Document:

SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT
        (the
“Agreement”), is
        entered into and made effective as of October ___, 2007, by and between
INNOVA
        ROBOTICS AND AUTOMATIONS, INC., a
        Delaware corporation with its principal place of business located at 15870
        Pine
        Ridge Road, Fort Myers, FL 33908 (the “Parent”),
        and
        each subsidiary of the Parent listed on Schedule I attached hereto (each
        a
“Subsidiary,”
and
        collectively and together with the Parent, the “Company”),
        in
        favor of the BUYER(S)
        (the
“Secured
        Party”)
        listed
        on Schedule I attached to the Securities Purchase Agreement (the “Securities
        Purchase Agreement”)
        dated
        the date hereof between the Company and the Secured Party.

       

      WHEREAS,
        The
        Parent shall issue and sell to the Secured Party, as provided in the Securities
        Purchase Agreement, and the Secured Party shall purchase Six Hundred Thousand
        Dollars ($600,000) of secured convertible debentures (the “Convertible
        Debentures”),
        which
        shall be convertible into shares of the Parent’s common stock, par value $0.001,
        in the respective amounts set forth opposite each Buyer(s) name on
        Schedule I attached to the Securities Purchase Agreement;

       

      WHEREAS,
        to
        induce
        the Secured Party to enter into the transaction contemplated by the Securities
        Purchase Agreement, the Convertible Debentures, the Investor Registration
        Rights
        Agreement of even date herewith between the Parent and the Secured Party
        (the
“Investor
        Registration Rights Agreement”),
        and
        the Irrevocable Transfer Agent Instructions among the Parent, the Secured
        Party,
        the Parent’s transfer agent, and David Gonzalez, Esq. (the “Transfer
        Agent Instructions”)
        (collectively referred to as the “Transaction
        Documents”),
        each
        Company hereby grants to the Secured Party a security interest in and to
        the
        pledged property of each Company identified on Exhibit
        A
        hereto
        (collectively referred to as the “Pledged
        Property”)
        to
        secure all of the Obligations (as defined below).

       

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

       

      ARTICLE
        1.

      DEFINITIONS
        AND INTERPRETATIONS

       

      Section
        1.1. Recitals.
        

       

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

       

      Section
        1.2. Interpretations.
        

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Section
        1.3. Obligations
        Secured.

       

      The
        security interest created hereby in the Pledged Property constitutes continuing
        collateral security for all of the obligations of the Parent now existing
        or
        hereinafter incurred to the Buyers, whether oral or written and whether arising
        before, on or after the date hereof including, without limitation following
        obligations (collectively, the “Obligations”):

      

      (a)
        for
        so long as the Convertible Debentures are outstanding, the payment by the
        Parent, as and when due and payable (by scheduled maturity, acceleration,
        demand
        or otherwise), of all amounts from time to time owing by it in respect of
        the
        Securities Purchase Agreement, the Convertible Debentures and the other
        Transaction Documents; and

      

      (b)
        for
        so long as the Convertible Debentures are outstanding, the due performance
        and
        observance by the Parent of all of its other obligations from time to time
        existing in respect of any of the Transaction Documents, including without
        limitation, the Parent’s obligations with respect to any conversion or
        redemption rights of the Secured Party under the Convertible
        Debentures.

      

      ARTICLE
        2.

      PLEDGED
        PROPERTY; EVENT OF DEFAULT

       

      Section
        2.1. Pledged
        Property.

       

      (a) As
        collateral security for all of the Obligations, the Company hereby pledges
        to
        the Secured Party, and creates in the Secured Party for its benefit, a
        continuing security interest in and to all of the Pledged Property whether
        now
        owned or hereafter acquired.

       

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

       

      (c)
        Establishment
        of a Lockbox Account, Dominion Account. 
        As of the date hereof the Parent, each Subsidiary and the Secured Party shall
        have established or designated all of the Company’s and each Subsidiaries bank
        accounts as (i) a depository account, dominion account or such other “blocked
        account” established at a bank or banks (each such bank, a “Blocked
        Account Bank”)
        pursuant to an arrangement with such Blocked Account Bank as well as a (ii)
        lock
        box account (collectively the depository account, dominion account and the
        lock
        box account shall be referred to as “Blocked
        Accounts”)
        or
        such other account as may be selected by the parties hereto for the deposit
        of
        all cash and all collections and proceeds from the Accounts to be deposited
        into
        the deposit account and/or lock box, as applicable, together with the proceeds
        thereof, all goods represented by such Accounts and all such goods that may
        be
        returned by the Company’s and each Subsidiaries customers, and all proceeds of
        any insurance thereon, and all guarantees, securities and liens which the
        Company and each Subsidiary may hold for the payment of any such Accounts
        including, without limitation, all rights of stoppage in transit, replevin
        and
        reclamation and as an unpaid vendor and/or lienor, all of which the Company
        and
        each Subsidiary represents and warrants will be bona fide and existing
        obligations of its respective customers, arising out of the sale of goods
        by the
        Company in the ordinary course of business into any accounts other than the
        Deposit and/or the Lockbox Accounts, as applicable The parties hereto and
        each
        Blocked Account Bank shall enter into a deposit account control agreement
        in
        form and substance satisfactory to Secured Party directing such Blocked Account
        Bank, upon notification by the Secured Party of an Event of Default as defined
        herein, to transfer such funds so deposited into the Blocked Accounts, either
        to
        any account maintained by the Secured Party at said Blocked Account Bank
        or by
        wire transfer to appropriate account(s) the Secured Party directs and providing
        the Secured Party such control over the Blocked Accounts until the earlier
        of
        the Event of Default being cured or repayment of the Obligations. Upon an
        Event
        of Default all funds deposited in such Blocked Accounts shall immediately
        become
        the property of the Secured Party and the parties hereto shall obtain the
        agreement by such Blocked Account Bank to waive any offset rights against
        the
        funds so deposited.  

       

      
        
           

        

        
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      Section
        2.2. Event
        of Default

       

      An
        “Event
        of Default”
shall
        be deemed to have occurred under this Agreement upon an Event of Default
        under
        and as defined in the Convertible Debentures.

       

      ARTICLE
        3.

      ATTORNEY-IN-FACT;
        PERFORMANCE

       

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

       

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

       

      
        
          
          

        

        
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      Section
        3.2. Secured
        Party May Perform.

       

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

       

      ARTICLE
        4.

      REPRESENTATIONS
        AND WARRANTIES

       

      Section
        4.1. Authorization;
        Enforceability.

       

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

       

      Section
        4.2. Ownership
        of Pledged Property.

       

      The
        Company represents and warrants that it is the legal and beneficial owner
        of the
        Pledged Property free and clear of any lien, security interest, option or
        other
        charge or encumbrance (each, a “Lien”) except for the security interest created
        by this Agreement and other Permitted Liens disclosed in Schedule II attached
        hereto. For purposes of this Agreement, “Permitted Liens” means: (1) the
        security interest created by this Agreement, (2) existing Liens disclosed
        by the
        Company to the Secured Party; (3) inchoate Liens for taxes, assessments or
        governmental charges or levies not yet due, as to which the grace period,
        if
        any, related thereto has not yet expired, or being contested in good faith
        and
        by appropriate proceedings for which adequate reserves have been established
        in
        accordance with GAAP; (4) Liens of carriers, materialmen, warehousemen,
        mechanics and landlords and other similar Liens which secure amounts which
        are
        not yet overdue by more than 60 days or which are being contested in good
        faith
        by appropriate proceedings; (5) licenses, sublicenses, leases or subleases
        granted to other Persons not materially interfering with the conduct of the
        business of the Company; (6) Liens securing capitalized lease obligations
        and
        purchase money indebtedness incurred solely for the purpose of financing
        an
        acquisition or lease; (7) easements, rights-of-way, restrictions, encroachments,
        municipal zoning ordinances and other similar charges or encumbrances, and
        minor
        title deficiencies, in each case not securing debt and not materially
        interfering with the conduct of the business of the Company and not materially
        detracting from the value of the property subject thereto; (8) Liens arising
        out
        of the existence of judgments or awards which judgments or awards do not
        constitute an Event of Default; (9) Liens incurred in the ordinary course
        of
        business in connection with workers compensation claims, unemployment insurance,
        pension liabilities and social security benefits and Liens securing the
        performance of bids, tenders, leases and contracts in the ordinary course
        of
        business, statutory obligations, surety bonds, performance bonds and other
        obligations of a like nature (other than appeal bonds) incurred in the ordinary
        course of business (exclusive of obligations in respect of the payment for
        borrowed money); (10) Liens in favor of a banking institution arising by
        operation of law encumbering deposits (including the right of set-off) and
        contractual set-off rights held by such banking institution and which are
        within
        the general parameters customary in the banking industry and only burdening
        deposit accounts or other funds maintained with a creditor depository
        institution; (11) usual and customary set-off rights in leases and other
        contracts; and (12) escrows in connection with acquisitions and
        dispositions.

       

      
        
          
          

        

        
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      Section
        4.3. Name
        Change.
        The
        Company and each Subsidiary have only effectuated changes to their respective
        corporate names as designated in Schedule 4.3 herein.

       

      ARTICLE
        5.

      DEFAULT;
        REMEDIES; SUBSTITUTE COLLATERAL

       

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

       

      If
        any
        Event of Default shall have occurred and be continuing:

       

      (a) The
        Secured Party may exercise in respect of the Pledged Property, in addition
        to
        any other rights and remedies provided for herein or otherwise available
        to it,
        all of the rights and remedies of a secured party upon default under the
        Uniform
        Commercial Code (whether or not the Uniform Commercial Code applies to the
        affected Pledged Property), and also may (i) take absolute control of the
        Pledged Property, including, without limitation, transfer into the Secured
        Party's name or into the name of its nominee or nominees (to the extent the
        Secured Party has not theretofore done so) and thereafter receive, for the
        benefit of the Secured Party, all payments made thereon, give all consents,
        waivers and ratifications in respect thereof and otherwise act with respect
        thereto as though it were the outright owner thereof, (ii) require the
        Company to assemble all or part of the Pledged Property as directed by the
        Secured Party and make it available to the Secured Party at a place or places
        to
        be designated by the Secured Party that is reasonably convenient to both
        parties, and the Secured Party may enter into and occupy any premises owned
        or
        leased by the Company where the Pledged Property or any part thereof is located
        or assembled for a reasonable period in order to effectuate the Secured Party's
        rights and remedies hereunder or under law, without obligation to the Company
        in
        respect of such occupation, and (iii) without notice except as specified
        below and without any obligation to prepare or process the Pledged Property
        for
        sale, (A) sell the Pledged Property or any part thereof in one or more
        parcels at public or private sale, at any of the Secured Party's offices
        or
        elsewhere, for cash, on credit or for future delivery, and at such price
        or
        prices and upon such other terms as the Secured Party may deem commercially
        reasonable and/or (B) lease, license or dispose of the Pledged Property or
        any part thereof upon such terms as the Secured Party may deem commercially
        reasonable. The Company agrees that, to the extent notice of sale or any
        other
        disposition of the Pledged Property shall be required by law, at least ten
        (10)
        days' notice to the Company of the time and place of any public sale or the
        time
        after which any private sale or other disposition of the Pledged Property
        is to
        be made shall constitute reasonable notification. The Secured Party shall
        not be
        obligated to make any sale or other disposition of any Pledged Property
        regardless of notice of sale having been given. The Secured Party may adjourn
        any public or private sale from time to time by announcement at the time
        and
        place fixed therefor, and such sale may, without further notice, be made
        at the
        time and place to which it was so adjourned. The Company hereby waives any
        claims against the Secured Party arising by reason of the fact that the price
        at
        which the Pledged Property may have been sold at a private sale was less
        than
        the price which might have been obtained at a public sale or was less than
        the
        aggregate amount of the Obligations, even if the Secured Party accepts the
        first
        offer received and does not offer such Pledged Property to more than one
        offeree, and waives all rights that the Company may have to require that
        all or
        any part of such Pledged Property be marshaled upon any sale (public or private)
        thereof. The Company hereby acknowledges that (i) any such sale of the
        Pledged Property by the Secured Party may be made without warranty,
        (ii) the Secured Party may specifically disclaim any warranties of title,
        possession, quiet enjoyment or the like, and (iii) such actions set forth
        in clauses (i) and (ii) above shall not adversely affect the commercial
        reasonableness of any such sale of Pledged Property. 

       

      
        
          
          

        

        
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      (b) Upon
        an
        Event of Default all funds deposited in such Blocked Accounts shall immediately
        become the property of the Buyer. The Secured Party shall direct such Blocked
        Account Bank, to transfer such funds so deposited into the Blocked Accounts,
        either to any account maintained by the Secured Party at said Blocked Account
        Bank or by wire transfer to appropriate account(s) the Secured Party directs
        and
        providing the Secured Party such control over the Blocked Accounts until
        the
        earlier of the Event of Default being cured or repayment of the Obligations.
        

       

      (c) Any
        cash
        held by the Secured Party as Pledged Property and all cash proceeds received
        by
        the Secured Party in respect of any sale of or collection from, or other
        realization upon, all or any part of the Pledged Property shall be applied
        (after payment of any amounts payable to the Secured Party pursuant to Section
        8.3 hereof) by the Secured Party against, all or any part of the Obligations
        in
        such order as the Secured Party shall elect, consistent with the provisions
        of
        the Securities Purchase Agreement. Any surplus of such cash or cash proceeds
        held by the Secured Party and remaining after the indefeasible payment in
        full
        in cash of all of the Obligations shall be paid over to whomsoever shall
        be
        lawfully entitled to receive the same or as a court of competent jurisdiction
        shall direct.

       

      (d) In
        the
        event that the proceeds of any such sale, collection or realization are
        insufficient to pay all amounts to which the Secured Party is legally entitled,
        the Company shall be liable for the deficiency, together with interest thereon
        at the rate specified in the Convertible Debentures for interest on overdue
        principal thereof or such other rate as shall be fixed by applicable law,
        together with the costs of collection and the reasonable fees, costs, expenses
        and other client charges of any attorneys employed by the Secured Party to
        collect such deficiency.

       

      (e) The
        Company hereby acknowledges that if the Secured Party complies with any
        applicable state, provincial, or federal law requirements in connection with
        a
        disposition of the Pledged Property, such compliance will not adversely affect
        the commercial reasonableness of any sale or other disposition of the Pledged
        Property.

       

      (f) The
        Secured Party shall not be required to marshal any present or future collateral
        security (including, but not limited to, this Agreement and the Pledged
        Property) for, or other assurances of payment of, the Obligations or any
        of them
        or to resort to such collateral security or other assurances of payment in
        any
        particular order, and all of the Secured Party's rights hereunder and in
        respect
        of such collateral security and other assurances of payment shall be cumulative
        and in addition to all other rights, however existing or arising. To the
        extent
        that the Company lawfully may, the Company hereby agrees that it will not
        invoke
        any law relating to the marshaling of collateral which might cause delay
        in or
        impede the enforcement of the Secured Party's rights under this Agreement
        or
        under any other instrument creating or evidencing any of the Obligations
        or
        under which any of the Obligations is outstanding or by which any of the
        Obligations is secured or payment thereof is otherwise assured, and, to the
        extent that it lawfully may, the Company hereby irrevocably waives the benefits
        of all such laws.

       

      
        
          
          

        

        
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      Section
        5.2 Duties
        Regarding Pledged Property.

       

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

       

      ARTICLE
        6.

      AFFIRMATIVE
        COVENANTS

       

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

       

      Section
        6.1. Existence,
        Properties, Etc.

       

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

       

      Section
        6.2. Financial
        Statements and Reports.

       

      The
        Company shall furnish to the Secured Party within a reasonable time such
        financial data as the Secured Party may reasonably request.

       

      
        
          
          

        

        
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      Section
        6.3. Accounts
        and Reports.

       

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

       

      (a) as
        soon
        as available, a copy of any notice or other communication alleging any
        nonpayment or other material breach or default, or any foreclosure or other
        action respecting any material portion of its assets and properties, received
        respecting any of the indebtedness of the Company in excess of $500,000 (other
        than the Obligations), or any demand or other request for payment under any
        guaranty, assumption, purchase agreement or similar agreement or arrangement
        respecting the indebtedness or obligations of others in excess of $500,000;
        and

       

      (b) within
        fifteen (15) days after the making of each submission or filing, a copy of
        any report, financial statement, notice or other document, whether periodic
        or
        otherwise, submitted to the shareholders of the Company, or submitted to
        or
        filed by the Company with any governmental authority involving or affecting
        (i)
        the Company that could reasonably be expected to have a Material Adverse
        Effect;
        (ii) the Obligations; (iii) any part of the Pledged Property; or
        (iv) any of the transactions contemplated in this Agreement or the Loan
        Instruments (except, in each case, to the extent any such submission, filing,
        report, financial statement, notice or other document is posted on EDGAR
        Online).

       

      Section
        6.4. Maintenance
        of Books and Records; Inspection.

       

      The
        Company shall maintain its books, accounts and records in accordance with
        GAAP,
        and permit the Secured Party, its officers and employees and any professionals
        designated by the Secured Party in writing, at any time during normal business
        hours and upon reasonable notice to visit and inspect any of its properties
        (including but not limited to the collateral security described in the
        Transaction Documents), corporate books and financial records, and to discuss
        its accounts, affairs and finances with any employee, officer or director
        thereof (it being agreed that, unless an Event of Default shall have occurred
        and be continuing, there shall be no more than two (2) such visits and
        inspections in any Fiscal Year).

       

      Section
        6.5. Maintenance
        and Insurance.

       

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

       

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

       

      
        
          
          

        

        
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      Section
        6.6. Contracts
        and Other Collateral.

       

      The
        Company shall perform all of its obligations under or with respect to each
        instrument, receivable, contract and other intangible included in the Pledged
        Property to which the Company is now or hereafter will be party on a timely
        basis and in the manner therein required, including, without limitation,
        this
        Agreement, except to the extent the failure to so perform such obligations
        would
        not reasonably be expected to have a Material Adverse Effect.

       

      Section
        6.7. Defense
        of Collateral, Etc.

       

      The
        Company shall defend and enforce its right, title and interest in and to
        any
        part of: (a) the Pledged Property; and (b) if not included within the
        Pledged Property, those assets and properties whose loss would reasonably
        be
        expected to have a Material Adverse Effect, each against all manner of claims
        and demands on a timely basis to the full extent permitted by applicable
        law
        (other than any such claims and demands by holders of Permitted
        Liens).

       

      Section
        6.8. Taxes
        and Assessments.

       

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

       

      Section
        6.9. Compliance
        with Law and Other Agreements.
        

       

      The
        Company shall maintain its business operations and property owned or used
        in
        connection therewith in compliance with (a) all applicable federal, state
        and local laws, regulations and ordinances governing such business operations
        and the use and ownership of such property, and (b) all agreements,
        licenses, franchises, indentures and mortgages to which the Company is a
        party
        or by which the Company or any of its properties is bound, except where the
        failure to so comply would not reasonably be expected to have a Material
        Adverse
        Effect.

       

      Section
        6.10. Notice
        of Default.
        

       

      The
        Company shall give written notice to the Secured Party of the occurrence
        of any
        Event of Default.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Section
        6.11. Notice
        of Litigation.

       

      The
        Company shall give notice, in writing, to the Secured Party of (a) any
        actions, suits or proceedings wherein the amount at issue is in excess of
        $250,000, instituted by any persons against the Company, or affecting any
        of the
        assets of the Company, and (b) any dispute, not resolved within fifteen
        (15) days of the commencement thereof, between the Company on the one hand
        and
        any governmental or regulatory body on the other hand, which might reasonably
        be
        expected to have a Material Adverse Effect on the business operations or
        financial condition of the Company.

       

      Section
        6.13. Future
        Subsidiaries.

       

      If
        the
        Company shall hereafter create or acquire any subsidiary, simultaneously
        with
        the creation or acquisition of such subsidiary, the Company shall cause such
        subsidiary to grant to the Secured Party a security interest of the same
        tenor
        as created under this Agreement. 

       

      Section
        6.14. Deposit/Lock
        Box Accounts. The
        Company and each Subsidiary shall cause all cash and all collections and
        proceeds from the Accounts to be deposited into the Deposit Account and/or
        Lock
        Box, as applicable, together with the proceeds thereof, all goods represented
        by
        such Accounts and all such goods that may be returned by the Company’s and each
        Subsidiaries customers, and all proceeds of any insurance thereon, and all
        guarantees, securities and liens which the Company and each Subsidiary may
        hold
        for the payment of any such Accounts including, without limitation, all rights
        of stoppage in transit, replevin and reclamation and as an unpaid vendor
        and/or
        lienor, all of which the Company and the each Subsidiary represents and warrants
        will be bona fide and existing obligations of its respective customers, arising
        out of the sale of goods by the Company and each Subsidiary in the ordinary
        course of business into any accounts other than the Deposit and/or the Lockbox
        Accounts, as applicable.

       

      ARTICLE
        7.

      NEGATIVE
        COVENANTS

       

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

       

      Section
        7.1. Liens
        and Encumbrances.

       

      Directly
        or indirectly make, create, incur, assume or permit to exist any Lien in,
        to or
        against any part of the Pledged Property other than Permitted
        Liens.

       

      Section
        7.2. Restriction
        on Redemption and Cash Dividends

       

      Directly
        or indirectly, redeem, repurchase or declare or pay any cash dividend or
        distribution on its capital stock without the prior express written consent
        of
        the Secured Party.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Section
        7.3. Incurrence
        of Indebtedness.

       

      Directly
        or indirectly, incur or guarantee, assume or suffer to exist any indebtedness,
        other than the indebtedness evidenced by the Convertible Debentures and other
        Permitted Indebtedness. “Permitted
        Indebtedness”
means:
        (i) indebtedness evidenced by Convertible Debentures; (ii) indebtedness
        described on the Disclosure Schedule to the Securities Purchase Agreement;
        (iii)
        indebtedness incurred solely for the purpose of financing the acquisition
        or
        lease of any equipment by the Company, including capital lease obligations
        with
        no recourse other than to such equipment; (iv) indebtedness (A) the repayment
        of
        which has been subordinated to the payment of the Convertible Debentures
        on
        terms and conditions acceptable to the Secured Party, including with regard
        to
        interest payments and repayment of principal, (B) which does not mature or
        otherwise require or permit redemption or repayment prior to or on the
        91st
        day
        after the maturity date of any Convertible Debentures then outstanding; and
        (C)
        which is not secured by any assets of the Company; (v) indebtedness solely
        between the Company and/or one of its domestic subsidiaries, on the one hand,
        and the Company and/or one of its domestic subsidiaries, on the other which
        indebtedness is not secured by any assets of the Company or any of its
        subsidiaries, provided that (x) in each case a majority of the equity of
        any
        such domestic subsidiary is directly or indirectly owned by the Company,
        such
        domestic subsidiary is controlled by the Company and such domestic subsidiary
        has executed a security agreement in the form of this Agreement and (y) any
        such
        loan shall be evidenced by an intercompany note that is pledged by the Company
        or its subsidiary, as applicable, as collateral pursuant to this Agreement;
        (vi)
        reimbursement obligations in respect of letters of credit issued for the
        account
        of the Company or any of its subsidiaries for the purpose of securing
        performance obligations of the Company or its subsidiaries incurred in the
        ordinary course of business so long as the aggregate face amount of all such
        letters of credit does not exceed $500,000 at any one time; and (vii) renewals,
        extensions and refinancing of any indebtedness described in clauses (i) or
        (iii)
        of this subsection.

       

      Section
        7.4. Places
        of Business.

       

      Change
        the location of its chief place of business, chief executive office or any
        place
        of business disclosed to the Secured Party, unless such change in location
        is to
        a different location within the United States and the Company provides notice
        to
        the Secured Party of new location within 10 days’ of such change in
        location.

       

      Section
        7.5. Company
        Name. The
        Company and each Subsidiary shall not change their respective names with
        out
        providing the Secured Party thirty (30) calendar days prior written
        notice.

       

      Section
        7.6. Bank
        Accounts.
         The
        Company and each Subsidiary shall not open, create, assume, establish or
        maintain any bank account with out having it designated as a “Deposit Account”
and complying with the term hereunder.

       

      Section
        7.7. Deposit/Lockbox
        Accounts. The
        Company and each Subsidiary shall not direct, instruct, cause to be deposited
        or
        otherwise deposit any cash and or any collections and proceeds from the
        Accounts, together with the proceeds thereof, all goods represented by such
        Accounts and all such goods that may be returned by the Company’s and each
        Subsidiaries customers, and all proceeds of any insurance thereon, and all
        guarantees, securities and liens which the Company and each Subsidiary may
        hold
        for the payment of any such Accounts including, without limitation, all rights
        of stoppage in transit, replevin and reclamation and as an unpaid vendor
        and/or
        lienor, all of which the Company represents and warrants will be bona fide
        and
        existing obligations of its respective customers, arising out of the sale
        of
        goods by the Company and each Subsidiary in the ordinary course of business
        into
        any accounts other than the Deposit and/or the Lockbox Accounts, as
        applicable.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      8.

    MISCELLANEOUS

     

    Section
      8.1. Notices.

     

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

     

    
      	
              If
                to the Secured Party:

            	
              YA
                Global Investments, L.P.

            
	 	
              101
                Hudson Street-Suite 3700 

            
	 	
              Jersey
                City, New Jersey 07302 

            
	 	
              Attention:      
                Mark
                Angelo

            
	 	
                                     Portfolio
                Manager

            
	 	
              Telephone:   
                 (201)
                986-8300

            
	 	
              Facsimile:     
                (201)
                985-8266

            
	 	 
	
              With
                a copy to:

            	
              David
                Gonzalez, Esq.

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone:    
                (201)
                985-8300

            
	 	
              Facsimile:     
                (201)
                985-8266

            

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              And
                if to the Company:

            	
              Innova
                Robotics and Automations, Inc., 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

            

    

    

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

     

    Section
      8.2. Severability.

     

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

     

    Section
      8.3. Expenses.

     

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

     

    Section
      8.4. Waivers,
      Amendments, Etc.

     

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    Section
      8.5. Continuing
      Security Interest; Partial Release.

     

    (a)
      This
      Agreement shall create a continuing security interest in the Pledged Property
      and shall: (i) remain in full force and effect until payment or conversion
      in full of the Convertible Debentures; (ii) be binding upon the Company and
      its successors and assigns; and (iii) inure to the benefit of the Secured
      Party and its successors and assigns. Upon the payment or satisfaction in full
      or conversion in full of the Convertible Debentures, this Agreement and the
      security interest created hereby shall terminate, and, in connection therewith,
      the Company shall be entitled to the return, at its expense, of such of the
      Pledged Property as shall not have been sold in accordance with Section 5.2
      hereof or otherwise applied pursuant to the terms hereof and the Secured Party
      shall deliver to the Company such documents as the Company shall reasonably
      request to evidence such termination.

     

    (b) Effective
      upon the closing of a disposition of any Pledged Property, provided the Secured
      Party consents in writing prior to such disposition or such disposition is
      made
      in the ordinary course of business, the security interest granted hereunder
      in
      the Pledged Property so disposed of shall terminate and the Secured Party shall
      deliver such documents as the Company shall reasonably request to evidence
      such
      termination; provided, however, the security interest granted hereunder in
      all
      remaining Pledged Property shall remain in full force and effect.

     

    Section
      8.6. Independent
      Representation.

     

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

     

    Section
      8.7. Applicable
      Law: Jurisdiction.

     

    This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of 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.

     

    Section
      8.8. Waiver
      of Jury Trial.

     

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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    Section
      8.9. Entire
      Agreement.

     

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

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

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

    

    
      	 	
              COMPANY:

            
	 	
              INNOVA
                ROBOTICS AND AUTOMATION, INC.

            
	 	 
	 	
              By:
                

            	
              /s/Eugene
                Gartlan

            
	 	
              Name:     
                Eugene
                Gartlan

            
	 	
              Title:       
                Chief
                Executive Officer

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              COMPANY:

            
	 	
              COROWARE
                TECHNOLOGIES, INC.

            
	 	 
	 	
              By:
                

            	
              /s/Lloyd
                Spencer

            
	 	
              Name:    
                Lloyd
                T. Spencer

            
	 	
              Title:      
                President
                and Chief Executive Officer

            

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              COMPANY:

            
	 	
              ROBOTIC
                WORKSPACE TECHNOLOGIES, INC.

            
	 	 
	 	
              By:
                

            	
              /s/Walter
                Weisel

            
	 	
              Name:    
                Walter
                Weisel

            
	 	
              Title:      
                President

            

    

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	
              COMPANY:

            
	 	
              INNOVA
                ROBOTICS, INC.

            
	 	 
	 	
              By:
                

            	
              /s/Walter
                Wiesel

            
	 	
              Name:   
                Walter
                Wiesel

            
	 	
              Title:     
                President

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	
              COMPANY:

            
	 	
              ROBOTIC
                SOFTWARE SERVICES, INC.

            
	 	 
	 	
              By:
                

            	
              /s/Eugene
                Gartlan

            
	 	
              Name:   
                Eugene
                Gartlan

            
	 	
              Title:     
                President

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	
              SECURED
                PARTY:

            
	 	
              YA
                GLOBAL INVESTMENTS, L.P.

            
	 	 
	 	
              By:

            	
              Yorkville
                Advisors, LLC

            
	 	
              Its:

            	
              General
                Partner

            
	 	 	 
	 	
              By:
                

            	
              /s/Mark
                Angelo

            
	 	
              Name:

            	
              Mark
                Angelo

            
	 	
              Title:

            	
              Portfolio
                Manager

            

    

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

    

    LEGAL
      NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OF
      ORGANIZATION

    

    
      	
               

              Company’s
                Name

            	 	
              State
                of 

              Organization

            	 	
              Employer
                ID

            	 	
              Organizational
                ID

            	 
	 	 	 	 	 	 	 	 
	
              CoroWare
                Technologies, Inc.

            	 	FL	 	760828301	 	P06000060768	 
	 	 	 	 	 	 	 	 
	
              Robotic
                Workspace Technologies, Inc.

            	 	FL	 	650530259	 	P06000143976	 
	 	 	 	 	 	 	
            	 
	
              Innova
                Robotics, Inc. (f/k/a Service Robots, Inc.)

            	 	FL	 	830388620	 	P03000100287	 
	 	 	 	 	 	 	 	 
	
              Robotic
                Software Services, Inc. (f/k/a Altronics Service, Inc.)

            	 	FL	 	592952927	 	K91938	 

    

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      II

    

    Permitted
      Liens

    

    Robotic
      Workspace Technologies, Inc. 

    

    
      1) 
        US
        Small Business Administration - UCC- 1 filed
        with          Secretary of State on

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    DEFINITION
      OF PLEDGED PROPERTY

     

    For
      the
      purpose of securing prompt and complete payment and performance by the Company
      of all of the Obligations, the Company unconditionally and irrevocably hereby
      grants to the Secured Party a continuing security interest in and to, and lien
      upon, the following Pledged Property of the Company:

     

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

     

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

     

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

     

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

     

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

     

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

     

    (g) all
      investment property, equity interests, securities or other instruments in other
      companies, including, without limitation, any subsidiaries, investments or
      other
      entities (whether or not controlled); whether no existing or later acquired
      or
      created and

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    DISCLOSURE
      SCHEDULES

     

    to

    Security
      Agreement

    

    Schedule
      4.3: Name Changes

    

    Company
      Name History

    

    Innova
      Robotics & Automation, Inc. was previously Innova Holdings, Inc., which was
      previously HyTech Technology Group, which was previously, SRM Networks.

    

    Innova
      Robotics, Inc. the subsidiary was previously Service Robots, Inc. which was
      previously Robotic Artists, Inc. 

    

    Robotic
      Software Services, Inc. was previously Altronics Service, Inc.

     

    
      
        
        

      

      
        26PATENT
      AND TRADEMARK SECURITY AGREEMENT

     

    THIS
      PATENT AND TRADEMARK SECURITY AGREEMENT (“Security
      Agreement”),
      dated
      as of October ___, 2007, between Innova
      Robotics and Automation, Inc., a
      Delaware corporation (the “Parent”),
      Robotic
      Workspace Technologies, Inc.,
      a
      subsidiary of the Parent (the “Grantor”)
      and YA
      Global Investments, L.P.,
      a
      Cayman
      Island exempted limited partnership (the “Lender”).

     

    WITNESETH:

     

    WHEREAS,
      pursuant to a Securities Purchase Agreement, dated as of October ___,
      2007 (together with all amendments, supplements, restatements and other
      modifications, if any, from time to time made thereto, the “Securities
      Purchase Agreement”)
      between the Grantor and the as Lender (the “Lender”),
      has
      agreed to purchase up to $600,000 of secured convertible debentures of the
      Parent (the “Convertible
      Debentures”)
      subject to the terms and provisions of the Securities Purchase
      Agreement;

     

    WHEREAS,
      The
      Parent shall issue and sell to the Secured Party, as provided in the Securities
      Purchase Agreement, and the Secured Party shall purchase, up to Six Hundred
      Thousand Dollars ($600,000) of secured convertible debentures (the
“Convertible
      Debentures”),
      which
      shall be convertible into shares of the Parent’s common stock, par value $0.001,
      in the respective amounts set forth opposite each Buyer(s) name on
      Schedule I attached to the Securities Purchase Agreement;

     

    WHEREAS,
      to
      induce
      the Lender to enter into the transaction contemplated by the Securities Purchase
      Agreement, the Convertible Debentures, the Investor Registration Rights
      Agreement of even date herewith between the Parent and the Lender (the
“Investor
      Registration Rights Agreement”),
      and
      the Irrevocable Transfer Agent Instructions among the Parent, the Lender, the
      Parent’s transfer agent, and David Gonzalez, Esq. (the “Transfer
      Agent Instructions”)
      (collectively referred to as the “Transaction
      Documents”),
      the
      Parent and the Grantor have agreed to grant to the Lender a security interest
      in
      and to the Patent Collateral (as defined herein and the Patent and Trademark
      Agreement by and between the Parent and the Lender dated the date hereof) to
      secure all of the Obligations (as defined below).

     

    WHEREAS,
      in
      connection with the Securities Purchase Agreement, the Parent and the Grantor
      have agreed to provide the Lender a general security interest, pursuant Security
      Agreement dated as of October ___, 2007 between the Parent, Grantor and the
      as
      Lender (the “Security
      Agreement”)
      in the
      Pledged Collateral (as this term is defined in the Security
      Agreement);

     

    AND
      WHEREAS,
      as a
      condition precedent to the purchasing the Convertible Debentures on the closing
      date under the Securities Purchase Agreement, the Grantor is required to execute
      and deliver this Agreement and to grant to the Lender a continuing security
      interest in all of the Patent and Trademark Collateral (as hereinafter defined)
      to secure all Obligations (as defined in the Security
      Agreement);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AND
      WHEREAS,
      in
      connection with the Securities Purchase Agreement dated July 20, 2006, the
      Grantor provided the Lender a general security interest, pursuant Security
      Agreement dated as of July 20, 2006 between the Grantor and the as Lender (the
      “2006
      Security Agreement”)
      in the
      Pledged Collateral (as this term is defined in the 2006 Security
      Agreement);

     

    AND
      WHEREAS,
      as a
      condition precedent to the purchasing the Convertible Debentures on the closing
      date under the Securities Purchase Agreement, the Grantor is required to execute
      and deliver this Agreement and to grant to the Lender a continuing security
      interest in all of the Patent and Trademark Collateral (as hereinafter defined)
      to secure all Obligations under and as defined in the 2006 Security
      Agreement)

     

    AND
      WHEREAS,
      the
      Grantor has duly authorized the execution, delivery and performance of this
      Agreement;

     

    NOW
      THEREFORE,
      for
      good and valuable consideration, the receipt of which is hereby acknowledged,
      the Grantors agree as follows:

     

    SECTION
      1. Definitions.
      Unless
      otherwise defined herein otherwise requires, terms used in this Agreement,
      including its preamble and recitals, have the meanings provided in the
      Securities Purchase Agreement.

     

    SECTION
      2. Grant
      of Security Interest.
      For good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, to secure the payment and performance of all of the Obligations
      by
      the Grantor, the Grantor does hereby mortgage, pledge and hypothecate to the
      Lender and grant to the Lender a security interest in all of the following
      property (the “Patent
      Collateral”),
      now
      owned and existing:

     

    (a) all
      letters patent and applications for letters patent throughout the world,
      including all patent applications in preparation for filing anywhere in the
      world and including each patent and patent application referred to in
Schedule
      “A”
      hereto;

     

    (b) all
      reissues, divisions, continuations, continuations-in-part, extensions, renewals
      and reexaminations of any of the items described in clause (a);

     

    (c) all
      patent licenses and other agreements providing the Grantor with the right to
      use
      any of the items of the type referred to in clauses (a) and (b), including
      each
      patent license referred to in Schedule
      “A”
      hereto;

     

    (d) the
      right
      to sue third parties for past, present or future infringements of any Patent
      Collateral described in clauses (a) and (b) and, to the extent applicable,
      clause (c); and

     

    (e) all
      proceeds of, and rights associated with, the foregoing, (including license
      royalties and proceeds of infringement suits), and all rights corresponding
      thereto throughout the world.

     

    SECTION
      3. Security
      Agreement.
      This
      Agreement has been executed and delivered by the Grantor for the purpose of
      recording the security interest of the Lender in the Patent Collateral relating
      to patents referred to in Schedule
      “A”
      with the
      United States Patent and Trade Marks Office, to the extent it may be so
      registered therein. The security interest granted hereby has been granted as
      a
      supplement to, and not in limitation of, the security interest granted to the
      Lender under the Security Agreement. The Security Agreement (and all rights
      and
      remedies of the Lender thereunder) shall remain in full force and effect in
      accordance with its terms.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SECTION
      4. Release
      of Security Interest.
      Upon
      payment in full of all Obligations and the termination of the Securities
      Purchase Agreement, the Lender shall, at the Grantor’s expense, execute and
      deliver to the Grantor all instruments and other documents as may be necessary
      or proper to release the lien on any security interest in the Patent Collateral
      which has been granted hereunder.

     

    SECTION
      5. Acknowledgement.
      The
      Grantor does hereby further acknowledge and affirm that the rights and remedies
      of the Lender with respect to the security interest in the Patent Collateral
      granted hereby are more fully set forth in the Security Agreement, the terms
      and
      provisions of which (including the remedies provided for therein) are
      incorporated by references herein as if fully set forth herein.

     

    SECTION
      6. Securities
      Purchase Agreement.
      Notwithstanding any other term or provision hereof, in the event that any
      provisions hereof contradict and are incapable of being construed in conjunction
      with the provisions of the Securities Purchase Agreement, the provisions of
      the
      Securities Purchase Agreement shall take precedence over those contained herein
      and, in particular, if any act of the Grantor is expressly permitted under
      the
      Securities Purchase Agreement but is prohibited hereunder, any such act shall
      be
      permitted hereunder and any encumbrance expressly permitted under the Securities
      Purchase Agreement to exist or to remain outstanding shall be permitted
      hereunder and thereunder. This instrument, document or agreement may be sold,
      assigned or transferred by the Agent in accordance with the terms of the
      Securities Purchase Agreement.

     

    SECTION
      7. Counterparts.
      This
      Agreement may be executed by the parties hereto in several counterparts, each
      of
      which shall be deemed to be an original and all of which shall constitute
      together but one and the same agreement.

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Agreement to be duly executed and delivered
      by
      their respective officers thereunto duly authorized as of the day and first
      year
      above written.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	 	
              SUBSIDARY

            
	 	
              ROBOTIC
                WORKSPACE TECHNOLOGIES, INC.

            
	 	 
	 	
              By:

            	 
	 	
              Name: 

            
	 	
              Title:    

            
	 	
              INNOVA
                ROBOTICS AND AUTOMATION, INC.

            
	 	 
	 	
              By:

            	 
	 	
              Name:
                Eugene Gartlan

            
	 	
              Title:
                Chief Executive Officer

            
	 	 

    

     

    STATE
      OF ____________________)

      )
      SS:

    COUNTY
      OF __________________)

    

    BEFORE
      ME,
      a Notary
      Public in and for said County and State, personally appeared the above-named
      _______________________ who acknowledged that he/she did sign the foregoing
      agreement and that the same is his/her free act and deed.

     

    IN
      TESTIMONY WHEREOF,
      I have
      hereunto set my hand an official seal at __________________,
      ____________________, this ___ day of __________, 2007.

     

    
      	 	 
	 	
              Notary
                Public 

            
	 	 
	 	 
	 	
              YA
                GLOBAL INVESTMENTS, L.P.

            
	 	
              By:
                

            	Yorkville
              Advisors, LLC
	 	
              Its:
                

            	Investment
              Manager
	 	 	
            
	 	
              By:
                

            	 
	 	
              Name:  

            	Mark
              Angelo
	 	
              Title:

            	 President
              and
              Portfolio Manager
	 	 
	 	 

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      “A”

     

    U.S.
      Letters Patent And Applications 

     

    For
      Letters Patent Of Harvey Electronics, Inc.

     

    
      	
              Holder

            	 	
              Title

            	 	
              Filing Date

            	 	
              Application

              Number

            	 	
              Class

            	 	
              Issue Date

            	 	
              Registration

              Number

            	
               

               

            
	
              Robotic
                Workspace Technologies

               

            	 	
              Versatile
                robot control system

               

            	 	
              December
                28, 2000

               

            	 	
              09/750,433

               

            	 	
              700/245
                ;

              318/568.11;

              318/568.13;

              318/568.16;

              318/573;

              318/574;

              700/247;

              700/248;

              700/249;

              700/259;

              700/260;

              701/23;

              701/24;

              901/16;

              901/2;

              901/47;

              901/8

            	 	
              August
                27, 2002

               

            	 	
              Patent
                # 6,442,451

               

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Robotic
                Workspace Technologies

               

            	 	
              Automation
                equipment control system

               

            	 	
              August
                26, 2002

               

            	 	
              10/227,660

               

            	 	
              
                700/245
                  ;

                318/568.11;

                318/568.13;

                318/568.16;

                318/573;

                318/574;

                345/157;

                700/247;

                700/248;

                700/249;

                700/259;

                700/260;

                701/23;

                707/10;

                709/203;

                709/213;

                709/217;

                709/225;

                709/229;

                715/862;

                901/16;

                901/2;

                901/47;

                901/8

              

            	 	
              January
                6, 2004

               

            	 	
              Patent
                # 6,675,070

               

            	 

    

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    
      	
              Robotic
                Workspace Technologies

               

            	 	
              Automation
                equipment control system

               

            	 	
              December
                30, 2003

               

            	 	
              10/749,048

               

            	 	
              
                700/245
                  ;

                318/568.11;

                318/568.13;

                318/568.16;

                318/573;

                318/574;

                700/247;

                700/248;

                700/249;

                700/259;

                700/260;

                701/23;

                707/10;

                709/203;

                709/217;

                709/225;

                709/229;

                901/16;

                901/2;

                901/47;

                901/8

              

            	 	
              July
                26, 2005

               

            	 	
              Patent
                # 6,922,611

               

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Robotic
                Workspace Technologies

               

            	 	
              Automation
                equipment control system

               

            	 	
              July
                26, 2005

               

            	 	
              20050267637

               

            	 	
              700/245

               

            	 	
              Pending

               

            	 	
              Pending

               

            	 

    

    

    
      
        
        

      

      
        A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]