any restrictive  legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such  certificates to be in such  denominations or amounts,
as the case may be, as the Investors may  reasonably  request and  registered in
such names as the Investors may request.

The  Company  shall use its best  efforts  to cause the  Registrable  Securities
covered  by the  applicable  Registration  Statement  to be  registered  with or
approved by such other governmental  agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.

The Company shall make  generally  available to its security  holders as soon as
practical,  but not later  than  ninety  (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve (12) month period beginning
not later than the first day of the Company's  fiscal quarter next following the
effective date of the Registration Statement.

                                       4
<PAGE>

The Company shall  otherwise use its best efforts to comply with all  applicable
rules and regulations of the SEC in connection with any registration hereunder.

Within  two (2)  business  days  after a  Registration  Statement  which  covers
Registrable  Securities  is declared  effective  by the SEC,  the Company  shall
deliver,  and shall  cause legal  counsel  for the  Company to  deliver,  to the
transfer  agent for such  Registrable  Securities  (with copies to the Investors
whose  Registrable  Securities  are  included  in such  Registration  Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

The Company shall take all other  reasonable  actions  necessary to expedite and
facilitate  disposition by the Investors of Registrable Securities pursuant to a
Registration Statement.

OBLIGATIONS OF THE INVESTORS.
-----------------------------

      Each Investor  agrees that, upon receipt of any notice from the Company of
the  happening  of any event of the kind  described in Section 3(f) or the first
sentence of 3(e),  such Investor will  immediately  discontinue  disposition  of
Registrable  Securities pursuant to any Registration  Statement(s) covering such
Registrable  Securities  until  such  Investor's  receipt  of the  copies of the
supplemented  or amended  prospectus  contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required.  Notwithstanding anything to
the contrary,  the Company shall cause its transfer agent to deliver  unlegended
certificates  for  shares of Common  Stock to a  transferee  of an  Investor  in
accordance  with the terms of the  Securities  Purchase  Agreement in connection
with any sale of  Registrable  Securities  with respect to which an Investor has
entered  into a contract  for sale prior to the  Investor's  receipt of a notice
from the Company of the happening of any event of the kind  described in Section
3(f) or the  first  sentence  of 3(e) and for  which  the  Investor  has not yet
settled.

EXPENSES OF REGISTRATION.
-------------------------

      All  expenses  incurred  in  connection  with  registrations,  filings  or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration,  listing and qualifications fees,  printers,  legal and accounting
fees shall be paid by the Company.

INDEMNIFICATION.
----------------

      With  respect  to   Registrable   Securities   which  are  included  in  a
Registration Statement under this Agreement:

To the fullest  extent  permitted  by law,  the Company  will,  and hereby does,
indemnify,  hold harmless and defend each  Investor,  the  directors,  officers,
partners,  employees,  agents,  representatives of, and each Person, if any, who
controls any Investor  within the meaning of the  Securities Act or the Exchange
Act (each,  an  "Indemnified  Person"),  against  any losses,  claims,  damages,
liabilities,  judgments, fines, penalties, charges, costs, reasonable attorneys'
fees,  amounts paid in settlement or expenses,  joint or several  (collectively,
"Claims") incurred in investigating,  preparing or defending any action,  claim,
suit, inquiry,  proceeding,  investigation or appeal taken from the foregoing by
or before any court or governmental,  administrative or other regulatory agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or alleged  untrue  statement  of a  material  fact in a
Registration Statement or any post-effective  amendment thereto or in any filing
made in connection with the  qualification  of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("Blue Sky  Filing"),  or the  omission or alleged  omission to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final  prospectus (as amended or  supplemented,
if the Company files any amendment  thereof or supplement  thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein,  in light of the circumstances  under which
the  statements  therein were made,  not  misleading;  or (iii) any violation or
alleged  violation by the Company of the  Securities  Act, the Exchange Act, any
other law, including,  without limitation, any state securities law, or any rule
or  regulation  there  under  relating  to the offer or sale of the  Registrable
Securities  pursuant to a  Registration  Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively,  "Violations"). The Company shall
reimburse  the  Investors  and each such  controlling  person  promptly  as such
expenses  are  incurred  and  are  due  and  payable,  for  any  legal  fees  or
disbursements or other reasonable  expenses  incurred by them in connection with
investigating  or  defending  any such  Claim.  Notwithstanding  anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section 6(a):  (x) shall not apply to a Claim by an  Indemnified  Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by such Indemnified Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement or any such amendment thereof or supplement thereto;  (y) shall not be
available  to the extent  such Claim is based on a failure  of the  Investor  to
deliver  or to  cause to be  delivered  the  prospectus  made  available  by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(c); and (z) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the  Indemnified  Person  and shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9 hereof.

                                       5
<PAGE>

In connection with a Registration  Statement,  each Investor agrees to severally
and not jointly  indemnify,  hold harmless and defend, to the same extent and in
the same  manner as is set  forth in  Section  6(a),  the  Company,  each of its
directors, each of its officers, employees,  representatives, or agents and each
Person,  if any, who controls the Company  within the meaning of the  Securities
Act or the  Exchange  Act (each an  "Indemnified  Party"),  against any Claim or
Indemnified  Damages  to  which  any of  them  may  become  subject,  under  the
Securities  Act,  the  Exchange  Act or  otherwise,  insofar  as such  Claim  or
Indemnified Damages arise out of or is based upon any Violation, in each case to
the extent, and only to the extent,  that such Violation occurs in reliance upon
and in  conformity  with  written  information  furnished to the Company by such
Investor expressly for use in connection with such Registration Statement;  and,
subject  to  Section  6(d),  such  Investor  will  reimburse  any legal or other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending  any such  Claim;  provided,  however,  that the  indemnity  agreement
contained in this Section 6(b) and the  agreement  with respect to  contribution
contained  in Section 7 shall not apply to  amounts  paid in  settlement  of any
Claim if such  settlement is effected  without the prior written consent of such
Investor, which consent shall not be unreasonably withheld;  provided,  further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified  Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration  Statement.  Such  indemnity  shall remain in full force and effect
regardless of any  investigation  made by or on behalf of such Indemnified Party
and shall  survive the transfer of the  Registrable  Securities by the Investors
pursuant  to Section  9.  Notwithstanding  anything  to the  contrary  contained
herein,  the  indemnification  agreement  contained  in this  Section  6(b) with
respect to any  prospectus  shall not inure to the  benefit  of any  Indemnified
Party if the untrue  statement  or omission of material  fact  contained  in the
prospectus  was corrected and such new prospectus was delivered to each Investor
prior to such Investor's use of the prospectus to which the Claim relates.

Promptly after receipt by an Indemnified  Person or Indemnified Party under this
Section 6 of notice of the  commencement of any action or proceeding  (including
any  governmental  action or  proceeding)  involving a Claim,  such  Indemnified
Person or Indemnified  Party shall,  if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement  thereof,  and the indemnifying party
shall have the right to  participate  in,  and,  to the extent the  indemnifying
party so desires,  jointly with any other  indemnifying party similarly noticed,
to assume control of the defense thereof with counsel  mutually  satisfactory to
the indemnifying  party and the Indemnified  Person or the Indemnified Party, as
the case may be; provided,  however,  that an Indemnified  Person or Indemnified
Party shall have the right to retain its own counsel  with the fees and expenses
of not more than one (1)  counsel  for such  Indemnified  Person or  Indemnified
Party to be paid by the  indemnifying  party,  if, in the reasonable  opinion of
counsel retained by the indemnifying  party, the  representation by such counsel
of the Indemnified  Person or Indemnified Party and the indemnifying party would
be inappropriate  due to actual or potential  differing  interests  between such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel in such proceeding.  The Indemnified  Party or Indemnified  Person shall
cooperate fully with the  indemnifying  party in connection with any negotiation
or  defense  of any such  action  or claim by the  indemnifying  party and shall
furnish to the indemnifying  party all information  reasonably  available to the
Indemnified  Party or Indemnified  Person which relates to such action or claim.
The indemnifying  party shall keep the Indemnified  Party or Indemnified  Person
fully  apprised at all times as to the status of the  defense or any  settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior written
consent;  provided,  however, that the indemnifying party shall not unreasonably
withhold,  delay or condition its consent. No indemnifying party shall,  without
the prior  written  consent  of the  Indemnified  Party or  Indemnified  Person,
consent  to  entry  of any  judgment  or  enter  into  any  settlement  or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified  Party or Indemnified  Person of a
release  from all  liability in respect to such claim or  litigation.  Following
indemnification  as provided  for  hereunder,  the  indemnifying  party shall be
subrogated to all rights of the  Indemnified  Party or  Indemnified  Person with
respect to all third parties,  firms or corporations  relating to the matter for
which  indemnification  has been made. The failure to deliver  written notice to
the indemnifying  party within a reasonable time of the commencement of any such
action  shall  not  relieve  such  indemnifying  party of any  liability  to the
Indemnified  Person or  Indemnified  Party  under this  Section 6, except to the
extent that the  indemnifying  party is prejudiced in its ability to defend such
action.

                                       6
<PAGE>

The  indemnification  required  by  this  Section  6 shall  be made by  periodic
payments  of the  amount  thereof  during  the  course of the  investigation  or
defense, as and when bills are received or Indemnified Damages are incurred.

The indemnity  agreements contained herein shall be in addition to (i) any cause
of  action or  similar  right of the  Indemnified  Party or  Indemnified  Person
against  the  indemnifying  party  or  others,  and  (ii)  any  liabilities  the
indemnifying party may be subject to pursuant to the law.

CONTRIBUTION.
-------------

      To the extent any  indemnification  by an indemnifying party is prohibited
or  limited  by  law,  the  indemnifying   party  agrees  to  make  the  maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable  Securities guilty of fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds  received by
such seller from the sale of such Registrable Securities.

REPORTS UNDER THE EXCHANGE ACT.
-------------------------------

      With a view to making  available to the Investors the benefits of Rule 144
promulgated  under the  Securities  Act or any similar rule or regulation of the
SEC that may at any time permit the Investors to sell  securities of the Company
to the public without registration ("Rule 144") the Company agrees to:

make and keep public  information  available,  as those terms are understood and
defined in Rule 144;

file with the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such  requirements  (it being  understood that nothing herein
shall limit the  Company's  obligations  under  Section  4(c) of the  Securities
Purchase  Agreement)  and the filing of such reports and other  documents as are
required by the applicable provisions of Rule 144; and

furnish to each Investor so long as such Investor owns  Registrable  Securities,
promptly  upon  request,  (i) a written  statement  by the  Company  that it has
complied with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act,  (ii) a copy of the most recent annual or quarterly  report of the
Company and such other reports and documents so filed by the Company,  and (iii)
such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.

                                       7
<PAGE>

AMENDMENT OF REGISTRATION RIGHTS.
---------------------------------

      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only with the written  consent of the Company and Investors
who then  hold at least  two-thirds  (2/3) of the  Registrable  Securities.  Any
amendment or waiver  effected in accordance with this Section 9 shall be binding
upon each Investor and the Company.  No such amendment shall be effective to the
extent  that it  applies to fewer  than all of the  holders  of the  Registrable
Securities.  No consideration shall be offered or paid to any Person to amend or
consent to a waiver or  modification  of any provision of any of this  Agreement
unless the same  consideration  also is  offered  to all of the  parties to this
Agreement.

MISCELLANEOUS.
--------------

A Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable  Securities.  If the Company
receives  conflicting  instructions,  notices or elections  from two (2) or more
Persons with respect to the same Registrable  Securities,  the Company shall act
upon the basis of instructions,  notice or election received from the registered
owner of such Registrable Securities.

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
receipt,  when sent by  facsimile  (provided  confirmation  of  transmission  is
mechanically or electronically generated and kept on file by the sending party);
or (iii)  one (1)  business  day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

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

With Copy to:               Kirkpatrick & Lockhart Nicholson Graham LLP
                            201 S. Biscayne Blvd. - Suite 2000
                            Miami, Florida 33131
                            Attention:   Clayton E. Parker, Esq.
                            Telephone:   (305) 539-3306
                            Facsimile:   (305) 358-7095

If to an  Investor,  to its  address  and  facsimile  number on the  Schedule of
Investors attached hereto, with copies to such Investor's representatives as set
forth on the  Schedule of Investors or to such other  address  and/or  facsimile
number and/or to the  attention of such other person as the recipient  party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written  confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,   waiver  or  other  communication,   (B)
mechanically  or  electronically  generated  by the sender's  facsimile  machine
containing the time, date,  recipient facsimile number and an image of the first
page of such  transmission  or (C)  provided by a courier or  overnight  courier
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

Failure of any party to exercise  any right or remedy  under this  Agreement  or
otherwise,  or delay by a party in  exercising  such right or remedy,  shall not
operate as a waiver thereof.

                                       8
<PAGE>

The laws of the State of New  Jersey  shall  govern all  issues  concerning  the
relative rights of the Company and the Investors as its stockholders.  All other
questions concerning the construction,  validity, enforcement and interpretation
of this  Agreement  shall be governed by the  internal  laws of the State of New
Jersey,  without giving effect to any choice of law or conflict of law provision
or rule  (whether  of the State of New  Jersey or any other  jurisdiction)  that
would cause the application of the laws of any jurisdiction other than the State
of New  Jersey.  Each party  hereby  irrevocably  submits  to the  non-exclusive
jurisdiction  of the  Superior  Courts of the State of New  Jersey,  sitting  in
Hudson  County,  New Jersey and  federal  courts for the  District of New Jersey
sitting Newark,  New Jersey, for the adjudication of any dispute hereunder or in
connection  herewith or with any  transaction  contemplated  hereby or discussed
herein,  and hereby  irrevocably  waives,  and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve  process in any manner  permitted by law.
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.  EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES  NOT TO  REQUEST,  A JURY  TRIAL  FOR  THE  ADJUDICATION  OF ANY  DISPUTE
HEREUNDER  OR IN  CONNECTION  HEREWITH OR ARISING OUT OF THIS  AGREEMENT  OR ANY
TRANSACTION CONTEMPLATED HEREBY.

This Agreement,  the  Irrevocable  Transfer Agent  Instructions,  the Securities
Purchase Agreement and related documents including the Convertible Debenture and
the  Security  Agreement  dated  the  date  hereof  (the  "Security  Agreement")
constitute  the entire  agreement  among the parties  hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This  Agreement,  the  Irrevocable  Transfer Agent  Instructions,  the
Securities  Purchase  Agreement and related documents  including the Convertible
Debenture,  the Escrow Agreement and the Security Agreement  supersede all prior
agreements  and  understandings  among the parties  hereto  with  respect to the
subject matter hereof and thereof.

This  Agreement  shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.

The headings in this  Agreement are for  convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

This Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This  Agreement,  once executed by a party,  may be delivered to the other party
hereto  by  facsimile  transmission  of a copy of  this  Agreement  bearing  the
signature of the party so delivering this Agreement.

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.

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.

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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       9
<PAGE>

      IN WITNESS  WHEREOF,  the parties have caused this  Investor  Registration
Rights Agreement to be duly executed as of day and year first above written.

                                            COMPANY:
                                            TELEPLUS ENTERPRISES, INC.

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

                                       10Exhibit 10.5

                                     WARRANT
                                     -------

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  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 FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                           TELEPLUS ENTERPRISES, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: TLPE-005                                Number of Shares: 5,000,000

Date of Issuance: July 28, 2006

Teleplus  Enterprises,  Inc.,  a  Nevada  corporation  (the  "Company"),  hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged,  CORNELL CAPITAL PARTNERS, LP ("Cornell"), the
registered holder hereof or its permitted assigns,  is entitled,  subject to the
terms set forth  below,  to purchase  from the Company  upon  surrender  of this
Warrant,  at any time or times on or after the date hereof,  but not after 11:59
P.M.  Eastern  Time on the  Expiration  Date (as defined  herein)  Five  Million
(5,000,000)  fully paid and  nonassessable  shares of Common  Stock (as  defined
herein) of the Company (the  "Warrant  Shares") at the exercise  price per share
provided in Section 1(b) below or as subsequently adjusted;  provided,  however,
that in no event shall the holder be entitled  to  exercise  this  Warrant for a
number of Warrant Shares in excess of that number of Warrant Shares which,  upon
giving effect to such  exercise,  would cause the aggregate  number of shares of
Common Stock beneficially owned by the holder and its affiliates to exceed 4.99%
of the outstanding  shares of the Common Stock  following such exercise,  except
within sixty (60) days of the Expiration Date (however,  such restriction may be
waived by Cornell  (but only as to itself and not to any other  holder) upon not
less than 65 days prior notice to the  Company).  For purposes of the  foregoing
provision,  the aggregate number of shares of Common Stock beneficially owned by
the holder and its affiliates shall include the number of shares of Common Stock
issuable upon  exercise of this Warrant with respect to which the  determination
of such  provision is being made, but shall exclude shares of Common Stock which
would be issuable  upon (i)  exercise  of the  remaining,  unexercised  Warrants
beneficially  owned  by the  holder  and its  affiliates  and (ii)  exercise  or
conversion of the unexercised or unconverted  portion of any other securities of
the  Company  beneficially  owned by the holder and its  affiliates  (including,
without  limitation,  any  convertible  notes or preferred  stock)  subject to a
limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein.  Except as set forth in the  preceding  sentence,  for  purposes of this
paragraph,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended.  For purposes of this
Warrant,  in  determining  the number of  outstanding  shares of Common  Stock a
holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company's most recent Form 10-QSB or Form 10-KSB, as the case may be,
(2) a more recent public  announcement by the Company or (3) any other notice by
the Company or its transfer  agent  setting forth the number of shares of Common
Stock  outstanding.  Upon the written  request of any holder,  the Company shall
promptly,  but in no event later than one (1) Business Day following the receipt
of such  notice,  confirm in writing to any such  holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the exercise of Warrants
(as defined below) by such holder and its affiliates  since the date as of which
such number of outstanding shares of Common Stock was reported.

<PAGE>

This  Warrant  is the common  stock  purchase  warrant  (the  "Warrant")  issued
pursuant to the Securities Purchase Agreement  ("Securities Purchase Agreement")
dated the date hereof  between  the Company and the Buyers  listed on Schedule I
thereto.

Definitions.  The  following  words and terms as used in this Warrant shall have
the following meanings:

"Approved Stock Plan" means any employee benefit plan which has been approved by
the  Board  of  Directors  of the  Company,  pursuant  to  which  the  Company's
securities  may be issued to any  employee,  officer or  director  for  services
provided to the Company.

"Business Day" means any day other than  Saturday,  Sunday or other day on which
commercial  banks in the City of New York are  authorized  or required by law to
remain closed.

"Closing Bid Price" means the closing bid price of Common Stock as quoted on the
Principal  Market (as  reported by  Bloomberg  Financial  Markets  ("Bloomberg")
through its "Volume at Price" function).

"Common Stock" means (i) the Company's common stock, par value $0.001 per share,
and (ii) any capital  stock into which such Common Stock shall have been changed
or any capital stock resulting from a reclassification of such Common Stock.

"Event of  Default"  means an event of  default  under the  Securities  Purchase
Agreement or the Convertible Debentures issued in connection therewith.

"Excluded  Securities" means,  provided such security is issued at a price which
is greater than or equal to the arithmetic  average of the Closing Bid Prices of
the Common Stock for the ten (10) consecutive trading days immediately preceding
the date of issuance,  any of the following:  (a) any issuance by the Company of
securities in connection  with a strategic  partnership  or a joint venture (the
primary  purpose of which is not to raise equity  capital),  (b) any issuance by
the Company of securities as consideration  for a merger or consolidation or the
acquisition of a business,  product,  license, or other assets of another person
or entity and (c) options to purchase shares of Common Stock,  provided (I) such
options are issued  after the date of this  Warrant to  employees of the Company
within  thirty (30) days of such  employee's  starting his  employment  with the
Company,  and  (II) the  exercise  price of such  options  is not less  than the
Closing Bid Price of the Common Stock on the date of issuance of such option.

                                       2
<PAGE>

"Expiration  Date" means the date three (3) years from the Issuance Date of this
Warrant or, if such date falls on a Saturday, Sunday or other day on which banks
are required or  authorized to be closed in the City of New York or the State of
New York or on which  trading does not take place on the  Principal  Exchange or
automated  quotation  system on which the Common Stock is traded (a  "Holiday"),
the next date that is not a Holiday.

"Issuance Date" means the date hereof.

"Options"  means any rights,  warrants or options to  subscribe  for or purchase
Common Stock or Convertible Securities.

"Other  Securities"  means (i) those options and warrants of the Company  issued
prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the shares
of Common Stock issuable on exercise of such options and warrants, provided such
options and warrants are not amended after the Issuance Date of this Warrant and
(iii) the shares of Common Stock issuable upon exercise of this Warrant.

"Person" means an individual,  a limited  liability  company,  a partnership,  a
joint venture,  a corporation,  a trust, an  unincorporated  organization  and a
government or any department or agency thereof.

"Principal  Market"  means  the New York  Stock  Exchange,  the  American  Stock
Exchange,  the Nasdaq National Market, the Nasdaq SmallCap Market,  whichever is
at the time the principal  trading exchange or market for such security,  or the
over-the-counter  market on the  electronic  bulletin board for such security as
reported by  Bloomberg  or, if no bid or sale  information  is reported for such
security by Bloomberg,  then the average of the bid prices of each of the market
makers for such  security  as  reported  in the "pink  sheets"  by the  National
Quotation Bureau, Inc.

"Securities Act" means the Securities Act of 1933, as amended.

"Warrant"  means this Warrant and all Warrants  issued in exchange,  transfer or
replacement thereof.

"Warrant Exercise Price" shall be $0.11 or as subsequently  adjusted as provided
in Section 8 hereof.  Notwithstanding anything to the contrary, upon an Event of
Default, the Warrant Exercise Price shall be $0.05 (or as subsequently  adjusted
as provided in Section 8 hereof).

"Warrant  Shares"  means the shares of Common  Stock  issuable  at any time upon
exercise of this Warrant.

Other Definitional Provisions.

Except as otherwise  specified herein,  all references herein (A) to the Company
shall be deemed to include the Company's  successors  and (B) to any  applicable
law defined or referred to herein shall be deemed  references to such applicable
law as the same may have been or may be  amended  or  supplemented  from time to
time.

When used in this Warrant,  the words  "herein",  "hereof",  and "hereunder" and
words of similar  import,  shall refer to this Warrant as a whole and not to any
provision of this Warrant,  and the words "Section",  "Schedule",  and "Exhibit"
shall refer to Sections of, and Schedules  and Exhibits to, this Warrant  unless
otherwise specified.

Whenever the context so requires,  the neuter  gender  includes the masculine or
feminine, and the singular number includes the plural, and vice versa.

                                       3
<PAGE>

      EXERCISE OF WARRANT.
      --------------------

Subject to the terms and conditions hereof, this Warrant may be exercised by the
holder hereof then registered on the books of the Company, pro rata as
hereinafter provided, at any time on any Business Day on or after the opening of
business on such Business Day, commencing with the first day after the date
hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by
delivery of a written notice, in the form of the subscription notice attached as
Exhibit A hereto (the "Exercise Notice"), of such holder's election to exercise
this Warrant, which notice shall specify the number of Warrant Shares to be
purchased, payment to the Company of an amount equal to the Warrant Exercise
Price(s) applicable to the Warrant Shares being purchased, multiplied by the
number of Warrant Shares (at the applicable Warrant Exercise Price) as to which
this Warrant is being exercised (plus any applicable issue or transfer taxes)
(the "Aggregate Exercise Price") in cash or wire transfer of immediately
available funds and the surrender of this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction) to a common carrier for overnight delivery to the Company as soon
as practicable following such date ("Cash Basis") or (ii) if at the time of
exercise, the Warrant Shares are not subject to an effective registration
statement or if an Event of Default has occurred, by delivering an Exercise
Notice and in lieu of making payment of the Aggregate Exercise Price in cash or
wire transfer, elect instead to receive upon such exercise the "Net Number" of
shares of Common Stock determined according to the following formula (the
"Cashless Exercise"):

      Net Number = (A x B) - (A x C)
                   -----------------
                           B

            For purposes of the foregoing formula:

            A     = the total  number of Warrant  Shares  with  respect to which
                  this Warrant is then being exercised.

            B     = the  Closing  Bid Price of the  Common  Stock on the date of
                  exercise of the Warrant.

            C     = the Warrant Exercise Price then in effect for the applicable
                  Warrant Shares at the time of such exercise.

      IN THE EVENT OF ANY EXERCISE OF THE RIGHTS  REPRESENTED BY THIS WARRANT IN
COMPLIANCE  WITH THIS SECTION 2, THE COMPANY  SHALL ON OR BEFORE THE FIFTH (5TH)
BUSINESS DAY FOLLOWING THE DATE OF RECEIPT OF THE EXERCISE NOTICE, THE AGGREGATE
EXERCISE PRICE AND THIS WARRANT (OR AN INDEMNIFICATION  UNDERTAKING WITH RESPECT
TO THIS WARRANT IN THE CASE OF ITS LOSS,  THEFT OR DESTRUCTION)  AND THE RECEIPT
OF THE REPRESENTATIONS OF THE HOLDER SPECIFIED IN SECTION 6 HEREOF, IF REQUESTED
BY THE COMPANY (THE "EXERCISE DELIVERY  DOCUMENTS"),  AND IF THE COMMON STOCK IS
DTC ELIGIBLE,  CREDIT SUCH  AGGREGATE  NUMBER OF SHARES OF COMMON STOCK TO WHICH
THE HOLDER SHALL BE ENTITLED TO THE HOLDER'S OR ITS DESIGNEE'S  BALANCE  ACCOUNT
WITH  THE  DEPOSITORY  TRUST  COMPANY;  PROVIDED,  HOWEVER,  IF THE  HOLDER  WHO
SUBMITTED THE EXERCISE NOTICE REQUESTED  PHYSICAL  DELIVERY OF ANY OR ALL OF THE
WARRANT  SHARES,  OR, IF THE COMMON STOCK IS NOT DTC  ELIGIBLE  THEN THE COMPANY
SHALL,  ON OR BEFORE  THE FIFTH  (5TH)  BUSINESS  DAY  FOLLOWING  RECEIPT OF THE
EXERCISE  DELIVERY  DOCUMENTS,  ISSUE  AND  SURRENDER  TO A COMMON  CARRIER  FOR
OVERNIGHT   DELIVERY  TO  THE  ADDRESS  SPECIFIED  IN  THE  EXERCISE  NOTICE,  A
CERTIFICATE,  REGISTERED IN THE NAME OF THE HOLDER,  FOR THE NUMBER OF SHARES OF
COMMON  STOCK TO WHICH THE HOLDER  SHALL BE ENTITLED  PURSUANT TO SUCH  REQUEST.
UPON DELIVERY OF THE EXERCISE NOTICE AND AGGREGATE EXERCISE PRICE REFERRED TO IN
CLAUSE  (I) OR (II)  ABOVE THE  HOLDER OF THIS  WARRANT  SHALL BE DEEMED FOR ALL
CORPORATE  PURPOSES TO HAVE  BECOME THE HOLDER OF RECORD OF THE  WARRANT  SHARES
WITH RESPECT TO WHICH THIS WARRANT HAS BEEN EXERCISED.  IN THE CASE OF A DISPUTE
AS TO THE  DETERMINATION OF THE WARRANT EXERCISE PRICE, THE CLOSING BID PRICE OR
THE  ARITHMETIC  CALCULATION OF THE WARRANT  SHARES,  THE COMPANY SHALL PROMPTLY
ISSUE TO THE HOLDER THE NUMBER OF WARRANT  SHARES THAT IS NOT DISPUTED AND SHALL
SUBMIT THE DISPUTED  DETERMINATIONS OR ARITHMETIC CALCULATIONS TO THE HOLDER VIA
FACSIMILE  WITHIN  ONE (1)  BUSINESS  DAY OF RECEIPT  OF THE  HOLDER'S  EXERCISE
NOTICE.

If the holder and the Company are unable to agree upon the  determination of the
Warrant  Exercise  Price or arithmetic  calculation of the Warrant Shares within
one (1) day of such  disputed  determination  or  arithmetic  calculation  being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed  determination of the Warrant Exercise Price or the Closing Bid
Price to an independent,  reputable investment banking firm or (ii) the disputed
arithmetic  calculation  of  the  Warrant  Shares  to its  independent,  outside
accountant.  The  Company  shall  cause  the  investment  banking  firm  or  the
accountant,  as the case may be, to perform the  determinations  or calculations
and notify the Company  and the holder of the results no later than  forty-eight
(48)  hours  from  the  time  it  receives   the  disputed   determinations   or
calculations.  Such investment  banking firm's or accountant's  determination or
calculation,  as the case may be,  shall be deemed  conclusive  absent  manifest
error.

Unless the rights  represented  by this Warrant shall have expired or shall have
been fully exercised,  the Company shall, as soon as practicable and in no event
later than five (5)  Business  Days after any  exercise  and at its own expense,
issue a new Warrant  identical in all respects to this Warrant  exercised except
it shall represent  rights to purchase the number of Warrant Shares  purchasable
immediately prior to such exercise under this Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is exercised.

                                       4
<PAGE>

No fractional Warrant Shares are to be issued upon any pro rata exercise of this
Warrant,  but rather the number of Warrant  Shares  issued upon such exercise of
this Warrant shall be rounded up or down to the nearest whole number.

If the Company or its Transfer  Agent shall fail for any reason or for no reason
to issue to the holder within ten (10) days of receipt of the Exercise  Delivery
Documents, a certificate for the number of Warrant Shares to which the holder is
entitled or to credit the holder's  balance  account with The  Depository  Trust
Company for such number of Warrant  Shares to which the holder is entitled  upon
the holder's  exercise of this Warrant,  the Company  shall,  in addition to any
other remedies under this Warrant or the Placement  Agent Agreement or otherwise
available to such holder,  pay as  additional  damages in cash to such holder on
each day the  issuance  of such  certificate  for  Warrant  Shares is not timely
effected  an amount  equal to 0.025% of the product of (A) the sum of the number
of Warrant  Shares  not issued to the holder on a timely  basis and to which the
holder is  entitled,  and (B) the Closing Bid Price of the Common  Stock for the
trading day immediately preceding the last possible date which the Company could
have issued such Common Stock to the holder without violating this Section 2.

If within ten (10) days after the  Company's  receipt of the  Exercise  Delivery
Documents,  the  Company  fails to  deliver a new  Warrant to the holder for the
number of Warrant Shares to which such holder is entitled  pursuant to Section 2
hereof,  then, in addition to any other available remedies under this Warrant or
the  Placement  Agent  Agreement,  or otherwise  available  to such holder,  the
Company shall pay as additional damages in cash to such holder on each day after
such  tenth  (10th)  day that such  delivery  of such new  Warrant is not timely
effected in an amount equal to 0.25% of the product of (A) the number of Warrant
Shares  represented by the portion of this Warrant which is not being  exercised
and (B)  the  Closing  Bid  Price  of the  Common  Stock  for  the  trading  day
immediately preceding the last possible date which the Company could have issued
such Warrant to the holder without violating this Section 2.

Forced  Exercise by the Company.  At the option of the Company,  the Company may
force  Cornell to exercise the Warrant at an price equal to $0.20  provided that
(i) the Company's Common Stock is trading at $0.30 or higher for a period of ten
(10)  consecutive  Trading Days  immediately  prior to such  exercise,  (ii) the
trading volume during those ten (10) Trading Days exceeds Four Hundred  Thousand
(400,000)  shares  per day,  (iii) the  Warrant  Shares are  registered  and the
registration  statement is declared  effective and (iv) such forced  exercise by
the  Company  shall  not cause the  aggregate  number of shares of Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding shares of the Common Stock following such exercise.

      COVENANTS AS TO COMMON STOCK.  THE COMPANY HEREBY  COVENANTS AND AGREES AS
FOLLOWS:

This Warrant is, and any Warrants issued in  substitution  for or replacement of
this Warrant will upon issuance be, duly authorized and validly issued.

All  Warrant  Shares  which  may be  issued  upon  the  exercise  of the  rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

During the period  within  which the rights  represented  by this Warrant may be
exercised,  the Company will at all times have  authorized and reserved at least
one hundred  percent  (100%) of the number of shares of Common  Stock  needed to
provide for the exercise of the rights then  represented by this Warrant and the
par  value  of said  shares  will at all  times  be less  than or  equal  to the
applicable  Warrant  Exercise  Price. If at any time the Company does not have a
sufficient  number of shares of Common Stock authorized and available,  then the
Company shall call and hold a special meeting of its  stockholders  within sixty
(60)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

                                       5
<PAGE>

If at any time after the date  hereof  the  Company  shall  file a  registration
statement,  the Company shall include the Warrant Shares issuable to the holder,
pursuant to the terms of this Warrant and shall  maintain,  so long as any other
shares of Common Stock shall be so listed,  such  listing of all Warrant  Shares
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall  so list on each  national  securities  exchange  or  automated  quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital  stock of the Company  issuable  upon the exercise of this Warrant if
and so long as any  shares of the same  class  shall be listed on such  national
securities exchange or automated quotation system.

The Company will not, by amendment of its Articles of  Incorporation  or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of securities,  or any other  voluntary  action,  avoid or seek to
avoid  the  observance  or  performance  of any of the terms to be  observed  or
performed  by it  hereunder,  but will at all times in good faith  assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may  reasonably be requested by the holder of this Warrant in order to
protect the exercise privilege of the holder of this Warrant against dilution or
other  impairment,  consistent  with the tenor and purpose of this Warrant.  The
Company will not increase the par value of any shares of Common Stock receivable
upon the  exercise  of this  Warrant  above the Warrant  Exercise  Price then in
effect,  and (ii) will take all such actions as may be necessary or  appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

This  Warrant  will be binding  upon any  entity  succeeding  to the  Company by
merger,  consolidation  or  acquisition  of  all  or  substantially  all  of the
Company's assets.

                                       6
<PAGE>

      TAXES.  THE  COMPANY  SHALL PAY ANY AND ALL TAXES,  EXCEPT ANY  APPLICABLE
WITHHOLDING,  WHICH MAY BE PAYABLE  WITH RESPECT TO THE ISSUANCE AND DELIVERY OF
WARRANT SHARES UPON EXERCISE OF THIS WARRANT.

      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED HEREIN,  NO HOLDER,  AS SUCH, OF THIS WARRANT SHALL BE ENTITLED TO VOTE
OR RECEIVE  DIVIDENDS OR BE DEEMED THE HOLDER OF SHARES OF CAPITAL  STOCK OF THE
COMPANY  FOR ANY  PURPOSE,  NOR SHALL  ANYTHING  CONTAINED  IN THIS  WARRANT  BE
CONSTRUED  TO CONFER  UPON THE HOLDER  HEREOF,  AS SUCH,  ANY OF THE RIGHTS OF A
STOCKHOLDER OF THE COMPANY OR ANY RIGHT TO VOTE, GIVE OR WITHHOLD CONSENT TO ANY
CORPORATE ACTION (WHETHER ANY REORGANIZATION,  ISSUE OF STOCK,  RECLASSIFICATION
OF STOCK,  CONSOLIDATION,  MERGER,  CONVEYANCE OR OTHERWISE),  RECEIVE NOTICE OF
MEETINGS,  RECEIVE DIVIDENDS OR SUBSCRIPTION RIGHTS, OR OTHERWISE,  PRIOR TO THE
ISSUANCE TO THE HOLDER OF THIS WARRANT OF THE WARRANT  SHARES WHICH HE OR SHE IS
THEN  ENTITLED TO RECEIVE  UPON THE DUE EXERCISE OF THIS  WARRANT.  IN ADDITION,
NOTHING CONTAINED IN THIS WARRANT SHALL BE CONSTRUED AS IMPOSING ANY LIABILITIES
ON SUCH HOLDER TO PURCHASE  ANY  SECURITIES  (UPON  EXERCISE OF THIS  WARRANT OR
OTHERWISE)  OR AS A STOCKHOLDER  OF THE COMPANY,  WHETHER SUCH  LIABILITIES  ARE
ASSERTED BY THE COMPANY OR BY  CREDITORS OF THE  COMPANY.  NOTWITHSTANDING  THIS
SECTION 5, THE COMPANY  WILL  PROVIDE THE HOLDER OF THIS  WARRANT WITH COPIES OF
THE SAME NOTICES AND OTHER  INFORMATION GIVEN TO THE STOCKHOLDERS OF THE COMPANY
GENERALLY, CONTEMPORANEOUSLY WITH THE GIVING THEREOF TO THE STOCKHOLDERS.

      REPRESENTATIONS OF HOLDER.  THE HOLDER OF THIS WARRANT,  BY THE ACCEPTANCE
HEREOF,  REPRESENTS THAT IT IS ACQUIRING THIS WARRANT AND THE WARRANT SHARES FOR
ITS OWN ACCOUNT FOR INVESTMENT  ONLY AND NOT WITH A VIEW TOWARDS,  OR FOR RESALE
IN  CONNECTION  WITH,  THE PUBLIC SALE OR  DISTRIBUTION  OF THIS  WARRANT OR THE
WARRANT  SHARES,  EXCEPT  PURSUANT TO SALES  REGISTERED  OR  EXEMPTED  UNDER THE
SECURITIES ACT; PROVIDED,  HOWEVER,  THAT BY MAKING THE REPRESENTATIONS  HEREIN,
THE HOLDER DOES NOT AGREE TO HOLD THIS WARRANT OR ANY OF THE WARRANT  SHARES FOR
ANY MINIMUM OR OTHER  SPECIFIC  TERM AND  RESERVES  THE RIGHT TO DISPOSE OF THIS
WARRANT AND THE WARRANT  SHARES AT ANY TIME IN ACCORDANCE  WITH OR PURSUANT TO A
REGISTRATION  STATEMENT OR AN EXEMPTION  UNDER THE SECURITIES ACT. THE HOLDER OF
THIS WARRANT FURTHER  REPRESENTS,  BY ACCEPTANCE HEREOF,  THAT, AS OF THIS DATE,
SUCH  HOLDER  IS AN  "ACCREDITED  INVESTOR"  AS  SUCH  TERM IS  DEFINED  IN RULE
501(A)(1) OF REGULATION D PROMULGATED BY THE SECURITIES AND EXCHANGE  COMMISSION
UNDER THE  SECURITIES  ACT (AN  "ACCREDITED  INVESTOR").  UPON  EXERCISE OF THIS
WARRANT THE HOLDER SHALL, IF REQUESTED BY THE COMPANY,  CONFIRM IN WRITING, IN A
FORM SATISFACTORY TO THE COMPANY, THAT THE WARRANT SHARES SO PURCHASED ARE BEING
ACQUIRED  SOLELY FOR THE HOLDER'S OWN ACCOUNT AND NOT AS A NOMINEE FOR ANY OTHER
PARTY,  FOR  INVESTMENT,  AND NOT WITH A VIEW TOWARD  DISTRIBUTION OR RESALE AND
THAT SUCH HOLDER IS AN  ACCREDITED  INVESTOR.  IF SUCH  HOLDER  CANNOT MAKE SUCH
REPRESENTATIONS  BECAUSE  THEY  WOULD  BE  FACTUALLY  INCORRECT,  IT  SHALL BE A
CONDITION TO SUCH  HOLDER'S  EXERCISE OF THIS  WARRANT THAT THE COMPANY  RECEIVE
SUCH OTHER  REPRESENTATIONS  AS THE COMPANY  CONSIDERS  REASONABLY  NECESSARY TO
ASSURE THE COMPANY THAT THE  ISSUANCE OF ITS  SECURITIES  UPON  EXERCISE OF THIS
WARRANT SHALL NOT VIOLATE ANY UNITED STATES OR STATE SECURITIES LAWS.

      OWNERSHIP AND TRANSFER.

The Company  shall  maintain at its principal  executive  offices (or such other
office or agency of the  Company  as it may  designate  by notice to the  holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant has been issued, as well as
the name and  address of each  transferee.  The  Company may treat the person in
whose name any  Warrant is  registered  on the  register as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary, but in all
events  recognizing  any  transfers  made in  accordance  with the terms of this
Warrant.

      ADJUSTMENT  OF WARRANT  EXERCISE  PRICE AND NUMBER OF SHARES.  THE WARRANT
EXERCISE  PRICE AND THE NUMBER OF SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE
OF THIS WARRANT SHALL BE ADJUSTED  FROM TIME TO TIME AS FOLLOWS  (EXCEPT FOR ANY
ISSUANCES TO CORNELL  CAPITAL  PARTNERS,  LP AND OPTIONS GRANTED AND OUTSTANDING
BEFORE JULY 15, 2005 UNDER A BONA FIDE EMPLOYEE STOCK OPTION PLAN OF THE COMPANY
OR ISSUANCES OF RESTRICTED  STOCK IN CONNECTION WITH AN ACQUISITION OR A CAPITAL
RAISE WHICH WAS ENTERED INTO PRIOR TO JULY 15, 2005):

Adjustment  of Warrant  Exercise  Price and Number of Shares  upon  Issuance  of
Common Stock. If and whenever on or after the Issuance Date of this Warrant, the
Company  issues or sells,  or is deemed to have  issued or sold,  any  shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than a price (the "Applicable  Price") equal
to the Warrant  Exercise Price in effect  immediately  prior to such issuance or
sale, then immediately  after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such  consideration  per share.
Upon each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant  Shares  issuable upon exercise of this Warrant shall be adjusted to the
number of shares  determined by multiplying the Warrant Exercise Price in effect
immediately  prior to such  adjustment by the number of Warrant Shares  issuable
upon exercise of this Warrant  immediately prior to such adjustment and dividing
the  product  thereof  by  the  Warrant   Exercise  Price  resulting  from  such
adjustment.

                                       7
<PAGE>

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant  Exercise  Price under  Section 8(a) above,  the following
shall be applicable:

Issuance of Options.  If after the date hereof, the Company in any manner grants
any Options and the lowest  price per share for which one share of Common  Stock
is issuable upon the exercise of any such Option or upon  conversion or exchange
of any convertible  securities issuable upon exercise of any such Option is less
than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For  purposes of this
Section 8(b)(i),  the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of such
Convertible  Securities  shall  be  equal to the sum of the  lowest  amounts  of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the  Option  or upon  conversion  or  exchange  of any  convertible  security
issuable  upon  exercise of such Option.  No further  adjustment  of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  convertible
securities.

Issuance of Convertible Securities. If the Company in any manner issues or sells
any convertible securities and the lowest price per share for which one share of
Common Stock is issuable upon the  conversion  or exchange  thereof is less than
the  Applicable  Price,  then such share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
issuance or sale of such  convertible  securities for such price per share.  For
the purposes of this Section 8(b)(ii),  the lowest price per share for which one
share of Common  Stock is issuable  upon such  conversion  or exchange  shall be
equal to the sum of the lowest  amounts of  consideration  (if any)  received or
receivable  by the Company  with  respect to one share of Common  Stock upon the
issuance or sale of the convertible  security and upon conversion or exchange of
such convertible  security.  No further adjustment of the Warrant Exercise Price
shall be made upon the actual  issuance of such Common Stock upon  conversion or
exchange of such convertible  securities,  and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment
of the  Warrant  Exercise  Price  had been or are to be made  pursuant  to other
provisions of this Section 8(b), no further  adjustment of the Warrant  Exercise
Price shall be made by reason of such issue or sale.

Change in Option Price or Rate of Conversion. If the purchase price provided for
in any Options,  the additional  consideration,  if any, payable upon the issue,
conversion or exchange of any convertible  securities,  or the rate at which any
convertible  securities are convertible  into or  exchangeable  for Common Stock
changes at any time,  the Warrant  Exercise  Price in effect at the time of such
change shall be adjusted to the Warrant  Exercise Price which would have been in
effect at such time had such Options or convertible securities provided for such
changed purchase price, additional  consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
Warrant Shares  issuable upon exercise of this Warrant shall be  correspondingly
readjusted.  For purposes of this Section 8(b)(iii),  if the terms of any Option
or  convertible  security that was  outstanding  as of the Issuance Date of this
Warrant  are  changed  in the  manner  described  in the  immediately  preceding
sentence,  then such Option or convertible  security and the Common Stock deemed
issuable upon exercise,  conversion or exchange  thereof shall be deemed to have
been  issued  as of the date of such  change.  No  adjustment  pursuant  to this
Section 8(b) shall be made if such adjustment would result in an increase of the
Warrant Exercise Price then in effect.

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant Exercise Price under Sections 8(a) and 8(b), the following
shall be applicable:

                                       8
<PAGE>

Calculation  of  Consideration   Received.  If  any  Common  Stock,  Options  or
convertible  securities are issued or sold or deemed to have been issued or sold
for cash,  the  consideration  received  therefore  will be deemed to be the net
amount  received  by the  Company  therefore.  If any Common  Stock,  Options or
convertible  securities are issued or sold for a consideration  other than cash,
the amount of such consideration  received by the Company will be the fair value
of such  consideration,  except where such consideration  consists of marketable
securities,  in which case the amount of  consideration  received by the Company
will be the  market  price of such  securities  on the date of  receipt  of such
securities. If any Common Stock, Options or convertible securities are issued to
the owners of the  non-surviving  entity in connection  with any merger in which
the Company is the surviving entity, the amount of consideration  therefore will
be deemed to be the fair value of such portion of the net assets and business of
the  non-surviving  entity as is attributable  to such Common Stock,  Options or
convertible securities,  as the case may be. The fair value of any consideration
other than cash or securities will be determined  jointly by the Company and the
holders of Warrants  representing at least  two-thirds (b) of the Warrant Shares
issuable  upon exercise of the Warrants  then  outstanding.  If such parties are
unable to reach agreement  within ten (10) days after the occurrence of an event
requiring   valuation  (the   "Valuation   Event"),   the  fair  value  of  such
consideration  will be determined  within five (5) Business Days after the tenth
(10th) day following the Valuation Event by an independent,  reputable appraiser
jointly  selected by the Company  and the  holders of Warrants  representing  at
least  two-thirds  (b) of the  Warrant  Shares  issuable  upon  exercise  of the
Warrants then  outstanding.  The  determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such  appraiser  shall
be borne jointly by the Company and the holders of Warrants.

Integrated  Transactions.  In case any Option is issued in  connection  with the
issue  or sale of other  securities  of the  Company,  together  comprising  one
integrated  transaction in which no specific  consideration is allocated to such
Options by the parties  thereto,  the Options will be deemed to have been issued
for a consideration of $.01.

Treasury Shares.  The number of shares of Common Stock  outstanding at any given
time does not include shares owned or held by or for the account of the Company,
and the  disposition  of any shares so owned or held will be considered an issue
or sale of Common Stock.

Record  Date.  If the Company  takes a record of the holders of Common Stock for
the purpose of  entitling  them (1) to receive a dividend or other  distribution
payable  in  Common  Stock,  Options  or in  convertible  securities  or  (2) to
subscribe for or purchase Common Stock, Options or convertible securities,  then
such  record  date  will be  deemed  to be the date of the  issue or sale of the
shares of Common Stock  deemed to have been issued or sold upon the  declaration
of such  dividend  or the making of such other  distribution  or the date of the
granting of such right of subscription or purchase, as the case may be.

Adjustment of Warrant  Exercise Price upon  Subdivision or Combination of Common
Stock.  If the Company at any time after the date of  issuance  of this  Warrant
subdivides (by any stock split, stock dividend,  recapitalization  or otherwise)
one or more  classes of its  outstanding  shares of Common  Stock into a greater
number of shares, any Warrant Exercise Price in effect immediately prior to such
subdivision will be  proportionately  reduced and the number of shares of Common
Stock  obtainable  upon  exercise  of  this  Warrant  will  be   proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination,  reverse stock split or otherwise) one or more classes
of its outstanding  shares of Common Stock into a smaller number of shares,  any
Warrant Exercise Price in effect  immediately  prior to such combination will be
proportionately  increased  and the  number  of  Warrant  Shares  issuable  upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section  8(d) shall  become  effective at the close of business on the date
the subdivision or combination becomes effective.

Distribution  of Assets.  If the Company  shall  declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common  Stock,  by way of return of capital  or  otherwise  (including,  without
limitation,  any  distribution of cash, stock or other  securities,  property or
options  by  way  of  a   dividend,   spin  off,   reclassification,   corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

any Warrant Exercise Price in effect  immediately prior to the close of business
on the record  date  fixed for the  determination  of  holders  of Common  Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record  date,  to a price  determined  by  multiplying  such
Warrant  Exercise  Price by a fraction of which (A) the  numerator  shall be the
Closing Sale Price of the Common Stock on the trading day immediately  preceding
such  record date minus the value of the  Distribution  (as  determined  in good
faith by the  Company's  Board of  Directors)  applicable to one share of Common
Stock,  and (B) the  denominator  shall be the Closing  Sale Price of the Common
Stock on the trading day immediately preceding such record date; and

                                       9
<PAGE>

either (A) the number of Warrant Shares obtainable upon exercise of this Warrant
shall be increased to a number of shares equal to the number of shares of Common
Stock obtainable  immediately  prior to the close of business on the record date
fixed for the  determination  of holders of Common Stock entitled to receive the
Distribution  multiplied  by the  reciprocal  of the  fraction  set forth in the
immediately  preceding  clause (i), or (B) in the event that the Distribution is
of  common  stock of a  company  whose  common  stock is  traded  on a  national
securities exchange or a national automated quotation system, then the holder of
this Warrant shall receive an additional  warrant to purchase Common Stock,  the
terms of which shall be  identical  to those of this  Warrant,  except that such
warrant shall be exercisable  into the amount of the assets that would have been
payable to the  holder of this  Warrant  pursuant  to the  Distribution  had the
holder exercised this Warrant  immediately prior to such record date and with an
exercise  price equal to the amount by which the exercise  price of this Warrant
was  decreased  with  respect to the  Distribution  pursuant to the terms of the
immediately preceding clause (i).

Certain Events.  If any event occurs of the type  contemplated by the provisions
of this Section 8 but not expressly provided for by such provisions  (including,
without  limitation,  the granting of stock appreciation  rights,  phantom stock
rights or other  rights  with  equity  features),  then the  Company's  Board of
Directors will make an appropriate  adjustment in the Warrant Exercise Price and
the number of shares of Common Stock obtainable upon exercise of this Warrant so
as to protect the rights of the holders of the Warrants; provided, except as set
forth in section 8(d),that no such adjustment pursuant to this Section 8(f) will
increase the Warrant  Exercise  Price or decrease the number of shares of Common
Stock obtainable as otherwise determined pursuant to this Section 8.

Notices.

Immediately  upon any adjustment of the Warrant Exercise Price, the Company will
give written  notice  thereof to the holder of this  Warrant,  setting  forth in
reasonable detail, and certifying, the calculation of such adjustment.

The Company will give written  notice to the holder of this Warrant at least ten
(10) days  prior to the date on which the  Company  closes  its books or takes a
record (A) with respect to any dividend or  distribution  upon the Common Stock,
(B) with respect to any pro rata  subscription  offer to holders of Common Stock
or (C) for  determining  rights to vote with  respect to any Organic  Change (as
defined below), dissolution or liquidation, provided that such information shall
be made known to the public  prior to or in  conjunction  with such notice being
provided to such holder.

The Company will also give written notice to the holder of this Warrant at least
ten (10) days  prior to the date on which any  Organic  Change,  dissolution  or
liquidation will take place,  provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to such
holder.

      PURCHASE RIGHTS; REORGANIZATION,  RECLASSIFICATION,  CONSOLIDATION, MERGER
OR SALE.

In addition to any  adjustments  pursuant to Section 8 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights to
purchase  stock,  warrants,  securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then the holder of
this  Warrant  will be entitled to acquire,  upon the terms  applicable  to such
Purchase  Rights,  the  aggregate  Purchase  Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete  exercise of this Warrant  immediately  before the date on which a
record is taken for the grant,  issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

Any recapitalization,  reorganization, reclassification,  consolidation, merger,
sale of all or  substantially  all of the Company's  assets to another Person or
other  transaction  in each case which is effected in such a way that holders of
Common  Stock are  entitled  to  receive  (either  directly  or upon  subsequent
liquidation)  stock,  securities  or assets with  respect to or in exchange  for
Common  Stock  is  referred  to  herein  as an  "Organic  Change."  Prior to the
consummation of any (i) sale of all or substantially all of the Company's assets
to an acquiring  Person or (ii) other Organic Change following which the Company
is not a surviving  entity,  the Company will secure from the Person  purchasing
such assets or the successor  resulting  from such Organic Change (in each case,
the "Acquiring Entity") a written agreement (in form and substance  satisfactory
to the holders of Warrants representing at least two-thirds (iii) of the Warrant
Shares  issuable upon exercise of the Warrants then  outstanding)  to deliver to
each  holder of  Warrants  in  exchange  for such  Warrants,  a security  of the
Acquiring Entity evidenced by a written instrument substantially similar in form
and  substance to this Warrant and  satisfactory  to the holders of the Warrants
(including an adjusted  warrant exercise price equal to the value for the Common
Stock  reflected  by the  terms  of such  consolidation,  merger  or  sale,  and
exercisable for a corresponding  number of shares of Common Stock acquirable and
receivable  upon exercise of the Warrants  without regard to any  limitations on
exercise, if the value so reflected is less than any Applicable Warrant Exercise
Price immediately  prior to such  consolidation,  merger or sale).  Prior to the
consummation  of any other Organic  Change,  the Company shall make  appropriate
provision  (in  form and  substance  satisfactory  to the  holders  of  Warrants
representing  a majority of the Warrant  Shares  issuable  upon  exercise of the
Warrants  then  outstanding)  to insure that each of the holders of the Warrants
will  thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the Warrant Shares immediately  theretofore issuable and
receivable  upon the exercise of such holder's  Warrants  (without regard to any
limitations on exercise),  such shares of stock, securities or assets that would
have been  issued or  payable  in such  Organic  Change  with  respect  to or in
exchange  for the number of Warrant  Shares  which would have been  issuable and
receivable  upon the  exercise of such  holder's  Warrant as of the date of such
Organic Change  (without  taking into account any limitations or restrictions on
the exercisability of this Warrant).

                                       10
<PAGE>

      LOST,  STOLEN,  MUTILATED OR DESTROYED  WARRANT.  IF THIS WARRANT IS LOST,
STOLEN,  MUTILATED OR DESTROYED,  THE COMPANY SHALL  PROMPTLY,  ON RECEIPT OF AN
INDEMNIFICATION  UNDERTAKING  (OR,  IN THE  CASE  OF A  MUTILATED  WARRANT,  THE
WARRANT),  ISSUE A NEW WARRANT OF LIKE DENOMINATION AND TENOR AS THIS WARRANT SO
LOST, STOLEN, MUTILATED OR DESTROYED.

      NOTICE. ANY NOTICES, CONSENTS, WAIVERS OR OTHER COMMUNICATIONS REQUIRED OR
PERMITTED  TO BE GIVEN  UNDER THE TERMS OF THIS  WARRANT  MUST BE IN WRITING AND
WILL BE  DEEMED  TO HAVE  BEEN  DELIVERED:  (I)  UPON  RECEIPT,  WHEN  DELIVERED
PERSONALLY;  (II) UPON RECEIPT, WHEN SENT BY FACSIMILE (PROVIDED CONFIRMATION OF
RECEIPT IS  RECEIVED  BY THE  SENDING  PARTY  TRANSMISSION  IS  MECHANICALLY  OR
ELECTRONICALLY  GENERATED AND KEPT ON FILE BY THE SENDING  PARTY);  OR (III) ONE
BUSINESS  DAY AFTER  DEPOSIT  WITH A NATIONALLY  RECOGNIZED  OVERNIGHT  DELIVERY
SERVICE,  IN EACH CASE PROPERLY  ADDRESSED TO THE PARTY TO RECEIVE THE SAME. THE
ADDRESSES AND FACSIMILE NUMBERS FOR SUCH COMMUNICATIONS SHALL BE:

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

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

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

                                       11
<PAGE>

With a copy to:           Kirkpatrick & Lockhart Nicholson Graham, LLP
                          201 South Biscayne Boulevard, Suite 2000
                          Miami, Florida 33131
                          Attention:    Clayton E. Parker, Esquire
                          Telephone:    (305) 539-3306
                          Facsimile:    (305) 358-7095

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth on Exhibit C hereto,  with copies to such holder's  representatives as set
forth on Exhibit C, or at such other address and facsimile as shall be delivered
to the Company upon the issuance or transfer of this  Warrant.  Each party shall
provide  five days'  prior  written  notice to the other  party of any change in
address or facsimile  number.  Written  confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally  recognized  overnight  delivery  service  shall be
rebuttable evidence of personal service,  receipt by facsimile or receipt from a
nationally  recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

                                       12
<PAGE>

      DATE.  THE  DATE OF THIS  WARRANT  IS SET  FORTH  ON PAGE 1  HEREOF.  THIS
WARRANT, IN ALL EVENTS, SHALL BE WHOLLY VOID AND OF NO EFFECT AFTER THE CLOSE OF
BUSINESS  ON  THE  EXPIRATION  DATE,  EXCEPT  THAT   NOTWITHSTANDING  ANY  OTHER
PROVISIONS  HEREOF,  THE PROVISIONS OF SECTION 8(B) SHALL CONTINUE IN FULL FORCE
AND EFFECT AFTER SUCH DATE AS TO ANY WARRANT SHARES OR OTHER  SECURITIES  ISSUED
UPON THE EXERCISE OF THIS WARRANT.

      AMENDMENT AND WAIVER.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS
OF THE  WARRANTS  MAY BE AMENDED  AND THE  COMPANY  MAY TAKE ANY  ACTION  HEREIN
PROHIBITED,  OR OMIT TO PERFORM ANY ACT HEREIN  REQUIRED TO BE  PERFORMED BY IT,
ONLY IF THE COMPANY HAS OBTAINED THE WRITTEN  CONSENT OF THE HOLDERS OF WARRANTS
REPRESENTING AT LEAST TWO-THIRDS OF THE WARRANT SHARES ISSUABLE UPON EXERCISE OF
THE WARRANTS THEN  OUTSTANDING;  PROVIDED THAT, EXCEPT FOR SECTION 8(D), NO SUCH
ACTION MAY INCREASE THE WARRANT  EXERCISE PRICE OR DECREASE THE NUMBER OF SHARES
OR CLASS OF STOCK  OBTAINABLE  UPON EXERCISE OF ANY WARRANT  WITHOUT THE WRITTEN
CONSENT OF THE HOLDER OF SUCH WARRANT.

      DESCRIPTIVE  HEADINGS;  GOVERNING  LAW.  THE  DESCRIPTIVE  HEADINGS OF THE
SEVERAL  SECTIONS AND  PARAGRAPHS  OF THIS WARRANT ARE INSERTED FOR  CONVENIENCE
ONLY AND DO NOT  CONSTITUTE A PART OF THIS WARRANT.  THE  CORPORATE  LAWS OF THE
STATE OF NEW JERSEY SHALL GOVERN ALL ISSUES  CONCERNING  THE RELATIVE  RIGHTS OF
THE  COMPANY  AND  ITS   STOCKHOLDERS.   ALL  OTHER  QUESTIONS   CONCERNING  THE
CONSTRUCTION,  VALIDITY,  ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE  INTERNAL  LAWS OF THE STATE OF NEW  JERSEY,  WITHOUT  GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW JERSEY OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION
OF THE LAWS OF ANY JURISDICTIONS  OTHER THAN THE STATE OF NEW JERSEY. EACH PARTY
HEREBY  IRREVOCABLY  SUBMITS  TO THE  EXCLUSIVE  JURISDICTION  OF THE  STATE AND
FEDERAL COURTS SITTING IN HUDSON COUNTY AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY,  FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR THEREWITH, OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING,  ANY CLAIM THAT IT IS NOT PERSONALLY  SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT,  THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY  IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS  TO PROCESS  BEING  SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER
THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

      WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT  FOR EACH PARTY HERETO TO
ENTER INTO THIS WARRANT,  THE PARTIES  HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL  PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                       13
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
the date first set forth above.

                                            TELEPLUS ENTERPRISES, INC.

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

                                       14
<PAGE>

                              EXHIBIT A TO WARRANT
                              --------------------

                                 EXERCISE NOTICE
                                 ---------------

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                           TELEPLUS ENTERPRISES, INC.

      The   undersigned   holder   hereby   exercises   the  right  to  purchase
______________  of the shares of Common  Stock  ("Warrant  Shares")  of Teleplus
Enterprises,  Inc.  (the  "Company"),  evidenced  by the  attached  Warrant (the
"Warrant").  Capitalized  terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

      Specify Method of exercise by check mark:

      1.    ___ Cash Exercise

            (a)   Payment of Warrant  Exercise  Price.  The holder shall pay the
                  Aggregate  Exercise Price of $______________ to the Company in
                  accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

      2.    ___ Cashless Exercise

            (a)   Payment of Warrant  Exercise  Price. In lieu of making payment
                  of the Aggregate  Exercise Price, the holder elects to receive
                  upon such  exercise  the Net Number of shares of Common  Stock
                  determined in accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:
     ---------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

                                       15
<PAGE>

                              EXHIBIT B TO WARRANT
                              --------------------

                              FORM OF WARRANT POWER
                              ---------------------

      FOR VALUE  RECEIVED,  the  undersigned  does hereby assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares  of  the  capital  stock  of  Teleplus  Enterprises,   Inc.
represented  by  warrant  certificate  no.  _____,  standing  in the name of the
undersigned  on the  books of said  corporation.  The  undersigned  does  hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.

Dated:
      ------------------------

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                       16
<PAGE>

                                     WARRANT
                                     -------

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  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 FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                           TELEPLUS ENTERPRISES, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: TLPE-007                               Number of Shares: 10,000,000

Date of Issuance: July 28, 2006

Teleplus  Enterprises,  Inc.,  a  Nevada  corporation  (the  "Company"),  hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged,  CORNELL CAPITAL PARTNERS, LP ("Cornell"), the
registered holder hereof or its permitted assigns,  is entitled,  subject to the
terms set forth  below,  to purchase  from the Company  upon  surrender  of this
Warrant,  at any time or times on or after the date hereof,  but not after 11:59
P.M.  Eastern  Time on the  Expiration  Date (as  defined  herein)  Ten  Million
(10,000,000)  fully paid and  nonassessable  shares of Common  Stock (as defined
herein) of the Company (the  "Warrant  Shares") at the exercise  price per share
provided in Section 1(b) below or as subsequently adjusted;  provided,  however,
that in no event shall the holder be entitled  to  exercise  this  Warrant for a
number of Warrant Shares in excess of that number of Warrant Shares which,  upon
giving effect to such  exercise,  would cause the aggregate  number of shares of
Common Stock beneficially owned by the holder and its affiliates to exceed 4.99%
of the outstanding  shares of the Common Stock  following such exercise,  except
within sixty (60) days of the Expiration Date (however,  such restriction may be
waived by Cornell  (but only as to itself and not to any other  holder) upon not
less than 65 days prior notice to the  Company).  For purposes of the  foregoing
provision,  the aggregate number of shares of Common Stock beneficially owned by
the holder and its affiliates shall include the number of shares of Common Stock
issuable upon  exercise of this Warrant with respect to which the  determination
of such  provision is being made, but shall exclude shares of Common Stock which
would be issuable  upon (i)  exercise  of the  remaining,  unexercised  Warrants
beneficially  owned  by the  holder  and its  affiliates  and (ii)  exercise  or
conversion of the unexercised or unconverted  portion of any other securities of
the  Company  beneficially  owned by the holder and its  affiliates  (including,
without  limitation,  any  convertible  notes or preferred  stock)  subject to a
limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein.  Except as set forth in the  preceding  sentence,  for  purposes of this
paragraph,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended.  For purposes of this
Warrant,  in  determining  the number of  outstanding  shares of Common  Stock a
holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company's most recent Form 10-QSB or Form 10-KSB, as the case may be,
(2) a more recent public  announcement by the Company or (3) any other notice by
the Company or its transfer  agent  setting forth the number of shares of Common
Stock  outstanding.  Upon the written  request of any holder,  the Company shall
promptly,  but in no event later than one (1) Business Day following the receipt
of such  notice,  confirm in writing to any such  holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the exercise of Warrants
(as defined below) by such holder and its affiliates  since the date as of which
such number of outstanding shares of Common Stock was reported.

                                       17
<PAGE>

This  Warrant  is the common  stock  purchase  warrant  (the  "Warrant")  issued
pursuant to the Securities Purchase Agreement  ("Securities Purchase Agreement")
dated the date hereof  between  the Company and the Buyers  listed on Schedule I
thereto.

Definitions.  The  following  words and terms as used in this Warrant shall have
the following meanings:

"Approved Stock Plan" means any employee benefit plan which has been approved by
the  Board  of  Directors  of the  Company,  pursuant  to  which  the  Company's
securities  may be issued to any  employee,  officer or  director  for  services
provided to the Company.

"Business Day" means any day other than  Saturday,  Sunday or other day on which
commercial  banks in the City of New York are  authorized  or required by law to
remain closed.

"Closing Bid Price" means the closing bid price of Common Stock as quoted on the
Principal  Market (as  reported by  Bloomberg  Financial  Markets  ("Bloomberg")
through its "Volume at Price" function).

"Common Stock" means (i) the Company's common stock, par value $0.001 per share,
and (ii) any capital  stock into which such Common Stock shall have been changed
or any capital stock resulting from a reclassification of such Common Stock.

"Event of  Default"  means an event of  default  under the  Securities  Purchase
Agreement or the Convertible Debentures issued in connection therewith.

"Excluded  Securities" means,  provided such security is issued at a price which
is greater than or equal to the arithmetic  average of the Closing Bid Prices of
the Common Stock for the ten (10) consecutive trading days immediately preceding
the date of issuance,  any of the following:  (a) any issuance by the Company of
securities in connection  with a strategic  partnership  or a joint venture (the
primary  purpose of which is not to raise equity  capital),  (b) any issuance by
the Company of securities as consideration  for a merger or consolidation or the
acquisition of a business,  product,  license, or other assets of another person
or entity and (c) options to purchase shares of Common Stock,  provided (I) such
options are issued  after the date of this  Warrant to  employees of the Company
within  thirty (30) days of such  employee's  starting his  employment  with the
Company,  and  (II) the  exercise  price of such  options  is not less  than the
Closing Bid Price of the Common Stock on the date of issuance of such option.

"Expiration  Date" means the date three (3) years from the Issuance Date of this
Warrant or, if such date falls on a Saturday, Sunday or other day on which banks
are required or  authorized to be closed in the City of New York or the State of
New York or on which  trading does not take place on the  Principal  Exchange or
automated  quotation  system on which the Common Stock is traded (a  "Holiday"),
the next date that is not a Holiday.

                                       18
<PAGE>

"Issuance Date" means the date hereof.

"Options"  means any rights,  warrants or options to  subscribe  for or purchase
Common Stock or Convertible Securities.

"Other  Securities"  means (i) those options and warrants of the Company  issued
prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the shares
of Common Stock issuable on exercise of such options and warrants, provided such
options and warrants are not amended after the Issuance Date of this Warrant and
(iii) the shares of Common Stock issuable upon exercise of this Warrant.

"Person" means an individual,  a limited  liability  company,  a partnership,  a
joint venture,  a corporation,  a trust, an  unincorporated  organization  and a
government or any department or agency thereof.

"Principal  Market"  means  the New York  Stock  Exchange,  the  American  Stock
Exchange,  the Nasdaq National Market, the Nasdaq SmallCap Market,  whichever is
at the time the principal  trading exchange or market for such security,  or the
over-the-counter  market on the  electronic  bulletin board for such security as
reported by  Bloomberg  or, if no bid or sale  information  is reported for such
security by Bloomberg,  then the average of the bid prices of each of the market
makers for such  security  as  reported  in the "pink  sheets"  by the  National
Quotation Bureau, Inc.

"Securities Act" means the Securities Act of 1933, as amended.

"Warrant"  means this Warrant and all Warrants  issued in exchange,  transfer or
replacement thereof.

"Warrant Exercise Price" shall be $0.13 or as subsequently  adjusted as provided
in Section 8 hereof.  Notwithstanding anything to the contrary, upon an Event of
Default, the Warrant Exercise Price shall be $0.05 (or as subsequently  adjusted
as provided in Section 8 hereof).

"Warrant  Shares"  means the shares of Common  Stock  issuable  at any time upon
exercise of this Warrant.

Other Definitional Provisions.

Except as otherwise  specified herein,  all references herein (A) to the Company
shall be deemed to include the Company's  successors  and (B) to any  applicable
law defined or referred to herein shall be deemed  references to such applicable
law as the same may have been or may be  amended  or  supplemented  from time to
time.

When used in this Warrant,  the words  "herein",  "hereof",  and "hereunder" and
words of similar  import,  shall refer to this Warrant as a whole and not to any
provision of this Warrant,  and the words "Section",  "Schedule",  and "Exhibit"
shall refer to Sections of, and Schedules  and Exhibits to, this Warrant  unless
otherwise specified.

Whenever the context so requires,  the neuter  gender  includes the masculine or
feminine, and the singular number includes the plural, and vice versa.

      EXERCISE OF WARRANT.
      --------------------

Subject to the terms and conditions hereof, this Warrant may be exercised by the
holder  hereof  then  registered  on the  books  of the  Company,  pro  rata  as
hereinafter provided, at any time on any Business Day on or after the opening of
business  on such  Business  Day,  commencing  with the first day after the date
hereof,  and prior to 11:59  P.M.  Eastern  Time on the  Expiration  Date (i) by
delivery of a written notice, in the form of the subscription notice attached as
Exhibit A hereto (the "Exercise Notice"),  of such holder's election to exercise
this  Warrant,  which  notice shall  specify the number of Warrant  Shares to be
purchased,  payment to the Company of an amount  equal to the  Warrant  Exercise
Price(s)  applicable to the Warrant  Shares being  purchased,  multiplied by the
number of Warrant Shares (at the applicable  Warrant Exercise Price) as to which
this Warrant is being  exercised  (plus any applicable  issue or transfer taxes)
(the  "Aggregate  Exercise  Price")  in  cash or wire  transfer  of  immediately
available  funds  and the  surrender  of  this  Warrant  (or an  indemnification
undertaking  with  respect  to this  Warrant  in the case of its loss,  theft or
destruction)  to a common carrier for overnight  delivery to the Company as soon
as  practicable  following  such date  ("Cash  Basis") or (ii) if at the time of
exercise,  the  Warrant  Shares  are not  subject to an  effective  registration
statement  or if an Event of Default has  occurred,  by  delivering  an Exercise
Notice and in lieu of making payment of the Aggregate  Exercise Price in cash or
wire  transfer,  elect instead to receive upon such exercise the "Net Number" of
shares of Common  Stock  determined  according  to the  following  formula  (the
"Cashless Exercise"):

                                       19
<PAGE>

         Net Number = (A x B) - (A x C)
                      -----------------
                              B

            For purposes of the foregoing formula:

            A     = the total  number of Warrant  Shares  with  respect to which
                  this Warrant is then being exercised.

            B     = the  Closing  Bid Price of the  Common  Stock on the date of
                  exercise of the Warrant.

            C     = the Warrant Exercise Price then in effect for the applicable
                  Warrant Shares at the time of such exercise.

      IN THE EVENT OF ANY EXERCISE OF THE RIGHTS  REPRESENTED BY THIS WARRANT IN
COMPLIANCE  WITH THIS SECTION 2, THE COMPANY  SHALL ON OR BEFORE THE FIFTH (5TH)
BUSINESS DAY FOLLOWING THE DATE OF RECEIPT OF THE EXERCISE NOTICE, THE AGGREGATE
EXERCISE PRICE AND THIS WARRANT (OR AN INDEMNIFICATION  UNDERTAKING WITH RESPECT
TO THIS WARRANT IN THE CASE OF ITS LOSS,  THEFT OR DESTRUCTION)  AND THE RECEIPT
OF THE REPRESENTATIONS OF THE HOLDER SPECIFIED IN SECTION 6 HEREOF, IF REQUESTED
BY THE COMPANY (THE "EXERCISE DELIVERY  DOCUMENTS"),  AND IF THE COMMON STOCK IS
DTC ELIGIBLE,  CREDIT SUCH  AGGREGATE  NUMBER OF SHARES OF COMMON STOCK TO WHICH
THE HOLDER SHALL BE ENTITLED TO THE HOLDER'S OR ITS DESIGNEE'S  BALANCE  ACCOUNT
WITH  THE  DEPOSITORY  TRUST  COMPANY;  PROVIDED,  HOWEVER,  IF THE  HOLDER  WHO
SUBMITTED THE EXERCISE NOTICE REQUESTED  PHYSICAL  DELIVERY OF ANY OR ALL OF THE
WARRANT  SHARES,  OR, IF THE COMMON STOCK IS NOT DTC  ELIGIBLE  THEN THE COMPANY
SHALL,  ON OR BEFORE  THE FIFTH  (5TH)  BUSINESS  DAY  FOLLOWING  RECEIPT OF THE
EXERCISE  DELIVERY  DOCUMENTS,  ISSUE  AND  SURRENDER  TO A COMMON  CARRIER  FOR
OVERNIGHT   DELIVERY  TO  THE  ADDRESS  SPECIFIED  IN  THE  EXERCISE  NOTICE,  A
CERTIFICATE,  REGISTERED IN THE NAME OF THE HOLDER,  FOR THE NUMBER OF SHARES OF
COMMON  STOCK TO WHICH THE HOLDER  SHALL BE ENTITLED  PURSUANT TO SUCH  REQUEST.
UPON DELIVERY OF THE EXERCISE NOTICE AND AGGREGATE EXERCISE PRICE REFERRED TO IN
CLAUSE  (I) OR (II)  ABOVE THE  HOLDER OF THIS  WARRANT  SHALL BE DEEMED FOR ALL
CORPORATE  PURPOSES TO HAVE  BECOME THE HOLDER OF RECORD OF THE  WARRANT  SHARES
WITH RESPECT TO WHICH THIS WARRANT HAS BEEN EXERCISED.  IN THE CASE OF A DISPUTE
AS TO THE  DETERMINATION OF THE WARRANT EXERCISE PRICE, THE CLOSING BID PRICE OR
THE  ARITHMETIC  CALCULATION OF THE WARRANT  SHARES,  THE COMPANY SHALL PROMPTLY
ISSUE TO THE HOLDER THE NUMBER OF WARRANT  SHARES THAT IS NOT DISPUTED AND SHALL
SUBMIT THE DISPUTED  DETERMINATIONS OR ARITHMETIC CALCULATIONS TO THE HOLDER VIA
FACSIMILE  WITHIN  ONE (1)  BUSINESS  DAY OF RECEIPT  OF THE  HOLDER'S  EXERCISE
NOTICE.

If the holder and the Company are unable to agree upon the  determination of the
Warrant  Exercise  Price or arithmetic  calculation of the Warrant Shares within
one (1) day of such  disputed  determination  or  arithmetic  calculation  being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed  determination of the Warrant Exercise Price or the Closing Bid
Price to an independent,  reputable investment banking firm or (ii) the disputed
arithmetic  calculation  of  the  Warrant  Shares  to its  independent,  outside
accountant.  The  Company  shall  cause  the  investment  banking  firm  or  the
accountant,  as the case may be, to perform the  determinations  or calculations
and notify the Company  and the holder of the results no later than  forty-eight
(48)  hours  from  the  time  it  receives   the  disputed   determinations   or
calculations.  Such investment  banking firm's or accountant's  determination or
calculation,  as the case may be,  shall be deemed  conclusive  absent  manifest
error.

Unless the rights  represented  by this Warrant shall have expired or shall have
been fully exercised,  the Company shall, as soon as practicable and in no event
later than five (5)  Business  Days after any  exercise  and at its own expense,
issue a new Warrant  identical in all respects to this Warrant  exercised except
it shall represent  rights to purchase the number of Warrant Shares  purchasable
immediately prior to such exercise under this Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is exercised.

                                       20
<PAGE>

No fractional Warrant Shares are to be issued upon any pro rata exercise of this
Warrant,  but rather the number of Warrant  Shares  issued upon such exercise of
this Warrant shall be rounded up or down to the nearest whole number.

If the Company or its Transfer  Agent shall fail for any reason or for no reason
to issue to the holder within ten (10) days of receipt of the Exercise  Delivery
Documents, a certificate for the number of Warrant Shares to which the holder is
entitled or to credit the holder's  balance  account with The  Depository  Trust
Company for such number of Warrant  Shares to which the holder is entitled  upon
the holder's  exercise of this Warrant,  the Company  shall,  in addition to any
other remedies under this Warrant or the Placement  Agent Agreement or otherwise
available to such holder,  pay as  additional  damages in cash to such holder on
each day the  issuance  of such  certificate  for  Warrant  Shares is not timely
effected  an amount  equal to 0.025% of the product of (A) the sum of the number
of Warrant  Shares  not issued to the holder on a timely  basis and to which the
holder is  entitled,  and (B) the Closing Bid Price of the Common  Stock for the
trading day immediately preceding the last possible date which the Company could
have issued such Common Stock to the holder without violating this Section 2.

If within ten (10) days after the  Company's  receipt of the  Exercise  Delivery
Documents,  the  Company  fails to  deliver a new  Warrant to the holder for the
number of Warrant Shares to which such holder is entitled  pursuant to Section 2
hereof,  then, in addition to any other available remedies under this Warrant or
the  Placement  Agent  Agreement,  or otherwise  available  to such holder,  the
Company shall pay as additional damages in cash to such holder on each day after
such  tenth  (10th)  day that such  delivery  of such new  Warrant is not timely
effected in an amount equal to 0.25% of the product of (A) the number of Warrant
Shares  represented by the portion of this Warrant which is not being  exercised
and (B)  the  Closing  Bid  Price  of the  Common  Stock  for  the  trading  day
immediately preceding the last possible date which the Company could have issued
such Warrant to the holder without violating this Section 2.

Forced  Exercise by the Company.  At the option of the Company,  the Company may
force  Cornell to exercise the Warrant at an price equal to $0.20  provided that
(i) the Company's Common Stock is trading at $0.30 or higher for a period of ten
(10)  consecutive  Trading Days  immediately  prior to such  exercise,  (ii) the
trading volume during those ten (10) Trading Days exceeds Four Hundred  Thousand
(400,000)  shares  per day,  (iii) the  Warrant  Shares are  registered  and the
registration  statement is declared  effective and (iv) such forced  exercise by
the  Company  shall  not cause the  aggregate  number of shares of Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding shares of the Common Stock following such exercise.

      COVENANTS AS TO COMMON STOCK.  THE COMPANY HEREBY  COVENANTS AND AGREES AS
FOLLOWS:

This Warrant is, and any Warrants issued in  substitution  for or replacement of
this Warrant will upon issuance be, duly authorized and validly issued.

All  Warrant  Shares  which  may be  issued  upon  the  exercise  of the  rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

During the period  within  which the rights  represented  by this Warrant may be
exercised,  the Company will at all times have  authorized and reserved at least
one hundred  percent  (100%) of the number of shares of Common  Stock  needed to
provide for the exercise of the rights then  represented by this Warrant and the
par  value  of said  shares  will at all  times  be less  than or  equal  to the
applicable  Warrant  Exercise  Price. If at any time the Company does not have a
sufficient  number of shares of Common Stock authorized and available,  then the
Company shall call and hold a special meeting of its  stockholders  within sixty
(60)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

If at any time after the date  hereof  the  Company  shall  file a  registration
statement,  the Company shall include the Warrant Shares issuable to the holder,
pursuant to the terms of this Warrant and shall  maintain,  so long as any other
shares of Common Stock shall be so listed,  such  listing of all Warrant  Shares
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall  so list on each  national  securities  exchange  or  automated  quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital  stock of the Company  issuable  upon the exercise of this Warrant if
and so long as any  shares of the same  class  shall be listed on such  national
securities exchange or automated quotation system.

                                       21
<PAGE>

The Company will not, by amendment of its Articles of  Incorporation  or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of securities,  or any other  voluntary  action,  avoid or seek to
avoid  the  observance  or  performance  of any of the terms to be  observed  or
performed  by it  hereunder,  but will at all times in good faith  assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may  reasonably be requested by the holder of this Warrant in order to
protect the exercise privilege of the holder of this Warrant against dilution or
other  impairment,  consistent  with the tenor and purpose of this Warrant.  The
Company will not increase the par value of any shares of Common Stock receivable
upon the  exercise  of this  Warrant  above the Warrant  Exercise  Price then in
effect,  and (ii) will take all such actions as may be necessary or  appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

This  Warrant  will be binding  upon any  entity  succeeding  to the  Company by
merger,  consolidation  or  acquisition  of  all  or  substantially  all  of the
Company's assets.

      TAXES.  THE  COMPANY  SHALL PAY ANY AND ALL TAXES,  EXCEPT ANY  APPLICABLE
WITHHOLDING,  WHICH MAY BE PAYABLE  WITH RESPECT TO THE ISSUANCE AND DELIVERY OF
WARRANT SHARES UPON EXERCISE OF THIS WARRANT.

      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED HEREIN,  NO HOLDER,  AS SUCH, OF THIS WARRANT SHALL BE ENTITLED TO VOTE
OR RECEIVE  DIVIDENDS OR BE DEEMED THE HOLDER OF SHARES OF CAPITAL  STOCK OF THE
COMPANY  FOR ANY  PURPOSE,  NOR SHALL  ANYTHING  CONTAINED  IN THIS  WARRANT  BE
CONSTRUED  TO CONFER  UPON THE HOLDER  HEREOF,  AS SUCH,  ANY OF THE RIGHTS OF A
STOCKHOLDER OF THE COMPANY OR ANY RIGHT TO VOTE, GIVE OR WITHHOLD CONSENT TO ANY
CORPORATE ACTION (WHETHER ANY REORGANIZATION,  ISSUE OF STOCK,  RECLASSIFICATION
OF STOCK,  CONSOLIDATION,  MERGER,  CONVEYANCE OR OTHERWISE),  RECEIVE NOTICE OF
MEETINGS,  RECEIVE DIVIDENDS OR SUBSCRIPTION RIGHTS, OR OTHERWISE,  PRIOR TO THE
ISSUANCE TO THE HOLDER OF THIS WARRANT OF THE WARRANT  SHARES WHICH HE OR SHE IS
THEN  ENTITLED TO RECEIVE  UPON THE DUE EXERCISE OF THIS  WARRANT.  IN ADDITION,
NOTHING CONTAINED IN THIS WARRANT SHALL BE CONSTRUED AS IMPOSING ANY LIABILITIES
ON SUCH HOLDER TO PURCHASE  ANY  SECURITIES  (UPON  EXERCISE OF THIS  WARRANT OR
OTHERWISE)  OR AS A STOCKHOLDER  OF THE COMPANY,  WHETHER SUCH  LIABILITIES  ARE
ASSERTED BY THE COMPANY OR BY  CREDITORS OF THE  COMPANY.  NOTWITHSTANDING  THIS
SECTION 5, THE COMPANY  WILL  PROVIDE THE HOLDER OF THIS  WARRANT WITH COPIES OF
THE SAME NOTICES AND OTHER  INFORMATION GIVEN TO THE STOCKHOLDERS OF THE COMPANY
GENERALLY, CONTEMPORANEOUSLY WITH THE GIVING THEREOF TO THE STOCKHOLDERS.

      REPRESENTATIONS OF HOLDER.  THE HOLDER OF THIS WARRANT,  BY THE ACCEPTANCE
HEREOF,  REPRESENTS THAT IT IS ACQUIRING THIS WARRANT AND THE WARRANT SHARES FOR
ITS OWN ACCOUNT FOR INVESTMENT  ONLY AND NOT WITH A VIEW TOWARDS,  OR FOR RESALE
IN  CONNECTION  WITH,  THE PUBLIC SALE OR  DISTRIBUTION  OF THIS  WARRANT OR THE
WARRANT  SHARES,  EXCEPT  PURSUANT TO SALES  REGISTERED  OR  EXEMPTED  UNDER THE
SECURITIES ACT; PROVIDED,  HOWEVER,  THAT BY MAKING THE REPRESENTATIONS  HEREIN,
THE HOLDER DOES NOT AGREE TO HOLD THIS WARRANT OR ANY OF THE WARRANT  SHARES FOR
ANY MINIMUM OR OTHER  SPECIFIC  TERM AND  RESERVES  THE RIGHT TO DISPOSE OF THIS
WARRANT AND THE WARRANT  SHARES AT ANY TIME IN ACCORDANCE  WITH OR PURSUANT TO A
REGISTRATION  STATEMENT OR AN EXEMPTION  UNDER THE SECURITIES ACT. THE HOLDER OF
THIS WARRANT FURTHER  REPRESENTS,  BY ACCEPTANCE HEREOF,  THAT, AS OF THIS DATE,
SUCH  HOLDER  IS AN  "ACCREDITED  INVESTOR"  AS  SUCH  TERM IS  DEFINED  IN RULE
501(A)(1) OF REGULATION D PROMULGATED BY THE SECURITIES AND EXCHANGE  COMMISSION
UNDER THE  SECURITIES  ACT (AN  "ACCREDITED  INVESTOR").  UPON  EXERCISE OF THIS
WARRANT THE HOLDER SHALL, IF REQUESTED BY THE COMPANY,  CONFIRM IN WRITING, IN A
FORM SATISFACTORY TO THE COMPANY, THAT THE WARRANT SHARES SO PURCHASED ARE BEING
ACQUIRED  SOLELY FOR THE HOLDER'S OWN ACCOUNT AND NOT AS A NOMINEE FOR ANY OTHER
PARTY,  FOR  INVESTMENT,  AND NOT WITH A VIEW TOWARD  DISTRIBUTION OR RESALE AND
THAT SUCH HOLDER IS AN  ACCREDITED  INVESTOR.  IF SUCH  HOLDER  CANNOT MAKE SUCH
REPRESENTATIONS  BECAUSE  THEY  WOULD  BE  FACTUALLY  INCORRECT,  IT  SHALL BE A
CONDITION TO SUCH  HOLDER'S  EXERCISE OF THIS  WARRANT THAT THE COMPANY  RECEIVE
SUCH OTHER  REPRESENTATIONS  AS THE COMPANY  CONSIDERS  REASONABLY  NECESSARY TO
ASSURE THE COMPANY THAT THE  ISSUANCE OF ITS  SECURITIES  UPON  EXERCISE OF THIS
WARRANT SHALL NOT VIOLATE ANY UNITED STATES OR STATE SECURITIES LAWS.

      OWNERSHIP AND TRANSFER.

The Company  shall  maintain at its principal  executive  offices (or such other
office or agency of the  Company  as it may  designate  by notice to the  holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant has been issued, as well as
the name and  address of each  transferee.  The  Company may treat the person in
whose name any  Warrant is  registered  on the  register as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary, but in all
events  recognizing  any  transfers  made in  accordance  with the terms of this
Warrant.

                                       22
<PAGE>

      ADJUSTMENT  OF WARRANT  EXERCISE  PRICE AND NUMBER OF SHARES.  THE WARRANT
EXERCISE  PRICE AND THE NUMBER OF SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE
OF THIS WARRANT SHALL BE ADJUSTED  FROM TIME TO TIME AS FOLLOWS  (EXCEPT FOR ANY
ISSUANCES TO CORNELL  CAPITAL  PARTNERS,  LP AND OPTIONS GRANTED AND OUTSTANDING
BEFORE JULY 15, 2005 UNDER A BONA FIDE EMPLOYEE STOCK OPTION PLAN OF THE COMPANY
OR ISSUANCES OF RESTRICTED  STOCK IN CONNECTION WITH AN ACQUISITION OR A CAPITAL
RAISE WHICH WAS ENTERED INTO PRIOR TO JULY 15, 2005):

Adjustment  of Warrant  Exercise  Price and Number of Shares  upon  Issuance  of
Common Stock. If and whenever on or after the Issuance Date of this Warrant, the
Company  issues or sells,  or is deemed to have  issued or sold,  any  shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than a price (the "Applicable  Price") equal
to the Warrant  Exercise Price in effect  immediately  prior to such issuance or
sale, then immediately  after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such  consideration  per share.
Upon each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant  Shares  issuable upon exercise of this Warrant shall be adjusted to the
number of shares  determined by multiplying the Warrant Exercise Price in effect
immediately  prior to such  adjustment by the number of Warrant Shares  issuable
upon exercise of this Warrant  immediately prior to such adjustment and dividing
the  product  thereof  by  the  Warrant   Exercise  Price  resulting  from  such
adjustment.

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant  Exercise  Price under  Section 8(a) above,  the following
shall be applicable:

Issuance of Options.  If after the date hereof, the Company in any manner grants
any Options and the lowest  price per share for which one share of Common  Stock
is issuable upon the exercise of any such Option or upon  conversion or exchange
of any convertible  securities issuable upon exercise of any such Option is less
than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For  purposes of this
Section 8(b)(i),  the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of such
Convertible  Securities  shall  be  equal to the sum of the  lowest  amounts  of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the  Option  or upon  conversion  or  exchange  of any  convertible  security
issuable  upon  exercise of such Option.  No further  adjustment  of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  convertible
securities.

Issuance of Convertible Securities. If the Company in any manner issues or sells
any convertible securities and the lowest price per share for which one share of
Common Stock is issuable upon the  conversion  or exchange  thereof is less than
the  Applicable  Price,  then such share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
issuance or sale of such  convertible  securities for such price per share.  For
the purposes of this Section 8(b)(ii),  the lowest price per share for which one
share of Common  Stock is issuable  upon such  conversion  or exchange  shall be
equal to the sum of the lowest  amounts of  consideration  (if any)  received or
receivable  by the Company  with  respect to one share of Common  Stock upon the
issuance or sale of the convertible  security and upon conversion or exchange of
such convertible  security.  No further adjustment of the Warrant Exercise Price
shall be made upon the actual  issuance of such Common Stock upon  conversion or
exchange of such convertible  securities,  and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment
of the  Warrant  Exercise  Price  had been or are to be made  pursuant  to other
provisions of this Section 8(b), no further  adjustment of the Warrant  Exercise
Price shall be made by reason of such issue or sale.

Change in Option Price or Rate of Conversion. If the purchase price provided for
in any Options,  the additional  consideration,  if any, payable upon the issue,
conversion or exchange of any convertible  securities,  or the rate at which any
convertible  securities are convertible  into or  exchangeable  for Common Stock
changes at any time,  the Warrant  Exercise  Price in effect at the time of such
change shall be adjusted to the Warrant  Exercise Price which would have been in
effect at such time had such Options or convertible securities provided for such
changed purchase price, additional  consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
Warrant Shares  issuable upon exercise of this Warrant shall be  correspondingly
readjusted.  For purposes of this Section 8(b)(iii),  if the terms of any Option
or  convertible  security that was  outstanding  as of the Issuance Date of this
Warrant  are  changed  in the  manner  described  in the  immediately  preceding
sentence,  then such Option or convertible  security and the Common Stock deemed
issuable upon exercise,  conversion or exchange  thereof shall be deemed to have
been  issued  as of the date of such  change.  No  adjustment  pursuant  to this
Section 8(b) shall be made if such adjustment would result in an increase of the
Warrant Exercise Price then in effect.

                                       23
<PAGE>

Effect on Warrant Exercise Price of Certain Events. For purposes of determining
the adjusted Warrant Exercise Price under Sections 8(a) and 8(b), the following
shall be applicable:

Calculation  of  Consideration   Received.  If  any  Common  Stock,  Options  or
convertible  securities are issued or sold or deemed to have been issued or sold
for cash,  the  consideration  received  therefore  will be deemed to be the net
amount  received  by the  Company  therefore.  If any Common  Stock,  Options or
convertible  securities are issued or sold for a consideration  other than cash,
the amount of such consideration  received by the Company will be the fair value
of such  consideration,  except where such consideration  consists of marketable
securities,  in which case the amount of  consideration  received by the Company
will be the  market  price of such  securities  on the date of  receipt  of such
securities. If any Common Stock, Options or convertible securities are issued to
the owners of the  non-surviving  entity in connection  with any merger in which
the Company is the surviving entity, the amount of consideration  therefore will
be deemed to be the fair value of such portion of the net assets and business of
the  non-surviving  entity as is attributable  to such Common Stock,  Options or
convertible securities,  as the case may be. The fair value of any consideration
other than cash or securities will be determined  jointly by the Company and the
holders of Warrants  representing at least  two-thirds (b) of the Warrant Shares
issuable  upon exercise of the Warrants  then  outstanding.  If such parties are
unable to reach agreement  within ten (10) days after the occurrence of an event
requiring   valuation  (the   "Valuation   Event"),   the  fair  value  of  such
consideration  will be determined  within five (5) Business Days after the tenth
(10th) day following the Valuation Event by an independent,  reputable appraiser
jointly  selected by the Company  and the  holders of Warrants  representing  at
least  two-thirds  (b) of the  Warrant  Shares  issuable  upon  exercise  of the
Warrants then  outstanding.  The  determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such  appraiser  shall
be borne jointly by the Company and the holders of Warrants.

Integrated  Transactions.  In case any Option is issued in  connection  with the
issue  or sale of other  securities  of the  Company,  together  comprising  one
integrated  transaction in which no specific  consideration is allocated to such
Options by the parties  thereto,  the Options will be deemed to have been issued
for a consideration of $.01.

Treasury Shares.  The number of shares of Common Stock  outstanding at any given
time does not include shares owned or held by or for the account of the Company,
and the  disposition  of any shares so owned or held will be considered an issue
or sale of Common Stock.

Record  Date.  If the Company  takes a record of the holders of Common Stock for
the purpose of  entitling  them (1) to receive a dividend or other  distribution
payable  in  Common  Stock,  Options  or in  convertible  securities  or  (2) to
subscribe for or purchase Common Stock, Options or convertible securities,  then
such  record  date  will be  deemed  to be the date of the  issue or sale of the
shares of Common Stock  deemed to have been issued or sold upon the  declaration
of such  dividend  or the making of such other  distribution  or the date of the
granting of such right of subscription or purchase, as the case may be.

Adjustment of Warrant  Exercise Price upon  Subdivision or Combination of Common
Stock.  If the Company at any time after the date of  issuance  of this  Warrant
subdivides (by any stock split, stock dividend,  recapitalization  or otherwise)
one or more  classes of its  outstanding  shares of Common  Stock into a greater
number of shares, any Warrant Exercise Price in effect immediately prior to such
subdivision will be  proportionately  reduced and the number of shares of Common
Stock  obtainable  upon  exercise  of  this  Warrant  will  be   proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination,  reverse stock split or otherwise) one or more classes
of its outstanding  shares of Common Stock into a smaller number of shares,  any
Warrant Exercise Price in effect  immediately  prior to such combination will be
proportionately  increased  and the  number  of  Warrant  Shares  issuable  upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section  8(d) shall  become  effective at the close of business on the date
the subdivision or combination becomes effective.

                                       24
<PAGE>

Distribution  of Assets.  If the Company  shall  declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common  Stock,  by way of return of capital  or  otherwise  (including,  without
limitation,  any  distribution of cash, stock or other  securities,  property or
options  by  way  of  a   dividend,   spin  off,   reclassification,   corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

any Warrant Exercise Price in effect  immediately prior to the close of business
on the record  date  fixed for the  determination  of  holders  of Common  Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record  date,  to a price  determined  by  multiplying  such
Warrant  Exercise  Price by a fraction of which (A) the  numerator  shall be the
Closing Sale Price of the Common Stock on the trading day immediately  preceding
such  record date minus the value of the  Distribution  (as  determined  in good
faith by the  Company's  Board of  Directors)  applicable to one share of Common
Stock,  and (B) the  denominator  shall be the Closing  Sale Price of the Common
Stock on the trading day immediately preceding such record date; and

either (A) the number of Warrant Shares obtainable upon exercise of this Warrant
shall be increased to a number of shares equal to the number of shares of Common
Stock obtainable  immediately  prior to the close of business on the record date
fixed for the  determination  of holders of Common Stock entitled to receive the
Distribution  multiplied  by the  reciprocal  of the  fraction  set forth in the
immediately  preceding  clause (i), or (B) in the event that the Distribution is
of  common  stock of a  company  whose  common  stock is  traded  on a  national
securities exchange or a national automated quotation system, then the holder of
this Warrant shall receive an additional  warrant to purchase Common Stock,  the
terms of which shall be  identical  to those of this  Warrant,  except that such
warrant shall be exercisable  into the amount of the assets that would have been
payable to the  holder of this  Warrant  pursuant  to the  Distribution  had the
holder exercised this Warrant  immediately prior to such record date and with an
exercise  price equal to the amount by which the exercise  price of this Warrant
was  decreased  with  respect to the  Distribution  pursuant to the terms of the
immediately preceding clause (i).

Certain Events.  If any event occurs of the type  contemplated by the provisions
of this Section 8 but not expressly provided for by such provisions  (including,
without  limitation,  the granting of stock appreciation  rights,  phantom stock
rights or other  rights  with  equity  features),  then the  Company's  Board of
Directors will make an appropriate  adjustment in the Warrant Exercise Price and
the number of shares of Common Stock obtainable upon exercise of this Warrant so
as to protect the rights of the holders of the Warrants; provided, except as set
forth in section 8(d),that no such adjustment pursuant to this Section 8(f) will
increase the Warrant  Exercise  Price or decrease the number of shares of Common
Stock obtainable as otherwise determined pursuant to this Section 8.

Notices.
--------

Immediately  upon any adjustment of the Warrant Exercise Price, the Company will
give written  notice  thereof to the holder of this  Warrant,  setting  forth in
reasonable detail, and certifying, the calculation of such adjustment.

The Company will give written  notice to the holder of this Warrant at least ten
(10) days  prior to the date on which the  Company  closes  its books or takes a
record (A) with respect to any dividend or  distribution  upon the Common Stock,
(B) with respect to any pro rata  subscription  offer to holders of Common Stock
or (C) for  determining  rights to vote with  respect to any Organic  Change (as
defined below), dissolution or liquidation, provided that such information shall
be made known to the public  prior to or in  conjunction  with such notice being
provided to such holder.

The Company will also give written notice to the holder of this Warrant at least
ten (10) days  prior to the date on which any  Organic  Change,  dissolution  or
liquidation will take place,  provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to such
holder.

                                       25
<PAGE>

      PURCHASE RIGHTS; REORGANIZATION,  RECLASSIFICATION,  CONSOLIDATION, MERGER
OR SALE.

In addition to any  adjustments  pursuant to Section 8 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights to
purchase  stock,  warrants,  securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then the holder of
this  Warrant  will be entitled to acquire,  upon the terms  applicable  to such
Purchase  Rights,  the  aggregate  Purchase  Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete  exercise of this Warrant  immediately  before the date on which a
record is taken for the grant,  issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

Any recapitalization,  reorganization, reclassification,  consolidation, merger,
sale of all or  substantially  all of the Company's  assets to another Person or
other  transaction  in each case which is effected in such a way that holders of
Common  Stock are  entitled  to  receive  (either  directly  or upon  subsequent
liquidation)  stock,  securities  or assets with  respect to or in exchange  for
Common  Stock  is  referred  to  herein  as an  "Organic  Change."  Prior to the
consummation of any (i) sale of all or substantially all of the Company's assets
to an acquiring  Person or (ii) other Organic Change following which the Company
is not a surviving  entity,  the Company will secure from the Person  purchasing
such assets or the successor  resulting  from such Organic Change (in each case,
the "Acquiring Entity") a written agreement (in form and substance  satisfactory
to the holders of Warrants representing at least two-thirds (iii) of the Warrant
Shares  issuable upon exercise of the Warrants then  outstanding)  to deliver to
each  holder of  Warrants  in  exchange  for such  Warrants,  a security  of the
Acquiring Entity evidenced by a written instrument substantially similar in form
and  substance to this Warrant and  satisfactory  to the holders of the Warrants
(including an adjusted  warrant exercise price equal to the value for the Common
Stock  reflected  by the  terms  of such  consolidation,  merger  or  sale,  and
exercisable for a corresponding  number of shares of Common Stock acquirable and
receivable  upon exercise of the Warrants  without regard to any  limitations on
exercise, if the value so reflected is less than any Applicable Warrant Exercise
Price immediately  prior to such  consolidation,  merger or sale).  Prior to the
consummation  of any other Organic  Change,  the Company shall make  appropriate
provision  (in  form and  substance  satisfactory  to the  holders  of  Warrants
representing  a majority of the Warrant  Shares  issuable  upon  exercise of the
Warrants  then  outstanding)  to insure that each of the holders of the Warrants
will  thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the Warrant Shares immediately  theretofore issuable and
receivable  upon the exercise of such holder's  Warrants  (without regard to any
limitations on exercise),  such shares of stock, securities or assets that would
have been  issued or  payable  in such  Organic  Change  with  respect  to or in
exchange  for the number of Warrant  Shares  which would have been  issuable and
receivable  upon the  exercise of such  holder's  Warrant as of the date of such
Organic Change  (without  taking into account any limitations or restrictions on
the exercisability of this Warrant).

      LOST,  STOLEN,  MUTILATED OR DESTROYED  WARRANT.  IF THIS WARRANT IS LOST,
STOLEN,  MUTILATED OR DESTROYED,  THE COMPANY SHALL  PROMPTLY,  ON RECEIPT OF AN
INDEMNIFICATION  UNDERTAKING  (OR,  IN THE  CASE  OF A  MUTILATED  WARRANT,  THE
WARRANT),  ISSUE A NEW WARRANT OF LIKE DENOMINATION AND TENOR AS THIS WARRANT SO
LOST, STOLEN, MUTILATED OR DESTROYED.

      NOTICE. ANY NOTICES, CONSENTS, WAIVERS OR OTHER COMMUNICATIONS REQUIRED OR
PERMITTED  TO BE GIVEN  UNDER THE TERMS OF THIS  WARRANT  MUST BE IN WRITING AND
WILL BE  DEEMED  TO HAVE  BEEN  DELIVERED:  (I)  UPON  RECEIPT,  WHEN  DELIVERED
PERSONALLY;  (II) UPON RECEIPT, WHEN SENT BY FACSIMILE (PROVIDED CONFIRMATION OF
RECEIPT IS  RECEIVED  BY THE  SENDING  PARTY  TRANSMISSION  IS  MECHANICALLY  OR
ELECTRONICALLY  GENERATED AND KEPT ON FILE BY THE SENDING  PARTY);  OR (III) ONE
BUSINESS  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:

                                       26
<PAGE>

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

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

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

With a copy to:              Kirkpatrick & Lockhart Nicholson Graham, LLP
                             201 South Biscayne Boulevard, Suite 2000
                             Miami, Florida 33131
                             Attention:   Clayton E. Parker, Esquire
                             Telephone:   (305) 539-3306
                             Facsimile:   (305) 358-7095

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth on Exhibit C hereto,  with copies to such holder's  representatives as set
forth on Exhibit C, or at such other address and facsimile as shall be delivered
to the Company upon the issuance or transfer of this  Warrant.  Each party shall
provide  five days'  prior  written  notice to the other  party of any change in
address or facsimile  number.  Written  confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally  recognized  overnight  delivery  service  shall be
rebuttable evidence of personal service,  receipt by facsimile or receipt from a
nationally  recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

      DATE.  THE  DATE OF THIS  WARRANT  IS SET  FORTH  ON PAGE 1  HEREOF.  THIS
WARRANT, IN ALL EVENTS, SHALL BE WHOLLY VOID AND OF NO EFFECT AFTER THE CLOSE OF
BUSINESS  ON  THE  EXPIRATION  DATE,  EXCEPT  THAT   NOTWITHSTANDING  ANY  OTHER
PROVISIONS  HEREOF,  THE PROVISIONS OF SECTION 8(B) SHALL CONTINUE IN FULL FORCE
AND EFFECT AFTER SUCH DATE AS TO ANY WARRANT SHARES OR OTHER  SECURITIES  ISSUED
UPON THE EXERCISE OF THIS WARRANT.

      AMENDMENT AND WAIVER.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS
OF THE  WARRANTS  MAY BE AMENDED  AND THE  COMPANY  MAY TAKE ANY  ACTION  HEREIN
PROHIBITED,  OR OMIT TO PERFORM ANY ACT HEREIN  REQUIRED TO BE  PERFORMED BY IT,
ONLY IF THE COMPANY HAS OBTAINED THE WRITTEN  CONSENT OF THE HOLDERS OF WARRANTS
REPRESENTING AT LEAST TWO-THIRDS OF THE WARRANT SHARES ISSUABLE UPON EXERCISE OF
THE WARRANTS THEN  OUTSTANDING;  PROVIDED THAT, EXCEPT FOR SECTION 8(D), NO SUCH
ACTION MAY INCREASE THE WARRANT  EXERCISE PRICE OR DECREASE THE NUMBER OF SHARES
OR CLASS OF STOCK  OBTAINABLE  UPON EXERCISE OF ANY WARRANT  WITHOUT THE WRITTEN
CONSENT OF THE HOLDER OF SUCH WARRANT.

                                       27
<PAGE>

      DESCRIPTIVE  HEADINGS;  GOVERNING  LAW.  THE  DESCRIPTIVE  HEADINGS OF THE
SEVERAL  SECTIONS AND  PARAGRAPHS  OF THIS WARRANT ARE INSERTED FOR  CONVENIENCE
ONLY AND DO NOT  CONSTITUTE A PART OF THIS WARRANT.  THE  CORPORATE  LAWS OF THE
STATE OF NEW JERSEY SHALL GOVERN ALL ISSUES  CONCERNING  THE RELATIVE  RIGHTS OF
THE  COMPANY  AND  ITS   STOCKHOLDERS.   ALL  OTHER  QUESTIONS   CONCERNING  THE
CONSTRUCTION,  VALIDITY,  ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE  INTERNAL  LAWS OF THE STATE OF NEW  JERSEY,  WITHOUT  GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW JERSEY OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION
OF THE LAWS OF ANY JURISDICTIONS  OTHER THAN THE STATE OF NEW JERSEY. EACH PARTY
HEREBY  IRREVOCABLY  SUBMITS  TO THE  EXCLUSIVE  JURISDICTION  OF THE  STATE AND
FEDERAL COURTS SITTING IN HUDSON COUNTY AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY,  FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR THEREWITH, OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING,  ANY CLAIM THAT IT IS NOT PERSONALLY  SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT,  THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY  IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS  TO PROCESS  BEING  SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER
THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

      WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT  FOR EACH PARTY HERETO TO
ENTER INTO THIS WARRANT,  THE PARTIES  HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL  PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                       28
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
the date first set forth above.

                                       TELEPLUS ENTERPRISES, INC.

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

                                       29
<PAGE>

                              EXHIBIT A TO WARRANT
                              --------------------

                                 EXERCISE NOTICE
                                 ---------------

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                           TELEPLUS ENTERPRISES, INC.

      The   undersigned   holder   hereby   exercises   the  right  to  purchase
______________  of the shares of Common  Stock  ("Warrant  Shares")  of Teleplus
Enterprises,  Inc.  (the  "Company"),  evidenced  by the  attached  Warrant (the
"Warrant").  Capitalized  terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

      1.    ___ Cash Exercise

            (a)   Payment of Warrant  Exercise  Price.  The holder shall pay the
                  Aggregate  Exercise Price of $______________ to the Company in
                  accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

      2.    ___ Cashless Exercise

            (a)   Payment of Warrant  Exercise  Price. In lieu of making payment
                  of the Aggregate  Exercise Price, the holder elects to receive
                  upon such  exercise  the Net Number of shares of Common  Stock
                  determined in accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:
   ------------------------------------
Name:
     ----------------------------------
Title:
      ---------------------------------

                                       30
<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

      FOR VALUE  RECEIVED,  the  undersigned  does hereby assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares  of  the  capital  stock  of  Teleplus  Enterprises,   Inc.
represented  by  warrant  certificate  no.  _____,  standing  in the name of the
undersigned  on the  books of said  corporation.  The  undersigned  does  hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.

Dated:
      ----------------------------       --------------------------------------

                                         By:
                                                -------------------------------
                                         Name:
                                                -------------------------------
                                         Title:
                                                -------------------------------

                                       31
<PAGE>

                                     WARRANT
                                     -------

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  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 FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                           TELEPLUS ENTERPRISES, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: TLPE-006                               Number of Shares: 10,000,000

Date of Issuance: July 28, 2006

Teleplus  Enterprises,  Inc.,  a  Nevada  corporation  (the  "Company"),  hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged,  CORNELL CAPITAL PARTNERS, LP ("Cornell"), the
registered holder hereof or its permitted assigns,  is entitled,  subject to the
terms set forth  below,  to purchase  from the Company  upon  surrender  of this
Warrant,  at any time or times on or after the date hereof,  but not after 11:59
P.M.  Eastern  Time on the  Expiration  Date (as  defined  herein)  Ten  Million
(10,000,000)  fully paid and  nonassessable  shares of Common  Stock (as defined
herein) of the Company (the  "Warrant  Shares") at the exercise  price per share
provided in Section 1(b) below or as subsequently adjusted;  provided,  however,
that in no event shall the holder be entitled  to  exercise  this  Warrant for a
number of Warrant Shares in excess of that number of Warrant Shares which,  upon
giving effect to such  exercise,  would cause the aggregate  number of shares of
Common Stock beneficially owned by the holder and its affiliates to exceed 4.99%
of the outstanding  shares of the Common Stock  following such exercise,  except
within sixty (60) days of the Expiration Date (however,  such restriction may be
waived by Cornell  (but only as to itself and not to any other  holder) upon not
less than 65 days prior notice to the  Company).  For purposes of the  foregoing
provision,  the aggregate number of shares of Common Stock beneficially owned by
the holder and its affiliates shall include the number of shares of Common Stock
issuable upon  exercise of this Warrant with respect to which the  determination
of such  provision is being made, but shall exclude shares of Common Stock which
would be issuable  upon (i)  exercise  of the  remaining,  unexercised  Warrants
beneficially  owned  by the  holder  and its  affiliates  and (ii)  exercise  or
conversion of the unexercised or unconverted  portion of any other securities of
the  Company  beneficially  owned by the holder and its  affiliates  (including,
without  limitation,  any  convertible  notes or preferred  stock)  subject to a
limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein.  Except as set forth in the  preceding  sentence,  for  purposes of this
paragraph,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended.  For purposes of this
Warrant,  in  determining  the number of  outstanding  shares of Common  Stock a
holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company's most recent Form 10-QSB or Form 10-KSB, as the case may be,
(2) a more recent public  announcement by the Company or (3) any other notice by
the Company or its transfer  agent  setting forth the number of shares of Common
Stock  outstanding.  Upon the written  request of any holder,  the Company shall
promptly,  but in no event later than one (1) Business Day following the receipt
of such  notice,  confirm in writing to any such  holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the exercise of Warrants
(as defined below) by such holder and its affiliates  since the date as of which
such number of outstanding shares of Common Stock was reported.

                                       32
<PAGE>

This  Warrant  is the common  stock  purchase  warrant  (the  "Warrant")  issued
pursuant to the Securities Purchase Agreement  ("Securities Purchase Agreement")
dated the date hereof  between  the Company and the Buyers  listed on Schedule I
thereto.

Definitions.  The  following  words and terms as used in this Warrant shall have
the following meanings:

"Approved Stock Plan" means any employee benefit plan which has been approved by
the  Board  of  Directors  of the  Company,  pursuant  to  which  the  Company's
securities  may be issued to any  employee,  officer or  director  for  services
provided to the Company.

"Business Day" means any day other than  Saturday,  Sunday or other day on which
commercial  banks in the City of New York are  authorized  or required by law to
remain closed.

"Closing Bid Price" means the closing bid price of Common Stock as quoted on the
Principal  Market (as  reported by  Bloomberg  Financial  Markets  ("Bloomberg")
through its "Volume at Price" function).

"Common Stock" means (i) the Company's common stock, par value $0.001 per share,
and (ii) any capital  stock into which such Common Stock shall have been changed
or any capital stock resulting from a reclassification of such Common Stock.

"Event of  Default"  means an event of  default  under the  Securities  Purchase
Agreement or the Convertible Debentures issued in connection therewith.

"Excluded  Securities" means,  provided such security is issued at a price which
is greater than or equal to the arithmetic  average of the Closing Bid Prices of
the Common Stock for the ten (10) consecutive trading days immediately preceding
the date of issuance,  any of the following:  (a) any issuance by the Company of
securities in connection  with a strategic  partnership  or a joint venture (the
primary  purpose of which is not to raise equity  capital),  (b) any issuance by
the Company of securities as consideration  for a merger or consolidation or the
acquisition of a business,  product,  license, or other assets of another person
or entity and (c) options to purchase shares of Common Stock,  provided (I) such
options are issued  after the date of this  Warrant to  employees of the Company
within  thirty (30) days of such  employee's  starting his  employment  with the
Company,  and  (II) the  exercise  price of such  options  is not less  than the
Closing Bid Price of the Common Stock on the date of issuance of such option.

"Expiration  Date" means the date three (3) years from the Issuance Date of this
Warrant or, if such date falls on a Saturday, Sunday or other day on which banks
are required or  authorized to be closed in the City of New York or the State of
New York or on which  trading does not take place on the  Principal  Exchange or
automated  quotation  system on which the Common Stock is traded (a  "Holiday"),
the next date that is not a Holiday.

                                       33
<PAGE>

"Issuance Date" means the date hereof.

"Options"  means any rights,  warrants or options to  subscribe  for or purchase
Common Stock or Convertible Securities.

"Other  Securities"  means (i) those options and warrants of the Company  issued
prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the shares
of Common Stock issuable on exercise of such options and warrants, provided such
options and warrants are not amended after the Issuance Date of this Warrant and
(iii) the shares of Common Stock issuable upon exercise of this Warrant.

"Person" means an individual,  a limited  liability  company,  a partnership,  a
joint venture,  a corporation,  a trust, an  unincorporated  organization  and a
government or any department or agency thereof.

"Principal  Market"  means  the New York  Stock  Exchange,  the  American  Stock
Exchange,  the Nasdaq National Market, the Nasdaq SmallCap Market,  whichever is
at the time the principal  trading exchange or market for such security,  or the
over-the-counter  market on the  electronic  bulletin board for such security as
reported by  Bloomberg  or, if no bid or sale  information  is reported for such
security by Bloomberg,  then the average of the bid prices of each of the market
makers for such  security  as  reported  in the "pink  sheets"  by the  National
Quotation Bureau, Inc.

"Securities Act" means the Securities Act of 1933, as amended.

"Warrant"  means this Warrant and all Warrants  issued in exchange,  transfer or
replacement thereof.

"Warrant Exercise Price" shall be $0.15 or as subsequently  adjusted as provided
in Section 8 hereof.  Notwithstanding anything to the contrary, upon an Event of
Default, the Warrant Exercise Price shall be $0.05 (or as subsequently  adjusted
as provided in Section 8 hereof).

"Warrant  Shares"  means the shares of Common  Stock  issuable  at any time upon
exercise of this Warrant.

Other Definitional Provisions.

Except as otherwise  specified herein,  all references herein (A) to the Company
shall be deemed to include the Company's  successors  and (B) to any  applicable
law defined or referred to herein shall be deemed  references to such applicable
law as the same may have been or may be  amended  or  supplemented  from time to
time.

When used in this Warrant,  the words  "herein",  "hereof",  and "hereunder" and
words of similar  import,  shall refer to this Warrant as a whole and not to any
provision of this Warrant,  and the words "Section",  "Schedule",  and "Exhibit"
shall refer to Sections of, and Schedules  and Exhibits to, this Warrant  unless
otherwise specified.

Whenever the context so requires,  the neuter  gender  includes the masculine or
feminine, and the singular number includes the plural, and vice versa.

      EXERCISE OF WARRANT.
      --------------------

Subject to the terms and conditions hereof, this Warrant may be exercised by the
holder  hereof  then  registered  on the  books  of the  Company,  pro  rata  as
hereinafter provided, at any time on any Business Day on or after the opening of
business  on such  Business  Day,  commencing  with the first day after the date
hereof,  and prior to 11:59  P.M.  Eastern  Time on the  Expiration  Date (i) by
delivery of a written notice, in the form of the subscription notice attached as
Exhibit A hereto (the "Exercise Notice"),  of such holder's election to exercise
this  Warrant,  which  notice shall  specify the number of Warrant  Shares to be
purchased,  payment to the Company of an amount  equal to the  Warrant  Exercise
Price(s)  applicable to the Warrant  Shares being  purchased,  multiplied by the
number of Warrant Shares (at the applicable  Warrant Exercise Price) as to which
this Warrant is being  exercised  (plus any applicable  issue or transfer taxes)
(the  "Aggregate  Exercise  Price")  in  cash or wire  transfer  of  immediately
available  funds  and the  surrender  of  this  Warrant  (or an  indemnification
undertaking  with  respect  to this  Warrant  in the case of its loss,  theft or
destruction)  to a common carrier for overnight  delivery to the Company as soon
as  practicable  following  such date  ("Cash  Basis") or (ii) if at the time of
exercise,  the  Warrant  Shares  are not  subject to an  effective  registration
statement  or if an Event of Default has  occurred,  by  delivering  an Exercise
Notice and in lieu of making payment of the Aggregate  Exercise Price in cash or
wire  transfer,  elect instead to receive upon such exercise the "Net Number" of
shares of Common  Stock  determined  according  to the  following  formula  (the
"Cashless Exercise"):

                                       34
<PAGE>

         Net Number = (A x B) - (A x C)
                      -----------------
                              B

            For purposes of the foregoing formula:

            A     = the total  number of Warrant  Shares  with  respect to which
                  this Warrant is then being exercised.

            B     = the  Closing  Bid Price of the  Common  Stock on the date of
                  exercise of the Warrant.

            C     = the Warrant Exercise Price then in effect for the applicable
                  Warrant Shares at the time of such exercise.

      IN THE EVENT OF ANY EXERCISE OF THE RIGHTS  REPRESENTED BY THIS WARRANT IN
COMPLIANCE  WITH THIS SECTION 2, THE COMPANY  SHALL ON OR BEFORE THE FIFTH (5TH)
BUSINESS DAY FOLLOWING THE DATE OF RECEIPT OF THE EXERCISE NOTICE, THE AGGREGATE
EXERCISE PRICE AND THIS WARRANT (OR AN INDEMNIFICATION  UNDERTAKING WITH RESPECT
TO THIS WARRANT IN THE CASE OF ITS LOSS,  THEFT OR DESTRUCTION)  AND THE RECEIPT
OF THE REPRESENTATIONS OF THE HOLDER SPECIFIED IN SECTION 6 HEREOF, IF REQUESTED
BY THE COMPANY (THE "EXERCISE DELIVERY  DOCUMENTS"),  AND IF THE COMMON STOCK IS
DTC ELIGIBLE,  CREDIT SUCH  AGGREGATE  NUMBER OF SHARES OF COMMON STOCK TO WHICH
THE HOLDER SHALL BE ENTITLED TO THE HOLDER'S OR ITS DESIGNEE'S  BALANCE  ACCOUNT
WITH  THE  DEPOSITORY  TRUST  COMPANY;  PROVIDED,  HOWEVER,  IF THE  HOLDER  WHO
SUBMITTED THE EXERCISE NOTICE REQUESTED  PHYSICAL  DELIVERY OF ANY OR ALL OF THE
WARRANT  SHARES,  OR, IF THE COMMON STOCK IS NOT DTC  ELIGIBLE  THEN THE COMPANY
SHALL,  ON OR BEFORE  THE FIFTH  (5TH)  BUSINESS  DAY  FOLLOWING  RECEIPT OF THE
EXERCISE  DELIVERY  DOCUMENTS,  ISSUE  AND  SURRENDER  TO A COMMON  CARRIER  FOR
OVERNIGHT   DELIVERY  TO  THE  ADDRESS  SPECIFIED  IN  THE  EXERCISE  NOTICE,  A
CERTIFICATE,  REGISTERED IN THE NAME OF THE HOLDER,  FOR THE NUMBER OF SHARES OF
COMMON  STOCK TO WHICH THE HOLDER  SHALL BE ENTITLED  PURSUANT TO SUCH  REQUEST.
UPON DELIVERY OF THE EXERCISE NOTICE AND AGGREGATE EXERCISE PRICE REFERRED TO IN
CLAUSE  (I) OR (II)  ABOVE THE  HOLDER OF THIS  WARRANT  SHALL BE DEEMED FOR ALL
CORPORATE  PURPOSES TO HAVE  BECOME THE HOLDER OF RECORD OF THE  WARRANT  SHARES
WITH RESPECT TO WHICH THIS WARRANT HAS BEEN EXERCISED.  IN THE CASE OF A DISPUTE
AS TO THE  DETERMINATION OF THE WARRANT EXERCISE PRICE, THE CLOSING BID PRICE OR
THE  ARITHMETIC  CALCULATION OF THE WARRANT  SHARES,  THE COMPANY SHALL PROMPTLY
ISSUE TO THE HOLDER THE NUMBER OF WARRANT  SHARES THAT IS NOT DISPUTED AND SHALL
SUBMIT THE DISPUTED  DETERMINATIONS OR ARITHMETIC CALCULATIONS TO THE HOLDER VIA
FACSIMILE  WITHIN  ONE (1)  BUSINESS  DAY OF RECEIPT  OF THE  HOLDER'S  EXERCISE
NOTICE.

If the holder and the Company are unable to agree upon the  determination of the
Warrant  Exercise  Price or arithmetic  calculation of the Warrant Shares within
one (1) day of such  disputed  determination  or  arithmetic  calculation  being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed  determination of the Warrant Exercise Price or the Closing Bid
Price to an independent,  reputable investment banking firm or (ii) the disputed
arithmetic  calculation  of  the  Warrant  Shares  to its  independent,  outside
accountant.  The  Company  shall  cause  the  investment  banking  firm  or  the
accountant,  as the case may be, to perform the  determinations  or calculations
and notify the Company  and the holder of the results no later than  forty-eight
(48)  hours  from  the  time  it  receives   the  disputed   determinations   or
calculations.  Such investment  banking firm's or accountant's  determination or
calculation,  as the case may be,  shall be deemed  conclusive  absent  manifest
error.

Unless the rights  represented  by this Warrant shall have expired or shall have
been fully exercised,  the Company shall, as soon as practicable and in no event
later than five (5)  Business  Days after any  exercise  and at its own expense,
issue a new Warrant  identical in all respects to this Warrant  exercised except
it shall represent  rights to purchase the number of Warrant Shares  purchasable
immediately prior to such exercise under this Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is exercised.

                                       35
<PAGE>

No fractional Warrant Shares are to be issued upon any pro rata exercise of this
Warrant,  but rather the number of Warrant  Shares  issued upon such exercise of
this Warrant shall be rounded up or down to the nearest whole number.

If the Company or its Transfer  Agent shall fail for any reason or for no reason
to issue to the holder within ten (10) days of receipt of the Exercise  Delivery
Documents, a certificate for the number of Warrant Shares to which the holder is
entitled or to credit the holder's  balance  account with The  Depository  Trust
Company for such number of Warrant  Shares to which the holder is entitled  upon
the holder's  exercise of this Warrant,  the Company  shall,  in addition to any
other remedies under this Warrant or the Placement  Agent Agreement or otherwise
available to such holder,  pay as  additional  damages in cash to such holder on
each day the  issuance  of such  certificate  for  Warrant  Shares is not timely
effected  an amount  equal to 0.025% of the product of (A) the sum of the number
of Warrant  Shares  not issued to the holder on a timely  basis and to which the
holder is  entitled,  and (B) the Closing Bid Price of the Common  Stock for the
trading day immediately preceding the last possible date which the Company could
have issued such Common Stock to the holder without violating this Section 2.

If within ten (10) days after the  Company's  receipt of the  Exercise  Delivery
Documents,  the  Company  fails to  deliver a new  Warrant to the holder for the
number of Warrant Shares to which such holder is entitled  pursuant to Section 2
hereof,  then, in addition to any other available remedies under this Warrant or
the  Placement  Agent  Agreement,  or otherwise  available  to such holder,  the
Company shall pay as additional damages in cash to such holder on each day after
such  tenth  (10th)  day that such  delivery  of such new  Warrant is not timely
effected in an amount equal to 0.25% of the product of (A) the number of Warrant
Shares  represented by the portion of this Warrant which is not being  exercised
and (B)  the  Closing  Bid  Price  of the  Common  Stock  for  the  trading  day
immediately preceding the last possible date which the Company could have issued
such Warrant to the holder without violating this Section 2.

Forced  Exercise by the Company.  At the option of the Company,  the Company may
force  Cornell to exercise the Warrant at an price equal to $0.20  provided that
(i) the Company's Common Stock is trading at $0.30 or higher for a period of ten
(10)  consecutive  Trading Days  immediately  prior to such  exercise,  (ii) the
trading volume during those ten (10) Trading Days exceeds Four Hundred  Thousand
(400,000)  shares  per day,  (iii) the  Warrant  Shares are  registered  and the
registration  statement is declared  effective and (iv) such forced  exercise by
the  Company  shall  not cause the  aggregate  number of shares of Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding shares of the Common Stock following such exercise.

      COVENANTS AS TO COMMON STOCK.  THE COMPANY HEREBY  COVENANTS AND AGREES AS
FOLLOWS:

This Warrant is, and any Warrants issued in  substitution  for or replacement of
this Warrant will upon issuance be, duly authorized and validly issued.

All  Warrant  Shares  which  may be  issued  upon  the  exercise  of the  rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

During the period  within  which the rights  represented  by this Warrant may be
exercised,  the Company will at all times have  authorized and reserved at least
one hundred  percent  (100%) of the number of shares of Common  Stock  needed to
provide for the exercise of the rights then  represented by this Warrant and the
par  value  of said  shares  will at all  times  be less  than or  equal  to the
applicable  Warrant  Exercise  Price. If at any time the Company does not have a
sufficient  number of shares of Common Stock authorized and available,  then the
Company shall call and hold a special meeting of its  stockholders  within sixty
(60)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

If at any time after the date  hereof  the  Company  shall  file a  registration
statement,  the Company shall include the Warrant Shares issuable to the holder,
pursuant to the terms of this Warrant and shall  maintain,  so long as any other
shares of Common Stock shall be so listed,  such  listing of all Warrant  Shares
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall  so list on each  national  securities  exchange  or  automated  quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital  stock of the Company  issuable  upon the exercise of this Warrant if
and so long as any  shares of the same  class  shall be listed on such  national
securities exchange or automated quotation system.

                                       36
<PAGE>

The Company will not, by amendment of its Articles of  Incorporation  or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of securities,  or any other  voluntary  action,  avoid or seek to
avoid  the  observance  or  performance  of any of the terms to be  observed  or
performed  by it  hereunder,  but will at all times in good faith  assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may  reasonably be requested by the holder of this Warrant in order to
protect the exercise privilege of the holder of this Warrant against dilution or
other  impairment,  consistent  with the tenor and purpose of this Warrant.  The
Company will not increase the par value of any shares of Common Stock receivable
upon the  exercise  of this  Warrant  above the Warrant  Exercise  Price then in
effect,  and (ii) will take all such actions as may be necessary or  appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

This  Warrant  will be binding  upon any  entity  succeeding  to the  Company by
merger,  consolidation  or  acquisition  of  all  or  substantially  all  of the
Company's assets.

      TAXES.  THE  COMPANY  SHALL PAY ANY AND ALL TAXES,  EXCEPT ANY  APPLICABLE
WITHHOLDING,  WHICH MAY BE PAYABLE  WITH RESPECT TO THE ISSUANCE AND DELIVERY OF
WARRANT SHARES UPON EXERCISE OF THIS WARRANT.

      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED HEREIN,  NO HOLDER,  AS SUCH, OF THIS WARRANT SHALL BE ENTITLED TO VOTE
OR RECEIVE  DIVIDENDS OR BE DEEMED THE HOLDER OF SHARES OF CAPITAL  STOCK OF THE
COMPANY  FOR ANY  PURPOSE,  NOR SHALL  ANYTHING  CONTAINED  IN THIS  WARRANT  BE
CONSTRUED  TO CONFER  UPON THE HOLDER  HEREOF,  AS SUCH,  ANY OF THE RIGHTS OF A
STOCKHOLDER OF THE COMPANY OR ANY RIGHT TO VOTE, GIVE OR WITHHOLD CONSENT TO ANY
CORPORATE ACTION (WHETHER ANY REORGANIZATION,  ISSUE OF STOCK,  RECLASSIFICATION
OF STOCK,  CONSOLIDATION,  MERGER,  CONVEYANCE OR OTHERWISE),  RECEIVE NOTICE OF
MEETINGS,  RECEIVE DIVIDENDS OR SUBSCRIPTION RIGHTS, OR OTHERWISE,  PRIOR TO THE
ISSUANCE TO THE HOLDER OF THIS WARRANT OF THE WARRANT  SHARES WHICH HE OR SHE IS
THEN  ENTITLED TO RECEIVE  UPON THE DUE EXERCISE OF THIS  WARRANT.  IN ADDITION,
NOTHING CONTAINED IN THIS WARRANT SHALL BE CONSTRUED AS IMPOSING ANY LIABILITIES
ON SUCH HOLDER TO PURCHASE  ANY  SECURITIES  (UPON  EXERCISE OF THIS  WARRANT OR
OTHERWISE)  OR AS A STOCKHOLDER  OF THE COMPANY,  WHETHER SUCH  LIABILITIES  ARE
ASSERTED BY THE COMPANY OR BY  CREDITORS OF THE  COMPANY.  NOTWITHSTANDING  THIS
SECTION 5, THE COMPANY  WILL  PROVIDE THE HOLDER OF THIS  WARRANT WITH COPIES OF
THE SAME NOTICES AND OTHER  INFORMATION GIVEN TO THE STOCKHOLDERS OF THE COMPANY
GENERALLY, CONTEMPORANEOUSLY WITH THE GIVING THEREOF TO THE STOCKHOLDERS.

      REPRESENTATIONS OF HOLDER.  THE HOLDER OF THIS WARRANT,  BY THE ACCEPTANCE
HEREOF,  REPRESENTS THAT IT IS ACQUIRING THIS WARRANT AND THE WARRANT SHARES FOR
ITS OWN ACCOUNT FOR INVESTMENT  ONLY AND NOT WITH A VIEW TOWARDS,  OR FOR RESALE
IN  CONNECTION  WITH,  THE PUBLIC SALE OR  DISTRIBUTION  OF THIS  WARRANT OR THE
WARRANT  SHARES,  EXCEPT  PURSUANT TO SALES  REGISTERED  OR  EXEMPTED  UNDER THE
SECURITIES ACT; PROVIDED,  HOWEVER,  THAT BY MAKING THE REPRESENTATIONS  HEREIN,
THE HOLDER DOES NOT AGREE TO HOLD THIS WARRANT OR ANY OF THE WARRANT  SHARES FOR
ANY MINIMUM OR OTHER  SPECIFIC  TERM AND  RESERVES  THE RIGHT TO DISPOSE OF THIS
WARRANT AND THE WARRANT  SHARES AT ANY TIME IN ACCORDANCE  WITH OR PURSUANT TO A
REGISTRATION  STATEMENT OR AN EXEMPTION  UNDER THE SECURITIES ACT. THE HOLDER OF
THIS WARRANT FURTHER  REPRESENTS,  BY ACCEPTANCE HEREOF,  THAT, AS OF THIS DATE,
SUCH  HOLDER  IS AN  "ACCREDITED  INVESTOR"  AS  SUCH  TERM IS  DEFINED  IN RULE
501(A)(1) OF REGULATION D PROMULGATED BY THE SECURITIES AND EXCHANGE  COMMISSION
UNDER THE  SECURITIES  ACT (AN  "ACCREDITED  INVESTOR").  UPON  EXERCISE OF THIS
WARRANT THE HOLDER SHALL, IF REQUESTED BY THE COMPANY,  CONFIRM IN WRITING, IN A
FORM SATISFACTORY TO THE COMPANY, THAT THE WARRANT SHARES SO PURCHASED ARE BEING
ACQUIRED  SOLELY FOR THE HOLDER'S OWN ACCOUNT AND NOT AS A NOMINEE FOR ANY OTHER
PARTY,  FOR  INVESTMENT,  AND NOT WITH A VIEW TOWARD  DISTRIBUTION OR RESALE AND
THAT SUCH HOLDER IS AN  ACCREDITED  INVESTOR.  IF SUCH  HOLDER  CANNOT MAKE SUCH
REPRESENTATIONS  BECAUSE  THEY  WOULD  BE  FACTUALLY  INCORRECT,  IT  SHALL BE A
CONDITION TO SUCH  HOLDER'S  EXERCISE OF THIS  WARRANT THAT THE COMPANY  RECEIVE
SUCH OTHER  REPRESENTATIONS  AS THE COMPANY  CONSIDERS  REASONABLY  NECESSARY TO
ASSURE THE COMPANY THAT THE  ISSUANCE OF ITS  SECURITIES  UPON  EXERCISE OF THIS
WARRANT SHALL NOT VIOLATE ANY UNITED STATES OR STATE SECURITIES LAWS.

      OWNERSHIP AND TRANSFER.
      -----------------------

The Company  shall  maintain at its principal  executive  offices (or such other
office or agency of the  Company  as it may  designate  by notice to the  holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant has been issued, as well as
the name and  address of each  transferee.  The  Company may treat the person in
whose name any  Warrant is  registered  on the  register as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary, but in all
events  recognizing  any  transfers  made in  accordance  with the terms of this
Warrant.

                                       37
<PAGE>

      ADJUSTMENT  OF WARRANT  EXERCISE  PRICE AND NUMBER OF SHARES.  THE WARRANT
EXERCISE  PRICE AND THE NUMBER OF SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE
OF THIS WARRANT SHALL BE ADJUSTED  FROM TIME TO TIME AS FOLLOWS  (EXCEPT FOR ANY
ISSUANCES TO CORNELL  CAPITAL  PARTNERS,  LP AND OPTIONS GRANTED AND OUTSTANDING
BEFORE JULY 15, 2005 UNDER A BONA FIDE EMPLOYEE STOCK OPTION PLAN OF THE COMPANY
OR ISSUANCES OF RESTRICTED  STOCK IN CONNECTION WITH AN ACQUISITION OR A CAPITAL
RAISE WHICH WAS ENTERED INTO PRIOR TO JULY 15, 2005):

Adjustment  of Warrant  Exercise  Price and Number of Shares  upon  Issuance  of
Common Stock. If and whenever on or after the Issuance Date of this Warrant, the
Company  issues or sells,  or is deemed to have  issued or sold,  any  shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than a price (the "Applicable  Price") equal
to the Warrant  Exercise Price in effect  immediately  prior to such issuance or
sale, then immediately  after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such  consideration  per share.
Upon each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant  Shares  issuable upon exercise of this Warrant shall be adjusted to the
number of shares  determined by multiplying the Warrant Exercise Price in effect
immediately  prior to such  adjustment by the number of Warrant Shares  issuable
upon exercise of this Warrant  immediately prior to such adjustment and dividing
the  product  thereof  by  the  Warrant   Exercise  Price  resulting  from  such
adjustment.

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant  Exercise  Price under  Section 8(a) above,  the following
shall be applicable:

Issuance of Options.  If after the date hereof, the Company in any manner grants
any Options and the lowest  price per share for which one share of Common  Stock
is issuable upon the exercise of any such Option or upon  conversion or exchange
of any convertible  securities issuable upon exercise of any such Option is less
than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For  purposes of this
Section 8(b)(i),  the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of such
Convertible  Securities  shall  be  equal to the sum of the  lowest  amounts  of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the  Option  or upon  conversion  or  exchange  of any  convertible  security
issuable  upon  exercise of such Option.  No further  adjustment  of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  convertible
securities.

Issuance of Convertible Securities. If the Company in any manner issues or sells
any convertible securities and the lowest price per share for which one share of
Common Stock is issuable upon the  conversion  or exchange  thereof is less than
the  Applicable  Price,  then such share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
issuance or sale of such  convertible  securities for such price per share.  For
the purposes of this Section 8(b)(ii),  the lowest price per share for which one
share of Common  Stock is issuable  upon such  conversion  or exchange  shall be
equal to the sum of the lowest  amounts of  consideration  (if any)  received or
receivable  by the Company  with  respect to one share of Common  Stock upon the
issuance or sale of the convertible  security and upon conversion or exchange of
such convertible  security.  No further adjustment of the Warrant Exercise Price
shall be made upon the actual  issuance of such Common Stock upon  conversion or
exchange of such convertible  securities,  and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment
of the  Warrant  Exercise  Price  had been or are to be made  pursuant  to other
provisions of this Section 8(b), no further  adjustment of the Warrant  Exercise
Price shall be made by reason of such issue or sale.

                                       38
<PAGE>

Change in Option Price or Rate of Conversion. If the purchase price provided for
in any Options,  the additional  consideration,  if any, payable upon the issue,
conversion or exchange of any convertible  securities,  or the rate at which any
convertible  securities are convertible  into or  exchangeable  for Common Stock
changes at any time,  the Warrant  Exercise  Price in effect at the time of such
change shall be adjusted to the Warrant  Exercise Price which would have been in
effect at such time had such Options or convertible securities provided for such
changed purchase price, additional  consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
Warrant Shares  issuable upon exercise of this Warrant shall be  correspondingly
readjusted.  For purposes of this Section 8(b)(iii),  if the terms of any Option
or  convertible  security that was  outstanding  as of the Issuance Date of this
Warrant  are  changed  in the  manner  described  in the  immediately  preceding
sentence,  then such Option or convertible  security and the Common Stock deemed
issuable upon exercise,  conversion or exchange  thereof shall be deemed to have
been  issued  as of the date of such  change.  No  adjustment  pursuant  to this
Section 8(b) shall be made if such adjustment would result in an increase of the
Warrant Exercise Price then in effect.

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant Exercise Price under Sections 8(a) and 8(b), the following
shall be applicable:

Calculation  of  Consideration   Received.  If  any  Common  Stock,  Options  or
convertible  securities are issued or sold or deemed to have been issued or sold
for cash,  the  consideration  received  therefore  will be deemed to be the net
amount  received  by the  Company  therefore.  If any Common  Stock,  Options or
convertible  securities are issued or sold for a consideration  other than cash,
the amount of such consideration  received by the Company will be the fair value
of such  consideration,  except where such consideration  consists of marketable
securities,  in which case the amount of  consideration  received by the Company
will be the  market  price of such  securities  on the date of  receipt  of such
securities. If any Common Stock, Options or convertible securities are issued to
the owners of the  non-surviving  entity in connection  with any merger in which
the Company is the surviving entity, the amount of consideration  therefore will
be deemed to be the fair value of such portion of the net assets and business of
the  non-surviving  entity as is attributable  to such Common Stock,  Options or
convertible securities,  as the case may be. The fair value of any consideration
other than cash or securities will be determined  jointly by the Company and the
holders of Warrants  representing at least  two-thirds (b) of the Warrant Shares
issuable  upon exercise of the Warrants  then  outstanding.  If such parties are
unable to reach agreement  within ten (10) days after the occurrence of an event
requiring   valuation  (the   "Valuation   Event"),   the  fair  value  of  such
consideration  will be determined  within five (5) Business Days after the tenth
(10th) day following the Valuation Event by an independent,  reputable appraiser
jointly  selected by the Company  and the  holders of Warrants  representing  at
least  two-thirds  (b) of the  Warrant  Shares  issuable  upon  exercise  of the
Warrants then  outstanding.  The  determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such  appraiser  shall
be borne jointly by the Company and the holders of Warrants.

Integrated  Transactions.  In case any Option is issued in  connection  with the
issue  or sale of other  securities  of the  Company,  together  comprising  one
integrated  transaction in which no specific  consideration is allocated to such
Options by the parties  thereto,  the Options will be deemed to have been issued
for a consideration of $.01.

Treasury Shares.  The number of shares of Common Stock  outstanding at any given
time does not include shares owned or held by or for the account of the Company,
and the  disposition  of any shares so owned or held will be considered an issue
or sale of Common Stock.

Record  Date.  If the Company  takes a record of the holders of Common Stock for
the purpose of  entitling  them (1) to receive a dividend or other  distribution
payable  in  Common  Stock,  Options  or in  convertible  securities  or  (2) to
subscribe for or purchase Common Stock, Options or convertible securities,  then
such  record  date  will be  deemed  to be the date of the  issue or sale of the
shares of Common Stock  deemed to have been issued or sold upon the  declaration
of such  dividend  or the making of such other  distribution  or the date of the
granting of such right of subscription or purchase, as the case may be.

Adjustment of Warrant  Exercise Price upon  Subdivision or Combination of Common
Stock.  If the Company at any time after the date of  issuance  of this  Warrant
subdivides (by any stock split, stock dividend,  recapitalization  or otherwise)
one or more  classes of its  outstanding  shares of Common  Stock into a greater
number of shares, any Warrant Exercise Price in effect immediately prior to such
subdivision will be  proportionately  reduced and the number of shares of Common
Stock  obtainable  upon  exercise  of  this  Warrant  will  be   proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination,  reverse stock split or otherwise) one or more classes
of its outstanding  shares of Common Stock into a smaller number of shares,  any
Warrant Exercise Price in effect  immediately  prior to such combination will be
proportionately  increased  and the  number  of  Warrant  Shares  issuable  upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section  8(d) shall  become  effective at the close of business on the date
the subdivision or combination becomes effective.

                                       39
<PAGE>

Distribution  of Assets.  If the Company  shall  declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common  Stock,  by way of return of capital  or  otherwise  (including,  without
limitation,  any  distribution of cash, stock or other  securities,  property or
options  by  way  of  a   dividend,   spin  off,   reclassification,   corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

any Warrant Exercise Price in effect  immediately prior to the close of business
on the record  date  fixed for the  determination  of  holders  of Common  Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record  date,  to a price  determined  by  multiplying  such
Warrant  Exercise  Price by a fraction of which (A) the  numerator  shall be the
Closing Sale Price of the Common Stock on the trading day immediately  preceding
such  record date minus the value of the  Distribution  (as  determined  in good
faith by the  Company's  Board of  Directors)  applicable to one share of Common
Stock,  and (B) the  denominator  shall be the Closing  Sale Price of the Common
Stock on the trading day immediately preceding such record date; and

either (A) the number of Warrant Shares obtainable upon exercise of this Warrant
shall be increased to a number of shares equal to the number of shares of Common
Stock obtainable  immediately  prior to the close of business on the record date
fixed for the  determination  of holders of Common Stock entitled to receive the
Distribution  multiplied  by the  reciprocal  of the  fraction  set forth in the
immediately  preceding  clause (i), or (B) in the event that the Distribution is
of  common  stock of a  company  whose  common  stock is  traded  on a  national
securities exchange or a national automated quotation system, then the holder of
this Warrant shall receive an additional  warrant to purchase Common Stock,  the
terms of which shall be  identical  to those of this  Warrant,  except that such
warrant shall be exercisable  into the amount of the assets that would have been
payable to the  holder of this  Warrant  pursuant  to the  Distribution  had the
holder exercised this Warrant  immediately prior to such record date and with an
exercise  price equal to the amount by which the exercise  price of this Warrant
was  decreased  with  respect to the  Distribution  pursuant to the terms of the
immediately preceding clause (i).

Certain Events.  If any event occurs of the type  contemplated by the provisions
of this Section 8 but not expressly provided for by such provisions  (including,
without  limitation,  the granting of stock appreciation  rights,  phantom stock
rights or other  rights  with  equity  features),  then the  Company's  Board of
Directors will make an appropriate  adjustment in the Warrant Exercise Price and
the number of shares of Common Stock obtainable upon exercise of this Warrant so
as to protect the rights of the holders of the Warrants; provided, except as set
forth in section 8(d),that no such adjustment pursuant to this Section 8(f) will
increase the Warrant  Exercise  Price or decrease the number of shares of Common
Stock obtainable as otherwise determined pursuant to this Section 8.

Notices.

Immediately  upon any adjustment of the Warrant Exercise Price, the Company will
give written  notice  thereof to the holder of this  Warrant,  setting  forth in
reasonable detail, and certifying, the calculation of such adjustment.

The Company will give written  notice to the holder of this Warrant at least ten
(10) days  prior to the date on which the  Company  closes  its books or takes a
record (A) with respect to any dividend or  distribution  upon the Common Stock,
(B) with respect to any pro rata  subscription  offer to holders of Common Stock
or (C) for  determining  rights to vote with  respect to any Organic  Change (as
defined below), dissolution or liquidation, provided that such information shall
be made known to the public  prior to or in  conjunction  with such notice being
provided to such holder.

The Company will also give written notice to the holder of this Warrant at least
ten (10) days  prior to the date on which any  Organic  Change,  dissolution  or
liquidation will take place,  provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to such
holder.

                                       40
<PAGE>

      PURCHASE RIGHTS; REORGANIZATION,  RECLASSIFICATION,  CONSOLIDATION, MERGER
OR SALE.

In addition to any  adjustments  pursuant to Section 8 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights to
purchase  stock,  warrants,  securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then the holder of
this  Warrant  will be entitled to acquire,  upon the terms  applicable  to such
Purchase  Rights,  the  aggregate  Purchase  Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete  exercise of this Warrant  immediately  before the date on which a
record is taken for the grant,  issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

Any recapitalization,  reorganization, reclassification,  consolidation, merger,
sale of all or  substantially  all of the Company's  assets to another Person or
other  transaction  in each case which is effected in such a way that holders of
Common  Stock are  entitled  to  receive  (either  directly  or upon  subsequent
liquidation)  stock,  securities  or assets with  respect to or in exchange  for
Common  Stock  is  referred  to  herein  as an  "Organic  Change."  Prior to the
consummation of any (i) sale of all or substantially all of the Company's assets
to an acquiring  Person or (ii) other Organic Change following which the Company
is not a surviving  entity,  the Company will secure from the Person  purchasing
such assets or the successor  resulting  from such Organic Change (in each case,
the "Acquiring Entity") a written agreement (in form and substance  satisfactory
to the holders of Warrants representing at least two-thirds (iii) of the Warrant
Shares  issuable upon exercise of the Warrants then  outstanding)  to deliver to
each  holder of  Warrants  in  exchange  for such  Warrants,  a security  of the
Acquiring Entity evidenced by a written instrument substantially similar in form
and  substance to this Warrant and  satisfactory  to the holders of the Warrants
(including an adjusted  warrant exercise price equal to the value for the Common
Stock  reflected  by the  terms  of such  consolidation,  merger  or  sale,  and
exercisable for a corresponding  number of shares of Common Stock acquirable and
receivable  upon exercise of the Warrants  without regard to any  limitations on
exercise, if the value so reflected is less than any Applicable Warrant Exercise
Price immediately  prior to such  consolidation,  merger or sale).  Prior to the
consummation  of any other Organic  Change,  the Company shall make  appropriate
provision  (in  form and  substance  satisfactory  to the  holders  of  Warrants
representing  a majority of the Warrant  Shares  issuable  upon  exercise of the
Warrants  then  outstanding)  to insure that each of the holders of the Warrants
will  thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the Warrant Shares immediately  theretofore issuable and
receivable  upon the exercise of such holder's  Warrants  (without regard to any
limitations on exercise),  such shares of stock, securities or assets that would
have been  issued or  payable  in such  Organic  Change  with  respect  to or in
exchange  for the number of Warrant  Shares  which would have been  issuable and
receivable  upon the  exercise of such  holder's  Warrant as of the date of such
Organic Change  (without  taking into account any limitations or restrictions on
the exercisability of this Warrant).

      LOST,  STOLEN,  MUTILATED OR DESTROYED  WARRANT.  IF THIS WARRANT IS LOST,
STOLEN,  MUTILATED OR DESTROYED,  THE COMPANY SHALL  PROMPTLY,  ON RECEIPT OF AN
INDEMNIFICATION  UNDERTAKING  (OR,  IN THE  CASE  OF A  MUTILATED  WARRANT,  THE
WARRANT),  ISSUE A NEW WARRANT OF LIKE DENOMINATION AND TENOR AS THIS WARRANT SO
LOST, STOLEN, MUTILATED OR DESTROYED.

      NOTICE. ANY NOTICES, CONSENTS, WAIVERS OR OTHER COMMUNICATIONS REQUIRED OR
PERMITTED  TO BE GIVEN  UNDER THE TERMS OF THIS  WARRANT  MUST BE IN WRITING AND
WILL BE  DEEMED  TO HAVE  BEEN  DELIVERED:  (I)  UPON  RECEIPT,  WHEN  DELIVERED
PERSONALLY;  (II) UPON RECEIPT, WHEN SENT BY FACSIMILE (PROVIDED CONFIRMATION OF
RECEIPT IS  RECEIVED  BY THE  SENDING  PARTY  TRANSMISSION  IS  MECHANICALLY  OR
ELECTRONICALLY  GENERATED AND KEPT ON FILE BY THE SENDING  PARTY);  OR (III) ONE
BUSINESS  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:

                                       41
<PAGE>

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

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

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

With a copy to:            Kirkpatrick & Lockhart Nicholson Graham, LLP
                           201 South Biscayne Boulevard, Suite 2000
                           Miami, Florida 33131
                           Attention:   Clayton E. Parker, Esquire
                           Telephone:   (305) 539-3306
                           Facsimile:   (305) 358-7095

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth on Exhibit C hereto,  with copies to such holder's  representatives as set
forth on Exhibit C, or at such other address and facsimile as shall be delivered
to the Company upon the issuance or transfer of this  Warrant.  Each party shall
provide  five days'  prior  written  notice to the other  party of any change in
address or facsimile  number.  Written  confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally  recognized  overnight  delivery  service  shall be
rebuttable evidence of personal service,  receipt by facsimile or receipt from a
nationally  recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

      DATE.  THE  DATE OF THIS  WARRANT  IS SET  FORTH  ON PAGE 1  HEREOF.  THIS
WARRANT, IN ALL EVENTS, SHALL BE WHOLLY VOID AND OF NO EFFECT AFTER THE CLOSE OF
BUSINESS  ON  THE  EXPIRATION  DATE,  EXCEPT  THAT   NOTWITHSTANDING  ANY  OTHER
PROVISIONS  HEREOF,  THE PROVISIONS OF SECTION 8(B) SHALL CONTINUE IN FULL FORCE
AND EFFECT AFTER SUCH DATE AS TO ANY WARRANT SHARES OR OTHER  SECURITIES  ISSUED
UPON THE EXERCISE OF THIS WARRANT.

      AMENDMENT AND WAIVER.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS
OF THE  WARRANTS  MAY BE AMENDED  AND THE  COMPANY  MAY TAKE ANY  ACTION  HEREIN
PROHIBITED,  OR OMIT TO PERFORM ANY ACT HEREIN  REQUIRED TO BE  PERFORMED BY IT,
ONLY IF THE COMPANY HAS OBTAINED THE WRITTEN  CONSENT OF THE HOLDERS OF WARRANTS
REPRESENTING AT LEAST TWO-THIRDS OF THE WARRANT SHARES ISSUABLE UPON EXERCISE OF
THE WARRANTS THEN  OUTSTANDING;  PROVIDED THAT, EXCEPT FOR SECTION 8(D), NO SUCH
ACTION MAY INCREASE THE WARRANT  EXERCISE PRICE OR DECREASE THE NUMBER OF SHARES
OR CLASS OF STOCK  OBTAINABLE  UPON EXERCISE OF ANY WARRANT  WITHOUT THE WRITTEN
CONSENT OF THE HOLDER OF SUCH WARRANT.

                                       42
<PAGE>

      DESCRIPTIVE  HEADINGS;  GOVERNING  LAW.  THE  DESCRIPTIVE  HEADINGS OF THE
SEVERAL  SECTIONS AND  PARAGRAPHS  OF THIS WARRANT ARE INSERTED FOR  CONVENIENCE
ONLY AND DO NOT  CONSTITUTE A PART OF THIS WARRANT.  THE  CORPORATE  LAWS OF THE
STATE OF NEW JERSEY SHALL GOVERN ALL ISSUES  CONCERNING  THE RELATIVE  RIGHTS OF
THE  COMPANY  AND  ITS   STOCKHOLDERS.   ALL  OTHER  QUESTIONS   CONCERNING  THE
CONSTRUCTION,  VALIDITY,  ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE  INTERNAL  LAWS OF THE STATE OF NEW  JERSEY,  WITHOUT  GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW JERSEY OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION
OF THE LAWS OF ANY JURISDICTIONS  OTHER THAN THE STATE OF NEW JERSEY. EACH PARTY
HEREBY  IRREVOCABLY  SUBMITS  TO THE  EXCLUSIVE  JURISDICTION  OF THE  STATE AND
FEDERAL COURTS SITTING IN HUDSON COUNTY AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY,  FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR THEREWITH, OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING,  ANY CLAIM THAT IT IS NOT PERSONALLY  SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT,  THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY  IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS  TO PROCESS  BEING  SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER
THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

      WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT  FOR EACH PARTY HERETO TO
ENTER INTO THIS WARRANT,  THE PARTIES  HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL  PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                       43
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
the date first set forth above.

                                         TELEPLUS ENTERPRISES, INC.

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

                                       44
<PAGE>

                              EXHIBIT A TO WARRANT
                              --------------------

                                 EXERCISE NOTICE
                                 ---------------

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                           TELEPLUS ENTERPRISES, INC.

      The   undersigned   holder   hereby   exercises   the  right  to  purchase
______________  of the shares of Common  Stock  ("Warrant  Shares")  of Teleplus
Enterprises,  Inc.  (the  "Company"),  evidenced  by the  attached  Warrant (the
"Warrant").  Capitalized  terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

      1.    ___ Cash Exercise

            (a)   Payment of Warrant  Exercise  Price.  The holder shall pay the
                  Aggregate  Exercise Price of $______________ to the Company in
                  accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

      2.    ___ Cashless Exercise

            (a)   Payment of Warrant  Exercise  Price. In lieu of making payment
                  of the Aggregate  Exercise Price, the holder elects to receive
                  upon such  exercise  the Net Number of shares of Common  Stock
                  determined in accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

                                       45
<PAGE>

                              EXHIBIT B TO WARRANT
                              --------------------

                              FORM OF WARRANT POWER
                              ---------------------

      FOR VALUE  RECEIVED,  the  undersigned  does hereby assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares  of  the  capital  stock  of  Teleplus  Enterprises,   Inc.
represented  by  warrant  certificate  no.  _____,  standing  in the name of the
undersigned  on the  books of said  corporation.  The  undersigned  does  hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.

Dated:
      --------------------------         --------------------------------------

                                         By:
                                               --------------------------------
                                         Name:
                                               --------------------------------
                                         Title:
                                               --------------------------------

                                       46
<PAGE>

                                     WARRANT
                                     -------

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  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 FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                           TELEPLUS ENTERPRISES, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: TLPE-008                                Number of Shares: 5,000,000

Date of Issuance: July 28, 2006

Teleplus  Enterprises,  Inc.,  a  Nevada  corporation  (the  "Company"),  hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged,  CORNELL CAPITAL PARTNERS, LP ("Cornell"), the
registered holder hereof or its permitted assigns,  is entitled,  subject to the
terms set forth  below,  to purchase  from the Company  upon  surrender  of this
Warrant,  at any time or times on or after the date hereof,  but not after 11:59
P.M.  Eastern  Time on the  Expiration  Date (as defined  herein)  Five  Million
(5,000,000)  fully paid and  nonassessable  shares of Common  Stock (as  defined
herein) of the Company (the  "Warrant  Shares") at the exercise  price per share
provided in Section 1(b) below or as subsequently adjusted;  provided,  however,
that in no event shall the holder be entitled  to  exercise  this  Warrant for a
number of Warrant Shares in excess of that number of Warrant Shares which,  upon
giving effect to such  exercise,  would cause the aggregate  number of shares of
Common Stock beneficially owned by the holder and its affiliates to exceed 4.99%
of the outstanding  shares of the Common Stock  following such exercise,  except
within sixty (60) days of the Expiration Date (however,  such restriction may be
waived by Cornell  (but only as to itself and not to any other  holder) upon not
less than 65 days prior notice to the  Company).  For purposes of the  foregoing
provision,  the aggregate number of shares of Common Stock beneficially owned by
the holder and its affiliates shall include the number of shares of Common Stock
issuable upon  exercise of this Warrant with respect to which the  determination
of such  provision is being made, but shall exclude shares of Common Stock which
would be issuable  upon (i)  exercise  of the  remaining,  unexercised  Warrants
beneficially  owned  by the  holder  and its  affiliates  and (ii)  exercise  or
conversion of the unexercised or unconverted  portion of any other securities of
the  Company  beneficially  owned by the holder and its  affiliates  (including,
without  limitation,  any  convertible  notes or preferred  stock)  subject to a
limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein.  Except as set forth in the  preceding  sentence,  for  purposes of this
paragraph,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended.  For purposes of this
Warrant,  in  determining  the number of  outstanding  shares of Common  Stock a
holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company's most recent Form 10-QSB or Form 10-KSB, as the case may be,
(2) a more recent public  announcement by the Company or (3) any other notice by
the Company or its transfer  agent  setting forth the number of shares of Common
Stock  outstanding.  Upon the written  request of any holder,  the Company shall
promptly,  but in no event later than one (1) Business Day following the receipt
of such  notice,  confirm in writing to any such  holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the exercise of Warrants
(as defined below) by such holder and its affiliates  since the date as of which
such number of outstanding shares of Common Stock was reported.

                                       47
<PAGE>

This  Warrant  is the common  stock  purchase  warrant  (the  "Warrant")  issued
pursuant to the Securities Purchase Agreement ("Securities Purchase Agreement")
dated the date hereof between the Company and the Buyers listed on Schedule I
thereto.

Definitions.  The  following  words and terms as used in this Warrant shall have
the following meanings:

"Approved Stock Plan" means any employee benefit plan which has been approved by
the  Board  of  Directors  of the  Company,  pursuant  to  which  the  Company's
securities  may be issued to any  employee,  officer or  director  for  services
provided to the Company.

"Business Day" means any day other than  Saturday,  Sunday or other day on which
commercial  banks in the City of New York are  authorized  or required by law to
remain closed.

"Closing Bid Price" means the closing bid price of Common Stock as quoted on the
Principal  Market (as  reported by  Bloomberg  Financial  Markets  ("Bloomberg")
through its "Volume at Price" function).

"Common Stock" means (i) the Company's common stock, par value $0.001 per share,
and (ii) any capital  stock into which such Common Stock shall have been changed
or any capital stock resulting from a reclassification of such Common Stock.

"Event of  Default"  means an event of  default  under the  Securities  Purchase
Agreement or the Convertible Debentures issued in connection therewith.

"Excluded  Securities" means,  provided such security is issued at a price which
is greater than or equal to the arithmetic  average of the Closing Bid Prices of
the Common Stock for the ten (10) consecutive trading days immediately preceding
the date of issuance,  any of the following:  (a) any issuance by the Company of
securities in connection  with a strategic  partnership  or a joint venture (the
primary  purpose of which is not to raise equity  capital),  (b) any issuance by
the Company of securities as consideration  for a merger or consolidation or the
acquisition of a business,  product,  license, or other assets of another person
or entity and (c) options to purchase shares of Common Stock,  provided (I) such
options are issued  after the date of this  Warrant to  employees of the Company
within  thirty (30) days of such  employee's  starting his  employment  with the
Company,  and  (II) the  exercise  price of such  options  is not less  than the
Closing Bid Price of the Common Stock on the date of issuance of such option.

"Expiration  Date" means the date three (3) years from the Issuance Date of this
Warrant or, if such date falls on a Saturday, Sunday or other day on which banks
are required or  authorized to be closed in the City of New York or the State of
New York or on which  trading does not take place on the  Principal  Exchange or
automated  quotation  system on which the Common Stock is traded (a  "Holiday"),
the next date that is not a Holiday.

                                       48
<PAGE>

"Issuance Date" means the date hereof.

"Options"  means any rights,  warrants or options to  subscribe  for or purchase
Common Stock or Convertible Securities.

"Other  Securities"  means (i) those options and warrants of the Company  issued
prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the shares
of Common Stock issuable on exercise of such options and warrants, provided such
options and warrants are not amended after the Issuance Date of this Warrant and
(iii) the shares of Common Stock issuable upon exercise of this Warrant.

"Person" means an individual,  a limited  liability  company,  a partnership,  a
joint venture,  a corporation,  a trust, an  unincorporated  organization  and a
government or any department or agency thereof.

"Principal  Market"  means  the New York  Stock  Exchange,  the  American  Stock
Exchange,  the Nasdaq National Market, the Nasdaq SmallCap Market,  whichever is
at the time the principal  trading exchange or market for such security,  or the
over-the-counter  market on the  electronic  bulletin board for such security as
reported by  Bloomberg  or, if no bid or sale  information  is reported for such
security by Bloomberg,  then the average of the bid prices of each of the market
makers for such  security  as  reported  in the "pink  sheets"  by the  National
Quotation Bureau, Inc.

"Securities Act" means the Securities Act of 1933, as amended.

"Warrant"  means this Warrant and all Warrants  issued in exchange,  transfer or
replacement thereof.

"Warrant Exercise Price" shall be $0.18 or as subsequently  adjusted as provided
in Section 8 hereof.  Notwithstanding anything to the contrary, upon an Event of
Default, the Warrant Exercise Price shall be $0.05 (or as subsequently  adjusted
as provided in Section 8 hereof).

"Warrant  Shares"  means the shares of Common  Stock  issuable  at any time upon
exercise of this Warrant.

Other Definitional Provisions.

Except as otherwise  specified herein,  all references herein (A) to the Company
shall be deemed to include the Company's  successors  and (B) to any  applicable
law defined or referred to herein shall be deemed  references to such applicable
law as the same may have been or may be  amended  or  supplemented  from time to
time.

When used in this Warrant,  the words  "herein",  "hereof",  and "hereunder" and
words of similar  import,  shall refer to this Warrant as a whole and not to any
provision of this Warrant,  and the words "Section",  "Schedule",  and "Exhibit"
shall refer to Sections of, and Schedules  and Exhibits to, this Warrant  unless
otherwise specified.

Whenever the context so requires,  the neuter  gender  includes the masculine or
feminine, and the singular number includes the plural, and vice versa.

      EXERCISE OF WARRANT.
      --------------------

Subject to the terms and conditions hereof, this Warrant may be exercised by the
holder  hereof  then  registered  on the  books  of the  Company,  pro  rata  as
hereinafter provided, at any time on any Business Day on or after the opening of
business  on such  Business  Day,  commencing  with the first day after the date
hereof,  and prior to 11:59  P.M.  Eastern  Time on the  Expiration  Date (i) by
delivery of a written notice, in the form of the subscription notice attached as
Exhibit A hereto (the "Exercise Notice"),  of such holder's election to exercise
this  Warrant,  which  notice shall  specify the number of Warrant  Shares to be
purchased,  payment to the Company of an amount  equal to the  Warrant  Exercise
Price(s)  applicable to the Warrant  Shares being  purchased,  multiplied by the
number of Warrant Shares (at the applicable  Warrant Exercise Price) as to which
this Warrant is being  exercised  (plus any applicable  issue or transfer taxes)
(the  "Aggregate  Exercise  Price")  in  cash or wire  transfer  of  immediately
available  funds  and the  surrender  of  this  Warrant  (or an  indemnification
undertaking  with  respect  to this  Warrant  in the case of its loss,  theft or
destruction)  to a common carrier for overnight  delivery to the Company as soon
as  practicable  following  such date  ("Cash  Basis") or (ii) if at the time of
exercise,  the  Warrant  Shares  are not  subject to an  effective  registration
statement  or if an Event of Default has  occurred,  by  delivering  an Exercise
Notice and in lieu of making payment of the Aggregate  Exercise Price in cash or
wire  transfer,  elect instead to receive upon such exercise the "Net Number" of
shares of Common  Stock  determined  according  to the  following  formula  (the
"Cashless Exercise"):

                                       49
<PAGE>

         Net Number = (A x B) - (A x C)
                       ---------------
                              B

            For purposes of the foregoing formula:

            A     = the total  number of Warrant  Shares  with  respect to which
                  this Warrant is then being exercised.

            B     = the  Closing  Bid Price of the  Common  Stock on the date of
                  exercise of the Warrant.

            C     = the Warrant Exercise Price then in effect for the applicable
                  Warrant Shares at the time of such exercise.

      IN THE EVENT OF ANY EXERCISE OF THE RIGHTS  REPRESENTED BY THIS WARRANT IN
COMPLIANCE  WITH THIS SECTION 2, THE COMPANY  SHALL ON OR BEFORE THE FIFTH (5TH)
BUSINESS DAY FOLLOWING THE DATE OF RECEIPT OF THE EXERCISE NOTICE, THE AGGREGATE
EXERCISE PRICE AND THIS WARRANT (OR AN INDEMNIFICATION  UNDERTAKING WITH RESPECT
TO THIS WARRANT IN THE CASE OF ITS LOSS,  THEFT OR DESTRUCTION)  AND THE RECEIPT
OF THE REPRESENTATIONS OF THE HOLDER SPECIFIED IN SECTION 6 HEREOF, IF REQUESTED
BY THE COMPANY (THE "EXERCISE DELIVERY  DOCUMENTS"),  AND IF THE COMMON STOCK IS
DTC ELIGIBLE,  CREDIT SUCH  AGGREGATE  NUMBER OF SHARES OF COMMON STOCK TO WHICH
THE HOLDER SHALL BE ENTITLED TO THE HOLDER'S OR ITS DESIGNEE'S  BALANCE  ACCOUNT
WITH  THE  DEPOSITORY  TRUST  COMPANY;  PROVIDED,  HOWEVER,  IF THE  HOLDER  WHO
SUBMITTED THE EXERCISE NOTICE REQUESTED  PHYSICAL  DELIVERY OF ANY OR ALL OF THE
WARRANT  SHARES,  OR, IF THE COMMON STOCK IS NOT DTC  ELIGIBLE  THEN THE COMPANY
SHALL,  ON OR BEFORE  THE FIFTH  (5TH)  BUSINESS  DAY  FOLLOWING  RECEIPT OF THE
EXERCISE  DELIVERY  DOCUMENTS,  ISSUE  AND  SURRENDER  TO A COMMON  CARRIER  FOR
OVERNIGHT   DELIVERY  TO  THE  ADDRESS  SPECIFIED  IN  THE  EXERCISE  NOTICE,  A
CERTIFICATE,  REGISTERED IN THE NAME OF THE HOLDER,  FOR THE NUMBER OF SHARES OF
COMMON  STOCK TO WHICH THE HOLDER  SHALL BE ENTITLED  PURSUANT TO SUCH  REQUEST.
UPON DELIVERY OF THE EXERCISE NOTICE AND AGGREGATE EXERCISE PRICE REFERRED TO IN
CLAUSE  (I) OR (II)  ABOVE THE  HOLDER OF THIS  WARRANT  SHALL BE DEEMED FOR ALL
CORPORATE  PURPOSES TO HAVE  BECOME THE HOLDER OF RECORD OF THE  WARRANT  SHARES
WITH RESPECT TO WHICH THIS WARRANT HAS BEEN EXERCISED.  IN THE CASE OF A DISPUTE
AS TO THE  DETERMINATION OF THE WARRANT EXERCISE PRICE, THE CLOSING BID PRICE OR
THE  ARITHMETIC  CALCULATION OF THE WARRANT  SHARES,  THE COMPANY SHALL PROMPTLY
ISSUE TO THE HOLDER THE NUMBER OF WARRANT  SHARES THAT IS NOT DISPUTED AND SHALL
SUBMIT THE DISPUTED  DETERMINATIONS OR ARITHMETIC CALCULATIONS TO THE HOLDER VIA
FACSIMILE  WITHIN  ONE (1)  BUSINESS  DAY OF RECEIPT  OF THE  HOLDER'S  EXERCISE
NOTICE.

If the holder and the Company are unable to agree upon the  determination of the
Warrant  Exercise  Price or arithmetic  calculation of the Warrant Shares within
one (1) day of such  disputed  determination  or  arithmetic  calculation  being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed  determination of the Warrant Exercise Price or the Closing Bid
Price to an independent,  reputable investment banking firm or (ii) the disputed
arithmetic  calculation  of  the  Warrant  Shares  to its  independent,  outside
accountant.  The  Company  shall  cause  the  investment  banking  firm  or  the
accountant,  as the case may be, to perform the  determinations  or calculations
and notify the Company  and the holder of the results no later than  forty-eight
(48)  hours  from  the  time  it  receives   the  disputed   determinations   or
calculations.  Such investment  banking firm's or accountant's  determination or
calculation,  as the case may be,  shall be deemed  conclusive  absent  manifest
error.

Unless the rights  represented  by this Warrant shall have expired or shall have
been fully exercised,  the Company shall, as soon as practicable and in no event
later than five (5)  Business  Days after any  exercise  and at its own expense,
issue a new Warrant  identical in all respects to this Warrant  exercised except
it shall represent  rights to purchase the number of Warrant Shares  purchasable
immediately prior to such exercise under this Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is exercised.

                                       50
<PAGE>

No fractional Warrant Shares are to be issued upon any pro rata exercise of this
Warrant,  but rather the number of Warrant  Shares  issued upon such exercise of
this Warrant shall be rounded up or down to the nearest whole number.

If the Company or its Transfer  Agent shall fail for any reason or for no reason
to issue to the holder within ten (10) days of receipt of the Exercise  Delivery
Documents, a certificate for the number of Warrant Shares to which the holder is
entitled or to credit the holder's  balance  account with The  Depository  Trust
Company for such number of Warrant  Shares to which the holder is entitled  upon
the holder's  exercise of this Warrant,  the Company  shall,  in addition to any
other remedies under this Warrant or the Placement  Agent Agreement or otherwise
available to such holder,  pay as  additional  damages in cash to such holder on
each day the  issuance  of such  certificate  for  Warrant  Shares is not timely
effected  an amount  equal to 0.025% of the product of (A) the sum of the number
of Warrant  Shares  not issued to the holder on a timely  basis and to which the
holder is  entitled,  and (B) the Closing Bid Price of the Common  Stock for the
trading day immediately preceding the last possible date which the Company could
have issued such Common Stock to the holder without violating this Section 2.

If within ten (10) days after the  Company's  receipt of the  Exercise  Delivery
Documents,  the  Company  fails to  deliver a new  Warrant to the holder for the
number of Warrant Shares to which such holder is entitled  pursuant to Section 2
hereof,  then, in addition to any other available remedies under this Warrant or
the  Placement  Agent  Agreement,  or otherwise  available  to such holder,  the
Company shall pay as additional damages in cash to such holder on each day after
such  tenth  (10th)  day that such  delivery  of such new  Warrant is not timely
effected in an amount equal to 0.25% of the product of (A) the number of Warrant
Shares  represented by the portion of this Warrant which is not being  exercised
and (B)  the  Closing  Bid  Price  of the  Common  Stock  for  the  trading  day
immediately preceding the last possible date which the Company could have issued
such Warrant to the holder without violating this Section 2.

Forced  Exercise by the Company.  At the option of the Company,  the Company may
force  Cornell to exercise the Warrant at an price equal to $0.20  provided that
(i) the Company's Common Stock is trading at $0.30 or higher for a period of ten
(10)  consecutive  Trading Days  immediately  prior to such  exercise,  (ii) the
trading volume during those ten (10) Trading Days exceeds Four Hundred  Thousand
(400,000)  shares  per day,  (iii) the  Warrant  Shares are  registered  and the
registration  statement is declared  effective and (iv) such forced  exercise by
the  Company  shall  not cause the  aggregate  number of shares of Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding shares of the Common Stock following such exercise.

      COVENANTS AS TO COMMON STOCK.  THE COMPANY HEREBY  COVENANTS AND AGREES AS
FOLLOWS:

This Warrant is, and any Warrants issued in  substitution  for or replacement of
this Warrant will upon issuance be, duly authorized and validly issued.

All  Warrant  Shares  which  may be  issued  upon  the  exercise  of the  rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

During the period  within  which the rights  represented  by this Warrant may be
exercised,  the Company will at all times have  authorized and reserved at least
one hundred  percent  (100%) of the number of shares of Common  Stock  needed to
provide for the exercise of the rights then  represented by this Warrant and the
par  value  of said  shares  will at all  times  be less  than or  equal  to the
applicable  Warrant  Exercise  Price. If at any time the Company does not have a
sufficient  number of shares of Common Stock authorized and available,  then the
Company shall call and hold a special meeting of its  stockholders  within sixty
(60)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

If at any time after the date  hereof  the  Company  shall  file a  registration
statement,  the Company shall include the Warrant Shares issuable to the holder,
pursuant to the terms of this Warrant and shall  maintain,  so long as any other
shares of Common Stock shall be so listed,  such  listing of all Warrant  Shares
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall  so list on each  national  securities  exchange  or  automated  quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital  stock of the Company  issuable  upon the exercise of this Warrant if
and so long as any  shares of the same  class  shall be listed on such  national
securities exchange or automated quotation system.

                                       51
<PAGE>

The Company will not, by amendment of its Articles of  Incorporation  or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of securities,  or any other  voluntary  action,  avoid or seek to
avoid  the  observance  or  performance  of any of the terms to be  observed  or
performed  by it  hereunder,  but will at all times in good faith  assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may  reasonably be requested by the holder of this Warrant in order to
protect the exercise privilege of the holder of this Warrant against dilution or
other  impairment,  consistent  with the tenor and purpose of this Warrant.  The
Company will not increase the par value of any shares of Common Stock receivable
upon the  exercise  of this  Warrant  above the Warrant  Exercise  Price then in
effect,  and (ii) will take all such actions as may be necessary or  appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

This  Warrant  will be binding  upon any  entity  succeeding  to the  Company by
merger,  consolidation  or  acquisition  of  all  or  substantially  all  of the
Company's assets.

      TAXES.  THE  COMPANY  SHALL PAY ANY AND ALL TAXES,  EXCEPT ANY  APPLICABLE
WITHHOLDING,  WHICH MAY BE PAYABLE  WITH RESPECT TO THE ISSUANCE AND DELIVERY OF
WARRANT SHARES UPON EXERCISE OF THIS WARRANT.

      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED HEREIN,  NO HOLDER,  AS SUCH, OF THIS WARRANT SHALL BE ENTITLED TO VOTE
OR RECEIVE  DIVIDENDS OR BE DEEMED THE HOLDER OF SHARES OF CAPITAL  STOCK OF THE
COMPANY  FOR ANY  PURPOSE,  NOR SHALL  ANYTHING  CONTAINED  IN THIS  WARRANT  BE
CONSTRUED  TO CONFER  UPON THE HOLDER  HEREOF,  AS SUCH,  ANY OF THE RIGHTS OF A
STOCKHOLDER OF THE COMPANY OR ANY RIGHT TO VOTE, GIVE OR WITHHOLD CONSENT TO ANY
CORPORATE ACTION (WHETHER ANY REORGANIZATION,  ISSUE OF STOCK,  RECLASSIFICATION
OF STOCK,  CONSOLIDATION,  MERGER,  CONVEYANCE OR OTHERWISE),  RECEIVE NOTICE OF
MEETINGS,  RECEIVE DIVIDENDS OR SUBSCRIPTION RIGHTS, OR OTHERWISE,  PRIOR TO THE
ISSUANCE TO THE HOLDER OF THIS WARRANT OF THE WARRANT  SHARES WHICH HE OR SHE IS
THEN  ENTITLED TO RECEIVE  UPON THE DUE EXERCISE OF THIS  WARRANT.  IN ADDITION,
NOTHING CONTAINED IN THIS WARRANT SHALL BE CONSTRUED AS IMPOSING ANY LIABILITIES
ON SUCH HOLDER TO PURCHASE  ANY  SECURITIES  (UPON  EXERCISE OF THIS  WARRANT OR
OTHERWISE)  OR AS A STOCKHOLDER  OF THE COMPANY,  WHETHER SUCH  LIABILITIES  ARE
ASSERTED BY THE COMPANY OR BY  CREDITORS OF THE  COMPANY.  NOTWITHSTANDING  THIS
SECTION 5, THE COMPANY  WILL  PROVIDE THE HOLDER OF THIS  WARRANT WITH COPIES OF
THE SAME NOTICES AND OTHER  INFORMATION GIVEN TO THE STOCKHOLDERS OF THE COMPANY
GENERALLY, CONTEMPORANEOUSLY WITH THE GIVING THEREOF TO THE STOCKHOLDERS.

      REPRESENTATIONS OF HOLDER.  THE HOLDER OF THIS WARRANT,  BY THE ACCEPTANCE
HEREOF,  REPRESENTS THAT IT IS ACQUIRING THIS WARRANT AND THE WARRANT SHARES FOR
ITS OWN ACCOUNT FOR INVESTMENT  ONLY AND NOT WITH A VIEW TOWARDS,  OR FOR RESALE
IN  CONNECTION  WITH,  THE PUBLIC SALE OR  DISTRIBUTION  OF THIS  WARRANT OR THE
WARRANT  SHARES,  EXCEPT  PURSUANT TO SALES  REGISTERED  OR  EXEMPTED  UNDER THE
SECURITIES ACT; PROVIDED,  HOWEVER,  THAT BY MAKING THE REPRESENTATIONS  HEREIN,
THE HOLDER DOES NOT AGREE TO HOLD THIS WARRANT OR ANY OF THE WARRANT  SHARES FOR
ANY MINIMUM OR OTHER  SPECIFIC  TERM AND  RESERVES  THE RIGHT TO DISPOSE OF THIS
WARRANT AND THE WARRANT  SHARES AT ANY TIME IN ACCORDANCE  WITH OR PURSUANT TO A
REGISTRATION  STATEMENT OR AN EXEMPTION  UNDER THE SECURITIES ACT. THE HOLDER OF
THIS WARRANT FURTHER  REPRESENTS,  BY ACCEPTANCE HEREOF,  THAT, AS OF THIS DATE,
SUCH  HOLDER  IS AN  "ACCREDITED  INVESTOR"  AS  SUCH  TERM IS  DEFINED  IN RULE
501(A)(1) OF REGULATION D PROMULGATED BY THE SECURITIES AND EXCHANGE  COMMISSION
UNDER THE  SECURITIES  ACT (AN  "ACCREDITED  INVESTOR").  UPON  EXERCISE OF THIS
WARRANT THE HOLDER SHALL, IF REQUESTED BY THE COMPANY,  CONFIRM IN WRITING, IN A
FORM SATISFACTORY TO THE COMPANY, THAT THE WARRANT SHARES SO PURCHASED ARE BEING
ACQUIRED  SOLELY FOR THE HOLDER'S OWN ACCOUNT AND NOT AS A NOMINEE FOR ANY OTHER
PARTY,  FOR  INVESTMENT,  AND NOT WITH A VIEW TOWARD  DISTRIBUTION OR RESALE AND
THAT SUCH HOLDER IS AN  ACCREDITED  INVESTOR.  IF SUCH  HOLDER  CANNOT MAKE SUCH
REPRESENTATIONS  BECAUSE  THEY  WOULD  BE  FACTUALLY  INCORRECT,  IT  SHALL BE A
CONDITION TO SUCH  HOLDER'S  EXERCISE OF THIS  WARRANT THAT THE COMPANY  RECEIVE
SUCH OTHER  REPRESENTATIONS  AS THE COMPANY  CONSIDERS  REASONABLY  NECESSARY TO
ASSURE THE COMPANY THAT THE  ISSUANCE OF ITS  SECURITIES  UPON  EXERCISE OF THIS
WARRANT SHALL NOT VIOLATE ANY UNITED STATES OR STATE SECURITIES LAWS.

      OWNERSHIP AND TRANSFER.
      -----------------------

The Company  shall  maintain at its principal  executive  offices (or such other
office or agency of the  Company  as it may  designate  by notice to the  holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant has been issued, as well as
the name and  address of each  transferee.  The  Company may treat the person in
whose name any  Warrant is  registered  on the  register as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary, but in all
events  recognizing  any  transfers  made in  accordance  with the terms of this
Warrant.

                                       52
<PAGE>

      ADJUSTMENT  OF WARRANT  EXERCISE  PRICE AND NUMBER OF SHARES.  THE WARRANT
EXERCISE  PRICE AND THE NUMBER OF SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE
OF THIS WARRANT SHALL BE ADJUSTED  FROM TIME TO TIME AS FOLLOWS  (EXCEPT FOR ANY
ISSUANCES TO CORNELL  CAPITAL  PARTNERS,  LP AND OPTIONS GRANTED AND OUTSTANDING
BEFORE JULY 15, 2005 UNDER A BONA FIDE EMPLOYEE STOCK OPTION PLAN OF THE COMPANY
OR ISSUANCES OF RESTRICTED  STOCK IN CONNECTION WITH AN ACQUISITION OR A CAPITAL
RAISE WHICH WAS ENTERED INTO PRIOR TO JULY 15, 2005):

Adjustment  of Warrant  Exercise  Price and Number of Shares  upon  Issuance  of
Common Stock. If and whenever on or after the Issuance Date of this Warrant, the
Company  issues or sells,  or is deemed to have  issued or sold,  any  shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than a price (the "Applicable  Price") equal
to the Warrant  Exercise Price in effect  immediately  prior to such issuance or
sale, then immediately  after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such  consideration  per share.
Upon each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant  Shares  issuable upon exercise of this Warrant shall be adjusted to the
number of shares  determined by multiplying the Warrant Exercise Price in effect
immediately  prior to such  adjustment by the number of Warrant Shares  issuable
upon exercise of this Warrant  immediately prior to such adjustment and dividing
the  product  thereof  by  the  Warrant   Exercise  Price  resulting  from  such
adjustment.

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant  Exercise  Price under  Section 8(a) above,  the following
shall be applicable:

Issuance of Options.  If after the date hereof, the Company in any manner grants
any Options and the lowest  price per share for which one share of Common  Stock
is issuable upon the exercise of any such Option or upon  conversion or exchange
of any convertible  securities issuable upon exercise of any such Option is less
than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For  purposes of this
Section 8(b)(i),  the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of such
Convertible  Securities  shall  be  equal to the sum of the  lowest  amounts  of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the  Option  or upon  conversion  or  exchange  of any  convertible  security
issuable  upon  exercise of such Option.  No further  adjustment  of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  convertible
securities.

Issuance of Convertible Securities. If the Company in any manner issues or sells
any convertible securities and the lowest price per share for which one share of
Common Stock is issuable upon the  conversion  or exchange  thereof is less than
the  Applicable  Price,  then such share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
issuance or sale of such  convertible  securities for such price per share.  For
the purposes of this Section 8(b)(ii),  the lowest price per share for which one
share of Common  Stock is issuable  upon such  conversion  or exchange  shall be
equal to the sum of the lowest  amounts of  consideration  (if any)  received or
receivable  by the Company  with  respect to one share of Common  Stock upon the
issuance or sale of the convertible  security and upon conversion or exchange of
such convertible  security.  No further adjustment of the Warrant Exercise Price
shall be made upon the actual  issuance of such Common Stock upon  conversion or
exchange of such convertible  securities,  and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment
of the  Warrant  Exercise  Price  had been or are to be made  pursuant  to other
provisions of this Section 8(b), no further  adjustment of the Warrant  Exercise
Price shall be made by reason of such issue or sale.

                                       53
<PAGE>

Change in Option Price or Rate of Conversion. If the purchase price provided for
in any Options,  the additional  consideration,  if any, payable upon the issue,
conversion or exchange of any convertible  securities,  or the rate at which any
convertible  securities are convertible  into or  exchangeable  for Common Stock
changes at any time,  the Warrant  Exercise  Price in effect at the time of such
change shall be adjusted to the Warrant  Exercise Price which would have been in
effect at such time had such Options or convertible securities provided for such
changed purchase price, additional  consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
Warrant Shares  issuable upon exercise of this Warrant shall be  correspondingly
readjusted.  For purposes of this Section 8(b)(iii),  if the terms of any Option
or  convertible  security that was  outstanding  as of the Issuance Date of this
Warrant  are  changed  in the  manner  described  in the  immediately  preceding
sentence,  then such Option or convertible  security and the Common Stock deemed
issuable upon exercise,  conversion or exchange  thereof shall be deemed to have
been  issued  as of the date of such  change.  No  adjustment  pursuant  to this
Section 8(b) shall be made if such adjustment would result in an increase of the
Warrant Exercise Price then in effect.

Effect on Warrant Exercise Price of Certain Events.  For purposes of determining
the adjusted  Warrant Exercise Price under Sections 8(a) and 8(b), the following
shall be applicable:

Calculation  of  Consideration   Received.  If  any  Common  Stock,  Options  or
convertible  securities are issued or sold or deemed to have been issued or sold
for cash,  the  consideration  received  therefore  will be deemed to be the net
amount  received  by the  Company  therefore.  If any Common  Stock,  Options or
convertible  securities are issued or sold for a consideration  other than cash,
the amount of such consideration  received by the Company will be the fair value
of such  consideration,  except where such consideration  consists of marketable
securities,  in which case the amount of  consideration  received by the Company
will be the  market  price of such  securities  on the date of  receipt  of such
securities. If any Common Stock, Options or convertible securities are issued to
the owners of the  non-surviving  entity in connection  with any merger in which
the Company is the surviving entity, the amount of consideration  therefore will
be deemed to be the fair value of such portion of the net assets and business of
the  non-surviving  entity as is attributable  to such Common Stock,  Options or
convertible securities,  as the case may be. The fair value of any consideration
other than cash or securities will be determined  jointly by the Company and the
holders of Warrants  representing at least  two-thirds (b) of the Warrant Shares
issuable  upon exercise of the Warrants  then  outstanding.  If such parties are
unable to reach agreement  within ten (10) days after the occurrence of an event
requiring   valuation  (the   "Valuation   Event"),   the  fair  value  of  such
consideration  will be determined  within five (5) Business Days after the tenth
(10th) day following the Valuation Event by an independent,  reputable appraiser
jointly  selected by the Company  and the  holders of Warrants  representing  at
least  two-thirds  (b) of the  Warrant  Shares  issuable  upon  exercise  of the
Warrants then  outstanding.  The  determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such  appraiser  shall
be borne jointly by the Company and the holders of Warrants.

Integrated  Transactions.  In case any Option is issued in  connection  with the
issue  or sale of other  securities  of the  Company,  together  comprising  one
integrated  transaction in which no specific  consideration is allocated to such
Options by the parties  thereto,  the Options will be deemed to have been issued
for a consideration of $.01.

Treasury Shares.  The number of shares of Common Stock  outstanding at any given
time does not include shares owned or held by or for the account of the Company,
and the  disposition  of any shares so owned or held will be considered an issue
or sale of Common Stock.

Record  Date.  If the Company  takes a record of the holders of Common Stock for
the purpose of  entitling  them (1) to receive a dividend or other  distribution
payable  in  Common  Stock,  Options  or in  convertible  securities  or  (2) to
subscribe for or purchase Common Stock, Options or convertible securities,  then
such  record  date  will be  deemed  to be the date of the  issue or sale of the
shares of Common Stock  deemed to have been issued or sold upon the  declaration
of such  dividend  or the making of such other  distribution  or the date of the
granting of such right of subscription or purchase, as the case may be.

                                       54
<PAGE>

Adjustment of Warrant  Exercise Price upon  Subdivision or Combination of Common
Stock.  If the Company at any time after the date of  issuance  of this  Warrant
subdivides (by any stock split, stock dividend,  recapitalization  or otherwise)
one or more  classes of its  outstanding  shares of Common  Stock into a greater
number of shares, any Warrant Exercise Price in effect immediately prior to such
subdivision will be  proportionately  reduced and the number of shares of Common
Stock  obtainable  upon  exercise  of  this  Warrant  will  be   proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination,  reverse stock split or otherwise) one or more classes
of its outstanding  shares of Common Stock into a smaller number of shares,  any
Warrant Exercise Price in effect  immediately  prior to such combination will be
proportionately  increased  and the  number  of  Warrant  Shares  issuable  upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section  8(d) shall  become  effective at the close of business on the date
the subdivision or combination becomes effective.

Distribution  of Assets.  If the Company  shall  declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common  Stock,  by way of return of capital  or  otherwise  (including,  without
limitation,  any  distribution of cash, stock or other  securities,  property or
options  by  way  of  a   dividend,   spin  off,   reclassification,   corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

any Warrant Exercise Price in effect  immediately prior to the close of business
on the record  date  fixed for the  determination  of  holders  of Common  Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record  date,  to a price  determined  by  multiplying  such
Warrant  Exercise  Price by a fraction of which (A) the  numerator  shall be the
Closing Sale Price of the Common Stock on the trading day immediately  preceding
such  record date minus the value of the  Distribution  (as  determined  in good
faith by the  Company's  Board of  Directors)  applicable to one share of Common
Stock,  and (B) the  denominator  shall be the Closing  Sale Price of the Common
Stock on the trading day immediately preceding such record date; and

either (A) the number of Warrant Shares obtainable upon exercise of this Warrant
shall be increased to a number of shares equal to the number of shares of Common
Stock obtainable  immediately  prior to the close of business on the record date
fixed for the  determination  of holders of Common Stock entitled to receive the
Distribution  multiplied  by the  reciprocal  of the  fraction  set forth in the
immediately  preceding  clause (i), or (B) in the event that the Distribution is
of  common  stock of a  company  whose  common  stock is  traded  on a  national
securities exchange or a national automated quotation system, then the holder of
this Warrant shall receive an additional  warrant to purchase Common Stock,  the
terms of which shall be  identical  to those of this  Warrant,  except that such
warrant shall be exercisable  into the amount of the assets that would have been
payable to the  holder of this  Warrant  pursuant  to the  Distribution  had the
holder exercised this Warrant  immediately prior to such record date and with an
exercise  price equal to the amount by which the exercise  price of this Warrant
was  decreased  with  respect to the  Distribution  pursuant to the terms of the
immediately preceding clause (i).

Certain Events.  If any event occurs of the type  contemplated by the provisions
of this Section 8 but not expressly provided for by such provisions  (including,
without  limitation,  the granting of stock appreciation  rights,  phantom stock
rights or other  rights  with  equity  features),  then the  Company's  Board of
Directors will make an appropriate  adjustment in the Warrant Exercise Price and
the number of shares of Common Stock obtainable upon exercise of this Warrant so
as to protect the rights of the holders of the Warrants; provided, except as set
forth in section 8(d),that no such adjustment pursuant to this Section 8(f) will
increase the Warrant  Exercise  Price or decrease the number of shares of Common
Stock obtainable as otherwise determined pursuant to this Section 8.

Notices.

Immediately  upon any adjustment of the Warrant Exercise Price, the Company will
give written  notice  thereof to the holder of this  Warrant,  setting  forth in
reasonable detail, and certifying, the calculation of such adjustment.

The Company will give written  notice to the holder of this Warrant at least ten
(10) days  prior to the date on which the  Company  closes  its books or takes a
record (A) with respect to any dividend or  distribution  upon the Common Stock,
(B) with respect to any pro rata  subscription  offer to holders of Common Stock
or (C) for  determining  rights to vote with  respect to any Organic  Change (as
defined below), dissolution or liquidation, provided that such information shall
be made known to the public  prior to or in  conjunction  with such notice being
provided to such holder.

The Company will also give written notice to the holder of this Warrant at least
ten (10) days  prior to the date on which any  Organic  Change,  dissolution  or
liquidation will take place,  provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to such
holder.

                                       55
<PAGE>

      PURCHASE RIGHTS; REORGANIZATION,  RECLASSIFICATION,  CONSOLIDATION, MERGER
OR SALE.

In addition to any  adjustments  pursuant to Section 8 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights to
purchase  stock,  warrants,  securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then the holder of
this  Warrant  will be entitled to acquire,  upon the terms  applicable  to such
Purchase  Rights,  the  aggregate  Purchase  Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete  exercise of this Warrant  immediately  before the date on which a
record is taken for the grant,  issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

Any recapitalization,  reorganization, reclassification,  consolidation, merger,
sale of all or  substantially  all of the Company's  assets to another Person or
other  transaction  in each case which is effected in such a way that holders of
Common  Stock are  entitled  to  receive  (either  directly  or upon  subsequent
liquidation)  stock,  securities  or assets with  respect to or in exchange  for
Common  Stock  is  referred  to  herein  as an  "Organic  Change."  Prior to the
consummation of any (i) sale of all or substantially all of the Company's assets
to an acquiring  Person or (ii) other Organic Change following which the Company
is not a surviving  entity,  the Company will secure from the Person  purchasing
such assets or the successor  resulting  from such Organic Change (in each case,
the "Acquiring Entity") a written agreement (in form and substance  satisfactory
to the holders of Warrants representing at least two-thirds (iii) of the Warrant
Shares  issuable upon exercise of the Warrants then  outstanding)  to deliver to
each  holder of  Warrants  in  exchange  for such  Warrants,  a security  of the
Acquiring Entity evidenced by a written instrument substantially similar in form
and  substance to this Warrant and  satisfactory  to the holders of the Warrants
(including an adjusted  warrant exercise price equal to the value for the Common
Stock  reflected  by the  terms  of such  consolidation,  merger  or  sale,  and
exercisable for a corresponding  number of shares of Common Stock acquirable and
receivable  upon exercise of the Warrants  without regard to any  limitations on
exercise, if the value so reflected is less than any Applicable Warrant Exercise
Price immediately  prior to such  consolidation,  merger or sale).  Prior to the
consummation  of any other Organic  Change,  the Company shall make  appropriate
provision  (in  form and  substance  satisfactory  to the  holders  of  Warrants
representing  a majority of the Warrant  Shares  issuable  upon  exercise of the
Warrants  then  outstanding)  to insure that each of the holders of the Warrants
will  thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the Warrant Shares immediately  theretofore issuable and
receivable  upon the exercise of such holder's  Warrants  (without regard to any
limitations on exercise),  such shares of stock, securities or assets that would
have been  issued or  payable  in such  Organic  Change  with  respect  to or in
exchange  for the number of Warrant  Shares  which would have been  issuable and
receivable  upon the  exercise of such  holder's  Warrant as of the date of such
Organic Change  (without  taking into account any limitations or restrictions on
the exercisability of this Warrant).

      LOST,  STOLEN,  MUTILATED OR DESTROYED  WARRANT.  IF THIS WARRANT IS LOST,
STOLEN,  MUTILATED OR DESTROYED,  THE COMPANY SHALL  PROMPTLY,  ON RECEIPT OF AN
INDEMNIFICATION  UNDERTAKING  (OR,  IN THE  CASE  OF A  MUTILATED  WARRANT,  THE
WARRANT),  ISSUE A NEW WARRANT OF LIKE DENOMINATION AND TENOR AS THIS WARRANT SO
LOST, STOLEN, MUTILATED OR DESTROYED.

      NOTICE. ANY NOTICES, CONSENTS, WAIVERS OR OTHER COMMUNICATIONS REQUIRED OR
PERMITTED  TO BE GIVEN  UNDER THE TERMS OF THIS  WARRANT  MUST BE IN WRITING AND
WILL BE  DEEMED  TO HAVE  BEEN  DELIVERED:  (I)  UPON  RECEIPT,  WHEN  DELIVERED
PERSONALLY;  (II) UPON RECEIPT, WHEN SENT BY FACSIMILE (PROVIDED CONFIRMATION OF
RECEIPT IS  RECEIVED  BY THE  SENDING  PARTY  TRANSMISSION  IS  MECHANICALLY  OR
ELECTRONICALLY  GENERATED AND KEPT ON FILE BY THE SENDING  PARTY);  OR (III) ONE
BUSINESS  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:

                                       56
<PAGE>

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

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

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

With a copy to:             Kirkpatrick & Lockhart Nicholson Graham, LLP
                            201 South Biscayne Boulevard, Suite 2000
                            Miami, Florida 33131
                            Attention:  Clayton E. Parker, Esquire
                            Telephone:  (305) 539-3306
                            Facsimile:  (305) 358-7095

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth on Exhibit C hereto,  with copies to such holder's  representatives as set
forth on Exhibit C, or at such other address and facsimile as shall be delivered
to the Company upon the issuance or transfer of this  Warrant.  Each party shall
provide  five days'  prior  written  notice to the other  party of any change in
address or facsimile  number.  Written  confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally  recognized  overnight  delivery  service  shall be
rebuttable evidence of personal service,  receipt by facsimile or receipt from a
nationally  recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

      DATE.  THE  DATE OF THIS  WARRANT  IS SET  FORTH  ON PAGE 1  HEREOF.  THIS
WARRANT, IN ALL EVENTS, SHALL BE WHOLLY VOID AND OF NO EFFECT AFTER THE CLOSE OF
BUSINESS  ON  THE  EXPIRATION  DATE,  EXCEPT  THAT   NOTWITHSTANDING  ANY  OTHER
PROVISIONS  HEREOF,  THE PROVISIONS OF SECTION 8(B) SHALL CONTINUE IN FULL FORCE
AND EFFECT AFTER SUCH DATE AS TO ANY WARRANT SHARES OR OTHER  SECURITIES  ISSUED
UPON THE EXERCISE OF THIS WARRANT.

      AMENDMENT AND WAIVER.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS
OF THE  WARRANTS  MAY BE AMENDED  AND THE  COMPANY  MAY TAKE ANY  ACTION  HEREIN
PROHIBITED,  OR OMIT TO PERFORM ANY ACT HEREIN  REQUIRED TO BE  PERFORMED BY IT,
ONLY IF THE COMPANY HAS OBTAINED THE WRITTEN  CONSENT OF THE HOLDERS OF WARRANTS
REPRESENTING AT LEAST TWO-THIRDS OF THE WARRANT SHARES ISSUABLE UPON EXERCISE OF
THE WARRANTS THEN  OUTSTANDING;  PROVIDED THAT, EXCEPT FOR SECTION 8(D), NO SUCH
ACTION MAY INCREASE THE WARRANT  EXERCISE PRICE OR DECREASE THE NUMBER OF SHARES
OR CLASS OF STOCK  OBTAINABLE  UPON EXERCISE OF ANY WARRANT  WITHOUT THE WRITTEN
CONSENT OF THE HOLDER OF SUCH WARRANT.

                                       57
<PAGE>

      DESCRIPTIVE  HEADINGS;  GOVERNING  LAW.  THE  DESCRIPTIVE  HEADINGS OF THE
SEVERAL  SECTIONS AND  PARAGRAPHS  OF THIS WARRANT ARE INSERTED FOR  CONVENIENCE
ONLY AND DO NOT  CONSTITUTE A PART OF THIS WARRANT.  THE  CORPORATE  LAWS OF THE
STATE OF NEW JERSEY SHALL GOVERN ALL ISSUES  CONCERNING  THE RELATIVE  RIGHTS OF
THE  COMPANY  AND  ITS   STOCKHOLDERS.   ALL  OTHER  QUESTIONS   CONCERNING  THE
CONSTRUCTION,  VALIDITY,  ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE  INTERNAL  LAWS OF THE STATE OF NEW  JERSEY,  WITHOUT  GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW JERSEY OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION
OF THE LAWS OF ANY JURISDICTIONS  OTHER THAN THE STATE OF NEW JERSEY. EACH PARTY
HEREBY  IRREVOCABLY  SUBMITS  TO THE  EXCLUSIVE  JURISDICTION  OF THE  STATE AND
FEDERAL COURTS SITTING IN HUDSON COUNTY AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY,  FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR THEREWITH, OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING,  ANY CLAIM THAT IT IS NOT PERSONALLY  SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT,  THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY  IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS  TO PROCESS  BEING  SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER
THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

      WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT  FOR EACH PARTY HERETO TO
ENTER INTO THIS WARRANT,  THE PARTIES  HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL  PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                       58
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
the date first set forth above.

                                        TELEPLUS ENTERPRISES, INC.

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

                                       59
<PAGE>

                              EXHIBIT A TO WARRANT
                              --------------------

                                 EXERCISE NOTICE
                                 ---------------

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                           TELEPLUS ENTERPRISES, INC.

      The   undersigned   holder   hereby   exercises   the  right  to  purchase
______________  of the shares of Common  Stock  ("Warrant  Shares")  of Teleplus
Enterprises,  Inc.  (the  "Company"),  evidenced  by the  attached  Warrant (the
"Warrant").  Capitalized  terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

      1.    ___ Cash Exercise

            (a)   Payment of Warrant  Exercise  Price.  The holder shall pay the
                  Aggregate  Exercise Price of $______________ to the Company in
                  accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

            2.    ___ Cashless Exercise

            (a)   Payment of Warrant  Exercise  Price. In lieu of making payment
                  of the Aggregate  Exercise Price, the holder elects to receive
                  upon such  exercise  the Net Number of shares of Common  Stock
                  determined in accordance with the terms of the Warrant.

            (b)   Delivery of Warrant  Shares.  The Company shall deliver to the
                  holder  _________  Warrant Shares in accordance with the terms
                  of the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

                                       60
<PAGE>

                              EXHIBIT B TO WARRANT
                              --------------------

                              FORM OF WARRANT POWER
                              ---------------------

      FOR VALUE  RECEIVED,  the  undersigned  does hereby assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares  of  the  capital  stock  of  Teleplus  Enterprises,   Inc.
represented  by  warrant  certificate  no.  _____,  standing  in the name of the
undersigned  on the  books of said  corporation.  The  undersigned  does  hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.

Dated:
      --------------------------         --------------------------------------

                                         By:
                                                -------------------------------
                                         Name:
                                                -------------------------------
                                         Title:
                                                -------------------------------

                                       61

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