SECURITIES
          PURCHASE AGREEMENT

        


        THIS SECURITIES
          PURCHASE AGREEMENT
          (this
“Agreement”),
          dated
          as of July 21, 2006, by and among INNOVA
          HOLDINGS, INC.,
          a
          Delaware corporation (the “Company”),
          and
          the Buyers listed on Schedule I attached hereto (individually, a
“Buyer”
or
          collectively “Buyers”).

         

        WITNESSETH

        


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

         

        WHEREAS,
          the
          parties desire that, upon the terms and subject to the conditions contained
          herein, the Company shall issue and sell to the Buyer(s), as provided herein,
          and the Buyer(s) shall purchase up to Two Million Eight Hundred Twenty
          Five
          Thousand Dollars ($2,825,000) of secured convertible debentures (the
“Convertible
          Debentures”),
          which
          shall be convertible into shares of the Company’s common stock, par value $0.001
          (the “Common
          Stock”)
          (as
          converted, the “Conversion
          Shares”)
          of
          which One Million Two Hundred Fifty Thousand Dollars ($1,250,000) shall
          be
          funded on the fifth (5th)
          business day following the date hereof (the “First
          Closing”),
          Five
          Hundred Seventy Five Thousand Dollars ($575,000) shall be funded on the
          date the
          registration statement (the “Registration
          Statement”)
          is
          filed, pursuant to the Investor Registration Rights Agreement dated the
          date
          hereof, with the United States Securities and Exchange Commission (the
          “SEC”)
          (the
“Second
          Closing”),
          and
          One Million Dollars ($1,000,000) shall be funded within three (3) business
          days
          after the date the Registration Statement is declared effective by the
          SEC (the
“Third
          Closing”)
          (individually referred to as a “Closing”
          collectively referred to as the “Closings”),
          for a
          total purchase price of up to Two Million Eight Hundred Twenty Five Thousand
          Dollars ($2,825,000), (the “Purchase
          Price”)
          in the
          respective amounts set forth opposite each Buyer(s) name on Schedule I
          (the
“Subscription
          Amount”);
          and

         

        WHEREAS,
          contemporaneously with the execution and delivery of this Agreement, the
          parties
          hereto are executing and delivering a Registration Rights Agreement (the
          “Investor
          Registration Rights Agreement”)
          pursuant to which the Company has agreed to provide certain registration
          rights
          under the Securities Act and the rules and regulations promulgated there
          under,
          and applicable state securities laws; and

         

        WHEREAS,
          contemporaneously with the execution and delivery of this Agreement, the
          Company
          and the Buyers are executing and delivering a Security Agreement; CoroWare
          Technologies, Inc., a wholly owned subsidiary of the Company, and the Buyers
          are
          executing and delivering a Security Agreement (all such security agreements
          shall be referred to as the “Security
          Agreement”)
          pursuant to which the Company and its wholly owned subsidiaries agreed
          to
          provide the Buyers a security interest in Pledged Collateral (as this term
          is
          defined in the each Security Agreement) to secure the Company’s obligations
          under this Agreement, the Transaction Documents, or any other obligations
          of the
          Company to the Buyer;

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        WHEREAS,
          contemporaneously with the execution and delivery of this Agreement, the
          parties
          hereto are executing and delivering Irrevocable Transfer Agent Instructions
          (the
“Irrevocable
          Transfer Agent Instructions”)

         

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

      

       

      1. PURCHASE
        AND SALE OF CONVERTIBLE DEBENTURES.

       

      (a) Purchase
        of Convertible Debentures.
        Subject
        to the satisfaction (or waiver) of the terms and conditions of this Agreement,
        each Buyer agrees, severally and not jointly, to purchase at each Closing
        and
        the Company agrees to sell and issue to each Buyer, severally and not jointly,
        at each Closing, Convertible Debentures in amounts corresponding with the
        Subscription Amount set forth opposite each Buyer’s name on Schedule I hereto.


       

      (b) Closing
        Date.
        The
        First Closing of the purchase and sale of the Convertible Debentures shall
        take
        place at 10:00 a.m. Eastern Standard Time on the fifth (5th)
        business day following the date hereof, subject to notification of satisfaction
        of the conditions to the First Closing set forth herein and in Sections 6
        and 7
        below (or such later date as is mutually agreed to by the Company and the
        Buyer(s)) (the “First
        Closing Date”),
        the
        Second Closing of the purchase and sale of the Convertible Debentures shall
        take
        place at 10:00 a.m. Eastern Standard Time two (2) business days prior to
        the
        date the Registration Statement is filed with the SEC, subject to notification
        of satisfaction of the conditions to the Second Closing set forth herein
        and in
        Sections 6 and 7 below (or such later date as is mutually agreed to by the
        Company and the Buyer(s)) (the “Second
        Closing Date”),
        and
        the Third Closing of the purchase and sale of the Convertible Debentures
        shall
        take place at 10:00 a.m. Eastern Standard Time on the third (3rd) business
        day
        immediately following the date the Registration Statement is declared effective
        by the SEC, subject to notification of satisfaction of the conditions to
        the
        Third Closing set forth herein and in Sections 6 and 7 below (or such earlier
        date as is mutually agreed to by the Company and the Buyer(s)) (the
“Third
        Closing Date”)
        (collectively referred to a the “Closing
        Dates”).
        The
        Closing shall occur on the respective Closing Dates at the offices of Yorkville
        Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
        (or
        such other place as is mutually agreed to by the Company and the Buyer(s)).
        

       

      (c) Form
        of Payment.
        Subject
        to the satisfaction of the terms and conditions of this Agreement, on the
        Closing Dates, (i) the Buyers shall deliver to the Company such aggregate
        proceeds for the Convertible Debentures to be issued and sold to such Buyer(s),
        minus the fees to be paid directly from the proceeds of the Closings as set
        forth herein, and (ii) the Company shall deliver to each Buyer, Convertible
        Debentures which such Buyer(s) is purchasing in amounts indicated opposite
        such
        Buyer’s name on Schedule I, duly executed on behalf of the Company.

       

      2. BUYER’S
        REPRESENTATIONS AND WARRANTIES.

       

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

       

      
        
          
          

        

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

       

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

       

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

       

      (d) Information.
        Each
        Buyer and its advisors (and his or, its counsel), if any, have been furnished
        with all materials relating to the business, finances and operations of the
        Company and information he deemed material to making an informed investment
        decision regarding his purchase of the Convertible Debentures and the Conversion
        Shares, which have been requested by such Buyer. Each Buyer and its advisors,
        if
        any, have been afforded the opportunity to ask questions of the Company and
        its
        management. Neither such inquiries nor any other due diligence investigations
        conducted by such Buyer or its advisors, if any, or its representatives shall
        modify, amend or affect such Buyer’s right to rely on the Company’s
        representations and warranties contained in Section 3 below. Each Buyer
        understands that its investment in the Convertible Debentures and the Conversion
        Shares involves a high degree of risk. Each Buyer is in a position regarding
        the
        Company, which, based upon employment, family relationship or economic
        bargaining power, enabled and enables such Buyer to obtain information from
        the
        Company in order to evaluate the merits and risks of this investment. Each
        Buyer
        has sought such accounting, legal and tax advice, as it has considered necessary
        to make an informed investment decision with respect to its acquisition of
        the
        Convertible Debentures and the Conversion Shares.

       

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

       

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

       

      
        
          
          

        

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

       

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

       

      The
        legend set forth above shall be removed and the Company within five (5) business
        days shall issue a certificate without such legend to the holder of the
        Conversion Shares upon which it is stamped, if, unless otherwise required
        by
        state securities laws, (i) in connection with a sale transaction, provided
        the
        Conversion Shares are registered under the Securities Act or (ii) in connection
        with a sale transaction, after such holder provides the Company with an opinion
        of counsel, which opinion shall be in form, substance and scope customary
        for
        opinions of counsel in comparable transactions, to the effect that a public
        sale, assignment or transfer of the Conversion Shares may be made without
        registration under the Securities Act. 

       

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

       

      
        
          
          

        

        
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      (i) Receipt
        of Documents.
        Each
        Buyer and his or its counsel has received and read in their entirety: (i)
        this
        Agreement and each representation, warranty and covenant set forth herein
        and
        the Transaction Documents (as defined herein); (ii) all due diligence and
        other
        information necessary to verify the accuracy and completeness of such
        representations, warranties and covenants; (iii) the Company’s Form 10-KSB for
        the fiscal year ended December 31, 2005; (iv) the Company’s Form 10-QSB for the
        fiscal quarter ended March 31, 2006 and (v) answers to all questions each
        Buyer
        submitted to the Company regarding an investment in the Company; and each
        Buyer
        has relied on the information contained therein and has not been furnished
        any
        other documents, literature, memorandum or prospectus.

       

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

       

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

       

      3. REPRESENTATIONS
        AND WARRANTIES OF THE COMPANY.

       

      The
        Company represents and warrants as of the date hereof to each of the Buyers
        that, except as set forth in the SEC Documents (as defined herein) or in
        the
        Disclosure Schedule attached hereto (the “Disclosure
        Schedule”):

       

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

       

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

       

      
        
          
          

        

        
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      (c) Capitalization.
        The
        authorized capital stock of the Company consists of 900,000,000 shares of
        Common
        Stock and 10,000,000 shares of Preferred Stock, par value $0.001 (“Preferred
        Stock”)
        of
        which 742,391,000 shares of Common Stock and 492,000 shares of Series B
        Preferred Stock are issued and outstanding. All of such outstanding shares
        have
        been validly issued and are fully paid and nonassessable. No shares of Common
        Stock are subject to preemptive rights or any other similar rights or any
        liens
        or encumbrances suffered or permitted by the Company. As of the date of this
        Agreement, (i) there are no outstanding options, warrants, scrip, rights
        to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, any shares of capital stock of the
        Company or any of its subsidiaries, or contracts, commitments, understandings
        or
        arrangements by which the Company or any of its subsidiaries is or may become
        bound to issue additional shares of capital stock of the Company or any of
        its
        subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
        commitments of any character whatsoever relating to, or securities or rights
        convertible into, any shares of capital stock of the Company or any of its
        subsidiaries, (ii) there are no outstanding debt securities and (iii) there
        are
        no agreements or arrangements under which the Company or any of its subsidiaries
        is obligated to register the sale of any of their securities under the
        Securities Act (except pursuant to the Registration Rights Agreement) and
        (iv)
        there are no outstanding registration statements and there are no outstanding
        comment letters from the SEC or any other regulatory agency. There are no
        securities or instruments containing anti-dilution or similar provisions
        that
        will be triggered by the issuance of the Convertible Debentures as described
        in
        this Agreement. The Company has furnished to the Buyer true and correct copies
        of the Company’s Articles of Incorporation, as amended and as in effect on the
        date hereof (the “Articles
        of Incorporation”),
        and
        the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
        and
        the terms of all securities convertible into or exercisable for Common Stock
        and
        the material rights of the holders thereof in respect thereto other than
        stock
        options issued to employees and consultants. 

       

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

       

      
        
          
          

        

        
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      (e) No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company
        and the consummation by the Company of the transactions contemplated hereby
        will
        not (i) result in a violation of the Articles of Incorporation, any certificate
        of designations of any outstanding series of preferred stock of the Company
        or
        the By-laws or (ii) conflict with or constitute a default (or an event which
        with notice or lapse of time or both would become a default) under, or give
        to
        others any rights of termination, amendment, acceleration or cancellation
        of,
        any agreement, indenture or instrument to which the Company or any of its
        subsidiaries is a party, or result in a violation of any law, rule, regulation,
        order, judgment or decree (including federal and state securities laws and
        regulations and the rules and regulations of The National Association of
        Securities Dealers Inc.’s OTC Bulletin Board on which the Common Stock is
        quoted) applicable to the Company or any of its subsidiaries or by which
        any
        property or asset of the Company or any of its subsidiaries is bound or
        affected. Neither the Company nor its subsidiaries is in violation of any
        term
        of or in default under its Articles of Incorporation or By-laws or their
        organizational charter or by-laws, respectively, or any material contract,
        agreement, mortgage, indebtedness, indenture, instrument, judgment, decree
        or
        order or any statute, rule or regulation applicable to the Company or its
        subsidiaries. The business of the Company and its subsidiaries is not being
        conducted, and shall not be conducted in violation of any material law,
        ordinance, or regulation of any governmental entity. Except as specifically
        contemplated by this Agreement and as required under the Securities Act and
        any
        applicable state securities laws, the Company is not required to obtain any
        consent, authorization or order of, or make any filing or registration with,
        any
        court or governmental agency in order for it to execute, deliver or perform
        any
        of its obligations under or contemplated by this Agreement or the Registration
        Rights Agreement in accordance with the terms hereof or thereof. All consents,
        authorizations, orders, filings and registrations which the Company is required
        to obtain pursuant to the preceding sentence have been obtained or effected
        on
        or prior to the date hereof. The Company and its subsidiaries are unaware
        of any
        facts or circumstance, which might give rise to any of the
        foregoing.

       

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

       

      
        
          
          

        

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

       

      (h) Absence
        of Litigation.
        There
        is no action, suit, proceeding, inquiry or investigation before or by any
        court,
        public board, government agency, self-regulatory organization or body pending
        against or affecting the Company, the Common Stock or any of the Company’s
        subsidiaries, wherein an unfavorable decision, ruling or finding would (i)
        have
        a material adverse effect on the transactions contemplated hereby (ii) adversely
        affect the validity or enforceability of, or the authority or ability of
        the
        Company to perform its obligations under, this Agreement or any of the documents
        contemplated herein, or (iii) have a material adverse effect on the business,
        operations, properties, financial condition or results of operations of the
        Company and its subsidiaries taken as a whole.

       

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

       

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

       

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

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

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

       

      (s) No
        Material Adverse Breaches, etc.
        Neither
        the Company nor any of its subsidiaries is subject to any charter, corporate
        or
        other legal restriction, or any judgment, decree, order, rule or regulation
        which in the judgment of the Company’s officers has or is expected in the future
        to have a material adverse effect on the business, properties, operations,
        financial condition, results of operations or prospects of the Company or
        its
        subsidiaries. Neither the Company nor any of its subsidiaries is in breach
        of
        any contract or agreement which breach, in the judgment of the Company’s
        officers, has or is expected to have a material adverse effect on the business,
        properties, operations, financial condition, results of operations or prospects
        of the Company or its subsidiaries.

       

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

       

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

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

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

       

      4. COVENANTS.

       

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

       

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

       

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

       

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

       

      (e) Reservation
        of Shares.
        On the
        date hereof, the Company shall initially reserve for issuance to the Buyers
        75,000,000 shares in total for issuance upon both conversions of the Convertible
        Dentures and upon exercise of the Warrants (collectively, the “Initial
        Share Reserve”).
        The
        Company represents that it has sufficient authorized and unissued shares
        of
        Common Stock available to create the Initial Share Reserve after considering
        all
        other commitments that may require the issuance of Common Stock. After the
        Company increases its authorized Common Stock in accordance with Section
        4(0)
        hereof, the Company shall increase the Initial Share Reserve by 193,000,000
        shares to a total reserve of 268,000,000 share for issuance upon conversions
        of
        the Convertible Debentures and upon exercise of the Warrants (collectively,
        the
“Share
        Reserve”).
        The
        Company shall take all action reasonably necessary to at all times have
        authorized, and reserved for the purpose of issuance, such number of shares
        of
        Common Stock as shall be necessary to effect the full conversion of the
        Convertible Debentures and the full exercise of the Warrants. If at any time
        the
        Share Reserve is insufficient to effect the full conversion of the Convertible
        Debentures or the full exercise of the Warrants, the Company shall increase
        the
        Share Reserve accordingly. If the Company does not have sufficient authorized
        and unissued shares of Common Stock available to increase the Share Reserve,
        the
        Company shall call and hold a special meeting of the shareholders within
        thirty
        (30) days of such occurrence, for the sole purpose of increasing the number
        of
        shares authorized. The Company’s management shall recommend to the shareholders
        to vote in favor of increasing the number of shares of Common Stock authorized.
        Management shall also vote all of its shares in favor of increasing the number
        of authorized shares of Common Stock.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

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

       

      (g) Fees
        and Expenses.
        

       

      (i) Each
        of
        the Company and the Buyer(s) shall pay all costs and expenses incurred by
        such
        party in connection with the negotiation, investigation, preparation, execution
        and delivery of the Transaction Documents. The Company shall pay Yorkville
        Advisors, LLC a fee equal to ten percent (10%) of the Purchase Price.


       

      (ii) The
        Company shall pay a structuring fee to Yorkville Advisors, LLC of Fifteen
        Thousand Dollars ($15,000) which shall be paid directly from the proceeds
        of the
        First Closing. 

       

      (iii) The
        Company shall pay Yorkville Advisors, LLC a non-refundable due diligence
        fee of
        Ten Thousand Dollars ($10,000) which shall be paid directly from the proceeds
        of
        the First Closing.

       

      (iv) The
        Company shall issue to the Buyer the following warrants (collectively, the
        “Warrants”):
        

       

      
        	
                Holder

              	 	
                Warrant
                  No.

              	 	
                Term

              	 	
                Warrant
                  Shares

              	 	
                Warrant
                  Exercise Price

              
	
                Cornell
                  Capital Partners, LP.

              	 	
                IVHG-2-1

              	 	
                3
                  Years

              	 	
                23,000,000

              	 	
                $0.0250

              
	
                Cornell
                  Capital Partners, LP.

              	 	
                IVHG-2-2

              	 	
                5
                  years

              	 	
                10,000,000

              	 	
                $0.0500

              
	
                Cornell
                  Capital Partners, LP.

              	 	
                IVHG-2-3

              	 	
                3
                  Years

              	 	
                20,000,000

              	 	
                $0.0650

              
	
                Cornell
                  Capital Partners, LP.

              	 	
                IVHG-2-4

              	 	
                3
                  Years

              	 	
                25,000,000

              	 	
                $0.0750

              
	
                Cornell
                  Capital Partners, LP.

              	 	
                IVHG-2-5

              	 	
                5
                  Years

              	 	
                15,000,000

              	 	
                $0.1000

              
	 	 	 	 	
                 

              	 	 	 	 
	 	 	
                Total

              	 	 	 	
                93,000,000

              	 	 


      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      The
        shares of Common Stock issuable under the Warrants shall collectively be
        referred to as the “Warrant
        Shares”.
        

       

      (v) The
        Warrant Shares shall have “piggy-back” and demand registration rights.


       

      (vi) Prior
        to
        the Company’s completion of its increase in authorized Common Stock as set forth
        herein, the Investor shall have the right to decide how to allocate the shares
        set aside in the Initial Share Reserve among the Conversion Shares and the
        Warrant Shares in any way it sees fit. 

       

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

       

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

       

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

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (k) Restriction
        on Issuance of the Capital Stock.
        So long
        as any Convertible Debentures are outstanding, except for Excluded Securities
        (as defined in the Convertible Debentures), the Company shall not, without
        the
        prior written consent of the Buyer(s), (i) issue or sell shares of Common
        Stock
        or Preferred Stock without consideration or for a consideration per share
        less
        than the ninety percent (90%) of the bid price of the Common Stock determined
        immediately prior to its issuance, (ii) issue any preferred stock, warrant,
        option, right, contract, call, or other security or instrument granting the
        holder thereof the right to acquire Common Stock without consideration or
        for a
        consideration less than such Common Stock’s Bid Price determined immediately
        prior to it’s issuance, (iii) enter into any security instrument granting the
        holder a security interest in any and all assets of the Company, or (iv)
        file
        any registration statement on Form S-8 other than to register up to 25,000,000
        shares of Common Stock issued, or underlying options to purchase Common Stock
        issued in connection with any 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, director or consultant for services provided
        to
        the Company. 

       

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

       

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

       

      (n) Lock
        Up Agreements.
        On the
        date hereof, the Company shall obtain from each officer and director a lock
        up
        agreement in the form attached hereto as Exhibit
        A.

       

      (o) Authorized
        Common Stock. The
        Company shall take any and all steps necessary (including increasing its
        authorized capital stock, if necessary) to have a sufficient number of shares
        of
        Common Stock available to create the Share Reserve as set forth in Section
        4(c)
        hereof within 90 days of the date hereof. 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      5. TRANSFER
        AGENT INSTRUCTIONS.

       

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

       

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

       

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

       

      (a) Each
        Buyer shall have executed the Transaction Documents and delivered them to
        the
        Company.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (b) The
        Buyer(s) shall have delivered to the Company the Purchase Price for Convertible
        Debentures in respective amounts as set forth next to each Buyer as outlined
        on
        Schedule I attached hereto, minus any fees to be paid directly from the proceeds
        on the Closings as set forth herein, by wire transfer of immediately available
        U.S. funds pursuant to the wire instructions provided by the
        Company.

       

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

       

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

       

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

       

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

       

      (ii) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason. 

       

      (iii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the First Closing
        Date
        as though made at that time (except for representations and warranties that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the First Closing Date

       

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

       

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

       

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

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      (ix) The
        Company shall have created the Initial Share Reserve. 

       

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

       

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

       

      (i) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason. 

       

      (ii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Second Closing
        Date as though made at that time (except for representations and warranties
        that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Second Closing Date. 

       

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

       

      (iv) The
        Company shall certify that it will file the registration statement with the
        SEC
        in compliance with the rules and regulations promulgated by the SEC for filing
        thereof on the Second Closing Date.

       

      (v) The
        Company shall have certified, in a certificate executed by two officers of
        the
        Company and dated as of the Second Closing Date, that all conditions to the
        Second Closing have been satisfied.

       

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

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (i) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason. 

       

      (ii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Third Closing
        Date
        as though made at that time (except for representations and warranties that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Third Closing Date. 

       

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

       

      (iv) 
        The
        Registration Statement shall have been declared effective by the SEC.


       

      (v) The
        Company shall have satisfied its requirements uder Section 4(o) and shall
        have
        created the Share Reserve. 

       

      (vi) The
        Company shall have certified, in a certificate executed by two officers of
        the
        Company and dated as of the Third Closing Date, that all conditions to the
        Third
        Closing have been satisfied.

       

      8. INDEMNIFICATION.

       

      (a) In
        consideration of the Buyer’s execution and delivery of this Agreement and
        acquiring the Convertible Debentures and the Conversion Shares hereunder,
        and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Buyer(s) and
        each
        other holder of the Convertible Debentures and the Conversion Shares, and
        all of
        their officers, directors, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Buyer
        Indemnitees”)
        from
        and against any and all actions, causes of action, suits, claims, losses,
        costs,
        penalties, fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Buyer Indemnitee is a party to the action
        for
        which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified
        Liabilities”),
        incurred by the Buyer Indemnitees or any of them as a result of, or arising
        out
        of, or relating to (a) any misrepresentation or breach of any representation
        or
        warranty made by the Company in this Agreement, the Convertible Debentures
        or
        the Investor Registration Rights Agreement or any other certificate, instrument
        or document contemplated hereby or thereby, (b) any breach of any covenant,
        agreement or obligation of the Company contained in this Agreement, or the
        Investor Registration Rights Agreement or any other certificate, instrument
        or
        document contemplated hereby or thereby, or (c) any cause of action, suit
        or
        claim brought or made against such Indemnitee and arising out of or resulting
        from the execution, delivery, performance or enforcement of this Agreement
        or
        any other instrument, document or agreement executed pursuant hereto by any
        of
        the parties hereto, any transaction financed or to be financed in whole or
        in
        part, directly or indirectly, with the proceeds of the issuance of the
        Convertible Debentures or the status of the Buyer or holder of the Convertible
        Debentures the Conversion Shares, as a Buyer of Convertible Debentures in
        the
        Company. To the extent that the foregoing undertaking by the Company may
        be
        unenforceable for any reason, the Company shall make the maximum contribution
        to
        the payment and satisfaction of each of the Indemnified Liabilities, which
        is
        permissible under applicable law.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

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

       

      9. GOVERNING
        LAW: MISCELLANEOUS.

       

      (a) Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of New Jersey without regard to the principles of conflict of laws.
        The parties further agree that any action between them shall be heard in
        Hudson
        County, New Jersey, and expressly consent to the jurisdiction and venue of
        the
        Superior Court of New Jersey, sitting in Hudson County and the United States
        District Court for the District of New Jersey sitting in Newark, New Jersey
        for
        the adjudication of any civil action asserted pursuant to this
        Paragraph.

       

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

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

      (f) Notices.
        Any
        notices, consents, waivers, or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered (i) upon receipt, when delivered personally; (ii) upon
        confirmation of receipt, when sent by facsimile; (iii) three (3) days after
        being sent by U.S. certified mail, return receipt requested, or (iv) one
        (1) day
        after deposit with a nationally recognized overnight delivery service, in
        each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

       

      
        	
                If
                  to the Company, to:

              	 	
                Innova
                  Holdings, Inc.

              
	 	 	
                17105
                  San Carlos Boulevard, Suite A6151

              
	 	 	
                Fort
                  Myers, FL 33931

              
	 	 	
                Attention: Walter
                  Weisel

              
	 	 	
                Telephone: (239)
                  466-0488

              
	 	 	
                Facsimile: (239)
                  466-7270

              
	 	 	 
	
                With
                  a copy to:

              	 	
                Sichenzia
                  Ross Friedman Ference LLP

              
	 	 	
                1065
                  Avenue of the Americas

              
	 	 	
                New
                  York, NY 10018

              
	 	 	
                Attention: Gregory
                  Sichenzia

              
	 	 	
                Telephone: (212)
                  930-9700

              
	 	 	
                Facsimile: (212)
                  930-9725

              


      

       

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

       

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

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

      (l) Termination.
        In the
        event that the First Closing shall not have occurred with respect to the
        Buyers
        on or before five (5) business days from the date hereof due to the Company’s or
        the Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7
        above (and the non-breaching party’s failure to waive such unsatisfied
        condition(s)), the non-breaching party shall have the option to terminate
        this
        Agreement with respect to such breaching party at the close of business on
        such
        date without liability of any party to any other party; provided, however,
        that
        if this Agreement is terminated by the Company pursuant to this Section 9(l),
        the Company shall remain obligated to reimburse the Buyer(s) for the fees
        and
        expenses of Yorkville Advisors LLC described in Section 4(g) above and the
        Termination Agreement of even date herewith (the “Termination
        Agreement”)
        regarding the termination of the Standby Equity Distribution Agreement, as
        provided in the Termination Agreement, shall be null and void.

       

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

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      


      [REMAINDER
        PAGE INTENTIONALLY LEFT BLANK]


      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      


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

       

      
        	 	 	
                 

              
	 	
                COMPANY:
                  
                  INNOVA
                    HOLDINGS, INC. 

                

              
	 	 
	 	By:  	/s/ Walter
                K.
                Weisel
	 	
                

                Name: Walter
                  K. Weisel

              
	 	Title: Chief
                Executive Officer


      

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        I

       

      SCHEDULE
        OF BUYERS 

      


      
        	
                Name

              	 	
                Signature

              	 	
                Address/Facsimile
                  

                Number
                  of Buyer

              	 	
                Amount
                  of Subscription

              
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
                Cornell
                  Capital Partners, LP

              	 	
                By: Yorkville
                  Advisors, LLC

              	 	
                101
                  Hudson Street - Suite 3700

              	 	
                $2,825,000

              
	 	 	
                Its: General
                  Partner

              	 	
                Jersey
                  City, NJ 07303

              	 	 
	 	 	 	 	
                Facsimile: (201)
                  985-8266

              	 	 
	 	 	 	 	 	 	 
	 	 	
                By:/s/
                  Mark Angelo 

              	 	 	 	 
	 	 	
                Name: Mark
                  Angelo

              	 	 	 	 
	 	 	
                Its: Portfolio
                  Manager

              	 	 	 	 
	 	 	 	 	 	 	 
	
                With
                  a copy to: 

              	 	
                Troy
                  Rillo, Esq.

              	 	
                101
                  Hudson Street - Suite 3700

              	 	 
	 	 	 	 	
                Jersey
                  City, NJ 07302

              	 	 
	 	 	 	 	
                Facsimile:
                  (201) 985-8266

              	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        A

       

      LOCK
        UP AGREEMENT

       

      The
        undersigned hereby agrees that for a period commencing on July 21, 2006 and
        expiring on the date thirty (30) days after the date that all amounts owed
        to
        Cornell Capital Partners, LP (the “Investor”),
        under
        the Secured Convertible Debentures issued to the Investor pursuant to the
        Securities Purchase Agreement between Innova Holdings, Inc. (the “Company”)
        and
        the Investor dated July 21, 2006 have been paid (the “Lock-up
        Period”),
        he,
        she or it will not, directly or indirectly, without the prior written consent
        of
        the Investor, issue, offer, agree or offer to sell, sell, grant an option
        for
        the purchase or sale of, transfer, pledge, assign, hypothecate, distribute
        or
        otherwise encumber or dispose of any securities of the Company, including
        common
        stock or options, rights, warrants or other securities underlying, convertible
        into, exchangeable or exercisable for or evidencing any right to purchase
        or
        subscribe for any common stock (whether or not beneficially owned by the
        undersigned), or any beneficial interest therein (collectively, the
“Securities”)
        except
        in accordance with the volume limitations set forth in Rule 144(e) of the
        General Rules and Regulations under the Securities Act of 1933, as
        amended.

       

      In
        order
        to enable the aforesaid covenants to be enforced, the undersigned hereby
        consents to the placing of legends and/or stop-transfer orders with the transfer
        agent of the Company’s securities with respect to any of the Securities
        registered in the name of the undersigned or beneficially owned by the
        undersigned, and the undersigned hereby confirms the undersigned’s investment in
        the Company.

       

      
        	Dated:
                _______________, 2006	 	 
	 	Signature
	 
	 
 	 
 
	 	Name:  	 
	 	Address:  	 
	 	City,
                State, Zip Code: 	 
	 	 	 
	 	 
	 	Print
                Social Security Number 
                or
                  Taxpayer I.D. Number

              


      

       

      
        
          
          

        

        
          2