**SECURITIES
      PURCHASE AGREEMENT**





This
      Securities Purchase Agreement (this “ Agreement ”)
      is
      dated effective __________, 20__, and is made among TechnoConcepts, Inc., a
      Colorado corporation (the “ Company ”),
      and
      each purchaser identified on the signature pages and in Exhibit
      A hereto
      (each, including its successors and assigns, a “ Purchaser ”
and
      collectively the “ Purchasers ”).





WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the “ Securities
      Act ”)
      and
      Rule 506 promulgated thereunder, the Company desires to issue and sell to each
      Purchaser, and each Purchaser, severally and not jointly, desires to purchase
      from the Company, securities of the Company as more fully described in this
      Agreement.





NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and each Purchaser agrees as
      follows:





**ARTICLE
      I.**


**DEFINITIONS**





1.1  Definitions .
      In
      addition to the terms defined elsewhere in this Agreement: (a) capitalized
      terms
      that are not otherwise defined herein have the meanings given to such terms
      in
      Certificate of Designation of the Series B-1 Preferred Stock, the Warrants
      (as
      defined herein), etc. and (b) the following terms have the meanings indicated
      in
      this Section 1.1:





“ Action ”
shall
      have the meaning ascribed to such term in Section 3.1(j).





“ Affiliate ”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities
      Act. With
      respect to a Purchaser, any investment fund or managed account that is managed
      on a discretionary basis by the same investment manager as such Purchaser will
      be deemed to be an Affiliate of such Purchaser.





“ Closing ”
means
      the closing of all of the purchase and sale of the Securities pursuant to Section
      2.1 .





“ Closing
      Date ”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      the Purchasers’ obligations to pay the Subscription Amount and (ii) the
      Company’s obligations to deliver the Securities have been satisfied or waived.
      Nothing in this paragraph is intended to prevent the Company and individual
      Purchasers from settling individual transactions prior to Closing.





“ Commission ”
means
      the Securities and Exchange Commission.





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“ Common
      Stock ”
means
      the common stock of the Company, no par value, and any securities into which
      such common stock shall hereinafter have been reclassified into.





“ Common
      Stock Equivalents ”
means
      any securities of the Company or the Subsidiaries which would entitle the holder
      thereof to acquire at any time Common Stock, including without limitation,
      any
      debt, preferred stock, rights, options, warrants or other instrument that is
      at
      any time convertible into or exchangeable for, or otherwise entitles the holder
      thereof to receive, Common Stock.





“ Company
      Counsel ”
means
      the Law Offices of David L. Kagel, a Professional Corporation., with offices
      at
      1801 Century Park E 25th Floor, Los Angeles, CA 90067.





“ Debenture
      Placement ”
means
      the private placement by the Company on or about November 17, 2004 of its 7%
      Secured Convertible Debentures due two years from their date of issuance and
      the
      agreements entered into in connection therewith.





“ Disclosure
      Schedules ”
shall
      have the meaning ascribed to such term in Section 3.1 hereof.





“ Effective
      Date ”
means
      the date that the initial Registration Statement filed by the Company pursuant
      to the Registration Rights Exhibit is first declared effective by the
      Commission.





“ Exchange
      Act ”
means
      the Securities Exchange Act of 1934, as amended.





“ Exempt
      Issuance ”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      by a
      majority of the non-employee members of the Board of Directors of the Company
      or
      a majority of the members of a committee of non-employee directors established
      for such purpose, (b) securities upon the exercise of any securities issued
      hereunder, convertible securities, options or warrants issued and outstanding
      on
      the date of this Agreement, provided that such securities have not been amended
      since the date of this Agreement to increase the number of such securities,
      (c)
      securities issued pursuant to acquisitions or strategic transactions, provided
      any such issuance shall only be to a Person which is, itself or through its
      subsidiaries, an operating company in a business synergistic with the business
      of the Company and in which the Company receives benefits in addition to the
      investment of funds, but shall not include a transaction in which the Company
      is
      issuing securities primarily for the purpose of raising capital or to an entity
      whose primary business is investing in securities, and (d) securities issued
      pursuant to an equity offering of up to $10,000,000 at a price per share equal
      to or greater than $2.50, which issuance shall occur prior to the one month
      anniversary of the date hereof.





“ GAAP ”
shall
      have the meaning ascribed to such term in Section 3.1(h) hereof.





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“ Liens ”
means
      a
      lien, charge, security interest, encumbrance, right of first refusal, preemptive
      right or other restriction.





“ Material
      Adverse Effect ”
shall
      have the meaning assigned to such term in Section 3.1(b) hereof.





“ Majority
      in Interest ”
shall
      mean, at any time of determination, the majority in interest based on Shares
      owned by the Purchasers as a class at the time of such
      determination.





“ Material
      Permits ”
shall
      have the meaning ascribed to such term in Section 3.1(m).





“ Person ”
means
      an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.





“ Proceeding ”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened.





“ Registration
      Rights Exhibit ”
means
      Exhibit B (Registration Rights), attached hereto.





“ Registration
      Statement ”
means
      a
      registration statement meeting the requirements set forth in Exhibit B, attached
      hereto, and covering the resale of the Underlying Shares by each Purchaser
      as
      provided for in Exhibit B.





“ Required
      Approvals ”
shall
      have the meaning ascribed to such term in Section 3.1(e).





“ Required
      Minimum ”
means,
      as of any date, the maximum aggregate number of shares of Common Stock then
      issued or potentially issuable in the future pursuant to the Transaction
      Documents, including any Underlying Shares issuable upon exercise or conversion
      in full of all Warrants or Stock (including Underlying Shares issuable as
      payment in lieu of cash), ignoring any conversion or exercise limits set forth
      therein.





“ Rule
      144 ”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.





“ SEC
      Reports ”
shall
      have the meaning ascribed to such term in Section 3.1(h) hereof.





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“ Securities ”
means
      the Shares, the Warrants, the Warrant Shares and the Underlying
      Shares.





“ Securities
      Act ”
means
      the Securities Act of 1933, as amended.





“ Stock ”
means
      shares of Series B-1 Preferred Stock of the Company, each of which is
      convertible into 1,000 shares of common stock pursuant to the Form of
      Certificate of Designation attached hereto as Exhibit E, to be issued by the
      Company to the Purchasers hereunder.





“ Subscription
      Amount ” means,
      as
      to each Purchaser, the aggregate amoun t
      to be
      paid for Stock and Warrants purchased hereunder as specified below such
      Purchaser’s name on the signature page of this Agreement and next to the heading
“Subscription Amount”, in United States Dollars and in immediately available
      funds.





“ Subsequent
      Financing ”
shall
      have the meaning ascribed to such term in Section 4.13.





“ Subsidiary ”
means
      any subsidiary of the Company as set forth on Schedule
      3.1(a) .





“ Trading
      Day ”
means
      a
      day on which the Common Stock is traded on a Trading Market.





“ Trading
      Market ”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Nasdaq SmallCap Market, the American
      Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or
      the
      OTC Bulletin Board.





“ Transaction
      Documents ”
means
      this Agreement and its Exhibits, the Stock, the Warrants, and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder.





“ Underlying
      Shares ”
means
      the shares of Common Stock issuable upon conversion of the Stock and upon
      exercise of the Warrants and issued and Common Stock issuable in lieu of cash
      payments to the Purchasers, as may be set forth herein.





“ VWAP ”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the primary Trading Market on which the Common
      Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based
      on
      a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using the VAP
      function; (b) if the Common Stock is not then listed or quoted on the
      Trading Market and if prices for the Common Stock are then reported in the
“Pink
      Sheets” published by the Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid price
      per
      share of the Common Stock so reported; or (c) in all other cases, the fair
      market value of a share of Common Stock as determined in good faith by the
      Board
      of Directors of the Company.





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“ Warrants ”
means
      collectively the Common Stock purchase warrants, in the form of Exhibit C delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
      hereof, which Warrants shall be exercisable immediately and have a term of
      exercise equal to five years.





“ Warrant
      Shares ”
means
      the shares of Common Stock issuable upon exercise of the Warrants.





**ARTICLE
      II.**


**PURCHASE
      AND SALE**





2.1  Closing .
      On the
      Closing Date, upon the terms and subject to the conditions set forth herein,
      concurrent with the execution and delivery of this Agreement by the parties
      hereto, the Company agrees to sell, and each Purchaser agrees to purchase in
      the
      aggregate, severally and not jointly, up to 2,300 of shares the Stock at a
      purchase price of $2,500 per share for a total of $5,750,000 of the Stock
      (provided, however, that the Company may elect to sell more or fewer Shares).
      Each Purchaser shall deliver to the Company Counsel, via overnight or courier
      services, a wire transfer or a certified check with immediately available funds
      equal to their Subscription Amount and the Company shall deliver to each
      Purchaser their respective Stock and Warrants as determined pursuant to Section
      2.2(a) and the other items set forth in Section 2.2 issuable at the Closing.
      Upon satisfaction of the conditions set forth in Section 2.2 (“ Deliveries ”),
      the
      Closing shall occur at the offices of the Company Counsel, or such other
      location as the parties shall mutually agree. The Company Counsel shall not
      be
      required to wait for all Purchasers to make the required Deliveries but shall
      instead settle individual transactions for each Purchaser as Deliveries are
      completed.





2.2   Deliveries





.





a)
            On
                or before the Closing Date, the Company shall deliver to the Company
                Counsel for delivery to each Purchaser upon the Company’s receipt of the
                Subscription Amounts the following:





(i)
            this
                Agreement duly executed by the
                Company;





(ii)
            Stock
                in the number of shares equal to such Purchaser’s Subscription Amount,
                registered in the name of such
                Purchaser;





(iii)
            a
                Warrant registered in the name of such Purchaser to purchase up to
                a
                number of shares of Common Stock equal to 50% of such Purchaser’s
                Subscription Amount divided by $2.50, with an exercise price equal
                to
                $3.00,subject to adjustment therein;





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(iv)
            a
                Warrant registered in the name of such Purchaser to purchase up to
                a
                number of shares of Common Stock equal to 50% of such Purchaser’s
                Subscription Amount divided by $2.50, with an exercise price equal
                to
                $4.00,subject to adjustment therein;





(v)
            a
                legal opinion of Company Counsel, substantially in the form ofExhibit
                Dattached hereto.





b)
            On
                or before the Closing Date, each Purchaser shall deliver or cause
                to be
                delivered to the Company Counsel the following:





(i)
            this
                Agreement duly executed by such
                Purchaser;





(ii)
            the
                Agency Agreement duly executed by the Purchaser;
                and





(iii)
            the
                Purchaser shall deliver to the Company Counsel its Subscription
                Amount.





2.3  Closing
      Conditions .





a)
            The
                obligations of the Company hereunder in connection with the Closing
                are
                subject to the following conditions being
                met:





(i)
            the
                accuracy in all material respects when made and on the Closing Date
                of the
                representations and warranties of the Purchasers contained
                herein;





(ii)
            all
                obligations, covenants and agreements of the Purchasers required
                to be
                performed at or prior to the Closing Date shall have been performed;
                and





(iii)
            the
                delivery by the Purchasers of the items set forth in Section 2.2(b)
                of
                this Agreement.





b)
            The
                respective obligations of the Purchasers hereunder in connection
                with the
                Closing are subject to the following conditions being
                met:





(i)
            the
                accuracy in all material respects on the Closing Date of the
                representations and warranties of the Company contained
                herein;





(ii)
            all
                obligations, covenants and agreements of the Company required to
                be
                performed at or prior to the Closing Date shall have been performed;





(iii)
            the
                delivery by the Company of the items set forth in Section 2.2(a)
                of this
                Agreement;





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(iv)
            there
                shall have been no Material Adverse Effect with respect to the Company
                since the date hereof;





(v)
            from
                the date hereof to the date of each Purchaser’s individual settlement,
                trading in the Common Stock shall not have been suspended by the
                Commission (except for any suspension of trading of limited duration
                agreed to by the Company, which suspension shall be terminated prior
                to
                the Closing), and, at any time prior to the such settlement date,
                trading
                in securities generally as reported by Bloomberg Financial Markets
                shall
                not have been suspended or limited, or minimum prices shall not have
                been
                established on securities whose trades are reported by such service,
                or on
                any Trading Market, nor shall a banking moratorium have been declared
                either by the United States or New York State authorities nor shall
                there
                have occurred any material outbreak or escalation of hostilities
                or other
                national or international calamity of such magnitude in its effect
                on, or
                any material adverse change in, any financial market which, in each
                case,
                in the reasonable judgment of each Purchaser, makes it impracticable
                or
                inadvisable to purchase the Stock at the Closing;
                and





**ARTICLE
      III.**


**REPRESENTATIONS
      AND WARRANTIES**





3.1  Representations
      and Warranties of the Company .
      Except
      as set forth under the corresponding section of the disclosure schedules
      delivered to the Purchasers concurrently herewith (the “ Disclosure
      Schedules ”)
      which
      Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
      the
      representations and warranties set forth below to each Purchaser.





(a)  Subsidiaries .
      All of
      the direct and indirect subsidiaries of the Company are set forth on Schedule
      3.1(a) .
      The
      Company owns, directly or indirectly, at least 80% of 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.





(b)  Organization
      and Qualification .
      Each of
      the Company and the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could 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,
      prospects or financial condition 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.





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(c)  Authorization;
      Enforcement .
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations thereunder. The execution and
      delivery of each of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no further
      action is required by the Company in connection therewith other than in
      connection with the Required Approvals. Each Transaction Document has been
      (or
      upon delivery will have been) duly executed by the Company and, when delivered
      in accordance with the terms hereof, will constitute the valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      terms except (i) as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors’ rights generally and (ii) as limited by laws relating
      to the availability of specific performance, injunctive relief or other
      equitable remedies.





(d)  No
      Conflicts .
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the other transactions contemplated
      thereby do not and will not: (i) conflict with or violate any provision of
      the
      Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
      or other organizational or charter documents, or (ii) conflict with, or
      constitute a default (or an event that with notice or lapse of time or both
      would become a default) under, result in the creation of any Lien upon any
      of
      the properties or assets of the Company or any Subsidiary, or give to others
      any
      rights of termination, amendment, acceleration or cancellation (with or without
      notice, lapse of time or both) of, any agreement, credit facility, debt or
      other
      instrument (evidencing a Company or Subsidiary debt or otherwise) or other
      understanding to which the Company or any Subsidiary is a party or by which
      any
      property or asset of the Company or any Subsidiary is bound or affected, or
      (iii) subject to the Required Approvals, conflict with or result in a violation
      of any law, rule, regulation, order, judgment, injunction, decree or other
      restriction of any court or governmental authority to which the Company or
      a
      Subsidiary is subject (including federal and state securities laws and
      regulations), or by which any property or asset of the Company or a Subsidiary
      is bound or affected; except in the case of each of clauses (ii) and (iii),
      such
      as could not have or reasonably be expected to result in a Material Adverse
      Effect.





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(e)  Filings,
      Consents and Approvals .
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.6,
      (ii) the filing with the Commission of the Registration Statement, (iii) the
      notice and/or application(s) to each applicable Trading Market for the issuance
      and sale of the Stock and Warrants and the listing of the Underlying Shares
      for
      trading thereon in the time and manner required thereby and (iv) the filing
      of
      Form D with the Commission and such filings as are required to be made under
      applicable state securities laws (collectively, the “ Required
      Approvals ”).





(f)  Issuance
      of the Securities .
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the applicable Transaction Documents, will be duly and validly issued, fully
      paid and nonassessable, free and clear of all Liens imposed by the Company
      other
      than restrictions on transfer provided for in the Transaction Documents. The
      Underlying Shares, when issued in accordance with the terms of the Transaction
      Documents, will be validly issued, fully paid and nonassessable, free and clear
      of all Liens imposed by the Company. The Company has reserved from its duly
      authorized capital stock a number of shares of Common Stock for issuance of
      the
      Underlying Shares at least equal to the Required Minimum on the date hereof.
      The
      Company has not, and to the knowledge of the Company, no Affiliate of the
      Company has sold, offered for sale or solicited offers to buy or otherwise
      negotiated in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers, or that would be integrated with the offer
      or sale of the Securities for purposes of the rules and regulations of any
      Trading Market.





(g)  Capitalization .
      The
      capitalization of the Company is as described in the Company’s most recent
      periodic report filed with the Commission. The Company has not issued any
      capital stock since such filing other than pursuant to the exercise of employee
      stock options under the Company’s stock option plans, the issuance of shares of
      Common Stock to employees pursuant to the Company’s employee stock purchase plan
      and/or pursuant to the conversion or exercise of or dividends on outstanding
      Common Stock and/or Common Stock Equivalents. Except for current debenture
      holders pursuant to the Debenture Placement and Series B Preferred shareholders,
      no Person has any right of first refusal, preemptive right, right of
      participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents. Except as a result of the purchase
      and sale of the Securities or as otherwise previously disclosed, there are
      no
      outstanding options, warrants, script rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock,
      or
      securities or rights convertible or exchangeable into shares of Common Stock.
      The issuance and sale of the Securities will not obligate the Company to issue
      shares of Common Stock or other securities to any Person (other than the
      Purchasers) and will not result in a right of any holder of Company securities
      to adjust the exercise, conversion, exchange or reset price under such
      securities. 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. 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.





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(h)  SEC
      Reports; Financial Statements .
      The
      Company has filed all reports required to be filed by it under the Securities
      Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
      for the two years preceding the date hereof (or such shorter period as the
      Company was required by law to file such material) (the foregoing materials,
      including the exhibits thereto, being collectively referred to herein as the
      “ SEC
      Reports ”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, 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 light of the circumstances under which
      they were made, not misleading. The financial statements of the Company included
      in the SEC Reports comply in all material respects with applicable accounting
      requirements and the rules and regulations of the Commission with respect
      thereto as in effect at the time of filing. Such financial statements have
      been
      prepared in accordance with United States generally accepted accounting
      principles applied on a consistent basis during the periods involved
      (“ GAAP ”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments.





(i)  Material
      Changes .
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in the SEC Reports, (i) there has
      been
      no event, occurrence or development that has had or that could reasonably be
      expected to result in a Material Adverse Effect, (ii) the Company has not
      incurred any liabilities (contingent or otherwise) other than (A) trade payables
      and accrued expenses incurred in the ordinary course of business consistent
      with
      past practice and (B) liabilities not required to be reflected in the Company's
      financial statements pursuant to GAAP or required to be disclosed in filings
      made with the Commission, (iii) the Company has not altered its method of
      accounting, (iv) the Company has not declared or made any dividend or
      distribution of cash or other property to holders of its Common Stock or
      purchased, redeemed or made any agreements to purchase or redeem any shares
      of
      its capital stock and (v) the Company has not issued any equity securities
      to
      any officer, director or Affiliate, except pursuant to existing Company stock
      option plans. The Company does not have pending before the Commission any
      request for confidential treatment of information.





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(j)  Litigation .
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, any Subsidiary or any of their respective properties before or by
      any
      court, arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “ Action ”)
      which
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      any of the Transaction Documents or the Securities or (ii) could, if there
      were
      an unfavorable decision, have or reasonably be expected to result in a Material
      Adverse Effect. Neither the Company nor any Subsidiary, nor any director or
      officer thereof, is or has been the subject of any Action involving a claim
      of
      violation of or liability under federal or state securities laws or a claim
      of
      breach of fiduciary duty. There has not been, and to the knowledge of the
      Company, there is not pending or contemplated, any investigation by the
      Commission involving the Company or any current or former director or officer
      of
      the Company. The Commission has not issued any stop order or other order
      suspending the effectiveness of any registration statement filed by the Company
      or any Subsidiary under the Exchange Act or the Securities Act.





(k)  Labor
      Relations .
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company which could reasonably
      be
      expected to result in a Material Adverse Effect.





(l)  Compliance .
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws applicable to its business
      except in each case as could not have a Material Adverse Effect.





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(m)  Regulatory
      Permits .
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits could not have
      or
      reasonably be expected to result in a Material Adverse Effect (“ Material
      Permits ”),
      and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.





(n)  Title
      to Assets .
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries and good and marketable title in all personal property owned
      by
      them that is material to the business of the Company and the Subsidiaries,
      in
      each case free and clear of all Liens, except for such Liens pursuant to the
      Debenture Placement, such Liens pursuant to that certain Loan and Security
      Agreement dated on or about September 5, 2005, and such Liens as do not
      materially affect the value of such property and do not materially interfere
      with the use made and proposed to be made of such property by the Company and
      the Subsidiaries and Liens for the payment of federal, state or other taxes,
      the
      payment of which is neither delinquent nor subject to penalties. Any real
      property and facilities held under lease by the Company and the Subsidiaries
      are
      held by them under valid, subsisting and enforceable leases of which the Company
      and the Subsidiaries are in compliance.





(o)  Patents
      and Trademarks .
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights necessary or material for use
      in
      connection with their respective businesses as described in the SEC Reports
      and
      which the failure to so have could have a Material Adverse Effect (collectively,
      the “ Intellectual
      Property Rights ”).
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. To the knowledge of the Company, all
      such Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property Rights of
      others.





(p)  Insurance .
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged, including, but not limited to, directors and officers insurance
      coverage. To the best of Company’s knowledge, such insurance contracts and
      policies are accurate and complete. Neither the Company nor any 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 without a
      significant increase in cost.





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(q)  Transactions
      With Affiliates and Employees .
      Except
      as set forth in the SEC Reports, none of the officers or directors of the
      Company and, to the knowledge of the Company, none of the employees of the
      Company is presently a party to any transaction with the Company or any
      Subsidiary (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 entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in each case in excess of $60,000
      other than (i) for payment of salary or consulting fees for services rendered,
      (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
      for
      other employee benefits, including stock option agreements under any stock
      option plan of the Company.





(r)  Sarbanes-Oxley;
      Internal Accounting Controls .
      The
      Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it as of the Closing Date. The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management's general
      or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
      15d-15(e)) for the Company and designed such disclosure controls and procedures
      to ensure that material information relating to the Company, including its
      Subsidiaries, is made known to the certifying officers by others within those
      entities, particularly during the period in which the Company's most recently
      filed periodic report under the Exchange Act, as the case may be, is being
      prepared. The Company's certifying officers have evaluated the effectiveness
      of
      the Company's controls and procedures as of the date prior to the filing date
      of
      the most recently filed periodic report under the Exchange Act (such date,
      the
“ Evaluation
      Date ”).
      The
      Company presented in its most recently filed periodic report under the Exchange
      Act the conclusions of the certifying officers about the effectiveness of the
      disclosure controls and procedures based on their evaluations as of the
      Evaluation Date. Since the Evaluation Date, there have been no significant
      changes in the Company's internal controls (as such term is defined in Item
      307(b) of Regulation S-K under the Exchange Act) or, to the Company's knowledge,
      in other factors that could significantly affect the Company's internal
      controls.





(s)  Certain
      Fees .
      Certain
      brokerage or finder’s fees or commissions are or will be payable by the Company
      to brokers, financial advisors, consultants, finders, placement agents,
      investment bankers, banks or other Persons with respect to the transactions
      contemplated by this Agreement. The Purchasers shall have no obligation with
      respect to any fees or with respect to any claims made by or on behalf of other
      Persons for fees of a type contemplated in this Section that may be due in
      connection with the transactions contemplated by this Agreement.





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(t)  Private
      Placement .
      Assuming the accuracy of the Purchasers representations and warranties set
      forth
      in Section 3.2, no registration under the Securities Act is required for the
      offer and sale of the Securities by the Company to the Purchasers as
      contemplated hereby. The issuance and sale of the Securities hereunder does
      not
      contravene the rules and regulations of the Trading Market.





(u)  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.




(v)  Registration
      Rights .
      No
      Person has any right to cause the Company to effect the registration under
      the
      Securities Act of any securities of the Company, except pursuant to the
      Debenture Placement.





(w)  Listing
      and Maintenance Requirements .
      The
      Company’s Common Stock is registered pursuant to Section 15(d) of the Exchange
      Act, and the Company has taken no action designed to, 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 Commission is contemplating terminating such registration. The Company
      has
      not, in the 12 months preceding the date hereof, received notice from any
      Trading 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 Trading 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.





(x)  Application
      of Takeover Protections .
      The
      Company and its Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Company's Certificate of
      Incorporation (or similar charter documents) or the laws of its state of
      incorporation that is or could become applicable to the Purchasers as a result
      of the Purchasers and the Company fulfilling their obligations or exercising
      their rights under the Transaction Documents, including without limitation
      as a
      result of the Company's issuance of the Securities and the Purchasers’ ownership
      of the Securities.





(y)  Disclosure .
      The
      Company confirms that neither it nor to its knowledge any other Person acting
      on
      its behalf has provided any of the Purchasers or their agents or counsel with
      any information that constitutes or might constitute material, nonpublic
      information. The Company understands and confirms that the Purchasers will
      rely
      on the foregoing representations and covenants in effecting transactions in
      securities of the Company. All disclosure provided to the Purchasers regarding
      the Company, its business and the transactions contemplated hereby, including
      the Disclosure Schedules to this Agreement, furnished by or on behalf of the
      Company with respect to the representations and warranties made herein are
      true
      and correct with respect to such representations and warranties and do not
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading. The Company
      acknowledges and agrees that no Purchaser makes or has made any representations
      or warranties with respect to the transactions contemplated hereby other than
      those specifically set forth in Section 3.2 hereof.





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(z)  No
      Integrated Offering . Assuming
      the accuracy of the Purchasers’ representations and warranties set forth in
      Section 3.2, 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 cause this offering of the Securities to be integrated
      with prior offerings by the Company for purposes of the Securities Act or any
      applicable shareholder approval provisions, including, without limitation,
      under
      the rules and regulations of any exchange or automated quotation system on
      which
      any of the securities of the Company are listed or designated.





(aa)  Solvency .
      Based
      on the financial condition of the Company as of the Closing Date after giving
      effect to the receipt by the Company of the proceeds from the sale of the
      Securities hereunder, (i) the Company's fair saleable value of its assets
      exceeds the amount that will be required to be paid on or in respect of the
      Company's existing debts and other liabilities (including known contingent
      liabilities) as they mature; (ii) the Company's assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year
      as now conducted and as proposed to be conducted including its capital needs
      taking into account the particular capital requirements of the business
      conducted by the Company, and projected capital requirements and capital
      availability thereof; and (iii) the current cash flow of the Company, together
      with the proceeds the Company would receive, were it to liquidate all of its
      assets, after taking into account all anticipated uses of the cash, would be
      sufficient to pay all amounts on or in respect of its debt when such amounts
      are
      required to be paid. The Company does not intend to incur debts beyond its
      ability to pay such debts as they mature (taking into account the timing and
      amounts of cash to be payable on or in respect of its debt). The Company has
      no
      knowledge of any facts or circumstances which lead it to believe that it will
      file for reorganization or liquidation under the bankruptcy or reorganization
      laws of any jurisdiction within one year from the Closing Date. The SEC Reports
      set forth as of the dates thereof all outstanding secured and unsecured
      Indebtedness of the Company or any Subsidiary, or for which the Company or
      any
      Subsidiary has commitments. For the purposes of this Agreement, “ Indebtedness ”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000
      (other than trade accounts payable incurred in the ordinary course of business),
      (b) all guaranties, endorsements and other contingent obligations in respect
      of
      Indebtedness of others, whether or not the same are or should be reflected
      in
      the Company's balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business; and (c) the present value of
      any lease payments
      in excess of $50,000 due under leases required to be capitalized in accordance
      with GAAP. Neither
      the Company nor any Subsidiary is in default with respect to any
      Indebtedness.





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(bb)  Intentionally
      Omitted .





(cc)  Tax
      Status .  Except
      for matters that would not, individually or in the aggregate, have or reasonably
      be expected to result in a Material Adverse Effect, the Company and each
      Subsidiary has filed all necessary federal, state and foreign income and
      franchise tax returns and has paid or accrued all taxes shown as due thereon,
      and the Company has no knowledge of a tax deficiency which has been asserted
      or
      threatened against the Company or any Subsidiary. Has a return been
      filed?





(dd)  No
      General Solicitation .
      Neither
      the Company nor any person acting on behalf of the Company has offered or sold
      any of the Securities by any form of general solicitation or general
      advertising. The Company has offered the Securities for sale only to the
      Purchasers and certain other “accredited investors” within the meaning of Rule
      501 under the Securities Act.





(ee)  Foreign
      Corrupt Practices. Neither
      the Company, nor to the knowledge of the Company, any agent or other person
      acting on behalf of the Company, has (i) directly or indirectly, used any
      corrupt funds for unlawful contributions, gifts, entertainment or other unlawful
      expenses related to foreign or domestic political activity, (ii) made any
      unlawful payment to foreign or domestic government officials or employees or
      to
      any foreign or domestic political parties or campaigns from corporate funds,
      (iii) failed to disclose fully any contribution made by the Company (or made
      by
      any person acting on its behalf of which the Company is aware) which is in
      violation of law, or (iv) violated in any material respect any provision of
      the
      Foreign Corrupt Practices Act of 1977, as amended





(ff)  Accountants .
      The
      Company’s accountants are set forth on Schedule 3.1(ff) of the Disclosure
      Schedule. To the Company’s knowledge, such accountants, who the Company expects
      will express their opinion with respect to the financial statements to be
      included in the Company's Annual Report on Form 10-KSB for the year ending
      September 30, 2006, are a registered public accounting firm as required by
      the
      Securities Act.





(gg)  No
      Disagreements with Accountants and Lawyers. There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the accountants and lawyers formerly or
      presently employed by the Company and the Company is current with respect to
      any
      fees owed to its accountants and lawyers.





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(hh)  Acknowledgment
      Regarding Purchasers’ Purchase of Securities .
      The
      Company acknowledges and agrees that each of the Purchasers is acting solely
      in
      the capacity of an arm's length purchaser with respect to the Transaction
      Documents and the transactions contemplated hereby. The Company further
      acknowledges that no Purchaser is 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 any Purchaser or any
      of
      their respective representatives or agents in connection with this Agreement
      and
      the transactions contemplated hereby is merely incidental to the Purchasers’
purchase of the Securities. The Company further represents to each Purchaser
      that the Company’s decision to enter into this Agreement has been based solely
      on the independent evaluation of the transactions contemplated hereby by the
      Company and its representatives.





3.2  Representations
      and Warranties of the Purchasers .
      Each
      Purchaser hereby, for itself and for no other Purchaser, represents and warrants
      as of the date hereof and as of the Closing Date to the Company as
      follows:





(a)  Organization;
      Authority .
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with full right,
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the Transaction Documents and otherwise to carry
      out its obligations thereunder. The execution, delivery and performance by
      such
      Purchaser of the transactions contemplated by this Agreement have been duly
      authorized by all necessary corporate or similar action on the part of such
      Purchaser. Each Transaction Document to which it is a party has been duly
      executed by such Purchaser, and when delivered by such Purchaser in accordance
      with the terms hereof, will constitute the valid and legally binding obligation
      of such Purchaser, enforceable against it in accordance with its terms, except
      (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law.





(b)  Purchaser
      Representation .
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof, has no present intention of distributing any of such Securities and
      has
      no arrangement or understanding with any other persons regarding the
      distribution of such Securities (this representation and warranty not limiting
      such Purchaser’s right to sell the Securities pursuant to the Registration
      Statement or otherwise in compliance with applicable federal and state
      securities laws). Such Purchaser is acquiring the Securities hereunder in the
      ordinary course of its business. Such Purchaser does not have any agreement
      or
      understanding, directly or indirectly, with any Person to distribute any of
      the
      Securities.





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(c)  Purchaser
      Status .
      At the
      time such Purchaser was offered the Securities, it was, and at the date hereof
      it is, and on each date on which it exercises any Warrants or converts any
      Stock
      it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
      (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
      institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such
      Purchaser is not required to be registered as a broker-dealer under Section
      15
      of the Exchange Act.





(d)  Experience
      of Such Purchaser .
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.





(e)  General
      Solicitation .
      Such
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.





(f)  Short
      Sales .
      Each
      Purchaser represents that prior to 8:30 a.m. ET on the Trading Day immediately
      following the date of this Agreement, neither it nor any Person over which
      the
      Purchaser has direct or indirect control, have made any purchases or sales
      of,
      or granted any option for the purchase of or entered into any hedging or similar
      transaction with the same economic effect as a short sale, of the Common
      Stock.





(g)  Reliance
      on Exemptions .
      Each
      Purchaser 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 Purchaser’s compliance with, the
      representations, warranties, agreements, acknowledgements and understandings
      of
      such Purchaser set forth herein in order to determine the availability of such
      exemptions and the eligibility of such Purchaser to acquire the
      Securities.





(h)  Information .
      Each
      Purchaser and its advisors, if any, have been furnished with all materials
      relating to the business, finances and operations of the Company and materials
      relating to the offer and sale of the Securities which have been requested
      by
      such Purchaser. Such Purchaser and its advisors, if any, have been afforded
      the
      opportunity to ask questions of the Company. Neither such inquiries nor any
      other due diligence investigations conducted by such Purchaser or its advisors,
      if any, or its representatives shall modify, amend or affect such Purchaser’s
      right to rely on the Company’s representations and warranties contained herein.
      Such Purchaser understands that its investment in the Securities involves a
      high
      degree of risk and such Purchaser is able to bear the risk of losing its
      investment in the Securities. Such Purchaser 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. Such Purchaser
      has
      (i) such knowledge and experience, and has made investments of a similar nature,
      so as to be aware of the risks and uncertainties inherent in the transactions
      contemplated by this Agreement, and (ii) independently and without reliance
      upon
      the Company, and based on such information as such Purchaser has deemed
      appropriate, made its own analysis and decision to enter into this Agreement.
      Such Purchaser acknowledges that the Company has not given such Purchaser any
      investment advice, credit information or opinion on whether the purchase of
      the
      Securities is prudent.





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          Purchase Agreement - Page 18 of 74


(i)  No
      Governmental Review .
      Such
      Purchaser 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 nor have such authorities passed upon or endorsed
      the merits of the offering of the Securities.





The
      Company acknowledges and agrees that each Purchaser does not make or has not
      made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this Section
      3.2.





**ARTICLE
      IV.**


**OTHER
      AGREEMENTS OF THE PARTIES**





4.1  Transfer
      Restrictions .





(a)  The
      Securities may only be disposed of in compliance with state and federal
      securities laws. In connection with any transfer of Securities other than
      pursuant to an effective registration statement or Rule 144, to the Company
      or
      to an affiliate of a Purchaser or in connection with a pledge as contemplated
      in
      Section 4.1(b), the Company may require the transferor thereof to provide to
      the
      Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Securities under the Securities
      Act. As a condition of transfer, any such transferee shall agree in writing
      to
      be bound by the terms of this Agreement and shall have the rights of a Purchaser
      under this Agreement and the Registration Rights Exhibit.





(b)  The
      Purchasers agree to the imprinting, so long as is required by this Section
      4.1(b), of a legend on any of the Securities in substantially the following
      form:





[NEITHER]
      THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      [EXERCISABLE] [CONVERTIBLE]] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES
      AND
      EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
      AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE
      "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.





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The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      (including, but not limited to, the Registration Rights Exhibit) and, if
      required under the terms of such arrangement, such Purchaser may transfer
      pledged or secured Securities to the pledgees or secured parties. Such a pledge
      or transfer would not be subject to approval of the Company and no legal opinion
      of legal counsel of the pledgee, secured party or pledgor shall be required
      in
      connection therewith. Further, no notice shall be required of such pledge.
      At
      the appropriate Purchaser’s expense, the Company will execute and deliver such
      reasonable documentation as a pledgee or secured party of Securities may
      reasonably request in connection with a pledge or transfer of the Securities,
      including, if the Securities are subject to registration pursuant to the
      Registration Rights Agreement, the preparation and filing of any required
      prospectus supplement under Rule 424(b)(3) under the Securities Act or other
      applicable provision of the Securities Act to appropriately amend the list
      of
      Selling Stockholders thereunder.





(c)  Certificates
      evidencing the Underlying Shares shall not contain any legend (including the
      legend set forth in Section 4.1(b) hereof): (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such
      Underlying Shares pursuant to Rule 144, or (iii) if such Underlying 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 Commission).
      The
      Company shall cause its counsel to issue a legal opinion to the Company’s
      transfer agent (“Transfer Agent”) promptly after the Effective Date if required
      by the Transfer Agent to effect the removal of the legend hereunder. If all
      or
      any portion of Stock or a Warrant is converted or exercised (as applicable)
      at a
      time when there is an effective registration statement to cover the resale
      of
      the Underlying Shares, or if such Underlying Shares may be sold under Rule
      144(k) or if such legend is not otherwise required under applicable requirements
      of the Securities Act (including judicial interpretations thereof) then such
      Underlying 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 4.1(c), it will, no later than five Trading Days
      (not including time spent by the Transfer Agent) following the delivery by
      a
      Purchaser to the Company or the Transfer Agent of a certificate representing
      Underlying Shares, as applicable, issued with a restrictive legend (such fifth
      Trading Day, in addition to Trading Days required by the Transfer Agent, the
      “ Legend
      Removal Date ”),
      deliver or cause to be delivered to such Purchaser 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.





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(d)  In
      addition to the Purchasers’ other available remedies, the Company shall pay to a
      Purchaser as liquidated damages and not as a penalty, for each $1,000 of
      Underlying Shares (based on the VWAP of the Common Stock on the date such
      Securities are submitted to the Company’s transfer agent) delivered for removal
      of the restrictive legend and subject to this Section 4.1(c), $10 per Trading
      Day (increasing to $20 per Trading Day 25 Trading Days after such damages have
      begun to accrue) for each Trading Day after the Legend Removal Date until such
      certificate is delivered without a legend. Such liquidated damages shall be
      payable in shares of Common Stock, based on the average closing share price
      for
      the 5 Trading Days prior to the Legend Removal Date. The Purchasers shall have
      the right to pursue all remedies available to it at law or in equity including,
      without limitation, a decree of specific performance and/or injunctive
      relief.





(e)  Each
      Purchaser, severally and not jointly with the other Purchasers, agrees that
      the
      removal of the restrictive legend from certificates representing Securities
      as
      set forth in this Section 4.1 is predicated upon the Company’s reliance that the
      Purchaser will sell any Securities pursuant to either the registration
      requirements of the Securities Act, including any applicable prospectus delivery
      requirements, or an exemption therefrom.





4.2  Acknowledgment
      of Dilution .
      The
      Company acknowledges that the issuance of the Securities may result in dilution
      of the outstanding shares of Common Stock. The Company further acknowledges
      that
      its obligations under the Transaction Documents, including without limitation
      its obligation to issue the Underlying Shares pursuant to the Transaction
      Documents, are unconditional and absolute and not subject to any right of set
      off, counterclaim, delay or reduction, regardless of the effect of any such
      dilution or any claim the Company may have against any Purchaser and regardless
      of the dilutive effect that such issuance may have on the ownership of the
      other
      stockholders of the Company.





4.3  Furnishing
      of Information .
      As long
      as any Purchaser owns Securities, the Company covenants to timely file (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. As long as any Purchaser owns Securities, if
      the
      Company is not required to file reports pursuant to the Exchange Act, it will
      prepare and furnish to the Purchasers and make publicly available in accordance
      with Rule 144(c) such information as is required for the Purchasers to sell
      the
      Securities under Rule 144. The Company further covenants that it will take
      such
      further action as any holder of Securities may reasonably request, all to the
      extent required from time to time to enable such Person to sell such Securities
      without registration under the Securities Act within the limitation of the
      exemptions provided by Rule 144.





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4.4  Integration .
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers or that would be integrated with the offer
      or sale of the Securities for purposes of the rules and regulations of any
      Trading Market.





4.5  Conversion
      and Exercise Procedures .
      The
      form of Notice of Exercise included in the Warrants and the form of Notice
      of
      Conversion of Stock included in Exhibit E **** set
      forth
      the totality of the procedures required of the Purchasers in order to exercise
      the Warrants or convert the Stock. No additional legal opinion or other
      information or instructions shall be required of the Purchasers to exercise
      their Warrants or convert their Stock. The Company shall honor exercises of
      the
      Warrants and conversions of the Stock and shall deliver Underlying Shares in
      accordance with the terms, conditions and time periods set forth in the
      Transaction Documents.





4.6  Securities
      Laws Disclosure; Publicity .
      The
      Company shall, by 8:30 a.m. Eastern time on the fourth Trading Day following
      the
      Closing Date, issue a Current Report on Form 8-K, reasonably acceptable to
      the
      Purchasers disclosing the material terms of the transactions contemplated
      hereby, and shall attach the Transaction Documents thereto. The Company and
      the
      Purchasers shall consult with each other in issuing any other press releases
      with respect to the transactions contemplated hereby, and neither the Company
      nor any Purchaser shall issue any such press release or otherwise make any
      such
      public statement without the prior consent of the Company, with respect to
      any
      press release of any Purchaser, or without the prior consent of the Purchasers,
      with respect to any press release of the Company, which consent shall not
      unreasonably be withheld, except if such disclosure is required by law, in
      which
      case the disclosing party shall promptly provide the other party with prior
      notice of such public statement or communication. Notwithstanding the foregoing,
      the Company shall not publicly disclose the name of any Purchaser, or include
      the name of any Purchaser in any filing with the Commission or any regulatory
      agency or Trading Market, without the prior written consent of such Purchaser,
      except (i) as required by federal securities law and (ii) to the extent such
      disclosure is required by law or Trading Market regulations, in which case
      the
      Company shall provide the Purchasers with prior notice of such disclosure
      permitted under subclause (i) or (ii).





4.7  Shareholder
      Rights Plan .
      No
      claim will be made or enforced by the Company or, to the knowledge of the
      Company, any other Person that any Purchaser is an “Acquiring Person” under any
      shareholder rights plan or similar plan or arrangement in effect or hereafter
      adopted by the Company, or that any Purchaser could be deemed to trigger the
      provisions of any such plan or arrangement, by virtue of receiving Securities
      under the Transaction Documents or under any other agreement between the Company
      and the Purchasers. The Company shall conduct its business in a manner so that
      it will not become subject to the Investment Company Act.





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4.8  Non-Public
      Information .
      The
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Purchaser or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Purchaser shall have executed a written agreement regarding
      the confidentiality and use of such information. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing representations
      in effecting transactions in securities of the Company.





4.9  Use
      of
      Proceeds .
      The
      Company shall use the net proceeds from the sale of the Securities hereunder
      for
      working capital purposes or for the satisfaction of any portion of the Company’s
      debt (including payment of trade payables in the ordinary course of the
      Company’s business and prior practices), and for any other proper corporate
      purpose





4.10  Reimbursement .
      If any
      Purchaser becomes involved in any capacity in any Proceeding by or against
      any
      Person who is a stockholder of the Company (except as a result of sales,
      pledges, margin sales and similar transactions by such Purchaser to or with
      any
      current stockholder), solely as a result of such Purchaser’s acquisition of the
      Securities under this Agreement, the Company will reimburse such Purchaser
      for
      its reasonable legal and other expenses (including the cost of any investigation
      preparation and travel in connection therewith) incurred in connection
      therewith, as such expenses are incurred. The reimbursement obligations of
      the
      Company under this paragraph shall be in addition to any liability which the
      Company may otherwise have, shall extend upon the same terms and conditions
      to
      any Affiliates of the Purchasers who are actually named in such action,
      proceeding or investigation, and partners, directors, agents, employees and
      controlling persons (if any), as the case may be, of the Purchasers and any
      such
      Affiliate, and shall be binding upon and inure to the benefit of any successors,
      assigns, heirs and personal representatives of the Company, the Purchasers
      and
      any such Affiliate and any such Person. The Company also agrees that neither
      the
      Purchasers nor any such Affiliates, partners, directors, agents, employees
      or
      controlling persons shall have any liability to the Company or any Person
      asserting claims on behalf of or in right of the Company solely as a result
      of
      acquiring the Securities under this Agreement.





4.11  Indemnification
      of Purchasers .
      Subject
      to the provisions of this Section 4.11, the Company will indemnify and hold
      the
      Purchasers and their directors, officers, shareholders, partners, employees
      and
      agents (each, a “ Purchaser
      Party ”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Purchaser Party may suffer or incur as a result
      of
      or relating to (a) any breach of any of the representations, warranties,
      covenants or agreements made by the Company in this Agreement or in the other
      Transaction Documents or (b) any action instituted against a Purchaser, or
      any
      of them or their respective Affiliates, by any stockholder of the Company who
      is
      not an Affiliate of such Purchaser, with respect to any of the transactions
      contemplated by the Transaction Documents (unless such action is based upon
      a
      breach of such Purchaser’s representation, warranties or covenants under the
      Transaction Documents or any agreements or understandings such Purchaser may
      have with any such stockholder or any violations by the Purchaser of state
      or
      federal securities laws or any conduct by such Purchaser which constitutes
      fraud, gross negligence, willful misconduct or malfeasance). If any action
      shall
      be brought against any Purchaser Party in respect of which indemnity may be
      sought pursuant to this Agreement, such Purchaser Party shall promptly notify
      the Company in writing, and the Company shall have the right to assume the
      defense thereof with counsel of its own choosing. Any Purchaser Party shall
      have
      the right to employ separate counsel in any such action and participate in
      the
      defense thereof, but the fees and expenses of such counsel shall be at the
      expense of such Purchaser Party except to the extent that (i) the employment
      thereof has been specifically authorized by the Company in writing, (ii) the
      Company has failed after a reasonable period of time to assume such defense
      and
      to employ counsel or (iii) in such action there is, in the reasonable opinion
      of
      such separate counsel, a material conflict on any material issue between the
      position of the Company and the position of such Purchaser Party. The Company
      will not be liable to any Purchaser Party under this Agreement (i) for any
      settlement by a Purchaser Party effected without the Company’s prior written
      consent, which shall not be unreasonably withheld or delayed; or (ii) to the
      extent, but only to the extent that a loss, claim, damage or liability is
      attributable to any Purchaser Party’s breach of any of the representations,
      warranties, covenants or agreements made by the Purchasers in this Agreement
      or
      in the other Transaction Documents.





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4.12  Reservation
      and Listing of Securities .





(a)  The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations in full under the Transaction
      Documents.





(b)  If,
      on
      any date, the number of authorized but unissued (and otherwise unreserved)
      shares of Common Stock is less than the Required Minimum on such date, then
      the
      Board of Directors of the Company shall use commercially reasonable efforts
      to
      amend the Company's certificate or articles of incorporation to increase the
      number of authorized but unissued shares of Common Stock to at least the
      Required Minimum at such time, as soon as possible.





(c)  The
      Company shall, if applicable: (i) in the time and manner required by the Trading
      Market, prepare and file with such Trading Market an additional shares listing
      application covering a number of shares of Common Stock at least equal to the
      Required Minimum on the date of such application, (ii) take all steps necessary
      to cause such shares of Common Stock to be approved for listing on the Trading
      Market as soon as possible thereafter, (iii) provide to the Purchasers evidence
      of such listing, and (iv) maintain the listing of such Common Stock on any
      date
      at least equal to the Required Minimum on such date on such Trading Market
      or
      another Trading Market.





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4.13  Participation
      in Future Financing .
      From
      the Closing Date until the one year anniversary of the Effective Date, if the
      Company directly or indirectly undertakes a financing of Common Stock or Common
      Stock Equivalents (a “ Subsequent
      Financing ”),
      each
      Purchaser shall have the right to participate in up to 100% of the Subsequent
      Financing (the “ Participation
      Maximum ”).
      At
      least 5 days prior to the closing of the Subsequent Financing, the Company
      shall
      deliver to each Purchaser a written notice of its intention to effect a
      Subsequent Financing (“ Pre-Notice ”),
      which
      Pre-Notice shall ask such Purchaser if it wants to review the details of such
      financing (such additional notice, a “ Subsequent
      Financing Notice ”).
      Upon
      the request of a Purchaser, and only upon a request by such Purchaser, for
      a
      Subsequent Financing Notice, the Company shall promptly, but no later than
      1
      Trading Day after such request, deliver a Subsequent Financing Notice to such
      Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
      the proposed terms of such Subsequent Financing, the amount of proceeds intended
      to be raised thereunder, the Person with whom such Subsequent Financing is
      proposed to be effected, and attached to which shall be a term sheet or similar
      document relating thereto. If by 5:30 p.m. (New York City time) on the
      5 th day
      after
      all of the Purchasers have received the Pre-Notice, notifications by the
      Purchasers of their willingness to participate in the Subsequent Financing
      (or
      to cause their designees to participate) is, in the aggregate, less than the
      total amount of the Subsequent Financing, then the Company may effect the
      remaining portion of such Subsequent Financing on the terms and to the Persons
      set forth in the Subsequent Financing Notice. If the Company receives no notice
      from a Purchaser as of such 5 th day,
      such Purchaser shall be deemed to have notified the Company that it does not
      elect to participate. The Company must provide the Purchasers with a second
      Subsequent Financing Notice, and the Purchasers will again have the right of
      participation set forth above in this Section 4.13, if the Subsequent Financing
      subject to the initial Subsequent Financing Notice is not consummated for any
      reason on the terms set forth in such Subsequent Financing Notice within 60
      Trading Days after the date of the initial Subsequent Financing Notice. In
      the
      event the Company receives responses to Subsequent Financing Notices from
      Purchasers seeking to purchase more than the aggregate amount of the Subsequent
      Financing, each such Purchaser shall have the right to purchase their Pro Rata
      Portion (as defined below) of the Participation Maximum. “ Pro
      Rata Portion ”
is
      the
      ratio of (x) the Subscription Amount of Securities purchased by a participating
      Purchaser and (y) the sum of the aggregate Subscription Amount of all
      participating Purchasers. Notwithstanding the foregoing, this Section 4.13
      shall
      not apply in respect of an Exempt Issuance.





4.14  Equal
      Treatment of Purchasers .
      No
      consideration shall be offered or paid to any person to amend or consent to
      a
      waiver or modification of any provision of any of the Transaction Documents
      unless the same consideration is also offered to all of the parties to the
      Transaction Documents. For clarification purposes, this provision constitutes
      a
      separate right granted to each Purchaser by the Company and negotiated
      separately by each Purchaser, and is intended to treat for the Company the
      Purchasers as a class and shall not in any way be construed as the Purchasers
      acting in concert or as a group with respect to the purchase, disposition or
      voting of Securities or otherwise.





4.15  Most
      Favored Nation Provision .
      Any
      time the Company effects a Subsequent Financing, each Purchaser may elect,
      in
      its sole discretion, to exchange all or some of its Stock and Warrants (treated
      for this purpose only as a unit) then held by it for the securities issued
      in a
      Subsequent Financing based on the then outstanding principal amount of the
      Stock
      plus accrued but unpaid interest and any other fees then owed by the Company
      to
      the Purchaser, and the effective price at which such securities are sold in
      such
      Subsequent Financing.





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**ARTICLE
      V.**


**MISCELLANEOUS**





5.1  Termination .
      This
      Agreement may be terminated by any Purchaser, by written notice to the other
      parties, if the Closing has not been consummated on or before December 15,
      2005;
      provided that no such termination will affect the right of any party to sue
      for
      any breach by the other party (or parties).





5.2  Fees
      and Expenses .
      At the
      Closing, the Company has agreed to reimburse a placement agent actual fees
      of
      its legal counsel (not to exceed $35,000) and for other actual reasonable
      expenses. Except as expressly set forth in the Transaction Documents to the
      contrary, each party shall pay the fees and expenses of its advisers, counsel,
      accountants and other experts, if any, and all other expenses incurred by such
      party incident to the negotiation, preparation, execution, delivery and
      performance of this Agreement. The Company shall pay all transfer agent fees,
      stamp taxes and other taxes and duties levied in connection with the issuance
      of
      any Securities.





5.3  Entire
      Agreement .
      The
      Transaction Documents, together with the exhibits and schedules thereto, contain
      the entire understanding of the parties with respect to the subject matter
      hereof and supersede all prior agreements and understandings, oral or written,
      with respect to such matters, which the parties acknowledge have been merged
      into such documents, exhibits and schedules.





5.4  Notices .
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number set forth on the signature
      pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading
      Day,
      (b) the next Trading Day after the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number set forth
      on
      the signature pages attached hereto on a day that is not a Trading Day or later
      than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading
      Day following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to whom
      such
      notice is required to be given. The address for such notices and communications
      shall be as set forth on the signature pages attached hereto.





5.5  Amendments;
      Waivers .
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and the
      Purchasers or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right. The Purchasers agree that amendments
      and
      waivers hereunder shall be made by an Agent acting at the direction of a
      Majority in Interest, pursuant to Section 5.18, below .





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5.6  Construction .
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. 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.





5.7  Successors
      and Assigns .
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Purchasers. Any Purchaser may assign any or all of its rights
      under this Agreement to any Person to whom such Purchaser assigns or transfers
      any Securities, provided such transferee agrees in writing to be bound, with
      respect to the transferred Securities, by the provisions hereof that apply
      to
      the “Purchasers”.





5.8  No
      Third-Party Beneficiaries .
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except as otherwise set
      forth
      in Section 4.11.





5.9  Governing
      Law .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of the Transaction Documents shall be governed by and construed and enforced
      in
      accordance with the internal laws of the State of New York, without regard
      to
      the principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement and any other Transaction Documents
      (whether brought against a party hereto or its respective affiliates, directors,
      officers, shareholders, employees or agents) shall be commenced exclusively
      in
      the state and federal courts sitting in the City of New York. Each party hereby
      irrevocably submits to the exclusive jurisdiction of the state and federal
      courts sitting in the City of New York, borough of Manhattan for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein (including with respect
      to
      the enforcement of any of the Transaction Documents), and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is improper or inconvenient venue for such
      proceeding. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof via registered or certified mail or overnight delivery
      (with evidence of delivery) to such party at the address in effect for notices
      to it under this Agreement and agrees that such service shall constitute good
      and sufficient service of process and notice thereof. Nothing contained herein
      shall be deemed to limit in any way any right to serve process in any manner
      permitted by law. The parties hereby waive all rights to a trial by jury. If
      either party shall commence an action or proceeding to enforce any provisions
      of
      the Transaction Documents, then the prevailing party in such action or
      proceeding shall be reimbursed by the other party for its attorneys’ fees and
      other costs and expenses incurred with the investigation, preparation and
      prosecution of such action or proceeding.





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5.10  Survival .
      The
      representations and warranties contained herein shall survive the Closing and
      the delivery, exercise and/or conversion of the Securities, as applicable for
      the applicable statue of limitations.





5.11  Execution .
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together 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, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.





5.12  Severability .
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.





5.13  Rescission
      and Withdrawal Right .
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever any Purchaser
      exercises a right, election, demand or option under a Transaction Document
      and
      the Company does not timely perform its related obligations within the periods
      therein provided, then such Purchaser may rescind or withdraw, in its sole
      discretion from time to time upon written notice to the Company, any relevant
      notice, demand or election in whole or in part without prejudice to its future
      actions and rights; provided , however ,
      in the
      case of a rescission of a conversion of Stock or exercise of a Warrant, the
      Purchaser shall be required to return any shares of Common Stock subject to
      any
      such rescinded conversion or exercise notice.





5.14  Replacement
      of Securities .
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any reasonable
      third-party costs associated with the issuance of such replacement
      Securities.





5.15  Remedies .
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law (and in accordance with Section 5.18, below), including recovery of damages,
      both the Purchasers and the Company will be entitled to specific performance
      under the Transaction Documents. The parties agree that monetary damages may
      not
      be adequate compensation for any loss incurred by reason of any breach of
      obligations described in the foregoing sentence and hereby agrees to waive
      in
      any action for specific performance of any such obligation the defense that
      a
      remedy at law would be adequate.





Securities
          Purchase Agreement - Page 28 of 74


5.16  Payment
      Set Aside .
      To the
      extent that the Company makes a payment or payments to any Purchaser pursuant
      to
      any Transaction Document or a Purchaser enforces or exercises its rights
      thereunder, and such payment or payments or the proceeds of such enforcement
      or
      exercise or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside, recovered from, disgorged by or are
      required to be refunded, repaid or otherwise restored to the Company, a trustee,
      receiver or any other person under any law (including, without limitation,
      any
      bankruptcy law, state or federal law, common law or equitable cause of action),
      then to the extent of any such restoration the obligation or part thereof
      originally intended to be satisfied shall be revived and continued in full
      force
      and effect as if such payment had not been made or such enforcement or setoff
      had not occurred.





5.17  Usury .
      To the
      extent it may lawfully do so, the Company hereby agrees not to insist upon
      or
      plead or in any manner whatsoever claim, and will resist any and all efforts
      to
      be compelled to take the benefit or advantage of, usury laws wherever enacted,
      now or at any time hereafter in force, in connection with any claim, action
      or
      proceeding that may be brought by any Purchaser in order to enforce any right
      or
      remedy under any Transaction Document. Notwithstanding any provision to the
      contrary contained in any Transaction Document, it is expressly agreed and
      provided that the total liability of the Company under the Transaction Documents
      for payments in the nature of interest shall not exceed the maximum lawful
      rate
      authorized under applicable law (the “ Maximum
      Rate ”),
      and,
      without limiting the foregoing, in no event shall any rate of interest or
      default interest, or both of them, when aggregated with any other sums in the
      nature of interest that the Company may be obligated to pay under the
      Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
      contract rate of interest allowed by law and applicable to the Transaction
      Documents is increased or decreased by statute or any official governmental
      action subsequent to the date hereof, the new maximum contract rate of interest
      allowed by law will be the Maximum Rate applicable to the Transaction Documents
      from the effective date forward, unless such application is precluded by
      applicable law. If under any circumstances whatsoever, interest in excess of
      the
      Maximum Rate is paid by the Company to any Purchaser with respect to
      indebtedness evidenced by the Transaction Documents, such excess shall be
      applied by such Purchaser to the unpaid principal balance of any such
      indebtedness or be refunded to the Company, the manner of handling such excess
      to be at such Purchaser's election.





5.18  Independent
      Nature of Purchasers’ Obligations and Rights .
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. Nothing contained herein or in any
      Transaction Document, and no action taken by any Purchaser pursuant thereto,
      shall be deemed to constitute the Purchasers as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Purchasers are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Document. Each
      Purchaser shall be entitled to independently defend its rights, including
      without limitation the rights arising out of this Agreement or out of the other
      Transaction Documents, and it shall not be necessary for any other Purchaser
      to
      be joined as an additional party in any proceeding for such purpose. However,
      the Purchasers hereby
      appoint TRIUMPH RESEARCH PARTNERS LLC to act as their agent (“ Agent ”)
      for
      purposes of convenience in exercising, modifying or waiving any and all rights
      and remedies of the Purchasers hereunder, with the exception of the exercise
      of
      Conversion rights as set forth in the Certificate of Designation of Series
      B-1
      Convertible Preferred Stock. Such appointment shall continue until revoked
      in
      writing by a Majority
      in Interest, at which time a Majority in Interest shall
      appoint a new Agent. The Agent shall have the rights, responsibilities and
      immunities and shall act at the direction of a Majority in Interest, all as
      set
      forth in the Agency Agreement attached as Exhibit F hereto. Each
      Purchaser has been represented by its own separate legal counsel in their review
      and negotiation of the Transaction Documents. The Company has elected to provide
      all Purchasers with the same terms and Transaction Documents for the convenience
      of the Company and not because it was required or requested to do so by the
      Purchasers.





Securities
          Purchase Agreement - Page 29 of 74


5.19  Liquidated
      Damages .
      The
      Company’s obligations to pay any partial liquidated damages or other amounts
      owing under the Transaction Documents is a continuing obligation of the Company
      and shall not terminate until all unpaid partial liquidated damages and other
      amounts have been paid notwithstanding the fact that the instrument or security
      pursuant to which such partial liquidated damages or other amounts are due
      and
      payable shall have been canceled.






**[** **SIGNATURE
      PAGES FOLLOW** **]**






















Securities
          Purchase Agreement - Page 30 of 74


IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
      Agreement to be duly executed by their respective authorized signatories as
      of
      the date first indicated above.




**TECHNOCONCEPTS,
                INC.**
            Address
                for Notice:
              6060
                Sepulveda Blvd, Suite 202
              Van
                Nuys, CA 91411By:__________________________________________
              Name: Antonio Turgeon
              Title: Chairman & CEOWith
                a copy to (which shall not constitute notice):
              David
                Kagel, Esq.
              1801
                Century Park E 25th Fl
              Los
                Angeles, CA 90067





**[REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK**


**SIGNATURE
      PAGES FOR PURCHASERS FOLLOW]**








Securities
          Purchase Agreement - Page 31 of 74











[PURCHASER
      SIGNATURE PAGES TO TCPS SECURITIES PURCHASE AGREEMENT]





IN
      WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
      to be duly executed by their respective authorized signatories as of the date
      first indicated above.








Name
      of
      Investing Entity:
      ________________________________________________________








*Signature
      of Authorized Signatory of Investing Entity* :
      __________________________________


Name
      of
      Authorized Signatory:
      ____________________________________________________


Title
      of
      Authorized Signatory:
      _____________________________________________________


Email
      Address of Authorized
      Entity:________________________________________________





Address
      for Notice of Investing Entity:














Address
      for Delivery of Securities for Investing Entity (if not same as
      above):

















Subscription
      Amount: ____________________________


Preferred
      Shares: ________________________________


Warrant
      Shares:  ________________________________


EIN
      Number: *[PROVIDE
      THIS UNDER SEPARATE COVER]*




**[SIGNATURE
      PAGES CONTINUE]**






Securities
          Purchase Agreement - Page 32 of 74





**EXHIBIT
      A**





**SCHEDULE
      OF INVESTORS**








Name
            Purchase
                Amount
            Shares
            Warrants
            Exercise
              Price$3.00$4.00$3.00$4.00$3.00$4.00$3.00$4.00$3.00$4.00$3.00$4.00$3.00$4.00




Securities
          Purchase Agreement - Page 33 of 74




**EXHIBIT
      B**





**REGISTRATION
      RIGHTS**








This
      Exhibit is attached to and a part of the Securities Purchase Agreement, dated
      as
      of the date hereof, among the Company and the Purchasers (the “ Purchase
      Agreement ”).





By
      their
      acceptance of the benefits of the Purchase Agreement, the
      Company and the Purchasers have agreed as follows:





1. Additional
      Definitions





**Capitalized
      terms used and not otherwise defined herein that are defined in the Purchase
      Agreement shall have the meanings given such terms in the Purchase
      Agreement.** As used
      in this Exhibit, the following terms shall have the following
      meanings:





“ Advice ”
shall
      have the meaning set forth in Section 6(d).





“ Effectiveness
      Date ”
means,
      with respect to the initial Registration Statement required to be filed
      hereunder, the 180 th calendar
      day following the Closing Date and, with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 120 th calendar
      day following the date on which the Company first knows, or reasonably should
      have known, that such additional Registration Statement is required hereunder; provided , however ,
      in the
      event the Company is notified by the Commission that one of the above
      Registration Statements will not be reviewed or is no longer subject to further
      review and comments, the Effectiveness Date as to such Registration Statement
      shall be the fifth Trading Day following the date on which the Company is so
      notified if such date precedes the dates required above.





“ Effectiveness
      Period ”
shall
      have the meaning set forth in Section 2(a).





“ Event ”
shall
      have the meaning set forth in Section 2(b).





“ Event
      Date ”
shall
      have the meaning set forth in Section 2(b).





“ Filing
      Date ”
means,
      with respect to the initial Registration Statement required hereunder, the
      45 th calendar
      day following the Closing Date, and with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 45 th calendar
      day following the date on which the Company first knows, or reasonably should
      have known that such additional Registration Statement is required
      hereunder.





“ Holder ”
or
      “ Holders ”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.





Securities
          Purchase Agreement - Page 34 of 74


“ Indemnified
      Party ”
shall
      have the meaning set forth in Section 5(c).





“ Indemnifying
      Party ”
shall
      have the meaning set forth in Section 5(c).





“ Losses ”
shall
      have the meaning set forth in Section 5(a).





“ Proceeding ”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened.





“ Prospectus ”
means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by a Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.





“ Registrable
      Securities ”
means
      (i) all of the shares of Common Stock purchased pursuant to the Purchase
      Agreement, (ii) all Warrant Shares, (iii) any securities issued or issuable
      upon
      any stock split, dividend or other distribution recapitalization or similar
      event with respect to the foregoing and (iv) any additional shares issuable
      in
      connection with any anti-dilution provisions in the Warrants.




“ Registration
      Statement ”
means
      the registration statements required to be filed hereunder and any additional
      registration statements contemplated by Section 3(c), including (in each case)
      the Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.





“ Rule
      424 ”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.





2.  Registration





(a)
      On or
      prior to each Filing Date, the Company shall prepare and file with the
      Commission a Registration Statement on Form SB-2 covering the resale of 125%
      of
      the Registrable Securities on such Filing Date and
      containing (unless otherwise directed by a majority in interest of the Holders)
      substantially the “Plan of Distribution” attached hereto as Annex
      B-1 . If
      the
      Company is not then eligible to register for resale the Registrable Securities
      on Form SB-2, such registration shall be on another appropriate form in
      accordance herewith. Subject to the terms of this Agreement, the Company shall
      use its reasonable best efforts to cause the Registration Statement to be
      declared effective under the Securities Act as promptly as possible after the
      filing thereof, but in any event prior to the applicable Effectiveness Date,
      and
      shall use its reasonable best efforts to keep such Registration Statement
      continuously effective under the Securities Act until all Registrable Securities
      covered by such Registration Statement have been sold or may be sold without
      volume restrictions pursuant to Rule 144(k) as determined by the counsel to
      the
      Company pursuant to a written opinion letter to such effect, addressed and
      acceptable to the Company’s transfer agent and the affected Holders (the
“ Effectiveness
      Period ”).
      The
      Company shall immediately notify the Holders via facsimile of the effectiveness
      of the Registration Statement within 1 Trading Day that the Company receives
      notification of the effectiveness from the Commission. Failure to so notify
      the
      Holder within 1 Trading Day of such notification shall be deemed an Event under
      Section 2(b).





Securities
          Purchase Agreement - Page 35 of 74


(b)
      If:
      (i) a Registration Statement is not filed on or prior to its Filing Date, or
      (ii) the Company fails to file with the Commission a request for acceleration
      in
      accordance with Rule 461 promulgated under the Securities Act, within five
      Trading Days of the date that the Company is notified (orally or in writing,
      whichever is earlier) by the Commission that a Registration Statement will
      not
      be “reviewed,” or not subject to further review, or (iii) intentionally omitted,
      or (iv) a Registration Statement filed or required to be filed hereunder is
      not
      declared effective by the Commission by its Effectiveness Date, or (v) after
      the
      Effectiveness Date, a Registration Statement ceases for any reason to remain
      continuously effective as to all Registrable Securities for which it is required
      to be effective, or the Holders are not permitted to utilize the Prospectus
      therein to resell such Registrable Securities for 10 consecutive calendar days
      but no more than an aggregate of 15 calendar days during any 12-month period
      (which need not be consecutive Trading Days) (any such failure or breach being
      referred to as an “ Event ”,
      and
      for purposes of clause (i) or (iv) the date on which such Event occurs, or
      for
      purposes of clause (ii) the date on which such five Trading Day period is
      exceeded, or for purposes of clause (v) the date on which such 10 or 15 calendar
      day period, as applicable, is exceeded being referred to as “ Event
      Date ”),
      then
      in addition to any other rights the Holders may have hereunder or under
      applicable law, on each such Event Date the Company shall pay to each Holder,
      as
      liquidated damages and not as a penalty, an amount equal to 1.0% of the
      aggregate purchase price paid by such Holder pursuant to the Purchase Agreement
      for any Registrable Securities then held by such Holder. On each monthly
      anniversary of each such Event Date (if the applicable Event shall not have
      been
      cured by such date) until the applicable Event is cured, the Company shall
      pay
      to each Holder, as liquidated damages and not as a penalty, an amount equal
      to
      1.0% of the aggregate purchase price paid by such Holder pursuant to the
      Purchase Agreement for any Registrable Securities then held by such Holder.
      If
      the Company fails to pay any partial liquidated damages pursuant to this Section
      in full within seven days after the date payable, the Company will pay interest
      thereon at a rate of 18% per annum (or such lesser maximum amount that is
      permitted to be paid by applicable law) to the Holder, accruing daily from
      the
      date such partial liquidated damages are due until such amounts, plus all such
      interest thereon, are paid in full. The liquidated damages pursuant to the
      terms
      hereof shall apply on a daily pro-rata basis for any portion of a month prior
      to
      the cure of an Event. Such liquidated damages and interest, if any, shall be
      payable in shares of Common Stock, based on the average closing share price
      for
      the 5 Trading Days prior to the date that such liquidated damages or interest
      accrue.





Securities
          Purchase Agreement - Page 36 of 74


3. Registration
      Procedures





In
      connection with the Company’s registration obligations hereunder, the Company
      shall:





(a)  Not
      less
      than 15 Trading Days prior to the filing of each Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto (including any
      document that would be incorporated or deemed to be incorporated therein by
      reference), the Company shall, (i) furnish to each Holder copies of all such
      documents proposed to be filed, which documents (other than those incorporated
      or deemed to be incorporated by reference) will be subject to the review of
      such
      Holders, and (ii) cause its officers and directors, counsel and independent
      certified public accountants to respond to such inquiries as shall be necessary,
      in the reasonable opinion of respective counsel to conduct a reasonable
      investigation within the meaning of the Securities Act. The Company shall not
      file the Registration Statement or any such Prospectus or any amendments or
      supplements thereto to which the Holders of a majority of the Registrable
      Securities shall reasonably object in good faith, provided that, the Company
      is
      notified of such objection in writing no later than 5 Trading Days after the
      Holders have been so furnished copies of such documents and have agreed to
      indemnify the Company and waive any penalties. Each Holder agrees to furnish
      to
      the Company a completed Questionnaire in the form attached to this Agreement
      as
      Annex B-2 (a **“** Selling
      Holder Questionnaire **”** )
      not
      less than 10 Trading Days prior to the Filing Date or by the end of the fourth
      Trading Day following the date on which such Holder receives draft materials
      in
      accordance with this Section.





(b)  (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement (subject to the terms of
      this
      Agreement), and as so supplemented or amended to be filed pursuant to Rule
      424;
      (iii) respond as promptly as reasonably possible to any comments received from
      the Commission with respect to a Registration Statement or any amendment thereto
      and as promptly as reasonably possible provide the Holders true and complete
      copies of all correspondence from and to the Commission relating to a
      Registration Statement; and (iv) comply in all material respects with the
      provisions of the Securities Act and the Exchange Act with respect to the
      disposition of all Registrable Securities covered by a Registration Statement
      during the applicable period in accordance (subject to the terms of this
      Agreement) with the intended methods of disposition by the Holders thereof
      set
      forth in such Registration Statement as so amended or in such Prospectus as
      so
      supplemented.





Securities
          Purchase Agreement - Page 37 of 74


(c)  Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend
      the use of the Prospectus until the requisite changes have been made) as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      five Trading Days prior to such filing) and (if requested by any such Person)
      confirm such notice in writing no later than one Trading Day following the
      day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement (the Company shall provide true and complete copies
      thereof and all written responses thereto to each of the Holders); and (C)
      with
      respect to a Registration Statement or any post-effective amendment, when the
      same has become effective; (ii) of any request by the Commission or any other
      Federal or state governmental authority for amendments or supplements to a
      Registration Statement or Prospectus or for additional information; (iii) of
      the
      issuance by the Commission or any other federal or state governmental authority
      of any stop order suspending the effectiveness of a Registration Statement
      covering any or all of the Registrable Securities or the initiation of any
      Proceedings for that purpose; (iv) of the receipt by the Company of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; (v) of the occurrence of any event or passage of time that makes the
      financial statements included in a Registration Statement ineligible for
      inclusion therein or any statement made in a Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires any revisions to
      a
      Registration Statement, Prospectus or other documents so that, in the case
      of a
      Registration Statement or the Prospectus, as the case may be, it will not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading; and
      (vi) the occurrence or existence of any pending corporate development with
      respect to the Company that the Company believes may be material and that,
      in
      the determination of the Company, makes it not in the best interest of the
      Company to allow continued availability of the Registration Statement or
      Prospectus; provided that any and all of such information shall remain
      confidential to each Holder until such information otherwise becomes public,
      unless disclosure by a Holder is required by law; provided , further ,
      notwithstanding each Holder’s agreement to keep such information confidential,
      the Holders make no acknowledgement that any such information is material,
      non-public information.





(d)  Use
      its
      reasonable best efforts to avoid the issuance of, or, if issued, obtain the
      withdrawal of (i) any order suspending the effectiveness of a Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.





(e)  Furnish
      to each Holder, without charge, at least one conformed copy of each such
      Registration Statement and each amendment thereto, including financial
      statements and schedules, all documents incorporated or deemed to be
      incorporated therein by reference to the extent requested by such Person, and
      all exhibits to the extent requested by such Person (including those previously
      furnished or incorporated by reference) promptly after the filing of such
      documents with the Commission.





Securities
          Purchase Agreement - Page 38 of 74


(f)  Promptly
      deliver to each Holder, without charge, as many copies of the Prospectus or
      Prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as such Persons may reasonably request in connection with
      resales by the Holder of Registrable Securities. Subject to the terms of this
      Agreement, the Company hereby consents to the use of such Prospectus and each
      amendment or supplement thereto by each of the selling Holders in connection
      with the offering and sale of the Registrable Securities covered by such
      Prospectus and any amendment or supplement thereto, except after the giving
      on
      any notice pursuant to Section 3(d).





(g)  Prior
      to
      any resale of Registrable Securities by a Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the selling Holders
      in connection with the registration or qualification (or exemption from the
      Registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep each
      registration or qualification (or exemption therefrom) effective during the
      Effectiveness Period and to do any and all other acts or things reasonably
      necessary to enable the disposition in such jurisdictions of the Registrable
      Securities covered by each Registration Statement; provided, that the Company
      shall not be required to qualify generally to do business in any jurisdiction
      where it is not then so qualified, subject the Company to any material tax
      in
      any such jurisdiction where it is not then so subject or file a general consent
      to service of process in any such jurisdiction.





(h)  If
      requested by the Holders, cooperate with the Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to a Registration Statement, which
      certificates shall be free, to the extent permitted by the Purchase Agreement,
      of all restrictive legends, and to enable such Registrable Securities to be
      in
      such denominations and registered in such names as any such Holders may
      request.





**(i)**  Upon
      the
      occurrence of any event contemplated by this Section 3, as promptly as
      reasonably possible under the circumstances taking into account the Company’s
      good faith assessment of any adverse consequences to the Company and its
      stockholders of the premature disclosure of such event, prepare a supplement
      or
      amendment, including a post-effective amendment, to a Registration Statement
      or
      a supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading **.** **** If
      the
      Company notifies the Holders in accordance with clauses (ii) through (v) of
      Section 3(d) above to suspend the use of any Prospectus until the requisite
      changes to such Prospectus have been made, then the Holders shall suspend use
      of
      such Prospectus. The Company will use its best efforts to ensure that the use
      of
      the Prospectus may be resumed as promptly as is practicable. The Company shall
      be entitled to exercise its right under this Section 3(j) to suspend the
      availability of a Registration Statement and Prospectus, subject to the payment
      of partial liquidated damages pursuant to Section 2(b), for a period not to
      exceed 60 days (which need not be consecutive days) in any 12 month
      period **.**





Securities
          Purchase Agreement - Page 39 of 74


(j)  Comply
      with all applicable rules and regulations of the Commission.





(k)  The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to the number of shares of Common Stock beneficially owned by
      such
      Holder and, if required by the Commission, the person thereof that has voting
      and dispositive control over the Shares. During any periods that the Company
      is
      unable to meet its obligations hereunder with respect to the registration of
      the
      Registrable Securities solely because any Holder fails to furnish such
      information within three Trading Days of the Company’s request, any liquidated
      damages that are accruing at such time shall be tolled and any Event that may
      otherwise occur solely because of such delay shall be suspended, until such
      information is delivered to the Company.





(l)  The
      Company may require each holder of Registrable Securities to be sold pursuant
      to
      the Registration Statement to enter into a Nondisclosure Agreement with the
      Company to protect such nonpublic information as the Company may from time
      to
      time deem reasonably necessary to protect. The Company may exclude from the
      Registration Statement the Registrable Securities of any holder that
      unreasonably fails to enter into such a Nondisclosure Agreement.





4. Registration
      Expenses .
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to the Registration Statement. The
      fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with the
      Trading Market on which the Common Stock is then listed for trading, and (B)
      in
      compliance with applicable state securities or Blue Sky laws reasonably agreed
      to by the Company in writing (including, without limitation, fees and
      disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities and determination
      of
      the eligibility of the Registrable Securities for investment under the laws
      of
      such jurisdictions as requested by the Holders), (ii) printing expenses
      (including, without limitation, expenses of printing certificates for
      Registrable Securities and of printing prospectuses if the printing of
      prospectuses is reasonably requested by the holders of a majority of the
      Registrable Securities included in a Registration Statement), (iii) messenger,
      telephone and delivery expenses, (iv) fees and disbursements of counsel for
      the
      Company, (v) Securities Act liability insurance, if the Company so desires
      such
      insurance, and (vi) fees and expenses of all other Persons retained by the
      Company in connection with the consummation of the transactions contemplated
      by
      this Agreement. In addition, the Company shall be responsible for all of its
      internal expenses incurred in connection with the consummation of the
      transactions contemplated by this Agreement (including, without limitation,
      all
      salaries and expenses of its officers and employees performing legal or
      accounting duties), the expense of any annual audit and the fees and expenses
      incurred in connection with the listing of the Registrable Securities on any
      securities exchange as required hereunder. In no event shall the Company be
      responsible for any broker or similar commissions or, except to the extent
      provided for in the Transaction Documents, any legal fees or other costs of
      the
      Holders.





Securities
          Purchase Agreement - Page 40 of 74


5. Indemnification





(a) Indemnification
      by the Company .
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, agents, brokers (including
      brokers who offer and sell Registrable Securities as principal as a result
      of a
      pledge or any failure to perform under a margin call of Common Stock),
      investment advisors and employees of each of them, each Person who controls
      any
      such Holder (within the meaning of Section 15 of the Securities Act or Section
      20 of the Exchange Act) and the officers, directors, agents and employees of
      each such controlling Person, to the fullest extent permitted by applicable
      law,
      from and against any and all losses, claims, damages, liabilities, costs
      (including, without limitation, reasonable attorneys’ fees) and expenses
      (collectively, “ Losses ”),
      as
      incurred, arising out of or relating to any untrue or alleged untrue statement
      of a material fact contained in a Registration Statement, any Prospectus or
      any
      form of prospectus or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein (in the case of any Prospectus or form of prospectus
      or
      supplement thereto, in light of the circumstances under which they were made)
      not misleading, except to the extent, but only to the extent, that (i) such
      untrue statements or omissions are based solely upon information regarding
      such
      Holder furnished in writing to the Company by such Holder expressly for use
      therein, or to the extent that such information relates to such Holder or such
      Holder’s proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Holder expressly for use
      in a
      Registration Statement, such Prospectus or such form of Prospectus or in any
      amendment or supplement thereto (it being understood that the Holder has
      approved Annex B-1 hereto for this purpose) or (ii) in the case of an occurrence
      of an event of the type specified in Section 3(d)(ii)-(vi), the use by such
      Holder of an outdated or defective Prospectus after the Company has notified
      such Holder in writing that the Prospectus is outdated or defective and prior
      to
      the receipt by such Holder of the Advice contemplated in Section 6(d). The
      Company shall notify the Holders promptly of the institution, threat or
      assertion of any Proceeding arising from or in connection with the transactions
      contemplated by this Agreement of which the Company is aware.





(b) Indemnification
      by Holders .
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, to the extent arising out of or based
      solely upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue or alleged untrue statement
      of a material fact contained in any Registration Statement, any Prospectus,
      or
      any form of prospectus, or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading (i) to the extent, but only to the extent,
      that such untrue statement or omission is contained in any information so
      furnished in writing by such Holder to the Company specifically for inclusion
      in
      such Registration Statement or such Prospectus or (ii) to the extent that (1)
      such untrue statements or omissions are based solely upon information regarding
      such Holder furnished in writing to the Company by such Holder expressly for
      use
      therein, or to the extent that such information relates to such Holder or such
      Holder’s proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Holder expressly for use
      in
      the Registration Statement (it being understood that the Holder has approved
      Annex B-1 hereto for this purpose), such Prospectus or such form of Prospectus
      or in any amendment or supplement thereto or (2) in the case of an occurrence
      of
      an event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder
      of an outdated or defective Prospectus after the Company has notified such
      Holder in writing that the Prospectus is outdated or defective and prior to
      the
      receipt by such Holder of the Advice contemplated in Section 6(d). In no event
      shall the liability of any selling Holder hereunder be greater in amount than
      the dollar amount of the net proceeds received by such Holder upon the sale
      of
      the Registrable Securities giving rise to such indemnification
      obligation.





Securities
          Purchase Agreement - Page 41 of 74


(c) Conduct
      of Indemnification Proceedings .
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “ Indemnified
      Pa rty”),
      such Indemnified Party shall promptly notify the Person from whom indemnity
      is
      sought (the “ Indemnifying
      Party ”)
      in
      writing, and the Indemnifying Party shall have the right to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and only) to
      the
      extent that it shall be finally determined by a court of competent jurisdiction
      (which determination is not subject to appeal or further review) that such
      failure shall have prejudiced the Indemnifying Party.





An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying Party shall have failed promptly to assume the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (3) the named parties to any such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and such Indemnified Party shall reasonably believe
      that a material conflict of interest is likely to exist if the same counsel
      were
      to represent such Indemnified Party and the Indemnifying Party (in which case,
      if such Indemnified Party notifies the Indemnifying Party in writing that it
      elects to employ separate counsel at the expense of the Indemnifying Party,
      the
      Indemnifying Party shall not have the right to assume the defense thereof and
      the reasonable fees and expenses of one separate counsel shall be at the expense
      of the Indemnifying Party). The Indemnifying Party shall not be liable for
      any
      settlement of any such Proceeding effected without its written consent, which
      consent shall not be unreasonably withheld. No Indemnifying Party shall, without
      the prior written consent of the Indemnified Party, effect any settlement of
      any
      pending Proceeding in respect of which any Indemnified Party is a party, unless
      such settlement includes an unconditional release of such Indemnified Party
      from
      all liability on claims that are the subject matter of such
      Proceeding.





Securities
          Purchase Agreement - Page 42 of 74


Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within ten Trading Days of written notice thereof to the
      Indemnifying Party; provided, that the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and expenses
      applicable to such actions for which such Indemnified Party is not entitled
      to
      indemnification hereunder, determined based upon the relative faults of the
      parties.





(d) Contribution .
      If a
      claim for indemnification under Section 5(a) or 5(b) is unavailable to an
      Indemnified Party (by reason of public policy or otherwise), then each
      Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
      contribute to the amount paid or payable by such Indemnified Party as a result
      of such Losses, in such proportion as is appropriate to reflect the relative
      fault of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact,
      has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in this Exhibit, any reasonable attorneys’ or other reasonable fees or expenses
      incurred by such party in connection with any Proceeding to the extent such
      party would have been indemnified for such fees or expenses if the
      indemnification provided for in this Section was available to such party in
      accordance with its terms.





The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission, except in the case of fraud
      by
      such Holder.





Securities
          Purchase Agreement - Page 43 of 74


The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.





6. Miscellaneous





(a)  Remedies .
      In the
      event of a breach by the Company or by a Holder, of any of their obligations
      under this Exhibit, each Holder or the Company, as the case may be, in addition
      to being entitled to exercise all rights granted by law and under this Exhibit,
      including recovery of damages, will be entitled to specific performance of
      its
      rights under this Exhibit. The Company and each Holder agree that monetary
      damages would not provide adequate compensation for any losses incurred by
      reason of a breach by it of any of the provisions of this Exhibit and hereby
      further agrees that, in the event of any action for specific performance in
      respect of such breach, it shall waive the defense that a remedy at law would
      be
      adequate. Each Holder agrees that its rights and remedies hereunder shall be
      exercised and enforced in accordance with Section 5.18 of the Purchase
      Agreement.





(b)  No
      Multiple Registrations .
      The
      Company shall not file any other registration statements until the initial
      Registration Statement required hereunder is declared effective by the
      Commission, provided that this Section 6(b) shall not prohibit the Company
      from
      filing amendments to registration statements already filed.





(c)  Compliance .
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to the Registration Statement.





(d)  Discontinued
      Disposition .
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Section 3(d), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under a Registration Statement until such Holder’s
      receipt of the copies of the supplemented Prospectus and/or amended Registration
      Statement, or until it is advised in writing (the “ Advice ”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company will use its best efforts to ensure that
      the
      use of the Prospectus may be resumed as promptly as it practicable. The Company
      agrees and acknowledges that any periods during which the Holder is required
      to
      discontinue the disposition of the Registrable Securities hereunder shall be
      subject to the provisions of Section 2(b).





(e)  Piggy-Back
      Registrations .
      If at
      any time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act) or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with the stock option or other employee benefit plans, then the
      Company shall send to each Holder a written notice of such determination and,
      if
      within fifteen days after the date of such notice, any such Holder shall so
      request in writing, the Company shall include in such registration statement
      all
      or any part of such Registrable Securities such holder requests to be
      registered; provided, that, the Company shall not be required to register any
      Registrable Securities pursuant to this Section 6(e) that are eligible for
      resale pursuant to Rule 144(k) promulgated under the Securities Act or that
      are
      the subject of a then effective Registration Statement.





Securities
          Purchase Agreement - Page 44 of 74


(f)  Amendments
      and Waivers .
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, except as set forth in the Purchase
      Agreement.





(g)  Notices .
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase Agreement.





(h)  Successors
      and Assigns .
      This
      rights granted to the Holders in this Exhibit shall inure to the benefit of
      and
      be binding upon the successors and permitted assigns of each of the parties
      and
      shall inure to the benefit of each Holder. The Company may not assign its rights
      or obligations hereunder without the prior written consent of all of the Holders
      of the then-outstanding Registrable Securities. Each Holder may assign their
      respective rights hereunder in the manner and to the Persons as permitted under
      the Purchase Agreement.





(i)  No
      Inconsistent Agreements .
      Neither
      the Company nor any of its subsidiaries has entered, as of the date hereof,
      nor
      shall the Company or any of its subsidiaries, on or after the date of this
      Agreement, enter into any agreement with respect to its securities, that would
      have the effect of impairing the rights granted to the Holders in this Exhibit
      or otherwise conflicts with the provisions hereof. Except as set forth on Schedule
      6(i) ,
      neither
      the Company nor any of its subsidiaries has previously entered into any
      agreement granting any registration rights with respect to any of its securities
      to any Person that have not been satisfied in full.





(j)  Governing
      Law .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined with the provisions of the Purchase
      Agreement.





(k)  Cumulative
      Remedies .
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.





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          Purchase Agreement - Page 45 of 74


(l)  Severability .
      If any
      term, provision, covenant or restriction of this Exhibit is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.





*
      *
      *














Securities
          Purchase Agreement - Page 46 of 74




**Annex
      B-1**





**Plan
      of Distribution**





Each
      Selling Stockholder (the “ Selling
      Stockholders ”)
      of the
      common stock (“ Common
      Stock ”)
      of
      TechnoConcepts, Inc., a Colorado corporation (the “ Company ”)
      and
      any of their pledgees, assignees and successors-in-interest may, from time
      to
      time, sell any or all of their shares of Common Stock on the Trading Market
      or
      any other stock exchange, market or trading facility on which the shares are
      traded or in private transactions. These sales may be at fixed or negotiated
      prices. A Selling Stockholder may use any one or more of the following methods
      when selling shares:





·
            ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;





·
            block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;





·
            purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;





·
            an
                exchange distribution in accordance with the rules of the applicable
                exchange;





·
            privately
                negotiated transactions;





·
            settlement
                of short sales entered into after the date of this prospectus;





·
            broker-dealers
                may agree with the Selling Stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;





·
            a
                combination of any such methods of
                sale;





·
            through
                the writing or settlement of options or other hedging transactions,
                whether through an options exchange or otherwise;
                or





·
            any
                other method permitted pursuant to applicable
                law.





The
      Selling Stockholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended (the “ Securities
      Act ”),
      if
      available, rather than under this prospectus.





Broker-dealers
      engaged by the Selling Stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. Each
      Selling Stockholder does not expect these commissions and discounts relating
      to
      its sales of shares to exceed what are customary in the types of transactions
      involved.





Securities
          Purchase Agreement - Page 47 of 74


In
      connection with the sale of our common stock or interests therein, the Selling
      Stockholders may not enter into hedging transactions with broker-dealers or
      other financial institutions, which may engage in short sales of the common
      stock in the course of hedging the positions they assume. The Selling
      Stockholders may not sell shares of our common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities. The Selling
      Stockholders may enter into option or other transactions with broker-dealers
      or
      other financial institutions or the creation of one or more derivative
      securities which require the delivery to such broker-dealer or other financial
      institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such
      transaction).





The
      Selling Stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be “underwriters” within the meaning of the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. Each Selling Stockholder has informed the
      Company that it does not have any agreement or understanding, directly or
      indirectly, with any person to distribute the Common Stock.





The
      Company is required to pay certain fees and expenses incurred by the Company
      incident to the registration of the shares. The Company has agreed to indemnify
      the Selling Stockholders against certain losses, claims, damages and
      liabilities, including liabilities under the Securities Act.





Because
      Selling Stockholders may be deemed to be “underwriters” within the meaning of
      the Securities Act, they will be subject to the prospectus delivery requirements
      of the Securities Act. In addition, any securities covered by this prospectus
      which qualify for sale pursuant to Rule 144 under the Securities Act may be
      sold
      under Rule 144 rather than under this prospectus. Each Selling Stockholder
      has
      advised us that they have not entered into any agreements, understandings or
      arrangements with any underwriter or broker-dealer regarding the sale of the
      resale shares. There is no underwriter or coordinating broker acting in
      connection with the proposed sale of the resale shares by the Selling
      Stockholders.





We
      agreed
      to keep this prospectus effective until the earlier of (i) the date on which
      the
      shares may be resold by the Selling Stockholders without registration and
      without regard to any volume limitations by reason of Rule 144(e) under the
      Securities Act or any other rule of similar effect or (ii) all of the shares
      have been sold pursuant to the prospectus or Rule 144 under the Securities
      Act
      or any other rule of similar effect. The resale shares will be sold only through
      registered or licensed brokers or dealers if required under applicable state
      securities laws. In addition, in certain states, the resale shares may not
      be
      sold unless they have been registered or qualified for sale in the applicable
      state or an exemption from the registration or qualification requirement is
      available and is complied with.





Securities
          Purchase Agreement - Page 48 of 74


Under
      applicable rules and regulations under the Exchange Act, any person engaged
      in
      the distribution of the resale shares may not simultaneously engage in market
      making activities with respect to our common stock for a period of two business
      days prior to the commencement of the distribution. In addition, the Selling
      Stockholders will be subject to applicable provisions of the Exchange Act and
      the rules and regulations thereunder, including Regulation M, which may limit
      the timing of purchases and sales of shares of our common stock by the Selling
      Stockholders or any other person. We will make copies of this prospectus
      available to the Selling Stockholders and have informed them of the need to
      deliver a copy of this prospectus to each purchaser at or prior to the time
      of
      the sale.
















Securities
          Purchase Agreement - Page 49 of 74





**Annex
      B-2**





**TechnoConcepts,
      Inc.**





**Selling
      Shareholder Notice and Questionnaire**





The
      undersigned beneficial owner of common stock, no par value (the “ Common
      Stock ”),
      of
      TechnoConcepts, Inc., a Colorado corporation (the “ Company ”),
      (the
“ Registrable
      Securities ”)
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission (the “ Commission ”)
      a
      registration statement on Form SB-2 (the “ Registration
      Statement ”)
      for
      the registration and resale under Rule _____ of the Securities Act of 1933,
      as
      amended (the “ Securities
      Act ”),
      of
      the Registrable Securities, in accordance with the terms of Exhibit B of the
      Securities Purchase Agreement, dated as of November 3, 2005 (the “ Registration
      Rights Agreement ”),
      among
      the Company and the Purchasers named therein. A copy of the Registration Rights
      Agreement is available from the Company upon request at the address set forth
      below. All capitalized terms not otherwise defined herein shall have the
      meanings ascribed thereto in the Registration Rights Agreement.





Certain
      legal consequences arise from being named as a selling Shareholder in the
      Registration Statement and the related prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling Shareholder in the Registration Statement and the related
      prospectus.





**NOTICE**





The
      undersigned beneficial owner (the “ Selling
      Shareholder ”)
      of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it and listed below in Item 3 (unless otherwise specified under such Item
      3)
      in the Registration Statement.





The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:





**QUESTIONNAIRE**





**1.**  **Name.**





(a)
            Full
                Legal Name of Selling Securityholder __________________________________________________________________________





(b)
            Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities Listed in Item 3 below are
                held: ___________________________________________________________________________






Securities
          Purchase Agreement - Page 50 of 74




(c)
            Full
                Legal Name of Natural Control Person (which means a natural person
                who
                directly you indirectly alone or with others has power to vote or
                dispose
                of the securities covered by the
                questionnaire): ___________________________________________________________________________







**2.
      Address for Notices to Selling Securityholder:**


________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Telephone: 
                ________________________________________________________________________________________Fax:
                ______________________________________________________________________________________________Contact
                Person:
                _____________________________________________________________________________________





**3.
      Beneficial Ownership of Registrable Securities:**





(a)
            Type
                and Principal Amount of Registrable Securities beneficially
                owned:  __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________









**4.
      Broker-Dealer Status:**





(a)
            Are
                you a broker-dealer?





Yes
o  No
o





Note:
            If
                yes, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.





(b)
            Are
                you an affiliate of a
                broker-dealer?





Yes
oNo
o





(c)
            If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable
                Securities?





Yes
oNo
o




Securities
          Purchase Agreement - Page 51 of 74





Note:
            If
                no, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.





**5.
      Beneficial Ownership of Other Securities of the Company Owned by the Selling
      Securityholder.**





*Except
      as set forth below in this Item 5, the undersigned is not the beneficial or
      registered owner of any securities of the Company other than the Registrable
      Securities listed above in Item 3.*





(a)
            Type
                and Amount of Other Securities beneficially owned by the Selling
                Securityholder:  __________________________________________________________________________
              __________________________________________________________________________







**6.
      Relationships with the Company:**





*Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors or affiliates)
      during the past three years.*





State
      any
      exceptions here:




______________________________________________________________________________________________


______________________________________________________________________________________________





The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      at any time while the Registration Statement remains effective.





By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 6 and the inclusion of such
      information in the Registration Statement and the related prospectus. The
      undersigned understands that such information will be relied upon by the Company
      in connection with the preparation or amendment of the Registration Statement
      and the related prospectus.





**[SIGNATURE
      PAGE FOLLOWS]**





Securities
          Purchase Agreement - Page 52 of 74








IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by its duly
      authorized agent.





Dated:
              ________________________________________
            Beneficial Owner:
              ____________________________________By:
            _______________________________________Name:Title:











**PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO:**





General
      Counsel


TechnoConcepts
      Inc.


6060
      Sepulveda Blvd. Suite 202


Van
      Nuys,
      CA 91411


Fax:
      818-779-7631





Securities
          Purchase Agreement - Page 53 of 74


**EXHIBIT
      C**





**FORM
      OF WARRANT CERTIFICATE**





**NEITHER
      THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
      WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      "ACT") AND THIS WARRANT CANNOT BE SOLD OR TRANSFERRED, AND THE SHARES OF COMMON
      STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT CANNOT BE SOLD OR TRANSFERRED,
      UNLESS AND UNTIL (i) THEY ARE SO REGISTERED OR, (ii) RULE 144, RULE 144A OR
      ANY
      SUCCESSOR RULE UNDER THE ACT PERMITS SUCH SALE OR TRANSFER, OR (iii) UNLESS
      SUCH
      REGISTRATION IS NOT THEN REQUIRED UNDER THE CIRCUMSTANCES OF SUCH EXERCISE,
      SALE
      OR TRANSFER UNDER ANY OTHER EXEMPTION UNDER THE ACT, PROVIDED THAT THE HOLDER
      OF
      THIS WARRANT OR SHARES OF COMMON STOCK ISSUABLE HEREUNDER DELIVERS TO THE
      COMPANY AN OPINION OF HOLDER'S COUNSEL THAT AN EXEMPTION FROM REGISTRATION
      UNDER
      THE ACT IS AVAILABLE.**








**WARRANT
      TO PURCHASE COMMON STOCK OF**





**TECHNOCONCEPTS,
      INC.**








THIS
      CERTIFIES that, for value received, _________________ (herein called "Holder")
      is entitled, upon the terms and subject to the limitations on exercise and
      the
      conditions hereinafter set forth, at any time on or prior to the close of
      business on the five year anniversary of the effective date of this Warrant
      (the
“Termination Date”) but not thereafter, to subscribe for and purchase from
      TechnoConcepts, Inc. (herein called the "Company") a corporation organized
      and
      existing under the laws of the State of Colorado, at the price of $_____ per
      share (the "Warrant Exercise Price"), _____________ fully paid and nonassessable
      shares of the Company’s Common Stock, no par value per share, subject to
      adjustment as set forth in Paragraph 3 below.





This
      Warrant is subject to the following provisions, terms and
      conditions:





1.  **Exercise;
      Issuance of Certificates; Payment for Shares.**





The
      rights represented by this Warrant may be exercised by the Holder hereof, in
      whole or in part (but not as to a fractional share) at the principal office
      of
      the Company (or such office or agency of the Company as it may from time to
      time
      reasonably designate) at any time prior to the Termination Date, and by payment
      to the Company by certified check or bank draft of the Warrant Exercise Price
      for such shares. The notice accompanying the Warrant shall also set forth the
      number of shares remaining subject to the Warrant. The Company shall not be
      obligated to issue fractional shares of Common Stock upon exercise of this
      Warrant but shall pay to the Holder an amount in cash equal to the Current
      Market Price per share multiplied by such fraction (rounded to the nearest
      cent). The Company agrees that the shares so purchased shall be deemed to be
      issued to the Holder as the record owner of such shares as of the close of
      business on the date on which this Warrant shall have been surrendered and
      payment made for such shares as aforesaid. Subject to the provisions of the
      next
      succeeding paragraph and this Paragraph 1, certificates for the shares of stock
      so purchased shall be delivered to the Holder within two business days after
      the
      rights represented by this Warrant shall have been so exercised, and, unless
      this Warrant has expired, a new Warrant representing the number of shares,
      if
      any, with respect to which this Warrant shall not then have been exercised
      or
      surrendered shall also be delivered to the Holder hereof within two business
      days.





Securities
          Purchase Agreement - Page 54 of 74


For
      the
      purpose of any computation under this Section the "Current Market Price" at
      any
      date (the "Computation Date") shall be deemed to be the average of the daily
      closing prices of the Common Stock for ten consecutive trading days ending
      the
      trading day immediately prior to the Computation Date. The closing price for
      each day shall be the last reported sale price or, in case no such reported
      sale
      takes place on such date, the average of the last reported asked prices, in
      either case on the principal national securities exchange on which the Common
      Stock is admitted to trading or listed if that is the principal market for
      the
      Common Stock or if not listed or admitted to trading on any national securities
      exchange or if such national securities exchange is not the principal market
      for
      the Common Stock, the closing bid prices reported by NASDAQ or its successor,
      if
      any, or such other generally accepted source of publicly reported bid and asked
      quotations as the Company may reasonably designate. If the price of the Common
      Stock is not so reported or the Common Stock is not publicly traded, the Current
      Market Price per share as of any Computation Date shall be determined by the
      Board of Directors in good faith, on such basis as it considers appropriate,
      and
      such determination shall be described in a duly adopted board resolution
      certified by the Company's secretary or assistant secretary.





2.  **Shares
      to be Fully Paid; Reservation of Shares.**





The
      Company covenants and agrees:





(i)  That
      all
      Common Stock which may be issued upon the exercise of the rights represented
      by
      this Warrant, will, upon issuance, be fully paid and nonassessable and free
      from
      all pre-emptive rights, and taxes, liens and charges with respect to the
      issuance thereof;





(ii)  Without
      limiting the generality of the foregoing, that the Company will from time to
      time take all such action as may be necessary to assure that the par value
      per
      share of the Common Stock is at all times equal to or less than the then
      effective Warrant Exercise Price per share of the Common Stock issuable pursuant
      to this Warrant;





(iii)  That
      during the period within which the rights represented by this Warrant may be
      exercised, the Company will at all times have authorized and reserved for the
      purpose of the issuance upon exercise of the rights evidenced by this Warrant,
      a
      sufficient number of shares of Common Stock to provide for the exercise of
      the
      rights represented by this Warrant;





Securities
          Purchase Agreement - Page 55 of 74


(iv)  That
      the
      Company will take all such action as may be necessary to assure that the Common
      Stock issuable upon the exercise hereof may be so issued without violation
      of
      any applicable law or regulation or of any requirements of any domestic
      securities exchange or market upon which any capital stock of the Company may
      be
      listed or traded;





(v)  That
      the
      Company will not take any action if the total number of shares of Common Stock
      issuable after such action and upon exercise of all warrants and other rights
      to
      purchase or acquire Common Stock, together with all shares of Common Stock
      then
      outstanding, would exceed the total number of shares of Common Stock then
      authorized by the Company's Certificate of Incorporation. In the event any
      stock
      or securities of the Company other than Common Stock are issuable upon the
      exercise hereof, the Company will take or refrain from taking any action
      referred to in clauses (i) through (v) of this Paragraph 2 as though such
      clauses applied to such other shares or securities then issuable upon the
      exercise hereof;





(vi)  The
      Company has all requisite corporate power and authority to execute and deliver
      this Warrant; the execution and delivery of this Warrant have been duly and
      validly authorized by the Company's Board of Directors and no other corporate
      proceedings on the part of the Company are necessary to authorize this Warrant;
      this Warrant has been duly and validly executed and delivered by the Company
      and
      constitutes a legal, valid and binding agreement of the Company, enforceable
      against the Company in accordance with its terms;





(vii)  No
      order,
      permit, consent, approval, license, authorization or validation of, and no
      registration or filing of notice with, any governmental entity is necessary
      to
      authorize or permit, or is required in connection with, the execution, delivery
      or performance of this Warrant or the consummation by the Company of the
      transactions contemplated hereby; and





(viii)  Neither
      the execution, delivery nor compliance by the Company with any of the provisions
      hereof will (a) violate, conflict with or result in any breach of any provision
      of the Company's charter documents, (b) result in a violation or breach or
      termination of, or constitute a default under or conflict with any provision
      of,
      any note, bond, mortgage, indenture, license, lease, agreement or other
      instrument or obligation to which the Company is subject, or (c) violate any
      judgment, order, writ, injunction, decree, award, statute, rule or regulation
      to
      which the Company is subject.





3.  **Adjustment
      of Shares Issuable or Warrant Exercise Price.**





The
      above
      provisions are subject to the following:





Securities
          Purchase Agreement - Page 56 of 74


If
      the
      Company shall pay a dividend or make a distribution in shares of its Common
      Stock, subdivide (split) its outstanding shares of Common Stock, combine
      (reverse split) its outstanding shares of Common Stock, issue by
      reclassification of its shares of Common Stock any shares or other securities
      of
      the Company, or distribute to holders of its Common Stock any securities or
      any
      assets of the Company or of another entity, the number of shares of Common
      Stock
      or other securities the Holder hereof is entitled to purchase pursuant to this
      Warrant immediately prior thereto shall be adjusted so that the Holder shall
      be
      entitled to receive upon exercise the number of shares of Common Stock or other
      securities or assets which such Holder would have owned or would have been
      entitled to receive after the happening of any of the events described above
      had
      this Warrant been exercised in full immediately prior to the happening of such
      event, and the Warrant Exercise Price per share shall be correspondingly
      adjusted and the aggregate price upon exercise for all Warrants issuable
      hereunder after giving effect to such adjustment shall not exceed the aggregate
      amount payable upon exercise of such Warrant prior to such adjustment. An
      adjustment made pursuant to this Section 3 shall become effective immediately
      after the record date in the case of a stock dividend or other distribution
      and
      shall become effective immediately after the effective date in the case of
      a
      subdivision, combination or reclassification. The Holder of this Warrant shall
      be entitled to participate in any subscription or other rights offering made
      to
      holders of shares of Common Stock as if such Holder had purchased the full
      number of shares as to which this Warrant remains unexercised immediately prior
      to the record date for such subscription rights offering. If the Company is
      consolidated or merged with or into another corporation or entity or if all
      or
      substantially all of its assets are conveyed to another corporation or entity
      this Warrant shall thereafter be exercisable for the purchase of the kind and
      number of shares of stock or other securities or property, if any, receivable
      upon such consolidation, merger or conveyance by a Holder of the number of
      shares of Common Stock of the Company which could have been purchased on the
      exercise of this Warrant in full immediately prior to such consolidation, merger
      or conveyance; and, in any such case, appropriate adjustment (as determined
      in
      good faith by the Board of Directors) shall be made in the application of the
      provisions herein set forth with respect to the rights and interests thereafter
      of the Holder of this Warrant to the end that the provisions set forth herein
      (including provisions with respect to changes in and other adjustments of the
      number of shares of Common Stock the Holder of this Warrant is entitled to
      purchase) shall thereafter be applicable, as nearly as possible, in relation
      to
      any shares of Common Stock or other securities or other property thereafter
      deliverable upon the exercise of this Warrant.





The
      Company shall not effect any such consolidation, merger or conveyance, unless
      upon or prior to the consummation thereof the successor corporation, or if
      the
      Company shall be the surviving corporation in any such transaction and is not
      the issuer of the shares of stock or other securities or property to be
      delivered to holders of shares of the Common Stock outstanding at the effective
      time thereof, then such issuer shall assume by written instrument the obligation
      to deliver to the Holder such shares of stock, securities, cash or other
      property as the Holder shall be entitled to purchase in accordance with the
      foregoing provisions.





4.  **Notice
      of Adjustment.**





Upon
      any
      adjustment of the number of shares of Common Stock issuable upon exercise of
      this Warrant or the Warrant Exercise Price, then and in each such case, the
      Company shall give written notice thereof by first class mail, postage prepaid,
      addressed to the Holder at the address of such Holder as shown on the books
      of
      the Company and pursuant to Paragraph 17, which notice shall state the Warrant
      Exercise Price resulting from such adjustment and the increase or decrease,
      if
      any, in the number of shares purchasable at such price upon the exercise of
      this
      Warrant, setting forth in reasonable detail the method of calculation and the
      facts upon which such calculation is based.





Securities
          Purchase Agreement - Page 57 of 74


5.  **Other
      Notices** .





In
      case
      at any time prior to the Termination Date:





1.  The
      Company shall declare any cash dividend upon its Common Stock payable in stock
      or make any special dividend or other distribution (other than regular cash
      dividends) to the Holders of its Common Stock;





2.  The
      Company shall offer for subscription to the Holders of any of its Common Stock
      any additional shares of Common Stock of any class or other rights;





3.  There
      shall be any capital reorganization or reclassification of the capital stock
      of
      the Company or consolidation or merger of the Company with or sale of all or
      substantially of its assets to another corporation or entity; or





4.  There
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;





Then
      in
      any one or more of said cases the Company shall give by first class mail postage
      prepaid, addressed to the Holder of this Warrant at the address of such Holder
      as shown on the books of the Company and pursuant to Paragraph 17 (i) at least
      20 days prior written notice of the date on which the books of the Company
      shall
      close or a record shall be taken for such dividend, distribution or subscription
      rights or for determining rights to vote in respect of any such reorganization,
      reclassification, consolidation, merger or sale, dissolution, liquidation or
      winding and (ii) in the case of such reorganization or reclassification,
      consolidation, merger or sale, dissolution, liquidation or winding up, at least
      20 days prior written notice of the date when the same shall take place. Any
      notice required by clause (i) shall also specify in the case of any such
      dividend, distribution or subscription rights the date on which the holders
      of
      Common Stock shall be entitled thereto and a notice required by (ii) shall
      also
      specify the date on which the holders of the Common Stock shall be entitled
      to
      exchange their Common Stock for securities or other property deliverable upon
      such reorganization, reclassification, merger or sale, dissolution, liquidation
      or winding up as the case may be.





6.  **Issue
      Tax** .





The
      issuance of certificates for shares of Common Stock upon the exercise of this
      Warrant shall be made without charge to the Holder for any issuance tax in
      respect thereof, provided that the Company shall not be required to pay any
      tax
      which may be payable in respect of any transfer involved in the issuance and
      delivery of any certificate in a name other that of the Holder of the Warrant
      exercised.





Securities
          Purchase Agreement - Page 58 of 74


7.  **Closing
      of Books** .





The
      Company will at no time close its transfer books against the transfer of this
      Warrant or of any shares of Common Stock issued or issuable upon the exercise
      of
      this Warrant in any matter which interferes with a timely exercise of this
      Warrant. The Company will not, by any action, seek to avoid the observance
      or
      performance of any of the terms of this Warrant, but will at all times in good
      faith seek to carry out all such terms and take all such action as may be
      necessary or appropriate in order to protect the rights of the Holder against
      impairment.





8.  **No
      Voting Rights.**





This
      Warrant shall not entitle the Holder hereof to any voting rights or other rights
      as a stockholder of the Company.





9.  **Transfers.**





Prior
      to
      any transfer or attempted transfer of any securities (except a transfer by
      a
      Holder to an affiliate, subsidiary, employee or shareholder of the Holder),
      the
      Holder shall give written notice to the Company of such Holder's intention
      to
      effect such transfer. Holder will not transfer or dispose of this Warrant and
      will not sell or transfer any securities except pursuant to (i) an effective
      registration statement under the Act, (ii) Rule 144, Rule 144A or any successor
      rule under the Act permitting such sale or transfer or (iii) any other exemption
      under the Act provided that the Holder delivers an opinion of Holder's counsel
      reasonably satisfactory to counsel to the Company that an exemption from
      registration under the Act is available. Each certificate evidencing the
      securities issued upon such transfer shall bear the restrictive legend set
      forth
      on the first page of this Warrant modified to delete references to the Warrant,
      if appropriate, unless in the reasonable opinion of Holder's counsel such legend
      is not required in order to insure compliance with the Act.





10.  **Rights
      and Obligations Survive Exercise Of Warrant.**





The
      rights and obligations of the Company, of the Holder of this Warrant and of
      the
      Holder of the shares of Common Stock issuable upon exercise of this Warrant
      contained herein shall survive the exercise of this Warrant.





11.  **Descriptive
      Headings and Governing Law.**





The
      descriptive headings of the several paragraphs of this Warrant are inserted
      for
      convenience only and do not constitute a part of this Warrant. This Warrant
      is
      being delivered and is intended to be performed in the State of New York and
      shall be construed and enforced in accordance with such law and the rights
      of
      the Holder shall be governed by the law of such state.





Securities
          Purchase Agreement - Page 59 of 74


12.  **Rule
      144.**





The
      Company represents and warrants to the Holder that except as otherwise required
      by law the shares of Common Stock issuable upon conversion of the Warrant may
      be
      publicly sold by the Holder pursuant to Rule 144 promulgated under the
      Securities Act of 1933, as amended ( the “Rule”) one year after the date of
      issuance of the Warrant, subject to compliance with (i) paragraphs (c), (e)
      and
      (h) of the Rule, and (ii) paragraphs (f) or (g) of the Rule..





13.  **Arbitration.**





Any
      controversies, claims or disputes arising out of or under this Warrant or the
      obligations of the parties hereunder shall be resolved by binding arbitration
      to
      be held in New York, New York in accordance with the rules then pertaining
      of
      the American Arbitration Association. The arbitrators shall apply New York
      and
      Federal law in such arbitration and shall have the power to grant injunctive
      relief. Any decision of the arbitrators shall be enforceable in any court of
      competent jurisdiction.





14.  **Notices.**





All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be mailed by first class mail, postage prepaid, or delivered
      either by hand or by messenger, addressed (a) if to the Company, to the
      principal offices of the Company, to the attention of its General Counsel,
      6060
      Sepulveda Blvd., Suite #202, Van Nuys, CA 91411, or (b) if to the Holder, to
      such address as the Holder shall have furnished to the Company, or such other
      address as the Holder shall have furnished to the Company. All such notices
      of
      communications shall be deemed given when actually delivered by hand or
      messenger or, if mailed, three days after deposit in the U.S. Mail.





15.  **Successors
      and Assigns.**





All
      covenants, agreements, representations and warranties contained in this Warrant
      shall bind the parties hereto and their respective successors and
      assigns.





16.  **No
      Inconsistent Agreements.**





The
      Company has not previously entered into, and will not on or after the date
      of
      this Warrant enter into, any agreement with respect to its securities which
      is
      inconsistent with the terms of this Warrant, including any agreement which
      impairs or limits the rights granted to the Holder in this Warrant, or which
      otherwise conflicts with the provisions hereof or would preclude the Company
      from discharging its obligations hereunder.





Securities
          Purchase Agreement - Page 60 of 74


17.  **Nonwaiver
      and Expenses** **.**





No
      course
      of dealing or any delay or failure to exercise any right hereunder on the part
      of either party shall operate as a waiver of such right or otherwise prejudice
      the other party’s rights, powers or remedies, notwithstanding the fact that all
      of Holder’s rights hereunder terminate on the Termination Date.





18.  **Severability.**





In
      the
      event than any one or more of the provisions contained herein, or the
      application thereof in any circumstance, is held invalid, illegal or
      unenforceable, the validity, legality and enforceability of any such provision
      in every other respect and of the remaining provisions contained herein shall
      not be affected or impaired thereby.





19.  **Entire
      Agreement.**





This
      Warrant constitutes the entire agreement of the parties with respect to the
      subject matter hereof.





20.  **Amendment.**





Any
      provision of this Warrant may be amended, waived or modified by a writing signed
      by the Company and the Holder.





21.  **Confidentiality.**





The
      parties hereto agree that the existence of this Warrant, and the terms hereof,
      shall be held in the strictest confidence and shall not be disclosed to any
      third party unless (a) such disclosure is required by law, or (b) such
      disclosure is agreed upon in writing by the Holder and the Company.






DATED effective as of: 
              _________________________TECHNOCONCEPTS,
              INC.By:ANTONIO
              E. TURGEONChairman
              & CEO





Securities
          Purchase Agreement - Page 61 of 74









**EXHIBIT
      D**





**FORM
      OF LEGAL OPINION**





**-TBD-**











Securities
          Purchase Agreement - Page 62 of 74


**EXHIBIT
      E**





**FORM
      OF CERTIFICATE OF DESIGNATION**


**of**


**SERIES
      B-1 CONVERTIBLE PREFERRED STOCK**


**of**


**TECHNOCONCEPTS,
      INC.**








1.  DESIGNATION
      AND AMOUNT.





The
      designation of this Class, which consists of Two Thousand Four Hundred (2,400)
      shares (the "Preferred Shares") of Preferred Stock, is the Series B-1
      Convertible Preferred Stock (the "Series B-1 Preferred Stock"), and the face
      amount shall be Two Thousand Five Hundred Dollars ($2,500.00) per share (the
      "Face Amount"). The date on which a Preferred Share is issued and sold by the
      Corporation is referred to herein as the "Issue Date." The individual or entity
      in whose name a Preferred Share is registered on the books of the Corporation
      is
      referred to herein as a "Holder" and together with each other Holder, as the
      "Holders". The Preferred Shares issued and sold to the Purchasers pursuant
      to
      the above referred Purchase Agreement are sometimes referred to herein as the
      "Purchaser Preferred Shares."





2.  DIVIDENDS.





The
      Series B-1 Preferred Stock will bear dividends, payable in arrears at the rate
      of eight (8%) per cent per annum or $200.00 per Preferred Share. Such dividends
      shall be payable in cash or common stock (at the then current market price),
      as
      the Board of Directors shall determine.





3.  PRIORITY.





In
      the
      event of (i) any liquidation, dissolution or winding up of the affairs of the
      Corporation, either voluntarily or involuntarily, (ii) the commencement of
      any
      insolvency or bankruptcy proceedings, or any receivership, liquidation,
      reorganization or other similar proceeding relating to the Corporation or its
      assets or (iii) any assignment for the benefit of creditors or any marshalling
      of the material assets or material liabilities of the Corporation (each, a
      "Liquidation Event"), the Holders shall be entitled to receive, in preference
      to
      the payment of the liquidation preference of any other shares of Preferred
      Stock
      issued by the Corporation or of any other securities of the Corporation and
      prior and in preference to any distribution of any of the assets or surplus
      funds of the Corporation to the holders of Common Stock or any other stock
      of
      the Corporation having rights or preferences as to a distribution upon a
      Liquidation Event junior to the rights or preferences of the Series B-1
      Preferred Stock ("Junior Securities"), in cash an amount per share of Series
      B-1
      Preferred Stock equal to the Face Amount for such share, plus any amounts owed
      to the Holder thereof by the Corporation and not yet paid (collectively, the
      "Liquidation Preference") (which amount shall be adjusted appropriately in
      the
      event the outstanding shares of Series B-1 Preferred Stock shall be subdivided,
      combined or consolidated, by any capital reorganization, reclassification or
      otherwise into a greater or lesser number of shares of Series B-1 Preferred
      Stock). If upon the occurrence of a Liquidation Event, the assets and funds
      available for distribution to the Holders are insufficient to permit the payment
      to such holders of the full amount of the Liquidation Preference, then the
      assets and funds available for payment of the Liquidation Preference shall
      be
      distributed in proportion to the ratio that the preferential amount payable
      on
      each such share (which shall be the Liquidation Preference in the case of a
      Preferred Share) bears to the aggregate preferential amount payable on all
      such
      shares.





Securities
          Purchase Agreement - Page 63 of 74


For
      purposes of this Section 3, a Liquidation Event shall (at the option of each
      Holder with respect to such Holder's Preferred Shares, upon written notice
      delivered to the Corporation) be deemed to be occasioned by, and to include,
      but
      not be limited to (i) the Corporation's sale of all or substantially all of
      its
      assets coupled with a distribution of any of the proceeds of such sale to any
      holders of Junior Stock, (ii) change of control of this Corporation, or (iii)
      the acquisition of this Corporation by another entity by means of merger or
      consolidation resulting in the exchange of outstanding shares of this
      Corporation for securities or consideration issued, or caused to be issued,
      by
      the acquiring corporation or its subsidiary, in which the holders of the
      Company’s capital stock hold less than 50% of the voting power of the surviving
      entity; provided, however, that a reorganization, merger or consolidation
      involving only a change in the state of incorporation of the Corporation shall
      not be deemed a Liquidation Event.





4.  CONVERSION.





(a)  Right
      to Convert; Restriction .
      Each
      Holder shall have the right to convert, at any time after the date hereof,
      all
      or any part of the Preferred Shares held by such Holder at the rate of one
      thousand fully paid and non-assessable shares ("Conversion Shares") of the
      Corporation's common stock, no par value per share (the "Common Stock"), for
      each Preferred Share (a "Conversion") subject to adjustment as set forth herein
      (“Conversion Rate”). Notwithstanding the foregoing, the number of shares of
      Common Stock that may be acquired by a Holder upon any conversion of Preferred
      Shares (or otherwise in respect hereof) shall be limited to the extent necessary
      to insure that, following such conversion, the total number of shares of Common
      Stock then beneficially owned by such Holder and its affiliates and any other
      persons whose beneficial ownership of Common Stock would be aggregated with
      the
      Holder's for purposes of Section 13(d) or 13(g) of the Securities Exchange
      Act
      of 1934, as amended (the "Exchange Act"), does not exceed 4.999% of the total
      number of issued and outstanding shares of Common Stock (including for such
      purpose the shares of Common Stock issuable upon such conversion). For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) or 13(g) (as applicable) of the Exchange Act and the rules and regulations
      promulgated thereunder. Such limitation shall not apply upon Automatic
      Conversion, as set forth in 4(e). This limitation may be waived by the consent
      of a majority in interest of Holders and the Company’s Board of
      Directors.





Securities
          Purchase Agreement - Page 64 of 74


(b)  Conversion
      Notice .
      In
      order to convert Preferred Shares, a Holder shall send by mail, personal
      delivery, courier service or facsimile transmission, at any time prior to 11:59
      p.m., eastern time, on the date on which such Holder wishes to effect such
      Conversion (the "Conversion Date"), (i) a notice of conversion (a "Conversion
      Notice"), in substantially the form of Exhibit E-1 hereto, to the Corporation
      (which shall promptly forward such Conversion Notice to the Corporation's
      transfer agent for the Common Stock (the "Transfer Agent")) stating the number
      of Preferred Shares to be converted, the applicable Conversion Rate and a
      calculation of the number of shares of Common Stock issuable upon such
      Conversion and (ii) a copy of the certificate or certificates representing
      the
      Preferred Shares being converted. The Holder shall also deliver the original
      of
      the Conversion Notice and of such certificate or certificates to the
      Corporation. The Corporation shall issue a new certificate for Preferred Shares
      in the event that less than all of the Preferred Shares represented by a
      certificate delivered to the Corporation in connection with a Conversion are
      converted. Except as otherwise provided herein, upon delivery of a Conversion
      Notice by a Holder in accordance with the terms hereof, such Holder shall,
      as of
      the applicable Conversion Date, be deemed for all purposes to be the record
      owner of the Common Stock to which such Conversion Notice relates. In the case
      of a dispute between the Corporation and a Holder as to the calculation of
      the
      Conversion Rate or the number of Conversion Shares issuable upon a Conversion,
      the Corporation shall promptly issue to such Holder the number of Conversion
      Shares that are not disputed and shall submit the disputed calculations to
      its
      independent accountant within one (1) Business Day of receipt of such Holder's
      Conversion Notice. The Corporation shall cause such accountant to calculate
      the
      Conversion Rate as provided herein and to notify the Corporation and such Holder
      of the results in writing no later than two (2) Business Days following the
      day
      on which it received the disputed calculations. Such accountant's calculation
      shall be deemed conclusive absent manifest error. The fees of any such
      accountant shall be borne by the party whose calculations were most at variance
      with those of such accountant.





(c)  Delivery
      of Common Stock upon Conversion .
      Upon
      receipt of a Conversion Notice from a Holder pursuant to paragraph 4(b) above,
      the Corporation shall instruct the Transfer Agent to deliver to such Holder,
      no
      later than the close of business on the later to occur of (i) the third (3rd)
      Business Day following the Conversion Date set forth in such Conversion Notice
      and (ii) the Business Day following the day on which such Holder delivers to
      the
      Corporation the certificates representing the Preferred Shares being converted
      (the "Delivery Date"), the number of Conversion Shares as shall be determined
      as
      provided herein. The Corporation shall instruct the Transfer Agent to effect
      delivery of Conversion Shares to a Holder by, as long as the Transfer Agent
      participates in the Depository Trust Company ("DTC") Fast Automated Securities
      Transfer program ("FAST"), crediting the account of such Holder or its nominee
      at DTC with the number of Conversion Shares required to be delivered, no later
      than the close of business on such Delivery Date. In the event that Transfer
      Agent is not a participant in FAST or if a Holder so specifies in a Conversion
      Notice or otherwise in writing, the Corporation shall instruct the Transfer
      Agent to effect delivery of Conversion Shares by delivering to the Holder or
      its
      nominee physical certificates representing such Conversion Shares, no later
      than
      the close of business on such Delivery Date. If any Conversion would create
      a
      fractional Conversion Share, such fractional Conversion Share shall be
      disregarded and the number of Conversion Shares issuable upon such Conversion,
      in the aggregate, shall be the next higher number of Conversion Shares.
      Conversion Shares delivered to the Holder shall not contain any restrictive
      legend as long as (A) the sale or transfer of such Conversion Shares is covered
      by an effective Registration Statement, (B) such Conversion Shares can be sold
      pursuant to Rule 144 ("Rule 144") under the Securities Act of 1933, as amended
      (“Securities Act”) and a registered broker dealer provides to the Corporation a
      customary broker's Rule 144 letter, or (C) such Conversion Shares are eligible
      for resale under Rule 144(k) or any successor rule or provision.





Securities
          Purchase Agreement - Page 65 of 74


(d)  Failure
      to Deliver Conversion Shares.





(i)  In
      the
      event that the Corporation or the Transfer Agent fails for any reason to deliver
      to a Holder certificates representing the number of Conversion Shares specified
      in the applicable Conversion Notice on or before the Delivery Date therefor
      (a
      "Conversion Default"), and such failure continues for three (3) Business Days
      following the Delivery Date, the Corporation shall pay to such Holder payments
      ("Conversion Default Payments") in the amount of (i) (N/365) multiplied by
      (ii)
      the aggregate Liquidation Preference of the Preferred Shares represented by
      the
      Conversion Shares which remain the subject of such Conversion Default multiplied
      by (iii) the lower of twenty-four percent (24%) and the maximum rate permitted
      by applicable law (the "Default Interest Rate"), where "N" equals the number
      of
      days elapsed between the original Delivery Date for such Conversion Shares
      and
      the earlier to occur of (A) the date on which all of the certificates
      representing such Conversion Shares are issued and delivered to such Holder,
      (B)
      the date on which such Preferred Shares are redeemed pursuant to the terms
      hereof and (C) the date on which a Withdrawal Notice (as defined below) is
      delivered to the Corporation. Amounts payable under this subparagraph (f) shall
      be paid to the Holder in immediately available funds on or before the fifth
      (5th) Business Day of the calendar month immediately following the calendar
      month in which such amounts have accrued.





(ii)  In
      addition to any other remedies provided herein, each Holder shall have the
      right
      to pursue actual damages against the Corporation for the failure by the
      Corporation or the Transfer Agent to issue and deliver Conversion Shares on
      the
      applicable Delivery Date (including, without limitation, damages relating to
      any
      purchase of shares of Common Stock by such Holder to make delivery on a sale
      effected in anticipation of receiving Conversion Shares upon Conversion, such
      damages to be in an amount equal to (A) the aggregate amount paid by such Holder
      for the shares of Common Stock so purchased minus (B) the aggregate Conversion
      Price applicable to such Conversion Shares) and such Holder shall have the
      right
      to pursue all remedies available to it at law or in equity (including, without
      limitation, a decree of specific performance and/or injunctive relief).
“Conversion Price” shall mean the Face Value divided by the Conversion
      Rate.





(e)  Automatic
      Conversion .
      Provided that there is an effective registration statement, on the date when the
      market price of the Common equals or exceeds $5.00 for twenty (20) consecutive
      Trading Days, such Preferred Shares then outstanding shall be automatically
      converted into the number of shares of Common Stock as provided in paragraph
      4(a) (an "Automatic Conversion "); provided, however, that if, on the date
      of
      the Automatic Conversion, (i) the number of shares of Common Stock authorized,
      unissued and unreserved for all other purposes, or held in the Corporation's
      treasury, is not sufficient to effect the issuance and delivery of the number
      of
      Conversion Shares into which all outstanding Preferred Shares are then
      convertible, or (ii) the Common Stock is not actively traded on the NASDAQ
      Small
      Cap Market or the NASDAQ National Market, each Holder shall have the option,
      upon written notice to the Corporation, to retain its rights as a holder of
      Preferred Shares, including without limitation, the right to convert such
      Preferred Shares in accordance with the terms of paragraphs 4(a) through 4(c)
      hereof and, upon delivery of such notice, such Preferred Shares shall not be
      subject to an Automatic Conversion hereunder until the thirtieth (30th) day
      following the later of (a) the date on which the event specified (i), (ii)
      or
      (iii) is no longer continuing and (b) the date on which the Corporation delivers
      to each Holder written notice to such effect, and in such event, such thirtieth
      day shall be deemed to be the Date of Automatic Conversion for purposes of
      this
      Certificate of Designation. If an Automatic Conversion occurs, the Corporation
      and each Holder shall follow the procedures for Conversion set forth in this
      Section 4, with the Date of Automatic Conversion deemed to be the Conversion
      Date, except that the Holder shall not be required to send a Conversion Notice
      as contemplated by paragraph 4(b).





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          Purchase Agreement - Page 66 of 74


5.  ADJUSTMENTS
      TO CONVERSION RATE.





(a)  Adjustment
      to Conversion Rate Due to Stock Split, Stock Dividend, Etc. If,
      prior to the Conversion of all of the Preferred Shares, (A) the number of
      outstanding shares of Common Stock is increased by a stock split, a stock
      dividend on the Common Stock, a reclassification of the Common Stock, or the
      distribution to holders of Common Stock of rights or warrants entitling them
      to
      subscribe for or purchase Common Stock at less than the then current market
      price thereof (based upon the subscription or exercise price of such rights
      or
      warrants at the time of the issuance thereof), the Conversion Rate shall be
      proportionately reduced, or (B) the number of outstanding shares of Common
      Stock
      is decreased by a reverse stock split, combination or reclassification of
      shares, the Conversion Rate shall be proportionately increased. In such event,
      the Corporation shall notify the Transfer Agent of such change on or before
      the
      effective date thereof. For purposes hereof, the market price per share of
      Common Stock on any date shall be the average Closing Bid Price for the Common
      Stock on the five (5) consecutive Trading Days occurring immediately prior
      to
      but not including the earlier of such date and the Trading Day before the "ex"
      date, if any, with respect to the issuance or distribution requiring such
      computation. The term "'ex date", when used with respect to any issuance or
      distribution, means the first Trading Day on which the Common Stock trades
      regular way in the market from which such average Closing Bid Price is then
      to
      be determined without the right to receive such issuance or distribution.





(b)  Adjustment
      to Conversion Rate During Reference Period .
      If,
      prior to the Conversion of all of the Preferred Shares, the number of
      outstanding shares of Common Stock is increased or decreased by a stock split,
      a
      stock dividend on the Common Stock, a combination, or a reclassification of
      the
      Common Stock, and such event takes place during the reference period for the
      determination of the Conversion Rate for any Conversion thereof, the Conversion
      Rate shall be calculated giving appropriate effect to the stock split, stock
      dividend, combination, or reclassification for all Trading Days occurring during
      such reference period.





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          Purchase Agreement - Page 67 of 74


(c)  Adjustment
      Due to Merger, Consolidation, Etc .
      If,
      prior to the Conversion of all of the Preferred Shares, there shall be any
      merger, consolidation, business combination, tender offer, exchange of shares,
      recapitalization, reorganization, redemption or other similar event, as a result
      of which shares of Common Stock shall be changed into the same or a different
      number of shares of the same or another class or classes of stock or securities
      of the Corporation or another entity (an "Exchange Transaction"), then such
      Holder shall (A) upon the closing of such Exchange Transaction, have the right
      to receive, with respect to any shares of Common Stock then held by such Holder,
      or which such Holder is then entitled to receive pursuant to a Conversion Notice
      previously delivered by such Holder, (and without regard to whether such shares
      contain a restrictive legend or are freely-tradable) the same amount and type
      of
      consideration (including without limitation, stock, securities and/or other
      assets) and on the same terms as a holder of shares of Common Stock would be
      entitled to receive in connection with such Exchange Transaction (the "Exchange
      Consideration"), and (B) upon the Conversion of Preferred Shares occurring
      subsequent to the closing of such Exchange Transaction, have the right to
      receive the Exchange Consideration which such Holder would have been entitled
      to
      receive in connection with such Exchange Transaction had such shares been
      converted immediately prior to such Exchange Transaction, and in any such case
      appropriate provisions shall be made with respect to the rights and interests
      of
      such Holder to the end that the provisions hereof (including, without
      limitation, provisions for the adjustment of the Conversion Price and of the
      number of shares issuable upon a Conversion) shall thereafter be applicable
      as
      nearly as may be practicable in relation to any securities thereafter
      deliverable upon the Conversion of such Preferred Shares. The Corporation shall
      not effect any Exchange Transaction unless (i) it first gives to each Holder
      twenty (20) days prior written notice of such Exchange Transaction (an "Exchange
      Notice"), and makes a public announcement of such event at the same time that
      it
      gives such notice and (ii) the resulting successor or acquiring entity (if
      not
      the Corporation) assumes by written instrument the obligations of the
      Corporation hereunder, including the terms of this subparagraph 5(c), and any
      other agreement relating to the rights of Holders.





(d)  Distribution
      of Assets .
      If the
      Corporation or any of its subsidiaries shall declare or make any distribution
      of
      cash, evidences of indebtedness or other securities or assets (other than cash
      dividends or distributions payable out of earned surplus or net profits for
      the
      current or the immediately preceding year), or any rights to acquire any of
      the
      foregoing, to holders of Common Stock (or to a holder of the common stock of
      any
      such subsidiary) as a partial liquidating dividend, by way of return of capital
      or otherwise, including any dividend or distribution in shares of capital stock
      of a subsidiary of the Corporation (collectively, a "Distribution"), then,
      upon
      a Conversion by a Holder occurring after the record date for determining
      stockholders entitled to such Distribution, the Conversion Rate for Preferred
      Shares not converted prior to the record date of a Distribution shall be
      decreased to a rate directly proportional to the decrease, if any, from the
      Conversion Price to the fair market value of the assets so distributed with
      respect to each share of Common Stock, such fair market value to be determined
      by an investment banking firm selected by the Holders of at least two-thirds
      (2/3) of the Preferred Shares then outstanding and reasonably acceptable to
      the
      Corporation.





Securities
          Purchase Agreement - Page 68 of 74


(e)  Adjustment
      Pursuant to Other Agreements .
      In
      addition to and without limiting in any way the adjustments provided in this
      Section 5, the Conversion Rate shall be adjusted as may be required by the
      provisions of any other agreement between the Corporation and the
      Holders.





(f)  No
      Fractional Shares .
      If any
      adjustment under this Section would create a fractional share of Common Stock
      or
      a right to acquire a fractional share of Common Stock, such fractional share
      shall be disregarded and the number of shares of Common Stock issuable upon
      Conversion shall be the next higher number of shares or, at the option of the
      Corporation, shall be paid in cash in an amount calculated by multiplying the
      amount of the fractional share times the Closing Bid Price on the Trading Day
      of
      such Conversion.





6.  MISCELLANEOUS.





(a)  Transfer
      of Preferred Shares .
      A
      Holder may sell or transfer all or any portion of the Preferred Shares to any
      person or entity as long as such sale or transfer is the subject of an effective
      registration statement under the Securities Act or is exempt from registration
      thereunder and otherwise is made in accordance with the terms of the Purchase
      Agreement. From and after the date of such sale or transfer, the transferee
      thereof shall be deemed to be a Holder. Upon any such sale or transfer, the
      Corporation shall, promptly following the return of the certificate or
      certificates representing the Preferred Shares that are the subject of such
      sale
      or transfer, issue and deliver to such transferee a new certificate in the
      name
      of such transferee.





(b)  Notices .
      Except
      as otherwise provided herein, any notice, demand or request required or
      permitted to be given pursuant to the terms hereof, the form or delivery of
      which notice, demand or request is not otherwise specified herein, shall be
      in
      writing and shall be deemed given (i) when delivered personally or by verifiable
      facsimile transmission on or before 5:00 p.m., eastern time, on a Business
      Day
      or, if such day is not a Business Day, on the next succeeding Business Day,
      (ii)
      on the next Business Day after timely delivery to an overnight courier and
      (iii)
      on the third Business Day after deposit in the U.S. mail (certified or
      registered mail, return receipt requested, postage prepaid), addressed to the
      parties as follows:





If
              to the Corporation:
            c/o
                David L. Kagel
              Law
                  Offices of David L. Kagel, A Professional Corporation
                1801
                  Century Park East, Suite 2500
                Los
                  Angeles, California 90067




with
      a
      copy to the Corporation’s executive offices and if to any Holder, to such
      address for such Holder as shall be designated by such Holder in writing to
      the
      Corporation.





(c)  Lost
      or Stolen Certificate .
      Upon
      receipt by the Corporation of evidence of the loss, theft, destruction or
      mutilation of a certificate representing Preferred Shares, and (in the case
      of
      loss, theft or destruction) of indemnity or security reasonably satisfactory
      to
      the Corporation, and upon surrender and cancellation of such certificate if
      mutilated, the Corporation shall execute and deliver to the Holder a new
      certificate identical in all respects to the original certificate.





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          Purchase Agreement - Page 69 of 74


(d)  Voting
      Rights .
      The
      Holders of the Preferred Shares shall have no voting rights with respect to
      the
      business, management or affairs of the Corporation.





(e)  Remedies,
      Characterization, Other Obligations, Breaches and Injunctive
      Relief .
      The
      remedies provided to a Holder in this Certificate of Designation shall be
      cumulative and in addition to all other remedies available to such Holder under
      this Certificate of Designation at law or in equity (including without
      limitation a decree of specific performance and/or other injunctive relief),
      no
      remedy contained herein shall be deemed a waiver of compliance with the
      provisions giving rise to such remedy and nothing contained herein shall limit
      such Holder's right to pursue actual damages for any failure by the Corporation
      to comply with the terms of this Certificate of Designation. The Corporation
      agrees with each Holder that there shall be no characterization concerning
      this
      instrument other than as specifically provided herein. Amounts set forth or
      provided for herein with respect to payments, conversion and the like (and
      the
      computation thereof) shall be the amounts to be received by the Holder hereof
      and shall not, except as expressly provided herein, be subject to any other
      obligation of the Corporation (or the performance thereof). The Corporation
      acknowledges that a breach by it of its obligations hereunder will cause
      irreparable harm to the Holders and that the remedy at law for any such breach
      may be inadequate. The Corporation agrees, in the event of any such breach
      or
      threatened breach, each Holder shall be entitled, in addition to all other
      available remedies, to an injunction restraining any breach, without the
      necessity of showing economic loss and without any bond or other security being
      required.





(f)  Failure
      or Delay not Waiver .
      No
      failure or delay on the part of a Holder in the exercise of any power, right
      or
      privilege hereunder shall operate as a waiver thereof, nor shall any single
      or
      partial exercise of any such power, right or privilege preclude other or further
      exercise thereof or of any other right, power or privilege.





*
      *
      *





Securities
          Purchase Agreement - Page 70 of 74


EXHIBIT
      E-1





NOTICE
      OF
      CONVERSION





The
      undersigned hereby elects to convert shares of Series B-1 Convertible Preferred
      Stock (the "Preferred Stock"), represented by the stock certificate referred
      to
      below. (the "Preferred Stock Certificates"), into shares of common stock
      ("Common Stock") of TechnoConcepts, Inc. according to the terms and conditions
      of the Certificate of Designation relating to the Series B-1 Preferred Stock
      (the "Certificate of Designation"), as of the date written below. Capitalized
      terms used herein and not otherwise defined shall have the respective meanings
      set forth in the Certificate of Designation.





Date
      of
      Conversion:








Number
      of
      Shares of Preferred Stock and Series thereof to be Converted:








Certificate
      Numbers:








Applicable
      Conversion Rate:








Number
      of
      Shares of Common Stock to be Issued:








Name
      of
      Holder:





Address:





Signature:





Name:





Title:





Holder
      Requests Delivery to be made: (check one)





______
      By
      Delivery of Physical Certificates to the Above Address





______
      Through Depository Trust Corporation (Account)





Securities
          Purchase Agreement - Page 71 of 74








**EXHIBIT
      F**





**AGENCY
      AGREEMENT**





1. **Appointment** . ** The
      Purchasers (all capitalized terms used herein and not otherwise defined shall
      have the respective meanings provided in the Securities Purchase Agreement
      to
      which this Exhibit F is attached (the " Agreement ")),
      by
      their acceptance of the benefits of the Agreement, hereby designate TRIUMPH
      RESEARCH GROUP LLC (“ Agent ”)
      as the
      Agent to act as specified herein and in the Agreement. Each Purchaser shall
      be
      deemed irrevocably to authorize the Agent to take such action on its behalf
      under the provisions of the Agreement and any other Transaction Document (as
      such term is defined in the Securities Purchase Agreement) and to exercise
      such
      powers and to perform such duties hereunder and thereunder as are specifically
      delegated to or required of the Agent by the terms hereof and thereof and such
      other powers as are reasonably incidental thereto. The Agent may perform any
      of
      its duties hereunder by or through its agents or employees.





2. **Nature
      of Duties** *.* The
      Agent shall have no duties or responsibilities except those expressly set forth
      in the Agreement. Neither the Agent nor any of its partners, members,
      shareholders, officers, directors, employees or agents shall be liable for
      any
      action taken or omitted by it as such under the Agreement or hereunder or in
      connection herewith or therewith, be responsible for the consequence of any
      oversight or error of judgment or answerable for any loss, unless caused solely
      by its or their gross negligence or willful conduct as determined by a final
      judgment (not subject to further appeal) of a court of competent jurisdiction.
      The duties of the Agent shall be mechanical and administrative in nature; the
      Agent shall not have by reason of the Agreement or any other Transaction
      Document a fiduciary relationship in respect of any Debtor or any Purchaser;
      and
      nothing in the Agreement or any other Transaction Document, expressed or
      implied, is intended to or shall be so construed as to impose upon the Agent
      any
      obligations in respect of the Agreement or any other Transaction Document except
      as expressly set forth herein and therein.





3. **Lack
      of Reliance on the Agent** .
      Independently and without reliance upon the Agent, each Purchaser, to the extent
      it deems appropriate, has made and shall continue to make (i) its own
      independent investigation of the financial condition and affairs of the Company
      and its subsidiaries in connection with such Purchaser’s investment in the
      Company, the creation and continuance of the Obligations, the transactions
      contemplated by the Transaction Documents, and the taking or not taking of
      any
      action in connection therewith, and (ii) its own appraisal of the financial
      condition of the Company and its subsidiaries, and of the value of the Shares
      from time to time, and the Agent shall have no duty or responsibility, either
      initially or on a continuing basis, to provide any Purchaser with any credit,
      market or other information with respect thereto, whether coming into its
      possession before any Obligations are incurred or at any time or times
      thereafter. The Agent shall not be responsible to the Company or any Purchaser
      for any recitals, statements, information, representations or warranties herein
      or in any document, certificate or other writing delivered in connection
      herewith, or for the execution, effectiveness, genuineness, validity,
      enforceability, perfection, collectibility, priority or sufficiency of the
      Agreement or any other Transaction Document, or for the financial condition
      of
      the Company or the value of any of the Collateral, or be required to make any
      inquiry concerning either the performance or observance of any of the terms,
      provisions or conditions of the Agreement or any other Transaction Document,
      or
      the financial condition of the Company, or the value of any of the Collateral,
      or the existence or possible existence of any default or Event of Default under
      the Agreement or any of the other Transaction Documents.





Securities
          Purchase Agreement - Page 72 of 74


4. **Certain
      Rights of the Agent** .
      The
      Agent shall have the right to take any action with respect to the Transaction
      Documents, on behalf of all of the Purchasers. To the extent practical, the
      Agent shall request instructions from the Purchasers with respect to any
      material act or action (including failure to act) in connection with the
      Agreement or any other Transaction Document, and shall be entitled to act or
      refrain from acting in accordance with the instructions of a Majority in
      Interest of Purchasers; if such instructions are not provided despite the
      Agent’s request therefor, the Agent shall be entitled to refrain from such act
      or taking such action, and if such action is taken, shall be entitled to
      appropriate indemnification from the Purchasers in respect of actions to be
      taken by the Agent; and the Agent shall not incur liability to any person or
      entity by reason of so refraining. Without limiting the foregoing, (a) no
      Purchaser shall have any right of action whatsoever against the Agent as a
      result of the Agent acting or refraining from acting hereunder in accordance
      with the terms of the Agreement or any other Transaction Document, and the
      Company shall have no right to question or challenge the authority of, or the
      instructions given to, the Agent pursuant to the foregoing and (b) the Agent
      shall not be required to take any action which the Agent believes (i) could
      reasonably be expected to expose it to personal liability or (ii) is contrary
      to
      this Agreement, the Transaction Documents or applicable law.





5. **Reliance** .
      The
      Agent shall be entitled to rely, and shall be fully protected in relying, upon
      any writing, resolution, notice, statement, certificate, telex, teletype or
      telecopier message, cablegram, radiogram, order or other document or telephone
      message signed, sent or made by the proper person or entity, and, with respect
      to all legal matters pertaining to the Agreement and the other Transaction
      Documents and its duties thereunder, upon advice of counsel selected by it
      and
      upon all other matters pertaining to this Agreement and the other Transaction
      Documents and its duties thereunder, upon advice of other experts selected
      by
      it.





6. **Indemnification** *.* To the
      extent that the Agent is not reimbursed and indemnified by the Company, the
      Purchasers will jointly and severally reimburse and indemnify the Agent from
      and
      against any and all liabilities, obligations, losses, damages, penalties,
      actions, judgments, suits, costs, expenses or disbursements of any kind or
      nature whatsoever which may be imposed on, incurred by or asserted against
      the
      Agent in performing its duties hereunder or under the Agreement or any other
      Transaction Document, or in any way relating to or arising out of the Agreement
      or any other Transaction Document except for those determined by a final
      judgment (not subject to further appeal) of a court of competent jurisdiction
      to
      have resulted solely from the Agent's own gross negligence or willful
      misconduct. Prior to taking any action hereunder as Agent, the Agent may require
      each Purchaser to deposit with it sufficient sums as it determines in good
      faith
      is necessary to protect the Agent for costs and expenses associated with taking
      such action.





Securities
          Purchase Agreement - Page 73 of 74


7. **Resignation
      by the Agent** ***.*** ****


(a)
      The
      Agent may resign from the performance of all its functions and duties under
      the
      Agreement and the other Transaction Documents at any time by giving 30 days'
      prior written notice (as provided in the Agreement) to the Company and the
      Purchasers. Such resignation shall take effect upon the appointment of a
      successor Agent pursuant to clauses (b) and (c) below.





(b)
      Upon
      any such notice of resignation, the Purchasers, acting by a  **Majority
      in Interest** ,
      shall
      appoint a successor Agent hereunder.








(c)
      If a
      successor Agent shall not have been so appointed within said 30-day period,
      the
      Agent shall then appoint a successor Agent who shall serve as Agent until such
      time, if any, as the Purchasers appoint a successor Agent as provided above.
      If
      a successor Agent has not been appointed within such 30-day period, the Agent
      may petition any court of competent jurisdiction or may interplead the Company
      and the Purchasers in a proceeding for the appointment of a successor Agent,
      and
      all fees, including, but not limited to, extraordinary fees associated with
      the
      filing of interpleader and expenses associated therewith, shall be payable
      by
      the Company on demand.





8. **Rights
      and Remedies** *.* Each
      Purchaser agrees with all other Purchasers and the Agent (i) that it shall
      not,
      and shall not attempt to, exercise any rights or remedies under the Securities
      Purchase Agreement, whether pursuant to any other agreement or otherwise (other
      than pursuant to this Agreement), or take or institute any action against the
      Agent, the Company or any of the other Purchasers (other than any such action
      arising from the breach of this Agreement) and (ii) that such Purchaser has
      no
      other rights with respect to the Securities Purchase Agreement other than as
      set
      forth in this Agreement and the other Transaction Documents.







Securities
          Purchase Agreement - Page 74 of 74