Document:

SECURITIES PURCHASE AGREEMENT

          THIS
SECURITIES PURCHASE AGREEMENT
(this “Agreement”), dated as of July 21, 2008, by and among National Automation Services, Inc. a
Nevada corporation, with headquarters located at 2053 Pabco Road, Henderson, NV
89011 (the “Company”), and the Buyers listed on Schedule I attached
hereto (individually, a “Buyer” or collectively “Buyers”).

WITNESSETH:

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

          WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Buyer(s), as provided herein,
and the Buyer(s) shall purchase Seven Hundred Fifty Thousand U.S. Dollars
(US$750,000) of secured redeemable debentures (the “Redeemable Debentures”),
all of which shall be funded on the date hereof (the “Closing”) for a
total purchase price of Seven Hundred Fifty Thousand U.S. Dollars (US$750,000),
(the “Purchase Price”); and

          WHEREAS,
the aggregate proceeds of the sale of the Redeemable Debentures contemplated
hereby shall be held in escrow pursuant to the terms of an escrow agreement
substantially in the form of the Escrow Agreement attached hereto as Exhibit B
(the “Escrow Agreement”); and

          WHEREAS,
contemporaneously with the execution and delivery of this Agreement, Bob
Chance, President of the Company is executing and delivering a Personal
Guaranty substantially in the form attached hereto as Exhibit C (the “Personal
Guaranty”) pursuant to which Mr. Chance is guaranteeing the repayment of
the Redeemable Debentures, including principal, interest and any fees owed
thereon and in connection therewith; and

          WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Security Agreement substantially
in the form attached hereto as Exhibit D (the “Security Agreement”)
pursuant to which the Company has agreed to provide the Buyer a security
interest in Pledged Property (as this term is defined in the Security Agreement
dated the date hereof) to secure Company’s obligations under this Agreement,
the Redeemable Debenture, the Security Agreement, and the Escrow Agreement
(collectively, together with the Personal Guaranty, the “Transaction
Documents”) or any other obligations of the Company to the Buyer; 

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

1. PURCHASE AND SALE OF REDEEMABLE
DEBENTURES.

                    (a)
Purchase of Redeemable Debentures. Subject to the satisfaction (or waiver) of the terms and
conditions of this Agreement, the Buyer agrees to purchase on the date hereof
(the “Closing”), and the Company agrees to sell and issue to Buyer, at such Closing,
Redeemable Debentures in an aggregate principal amount of
Seven Hundred Fifty Thousand U.S. Dollars (US$750,000.00) for a total purchase
price of Seven Hundred Fifty Thousand U.S. Dollars (US$750,000) (the “Purchase
Price”). The Redeemable Debentures purchased by the
Buyer shall have a maturity date of eighteen (18) months from the Closing.  

                    (b)
Closing Date. The
Closing of the purchase and sale of the Redeemable Debentures shall take place
at 10:00 a.m. Eastern Standard Time on the date of this
Agreement, subject to notification of satisfaction
of the conditions to the Closing set forth in Sections 6 and 7 below, (or such
later date as is mutually agreed to by the Company and the Buyer(s)) (the “Closing
Date”). The Closing shall occur on
the Closing Date at the offices of James G. Dodrill II, P.A., 5800 Hamilton
Way, Boca Raton, FL 33496 (or such other place as is mutually agreed to by the
Company and the Buyer(s)). 

                    (c)
Closing Deliveries. Upon Closing, (i) the Buyer shall deliver to the Company the Purchase Price (minus
the fees and expenses as set forth herein which shall be paid directly at the
Closing) by wire transfer of
immediately available funds delivered by James G. Dodrill II, P.A. (the “Escrow
Agent”) and (ii) the Company and Buyer, as applicable, shall deliver
to each other executed copies of the Transaction Documents.

                    (d)
The Redeemable Debentures shall contain provisions that provide that in the
event the Euro strengthens against the U.S. Dollar during the life of the
Redeemable Debenture, the Buyer shall be afforded an adjustment to compensate
for any such movement in either conversions or redemptions. 

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

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

                    (a)
Investment Purpose. Each Buyer is acquiring the Redeemable Debentures for
its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act.

                    (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 Redeemable
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.

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                    (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 deemed material by the Buyer to
making an informed investment decision regarding the Buyer’s purchase of the
Redeemable Debentures, 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 Redeemable Debentures 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 Redeemable
Debentures.

                    (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 Redeemable
Debentures, or the fairness or suitability of the investment in the Redeemable
Debentures, nor have such authorities passed upon or endorsed the merits of the
offering of the Redeemable Debentures.

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

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

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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, GENERALLY
  ACCEPTABLE TO COMPANY’S COUNSEL, 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 three (3) business days
shall issue a certificate without such legend to the holder of the security
upon which it is stamped, if, unless otherwise required by state securities
laws, (i) in connection with a sale transaction, provided the securities are
registered under the 1933 Act or (ii) in connection with a sale transaction, after
such holder provides the Company with an opinion of counsel, which opinion
shall be in form, substance and scope reasonably acceptable to counsel for the
Company, to the effect that a public sale, assignment or transfer of the
securities may be made without registration under the 1933 Act. 

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

                    (i)
Receipt of Documents. Each Buyer and his or its counsel has received and
read in their entirety: (i) this Agreement and each representation, warranty
and covenant set forth herein, and the Transaction Documents; (ii) all due
diligence and other information necessary to verify the accuracy and
completeness of such representations, warranties and covenants; and (iii)
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 Redeemable 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. 

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3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

          Except
as otherwise provided in the Company Disclosure Schedule delivered herewith,
the Company represents and warrants as of the date hereof and as of the Closing
Date to each of the Buyers that:

                    (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 Transaction Documents, and any related
agreements, and to issue the Redeemable Debentures in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the
Transaction Documents and any related agreements by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Redeemable Debentures, have
been duly authorized by the Company’s Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement, the Transaction Documents and any related
agreements have been duly executed and delivered by the Company, (iv) this
Agreement, the Transaction Documents and any related agreements constitute the
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies. The
Company knows of no reason why the Company cannot perform any of the Company’s
obligations under this Agreement or the Transaction Documents. 

                    (c)
Capitalization. The authorized capital stock of the Company consists of
100,000,000 shares of common stock, par value $0.001 per share (“Common Stock”)
and no shares of Preferred Stock. As of the date hereof, the Company has
46,406,247 shares of Common Stock and no shares of Preferred Stock 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 

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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 other than existing credit lines 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 1933 Act 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 Redeemable
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 Redeemable 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. 

                    (e)
No Conflicts. The execution, delivery and performance of this Agreement,
the Transaction Documents and any related agreements by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
will not (i) result in a violation of the Articles of Incorporation or the
By-laws or (ii), to the best knowledge of the Company, 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 United States 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 Shares are 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. To the best knowledge
of the Company, 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 1933 Act and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with,
any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under or contemplated by this Agreement in accordance
with the terms hereof. 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, except for any required post-Closing
notice filings under applicable United States federal or state securities laws,
if any.

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                    (f)
Intentionally Omitted. 

                    (g)
No Material Misstatement or Omission. None of the materials provided to
the Buyer(s) by the Company and none of the representation and warranties made
in this Agreement or any of the other Transaction Documents include any untrue
statements of material fact, nor do the materials provided to the Buyer(s) by
the Company and the representations and warranties made in this Agreement or
any of the other Transaction Documents 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 or (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 Transaction Documents have a
material adverse effect on the business, operations, properties, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole.

                    (i)
Acknowledgment Regarding Buyer’s Purchase of the Redeemable 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 Redeemable Debentures. The Company further represents to the Buyer that
the Company’s decision to enter into this Agreement has been based solely on
the independent evaluation by the Company and its representatives.

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

                    (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 Redeemable
Debentures under the 1933 Act or cause this offering of the Redeemable
Debentures to be integrated with prior offerings by the Company for purposes of
the 1933 Act.

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                    (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. 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.

8

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

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

                    (s) No
Material Adverse Breaches, etc. 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 to the Buyer, 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.

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

4.COVENANTS.

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

                    (b) Form
D. The Company agrees to file a Form D with respect to
the Redeemable Debentures 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 Redeemable Debentures, or obtain an
exemption for the Redeemable Debentures 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 date on which none of the
Redeemable Debentures are outstanding, the Company, upon becoming a reporting
company under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
“1934 Act”), shall file in a timely manner all reports required to be filed
with the SEC pursuant to the 1934 Act and the regulations of the SEC
thereunder, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would otherwise permit such termination. 

                    (d) Use
of Proceeds. The Company will use the proceeds from the
sale of the Redeemable Debentures for the purposes of completing acquisitions
and for working capital. No proceeds from this or any funding received from the
Buyer shall be used to retire debt.

                    (e) Intentionally
omitted.

                    (f) Fees
and Expenses. 

	
 

	
 

	
 

	
               (i)

Except as otherwise provided herein, each of the
  Company and the Buyer(s) shall pay all costs and expenses incurred by such
  party in connection with the negotiation, investigation, preparation,
  execution and delivery of this Agreement, the Transaction Documents and any
  other documents relating to this transaction. 

	
 

	
 

	
 

	
               (ii) The Company has agreed to pay a Legal and
  Documentation Review Fee to the Buyer of Seventeen Thousand Five Hundred
  Dollars ($17,500), of which Ten Thousand Dollars ($10,000) remains
  outstanding and shall be paid directly from the proceeds of the Closing or by
  September 24, 2008 if the Closing has not occurred by such date.

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               (iii)
The Company has agreed to pay a Due Diligence Fee
  to the Buyer of Fifteen Thousand Dollars ($15,000), one-half of which has
  been paid prior to this date and one-half of which shall be paid directly
  from the proceeds of the Closing or by July 26, 2008 if the Closing has not
  occurred by such date.

	
 

	
 

	
 

	
               (iv)
The Company shall issue to the Buyer on the
  Closing Date Two Million (2,000,000) restricted shares of Common Stock. The
  Company shall also exchange the Buyer’s presently held warrants for One
  Hundred Fifty Thousand (150,000) restricted shares of Common Stock.

	
 

	
 

	
 

	
               (v)
The Company shall pay to the Buyer a Commitment
  Fee equal to six percent (6%) of the principal amount of the Redeemable
  Debenture which shall be paid directly from the proceeds of the Closing. The
  total cost of capital to the Company shall not exceed fourteen percent (14%).

	
 

	
 

	
 

	
               (vi)
The Company shall pay to the Buyer a Loan
  Commitment Fee equal to two percent (2%) of the principal amount of the
  Redeemable Debenture which shall be paid directly from the proceeds of the
  Closing.

                    (g) Corporate
Existence. So long as any of the Redeemable
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(g) will
thereafter be applicable to the Redeemable Debentures. 

                    (h) Transactions
With Affiliates. So long as any Redeemable
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, persons 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  

11

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.

                    (i) 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.

                    (j) Restriction
on Issuance of the Capital Stock. So long as any
Redeemable Debentures are outstanding, 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 bid price of the Common Stock determined immediately prior to its
issuance except for issuances to Richardson & Patel, LLP, (ii) issue any
Preferred Stock, warrant, option, right, contract, call, or other security
instrument granting the holder thereof, the right to acquire Common Stock
without consideration or for a consideration less than such Common Stock’s bid
price value determined immediately prior to it’s issuance, (iii) enter into any
security instrument granting the holder a security interest in any and all
assets of the Company, or (iv) file any registration statement on Form S-8
other than on behalf of Richardson & Patel, LLP.                        

                    (k) Restriction
on “Short” Position. Neither the Buyer nor any of
its affiliates have an open short position in the Common Stock of the Company,
and the Buyer agrees that it shall not, and that it will cause its affiliates
not to, engage in any short sales with respect to the Common Stock as long as
any Redeemable Debentures shall remain outstanding.

                    (l) Restriction
on Incurring Additional Debt. The Company shall
not incur any additional debt without the prior written approval of the Buyer
with the exception of equipment purchases and real estate acquisitions used in
the normal course of business.

5.Intentionally
Omitted.

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

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

                    (a) Each
Buyer shall have executed this Agreement, the Transaction
Documents and any other documents relating to this transaction and delivered
the same to the Company.

12

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

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

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

                    (e) The
Buyer shall have delivered to the Company its originally executed
warrants in order to be exchanged for One Hundred Fifty Thousand (150,000)
restricted shares of Common Stock, as contemplated by Section 4(g)(iv) above. 

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

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

                    (a) The
Company shall have executed this Agreement, the Transaction
Documents and any other documents relating to this transaction and delivered
the same to the Buyer(s). 

                    (b) The
trading in the Common Stock on the pink sheets shall not have
been suspended for any reason.

                    (c) The
representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and warranties shall be
true and correct without further qualification) as of the date when made and as
of the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. If requested
by the Buyer, the Buyer shall have received a certificate, executed by the
President of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by the Buyer
including, without limitation, an update as of the Closing Date regarding the
representation contained in Section 3(c) above.

13

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

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

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

                    (g)
Intentionally omitted.

                    (h)
Intentionally omitted. 

                    (i)
Upon issuance of the Company’s audits, and prior to the Company filing a Form
10 or other registration statement with the Securities and Exchange Commission,
the Company shall provide 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.

                    (j)
The Company shall file 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 as of the date hereof, providing the Buyer with a
senior lien on the Pledged Property, and provide proof of such filing to the
Buyer(s). 

                    (k)
The satisfactorily completion of all due diligence including evidence that cash
flows are sufficient to service the debt.

                    (l)
The Company shall have delivered certificates representing the Shares to the
Buyer(s) within five (5) business days after the Closing.

8. INDEMNIFICATION.

                    (a)
In consideration of the Buyer’s execution and delivery of this Agreement and
acquiring the Redeemable Debentures 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
Redeemable Debentures, 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
Transaction Documents 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 Transaction  

14

Documents 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 by a third party and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the Indemnities, any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Redeemable Debentures or
the status of the Buyer or holder of the Redeemable Debentures, as a Buyer of
Redeemable Debentures in the Company. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities, which is permissible under applicable law.

                    (b)
In consideration of the Company’s execution and delivery of this Agreement, and
in addition to all of the Buyer’s other obligations under this Agreement, the
Buyer shall defend, protect, indemnify and hold harmless the Company and all of
its officers, directors, employees and agents (including, without limitation,
those retained in connection with the transactions contemplated by this
Agreement) (collectively, the “Company Indemnitees”) from and against any and
all Indemnified Liabilities incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Buyer(s) in this
Agreement, the Transaction Documents or any other certificate, 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 Transaction Documents 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 Transaction Documents or any other certificate instrument,
document or agreement executed pursuant hereto by any of the Company
Indemnities. To the extent that the foregoing undertaking by each Buyer may be
unenforceable for any reason, each Buyer shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law. 

9. GOVERNING LAW: MISCELLANEOUS.

                    (a)
Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Florida without regard to the principles of
conflict of laws. The parties further agree that any action between them shall
be heard in Broward County, Florida and expressly consent to the jurisdiction
and venue of the State Court sitting in Broward County, Florida and the United
States District Court for the Southern District of Florida 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.  

                    (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. 

15

                    (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:

	
 

	
National
  Automation Services, Inc.

	
 

	
 

	
2053 Pabco
  Road

	
 

	
 

	
Henderson,
  NV 89011

	
 

	
 

	
Attention:
  Mr. Bob Chance, President

	
 

	
 

	
Telephone:
  (702) 642-7720

	
 

	
 

	
Facsimile:
  (702) 564-5411

	
 

	
 

	
 

	
With a copy
  to (which shall not constitute notice):

	
 

	
Richardson
  & Patel, LLP

	
 

	
 

	
10900
  Wilshire Boulevard, Suite 500

	
 

	
 

	
Los Angeles,
  CA 90024

	
 

	
 

	
Attention:
  Peter Hogan, Esq.

	
 

	
 

	
Telephone:
  (310) 208-1182

	
 

	
 

	
Facsimile:
  (310) 208-1154

	
 

	
 

	
 

	
If to the
  Buyer:

	
 

	
Trafalgar
  Capital Specialized 

	
 

	
 

	
Investment
  Fund, Luxembourg

	
 

	
 

	
8-10 Rue
  Mathias Hardt

	
 

	
 

	
BP 3023

	
 

	
 

	
L-1030
  Luxembourg

	
 

	
 

	
Attention:
  Andrew Garai

	
 

	
 

	
Facsimile:

	
 

	
 

	
011-44-207-405-0161

	
 

	
 

	
and

	
 

	
 

	
001-786-323-1651

	
 

	
 

	
 

	
With a copy
  to (which shall not constitute notice):

	
 

	
James G.
  Dodrill II, P.A.

	
 

	
 

	
5800
  Hamilton Way

	
 

	
 

	
Boca Raton,
  FL 33496

	
 

	
 

	
Attention:
  Jim Dodrill, Esq.

	
 

	
 

	
Telephone:
  (561) 862-0529

	
 

	
 

	
Facsimile:
  (561) 892-7787

	
 

	
 

	
 

16

          Each
party shall provide five (5) days’ prior written notice to the other party of
any change in address or facsimile number.

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

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

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

17

                    (l)
Termination. In the event that the Closing shall not have occurred with
respect to the Buyers on or before five (5) business days from the date hereof
due to the Company’s or the Buyer’s failure to satisfy the conditions set forth
in Sections 6 and 7 above (and the non-breaching party’s failure to waive such
unsatisfied condition(s)), the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching
party at the close of business on such date without liability of any party to
any other party; provided, however, that if this Agreement is terminated by the
Company pursuant to this Section 9(l), the Company shall remain obligated to
pay the Buyer(s) for the Legal and Documentation Review Fee and Due Diligence
Fee described in Sections 4(f)(ii) and 4(f)(iii), respectively, above.

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

18

          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:

	
 

	
NATIONAL AUTOMATION SERVICES, INC.

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name: Bob
  Chance 

	
 

	
Title:
  President

	
 

	
 

	
 

	
BUYER:

	
 

	
TRAFALGAR CAPITAL SPECIALIZED

	
 

	
INVESTMENT FUND, LUXEMBOURG

	
 

	
By:   Trafalgar Capital Sarl

	
 

	
Its:   General Partner

	
 

	
 

	
 

	
By: 

	
 

	
 

	

	
 

	
Name: Andrew
  Garai

	
 

	
Title:
  Chairman of the Board

19

EXHIBIT A

[RESERVED]

20

EXHIBIT B

FORM OF ESCROW AGREEMENT 

EXHIBIT C

FORM OF PERSONAL GUARANTY 

EXHIBIT D

FORM OF SECURITY AGREEMENT 

SCHEDULE I 

SCHEDULE OF BUYERS 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name

	
 

	
 

	
Signature

	
 

	
 

	
Address/Facsimile 

  Number of Buyer

	
 

	
 

	
Amount of

  Subscription

	

	
 

	
 

	

	
 

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
8-10 Rue Mathias Hardt

	
 

	
 

	
 

	
Trafalgar Capital
  Specialized

	
 

	
 

	
By: Trafalgar Capital Sarl

	
 

	
 

	
BP 3023

	
 

	
$

	
750,000

	
Investment Fund, Luxembourg

	
 

	
 

	
Its: General Partner

	
 

	
 

	
L-1030 Luxembourg

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Facsimile:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
011-44-207-405-0161

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
and

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
001-786-323-1651

	
 

	
 

	
 

	
 

	
 

	
 

	
Name: Andrew Garai

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Its: Chairman of the Board

	
 

	
 

	
 

	
 

	
 

	
 

Buyer’s
Counsel:

James G.
Dodrill II, P.A.

5800 Hamilton Way

Boca Raton, FL 33496

Telephone: (561) 862-0529

Facsimile: (561) 892-7787SECURITY AGREEMENT

          THIS SECURITY AGREEMENT (the
“Agreement”),
is entered into and made effective as of July 21, 2008, by and between NATIONAL AUTOMATION SERVICES, INC. (the
“Company”),
and the BUYER(S) listed on
Schedule I attached to the Securities Purchase Agreement dated as of the date
hereof (the “Secured Party”). 

          WHEREAS, the Company shall issue and sell
to the Secured Party, as provided in the Securities Purchase Agreement dated
the date hereof, and the Secured Party shall purchase up to Seven Hundred Fifty
Thousand U.S. Dollars (U.S.$750,000) of secured redeemable debentures (the “Secured
Redeemable Debentures”); 

          WHEREAS, to induce the Secured Party to
enter into the transaction contemplated by this Agreement, the Securities
Purchase Agreement, the Secured Redeemable Debenture, the Personal Guaranty and
the Escrow Agreement dated as of the date hereof (collectively referred to as
the “Transaction Documents”), the Company hereby grants to the Secured
Party a first priority security interest in and to the pledged property
identified on Exhibit “A” hereto (collectively referred to as the “Pledged
Property”) until the satisfaction of the Obligations, as defined herein
below. 

          NOW, THEREFORE, in consideration of the premises
and the mutual covenants herein contained, and for other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, the
parties hereto hereby agree as follows: 

ARTICLE 1.

DEFINITIONS AND INTERPRETATIONS

	
 

	
 

	
 

	
 

	
Section
  1.1. Recitals.

          The
above recitals are true and correct and are incorporated herein, in their
entirety, by this reference. 

	
 

	
 

	
 

	
 

	
Section
  1.2. Interpretations.

          Nothing
herein expressed or implied is intended or shall be construed to confer upon
any person other than the Secured Party any right, remedy or claim under or by
reason hereof. 

	
 

	
 

	
 

	
 

	
Section
  1.3. Obligations Secured.

          The
obligations secured hereby are any and all obligations of the Company to the
Secured Party now existing or hereinafter incurred to the Secured Party,
whether oral or written and whether arising before, on or after the date hereof
including, without limitation, those obligations of the Company to the Secured
Party under the Securities Purchase Agreement and the Secured Redeemable
Debenture and any other amounts now or hereafter owed to the Secured Party by
the Company thereunder or hereunder (collectively, the “Obligations”). 

ARTICLE 2.

PLEDGED PROPERTY, ADMINISTRATION OF
COLLATERAL

AND TERMINATION OF SECURITY INTEREST

          Section
2.1. Grant of Security Interest.

          1. Company
hereby pledges to the Secured Party and creates in the Secured Party for its
benefit a security interest for such time until the Obligations are paid in
full, in and to all of in the property described in “Exhibit A” hereto,
whether now existing or hereafter from time to time acquired (collectively, the
“Pledged Property.”). 

                    (a) Simultaneously
with the execution and delivery of this Agreement, the Company shall make,
execute, acknowledge, file, record and deliver to the Secured Party any
documents reasonably requested by the Secured Party to perfect its security
interest in the Pledged Property. Simultaneously with the execution and
delivery of this Agreement, the Company shall make, execute, acknowledge and
deliver to the Secured Party such documents and instruments, including, without
limitation, financing statements, certificates, affidavits and forms as may, in
the Secured Party’s reasonable judgment, be necessary to effectuate, complete
or perfect, or to continue and preserve, the security interest of the Secured
Party in the Pledged Property, and the Secured Party shall hold such documents
and instruments as secured party, subject to the terms and conditions contained
herein. 

          Section
2.2. Rights; Interests; Etc. 

                    (a) So
long as no Event of Default (as hereinafter defined) shall have occurred and be
continuing: 

                    
          (i) the
Company shall be entitled to exercise any and all rights pertaining to the
Pledged Property or any part thereof for any purpose not inconsistent with the
terms hereof; and 

                    
          (ii) the
Company shall be entitled to receive and retain any and all payments paid or
made in respect of the Pledged Property. 

                    (b) Upon
the occurrence and during the continuance of an Event of Default: 

                    
          (i) All
rights of the Company to exercise the rights which it would otherwise be
entitled to exercise pursuant to Section 2.2(a)(i) hereof and to receive
payments which it would otherwise be authorized to receive and retain pursuant
to Section 2.2(a)(ii) hereof shall be suspended, and all such rights shall
thereupon become vested in the Secured Party who shall thereupon have the sole
right to exercise such rights and to receive and hold as Pledged Property such
payments; provided, however, that
if the Secured Party shall become entitled and shall elect to exercise its
right to realize on the Pledged Property pursuant to Article 5 hereof, then all
cash sums received by the Secured Party, or held by Company for the benefit of
the Secured Party and paid over pursuant to Section 2.2(b)(ii) hereof, shall be
applied against any outstanding Obligations; and 

2

                    
          (ii) All
interest, dividends, income and other payments and distributions which are
received by the Company contrary to the provisions of Section 2.2(b)(i) hereof
shall be received in trust for the benefit of the Secured Party, shall be
segregated from other property of the Company and shall be forthwith paid over
to the Secured Party; or 

                    
          (iii) The
Secured Party in its sole discretion shall be authorized to sell any or all of
the Pledged Property at public or private sale in order to recoup all of the
outstanding principal plus accrued interest owed pursuant to the Redeemable
Debenture as described herein 

                    (c) Each
of the following events, subject to the lapse of applicable cure periods, shall
constitute a default under this Agreement (each an “Event of Default”): 

                    
          (i) any
default, whether in whole or in part, shall occur in the payment to the Secured
Party of principal, interest or other item comprising the Obligations as and
when due or with respect to any other debt or obligation of the Company to a
party other than the Secured Party; 

                    
          (ii) any
default, whether in whole or in part, shall occur in the due observance or
performance of any obligations or other covenants, terms or provisions to be
performed under this Agreement or the Transaction Documents; 

                    
          (iii) the
Company shall: (1) make a general assignment for the benefit of its creditors;
(2) apply for or consent to the appointment of a receiver, trustee, assignee,
custodian, sequestrator, liquidator or similar official for itself or any of
its assets and properties; (3) commence a voluntary case for relief as a debtor
under the United States Bankruptcy Code; (4) file with or otherwise submit to
any governmental authority any petition, answer or other document seeking: (A)
reorganization, (B) an arrangement with creditors or (C) to take advantage of
any other present or future applicable law respecting bankruptcy,
reorganization, insolvency, readjustment of debts, relief of debtors,
dissolution or liquidation; (5) file or otherwise submit any answer or other
document admitting or failing to contest the material allegations of a petition
or other document filed or otherwise submitted against it in any of the
proceedings set forth in this Section 2.2(c)(iii) under any such applicable
law, or (6) be adjudicated a bankrupt or insolvent by a court of competent
jurisdiction; or 

                    
          (iv) any
case, proceeding or other action shall be commenced against the Company for the
purpose of effecting, or an order, judgment or decree shall be entered by any
court of competent jurisdiction approving (in whole or in part) anything
specified in Section 2.2(c)(iii) hereof, or any receiver, trustee, assignee,
custodian, sequestrator, liquidator or other official shall be appointed with
respect to the Company, or shall be appointed to take or shall otherwise
acquire possession or control of all or a substantial part of the assets and
properties of the Company, and any of the foregoing shall continue unstayed and
in effect for any period of thirty (30) days. 

3

ARTICLE 3.

ATTORNEY-IN-FACT; PERFORMANCE

          Section
3.1. Secured Party Appointed Attorney-In-Fact.

          Upon
the occurrence of an Event of Default, the Company hereby appoints the Secured
Party as its attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company or otherwise, from time to time in
the Secured Party’s discretion to take any action and to execute any instrument
which the Secured Party may reasonably deem necessary to accomplish the
purposes of this Agreement, including, without limitation, to receive and
collect all instruments made payable to the Company representing any payments
in respect of the Pledged Property or any part thereof and to give full
discharge for the same. The Secured Party may demand, collect, receipt for,
settle, compromise, adjust, sue for, foreclose, or realize on the Pledged
Property as and when the Secured Party may determine. To facilitate collection,
the Secured Party may notify account debtors and obligors on any Pledged
Property or Pledged Property to make payments directly to the Secured Party. 

          Section
3.2. Secured Party May Perform. 

          If
the Company fails to perform any agreement contained herein, the Secured Party,
at its option, may itself perform, or cause performance of, such agreement, and
the expenses of the Secured Party incurred in connection therewith shall be
included in the Obligations secured hereby and payable by the Company under
Section 8.3. 

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

          Section
4.1. Authorization; Enforceability. 

          Each
of the parties hereto represents and warrants that it has taken all action
necessary to authorize the execution, delivery and performance of this
Agreement and the transactions contemplated hereby; and upon execution and
delivery, this Agreement shall constitute a valid and binding obligation of the
respective party, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights or by the principles
governing the availability of equitable remedies. 

          Section
4.2. Ownership of Pledged Property. 

          The
Company warrants and represents that it is the legal and beneficial owner of
the Pledged Property free and clear of any lien, security interest, option or
other charge or encumbrance except for the security interest created by this
Agreement and for the Permitted Liens. For purposes hereof, “Permitted Liens”
shall mean (i) liens for taxes or other governmental charges which are not yet
delinquent or are being contested in good faith by appropriate proceedings,
(ii) liens for carriers, contractors, warehousemen, mechanics, materialmen,
laborers, employees, suppliers or other similar persons arising by operation of
law and incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith, (iii) liens relating to deposits made in the
ordinary course of business in connection 

4

with workers’
compensation, unemployment insurance and other types of social security or to
secure the performance of leases, trade contracts or other similar agreements;
and (iv) in the case of real property, any matters, restrictions, covenants,
conditions, limitations, rights, rights of way, encumbrances, encroachments,
reservations, easements, agreements and other matters of record, such state of
facts of which an accurate survey or inspection of the property would reveal
and do not materially interfere with the use or value of the property. 

ARTICLE 5.

DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

          Section
5.1. Default and Remedies. 

                    (a) If
an Event of Default described in Section 2.2(c)(i) or (ii) occurs, then in each
such case the Secured Party may declare the Obligations to be due and payable
immediately, by a notice in writing to the Company, and upon any such
declaration, the Obligations shall become immediately due and payable. If an
Event of Default described in Sections 2.2(c)(iii) or (iv) occurs and is
continuing for the period set forth therein, then the Obligations shall
automatically become immediately due and payable without declaration or other
act on the part of the Secured Party. 

                    (b) Upon
the occurrence of an Event of Default, the Secured Party shall: (i) be entitled
to receive all distributions with respect to the Pledged Collateral, (ii) to
cause the Pledged Property to be transferred into the name of the Secured Party
or its nominee, (iii) to dispose of the Pledged Property, and (iv) to realize
upon any and all rights in the Pledged Property then held by the Secured Party
as provided herein. 

          Section
5.2. Method of Realizing Upon the Pledged
Property: Other Remedies. 

          Upon
the occurrence of an Event of Default, in addition to any rights and remedies
available at law or in equity, the following provisions shall govern the
Secured Party’s right to realize upon the Pledged Property: 

                    (a) Any
item of the Pledged Property may be sold for cash or other value in any number
of lots at brokers board, public auction or private sale and may be sold
without demand, advertisement or notice (except that the Secured Party shall
give the Company ten (10) days’ prior written notice of the time and place or
of the time after which a private sale may be made (the “Sale Notice”)),
which notice period is hereby agreed to be commercially reasonable. At any sale
or sales of the Pledged Property, the Company may bid for and purchase the
whole or any part of the Pledged Property and, upon compliance with the terms
of such sale, may hold, exploit and dispose of the same without further
accountability to the Secured Party. The Company will execute and deliver, or
cause to be executed and delivered, such instruments, documents, assignments,
waivers, certificates, and affidavits and supply or cause to be supplied such
further information and take such further action as the Secured Party
reasonably shall require in connection with any such sale. 

5

                    (b) Any
cash being held by the Secured Party as Pledged Property and all cash proceeds
received by the Secured Party in respect of, sale of, collection from, or other
realization upon all or any part of the Pledged Property shall be applied as
follows: 

                              (i) to
the payment of all amounts due the Secured Party for the expenses reimbursable
to it hereunder or owed to it pursuant to Section 8.3 hereof; 

                              (ii) to
the payment of the Obligations then due and unpaid. 

                              (iii) the
balance, if any, to the person or persons entitled thereto, including, without
limitation, the Company. 

                    (c) In
addition to all of the rights and remedies which the Secured Party may have
pursuant to this Agreement, the Secured Party shall have all of the rights and
remedies provided by law, including, without limitation, those under the
Uniform Commercial Code. 

                    (d) If
the Company fails to pay such amounts due upon the occurrence of an Event of
Default which is continuing, then the Secured Party may institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the
Company and collect the monies adjudged or decreed to be payable in the manner
provided by law out of the property of Company, wherever situated. 

                    (e) The
Company agrees that it shall be liable for any reasonable fees, expenses and
costs incurred by the Secured Party in connection with enforcement, collection
and preservation of the Transaction Documents, including, without limitation,
reasonable legal fees and expenses, and such amounts shall be deemed included
as Obligations secured hereby and payable as set forth in Section 8.3 hereof. 

          Section
5.3. Proofs of Claim. 

                    In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relating to the Company or the property of the Company or of such
other obligor or its creditors, the Secured Party (irrespective of whether the
Obligations shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), shall
be entitled and empowered, by intervention in such proceeding or otherwise: 

                              (i) to
file and prove a claim for the whole amount of the Obligations and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Secured Party (including any claim for the reasonable legal fees
and expenses and other expenses paid or incurred by the Secured Party permitted
hereunder and of the Secured Party allowed in such judicial proceeding), and 

                              (ii) to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by the Secured Party to make such
payments to the Secured Party and, in the event that the Secured Party shall
consent to the making of such payments directed to the Secured Party, to pay to
the Secured Party any amounts for expenses due it hereunder.

6

          Section
5.4. Duties Regarding Pledged Property. 

          The
Secured Party shall have no duty as to the collection or protection of the
Pledged Property or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody and reasonable care of any of the
Pledged Property actually in the Secured Party’s possession. 

ARTICLE 6.

AFFIRMATIVE COVENANTS

          The
Company covenants and agrees that, from the date hereof and until the
Obligations have been fully paid and satisfied, unless the Secured Party shall
consent otherwise in writing (as provided in Section 8.4 hereof): 

          Section
6.1. Existence, Properties, Etc.

                    (a) The
Company shall do, or cause to be done, all things, or proceed with due
diligence with any actions or courses of action, that may be reasonably
necessary (i) to maintain Company’s due organization, valid existence and good
standing under the laws of its state of incorporation, and (ii) to preserve and
keep in full force and effect all qualifications, licenses and registrations in
those jurisdictions in which the failure to do so could have a Material Adverse
Effect (as defined below); and (b) the Company shall not do, or cause to be
done, any act impairing the Company’s corporate power or authority (i) to carry
on the Company’s business as now conducted, and (ii) to execute or deliver this
Agreement or any other document delivered in connection herewith, including,
without limitation, any UCC-1 Financing Statements required by the Secured
Party to which it is or will be a party, or perform any of its obligations
hereunder or thereunder. For purpose of this Agreement, the term “Material
Adverse Effect” shall mean any material and adverse affect, whether
individually or in the aggregate, upon (a) the Company’s assets, business,
operations, properties or condition, financial or otherwise or results of
operations of the Company, taken as a whole, excluding any change, event,
circumstance or effect that is caused by changes in general economic conditions
or changes generally affecting the industry in which the Company operates
(provided that such changes do not affect the Company in a materially
disproportionate manner); or (b) the Company’s ability to make payment as and
when due of all or any part of the Obligations; or (c) the Pledged Property. 

          Section
6.2. Accounts and Reports. 

          The
Company shall maintain a standard system of accounting in accordance with
generally accepted accounting principles consistently applied and provide, at
its sole expense, to the Secured Party the following: 

7

                    (b) as
soon as available, a copy of any notice or other communication alleging any
nonpayment or other material breach or default, or any foreclosure or other
action respecting any material portion of its assets and properties, received
respecting any of the indebtedness of the Company in excess of $25,000 (other
than the Obligations), or any demand or other request for payment under any
guaranty, assumption, purchase agreement or similar agreement or arrangement
respecting the indebtedness or obligations of others in excess of $25,000,
including any received from any person acting on behalf of the Secured Party or
beneficiary thereof, except for supplier requests in the normal course of
business for payment of past due accounts payable invoices so long as such past
due amounts do not exceed in the aggregate $50,000 at any time; and 

                    (c) within
fifteen (15) days after the making of each submission or filing, a copy of any
report, financial statement, notice or other document, whether periodic or
otherwise, submitted to the shareholders of the Company, or submitted to or
filed by the Company with any governmental authority involving or affecting (i)
the Company that could have a Material Adverse Effect; (ii) the Obligations; or
(iii) any part of the Pledged Property. 

          Section
6.2. Maintenance of Books and Records;
Inspection. 

          The
Company shall maintain its books, accounts and records in accordance with
United States generally accepted accounting principles consistently applied,
and permit the Secured Party, its officers and employees and any professionals
designated by the Secured Party in writing, during business hours and upon
reasonable notice to visit and inspect any of its properties (including but not
limited to the Pledged Property), corporate books and financial records, and to
discuss its accounts, affairs and finances with any employee, officer or
director thereof. 

          Section
6.3. Maintenance and Insurance. 

                    (a) The
Company shall maintain or cause to be maintained, at its own expense, all of
its assets and properties in good working order and condition, making all
necessary repairs thereto and renewals and replacements thereof. 

                    (b) The
Company shall maintain or cause to be maintained, at its own expense, insurance
in form, substance and amounts (including deductibles), which the Company deems
reasonably necessary to the Company’s business, (i) adequate to insure all
assets and properties of the Company, which assets and properties are of a
character usually insured by persons engaged in the same or similar business
against loss or damage resulting from fire or other risks included in an
extended coverage policy; (ii) against public liability and other tort claims
that may be incurred by the Company; (iii) as may be required by the
Transaction Documents and/or applicable law and (iv) as may be reasonably
requested by Secured Party, all with adequate, financially sound and reputable
insurers. 

          Section
6.4. Contracts and Other Collateral. 

          The
Company shall perform all of its obligations under or with respect to each
instrument, receivable, contract and other intangible included in the Pledged
Property to which the Company is now or hereafter will be party on a timely
basis and in the manner therein required, including, without limitation, this
Agreement. 

8

          Section
6.5. Defense of Collateral, Etc.

          The
Company shall defend and enforce its right, title and interest in and to any
part of: (a) the Pledged Property; and (b) if not included within the Pledged
Property, those assets and properties whose loss could have a Material Adverse
Effect, the Company shall defend the Secured Party’s right, title and interest
in and to each and every part of the Pledged Property, each against all manner
of claims and demands on a timely basis to the full extent permitted by
applicable law. 

          Section
6.6. Payment of Debts, Taxes, Etc.

          The
Company shall pay, or cause to be paid, all of its indebtedness and other
liabilities and perform, or cause to be performed, all of its obligations in
accordance with the respective terms thereof, and pay and discharge, or cause
to be paid or discharged, all taxes, assessments and other governmental charges
and levies imposed upon it (other than those being contested by the Company in
good faith), upon any of its assets and properties on or before the last day on
which the same may be paid without penalty, as well as pay all other lawful
claims (whether for services, labor, materials, supplies or otherwise) as and
when due 

          Section
6.7. Taxes and Assessments; Tax Indemnity. 

          The
Company shall (a) file all tax returns and appropriate schedules thereto that
are required to be filed under applicable law, prior to the date of
delinquency, (b) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon the Company, upon its income and profits or upon
any properties belonging to it, prior to the date on which penalties attach
thereto, and (c) pay all taxes, assessments and governmental charges or levies
that, if unpaid, might become a lien or charge upon any of its properties; provided, however, that the Company in
good faith may contest any such tax, assessment, governmental charge or levy
described in the foregoing clauses (b) and (c) so long as appropriate reserves
are maintained with respect thereto. 

          Section
6.8. Compliance with Law and Other Agreements.

          The
Company shall maintain its business operations and property owned or used in
connection therewith in compliance with (a) all applicable federal, state and
local laws, regulations and ordinances governing such business operations and
the use and ownership of such property, and (b) all agreements, licenses,
franchises, indentures and mortgages to which the Company is a party or by
which the Company or any of its properties is bound. Without limiting the
foregoing, the Company shall pay all of its indebtedness promptly in accordance
with the terms thereof. 

          Section
6.9. Notice of Default.

          The
Company shall give written notice to the Secured Party of the occurrence of any
default or Event of Default under this Agreement or the Transaction Documents,
promptly upon the occurrence thereof. 

9

          Section
6.10. Notice of Litigation. 

          The
Company shall give notice, in writing, to the Secured Party of (a) any actions,
suits or proceedings wherein the amount at issue is in excess of $50,000,
instituted by any persons against the Company, or affecting any of the assets
of the Company, and (b) any dispute, not resolved within fifteen (15) days of
the commencement thereof, between the Company on the one hand and any
governmental or regulatory body on the other hand, which might reasonably be
expected to have a Material Adverse Effect on the business operations or
financial condition of the Company. 

ARTICLE 7.

NEGATIVE COVENANTS

          The
Company covenants and agrees that, from the date hereof until the Obligations
have been fully paid and satisfied, the Company shall not, unless the Secured
Party shall consent otherwise in writing: 

          Section
7.1. Indebtedness. 

          Other
than in the ordinary course of business consistent with past practice and
Section 7.7 below, the Company shall not directly or indirectly permit, create,
incur, assume, permit to exist, increase, renew or extend on or after the date
hereof any indebtedness on its part, including commitments, contingencies and
credit availabilities, or apply for or offer or agree to do any of the
foregoing. 

          Section
7.2. Liens and Encumbrances. 

          Except
for Permitted Liens and for transfers in the ordinary course of business, and
except for such assignment, transfer, pledge, mortgage, security interest or
other lien or encumbrance as is outstanding on the date of this Agreement, the
Company shall not directly or indirectly make, create, incur, assume or permit
to exist any assignment, transfer, pledge, mortgage, security interest or other
lien or encumbrance of any nature in, to or against any part of the Pledged
Property or of the Company’s capital stock, or offer or agree to do so, or own
or acquire or agree to acquire any asset or property of any character subject
to any of the foregoing encumbrances (including any conditional sale contract
or other title retention agreement), or assign, pledge or in any way transfer
or encumber its right to receive any income or other distribution or proceeds
from any part of the Pledged Property; or enter into any sale-leaseback
financing respecting any part of the Pledged Property as lessee, or cause or
assist the inception or continuation of any of the foregoing. 

10

          Section
7.3. Certificate of Incorporation, By-Laws,
Mergers, Consolidations, Acquisitions and Sales. 

          Other
than in the ordinary course of business, without the prior express written
consent of the Secured Party, the Company shall not: (a) Amend its Articles of
Incorporation or By-Laws; (b) issue or sell its stock, stock options, bonds,
notes or other corporate securities or obligations; (c) be a party to any
merger, consolidation or corporate reorganization, (d) purchase or otherwise acquire all or
substantially all of the assets or stock of, or any partnership or joint
venture interest in, any other person, firm or entity, (e) sell, transfer,
convey, grant a security interest in (except for Permitted Liens) or lease all
or any substantial part of its assets, nor (f) create any new subsidiaries nor
convey any of its assets to any subsidiary. In accordance with this Section
7.3, the Secured Party hereby expressly consents to the Company’s currently
proposed acquisition of Summit Controls, LLC, an Arizona limited liability
company. 

          Section
7.4. Management, Ownership. 

          The
Company shall not materially change its ownership, executive staff or
management without the prior written consent of the Secured Party. The
ownership, executive staff and management of the Company are material factors
in the Secured Party’s willingness to institute and maintain a lending
relationship with the Company. 

          Section
7.5. Dividends, Etc. 

          The
Company shall not declare or pay any dividend of any kind, in cash or in
property, on any class of its capital stock, nor purchase, redeem, retire or
otherwise acquire for value any shares of such stock, nor make any distribution
of any kind in respect thereof, nor make any return of capital to shareholders,
nor make any payments in respect of any pension, profit sharing, retirement,
stock option, stock bonus, incentive compensation or similar plan (except as
required or permitted hereunder), without the prior written consent of the
Secured Party. 

          Section
7.6. Guaranties; Loans. 

          Other
than in the ordinary course of business, and except for such guarantees or
liabilities as are outstanding on the date of this Agreement, the Company shall
not guarantee nor be liable in any manner, whether directly or indirectly, or
become contingently liable after the date of this Agreement in connection with
the obligations or indebtedness of any person or persons, except for (i) the
indebtedness currently secured by the liens identified on the Pledged Property
identified on Exhibit A hereto and (ii) the endorsement of negotiable
instruments payable to the Company for deposit or collection in the ordinary
course of business. The Company shall not make any loan, advance or extension
of credit to any person other than in the normal course of its business. 

          Section
7.7. Debt. 

          Other
than in the ordinary course of business, and except for such indebtedness as is
outstanding on the date of this Agreement, without the prior written approval
of the Secured Party, the Company shall not create, incur, assume or suffer to
exist any additional indebtedness of any description whatsoever in an aggregate
amount in excess of $50,000 (excluding any indebtedness of the Company to the
Secured Party, trade accounts payable and accrued expenses incurred in the
ordinary course of business, equipment purchases and real estate acquisitions
used in the ordinary course of business, and the endorsement of negotiable instruments
payable to the Company, respectively for deposit or collection in the ordinary
course of business). 

11

          Section
7.8. Conduct of Business. 

          The
Company will continue to engage in a business of the general type as conducted
by it on the date of this Agreement. 

          Section
7.9. Places of Business. 

          The
location of the Company’s chief place of business is at the address set forth
in Section 8.1 hereof. The Company shall not change the location of its chief
place of business, chief executive office or any place of business disclosed to
the Secured Party or move any of the Pledged Property from its current location
without thirty (30) days’ prior written notice to the Secured Party in each
instance. 

ARTICLE 8.

MISCELLANEOUS

          Section
8.1. Notices. 

          All
notices or other communications required or permitted to be given pursuant to
this Agreement shall be in writing and shall be considered as duly given on:
(a) the date of delivery, if delivered in person, by nationally recognized
overnight delivery service or (b) five (5) days after mailing if mailed from
within the continental United States by certified mail, return receipt
requested to the party entitled to receive the same: 

 

	
 

	
 

	
 

	
 

	
 

	
 

	
If to the
  Secured Party:

	
 

	
Trafalgar
  Capital Specialized Investment Fund

	
 

	
 

	
 

	
8-10 Rue
  Mathias Hardt

	
 

	
 

	
 

	
BP 3023

	
 

	
 

	
 

	
L-1030
  Luxembourg

	
 

	
 

	
 

	
Attention:
  Andrew Garai, Chairman of the Board of

	
 

	
 

	
 

	
Trafalgar
  Capital Sarl, General Partner

	
 

	
 

	
 

	
Facsimile: 

	
011-44-207-405-0161
  and

	
 

	
 

	
 

	
 

	
001-786-323-1651

	
 

	
 

	
 

	
 

	
 

	
 

	
With a copy
  to (which shall not constitute notice):

	
 

	
James G.
  Dodrill II, P.A.

	
 

	
 

	
 

	
5800
  Hamilton Way

	
 

	
 

	
 

	
Boca Raton,
  FL 33496 

	
 

	
 

	
 

	
Attention:. 

	
James
  Dodrill, Esq

	
 

	
 

	
 

	
Telephone: 

	
(561)
  862-0529

	
 

	
 

	
 

	
Facsimile:

	
(561)
  892-7787 

12

	
 

	
 

	
 

	
 

	
 

	
 

	
And if to
  the Company:

	
 

	
National
  Automation Services, Inc.

  2053 Pabco Road

  Henderson, NV 89011

  Attention: Mr. Bob Chance, President

	
 

	
 

	
 

	
Telephone;

	
(702)
  642-7720

	
 

	
 

	
 

	
Facsimile:

	
(702)
  564-5411

	
 

	
 

	
 

	
 

	
 

	
 

	
With a copy
  to (which shall not constitute notice):

	
 

	
Richardson
  & Patel, LLP 

  10900 Wilshire Boulevard, Suite 500 

  Los Angeles, CA 90024 

  Attn: Peter Hogan, Esq.

	
 

	
 

	
 

	
Telephone:

	
(310)
  208-1181

	
 

	
 

	
 

	
Facsimile:

	
(310)
  208-1154

          Any
party may change its address by giving notice to the other party stating its
new address. Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party’s address for
the purpose of all notices or other communications required or permitted to be
given pursuant to this Agreement. 

          Section
8.2. Severability. 

          If
any provision of this Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and shall
not in any manner affect or render invalid or unenforceable any other severable
provision of this Agreement, and this Agreement shall be carried out as if any
such invalid or unenforceable provision were not contained herein. 

          Section
8.3. Expenses. 

          In
the event of an Event of Default, the Company will pay to the Secured Party the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel, which the Secured Party may incur in connection with:
(i) the custody or preservation of, or the sale, collection from, or other
realization upon, any of the Pledged Property; (ii) the exercise or enforcement
of any of the rights of the Secured Party hereunder or (iii) the failure by the
Company to perform or observe any of the provisions hereof. 

          Section
8.4. Waivers, Amendments, Etc.

          The
Secured Party’s delay or failure at any time or times hereafter to require
strict performance by Company of any undertakings, agreements or covenants
shall not waiver, affect, or diminish any right of the Secured Party under this
Agreement to demand strict compliance and performance herewith. Any waiver by
the Secured Party of any Event of Default shall not waive or affect any other
Event of Default, whether such Event of Default is prior or subsequent thereto
and whether of the same or a different type. None of the undertakings,
agreements and covenants of the Company contained in this Agreement, and no
Event of Default, shall be deemed to have been waived by the Secured Party, nor
may this Agreement be amended, changed or modified, unless such waiver,
amendment, change or modification is evidenced by an instrument in writing
specifying such waiver, amendment, change or modification and signed by the
Secured Party. 

13

          Section
8.5. Continuing Security Interest. 

          This
Agreement shall create a continuing security interest in the Pledged Property
and shall: (i) remain in full force and effect until payment in full of the
Obligations (whether by payment of cash, redemption or conversion); and (ii) be
binding upon the Company and its successors and heirs and (iii) inure to the
benefit of the Secured Party and its successors and assigns. Upon the payment
or satisfaction in full of the Obligations, the Company shall be entitled to
the return, at its expense, of such of the Pledged Property as shall not have
been sold in accordance with Section 5.2 hereof or otherwise applied pursuant
to the terms hereof. Upon payment in full of all Obligations, the Secured Party
shall execute and deliver to the Company all instruments and other documents as
may be necessary or proper to release the lien on and security interest in the
Pledged Property which has been granted hereunder. 

          Section
8.6. Independent Representation. 

          Each
party hereto acknowledges and agrees that it has received or has had the
opportunity to receive independent legal counsel of its own choice and that it
has been sufficiently apprised of its rights and responsibilities with regard
to the substance of this Agreement. 

          Section
8.7. Applicable Law: Jurisdiction. 

          This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Florida without regard to the principles of conflict of laws. The
parties further agree that any action between them shall be heard in Florida
and expressly consent to the jurisdiction and venue of the Florida State Court
sitting in Broward County, Florida or the United States District Court for the
Southern District of Florida, for the adjudication of any civil action asserted
pursuant to this Paragraph. 

          Section
8.8. Waiver of Jury Trial. 

          AS
A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO
MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS
AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION. 

          Section
8.9. Entire Agreement. 

          This
Agreement constitutes the entire agreement among the parties and supersedes any
prior agreement or understanding among them with respect to the subject matter
hereof. 

14

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

	
 

	
 

	
 

	
 

	
COMPANY:

	
 

	
NATIONAL AUTOMATION SERVICES, INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name: 

	
Bob Chance

	
 

	
Title:

	
President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SECURED PARTY:

	
 

	
TRAFALGAR CAPITAL SPECIALIZED

	
 

	
INVESTMENT FUND, LUXEMBOURG

	
 

	
By:

	
Trafalgar Capital Sarl

	
 

	
Its:

	
General Partner

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
Portfolio
  Manager

15

EXHIBIT A

DEFINITION OF PLEDGED PROPERTY

          For
the purpose of securing prompt and complete payment and performance by the
Company of all of the Obligations, the Company unconditionally and irrevocably
hereby grants to the Secured Party a continuing security interest in and to,
and lien upon, all of the Company’s and its current and future acquired
subsidiaries’ assets (including specifically those of Summit Controls, LLC, an
Arizona limited liability company), and including specifically the following
Pledged Property of the Company and such subsidiaries: 

                    (a) all
goods of the Company and/or such subsidiaries, including, without limitation,
machinery, equipment, furniture, furnishings, fixtures, signs, lights, tools,
parts, supplies and motor vehicles of every kind and description, now or
hereafter owned by the Company and/or such subsidiaries or in which the Company
and/or such subsidiaries may have or may hereafter acquire any interest, and
all replacements, additions, accessions, substitutions and proceeds thereof,
arising from the sale or disposition thereof, and where applicable, the
proceeds of insurance and of any tort claims involving any of the foregoing; 

                    (b) all
inventory of the Company and/or such subsidiaries, including, but not limited
to, all goods, wares, merchandise, parts, supplies, finished products, other
tangible personal property, including such inventory as is temporarily out of
Company’s and/or such subsidiaries’ custody or possession and including any
returns upon any accounts or other proceeds, including insurance proceeds, resulting
from the sale or disposition of any of the foregoing;

                    (c) all
contract rights and general intangibles of the Company and/or such
subsidiaries, including, without limitation, goodwill, trademarks, trade
styles, trade names, leasehold interests, partnership or joint venture
interests, patents and patent applications, copyrights, deposit accounts
whether now owned or hereafter created;

                    (d) all
documents, warehouse receipts, instruments and chattel paper of the Company
and/or such subsidiaries whether now owned or hereafter created;

                    (e) all
accounts and other receivables, instruments or other forms of obligations and
rights to payment of the Company and/or such subsidiaries (herein collectively
referred to as “Accounts”), together with the proceeds thereof, all
goods represented by such Accounts and all such goods that may be returned by
the Company’s and/or such subsidiaries’ customers, and all proceeds of any
insurance thereon, and all guarantees, securities and liens which the Company
and/or such subsidiaries may hold for the payment of any such Accounts
including, without limitation, all rights of stoppage in transit, replevin and
reclamation and as an unpaid vendor and/or lienor, all of which the Company and
such subsidiaries represent and warrant will be bona fide and existing
obligations of its respective customers, arising out of the sale of goods by
the Company and/or such subsidiary in the ordinary course of business;

                    (f) to
the extent assignable, all of the Company’s and/or such subsidiaries rights
under all present and future authorizations, permits, licenses and franchises
issued or granted in connection with the operations of any of its facilities;

                    (g) all products and proceeds
(including, without limitation, insurance proceeds) from the above-described
Pledged Property; and

                    (h) all equity interests, securities or other instruments
in other companies, including, without limitation, any subsidiaries, investments
or other entities (whether or not controlled).

A-1

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