**EXHIBIT 10.4**

 

 

**PLAN ANDAGREEMENT OF REORGANIZATION**

 

 

**BY AND BETWEEN**

 

 

**QUANTUMREADER,INC.**

 

 

**AND**

 

 

**VUBOTICS, INC.**

 

 

**November 17, 2004**

 

----

 

**TABLE OFCONTENTS**

 
| Plan of Reorganization |                                                                               |
|------------------------|------------------------------------------------------------------------------------|
|                   |                                                                               |   |   |
| Agreement              |                                                                               |   |   |
| 1.                     | Transfer of QuantumReader Shares                                                   |   |
| 2.                     | Issuance of Exchange Stock to QuantumReader Stockholders, Delivery of  Certificate |   |
|                   | (a)                                                                                | Issuance  of Vubotics Stock |   |
|                   | (b)                                                                                | Delivery  of Certificates |   |
|                   | (c)                                                                                | Legend on Stock Certificates |   |
|                   |                                                                               |   |   |
| 3                      | Closing                                                                            |   |
|                   |                                                                               |   |   |
| 4.                     | Deliveries  at Closing                                                             |   |
|                   |                                                                               |   |   |
| 5.                     | Covenants, Representations and Warranties of QuantumReader and the  Stockholders   |   |
|                   | (a)                                                                                | Organization and Standing of QuantumReader |   |
|                   | (b)                                                                                | Subsidiaries |   |
|                   | (c)                                                                                | Capitalization |   |
|                   | (d)                                                                                | Absence of Undisclosed Liabilities |   |
|                   | (e)                                                                                | Absence  of Certain Changes |   |
|                   | (f)                                                                                | Title  to Properties |   |
|                   | (g)                                                                                | Litigation |   |
|                   | (h)                                                                                | Exhibits Relating to Certain Members |   |
|                   | (i)                                                                                | Contracts |   |
|                   | (j)                                                                                | Taxes |   |
|                   | (k)                                                                                | Authority to Execute Agreement |   |
|                   | (l)                                                                                | Finder’s  Fees |   |
|                   | (m)                                                                                | Disclosure |   |
|                   | (n)                                                                                | Compliance |   |
|                   |                                                                               |   |   |
| 6.                     | Access  and Information                                                            |   |
|                   |                                                                               |   |   |
| 7.                     | Covenants, Representations and Warranties of Vubotics                              |   |
|                   | (a)                                                                                | Organization and Standing of Vubotics |   |
|                   | (b)                                                                                | Subsidiaries |   |
|                   | (c)                                                                                | Capitalization |   |
|                   | (d)                                                                                | Absence  of Certain Changes |   |
|                   | (e)                                                                                | Litigation |   |
|                   | (f)                                                                                | Contracts |   |
|                   | (g)                                                                                | Authority to Execute Agreement |   |
|                   | (h)                                                                                | Finder’s  Fees |   |
|                   | (i)                                                                                | Disclosure |   |
|                   | (j)                                                                                | Compliance |   |
|                   |                                                                               |   |   |
| 8                      | Conditions Precedent to Closing                                                    |   |
|                   |                                                                               |   |   |
| 9.                     | Post Closing Covenant of Vubotics                                                  |   |

 

----

 
| 10.         | Miscellaneous  Provisions                                                                                 |                                 |
|-------------|-----------------------------------------------------------------------------------------------------------|--------------------------------------|
|        | (a)                                                                                                       | Waivers                              |   |
|        | (b)                                                                                                       | Assignment                           |   |
|        | (c)                                                                                                       | Section Headings                |   |
|        | (d)                                                                                                       | Enforceability:                      |   |
|        | (e)                                                                                                       | Merger and Expense of Enforceability |   |
|        | (f)                                                                                                       | Pronouns                             |   |
|        | (g)                                                                                                       | Additional  Documents                |   |
|        | (h)                                                                                                       | Entire  Agreement                    |   |
|        | (i)                                                                                                       | Construction                         |   |
|        | (j)                                                                                                       | Counterparts                         |   |
|        |                                                                                                      |                                 |   |
| Exhibits    |                                                                                                      |
|        | QuantumReader, Inc. Stockholders                                                                     |                                 |
|        | Exceptions to Covenants, Representations  and Warranties of QuantumReader, Inc. and the Stockholders |                                 |
|        | Consent of the Board of Directors of  Quantum Reader, Inc                                                 |                                 |
|        | Exception to Covenants, Representations and  Warranties of Vubotics, Inc                                  |                                 |
|        | Consent of the Board of Directors of  Vubotics, Inc.                                                 |                                 |
|        |                                                                                                      |                                 |   |
| Attachments |                                                                                                      |
|        | Agreement to Perform Programming Services  And Acknowledgement of Intellectual Property                   |                                 |
|        | General Assignments of Intellectual  Property                                                             |                                 |

 

----

 

**PLAN ANDAGREEMENT OF REORGANIZATION**

 

**THIS PLAN AND AGREEMENT OF REORGANIZATION**(this“Agreement”) is entered into on this  17thday of November, 2004, by and among **QUANTUMREADER, INC.,**aDelaware corporation (“Quantum Reader”), **VUBOTICS, INC.,**aNevada corporation (“Vubotics”) and those persons listed in Exhibit ”A”hereto being all of the stockholders of QuantumReader on this date (the “Stockholders”or the “QuantumReader Stockholders”).

 

**PLAN OF REORGANIZATION**

 

Thetransaction contemplated by QuantumReader, Vubotics and the QuantumReaderStockholders is to be a reorganization under Section 368(a)(1)(B) ofthe Internal Revenue Code of 1986, as amended (the “Code”), Pursuant to suchreorganization, Vubotics is to acquire 100%, or approximately One Million(1,000,000) shares, of QuantumReader’s issued and outstanding common stock, parvalue $.001 per share, all in exchange for Five Hundred Thousand (500,000)shares of Vubotics’s common stock, par value $0 001 per share (the “VuboticsCommon Stock”)..

 

Under the,terms of this Agreement, Vubotics will acquire One Million (1,000,000) shares(the “Exchangeable Common Shares”) of QuantumReader’s issued and outstandingcommon stock, par value $0.001 per share, owned by the QuantumReaderStockholders, constituting not less than one hundred percent (100%) of theissued and outstanding shares of common stock of QuantumReader as of theClosing.. The Exchangeable Common Shares shall be referred to herein as the “QuantumReaderStock” or the “QuantumReader Shares.”

 

**AGREEMENT**

 

1. **Transfer ofQuantumReader Shares.**The QuantumReader Stockholders shall transfer,assign, convey and deliver to Vubotics at the date of closing as hereinafterdefined (the “Closing” or the “Closing Date”), certificates representing theQuantumReader Shares that will be transferred pursuant to this Agreement, whichin no event can be less than one hundred percent (100%) of the issued andoutstanding common stock of QuantumReader as of the Closing. The transfer ofthe QuantumReader Shares shall be made free and clear of all liens, mortgages,pledges, encumbrances or charges, whether disclosed or undisclosed, except asthe QuantumReader Stockholders and Vubotics shall have otherwise agreed inwriting.

 

2.                                       **Issuance ofExchange Stock to QuantumReader Stockholders; Delivery of Certificates.**

 

(a) Issuance of Vubotics Stock. Asconsideration for the transfer, assignment, conveyance and delivery of theQuantumReader Stock hereunder, Vubotics shall issue to the QuantumReaderStockholders, in the aggregate.

 

(i)                                     anumber of shares of the Vubotics Common Stock (the “Issuable Common Shares”)equal to Five Hundred Thousand (500,000);

 

1

----

 

(ii) theIssuable Common Shares shall be issued pro rata in accordance with eachStockholder’s ownership of QuantumReader common stock immediately prior to theClosing,

 

(b) Delivery of Certificates,. Atthe Closing, Vubotics shall deliver certificates (the “Certificates”)representing the Issuable Shares, in the names of the respective QuantumReaderStockholders as set forth on attached Exhibit ”A”; and

 

(c) Legend on Stock Certificates.None of the Vubotics Common Stock issued to the Stockholders nor any of theQuantumReader Stock transferred to Vubotics hereunder shall, at the time ofClosing, be registered under federal securities laws but, rather, shall beconsidered “restricted stock” within the meaning of Rule 144 promulgatedunder the Securities Act of 1933, as amended (the “Act”) All of such sharesshall bear a legend worded substantially as follows:

 

“The shares represented by this certificate *have*not been registered under the Securities Act of 1933(the ‘Act”) and are ‘restricted securities’ as that term is defined in Rule 144under the Act The shares may not be offered for sale, sold or otherwisetransferred except pursuant to an effective registration statement under theAct, or pursuant to an exemption from registration under the Act, theavailability of which is to be established to the satisfaction of the Company “

 

The respective transfer agents of Vuboticsand QuantumReader shall annotate their records to reflect the restrictions ontransfer embodied in the legend set forth above. There shall be no requirementthat Vubotics register the Issuable Common Shares under the Act, nor shallQuantumReader or the Stockholders be required to register any QuantumReaderShares under the Act.

 

3 **Closing.**TheClosing of the exchange shall take place on a date chosen by mutual agreementof QuantumReader and Vubotics within thirty (30) days from the date of thisAgreement, unless a later time shall be mutually agreed upon by the parties, atthe office of Gambrel] & Stolz, L.L.P. located at Monarch Plaza, 3414Peachtree Road, Suite 1600, Atlanta, Georgia, 30326 Each of Vubotics and aduly appointed representative of the QuantumReader Stockholders has theunilateral right, one time only, to extend the Closing Date up to twenty (20)days..

 

4.                                       **Deliveries at Closing**

 

(a)                                QuantumReader and theStockholders shall deliver to Vubotics at Closing.

 

*0)**                                    certificatesrepresenting all shares of the QuantumReader Stock*as described in Section 1,each endorsed in blank by the registered owner;

 

(ii) acopy of a consent of QuantumReader’s Board of Directors authorizingQuantumReader to take the necessary steps toward Closing the transactiondescribed by this Agreement; and

 

(iv) acopy of a Certificate of Good Standing for QuantumReader issued not more thanthirty (30) days prior to Closing by the Delaware Secretary of State.

 

2

----

 

(b) Vuboticsshall deliver to the QuantumReader Stockholder, at Closing, the Certificates, inthe names of the appropriate Stockholders, each in the appropriatedenomination, as described in Section 2.

 

**5 Covenants, Representationsand Warranties of QuantumReader and the Stockholders**Subject to the schedule ofexceptions attached hereto as Exhibit ”B” and incorporated hereinby this reference (which schedule shall be acceptable to Vubotics),QuantumReader, and QuantumReader Stockholders, severally but not jointly,represent and warrant to Vubotics as follows:

 

(a) Organization and Standingof QuantumReader QuantumReader is a corporation duly organized, validlyexisting and in good standing under the laws of the State of Georgia Copies ofQuantumReader’s Certificate of Incorporation and all amendments thereof todate, certified by the proper Delaware officials, and of Quantum Reader’sbylaws as amended to date, together with all minutes of stockholder anddirectors’ meetings, certified by QuantumReader’s Secretary, will be deliveredto Vubotics within ten (10) business days following the date of thisAgreement and will be *complete and correct as ofthe date of delivery The same shall be subject to the review and approval ofcounsel for Vubotics.*

 

(c) Capitalization. The aggregate number ofshares of common stock, par value

 

(b) Subsidiaries.. QuantumReader has nosubsidiaries.

 

$.001 per share, which QuantumReader isauthorized to issue is Ten Million (10,000,000) shares, of which One Million(1,000,000) shares are currently issued and outstanding All of such outstandingshares are validly issued, fully paid and nonassessable.

 

The aggregatenumber of shares of Preferred Stock which QuantumReader is authorized to issueis none.

 

(d) Absence of UndisclosedLiabilities,. Except to the extent reflected in Exhibit ”B”QuantumReader has no liabilities of any nature, whether accrued, absolute,contingent or otherwise.

 

(e) Absence of Certain Changes.Except as disclosed in Exhibit ”B”, since January 2, 2004,there has not been, and as of the Closing there will not be, (i) anychange in QuantumReader’s financial condition, assets, liabilities or business,other than changes in the ordinary course of business, none of which takenindividually or considered together with other changes has been or, as of theClosing will be materially adverse, and (ii) any damage, destruction orloss, whether or not covered by insurance, materially and adversely affectingQuantumReader’s properties or business.

 

(f) Title to Properties. QuantumReaderhas good and marketable title to all of its properties and assets, real andpersonal, tangible and intangible, none of which is subject to any securityinterest, mortgage, pledge, lien, encumbrance or charge, except for liens, ifany, shown on Exhibit ”B” prepared in compliance with subsection (j)below securing specified liabilities set forth therein (with respect to whichno default exists) and, except for minor imperfections of title andencumbrances, if any, which are not substantial in amount, do not materiallydetract from the value of the properties subject

 

3

----

 

thereto or materially impair QuantumReader’soperations and have arisen in the ordinary course of business

 

(g) Litiqation. Except as disclosed in Exhibit ”B”to this Agreement, there is no litigation or proceeding pending, or toQuantumReader’s knowledge threatened, against or relating to QuantumReader, itsproperties or business, nor does QuantumReader know, or have reasonable groundsto know, of any basis for any such action, or of any governmental investigationrelative to QuantumReader, its properties or business that could have amaterial adverse impact on the properties or business of QuantumReader..QuantumReader is not, and on the Closing Date will not be, in default under orwith respect to any judgment, order, writ, injunction or decree of any court orof any federal, state, municipal or other governmental authority, department,commission, board, agency or other instrumentality; and QuantumReader has, andon the Closing Date will have, complied in all material respects with all laws,rules, regulations and orders presently applicable to it and to its business,if any.

 

(h) ExhibitsRelatinqtoCertainMatters. Exhibit ”B , attached hereto,contains a complete and accurate recitation of the following documents: adescription of all liens, mortgages, charges and encumbrances that areoutstanding with respect to any of the properties and assets of QuantumReader;a list of all leases wherein QuantumReader is either lessor or lessee; a listof all other material written or oral contracts, commitments, agreements andother contractual obligations to which QuantumReader is a party (for purposesof this Agreement, any contract, commitment, agreement or obligation is deemedmaterial if it provides for payment or performance by either party thereto ofan aggregate value in excess of $5,000 and if it is not cancelable upon 30 days’or less notice); a list of all insurance policies carried by QuantumReader; adescription of all bonus, pension, profit-sharing, retirement, stock purchase,stock option, hospitalization, insurance and other executive or employeecompensation or benefit plans to which QuantumReader is a party; a list of allnotes payable of QuantumReader; and a list of all notes and contractsreceivable of QuantumReader..

 

(i) Contracts. QuantumReader is not a party toany contract not made in the ordinary course of business, except contractsdescribed in Exhibit ”B” and, except as set forth in Exhibit ”B”is QuantumReader not a party to any written or oral:

 

(i)                                     employmentagreement that is not terminable on 30 days’ notice,

 

(ii)                                  contractwith any labor union or other person, firm or corporation with respect to theterms or conditions of employment of employees of QuantumReader; or

 

(iii)                               commitmentfor capital expenditures in excess of $5,000.

 

QuantumReader has in all material respectsperformed all obligations required to be performed by it to date and is not indefault in any material respect under any agreements, leases or other documentsto which it is a party, except as disclosed in Exhibit ”B” to thisAgreement

 

*0)**                                    Taxes. QuantumReader has filed all income taxreturns due with respect*to all periods through June 30, 2004, and allreal and personal property tax schedules, franchise, sales or use tax returns,and all federal and state employment and withholding

 

4

----

 

tax returns that are required to be filed,and has paid all taxes as shown on said returns and all assessments received byit to the extent that such taxes and assessments have become due. The InternalRevenue Service has not notified QuantumReader of its intent to audit anyfederal income tax returns of QuantumReader that have been filed with theInternal Revenue Service

 

(k) AuthoritytoExecuteAqreement. The Board of Directors of QuantumReader, pursuant to thepower and authority legally vested in it, has duly authorized the execution,sealing and delivery by QuantumReader of this Agreement and has duly authorizedeach of the transactions hereby contemplated, A copy of the Consent of theBoard of Directors of QuantumReader authorizing such action is attached heretoas Exhibit ”C” and incorporated herein by this reference.QuantumReader has the power and authority to execute, seal and deliver thisAgreement, to consummate the transactions hereby contemplated and to take allother actions required by law, its Certificate of Incorporation, as amended,its bylaws, as amended, or otherwise to authorize the execution, sealing anddelivery of this Agreement. This Agreement is valid and binding uponQuantumReader and the Stockholders in accordance with its terms. Neither theexecution, sealing and delivery of this Agreement nor the consummation of thetransactions contemplated hereby will constitute a violation or breach of theCertificate of Incorporation, as amended, or the bylaws, as amended, ofQuantumReader or any agreement, stipulation, order, writ, injunction, decree,law, rule or regulation applicable to QuantumReader..

 

(1) Finder’s Fees. QuantumReader and the Stockholdersare not, and on the Closing Date will not be, liable or obligated to pay anyfinder’s, agent’s or broker’s fee arising out of or in connection with thisAgreement or the transactions contemplated by this Agreement

 

(m) Disclosure. No representation or warrantyby QuantumReader in this Agreement, nor any statement or certificate hereto orin connection with the transactions contemplated hereby, contains or willcontain any untrue statement of a material fact or omits or will omit to statea material fact necessary to make the statements contained therein notmisleading.

 

(n) Compliance. QuantumReader has complied inall material respects with all applicable laws, orders and regulations offederal, state, municipal and/or other governments and/or any instrumentalitythereof, domestic or foreign, currently applicable to its assets and to thebusiness conducted by it.

 

For thepurposes of this Section 5, the limiting condition to the “best of theirknowledge” shall include either actual knowledge or such knowledge that adirector of a company, who has taken an active role in the management of thebusiness and financial affairs of said company, knew or had reason to know as aresult of said role as a director.

 

6. Access and information.QuantumReader and the Stockholders shall give to Vubotics and to Vubotics’scounsel, accountants and other representatives full access during normalbusiness hours throughout the period prior to the Closing to all of QuantumReader’s properties, books, contracts, commitments and records, informationconcerning products and customer base, and furnish Vubotics during such periodwith all such information concerning QuantumReader’s affairs as Vuboticsreasonably may request.

 

5

----

 

7..  Covenants,Representations and Warranties of Vubotics Subject to the schedule ofexceptions attached hereto as Exhibit ”D”, and incorporated hereinby this reference, Vubotics represents and warrants as follows:

 

(a) Organization andStanding of Vubotics, Vubotics is a corporation duly organized, validlyexisting and in good standing under the laws of the State of Nevada,

 

(b) Subsidiaries. Vubotics has nosubsidiaries.

 

(c) Capitalization,.As of the date of this Agreement, the aggregate number of shares of commonstock, par value $0.001 per share, which Vubotics is authorized to issue isFifty Million (50,000,000), of which Nineteen Million Two Hundred Twenty-TwoThousand Four Hundred Eighty-Six (19,222,486) shares are currently issued andoutstanding No options or rights to purchase warrants for common stock orpreferred stock are currently or will be as of the closing outstanding, theaggregate number of shares of preferred stock, which Vubotics is authorized toissue is Ten Million (10,000,000) par value $0.001 of which Nine HundredSeventy Six Thousand Five Hundred (976,500) are issued and outstanding. Allsecurities issued by Vubotics as of the date of this Agreement have been issuedin compliance with all applicable state and federal laws.

 

(d) Absenceof Certain Changes. Since January 1, 2004, there has not been anychange in Vubotics’s financial condition, assets or liabilities, except theincurring of expenses in connection with securities laws compliance matters andthe acquisition of QuantumReader.

 

(e) Litigation.There is no litigation or proceeding pending, or to Vubotics’s knowledgethreatened, against or relating to Vubotics, nor does Vubotics know or havereasonable grounds to know of any basis for any such action or of anygovernmental investigation relative to Vubotics. Vubotics is not, and on theClosing Date will not be, in default under or with respect to any judgment,order, writ, injunction or decree of any court or of any federal, state,municipal or other governmental authority, department, commission, board,agency or other instrumentality, and Vubotics has, and on the Closing Date willhave, complied in all material respects with all laws, rules, regulations andorders applicable to it, if any,

 

(f) Contracts.Vubotics is not a party to any contract, nor is Vubotics a party to any writtenor oral commitment, for capital expenditures. Vubotics has in all materialrespects performed all obligations required to be performed by it to date andis not in default in any material respect under any agreements or otherdocuments to which it was a party.

 

(g) Authorityto Execute Agreement. The Board of Directors of Vubotics, pursuant to thepower and authority legally vested in it, has duly authorized the execution,sealing and delivery by Vubotics of this Agreement and the lssuable CommonShares and has duly authorized each of the transactions herby contemplated. Acopy of the consent of the Board of Directors of Vubotics authorizing suchaction in the form of Exhibit ”E” to be attached hereto on orbefore Closing and which shall be incorporated herein by this reference.Vubotics has the power and authority to execute, seal and deliver thisAgreement, to consummate the transactions hereby contemplated and to take allother actions required by law, its Certificate of Incorporation, as amended,its

 

6

----

 

bylaws, as amended, or otherwise to authorizethe execution, sealing and delivery of the Issuable Common Shares pursuant tothe provisions hereof. This Agreement is valid and binding upon Vubotics inaccordance with its terms Neither the execution, sealing and delivery of thisAgreement nor the consummation of the transactions contemplated hereby willconstitute a violation or breach of the Certificate of incorporation, asamended, or the bylaws, as amended, of Vubotics or any agreement, stipulation,order, writ, injunction, decree, law, rule or regulation applicable toVubotics.

 

(h) Finder’s Fees.Vubotics is not, and on the Closing Date will not be, liable or obligated to *pay*any finder’s, agent’s or broker’s fee arising out of orin connection with this Agreement or the transactions contemplated by thisAgreement.

 

(i) Disclosure. Norepresentation or warranty by Vubotics in this Agreement, nor any statement orcertificate furnished or to be furnished to QuantumReader or the Stockholderspursuant hereto or in connection with the transactions contemplated hereby,contains or will contain any untrue statement of a material fact or omits orwill omit to state a material fact necessary to make the statements containedtherein not misleading

 

(j) Compliance Vuboticshas complied in all material respects with all applicable laws, orders andregulations of federal, state, municipal and/or other governments and/or anyinstrumentality thereof, domestic or foreign, currently applicable to itsassets and to the business conducted by it.

 

8. **ConditionsPrecedent to Closing.**All obligations of Vubotics and QuantumReaderand the QuantumReader Stockholders under this Agreement are subject to thefulfillment, prior to or at the Closing, of all conditions elsewhere herein setforth and of each of the following conditions:

 

(a) QuantumReader’s,the QuantumReader Stockholders’ and Vubotics’s representations and warrantiescontained in this Agreement shall be true at the time of Closing as though suchrepresentations and warranties were made at such time.

 

(b) QuantumReader,the QuantumReader Stockholders and Vubotics shall have performed and compliedwith all agreements and conditions required by this Agreement to be performedor complied with by each prior to or at the Closing,

 

(c) EachQuantumReader Stockholder will be required, at Closing, to sign an agreementconfirming that all the Issuable Common Shares received will be acquired forinvestment and not with a view to or for sale in connection with anydistribution thereof. Each transferring QuantumReader Stockholder will berequired to transfer to Vubotics at the Closing his/her respectiveQuantumReader Shares, free and clear of all liens, mortgages, pledges,encumbrances or changes, whether disclosed or undisclosed.

 

(d) Craig J.Larson will have executed and delivered to Vubotics an “Agreement to PerformProgramming Services And Acknowledgement of Intellectual Property Rights” inthe form of Attachment I attached hereto.

 

(e) CraigJ. Larson will have executed and delivered to Vubotics a “General Assignment ofIntellectual Property” in the form of Attachment II attached hereto.

 

7

----

 

(f) KenWiltsee will have executed and delivered to Vubotics a “General Assignment ofIntellectual Property in the form of Attachment III attached hereto.

 

(g) JosephJ. van Greuninger will have executed and delivered to Vubotics a “General Assignmentof Intellectual Property in the form of Attachment Ill attached hereto

 

9.                                       **Post ClosingCovenant of Vubotics..**

 

(a) Vuboticsand the QuantumReader Stockholders agree that a key condition of this mergertransaction is Vubotics promise to fund the ongoing software developmentalactivities presently engaged in by QuantumReader. Vubotics has agreed to fund aminimum of Five Hundred Thousand Dollars ($500,000) for working capital,software development, inventory purchases and promotion of the QuantumReadersoftware Vubotics has promised that a minimum of Two Hundred Fifty ThousandDollars ($250,000) will be available during the first six (6) monthsfollowing Closing, and an additional Two Hundred Fifty Thousand Dollars($250,000) will be available during the second six (6) months followingClosing (the “Minimum Working Capital Amount”). Vubotics agrees that if itfails to provide the Minimum Working Capital Amount during the twelve (12)month period following Closing, unless as otherwise agreed in writing betweenthe QuantumReader Stockholders, Vubotics agrees to transfer all of its rightand interest in the QuantumReader software and related intellectual property toCraig J. *Larson, a Georgia resident. This transaction is tobe effected pursuant to Vubotics receiving a written request from Craig J.Larson detailing the failure of Vubotics to fund*the requiredMinimum Working Capital Amount, and requesting that Vubotics move expeditiouslyto transfer the intellectual property.

 

(b) Inthe event that this Post Closing Covenant of Vubotics becomes effective, thenature of the legal documentation required to effectuate the transfer of theQuantumReader Intellectual Property to Craig J. Larson will be in the form of anonexclusive, worldwide, perpetual, irrevocable, paid-up license under any patents and patent applications that areowned by Vubotics. The scope of the license is to make, have made, use,have used, sell, license, or transfer items, an to practice and have practicedmethods to the extent required to exercise e rights granted back to Craig J.Larson.

 

(c) ThisCovenant shall survive the Closing.

 
|   |   |          |   |       |   |
|--------|--------|----------|--------|-------|--------|
|   |   | Vubotics |   | La on |   |

 

10.                                 **Miscellaneous Provisions.**

 

(a) Waivers. Neitherthis Agreement nor any term hereof may be changed, waived, amended or terminatedorally but only by written act of QuantumReader, Vubotics or the QuantumReaderStockholders (or, in respect of a waiver, the waiving party or parties).

 

(b) Assignment. This Agreement shall bind andinure to the benefit of the parties hereto and their respective successors andlegal representatives but shall not be *assignable by any partywithout the written consent of the other party.*

 

8

----

 

(c) Section Headings. The section andparagraph headings contained in this Agreement are for reference purposes onlyand shall not affect in any way the meaning and interpretation of thisAgreement.

 

(d) Enforceability  Any provision of this Agreement which isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction. To the extent permittedby applicable law, the parties hereto hereby waive any provision of law whichrenders any provision hereof prohibited or unenforceable in any respect.

 

(e) MergerandExpenseofEnforceability.. This Agreement, in all of its particulars,shall be enforceable by legal action for the recovery of damages or by way ofspecific performance, and the terms and conditions of this Agreement shallremain in full force and effect subsequent to Closing and shall not be deemedto be merged into any documents conveyed and delivered at the time of Closing.In the event that any person is required to initiate any action at law or inequity for the enforcement of this Agreement, *theprevailing party in such litigation shall be entitled to recover from the partydetermined*to be in default all of its reasonable costs incurred insaid litigation, including attorneys’ fees,

 

(f) Pronouns. All pronouns used herein shall bedeemed to refer to the masculine, feminine or neuter gender, as the contextrequires

 

(g) Additional Documents The partieshereto will at any time after the date hereof sign, execute and deliver orcause others so to do all such powers of attorney, deeds, assignments,documents and instruments and do or cause to be done all such other acts andthings as may be necessary or proper to carry out the transactions contemplatedby this Agreement

 

(h) Entire Agreement. This Agreementconstitutes the entire agreement among the parties hereto and supersedes and cancelsany prior agreements, representations, warranties or communications, whetheroral or written, among the parties hereto relating to the transactionscontemplated hereby or the subject matter herein. Neither this Agreement norany provision hereof may be changed, waived, discharged or terminated orally,but only by an agreement in writing signed by the party against whom or whichthe enforcement of such change, waiver, discharge or termination is sought.

 

(i) Construction. This Agreement is intendedto be performed in the State of Georgia and shall be construed and enforced inaccordance with the laws of that state,

 

*U) Counterparts. ThisAgreement may be executed in two or more*counterparts,each of which shall be deemed an original but all of which, together, shallconstitute one and the same instrument.

 

**[Remainderof this page intentionally left blank]**

 

9

----

 

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

 
| **QUANTUMREADER, INC.** | **VUBOTICS, INC.** |
|-------------------------|--------------------|
|                    |               |
|                    |               |
| By:                     | /s/ [ILLEGIBLE]    |   |   | /s/ [ILLEGIBLE] |   |
| Its.                    |               |   | Its: | [ILLEGIBLE] |   |

 

**SIGNATURE OF QUANTUMREADER, INC. STOCKHOLDERS**

 

Craig

 

 
| /s/ [ILLEGIBLE]   |   |
|-------------------|--------|
| Hans G. Ehrnrooth |

 

10

----

 

**Exhibit A**

 

**QuantumReader, Inc. Stockholders**

 

 

Craig J. Larson

 

Hans G. Ehrnrooth

 

11

----

 

**Exhibit B**

 

**Exceptions to Covenants, Representations and Warranties ofQuantumReader, Inc. and the Stockholders**

 

 

1,                                       Outstandinglegal bill to Smith Gambrell in the amount of $2,528,89.

 

No federal or Georgia tax returns have been filed byQuantumReader, Inc.

 

3                                          QuantumReader, Inc.has filed with the Delaware Secretary of State, the required filings toreinstate the Corporation to be in “Good Standing” in the State of Delaware.

 

QuantumReader, Inc, has a verbal agreementwith Ken Wiltsee and with Joseph J van Greuninger to pay them a sum not toexceed $                        forwork done in QuantumReader IP Phase 1 Development.

 

QuantumReader, Inca does not guarantee that any of its IP asit exists as of the Closing will ever be commerciably viable or work in anyform or fashion.

 

12

----

 

**Exhibit C**

 

**Consent of theBoard of Directors of QuantumReader, Inc.**

 

13

----

 

**Exhibit D**

 

**Exceptions to Covenants, Representations and Warrantiesof Vubotics, Inc.**

 

 

(1)                                  Pendinglawsuit over alleged nonpayment of Promissory Note filed in State of Florida, Lawsuitis being contested by the Company and is pending.

 

(2). Cellmart Wireless, Inc holds a judgmentagainst the Company in the State of Texas The judgment was for $100,000 and wasentered in August of 2002.

 

14

----

 

Exhibit E

 

Consent of the Board of Directors of Vubotics, Inc.

 

15

----

 

Attachment I

 

Agreement to Perform Programming Services and

Acknowledgement ofIntellectual Property Rights

 

16

----

 

Attachment11

 

GeneralAssignments of Intellectual Property

 

17

----