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      CONFIDENTIAL
        INFORMATION AND

      INVENTION
        ASSIGNMENT AGREEMENT

      

      

      This
        CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT (the “Agreement”) is
        made between Composite Technology Corporation, a Nevada corporation (the
        “Company”) and John P. Mitola.

      

      In
        consideration of my appointment as a director with the Company (which for
        purposes of this Agreement shall be deemed to include any subsidiaries or
        Affiliates of the Company and for purposes of this Agreement, “Affiliates” shall
        mean any person or entity that directly or indirectly controls, is controlled
        by
        or is under common control with the Company), the receipt of confidential
        information while associated with the Company, and other good and valuable
        consideration, I, the undersigned individual, agree that:

      

      1. Term
        of Agreement.
        This
        Agreement shall continue in full force and effect for the duration of my
        membership as a director of the Company (the “Effective Period”). 

      

      2. Confidentiality.

      

      (a) Existence
        of Confidential Information.
        The
        Company is in the legal possession of and/or owns and will develop and/or
        acquire Proprietary Information, as defined below, which have value to its
        business. This Confidential Information includes not only information disclosed
        by the Company to me, but also information developed or learned by me during
        the
        course of my tenure as a Director with the Company.

      

      (b) Definitions.
        “Proprietary Information” is all information in whatever form, tangible or
        intangible, pertaining in any manner to the business of the Company, or any
        of
        its Affiliates, or its employees, customers, consultants or business associates.
        All Proprietary Information not generally known outside of the Company’s
        organization, and all Proprietary Information so known only through improper
        means, shall be deemed “Confidential Information.” By example and without
        limiting the foregoing definition, Proprietary and Confidential Information
        shall include, but not be limited to:

      

      (i) Formulas,
        research and development techniques, processes, trade secrets, computer
        programs, software, electronic codes, mask works, inventions, innovations,
        patents, patent applications, discoveries, improvements, data, know-how,
        formats, test results and research projects; 

      

      (ii) information
        about costs, profits, markets, sales, contracts and lists of customers and
        distributors;

      

      (iii) business,
        marketing and strategic plans; 

      

      (iv) forecasts,
        unpublished financial information, budgets, projections and customer identities,
        characteristics and agreements; and

      

      (v) employee
        personnel files and compensation information.

      

      Confidential
        Information is to be broadly defined, and includes all information that has
        or
        could have commercial value or other utility in the business in which the
        Company is engaged or contemplates engaging, and all information of which
        the
        unauthorized disclosure could be detrimental to the interests of the Company,
        whether or not such information is identified as Confidential Information
        by the
        Company.

      

      (c) Protection
        of Confidential Information.
        I will
        not, directly or indirectly, use, make available, sell, disclose or otherwise
        communicate to any third party, other than in my assigned duties and for
        the
        benefit of the Company, any of the Company’s Confidential Information, either
        during or after my tenure as a Director with the Company. 

      

      
        
          
          

        

        
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      (d) Delivery
        of Confidential Information.
        Upon
        request or when my directorship with the Company terminates, I will immediately
        deliver to the Company all copies of any and all materials and writings received
        from, created for or belonging to the Company including, but not limited
        to,
        those which relate to or contain Confidential Information.

      

      (e) Location
        and Reproduction.
        I shall
        maintain at my work station and/or any other place under my control only
        such
        Confidential Information as I have a current “need to know.” I shall return to
        the appropriate person or location or otherwise properly dispose of Confidential
        Information once that need to know no longer exists. I shall not make copies
        of
        or otherwise reproduce Confidential Information unless there is a legitimate
        business need of the Company for reproduction. 

      

      (f) Prior
        Actions and Knowledge.
        I
        represent and warrant that from the time of my first contact with the Company
        I
        held in strict confidence all Confidential Information and have not disclosed
        any Confidential Information, directly or indirectly, to anyone outside the
        Company, or used, copied, published or summarized any Confidential Information,
        except to the extent otherwise permitted in this Agreement.

      

      (g) Third-Party
        Information.
        I
        acknowledge that the Company has received and in the future will receive
        from
        third parties the third party’s confidential information subject to a duty on
        the Company’s part to maintain the confidentiality of such information, and to
        use it only for certain limited purposes. I agree during the Effective Period
        and thereafter, I will hold all such confidential information in the strictest
        confidence and not disclose or use it, except as necessary to perform my
        obligations hereunder, and as is consistent with the Company’s agreement with
        such third parties.

      

      (h) Third
        Parties.
        I
        represent appointment and position as a Director with the Company does not
        and
        will not breach any agreements with or duties to any employer, former employer
        or any other third party. I will not disclose to the Company or use on its
        behalf any confidential information belonging to others and I will not bring
        onto the premises of the Company any confidential information belonging to
        any
        such party unless consented to in writing by such party.

      

      3. Proprietary
        Rights, Inventions and New Ideas.

      

      (a) Definition.
        The
        term “Subject Ideas” or “Inventions” includes any and all ideas, processes,
        trademarks, service marks, inventions, designs, technologies, computer hardware
        or software, original works of authorship, formulas, discoveries, patents,
        copyrights, copyrightable works, products, marketing and business ideas,
        and all
        improvements, know-how, data, rights and claims related to the foregoing,
        whether or not patentable, which are conceived, developed or created in whole
        or
        in part by me during the period I hold a Directorship with the Company and
        which: (i) relate to the Company’s current or contemplated business or
        activities; (ii) relate to the Company’s actual or demonstrably anticipated
        research or development; (iii) result from any work performed by me for the
        Company; (iv) involve the use of the Company’s equipment, supplies, facilities
        or trade secrets; (v) result from or are suggested by any work done by the
        Company or at the Company’s request, or any projects specifically assigned to
        me; or (vi) result from my access to any of the Company’s memoranda, notes,
        records, drawings, sketches, models, maps, customer lists, research results,
        data, formulae, specifications, inventions, processes, equipment or other
        materials (collectively, “Company Materials”).

      

      (b) Company
        Ownership.
        I
        hereby assign all right, title and interest in and to all of my Subject Ideas
        and Inventions, including but not limited to all registrable and patent rights
        which may subsist therein, to the Company. All Subject Ideas and Inventions
        shall be considered works made for hire. I shall take all actions deemed
        necessary by the Company to protect the Company’s rights therein. 

      

      (c) California
        Labor Code.
        Section
        3(b) of this Agreement shall not apply if and to the extent California Labor
        Code Section 2870 lawfully prohibits the assignment of rights in such
        intellectual property. I acknowledge I understand the limits placed on this
        definition by California Labor Code Section 2870, if applicable to me, which
        provides:

      

      
        
          
          

        

        
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      “(1)
        Any
        provision in an employment agreement which provides that an employee shall
        assign, or offer to assign, any of his or her rights in an invention to his
        or
        her employer shall not apply to an invention that the employee developed
        entirely on his or her own time without using the employer’s equipment,
        supplies, facilities or trade secret information except for those inventions
        that either:

      

      a. Relate
        at
        the time of conception or reduction to practice of the invention to the
        employer’s business, or actual or demonstrably anticipated research or
        development of the employer; or

      

      b. Result
        from any work performed by the employee for the employer.

      

      2)
        To the
        extent a provision in an employment agreement purports to require an employee
        to
        assign an invention otherwise excluded from being required to be assigned
        under
        subdivision (a), the provision is against the public policy of this state
        and is
        unenforceable.”

      

      (d) I
        understand I bear the full burden of proving to the Company an Invention
        qualifies fully under Section 2870. I agree to disclose promptly to the Company
        in writing full details of any and all Subject Ideas and
        Inventions.

      

      (e) Maintenance
        of Records.
        I agree
        to keep and maintain adequate and current written records of all Subject
        Ideas
        and Inventions and their development made by me (solely or jointly with others)
        during the term of appointment as a Director of the Company. These records
        will
        be in the form of notes, sketches, drawings and any other format that may
        be
        specified by the Company. These records will be available to and remain the
        sole
        property of the Company at all times.

      

      (f) Access.
        Because
        of the difficulty of establishing when any Subject Ideas or Inventions are
        first
        conceived by me, or whether they result from my access to Confidential
        Information or Company Materials, I agree that any Subject Idea and Invention
        shall, among other circumstances, be deemed to have resulted from my access
        to
        Company Materials if: (i) it grew out of or resulted from my work with the
        Company or is related to the business of the Company, and (ii) it is made,
        used, sold, exploited or reduced to practice, or an application for patent,
        trademark, copyright or other proprietary protection is filed thereon, by
        me or
        with my significant aid, within one (1) year after termination of the Effective
        Period.

      

      (g) Assistance.
        I
        further agree to assist the Company in every proper way (but at the Company’s
        expense) to obtain and from time to time enforce patents, copyrights or other
        rights or registrations on said Subject Ideas and Inventions in any and all
        countries, and to that end will execute all documents necessary:

      

      (i) to
        apply
        for, obtain and vest in the name of the Company alone (unless the Company
        otherwise directs) letters patent, copyrights or other analogous protection
        in
        any country throughout the world and when so obtained or vested to renew
        and
        restore the same; and

      

      (ii) to
        defend
        any opposition proceedings in respect of such applications and any opposition
        proceedings or petitions or applications for revocation of such letters patent,
        copyright or other analogous protection; and

      

      
        
          
          

        

        
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      (iii) to
        cooperate with the Company (but at the Company’s expense) in any enforcement or
        infringement proceeding on such letters patent, copyright or other analogous
        protection.

      

      (h) Authorization
        to Company.
        In the
        event the Company is unable, after reasonable effort, to secure my signature
        on
        any patent, copyright or other analogous protection relating to a Subject
        Idea
        and Invention, whether because of my physical or mental incapacity or for
        any
        other reason whatsoever, I hereby irrevocably designate and appoint the Company
        and its duly authorized officers and agents as my agent and attorney-in-fact,
        to
        act for and on my behalf and stead to execute and file any such application,
        applications or other documents and to do all other lawfully permitted acts
        to
        further the prosecution, issuance and enforcement of letters patent, copyright
        or other analogous rights or protections thereon with the same legal force
        and
        effect as if executed by me. My obligation to assist the Company in obtaining
        and enforcing patents and copyrights for Subject Ideas and Inventions in
        any and
        all countries shall continue beyond the termination of my relationship with
        the
        Company, but the Company shall compensate me at a reasonable rate after such
        termination for time actually spent by me at the Company’s request on such
        assistance.

      

      (i) Exhibit.
        I
        acknowledge that there are no currently existing ideas, processes, inventions,
        discoveries, marketing or business ideas or improvements which I desire to
        exclude from the operation of this Agreement except for the list set forth
        on
        Exhibit A, Prior Knowledge and Inventions, to this Agreement. To the best
        of my
        knowledge, there is no other contract to assign inventions, trademarks,
        copyrights, ideas, processes, discoveries or other intellectual property
        that is
        now in existence between me and any other person (including any business
        or
        governmental entity).

      

      (j) No
        Use
        of Name.
        I shall
        not at any time use the Company’s name or any of the Company trademark(s) or
        trade name(s) in any advertising or publicity without the prior written consent
        of the Company.

      

      4. Prohibited
        Activity.
        To
        prevent the above-described disclosure, misappropriation and breach, I agree
        that during the Effective Period and for a period of one (1) year after
        termination of the Effective Period, without the Company’s express written
        consent, I shall not, directly or indirectly, (i) employ, solicit for employment
        or recommend for employment by any party other than the Company, any person
        employed by the Company (or any Affiliate) as an employee or a consultant;
        and
        (ii) call on, solicit or take away, or attempt to call on, solicit or take
        away,
        any of the Company’s customers or potential customers on whom I called or with
        whom I became acquainted during my Effective Period for any business purpose
        that may compete with the Company.

      

      5. Representations
        and Warranties.
        I
        represent and warrant (i) I have no obligations, legal or otherwise,
        inconsistent with the terms of this Agreement or with my undertaking a
        relationship with the Company; (ii) the performance of the services called
        for
        by this Agreement do not and will not violate any applicable law, rule or
        regulation or any proprietary or other right of any third party; (iii) I
        will
        not use in the performance of my responsibilities for the Company any materials
        or documents of any employer or former employer; and (iv) I have not entered
        into or will enter into any agreement (whether oral or written) in conflict
        with
        this Agreement.

      

      6. Termination
        Obligations.

      

      (a) Upon
        the
        termination of my relationship with the Company or promptly upon the Company’s
        request, I shall surrender to the Company all equipment, tangible Proprietary
        Information, documents, books, notebooks, records, reports, notes, memoranda,
        drawings, sketches, models, maps, contracts, lists, computer disks (and other
        computer-generated files and data), any other data and records of any kind,
        and
        copies thereof (collectively, “Company Records”), created on any medium and
        furnished to, obtained by or prepared by myself in the course of or incident
        to
        my term as a Director, that are in my possession or under my
        control.

      

      
        
          
          

        

        
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      (b) My
        representations, warranties and obligations contained in this Agreement shall
        survive the termination of the Effective Period.

      

      (c) Following
        any termination of the Effective Period, I will fully cooperate with the
        Company
        in all matters relating to my continuing obligations under this
        Agreement.

      

      (d) In
        the
        event that I leave the position as a Director of the Company I hereby grant
        consent to notification by the Company to any new employer about my rights
        and
        obligations under this Agreement.

      

      7. Injunctive
        Relief.
        I
        acknowledge my failure to carry out any obligation under this Agreement,
        or a
        breach by me of any provision herein, will constitute immediate and irreparable
        damage to the Company, which cannot be fully and adequately compensated in
        money
        damages and which will warrant preliminary and other injunctive relief, an
        order
        for specific performance and other equitable relief. I further agree no bond
        or
        other security shall be required in obtaining such equitable relief and I
        hereby
        consent to the issuance of such injunction and to the ordering of specific
        performance. I also understand other action may be taken and remedies enforced
        against me.

      

      8. Modification.
        No
        modification of this Agreement shall be valid unless made in writing and
        signed
        by both parties.

      

      9. Binding
        Effect.
        This
        Agreement shall be binding upon me, my heirs, executors, assigns and
        administrators and is for the benefit of the Company and its successors and
        assigns.

      

      10. Governing
        Law.
        Any
        action or proceeding seeking to enforce any provision of, or based on any
        right
        arising out of, this Agreement may be brought against any of the Parties
        only in
        the courts of Orange County, in the State of California, or, if it has or
        can
        acquire jurisdiction, in the appropriate United States District Court for
        the
        Southern District of California, and each of the Parties consents to such
        venue
        and to the jurisdiction of such courts (and of the appropriate appellate
        courts)
        in any such action or proceeding and waives any objection to venue laid therein.
        Process in any action or proceeding referred to in the preceding sentence
        may be
        served on any Party anywhere in the world.

      

      11. Integration.
        This
        Agreement sets forth the parties’ mutual rights and obligations with respect to
        proprietary information, prohibited competition after the Effective Period
        and
        intellectual property. It is intended to be the final, complete and exclusive
        statement of the terms of the parties’ agreements regarding these subjects. This
        Agreement supersedes all other prior and contemporaneous agreements and
        statements on these subjects, and it may not be contradicted by evidence
        of any
        prior or contemporaneous statements or agreements. To the extent that the
        practices, policies or procedures of the Company, now or in the future, apply
        to
        myself and are inconsistent with the terms of this Agreement, the provisions
        of
        this Agreement shall control unless changed in writing by the
        Company.

      

      12. Employment
        at Will.
        This
        Agreement is not an employment agreement. I understand that the Company may
        terminate my Directorship or association with it at any time, with or without
        cause, subject to the terms of any separate written agreement approved by
        the
        Board of Directors and executed by a duly authorized officer of the
        Company.

      

      13. Construction.
        This
        Agreement shall be construed as a whole, according to its fair meaning, and
        not
        in favor of or against any party. By way of example and not limitation, this
        Agreement shall not be construed against the party responsible for any language
        in this Agreement. The headings of the paragraphs hereof are inserted for
        convenience only, and do not constitute part of and shall not be used to
        interpret this Agreement.

      

      14. Attorneys’
        Fees.
        Should
        either I or the Company, or any heir, personal representative, successor
        or
        permitted assign of either party, resort to legal proceedings to enforce
        this
        Agreement, the prevailing party (as defined in California statutory law)
        in such
        legal proceeding shall be awarded, in addition to such other relief as may
        be
        granted, attorneys’ fees and costs incurred in connection with such
        proceeding.

      

      
        
          
          

        

        
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      15. Severability.
        If any
        term, provision, covenant or condition of this Agreement, or the application
        thereof to any person, place or circumstance, shall be held to be invalid,
        unenforceable or void, the remainder of this Agreement and such term, provision,
        covenant or condition as applied to other persons, places and circumstances
        shall remain in full force and effect.

      

      16. Rights
        Cumulative.
        The
        rights and remedies provided by this Agreement are cumulative, and the exercise
        of any right or remedy by either the Company or me (or by that party’s
        successor), whether pursuant hereto, to any other agreement, or to law, shall
        not preclude or waive that party’s right to exercise any or all other rights and
        remedies. This Agreement will inure to the benefit of the Company and its
        successors and assigns.

      

      17. Nonwaiver.
        The
        failure of either the Company or me, whether purposeful or otherwise, to
        exercise in any instance any right, power or privilege under this Agreement
        or
        under law shall not constitute a waiver of any other right, power or privilege,
        nor of the same right, power or privilege in any other instance. Any waiver
        by
        the Company or by me must be in writing and signed by either myself, if I
        am
        seeking to waive any of my rights under this Agreement, or by an officer
        of the
        Company (other than me) or some other person duly authorized by the
        Company.

      

      18. Notices.
        Any
        notice, request, consent or approval required or permitted to be given under
        this Agreement or pursuant to law shall be sufficient if it is in writing,
        and
        if and when it is hand delivered or sent by regular mail, with postage prepaid,
        to my residence (as noted in the Company’s records), or to the Company’s
        principal office, as the case may be.

      

      19. Date
        of Effectiveness.
        This
        Agreement shall be deemed effective as of the date of my nomination to the
        Board
        of Directors of the Company.

      

      20. Agreement
        to Perform Necessary Acts.
        I agree
        to perform any further acts and execute and deliver any documents that may
        be
        reasonably necessary to carry out the provisions of this Agreement.

      

      21. Assignment.
        This
        Agreement may not be assigned without the Company’s prior written
        consent.

      

      22. Compliance
        with Law.
        I agree
        to abide by all federal, state and local laws, ordinances and regulations.
        

      

      23. Survival.
        Section
        2 (b), (c) (d), Section 3 (g), (h) (j), and Sections 4, 7, 10, 14 and 20
        shall
        survive the expiration or termination of this Agreement. 

      

      24. Acknowledgment.
        I
        acknowledge that I have had the opportunity to consult legal counsel in regard
        to this Agreement, that I have read and understand this Agreement, that I
        am
        fully aware of its legal effect, and that I have entered into it freely and
        voluntarily and based on my own judgment and not on any representations or
        promises other than those contained in this Agreement.

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
        set
        forth below.

      

      Dated:
        October 31, 2007

      

      

      John
        P. Mitola

      

      _________________

      John
        P.
        Mitola

      Chicago,
        IL 60631

      

      

      Composite
        Technology Corporation

      a
        Nevada
        corporation

      

      

      By:
        ______________________________

      

      Name:______Benton
        H Wilcoxon_______ 

      

      Title:_______CEO__________________ 

      

      
        
          
          

        

        
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      EXHIBIT
        A

      

      PRIOR
        KNOWLEDGE AND INVENTIONS

      

      
        	
                1.

              	
                Except as set forth below, I acknowledge that
                  certain
                  inventions which I may conceive or first actually reduce to practice
                  after
                  I am appointed a Director of the Company shall be the sole property
                  of the
                  Company. The following are those inventions that I own at this
                  time (if
                  none, so state):

              
	 	 
	 	 
	 	 
	
                2.

              	
                Except
                  as set forth below, I acknowledge that I have no other current
                  or prior
                  agreements, relationships or commitments that conflict with my
                  relationship with the Company under my Confidential Information
                  and
                  Invention Assignment Agreement (if none, so state): 

              
	 	 
	 	 
	 	 
	
                3.

              	
                I
                  acknowledge and agree that I will not use any proprietary information
                  or
                  trade secrets belonging to other persons or entities, including
                  former
                  employers, in my work for the Company. I further certify that I
                  returned
                  all property and confidential information belonging to all prior
                  employers.

              

      

       

      

      
        	Dated: _______November 1,
                1007	__________________________
	 	
                John P. Mitola

                Chicago,
                  IL 60631

              

      

      

      
        
          
          

        

        
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            8SECURITIES
      PURCHASE AGREEMENT

    

    THIS SECURITIES
      PURCHASE AGREEMENT
      (this
“Agreement”),
      dated
      as of October ___, 2007, by and among INNOVA
      ROBOTICS AND AUTOMATION, INC.,
      a
      Delaware corporation (the “Company”),
      and
      the Buyers listed on Schedule I attached hereto (individually, a
“Buyer”
or
      collectively “Buyers”).

     

    WITNESSETH

    

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

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Buyer(s), as provided herein,
      and the Buyer(s) shall purchase Six Hundred Thousand Dollars ($600,000) of
      secured convertible debentures in the form attached hereto as “Exhibit
      A”
(the
      “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value $0.001
      (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”)
      which
      shall be funded within five (5) business day following the date hereof (the
      “Closing”)
      for a
      total purchase price of Six Hundred Thousand Dollars ($600,000), (the
“Purchase
      Price”)
      in the
      respective amounts set forth opposite each Buyer(s) name on Schedule I (the
      “Subscription
      Amount”);
      

     

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

     

    WHEREAS,
      the
      Convertible Debentures are secured by (i) a security interest in all of the
      assets of the Company and of each of the Company's subsidiaries as evidenced
      by
      the security agreement of even date herewith (the “Security
      Agreement”),
      and
      (ii) a first security interest in all of the patents and trademarks of the
      Company and Robotic
      Workspace Technologies, Inc., a subsidiary
      of the Company, as evidenced by the patent and trademark security agreement
      of
      even date herewith by and between the Company, Robotic
      Workspace Technologies, Inc.
      and the
      Buyers (the “Patent
      and Trademark Security Agreement”)
      (the
      Patent and Trademark Security Agreement together with the Security Agreement
      are
      collectively referred to as the “Security
      Documents”);
      

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      the
      Convertible Debentures and the Conversion Shares, collectively are referred
      to
      herein as the “Securities”).
      

     

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

     

    1.  PURCHASE
      AND SALE OF CONVERTIBLE DEBENTURES.

     

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

     

    (b)  Closing
      Dates.
      The
      Closing of the purchase and sale of the Convertible Debentures shall take place
      at 10:00 a.m. Eastern Standard Time on the fifth (5th)
      business day following the date hereof, subject to notification of satisfaction
      of the conditions to the Closing set forth herein and in Sections 6 and 7 below
      (or such later date as is mutually agreed to by the Company and the Buyer(s))
      (the “Closing
      Date”).
      The
      Closing shall occur on the respective Closing Dates at the offices of Yorkville
      Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
      (or
      such other place as is mutually agreed to by the Company and the Buyer(s)).
      

     

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

     

    2.  BUYER’S
      REPRESENTATIONS AND WARRANTIES.

     

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

     

    (a)  Investment
      Purpose.
      Each
      Buyer is acquiring the Securities for its own account for investment only and
      not with a view towards, or for resale in connection with, the public sale
      or
      distribution thereof, except pursuant to sales registered or exempted under
      the
      Securities Act; provided, however, that by making the representations herein,
      such Buyer reserves the right to dispose of the Securities at any time in
      accordance with or pursuant to an effective registration statement covering
      such
      Securities or an available exemption under the Securities Act. Such Buyer does
      not presently have any agreement or understanding, directly or indirectly,
      with
      any Person to distribute any of the Securities. 

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)  Reliance
      on Exemptions.
      Each
      Buyer understands that the Securities 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 the
      Securities.

     

    (d)  Information.
      Each
      Buyer and its advisors (and his or, its counsel), if any, have been furnished
      with all materials relating to the business, finances and operations of the
      Company and information he deemed material to making an informed investment
      decision regarding his purchase of the Securities, 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 Securities
      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
      Securities.

     

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

     

    (f)  Transfer
      or Resale.
      Each
      Buyer understands that except as provided in the Registration Rights Agreement:
      (i) the Securities have not been and are not being registered under the
      Securities Act or any state securities laws, and may not be offered for sale,
      sold, assigned or transferred unless (A) subsequently registered thereunder,
      (B)
      such Buyer shall have delivered to the Company an opinion of counsel, in a
      generally acceptable form, to the effect that such Securities to be sold,
      assigned or transferred may be sold, assigned or transferred pursuant to an
      exemption from such registration requirements, or (C) such Buyer provides the
      Company with reasonable assurances (in the form of seller and broker
      representation letters) that such Securities can be sold, assigned or
      transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
      the Securities Act, as amended (or a successor rule thereto) (collectively,
      “Rule
      144”),
      in
      each case following the applicable holding period set forth therein; (ii) any
      sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the
      seller (or the person through whom the sale is made) may be deemed to be an
      underwriter (as that term is defined in the Securities Act) may require
      compliance with some other exemption under the Securities Act or the rules
      and
      regulations of the SEC thereunder; and (iii) neither the Company nor any other
      person is under any obligation to register the Securities under the Securities
      Act or any state securities laws or to comply with the terms and conditions
      of
      any exemption thereunder. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    (i)  Receipt
      of Documents.
      Each
      Buyer and his or its counsel has received and read in their entirety: (i) this
      Agreement and each representation, warranty and covenant set forth herein and
      the Transaction Documents (as defined herein); (ii) all due diligence and other
      information necessary to verify the accuracy and completeness of such
      representations, warranties and covenants; (iii) the Company’s Form 10-KSB for
      the fiscal year ended December 31, 2006; (iv) the Company’s Form 10-QSB for the
      fiscal quarter ended March 31, 2007, June 30, 2007 and September 30, 2007 (v)
      answers to all questions each Buyer submitted to the Company regarding an
      investment in the Company; and each Buyer has relied on the information
      contained therein and has not been furnished any other documents, literature,
      memorandum or prospectus.

     

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

     

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

     

    3.  REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

     

    Except
      as
      set forth under the corresponding section of the Disclosure Schedules which
      Disclosure Schedules shall be deemed a part hereof and to qualify any
      representation or warranty otherwise made herein to the extent of such
      disclosure, the Company hereby makes the representations and warranties set
      forth below to each Buyer: 

     

    (a)  Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each subsidiary free and clear of any liens, and all the issued
      and
      outstanding shares of capital stock of each subsidiary are validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights to
      subscribe for or purchase securities.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b)  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 or
      reasonably be expected to result in (i) a material adverse effect on the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business or
      condition (financial or otherwise) of the Company and the subsidiaries, taken
      as
      a whole, or (iii) a material adverse effect on the Company’s ability to perform
      in any material respect on a timely basis its obligations under any Transaction
      Document (any of (i), (ii) or (iii), a “Material
      Adverse Effect”)
      and no
      proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification..

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (d)  Capitalization.
      The
      authorized capital stock of the Company consists of 900,000,000 shares of Common
      Stock and 10,000,000 shares of Preferred Stock, par value $0.001 (“Preferred
      Stock”)
      of
      which 95,404,944 shares of Common Stock and 184,666 shares of Preferred Stock
      are issued and outstanding. All of the outstanding shares of capital stock
      of
      the Company are validly issued, fully paid and nonassessable, have been issued
      in compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. Except as disclosed in Schedule
      3(d): (i) none of the Company's capital stock is subject to preemptive rights
      or
      any other similar rights or any liens or encumbrances suffered or permitted
      by
      the Company; (ii) 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, or exercisable or exchangeable for,
      any
      capital stock of the Company or any of its subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its
      subsidiaries is or may become bound to issue additional 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, or exercisable or exchangeable for,
      any
      capital stock of the Company or any of its subsidiaries; (iii) there are no
      outstanding debt securities, notes, credit agreements, credit facilities or
      other agreements, documents or instruments evidencing indebtedness of the
      Company or any of its subsidiaries or by which the Company or any of its
      subsidiaries is or may become bound; (iv) there are no financing statements
      securing obligations in any material amounts, either singly or in the aggregate,
      filed in connection with the Company or any of its subsidiaries; (v) there
      are
      no outstanding securities or instruments of the Company or any of its
      subsidiaries which contain any redemption or similar provisions, and there
      are
      no contracts, commitments, understandings or arrangements by which the Company
      or any of its subsidiaries is or may become bound to redeem a security of the
      Company or any of its subsidiaries; (vi) there are no securities or instruments
      containing anti-dilution or similar provisions that will be triggered by the
      issuance of the Securities; (vii) the Company does not have any stock
      appreciation rights or "phantom stock" plans or agreements or any similar plan
      or agreement; and (viii) the Company and its subsidiaries have no liabilities
      or
      obligations required to be disclosed in the SEC Documents but not so disclosed
      in the SEC Documents, other than those incurred in the ordinary course of the
      Company's or its subsidiaries' respective businesses and which, individually
      or
      in the aggregate, do not or would not have a Material Adverse Effect. The
      Company has furnished to the Buyers true, correct and complete copies of the
      Company's Certificate of Incorporation, as amended and as in effect on the
      date
      hereof (the “Certificate
      of Incorporation”),
      and
      the Company's Bylaws, as amended and as in effect on the date hereof (the
“Bylaws”),
      and
      the terms of all securities convertible into, or exercisable or exchangeable
      for, shares of Common Stock and the material rights of the holders thereof
      in
      respect thereto. No further approval or authorization of any stockholder, the
      Board of Directors of the Company or others is required for the issuance and
      sale of the Securities. There are no stockholders agreements, voting agreements
      or other similar agreements with respect to the Company’s capital stock to which
      the Company is a party or, to the knowledge of the Company, between or among
      any
      of the Company’s stockholders. 

     

    (e)  Issuance
      of Securities.
      The
      issuance of the Convertible Debentures is duly authorized and free from all
      taxes, liens and charges with respect to the issue thereof. Upon conversion
      in
      accordance with the terms of the Convertible Debentures, as the case may be,
      the
      Conversion Shares when issued will be validly issued, fully paid and
      nonassessable, free from all taxes, liens and charges with respect to the issue
      thereof. The Company has reserved from its duly authorized capital stock the
      appropriate number of shares of Common Stock as set forth in this Agreement.
      

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (f)  No
      Conflicts.
      Except
      as disclosed in Schedule 3(f), the execution, delivery and performance of the
      Transaction Documents by the Company and the consummation by the Company of
      the
      transactions contemplated hereby and thereby (including, without limitation,
      the
      issuance of the Convertible Debentures and reservation for issuance and issuance
      of the Conversion Shares will not (i) result in a violation of any certificate
      of incorporation, certificate of formation, any certificate of designations
      or
      other constituent documents of the Company or any of its subsidiaries, any
      capital stock of the Company or any of its subsidiaries or bylaws of the Company
      or any of its subsidiaries or (ii) conflict with, or constitute a default (or
      an
      event which with notice or lapse of time or both would become a default) in
      any
      respect 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 (iii) result in a
      violation of any law, rule, regulation, order, judgment or decree (including
      foreign, federal and state securities laws and regulations and the rules and
      regulations of the National Association of Securities Dealers Inc.’s OTC
      Bulletin Board) applicable to the Company or any of its subsidiaries or by
      which
      any property or asset of the Company or any of its subsidiaries is bound or
      affected; except in the case of each of clauses (ii) and (iii), such as
could
      not, individually or in the aggregate, have or reasonably be expected to result
      in a Material Adverse Effect.
      The
      business of the Company and its subsidiaries is not being conducted, and shall
      not be conducted in violation of any material law, ordinance, or regulation
      of
      any governmental entity. Except as specifically contemplated by this Agreement
      and as required under the Securities Act and any applicable state securities
      laws, the Company is not required to obtain any consent, authorization or order
      of, or make any filing or registration with, any court or governmental agency
      in
      order for it to execute, deliver or perform any of its obligations under or
      contemplated by this Agreement or the Registration Rights Agreement in
      accordance with the terms hereof or thereof. All consents, authorizations,
      orders, filings and registrations which the Company is required to obtain
      pursuant to the preceding sentence have been obtained or effected on or prior
      to
      the date hereof. The Company and its subsidiaries are unaware of any facts
      or
      circumstance, which might give rise to any of the foregoing.

     

    (g)  SEC
      Documents; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC under the Securities Exchange Act of
      1934, as amended (the “Exchange
      Act”),
      for
      the two years preceding the date hereof (or such shorter period as the Company
      was required by law or regulation to file such material) (all of the foregoing
      filed prior to the date hereof or amended after the date hereof and all exhibits
      included therein and financial statements and schedules thereto and documents
      incorporated by reference therein, being hereinafter referred to as the
“SEC
      Documents”)
      on
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Document prior to the expiration of any such extension.
      The
      Company has delivered to the Buyers or their representatives, or made available
      through the SEC’s website at http://www.sec.gov., true and complete copies of
      the SEC Documents. As of their respective dates, the SEC Documents complied
      in
      all material respects with the requirements of the Exchange Act and the rules
      and regulations of the SEC promulgated thereunder applicable to the SEC
      Documents, and none of the SEC Documents, at the time they were filed with
      the
      SEC, contained any untrue statement of a material fact or omitted to state
      a
      material fact required to be stated therein or necessary in order to make the
      statements therein, in the light of the circumstances under which they were
      made, not misleading. As of their respective dates, the financial statements
      of
      the Company included in the SEC Documents complied as to form in all material
      respects with applicable accounting requirements and the published rules and
      regulations of the SEC with respect thereto. Such financial statements have
      been
      prepared in accordance with generally accepted accounting principles,
      consistently applied, during the periods involved (except (i) as may be
      otherwise indicated in such financial statements or the notes thereto, or (ii)
      in the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and fairly present in
      all
      material respects the financial position of the Company as of the dates thereof
      and the results of its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments). No other information provided by or on behalf of the Company
      to
      the Buyers which is not included in the SEC Documents, including, without
      limitation, information referred to in Section 2(i) of this Agreement, contains
      any untrue statement of a material fact or omits to state any material fact
      necessary in order to make the statements therein, in the light of the
      circumstance under which they are or were made and not misleading. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

    (i)  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.

     

    (j)  Acknowledgment
      Regarding Buyer’s Purchase of the Convertible Debentures.
      The
      Company acknowledges and agrees that each Buyer 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 each Buyer 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 each Buyer 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
      Securities. The Company further represents to each 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.

     

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

     

    (l)  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 Securities under the Securities Act or cause this offering
      of the Securities to be integrated with prior offerings by the Company for
      purposes of the Securities Act.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (m)  Employee
      Relations.
      Neither
      the Company nor any of its subsidiaries is involved in any labor dispute or,
      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.

     

    (n)  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.

     

    (o)  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.

     

    (p)  Title.
      All
      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.

     

    (q)  Insurance.
      The
      Company and each of its subsidiaries is 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.

     

    (r)  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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (s)  Internal
      Accounting Controls.
      The
      Company and each of its subsidiaries maintains 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 are
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    (t)  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.

     

    (u)  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.

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (w)  Fees
      and Rights of First Refusal.
      Except
      as disclosed in Schedule 3(w), 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.

     

    (x)  Investment
      Company.
      The
      Company is not, and is not an affiliate of, and immediately after receipt of
      payment for the Securities, will not be or be an affiliate of, an “investment
      company” within the meaning of the Investment Company Act of 1940, as amended.
      The Company shall conduct its business in a manner so that it will not become
      subject to the Investment Company Act.

     

    (y)  Registration
      Rights.
      Other
      than each of the Buyers and those listed on Schedule 3(y), no Person has any
      right to cause the Company to effect the registration under the Securities
      Act
      of any securities of the Company. There are no outstanding registration
      statements not yet declared effective and there are no outstanding comment
      letters from the SEC or any other regulatory agency.

     

    (z)  Private
      Placement.
      Assuming the accuracy of the Buyers’ representations and warranties set forth in
      Section 2, no registration under the Securities Act is required for the offer
      and sale of the Securities by the Company to the Buyers as contemplated hereby.
      The issuance and sale of the Securities hereunder does not contravene the rules
      and regulations of the Primary Market.

     

    (aa)  Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the
      Exchange Act, and the Company has taken no action designed to terminate, or
      which to its knowledge is likely to have the effect of, terminating the
      registration of the Common Stock under the Exchange Act nor has the Company
      received any notification that the SEC is contemplating terminating such
      registration. The Company has not, in the twelve (12) months preceding the
      date
      hereof, received notice from any Primary Market on which the Common Stock is
      or
      has been listed or quoted to the effect that the Company is not in compliance
      with the listing or maintenance requirements of such Primary Market. The Company
      is, and has no reason to believe that it will not in the foreseeable future
      continue to be, in compliance with all such listing and maintenance
      requirements.

     

    (bb)  Manipulation
      of Price. 
      The Company has not, and to its knowledge no one acting on its behalf has,
      (i)
      taken, directly or indirectly, any action designed to cause or to result in
      the
      stabilization or manipulation of the price of any security of the Company to
      facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
      purchased, or, paid any compensation for soliciting purchases of, any of the
      Securities, or (iii) paid or agreed to pay to any Person any compensation for
      soliciting another to purchase any other securities of the Company, other than,
      in the case of clauses (ii) and (iii), compensation paid to the Company’s
      placement agent in connection with the placement of the Securities.

     

    (cc)  Dilutive
      Effect.
      The
      Company understands and acknowledges that the number of Conversion Shares
      issuable upon conversion of the Convertible Debentures will increase in certain
      circumstances. The Company further acknowledges that its obligation to issue
      Conversion Shares upon conversion of the Convertible Debentures in accordance
      with this Agreement and the Convertible Debentures in accordance with this
      Agreement is absolute and unconditional regardless of the dilutive effect that
      such issuance may have on the ownership interests of other stockholders of
      the
      Company.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (dd)  Patents.The
      only
      patents held by the Company and its subsidiaries are those held by Robotic
      Workspace Technologies, Inc. as identified in the Patent
      and Trademark Security Agreement.

     

    (ee)  Security
      Interests.As
      of the
      date of this Agreement no individual, including Jerry Horne, and/or entity
      has a
      security interests,
      which is senior to that of Buyer,in
      any
      assets of the Company including but not limited to the Pledged Property as
      detailed in the Security Agreement or the Patent Collateral as detailed in
      the
      Patent and Trademark Security Agreements. 

     

    4.  COVENANTS.

     

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

     

    (b)  Form
      D.
      The
      Company agrees to file a Form D with respect to the Securities 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 Securities,
      or obtain an exemption for the Securities for sale to the Buyers at the Closing
      pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
      states of the United States, and shall provide evidence of any such action
      so
      taken to the Buyers on or prior to the Closing Date.

     

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

     

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (e)  Reservation
      of Shares.
      On the
      date hereof, the Company shall reserve for issuance to the Buyers 392,156,863
      shares for issuance upon conversions of the Convertible Dentures (collectively,
      the “Share
      Reserve”).
      The
      Company represents that it has sufficient authorized and unissued shares of
      Common Stock available to create the Share Reserve after considering all other
      commitments that may require the issuance of Common Stock. The Company shall
      take all action reasonably necessary to at all times have authorized, and
      reserved for the purpose of issuance, such number of shares of Common Stock
      as
      shall be necessary to effect the full conversion of the Convertible Debentures.
      If at any time the Share Reserve is insufficient to effect the full conversion
      of the Convertible Debentures, the Company shall increase the Share Reserve
      accordingly. If the Company does not have sufficient authorized and unissued
      shares of Common Stock available to increase the Share Reserve, the Company
      shall call and hold a special meeting of the shareholders within thirty (30)
      days of such occurrence, for the sole purpose of increasing the number of shares
      authorized. The Company’s management shall recommend to the shareholders to vote
      in favor of increasing the number of shares of Common Stock authorized.
      Management shall also vote all of its shares in favor of increasing the number
      of authorized shares of Common Stock.

     

    (f)  Listings
      or Quotation.
      The
      Company’s Common Stock shall be listed or quoted for trading on any of (a) the
      American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq Global
      Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board
      (“OTCBB”)
      (each,
      a “Primary
      Market”).
      The
      Company shall promptly secure the listing of all of the Registrable Securities
      (as defined in the Registration Rights Agreement) upon each national securities
      exchange and automated quotation system, if any, upon which the Common Stock
      is
      then listed (subject to official notice of issuance) and shall maintain such
      listing of all Registrable Securities from time to time issuable under the
      terms
      of the Transaction Documents. 

     

    (g)  Fees
      and Expenses.
      

     

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

     

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

     

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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (k)  Restriction
      on Issuance of the Capital Stock.
      So long
      as any Convertible Debentures are outstanding and except for the issuance of
      Excluded Securities (as this term is defined in the Convertible Debenture),
      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, (ii) issue any preferred stock, warrant,
      option, right, contract, call, or other security or instrument granting the
      holder thereof the right to acquire Common Stock without consideration or for
      a
      consideration less than such Common Stock’s Bid Price determined immediately
      prior to it’s issuance, (iii) enter into any security instrument granting the
      holder a security interest in any and all assets of the Company, or (iv) file
      any registration statement on Form S-8 provided the Company shall be entitled
      to
      file one (1) registration statement on Form S-8 registering an amount not
      greater than ten million (10,000,000) shares of the Company’s Common
      Stock.

     

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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (o)  Additional
      Registration Statements.
      Until
      the effective date of the initial Registration Statement, the Company will
      not
      file a registration statement under the Securities Act relating to securities
      that are not the Securities.

     

    (p)  Review
      of Public Disclosures.
      All SEC
      filings (including, without limitation, all filings required under the Exchange
      Act, which include Forms 10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc) and other
      public disclosures made by the Company, including, without limitation, all
      press
      releases, investor relations materials, and scripts of analysts meetings and
      calls, shall be reviewed and approved for release by the Company’s attorneys
      and, if containing financial information, the Company’s independent certified
      public accountants.

     

    (q)  Disclosure
      of Transaction.
      Within
      four Business Day following the date of this Agreement, the Company shall file
      a
      Current Report on Form 8-K describing the terms of the transactions contemplated
      by the Transaction Documents in the form required by the Exchange Act and
      attaching the material Transaction Documents (including, without limitation,
      this Agreement, the form of the Convertible Debenture, and the form of the
      Registration Rights Agreement) as exhibits to such filing.

     

    (r)  Deposit/Lock
      Box Account/ Dominion Account.The
      Company and its Subsidiaries shall within sixty (60) calendar days from the
      date
      hereof have established the Deposit/Lock Box Account/Dominion Account as
      outlined in the Security Agreement.

     

    
      
        
        

      

      
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    5.  TRANSFER
      AGENT INSTRUCTIONS.

     

    (a)  The
      Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
      agent, and any subsequent transfer agent, irrevocably appointing David Gonzalez,
      Esq. as the Company’s agent for the purpose of instructing its transfer agent to
      issue certificates or credit shares to the applicable balance accounts at The
      Deposity Trust Company (“DTC”),
      registered in the name of each Buyer or its respective nominee(s), for the
      Conversion Shares issued upon conversion of the Convertible Debentures as
      specified from time to time by each Buyer to the Company upon conversion of
      the
      Convertible Debentures. The Company shall not change its transfer agent without
      the express written consent of the Buyers, which may be withheld by the Buyers
      in their sole discretion. The Company warrants that no instruction other than
      the Irrevocable Transfer Agent Instructions referred to in this Section 5,
      and
      stop transfer instructions to give effect to Section 2(g) hereof (in the case
      of
      the Conversion Shares prior to registration of such shares under the Securities
      Act) will be given by the Company to its transfer agent, and that the Securities
      shall otherwise be freely transferable on the books and records of the Company
      as and to the extent provided in this Agreement and the other Transaction
      Documents. If a Buyer effects a sale, assignment or transfer of the Securities
      in accordance with Section 2(f), the Company shall promptly instruct its
      transfer agent to issue one or more certificates or credit shares to the
      applicable balance accounts at DTC in such name and in such denominations as
      specified by such Buyer to effect such sale, transfer or assignment and, with
      respect to any transfer, shall permit the transfer. In the event that such
      sale,
      assignment or transfer involves Conversion Shares sold, assigned or transferred
      pursuant to an effective registration statement or pursuant to Rule 144, the
      transfer agent shall issue such Securities to the Buyer, assignee or transferee,
      as the case may be, without any restrictive legend. Nothing in this Section
      5
      shall affect in any way the Buyer’s obligations and agreement to comply with all
      applicable securities laws upon resale of Conversion Shares. The Company
      acknowledges that a breach by it of its obligations hereunder will cause
      irreparable harm to the Buyer by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Section 5 will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Section 5, that the Buyer(s) shall be
      entitled, in addition to all other available remedies, to an injunction
      restraining any breach and requiring immediate issuance and transfer, without
      the necessity of showing economic loss and without any bond or other security
      being required.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    (ii)  The
      Common Stock shall be authorized for quotation or trading on the Primary Market,
      trading in the Common Stock shall not have been suspended for any reason, and
      all the Conversion Shares issuable upon the conversion of the Convertible
      Debentures shall be approved for listing or trading on the Primary Market.
      

     

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

     

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

     

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

     

    (vi)  The
      Company shall have provided to the Buyers a true copy of a certificate of good
      standing evidencing the formation and good standing of the Company from the
      secretary of state (or comparable office) from the jurisdiction in which the
      Company is incorporated, as of a date within 10 days of the Closing
      Date.

     

    (vii)  The
      Company shall have delivered to the Buyers a certificate, executed by the
      Secretary of the Company and dated as of the Closing Date, as to (i) the
      resolutions consistent with Section 3(c) as adopted by the Company's Board
      of
      Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
      of
      Incorporation and (iii) the Bylaws, each as in effect at the
      Closing.

     

    (viii)  The
      Company and the subsidiaries shall have delivered to the Buyer(s) such
      investment property owned by the Company along with medallion guaranteed stock
      powers as detailed in the Security Agreement. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

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

     

    (x)  The
      Company shall have made such filings, including but not limited to filing
      Buyer(s) security interest with United States Patent and Trademark Office,
      as
      may be required to perfect the Buyer’s interest in the Patent Collateral as
      detailed in the Patent and Trademark Security Agreements dated the date hereof
      and provided proof of such filing to the Buyer(s).

     

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

     

    (xii)  The
      Company shall have created the Share Reserve. 

     

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

     

    (xiv)  The
      Company shall have raised at least Thirty Five Thousand Dollars ($35,000)
      pursuant to sales of shares of the Company’s Common Stock.

     

    (xv)  The
      Company shall have hired consultants, which are to the satisfaction of the
      Buyers, in order to consult and assist the Company with its
      business.

     

    (xvi)  The
      Company shall have converted into shares of the Company’s Common Stock or in the
      alternative written off with out cash payments at least Two Hundred Fifty
      Thousand Dollars ($250,000) of debt and provided proof thereof satisfactory
      to
      the Buyers in their sole discretion.

     

    8.  INDEMNIFICATION.

     

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

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

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

     

    9.  GOVERNING
      LAW: MISCELLANEOUS.

     

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

     

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

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    
      	
              If
                to the Company, to:

            	
              Innova
                Robotics and Automation, Inc.

            
	
               

            	
              15870
                Pine Ridge Road

            
	
               

            	
              Fort
                Myers, FL 33908

            
	
               

            	
              Attention:    
                  Eugene
                Gartlan

            
	
               

            	
              Telephone:   
                 (239)
                466-0488

            
	
               

            	
              Facsimile:     
                 (239)
                466-7270

            
	
               

            	
               

            
	
              With
                a copy to:

            	
              Sichenzia
                Ross Friedman Ference LLP

            
	
               

            	
              61
                Broadway –
                32nd
                Floor

            
	
               

            	
              New
                York, NY 10006

            
	
               

            	
              Attention:   
                   Gregory
                Sichenzia

            
	
               

            	
              Telephone:   
                 (212)
                930-9700

            
	
               

            	
              Facsimile:      
                (212)
                930-9725

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (m)  Brokerage.
      The
      Company represents that no broker, agent, finder or other party has been
      retained by it in connection with the transactions contemplated hereby and
      that
      no other fee or commission has been agreed by the Company to be paid for or
      on
      account of the transactions contemplated hereby. 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

     

    

    [REMAINDER
      PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each
      Buyer and the Company have caused their respective signature page to this
      Securities Purchase Agreement to be duly executed as of the date first written
      above.

     

    

      
        	 	
                COMPANY:

              
	 	
                INNOVA
                  ROBOTICS AND 
AUTOMATION, INC. 

              
	 	 
	 	
                By:

              	/s/Eugene
                Gartlan	 
	 	Name:	Eugene
                Gartlan	 
	 	Title:	
                Chief
                  Executive Officer

              	 

      

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each
      Buyer and the Company have caused their respective signature page to this
      Securities Purchase Agreement to be duly executed as of the date first written
      above.

     

    
      	
            	
              
                BUYERS:

              

            
	 	
              
                YA
                  GLOBAL INVESTMENTS, L.P.

              

            
	 	 
	 	By:	Yorkville
              Advisors, LLC 	 
	 	Its:	Investment
              Manager	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	/s/Mark
              Angelo	 
	 	Name:	Mark
              Angelo	 
	 	Its:	
              Portfolio
                Manager

            	 

    

    
       

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYERS

     

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYERS

    

      
        	
                (1)

              	
                (2)

              	
                (3)

              	
                (4)

              	
                (5)

              	
                (6)

              	
                (7)

              	
                (8)

              
	
                Buyer

              	
                Subscription
                  Amount

              	 	 	 	
                Legal
                  Representative’s 
Address and Facsimile
                  
Number

              
	 	 	
                Closing

              	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
                YA
                  Global Investments, L.P.

                 

                101
                  Hudson Street, Suite 3700

                Jersey
                  City, NJ 07303

                Attention:
                  Mark Angelo

                Telephone:
                  (201) 985-8300

                Facsimile:
                  (201) 985-8266

                Residence:
                  Cayman Islands

              	 	
                $600,000

              	 	 	 	 	
                David
                  Gonzalez, Esq.

                101
                  Hudson Street, Suite 3700

                Jersey
                  City, New Jersey 07302 

                Telephone:
                  (201) 985-8300 

                Facsimile:
                  (201) 985-8266

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    DISCLOSURE
      SCHEDULE

     

    Schedule
      3(a)

     

    [Insert]

     

    Schedule
      3(d)

     

    [Insert]

     

    Schedule
      3(f)

     

    [Insert]

     

    Schedule
      3(e)

     

    [Insert]

     

    Schedule
      3(w)

     

    [Insert]

     

    Schedule
      3(y)

     

    [Insert]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    FORM
      OF CONVERTIBLE DEBENTURE

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    LOCK
      UP AGREEMENT

     

    The
      undersigned hereby agrees that for a period commencing on October ___, 2007
      and
      expiring on the date thirty (30) days after the date that all amounts owed
      to
      Cornell Capital Partners, LP (the “Buyer”),
      under
      the Secured Convertible Debentures issued to the Buyer pursuant to the
      Securities Purchase Agreement between Innova Robotics and Automation, Inc.
      (the
“Company”)
      and
      the Buyer dated October ___, 2007 have been paid (the “Lock-up
      Period”),
      he,
      she or it will not, directly or indirectly, without the prior written consent
      of
      the Buyer, issue, offer, agree or offer to sell, sell, grant an option for
      the
      purchase or sale of, transfer, pledge, assign, hypothecate, distribute or
      otherwise encumber or dispose of any securities of the Company, including common
      stock or options, rights, warrants or other securities underlying, convertible
      into, exchangeable or exercisable for or evidencing any right to purchase or
      subscribe for any common stock (whether or not beneficially owned by the
      undersigned), or any beneficial interest therein (collectively, the
“Securities”)
      except
      in accordance with the volume limitations set forth in Rule 144(e) of the
      General Rules and Regulations under the Securities Act of 1933, as
      amended.

     

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

     

    
      
        	
                Dated:
                  _______________, 2007

              
	 	 
	 	 
	 	
                Signature

              
	 	 
	 	 
	 	
                _____________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Address:
                  ______________________________

              
	 	
                City,
                  State, Zip Code: ___________________

              
	 	 
	 	 
	 	
                _____________________________________

              
	 	
                Print
                  Social Security Number

              
	 	
                or
                  Taxpayer I.D. Number

              

      

    

     

    
      
        
        

      

      
        3

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