Document:

SECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT (as amended, restated, supplemented or otherwise modified from time
      to
      time in accordance herewith and including all attachments, exhibits and
      schedules hereto, the “Agreement”),
      dated
      as of June 29, 2007, made by TechnoConcepts Inc., a Colorado corporation (the
      “Grantor”),
      in
      favor of the secured parties listed on Exhibit
      A
      to this
      Agreement and their permitted successors and assigns (collectively, the
“Secured
      Parties”).

     

    WHEREAS,
      Grantor has issued or will issue secured promissory notes to the Secured Parties
      (collectively, the “Note”)
      pursuant to a Note and Warrant Purchase Agreement, dated as of June 29, 2007
      (the “Purchase
      Agreement”),
      by
      and among Grantor and the Secured Parties; and

     

    WHEREAS,
      the Secured Parties and the Grantor agree that the Grantor execute and deliver
      to the Secured Parties a security agreement providing for the grant to the
      Secured Parties of a continuing security interest in all personal property
      and
      assets of the Grantor, all in substantially the form hereof to secure all
      Obligations (hereinafter defined).

     

    NOW,
      THEREFORE, the parties agree as follows:

     

    ARTICLE
      I. Definitions

     

    Section
      1.1. Definition
      of Terms Used Herein.
      All
      capitalized terms used herein and not defined herein have the respective
      meanings provided therefor in the Purchase Agreement or the Note, as applicable.
      All terms defined in the Uniform Commercial Code (hereinafter defined) as in
      effect from time to time and used herein and not otherwise defined herein
      (whether or not such terms are capitalized) have the same definitions herein
      as
      specified therein.

     

    Section
      1.2. Definition
      of Certain Terms Used Herein.
      As used
      herein, the following terms have the following meanings:

     

    “Collateral”
means
      all accounts receivable of the Grantor and all personal and fixed property
      of
      every kind and nature, including, without limitation, all furniture, fixtures,
      equipment, raw materials, inventory, as extracted collateral, or other goods,
      accounts, contract rights, rights to the payment of money, insurance refund
      claims and all other insurance claims and proceeds, tort claims, chattel paper,
      documents, instruments, securities and other investment property, deposit
      accounts, rights to proceeds of letters of credit and all general intangibles
      including, without limitation, all tax refund claims, license fees, patents,
      patent licenses, patent applications, trademarks, trademark licenses, trademark
      applications, trade names, copyrights, copyright licenses, copyright
      applications, rights to sue and recover for past infringement of patents,
      trademarks and copyrights, computer programs, computer software, engineering
      drawings, service marks, customer lists, goodwill, and all licenses, permits,
      agreements of any kind or nature pursuant to which the Grantor possesses, uses
      or has authority to possess or use property (whether tangible or intangible)
      of
      others or others possess, use or have authority to possess or use property
      (whether tangible or intangible) of the Grantor, and all recorded data of any
      kind or nature, regardless of the medium of recording including, without
      limitation, all books and records, software, writings, plans, specifications
      and
      schematics, whether now owned or hereinafter acquired by the Grantor together
      with all substitutions and replacements thereof and all proceeds and products
      of
      each of the foregoing; provided,
      that
      the Collateral shall not include license agreements or other agreements which
      require the consent of any person for the assignment thereof unless and until
      such consent has been obtained (provided that the proceeds thereof shall
      constitute Collateral). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Default”
means
      any event or circumstance which, with the giving of notice, the lapse of time,
      or both, would (if not cured, waived, or otherwise remedied during such time)
      constitute an Event of Default.

     

    “Event
      of Default”
has
      the
      meaning specified in the Note. 

     

    “Indemnitees”
      has the
      meaning specified in Section 7.5(b).

     

    “Intellectual
      Property”
      means
      the
      collective reference to all rights, priorities and privileges relating to
      intellectual property, whether arising under United States of America
      (“United
      States”),
      multinational or foreign laws or otherwise, including without limitation, (i)
      all copyrights arising under the laws of the United States, any other country
      or
      any political subdivision thereof, whether registered or unregistered and
      whether published or unpublished, all registrations and recordings thereof,
      and
      all applications in connection therewith, including, without limitation, all
      registrations, recordings and applications in the United States Copyright
      Office, (ii) all letters patent of the United States, any other country or
      any
      political subdivision thereof, all reissues and extensions thereof, and all
      applications for letters patent of the United States or any other country and
      all divisions, continuations and continuations-in-part thereof, (iii) all
      trademarks, trade names, corporate names, company names, business names,
      fictitious business names, trade dress, service marks, logos, domain names
      and
      other source or business identifiers, and all goodwill associated therewith,
      now
      existing or hereafter adopted or acquired, all registrations and recordings
      thereof, and all applications in connection therewith, whether in the United
      States Patent and Trademark Office or in any similar office or agency of the
      United States, any state thereof or any other country or any political
      subdivision thereof, or otherwise, and all common law rights related thereto,
      (iv) all trade secrets arising under the laws of the United States, any other
      country or any political subdivision thereof, (v) all rights to obtain any
      reissues, renewals or extensions of the foregoing, (vi) all licenses for any
      of
      the foregoing, and (vii) all causes of action for infringement of the foregoing.
      

     

    “Lien”
means:
      (i) any interest in property securing an obligation owed to, or a claim by,
      a Person other than the owner of the property, whether such interest is based
      on
      the common law, statute, or contract, and including a security interest, charge,
      claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge,
      hypothecation, assignment, deposit arrangement, agreement, security agreement,
      conditional sale or trust receipt or a lease, consignment or bailment for
      security purposes; (ii) to the extent not included under clause (i),
      any
      reservation, exception, encroachment, easement, right-of-way, covenant,
      condition, restriction, lease or other title exception or encumbrance affecting
      property; and (iii) any contingent or other agreement to provide any of the
      foregoing.

     

    “Note”
has
      the
      meaning assigned to such term in the first recital of this
      Agreement.

     

    “Obligations”
means
      all indebtedness, liabilities, obligations, covenants and duties of the Grantor
      to the Secured Parties of every kind, nature and description, direct or
      indirect, absolute or contingent, joint or several, due or not due, contractual
      or tortious, liquidated or unliquidated, arising by operation of law or
      otherwise, now existing of hereafter arising under or in connection with the
      Note, the Purchase Agreement, this Agreement or the other Transaction Documents,
      whether for principal, interest, fees, expenses or otherwise, together with
      all
      costs of collection or enforcement, including, without limitation, reasonable
      attorneys’ fees incurred in any collection efforts or in any action or
      proceeding.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Permitted
      Liens”
means
      (a) liens for taxes not delinquent or that are being contested in good faith
      by
      appropriate proceedings; (b) inchoate materialmens’, mechanics’, workmens’,
      repairmens’, or other like liens arising in the ordinary course of business and,
      in each case, not delinquent or that are being contested in good faith by
      appropriate proceedings; (c)
      pledges
      or deposits in connection with workers’ compensation, unemployment insurance and
      other social security legislation;(d)
      deposits to secure the performance of bids, trade contracts (other than for
      the
      repayment of borrowed money), leases, statutory obligations, surety and appeal
      bonds, performance bonds and other obligations of a like nature incurred in
      the
      ordinary course of business; (e) any interest or title of a lessor under any
      operating lease entered into by the Grantor in the ordinary course of its
      business and covering only the assets so leased; and (f) liens in favor of
      depository and collection banks and other regulated financial institutions
      consisting of statutory or contractual setoff rights with respect to deposit
      accounts or securities accounts of the Grantor maintained with such bank or
      financial institution to secure payment of customary maintenance fees or other
      administrative charges associated with such accounts so long as such Liens
      are
      incurred in the ordinary course of business for amounts that are not overdue
      for
      a period of more than 30 days or that are being contested in good faith by
      appropriate proceedings.

     

    “Registered
      Organization”
      means
      an
      entity formed by filing a registration document with a United States
      Governmental Authority, such as a corporation, limited partnership or limited
      liability company. 

     

    “Security
      Interest”
has
      the
      meaning specified in Section 2.1 of this Agreement.

     

    “Uniform
      Commercial Code”
      means
      the Uniform Commercial Code as in effect in the State of New York as it may
      be
      amended, supplemented or modified from time to time.

     

    ARTICLE
      II. Security Interest

     

    Section
      2.1. Security
      Interest.
      As
      security for the payment and performance, in full of the Obligations, and any
      extensions, renewals, modifications or refinancings of the Obligations, the
      Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
      hypothecates and transfers to the Secured Parties, and hereby grants to the
      Secured Parties, their successors and assigns, a security interest in, all
      of
      such Grantor’s right, title and interest in, to and under the Collateral and all
      hereinafter acquired Collateral (the “Security
      Interest”).
      

     

    Section
      2.2. No
      Assumption of Liability.
      The
      Security Interest is granted as security only and shall not subject the Secured
      Parties to, or in any way alter or modify, any obligation or liability of the
      Grantor with respect to or arising out of the Collateral.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Section
      2.3. Continuing
      Agreement.
      This
      Agreement shall create a continuing security interest in the Collateral and
      shall remain in full force and effect until payment in full of the
      Obligations.

     

    ARTICLE
      III. Representations and Warranties

     

    The
      Grantor represents and warrants to the Secured Parties that:

     

    Section
      3.1. Title
      and Authority.
      The
      Grantor has (or to the extent that this Agreement states that the Collateral
      is
      to be acquired after the date hereof, will have) good and valid rights in and
      title to the Collateral with respect to which it has purported to grant a
      security interest hereunder and has (or to the extent that this Agreement states
      that the Collateral is to be acquired after the date hereof, will have) full
      power and authority to grant to the Secured Parties the Security Interest and
      to
      execute, deliver and perform its obligations in accordance with the terms of
      this Agreement, without the consent or approval of any other Person other than
      any consent or approval which has been obtained.

     

    Section
      3.2. Filings;
      Actions to Achieve Perfection.
      Fully
      executed Uniform Commercial Code financing statements (including fixture
      filings, as applicable) or other appropriate filings, recordings or
      registrations containing a description of the Collateral as set forth herein
      or
      in any generic manner and may describe the Collateral as “all assets” or words
      of similar effect, have been delivered to the Secured Parties for filing in
      each
      United States governmental, municipal or other office specified in Schedule
      3.2
      to this
      Agreement, which are all the filings, recordings and registrations that are
      necessary to publish notice of and protect the validity of and to establish
      a
      legal, valid and perfected security interest in favor of the Secured Parties
      in
      respect of all Collateral in which the Security Interest may be perfected by
      filing, recording or registration in the United States (or any political
      subdivision thereof) and its territories and possessions, and no further or
      subsequent filing, refiling, recording, rerecording, registration or
      reregistration is necessary in any such jurisdiction, except as provided under
      applicable law with respect to the filing of continuation statements or with
      respect to the filing of amendments or new filings to reflect the change of
      the
      Grantor’s name, location, identity or corporate structure. The Grantor’s name is
      listed in the preamble of this Agreement identically to how it appears on its
      certificate of incorporation or other organizational documents and its
      organizational identification number is as set forth on Schedule
      3.2
      to this
      Agreement.

     

    Section
      3.3. Validity
      and Priority of Security Interest.
      The
      Security Interest constitutes (a) a legal and valid security interest in all
      the
      Collateral securing the payment and performance of the Obligations, (b) subject
      only to the filings described in Section 3.2 above, the Permitted Liens, and
      other previously perfected security interests in the Collateral listed on
Schedule
      3.3
      to this
      Agreement (the “Existing
      Liens”),
      a
      perfected security interest in all Collateral in which a security interest
      may
      be perfected by filing, recording or registration in the United States pursuant
      to the Uniform Commercial Code or other applicable law in the United States
      (or
      any political subdivision thereof) and its territories and possessions or any
      other country, state or nation (or any political subdivision thereof). Such
      notices, filings and all other action necessary or desirable to perfect and
      protect such security interest have been duly taken. Notwithstanding anything
      herein to the contrary, the Security Interest granted hereunder is expressly
      subordinated to those Liens on the Collateral listed on Schedule
      3.3
      to this
      Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
      3.4. Absence
      of Other Liens.
      The
      Grantor’s Collateral is owned by the Grantor free and clear of any Lien other
      than Permitted Liens and Existing Liens. Without limiting the foregoing and
      except as set forth on Schedule
      3.3
      to this
      Agreement, the Grantor has not filed or consented to any filing of any financing
      statement or similar filing in favor of any Person other than the Secured
      Parties, nor permitted the granting or assignment of a security interest or
      permitted perfection of any security interest in the Collateral in favor of
      any
      Person other than the Secured Parties. 

     

    Section
      3.5. Valid
      and Binding Obligation.
      This
      Agreement constitutes the legal, valid and binding obligation of the Grantor,
      enforceable against the Grantor 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, (ii) as limited by laws relating to the availability of specific
      performance, injunctive relief, or other equitable remedies, and (iii) to the
      extent the indemnification provisions contained in this Agreement may be limited
      by applicable federal or state securities laws.

     

    Section
      3.6. Location
      of Collateral.
      The
      Grantor has no place of business or offices where its respective books of
      account and records are kept (other than temporarily at the offices of is
      attorneys or accountants) or places where Collateral is stored or located,
      except as set forth on Schedule
      3.6
      to this
      Agreement. Except as specifically set forth on Schedule
      3.6
      to this
      Agreement, the Grantor is the record owner of the real property where such
      Collateral is located, and there exist no mortgages or other liens on any such
      real property except for Permitted Liens. Except as disclosed on Schedule
      3.6
      to this
      Agreement, none of such Collateral is in the possession of any consignee,
      bailee, warehousemen, agent or processor. 

     

    Section
      3.7. Intellectual
      Property.
      Schedule
      3.7
      to this
      Agreement lists, to the best knowledge of the Grantor, all of the patents,
      patent applications, trademarks, trademark applications, registered copyrights,
      and domain names owned by the Grantor as of the date hereof. Schedule
      3.7
      to this
      Agreement lists all material licenses in favor of the Grantor for the use of
      any
      patents, trademarks, copyrights and domain names as of the date hereof. All
      material patents and trademarks of the Grantor have been duly recorded at the
      United States Patent and Trademark Office and all material copyrights of the
      Grantor have been duly recorded at the United States Copyright Office.
Schedule
      3.7
      to this
      Agreement shall be updated to the extent necessary to reflect new or additional
      patents, trademarks, copyrights, domain names, and applications or licenses
      therefore, in favor of the Secured Parties. 

     

    Section
      3.8. Deposit
      Accounts; Securities Accounts.
      The
      only Deposit Accounts or Securities Accounts maintained by the Grantor on the
      date hereof are those listed on Schedule
      3.8
      to this
      Agreement. 

     

    ARTICLE
      IV. Covenants

     

    Section
      4.1. Change
      of Name; Location of Collateral; Place of Business, State of Formation or
      Organization.

     

    (a)
      The
      Grantor shall notify the Secured Parties in writing at least eleven (11) days
      prior to any change (i) in its corporate name or in any trade name used to
      identify it in the conduct of its business or in the ownership of its
      properties, (ii) in the location of its chief executive office, its principal
      place of business, any office in which it maintains books or records relating
      to
      Collateral owned by it (including the establishment of any such new office
      or
      facility), (iii) in its identity or corporate structure such that a filed filing
      made under the Uniform Commercial Code becomes misleading or (iv) in its Federal
      Taxpayer Identification Number or organizational identification number.
      Furthermore, the Grantor shall not effect or permit any change referred to
      in
      the preceding sentence unless all filings have been made under the Uniform
      Commercial Code or otherwise that are required in order for the Secured Parties
      to continue at all times following such change to have a valid, legal and
      perfected security interest in all the Collateral. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b)
      Without limiting Section 4.1(a), without prior written notice to the Secured
      Parties, in each instance, the Grantor shall not change its (i) principal
      residence, if it is an individual, (ii) place of business, if it has only one
      place of business and is not a Registered Organization, (iii) principal place
      of
      business, if it has more than one place of business and is not a Registered
      Organization, or (iv) state of incorporation, formation or organization, if
      it
      is a Registered Organization. 

     

    Section
      4.2. Records.
      The
      Grantor shall maintain, at its own cost and expense, such complete and accurate
      records with respect to the Collateral owned by it as is consistent with its
      current practices and in accordance with such prudent and standard practices
      used in industries that are the same as or similar to those in which the Grantor
      is engaged, but in any event to include complete accounting records indicating
      all payments and proceeds received with respect to any part of the Collateral,
      and, at such time or times as the Secured Parties may reasonably request,
      promptly to prepare and deliver to the Secured Parties a duly certified schedule
      or schedules in form and detail reasonably satisfactory to the Secured Parties
      showing the identity, amount and location of any and all Collateral.

     

    Section
      4.3. Periodic
      Certification; Notice of Changes.
      In the
      event there should at any time be any change in the information represented
      and
      warranted herein or in the documents and instruments executed and delivered
      in
      connection herewith, the Grantor shall immediately notify the Secured Parties
      in
      writing of such change (this notice requirement shall be in extension of and
      shall not limit or relieve the Grantor of any other covenants
      hereunder).

     

    Section
      4.4. Protection
      of Security.
      The
      Grantor shall, at its own cost and expense, take any and all actions necessary
      to defend title to the Collateral against all persons and to defend the Security
      Interest of the Secured Parties in the Collateral and the priority thereof
      against any Lien. 

     

    Section
      4.5. Inspection
      and Verification.
      The
      Secured Parties and such persons as the Secured Parties may reasonably designate
      shall have the right, upon reasonable notice to the Grantor and during normal
      business hours, to inspect the Collateral, all records related thereto (and
      to
      make extracts and copies from such records) and the premises upon which any
      of
      the Collateral is located, to discuss the Grantor’s affairs with the officers of
      the Grantor and its independent accountants and to verify under reasonable
      procedures the validity, amount, quality, quantity, value, condition and status
      of, or any other matter relating to, the Collateral, including, in the case
      of
      collateral in the possession of any third Person, by contacting any account
      debtor or third Person possessing such Collateral for the purpose of making
      such
      a verification. Out-of-pocket expenses in connection with any inspections by
      representatives of the Secured Parties shall be (a) the obligations of the
      Grantor with respect to any inspection after the Secured Parties’ demand payment
      of the Note in accordance with the terms thereof or (b) the obligation of the
      Secured Parties in any other case. 

     

    
      
        
        

      

      
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    Section
      4.6. Taxes;
      Encumbrances.
      At
      their option, the Secured Parties may discharge Liens other than Permitted
      Liens
      and Existing Liens at any time levied or placed on the Collateral and may pay
      for the maintenance and preservation of the Collateral to the extent the Grantor
      fails to do so and the Grantor shall reimburse the Secured Parties on demand
      for
      any payment made or any expense incurred by the Secured Parties pursuant to
      the
      foregoing authorization; provided,
      however,
      that
      nothing in this Section shall be interpreted as excusing the Grantor from the
      performance of, or imposing any obligation on the Secured Parties to cure or
      perform, any covenants or other obligation of the Grantor with respect to any
      Lien or maintenance or preservation of Collateral as set forth
      herein.

     

    Section
      4.7. Use
      and Disposition of Collateral.
      The
      Grantor shall not make or permit to be made an assignment, pledge or
      hypothecation of any Collateral or shall grant any other Lien (other than
      Permitted Liens) in respect of the Collateral without the prior written consent
      of the Secured Parties. The Grantor shall not make or permit to be made any
      transfer of any Collateral other than in the ordinary course of business or
      with
      respect to Existing Liens and other liens approved by the Secured Parties and
      the Grantor shall remain at all times in possession of the Collateral owned
      by
      it. 

     

    Section
      4.8. Insurance/Notice
      of Loss.
      Within
      a reasonable period of time following the date of this Agreement, Grantor,
      at
      its own expense, shall maintain or cause to be maintained insurance covering
      physical loss or damage to the Collateral as described on Schedule
      4.8
      to this
      Agreement. In extension of the foregoing and without limitation, such insurance
      shall be payable to the Secured Parties as loss payee under a “standard” loss
      payee clause, and the Secured Parties shall be listed as an “additional insured”
on Grantor’s general liability insurance. Such insurance shall not be
      terminated, cancelled or not renewed for any reason, including non-payment
      of
      insurance premiums, unless the insurer shall have provided the Secured Parties
      at least 30 days prior written notice. Grantor irrevocably makes, constitutes
      and appoints the Secured Parties (and all officers, employees or agents
      designated by the Secured Parties) as its true and lawful agent and
      attorney-in-fact for the purpose, at any time after the occurrence and during
      the continuance of an Event of Default, of making, settling and adjusting claims
      in respect of Collateral under policies of insurance, endorsing the name of
      Grantor on any check, draft, instrument or other item of payment for the
      proceeds of such policies of insurance and for making all determinations and
      decisions with respect thereto. In the event that Grantor at any time or times
      shall fail to obtain or maintain any of the policies of insurance required
      hereby or to pay any premium in whole or part relating thereto, the Secured
      Parties may, without waiving or releasing any obligation or liability of Grantor
      hereunder, in their sole discretion, obtain and maintain such policies of
      insurance and pay such premium and take any other actions with respect thereto
      as the Secured Parties deem advisable. All sums disbursed by the Secured Parties
      in connection and in accordance with this Section, including reasonable
      attorneys’ fees, court costs, expenses and other charges relating thereto, shall
      be payable upon demand, by Grantor to the Secured Parties and shall be
      additional Obligations secured hereby. Grantor shall promptly notify the Secured
      Parties if any material portion of the Collateral owned or held by Grantor
      is
      damaged or destroyed. The proceeds of any casualty insurance in respect of
      any
      casualty loss of any of the Collateral shall (i) so long as no Event of Default
      has occurred and is continuing, be disbursed to Grantor for direct application
      by Grantor solely to the repair or replacement of Grantor’s property so damaged
      or destroyed, and (ii) in all other circumstances, be held by the Secured
      Parties and promptly applied to the Obligations. The Secured Parties may apply
      any of such proceeds directly to the repair or replacement of Grantor’s property
      so damaged or destroyed, or Grantor may apply all or any part of such proceeds
      to the Obligations.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      4.9. Legend.
      Grantor
      shall legend, in form and manner satisfactory to the Secured Parties, its
      accounts and its books, records and documents evidencing or pertaining thereto
      with an appropriate reference to the fact that such accounts have been assigned
      to the Secured Parties and that the Secured Parties have a security interest
      therein. 

     

    Section
      4.10. Further
      Assurances.
      Grantor
      shall, at its own expense, execute, acknowledge, deliver and cause to be duly
      filed all such further instruments and documents and take all such actions
      as
      the Secured Parties may from time to time reasonably request to better assure,
      preserve, protect and perfect the Security Interest and the rights and remedies
      created hereby, including the payment of any fees and taxes required in
      connection with the execution and delivery of this Agreement, the granting
      of
      the Security Interest, the filing of any financing statements (including fixture
      filings), the delivery of a separate security agreement with respect to the
      Grantor’s Intellectual Property or any other documents in connection herewith or
      therewith. If any amount payable under or in connection with any of the
      Collateral shall be or become evidenced by any promissory note or other
      instrument, such note or instrument shall be immediately pledged and delivered
      to the Secured Parties, duly endorsed in a manner satisfactory to the Secured
      Parties. 

     

    ARTICLE
      V. Power of Attorney 

     

    Section
      5.1. Power
      of Attorney.
      

     

    (a)
      Grantor hereby irrevocably (as a power coupled with an interest) constitutes
      and
      appoints Vision Opportunity Master Fund, Ltd. (“Vision”)
      and
      all officers, employees or agents designated by Vision, its attorney-in-fact
      with full power of substitution, for the benefit of the Secured Parties,

     

    (i)
      to
      take all appropriate action and to execute all documents and instruments that
      may be necessary or desirable to accomplish the purposes of this Agreement,
      and
      without limiting the generality of the foregoing, Grantor hereby grants the
      power to file one or more financing statements (including fixture filings),
      continuation statements, filings with the United States Patent and Trademark
      Office or United States Copyright Office (or any successor office or any similar
      office in any other country) or other documents for the purpose of perfecting,
      confirming, continuing, enforcing or protecting the Security Interest granted
      by
      Grantor, without the signature of Grantor, and naming Grantor as debtor and
      the
      Secured Parties as secured party; and

     

    (ii)
      at
      any time after the occurrence and during the continuance of an Event of Default,
      (i) to receive, endorse, assign and/or deliver any and all notes, acceptances,
      checks, drafts, money orders or other evidences of payment relating to the
      Collateral or any part thereof; (ii) to demand, collect, receive payment of,
      give receipt for and give discharges and releases of all or any of the
      Collateral; (iii) to sign the name of Grantor on any invoice or bill of lading
      relating to any of the Collateral; (iv) to send verifications of accounts to
      any
      account debtor or any other Person liable for an account; (v) to commence and
      prosecute any and all suits, actions or proceedings at law or in equity in
      any
      court of competent jurisdiction to collect or otherwise realize on all or any
      of
      the Collateral or to enforce any rights in respect of any Collateral; (vi)
      to
      settle, compromise, compound, adjust or defend any actions, suits or proceedings
      relating to all or any of the Collateral; and (vii) to use, sell, assign,
      transfer, pledge, make any agreement with respect to or otherwise deal with
      all
      or any of the Collateral, and to do all other acts and things necessary to
      carry
      out the purposes of this Agreement, as fully and completely as though the
      Secured Parties were the absolute owner of the Collateral for all purposes;
      provided, however,
      that
      nothing herein contained shall be construed as requiring or obligating the
      Secured Parties to make any commitment or to make any inquiry as to the nature
      or sufficiency of any payment received by the Secured Parties, or to present
      or
      file any claim or notice, or to take any action with respect to the Collateral
      or any part thereof or the moneys due or to become due in respect thereof or
      any
      property covered thereby, and no action taken or omitted to be taken by the
      Secured Parties with respect to the Collateral or any part thereof shall give
      rise to any defense, counterclaim or offset in favor of Grantor or to any claim
      or action against the Secured Parties. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b)
      The
      provisions of this Article shall in no event relieve Grantor of any of its
      obligations hereunder with respect to the Collateral or any part thereof or
      impose any obligation on the Secured Parties to proceed in any particular manner
      with respect to the Collateral or any part thereof, or in any way limit the
      exercise by the Secured Parties of any other or further right which it may
      have
      on the date of this Agreement or hereafter, whether hereunder, by law or
      otherwise.

     

    ARTICLE
      VI. Remedies

     

    Section
      6.1. Remedies
      upon Default.
      

     

    (a)
      Upon
      the occurrence and during the continuance of an Event of Default, Grantor agrees
      to deliver each item of its Collateral to the Secured Parties on demand, and
      it
      is agreed that the Secured Parties shall have the right to take any of or all
      the following actions at the same or different times (but at all times subject
      to any Permitted Lien and Existing Liens): to the extent permitted by applicable
      law, with or without legal process and with or without prior notice or demand
      for performance, to take possession of the Collateral and without liability
      for
      trespass to enter any premises where the Collateral may be located for the
      purpose of taking possession of or removing the Collateral; exercise Grantor’s
      right to bill and receive payment for completed work; and, generally, to
      exercise any and all rights afforded to a secured party under the Uniform
      Commercial Code or other applicable law. Without limiting the generality of
      the
      foregoing, Grantor agrees that the Secured Parties shall have the right, subject
      to the mandatory requirements of applicable law, to sell or otherwise dispose
      of
      all or any part of the Collateral, at public or private sale or at any broker’s
      board or on any securities exchange, for cash, upon credit or for future
      delivery as the Secured Parties shall deem appropriate. The Secured Parties
      shall be authorized at any such sale (if it deems it advisable to do so) to
      restrict the prospective bidders or purchasers to persons who will represent
      and
      agree that they are purchasing the Collateral for their own account for
      investment and not with a view to the distribution or sale thereof, and upon
      consummation of any such sale the Secured Parties shall have the right to
      assign, transfer and deliver to the purchaser or purchasers thereof the
      Collateral so sold. Each such purchaser at any such sale shall hold the property
      sold absolutely, free from any claim or right on the part of Grantor, and
      Grantor hereby waives (to the extent permitted by law) all rights of redemption,
      stay and appraisal which Grantor now has or may at any time in the future have
      under any rule of law or statute now existing or hereafter enacted.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)
      The
      Secured Parties shall give Grantor ten (10) days’ written notice (which Grantor
      agrees is reasonable notice within the meaning of Section 9-611 of the Uniform
      Commercial Code) of the Secured Parties’ intention to make any sale of
      Collateral. Such notice, in the case of a public sale, shall state the time
      and
      place for such sale and, in the case of a sale at a broker’s board or on a
      securities exchange, shall state the board or exchange at which such sale is
      to
      be made and the day on which the Collateral, or portion thereof, will first
      be
      offered for sale at such board or exchange. Any such public sale shall be held
      at such time or times within ordinary business hours and at such place or places
      as the Secured Parties may fix and state in the notice (if any) of such sale.
      At
      any such sale, the Collateral, or portion thereof, to be sold may be sold in
      one
      lot as an entirety or in separate parcels, as the Secured Parties may (in their
      sole and absolute discretion) determine. The Secured Parties shall not be
      obligated to make any sale of any Collateral if it shall determine not to do
      so,
      regardless of the fact that notice of sale of such Collateral shall have been
      given. The Secured Parties may, without notice or publication, adjourn any
      public or private sale or cause the same to be adjourned from time to time
      by
      announcement at the time and place fixed for sale, and such sale may, without
      further notice, be made at the time and place to which the same was so
      adjourned. In case any sale of all or any part of the Collateral is made on
      credit or for future delivery, the Collateral so sold may be retained by the
      Secured Parties until the sale price is paid by the purchaser or purchasers
      thereof, but the Secured Parties shall not incur any liability in case any
      such
      purchaser or purchasers shall fail to take up and pay for the Collateral so
      sold
      and, in case of any such failure, such Collateral may be sold again upon like
      notice. At any public (or, to the extent permitted by law, private) sale made
      pursuant to this Section, the Secured Parties may bid for or purchase, free
      (to
      the extent permitted by law) from any right of redemption, stay, valuation
      or
      appraisal on the part of Grantor (all said rights being also hereby waived
      and
      released to the extent permitted by law), the Collateral or any part thereof
      offered for sale and may make payment on account thereof by using any claim
      then
      due and payable to the Secured Parties from Grantor as a credit against the
      purchase price, and the Secured Parties may, upon compliance with the terms
      of
      sale, hold, retain and dispose of such property without further accountability
      to Grantor therefor. For purposes hereof, a written agreement to purchase the
      Collateral or any portion thereof shall be treated as a sale thereof; the
      Secured Parties shall be free to carry out such sale pursuant to such agreement
      and Grantor shall not be entitled to the return of the Collateral or any portion
      thereof subject thereto, notwithstanding the fact that after the Secured Parties
      shall have entered into such an agreement all Obligations have been paid in
      full. As an alternative to exercising the power of sale herein conferred upon
      it, the Secured Parties may proceed by a suit or suits at law or in equity
      to
      foreclose this Agreement and to sell the Collateral or any portion thereof
      pursuant to a judgment or decree of a court or courts having competent
      jurisdiction or pursuant to a proceeding by a court-appointed
      receiver.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      6.2. Application
      of Proceeds.
      The
      Secured Parties shall apply the proceeds of any collection or sale of the
      Collateral, as well as any Collateral consisting of cash, as follows:

     

    (a)
      FIRST, to the payment of all costs and expenses incurred by the Secured Parties
      in connection with such collection or sale or otherwise in connection with
      this
      Agreement or any of the Obligations, including all court costs and the
      reasonable fees and expenses of its agents and legal counsel, and any other
      costs or expenses incurred in connection with the exercise of any right or
      remedy hereunder, under the Purchase Agreement, the Note and the other
      Transaction Documents;

     

    (b)
      SECOND, to the payment in full of the Obligations; and

     

    (c)
      THIRD, to Grantor, its successors or assigns, or to whomsoever may be lawfully
      entitled to receive the same, or as a court of competent jurisdiction may
      otherwise direct.

     

    Subject
      to the foregoing, the Secured Parties shall have absolute discretion as to
      the
      time of application of such proceeds, moneys or balances in accordance with
      this
      Agreement. Upon any sale of the Collateral by the Secured Parties (including
      pursuant to a power of sale granted by statute or under a judicial proceeding),
      the receipt of any such proceeds, moneys or balances by the Secured Parties
      or
      of the officer making the sale shall be a sufficient discharge to the purchaser
      or purchasers of the Collateral so sold and such purchaser or purchasers shall
      not be obligated to see to the application of any part of the purchase money
      paid over to the Secured Parties or such officer or be answerable in any way
      for
      the misapplication thereof.

     

    ARTICLE
      VII. Miscellaneous

     

    Section
      7.1. Notices.
      All
      communications and notices hereunder to the Grantor and to the Secured Parties
      shall (except as otherwise expressly permitted herein) be in writing and
      delivered to the Grantor or the Secured Parties, as the case may be, as provided
      in the Purchase Agreement. 

     

    Section
      7.2. Security
      Interest Absolute.
      All
      rights of the Secured Parties hereunder, the Security Interest and all
      obligations of Grantor hereunder shall be absolute and unconditional
      irrespective of (a) any lack of validity or enforceability of this Agreement,
      the Purchase Agreement, the Note, any Transaction Document or any agreement
      with
      respect to any of the Obligations or any other agreement or instrument relating
      to any of the foregoing, (b) any change in the time, manner or place of payment
      of, or in any other term of, all or any of the Obligations, or any other
      amendment or waiver of or any consent to any departure from the Purchase
      Agreement, the Note, any Transaction Document or any other agreement or
      instrument, (c) any exchange, release or non-perfection of any Lien on other
      collateral, or any release or amendment or waiver of or consent under or
      departure from any guarantee, securing or guaranteeing all or any of the
      Obligations, or (d) any other circumstance that might otherwise constitute
      a
      defense available to, or a discharge of, Grantor in respect of the Obligations
      or this Agreement. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      7.3. Survival
      of Agreement.
      All
      covenants, agreements, representations and warranties made by Grantor herein
      and
      in the certificates or other instruments prepared or delivered in connection
      with or pursuant to this Agreement shall be considered to have been relied
      upon
      by the Secured Parties and shall survive the making of the loan and the
      execution and delivery to the Secured Parties of the Note, regardless of any
      investigation made by the Secured Parties or on their behalf; and shall continue
      in full force and effect until this Agreement shall terminate.

     

    Section
      7.4. Binding
      Effect; Several Agreement; Successors and Assigns.
      This
      Agreement shall become effective as to Grantor when a counterpart hereof
      executed on behalf of Grantor shall have been delivered to the Secured Parties
      and a counterpart hereof shall have been executed on behalf of the Secured
      Parties, and thereafter shall be binding upon Grantor and the Secured Parties
      and their respective successors and assigns, and shall inure to the benefit
      of
      Grantor, the Secured Parties and their respective successors and assigns, except
      that Grantor shall not have the right to assign or transfer its rights or
      obligations hereunder or any interest herein or in the Collateral (and any
      such
      assignment or transfer shall be void) except as expressly contemplated by this
      Agreement, the Purchase Agreement, the Note or the other Transaction Documents.
      

     

    Section
      7.5. Secured
      Parties’ Fees and Expense; Indemnification.

     

    (a)
      Grantor agrees to pay upon demand to the Secured Parties the amount of any
      and
      all reasonable expenses, including all reasonable fees, disbursements and other
      charges of its counsel and of any experts or agents, which the Secured Parties
      may incur in connection with (i) (including all filings and recordings made
      hereunder), the administration of this Agreement, (ii) the custody or
      preservation of, or the sale of, collection from or other realization upon
      any
      of the Collateral, (iii) the exercise, enforcement or protection of any of
      the
      rights of the Secured Parties hereunder or (iv) the failure of Grantor to
      perform or observe any of the provisions hereof. 

     

    (b)
      Grantor agrees to indemnify the Secured Parties and the agent, contractors
      and
      employees of the Secured Parties (collectively, the “Indemnitees”)
      against, and hold each of them harmless from, any and all losses, claims,
      damages, liabilities and related expenses, including reasonable fees,
      disbursements and other charges of counsel, incurred by or asserted against
      any
      of them arising out of, in any way connected with, or as a result of, the
      execution, delivery, or performance of this Agreement or any agreement or
      instrument contemplated hereby or any claim, litigation, investigation or
      proceeding relating hereto or to the Collateral, whether or not any Indemnitee
      is a party thereto; provided,
      that
      such indemnity shall not, as to any Indemnitee, be available to the extent
      that
      such losses, claims, damages, liabilities or related expenses are determined
      by
      a court of competent jurisdiction by final and nonappealable judgment to have
      resulted from the gross negligence or willful misconduct of such
      Indemnitee.

     

    (c)
      Any
      such amounts payable as provided hereunder shall be additional Obligations
      secured hereby. The provisions of this Section shall remain operative and in
      full force and effect regardless of the termination of this Agreement, the
      Purchase Agreement, the Note or the other Transaction Documents, the
      consummation of the transactions contemplated hereby, the repayment of any
      of
      the Obligations, the invalidity or unenforceability of any term or provision
      of
      this Agreement, the Purchase Agreement, the Note or the other Transaction
      Documents, or any investigation made by or on behalf of the Secured Parties.
      All
      amounts due under this Section shall be payable on written demand therefor.
      

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      7.6. GOVERNING
      LAW.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
      LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY OF THE CONFLICTS
      OF
      LAW PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW
      OF
      ANOTHER JURISDICTION. THIS AGREEMENT SHALL NOT BE INTERPRETED OR CONSTRUED
      WITH
      ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE
      DRAFTED.

     

    Section
      7.7. Waivers;
      Amendment.
      

     

    (a)
      No
      failure or delay of the Secured Parties in exercising any power or right
      hereunder shall operate as a waiver thereof, nor shall any single or partial
      exercise of any such right or power, or any abandonment or discontinuance of
      steps to enforce such a right or power, preclude any other or further exercise
      thereof or the exercise of any other right or power. The rights and remedies
      of
      the Secured Parties hereunder and under the Purchase Agreement are cumulative
      and are not exclusive of any rights or remedies that they would otherwise have.
      No waiver of any provisions of this Agreement, the Purchase Agreement, the
      Note
      or the other Transaction Documents or consent to any departure by Grantor
      therefrom shall in any event be effective unless the same shall be permitted
      by
      paragraph (b) below, and then such waiver or consent shall be effective only
      in
      the specific instance and for the purpose for which given. No notice to or
      demand on Grantor in any case shall entitle Grantor to any other or further
      notice or demand in similar or other circumstances.

     

    (b)
      Neither this Agreement nor any provision hereof may be waived, amended or
      modified except pursuant to an agreement or agreements, in writing entered
      into
      by the Secured Parties and Grantor.

     

    Section
      7.8. WAIVER
      OF JURY TRIAL.
      EACH
      PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
      ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
      OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE
      PURCHASE AGREEMENT OR THE NOTE. EACH PARTY HERETO (A) CERTIFIES THAT NO
      REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
      OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
      SEEK
      TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
      PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE PURCHASE
      AGREEMENT AND THE NOTE, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
      WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     

    Section
      7.9. Severability.
      In the
      event any one or more of the provisions contained in this Agreement should
      be
      held invalid, illegal or unenforceable in any respect, the validity, legality
      and enforceability of the remaining provisions contained herein shall not in
      any
      way be affected or impaired thereby (it being understood that the invalidity
      of
      a particular provision in a particular jurisdiction shall not in and of itself
      affect the validity of such provision in any other jurisdiction). The parties
      shall endeavor in good-faith negotiations to replace the invalid, illegal or
      unenforceable provisions with valid provisions the economic effect of which
      comes as close as possible to that of the invalid, illegal or unenforceable
      provisions.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
      7.10. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      constitute an original but all of which when taken together shall constitute
      but
      one contract. Each party shall be entitled to rely on a facsimile signature
      of
      any other party hereunder as if it were an original.

     

    Section
      7.11. Jurisdiction;
      Consent to Service of Process.
      

     

    (a)
      Grantor hereby irrevocably and unconditionally submits, for itself and its
      property, to the nonexclusive jurisdiction of any New York State court or
      Federal court of the United States of America sitting in New York City, and
      any
      appellate court from any thereof, in any action or proceeding arising out of
      or
      relating to this Agreement, the Purchase Agreement or the Note, or for
      recognition or enforcement of any judgment, and each of the parties hereto
      hereby irrevocably and unconditionally agrees that all claims in respect of
      any
      such action or proceeding may be heard and determined in such New York State
      or,
      to the extent permitted by law, in such Federal court. Each of the parties
      hereto agrees that a final judgment in any such action or proceeding shall
      be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any other manner provided by law. Nothing in this Agreement shall affect
      any
      right that the Secured Parties may otherwise have to bring any action or
      proceeding relating to this Agreement, the Purchase Agreement, the Note or
      the
      other Transaction Documents against Grantor or its properties in the courts
      of
      any jurisdiction.

     

    (b)
      Grantor hereby irrevocably and unconditionally waives, to the fullest extent
      it
      may legally and effectively do so, any objection which it may now or hereafter
      have to the laying of venue of any suit, action or proceeding arising out of
      or
      relating to this Agreement, the Purchase Agreement, the Note or the other
      Transaction Documents in any New York State or Federal court. Each of the
      parties hereto hereby irrevocably waives, to the fullest extent permitted by
      law, the defense of an inconvenient forum to the maintenance of such action
      or
      proceeding in any such court. 

     

    (c)
      Each
      party to this Agreement irrevocably consents to service of process in the manner
      provided for notices in Section 7.1. Nothing in this Agreement will affect
      the
      right of any party to this Agreement to serve process in any other manner
      permitted by law.

     

    Section
      7.12. Termination.
      This
      Agreement and the Security Interest shall terminate when all the Obligations
      (other than indemnification obligations in respect of unasserted claims) have
      been paid in full, at which time the Secured Parties shall execute and deliver
      to Grantor, at Grantor’s expense, all Uniform Commercial Code termination
      statements and similar documents which Grantor shall reasonably request to
      evidence such termination. Any execution and delivery of termination statements
      or documents pursuant to this Section shall be without recourse to or warranty
      by the Secured Parties.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      7.13. Prejudgment
      Remedy Waiver.
      Grantor
      acknowledges that this Agreement, the Purchase Agreement, the Note and the
      other
      Transaction Documents evidence a commercial transaction and that it could,
      under
      certain circumstances have the right, to notice of and hearing on the right
      of
      the Secured Parties to obtain a prejudgment remedy, such as attachment,
      garnishment and/or replevin, upon commencing any litigation against Grantor.
      Notwithstanding, Grantor hereby waives, to the extent permitted by applicable
      law, all rights to notice, judicial hearing or prior court order to which it
      might otherwise have the right under any state or federal statute or
      constitution in connection with the obtaining by the Secured Parties of any
      prejudgment remedy by reason of this Agreement, the Purchase Agreement, the
      Note, the other Transaction Documents or by reason of the Obligations or any
      renewals or extensions of the same. Grantor also waives, to the extent permitted
      by applicable law, any and all objection which it might otherwise assert, now
      or
      in the future, to the exercise or use by the Secured Parties of any right of
      setoff, repossession or self help as may presently exist under statute or common
      law.

     

    Section
      7.14. Limitation
      on Secured Parties’ Duty in Respect of Collateral.
      Secured
      Party shall not have any duty as to any Collateral in its possession or control
      or in the possession or control of any agent or nominee of it or any income
      thereon or as to the preservation of rights against prior parties or any other
      rights pertaining thereto, except that Secured Party shall use reasonable care
      with respect to the Collateral in its possession or under its control.

     

     

    [SIGNATURE
      PAGES FOLLOW]

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Security Agreement as
      of
      the day and year first written above.

     

    
      	 	 	 
	 	
              TECHNOCONCEPTS
                INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                

              Title:
                

            

    

     

    
      	 	 	 
	 	
              
                VISION
                  OPPORTUNITY MASTER FUND, LTD.

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                

              Title:
                

            

    

     

    
      
        	 	 	 
	 	
                
                  
                    DYNAMIC
                      DECISIONS GROWTH PREMIUM

                  

                

              
	 
 	 
 	 
 
	
              	By:  	
              
	 	
                

                Name:
                  

                Title:
                  

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    Secured
      Parties

     

    

    Vision
      Opportunity Master Fund, Ltd.

    20
      W.
      55th Street, 5th floor 

    New
      York,
      NY 10019 

    

    Dynamic
      Decisions Growth Premium

    c/o
      Morgan Stanley

    25
      Cabot
      Square

    London
      E14 4QA UK

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.2

    State
      of Incorporation; Chief Executive Office; Filing Locations; Organizational
      Identification Number

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.3

    Existing
      Liens

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      3.6

    Location
      of Collateral

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.7

    Intellectual
      Property

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.8

    Deposit
      Accounts; Securities Accounts

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      4.8

    InsuranceTECHNOCONCEPTS,
      INC.

     

    PLACEMENT
      AGENT AGREEMENT

     

    Dated:
      June 28, 2007

     

    Westminster
      Securities Corporation 

    100
      Wall
      Street

    New
      York,
      NY 10005

     

    TriPoint
      Global Equities, LLC
      

    17
      State
      Street, 16th
      Floor

    New
      York,
      NY 10004

     

    Ladies
      and Gentlemen:

     

    The
      undersigned, TechnoConcepts, Inc., a Colorado corporation (the “Company”),
      proposes to issue
      and
      sell up to $3,000,000 of investment units (“Units”) (the “Maximum Offering”) in
      a private placement
      for which you, Westminster Securities Corp. (“Westminster”) and TriPoint Global
      Equities, LLC
      (“TriPoint”) (each a “Placement Agent” and collectively, the “Placement
      Agents”), shall act as co-placement
      agents. The terms and conditions of the sale, issuance, and rights held by
      the
      securities underlying these Units are as set forth in the subscription
      agreements among the Company and the investors in the offering (“Investors”),
      which shall be prepared by the Company and subject to the approval
      of the Placement Agents (together with all exhibits, schedules and supplements
      thereto, the “Subscription
      Documents”). The Units, the 10% Promissory Note forming a part of the Units
      (“Notes”), the
      common stock underlying the Notes (“Shares”), the warrants forming a part of the
      Units (“Warrants”),
      the common stock underlying the Warrants (“Warrant Shares”), and the Placement
      Agent Warrants
      (as hereinafter defined) are referred to collectively herein as the
“Equity”.

     

    The
      offering of Units in the Company (the “Offering”) will be conducted on a “best
      efforts” basis up
      to the
      Maximum Offering. Fractional Units may be sold at the discretion of the Company.
      As used herein,
      including with respect to the representations and warranties contained herein,
      unless the context otherwise
      requires, the term “Company” shall include the Company together with all of its
      direct and indirect
      wholly owned subsidiaries, and all representations and warranties of the Company
      herein shall also
      be
      deemed made on behalf of and with respect to each such subsidiary of the
      Company, except where the context indicates that such representation and
      warranty applies only to the Company, including, without limitation, any
      representations and warranties relating to the capital stock of the Company.
      This Placement Agent Agreement (“Agreement”) is to confirm the arrangements with
      the Placement
      Agents with respect to the sale of the Units by the Placement Agents as
      exclusive agents for the Company in the Offering.

     

    The
      Offering will not be registered with the Securities and Exchange Commission
      (“SEC”) nor with
      any
      state securities authority, but rather will be offered as a private placement
      pursuant to an exemption
      from registration under Regulation D (“Regulation D”) promulgated under Section
      4(2) and Rule 506 of the Securities Act of 1933, as amended (“Securities Act”),
      and available state securities law exemptions.
      The Units are to be sold in the Offering only to “accredited investors”, as that
      term is defined
      in Regulation D, pursuant to the Subscription Documents.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECTION
      1. Description
      of Capital Stock. The
      Equity shall conform in all respects to descriptions
      thereof contained in the Subscription Documents.

     

    SECTION
      2. Representations
      and Warranties of the Company. The
      Company hereby represents, warrants
      and covenants with the Placement Agents as follows:

     

    (a) The
      Subscription Documents, copies of which will be delivered to the Placement
      Agents, will be
      carefully prepared to disclose or incorporate by reference all information
      concerning the Company which
      would be material to an investment decision by a reasonable investor. The date
      on which the Offering is authorized by the Company to commence is June 28,
      2007
      and is herein called the “Commencement Date.” The time and date of each issuance
      of Units hereunder is herein called an “Issuance
      Date” or a “Closing.”

     

    (b) The
      Company is duly incorporated and validly existing as a corporation in good
      standing under the laws of the state of its incorporation, having corporate
      power and authority to own its properties
      and conduct its business and is duly qualified and in good standing in each
      foreign jurisdiction where
      the
      conduct of its business so requires such qualification, except where the failure
      to be so qualified
      would not have a material adverse effect on the financial condition, results
      of
      operations, assets or
      business of the Company or the Material Subsidiaries, taken as a whole (a
“Material Adverse Effect”). No
      direct
      or indirect rights to acquire Common Stock exist, except as have been previously
      disclosed to the
      public or as disclosed in the Subscription Documents.

     

    (c) The
      unaudited financial statements of the Company for the periods ended March 31,
      2007 and December
      31, 2006, and the audited financial statements of the Company for the years
      ended September 30,
      2006
      and 2005, each included in the SEC Reports (defined below) (collectively, the
      “Financial Statements”), fairly present in all material respects the information
      purported to be shown therein of the Company, at the respective dates to which
      they apply; and such Financial Statements have been prepared in
      conformity with GAAP consistently applied throughout the periods involved and
      are in accordance in all
      material respects with the books and records of the Company.

     

    (d) The
      assets of the Company, as shown in the Financial Statements, are owned by the
      Company with
      good
      title, free and clear of all liens, encumbrances and equities of record or
      otherwise, except (i) those specifically referred to in the Subscription
      Documents, (ii) those which do not materially adversely affect
      the use or value of such assets, (iii) the lien of current taxes not now due
      or
      which are being contested
      in good faith and for which adequate reserves have been set aside and (iv)
      those
      disclosed in the
      Financial Statements or elsewhere in the Subscription Documents. The Company
      has
      the full corporate
      right, power and authority to maintain and operate its business and properties
      as the same are now operated or proposed to be operated and is complying with
      all laws, ordinances and regulations applicable
      thereto, except where the failure to so comply would not have a Material Adverse
      Effect.

     

    (e) There
      are
      no actions, suits or proceedings at law or in equity pending, or to the
      Company’s knowledge,
      threatened, against the Company before or by any federal or state commission,
      regulatory body,
      administrative agency or other governmental body wherein, either in any case
      or
      in the aggregate, an
      unfavorable ruling, decision or finding would have a Material Adverse Effect
      which are not disclosed in
      the
      Subscription Documents or the SEC Reports.

     

    (f) The
      execution and delivery by the Company of this Agreement, the consummation and
      performance
      of the transactions herein contemplated, and compliance with the terms of this
      Agreement by
      the
      Company will not conflict with, result in a material breach of, or constitute
      a
      material default under,
      the Certificate of Incorporation or the bylaws of the Company, in each case
      as
      amended, or any indenture, mortgage, deed of trust or other agreement or
      instrument to which the Company is now a party or by which it or any of its
      assets or properties is bound and which is filed as an exhibit to the Company’s
Annual
      Report on Form 10-K for the year ended September 30, 2006, or any other periodic
      or current report
      filed by the Company with the Securities and Exchange Commission since September
      30, 2006 (the
“SEC
      Reports”) (such agreements or instruments, the “Material Contracts”), or any
      law, order, rule, regulation,
      writ, injunction, judgment or decree of any government, governmental
      instrumentality or court, domestic or foreign, having jurisdiction over the
      Company or any of its business or properties, to the extent that such conflict,
      breach or default could have a Material Adverse Effect.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    (g) Except
      as
      set forth in the Subscription Documents or the SEC Reports, all material
      licenses, permits
      and approvals referred to in the Subscription Documents or the SEC Reports
      (including the Financial
      Statements) (the “Permits”) have been obtained and are valid and in full force
      and effect. There are
      no
      proceedings pending, or to the knowledge of the Company threatened, seeking
      to
      cancel, terminate or limit such Permits. Neither the Company nor, to the
      knowledge of the Company, any other party is in default
      under any of the Material Contracts, and to the knowledge of the Company, no
      event has occurred which
      with the passage of time or the giving of notice, or both, would constitute
      a
      default thereunder.

     

    (h) Except
      as
      described in the Subscription Documents or the SEC Reports, the Company has
      timely
      filed all federal, state and local tax returns required to be filed, including
      without limitation, all sales tax
      returns, or has obtained extensions thereof and has paid, or is contesting
      in
      good faith, all taxes shown on such
      returns.

     

    (i) The
      Company shall use the net proceeds from the sale of the Units hereunder
      primarily as described
      in the Subscription Documents. The Company will not use any proceeds from the
      sale of the Units for
      the
      satisfaction of any indebtedness for borrowed money, to redeem any Common Stock
      or Common Stock
      Equivalents or to settle any litigation outstanding as of any
      Closing.

     

    (j) The
      SEC
      Reports describe all material patents, trademarks, trade names, copyright
registrations
      and applications therefor now or heretofore used or presently proposed to be
      used in the conduct
      of the business of the Company and the failure of which the Company to have
      would have a Material
      Adverse Effect (the “IP Rights”). Except as set forth in the SEC Reports: (i)
      the Company owns or possesses adequate licenses or other valid rights to use
      all
      IP Rights necessary to the conduct of the business
      of the Company as presently being conducted; (ii) the validity of such IP Rights
      and the rights of
      the
      Company thereto have not been questioned in any litigation to which the Company
      is or has been a party,
      nor, to the best knowledge of the Company, is any such litigation threatened,
      other than as set forth in
      the
      SEC Reports; (iii) to the best knowledge of the Company, the conduct of the
      business of the Company
      as now conducted does not and will not conflict with IP Rights of others in
      any
      way which has or might reasonably be expected to have a Material Adverse Effect;
      and (iv) no proceedings are pending against
      the Company nor, to the best knowledge of the Company, are any proceedings
      threatened against the
      Company, alleging any violation of IP Rights of any third person. The Company
      does not know of (x)
      any
      use
      that has heretofore been or is now being made of any IP Rights owned by the
      Company, except
      by
      the Company, any licensor of such IP Rights to the Company or by a person duly
      licensed by the
      Company to use the same under an agreement described in the SEC Reports or
      (y)
      any
      material infringement of any IP Right owned by or licensed by or to the Company.
      To the best knowledge of the Company, all IP Rights heretofore owned or held
      by
      any agent, independent contractor, employee or officer
      of the Company or any subsidiary thereof and used in the business of the Company
      in any manner have
      been
      duly and effectively transferred to the Company. The consummation of the
      transactions contemplated
      by this Agreement will not alter or impair the rights and interests of the
      Company in any of the
      IP
      Rights.

     

    (k)
      All
      of the representations, agreements and warranties in this Section 2 shall
      survive delivery of
      and
      payment for all or any part of the Units for two years from and after such
      delivery and payment.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (l) The
      Company has no subsidiaries other than as disclosed in the Subscription
      Documents.

     

    (m) All
      of
      the SEC Reports were true and correct in all material respects upon the dates
      of
filing
      thereof except as subsequently amended or disclosed in the SEC
      Reports.

     

    SECTION
      3. Issuance,
      Sale and Delivery of the Units. 

     

    (a) The
      Company hereby agrees to sell the Units directly to subscribers identified
      by
      the Placement
      Agents on a “best efforts” basis with respect to the remaining Units up to the
      Maximum Offering.
      The offering will commence on the Commencement Date and continue until
      terminated by the Company. The Units will be offered for cash and delivery
      of
      the purchase price for the Units and the certificates representing the Notes
      and
      Warrants shall be pursuant to the procedures set forth in the
      Subscription Documents.

     

    (b) As
      their
      basic compensation, the Placement Agents shall receive (i) cash compensation
      equal to
      ten
      percent (10%) of the gross cash proceeds received by the Company from the sale
      of Units, as commission,
      which commission shall be allocated as follows: 2% to Westminster and 8% to
      TriPoint; and (ii)
      additional compensation in the form of warrants (“Placement Agent Warrants”) to
      purchase shares of Common
      Stock, in an amount equal to 10% of the Shares and Warrant Shares underlying
      Units sold in the
      Offering, which warrants shall be allocated as follows: 2.5% to Westminster
      or
      its designees and 7.5% to TriPoint or its designees. The Placement Agent
      Warrants shall have their exercise price, registration,
      anti-dilution and other rights identical to the Warrants. They shall be
      exercisable any time from the Issuance Date through the last expiration date
      of
      any of the Warrants, and shall be exercisable via
      cashless exercise at any time in which they are not registered in an effective
      registration statement but are
      otherwise eligible for resale pursuant to Rule 144 or another exemption from
      registration then in effect.
      Cash compensation shall be paid in full on the Issuance Date with respect to
      gross proceeds for Units
      deliverable on such date.

     

    (c)
      The
      parties hereto represent that at the Issuance Date, the representations and
      warranties herein
      contained, and the statements contained in all certificates theretofore or
      simultaneously delivered by
      any
      party to another pursuant to this Agreement, shall be true and correct, except
      as otherwise disclosed
      in any certificate delivered on the Issuance Date.

     

    SECTION
      4. Covenants
      of the Company. The
      Company covenants and agrees with the Placement
      Agents that:

     

    (a) On
      the
      Commencement Date, and on each Issuance Date, the Subscription Documents (as
      amended
      or as supplemented, if the same shall have been amended or supplemented) will
      not (i) contain an
      untrue
      statement of a material fact and will not omit 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 and (ii) contain any material, non-public information
      required to be disclosed
      to the general public in order to comply with Regulation FD promulgated under
      the Securities Exchange Act of 1934, as amended, unless all recipients of the
      Subscription Documents execute a confidentiality
      agreement in form and substance acceptable to the Company and the Placement
      Agents, prior
      to
      receipt of the Subscription Documents.

     

    (b) The
      Company will prepare promptly upon the reasonable request of the Placement
      Agents, such
      amendments or supplements to the Subscription Documents, in such form as in
      the
      opinion of the respective
      counsel to the Placement Agents may be reasonably necessary or advisable in
      connection with the
      Offering. In addition, if at any time prior to the last date on which Units
      shall be issued, (i) an event relating
      to or affecting the Company shall have occurred which, in the judgment of the
      Company or in the opinion
      of the respective counsel for the Placement Agents, would cause the Subscription
      Documents as then
      in
      effect to include an untrue statement of a material fact or to omit 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, or (ii) it is otherwise necessary to
      amend
      or supplement the Subscription Documents, the Company shall promptly notify
      the
      Placement Agents of the occurrence and shall
      promptly prepare and deliver to the Placement Agents, without charge, sufficient
      copies of any amended
      or supplemented Subscription Documents, and shall use its reasonable best
      efforts to cause the appropriate
      state securities authorities to take any required action with regard to any
      amendment as may be necessary to permit the lawful use of the Subscription
      Documents, as so amended and supplemented, in connection with the
      Offering.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    (c) The
      Company’s counsel shall prepare and file any necessary filings, in the
      reasonable opinion of
      Company’s counsel or Placement Agents’ counsel, under the state securities, or
      so-called “blue sky” laws
      and
      regulations (the “Blue Sky Laws”) and the Company shall pay the filing fees and
      all other expenses
      in connection with any such qualification in such jurisdictions as the Placement
      Agents shall designate,
      and to continue such qualification in effect so long as required for the
      purposes of the Offering;
      provided, however, that the Company shall not be required to qualify as a
      foreign corporation or
      to
      file a consent to service of process in any jurisdiction in any action other
      than one arising out of the offering
      or sale of the Units. The Company will provide copies to the Placement Agents
      of
      all documents,
      exhibits and information filed in connection with the qualification of the
      Units
      for sale under the
      Blue
      Sky Laws.

     

    (d) The
      Company, at its own expense, will give and continue to give such financial
      statements and
      other
      information to and as may be required by the proper public bodies of the
      jurisdictions in which the Offering may be qualified.

     

    (e) The
      Company will pay all fees, taxes (excluding any taxes on the income or revenue
      of the purchasers of the Units) and expenses incident to the preparation and
      distribution of the Subscription Documents,
      the establishment of the escrow account with the Escrow Agent, the issuance
      of
      the Units and
      the
      fees and expenses of counsel and accountants for the Company. The Company will
      pay all of the Placement
      Agents’ accountable fees and expenses (including legal, due diligence, printing,
      mailing, travel,
      entertainment, etc), payable at the earlier of each Closing or twenty days
      following receipt of invoice.
      The Company will additionally pay the Placement Agents for their non-accountable
      fees and expenses
      at the rate of one percent (1%) of the gross proceeds received by the Company
      from the sale of the Units, payable at each Closing and allocated as follows:
      0.5% to Westminster and 0.5% to TriPoint. In
      the
      event that any payment due to the Placement Agents or their respective counsel
      hereunder shall not be
      made
      when due, interest shall accrue on the unpaid balance of such overdue payments
      at the rate of twelve
      percent (12%) per annum until paid.

     

    (f) The
      form
      of Subscription Documents, Notes, Warrants and Placement Agent Warrants shall
      contain
      the registration rights, anti-dilution protection and such other information,
      representations, warranties
      and covenants as shall be reasonably acceptable to the Placement
      Agents.

     

    (g) The
      Company shall not release any Offering documents or the Subscription Documents
      unless
      they are reasonably acceptable to the Placement Agents.

     

    (h) Except
      as
      described in the SEC Reports or the Subscription Documents, all Permits will
      be
valid
      on
      the Issuance Date, the Company shall in all material respects be complying
      therewith and there shall
      be
      no proceedings pending, or to the knowledge of the Company threatened, seeking
      to cancel, terminate,
      suspend or limit any such Permits.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    (i) At
      each
      Issuance Date, the Company shall not have failed to qualify to do business
      as a
foreign
      corporation in any jurisdiction where required, except where failure to so
      qualify would not have a
      Material Adverse Effect or where any qualification is required solely as a
      result of conducting business over the Internet.

     

    (j) At
      the
      Commencement Date and at each Issuance Date, the Company will be validly
      existing as
      a
      corporation in good standing under the laws of the state of its incorporation,
      having corporate power and authority to own its properties and conduct its
      business, and will have a capitalization as described in the
      SEC
      Reports. Other than as described in the Subscription Documents or the SEC
      Reports, 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 or entity any right to subscribe for or acquire, any shares of Common
      Stock, or contracts, commitments,
      understandings or arrangements by which the Company or any Material 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. Following the date of publication of the
      Subscription Documents
      and prior to the final Issuance Date, the only additional securities issued
      in
      addition to those described
      in the previous sentence shall be the Equity.

     

    (k)
      At
      each Closing, (i) the Equity will conform, in all material respects, to all
      statements with regard
      thereto contained in the Subscription Documents, (ii) the Equity shall have
      been
      duly and validly authorized by proper corporate authority, (iii) each portion
      of
      the Equity, when issued, exercised and/or paid
      for
      (as applicable), or otherwise earned, each in accordance with its terms, will
      be
      validly issued, fully
      paid and nonassessable and (iv) all shares of Common Stock that comprise the
      Equity shall have been
      duly
      and validly reserved for issuance. The Company shall ensure that all exercises
      properly requested
      shall be effected promptly by the Company.

     

    SECTION
      5. Indemnification.

     

    (a)
      The
      Company hereby agrees to indemnify and hold harmless the Placement Agents,
      their
respective
      directors, officers, agents, employees, members, affiliates, counsel and each
      other person or entity
      who controls either of the Placement Agents within the meaning of Section 15
      of
      the Securities Act (collectively,
      the “Agent Indemnified Parties”) from and against any and all losses, claims,
      damages or liabilities
      (or actions in respect thereof), joint or several, to which they or any of
      them
      may become subject
      under the Securities Act or any other statute or at common law, and to reimburse
      such Agent Indemnified
      Parties for any reasonable legal or other expense (including the cost of any
      investigation and preparation)
      incurred by them in connection with any litigation, whether or not resulting
      in
      any liability, but
      only
      insofar as such losses, claims, liabilities and litigation arise out of or
      are
      based upon (i) any untrue
      statement or alleged untrue statement of a material fact required to be stated
      in the Subscription Documents, or omission to state therein a material fact
      necessary in order to make the statements therein, in
      the
      light of the circumstances under which they are made, not misleading (including,
      but not limited to, any
      documents deemed to be incorporated into the Subscription Documents by
      reference), (ii) any breach by
      the
      Company of any representation, warranty or covenant contained herein, (iii)
      any
      matter otherwise relating
      to, arising out of or in connection with the Offering or (iv) Placement Agents’
service as Placement Agents hereunder; provided, however, that the indemnity
      provisions contained in this subsection
      (a) shall not apply to (x) amounts paid in settlement of any such litigation
      if
      such settlement is effected
      without the consent of the Company (which shall not be unreasonably withheld,
      delayed or denied), or (y) the Placement Agents or any other Agent Indemnified
      Parties in respect of any such losses,
      claims, damages, liabilities or actions (A) arising out of, or based upon any
      such untrue statement or alleged untrue statement, or any such omission or
      alleged omission, if such statement or omission was made in reliance upon
      information furnished in writing to the Company by the Placement Agents or
      such
      Agent Indemnified Parties specifically for use in connection with the
      preparation of the Subscription Documents
      or any amendment thereof or supplement thereto or (B) arising from the willful
      misconduct or
      gross
      negligence of the Placement Agents or any other Agent Indemnified
      Party.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    (b) The
      Placement Agents, each individually with respect to themselves, hereby agree
      to
indemnify
      and hold harmless the Company, its directors, officers, agents, employees,
      members, affiliates, counsel
      and each other person or entity who controls the Company within the meaning
      of
      Section 15 of the
      Securities Act (collectively, the “Company Indemnified Parties”) from and
      against any and all losses, claims, damages or liabilities (or actions in
      respect thereof), joint or several, to which they or any of them may
      become subject under the Securities Act or any other statute or at common law,
      and to reimburse such
      Company Indemnified Parties for any reasonable legal or other expense (including
      the cost of any investigation
      and preparation) incurred by them in connection with any litigation, whether
      or
      not resulting
      in any liability, but only insofar as such losses, claims, liabilities and
      litigation arise out of or are
      based
      upon such Placement Agent’s service as a Placement Agent hereunder; provided,
      however, that
      the
      indemnity provisions contained in this subsection (b) shall only apply to
      losses, claims, damages, liabilities
      or actions arising from the willful misconduct or gross negligence of such
      Placement Agent or any other applicable Agent Indemnified Party and shall not
      apply to amounts paid in settlement of any such
      litigation if such settlement is effected without the consent of such Placement
      Agent (which shall not be unreasonably withheld, delayed or
      denied).

     

    (c) Each
      party will reimburse all the other’s Indemnified Parties for all reasonable
      expenses (including,
      but not limited to, reasonable fees and disbursements of counsel for the
      applicable Indemnified
      Parties) incurred by any such Indemnified Parties in connection with
      investigating, preparing and
      defending any such action or claim, whether or not in connection with pending
      or
      threatened litigation
      in connection with the transaction to which an Indemnified Party is a party,
      as
      such expenses are
      incurred or paid. Each party agrees, within thirty (30) days of receipt, to
      notify the other party in writing of the receipt of written notice of the
      commencement of any action against it or against any other Indemnified Parties,
      in respect of which indemnity may be sought from the other party on account
      of
      the indemnity
      provisions contained in this Section 5. In case any such action shall be brought
      against the any Indemnified
      Parties, the indemnifying party shall be entitled to participate in (and, to
      the
      extent that it shall
      wish, to direct) the defense thereof at its own expense, but such defense shall
      be conducted by counsel
      reasonably satisfactory to the Indemnified Parties.

     

    (d) The
      indemnity provisions set forth herein, and the representations and warranties
      of
      each party
      set
      forth in this Agreement, shall remain operative and in full force and effect,
      regardless of any investigation
      made by or on behalf of the other party, subject to the limitations contained
      herein, and shall
      survive the delivery of the Units, and any successor of any Indemnified Parties
      shall be entitled to the
      benefit of the respective indemnity provisions.

     

    (e) In
      order
      to provide for just and equitable contribution in any case in which (i) any
      person entitled
      to indemnification under this Section 5 makes claim for indemnification pursuant
      hereto but it is judicially
      determined (by the entry of a final judgment or decree by a court of competent
      jurisdiction and the
      expiration of time to appeal or the denial of the last right of appeal) that
      such indemnification may not be
      enforced in such case notwithstanding the fact that this Section 5 provides
      for
      indemnification in such case,
      or
      (ii) contribution under the Securities Act may be required on the part of any
      such person in circumstances
      for which indemnification is provided under this Section 5, then and in each
      such case, the Company
      and the Placement Agent shall contribute to the aggregate losses, claims,
      damages or liabilities to
      which
      they may be subject (after any contribution from others) in such proportion
      so
      that the Placement
      Agents are responsible for an aggregate of ten percent (10.0%) of the gross
      proceeds received by
      the
      Company on account of the sale of such Units by the Placement Agents (being
      the
      Placement Agents’ cash commission, provided any such contribution shall be made
      pro rata based on each Placement Agent’s respective cash commission), and the
      Company is responsible for the remaining portion; provided however, that in
      any
      such case, no person guilty of a fraudulent misrepresentation (within
      the meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person
      who was not guilty of such fraudulent misrepresentation.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    (f)
      Promptly after receipt by any party to this Agreement (or its representative)
      of
      notice of the
      commencement of any action, suit or proceeding, such party will, if a claim
      for
      contribution in respect thereof
      is to be made against another party (the “Contributing Party”), notify the
      Contributing Party in writing
      of the commencement thereof, but the omission to so notify the Contributing
      Party will not relieve
      it from any liability which it may have to any other party other than for
      contribution hereunder. In case
      any
      such action, suit or proceeding is brought against any party and such party
      so
      notifies a Contributing
      Party or his or its representative of the commencement thereof within the
      aforesaid period, the
      Contributing Party will be entitled to participate therein, with the notifying
      party and any other Contributing
      Party similarly notified. Any such Contributing Party shall not be liable to
      any
      party seeking
      contribution on account of any settlement of any claim, action or proceeding
      effected by such party
      seeking contribution without the written consent of such Contributing Party.
      The
      contribution provisions
      contained in this Section 5 are in addition to any other rights or remedies
      which the Company and
      the
      Placement Agents may have hereunder or otherwise.

     

    SECTION
      6. Effectiveness
      of Agreement. This
      Agreement shall become effective as of the date hereof.

     

    SECTION
      7. Conditions
      of the Placement Agents’ Obligations. The
      Placement Agents’ respective
      obligation to act as an agent of the Company hereunder, and the Placement
      Agents’ respective obligation to use their best efforts to find purchasers for
      the Units, shall be subject to the satisfactory completion
      of their due diligence examination and the accuracy, as of each Issuance Date,
      of the representations
      and warranties on the part of the Company herein contained, to the performance
      by the Company
      of all its agreements herein contained, to the fulfillment of or compliance
      by
      the Company with all
      covenants and conditions hereof, and to the following additional
      conditions:

     

    (a) The
      Placement Agents shall not have disclosed in writing to the Company that the
      Subscription
      Documents or any amendment or supplement thereto contains an untrue statement
      of
      a fact which in the opinion of counsel to the Placement Agents, is material
      or
      omits to state a fact which, in the opinion
      of such counsel, is material and is required to be stated therein or is
      necessary to make the statements
      therein not misleading.

     

    (b) Between
      the date hereof and each Issuance Date, the Company shall not have sustained
      any
loss
      on
      account of fire, explosion, flood, accident, calamity or other cause, of such
      character as shall, in the
      sole
      discretion of a Placement Agent, materially adversely affect its business or
      property.

     

    (c) Between
      the date hereof and each Issuance Date, there shall be no litigation instituted,
      or to the
      knowledge of the Company threatened, against the Company and there shall be
      no
      proceeding instituted
      or threatened against the Company or before or by any federal or state
      commission, regulatory body
      or
      administrative agency or other governmental body, domestic or foreign, wherein
      an unfavorable ruling,
      decision or finding would have a Material Adverse Effect.

     

    (d) During
      the period subsequent to the Commencement Date and prior to each Issuance Date,
      the Company
      (i) shall have conducted its business in the usual and ordinary manner as the
      same was being conducted on the Commencement Date and (ii) the Company shall
      not
      have suffered or experienced any Material
      Adverse Effect.

     

    (e)
      The
      authorization of the Units, the Placement Agent Warrants, the Equity, the
      Subscription Documents,
      and all corporate proceedings and other legal matters incident thereto and
      to
      this Agreement shall
      be
      reasonably satisfactory in all material respects to counsel to the Placement
      Agent.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    (f)
      The
      Company shall have furnished to the Placement Agent the opinion of its counsel,
      that:

     

    (i) The
      Company is a validly existing corporation in good standing under the laws of
      the
      state of
      its
      incorporation with full corporate power and authority to enter into this
      Agreement and perform its obligations hereunder, and the Company is in good
      standing as a foreign corporation in the jurisdictions where
      it
      is qualified to do business and where its business requires such
      qualification.

     

    (ii) The
      Company has an authorized capitalization as described in the Subscription
Documents.
      The Units, Notes, Warrants and Placement Agent Warrants are in due and proper
      form and conform
      in all material respects to the rights set forth in the instruments defining
      the
      same. Except as set forth
      in
      the Subscription Documents or in the Company’s filings with the SEC, no direct
      or indirect rights to
      acquire Common Stock exist.

     

    (iii) The
      Equity has been duly and validly issued and are fully paid and does not have
      any
      preemptive rights applicable thereto; and all of the Common Stock underlying
      the
      Equity has been duly authorized,
      reserved for issuance and, upon payment or conversion therefor (as applicable)
      in accordance with
      the
      terms of the applicable security, will be duly and validly issued, fully paid
      and non-assessable and
      will
      have no preemptive rights applicable thereto.

     

    (iv) This
      Agreement, the Subscription Documents and all transactions contemplated hereby
      and
      thereby have been duly authorized, executed and delivered by the Company and
      are
      valid and binding obligations of the Company legally enforceable against the
      Company in accordance with its terms
      except as enforceability may be limited by bankruptcy, insolvency,
      reorganization and other laws of
      general applicability relating to or affecting creditors’ rights now or
      hereafter in effect, and to general equitable principles.

     

    (v) Neither
      the execution, delivery or performance of this Agreement nor the consummation
      of
the
      transactions herein contemplated, nor compliance with the terms hereof by the
      Company do or will conflict
      with or result in a breach of any of the terms or provisions of, or constitute
      a
      default under, the articles
      of incorporation, as amended, or the bylaws, as amended, of the Company, any
      indenture, mortgage,
      deed of trust or other agreement or instrument to which the Company is a party
      or by which it or
      any of
      its assets or properties is bound, or any law, order, rule, regulation,
      judgment, writ, injunction or
      decree
      of any government, governmental instrumentality or court, domestic or foreign,
      having jurisdiction over the Company or its business or any of its properties,
      the violation of which could prevent
      the Company from performing its obligations hereunder or otherwise materially
      adversely affect the
      Company; and no consent, approvals, authorizations or orders of agencies,
      officers or other regulatory authorities are necessary for the valid
      authorization, issue or sale of the Equity, and the performance
      by the Company of this Agreement and its consummation of the transactions
      contemplated hereby
      and under the Subscription Documents, except under state securities or Blue
      Sky
      Laws, as to which
      no
      opinion need be expressed.

     

    (vi) There
      are
      no actions, suits or proceedings at law or in equity pending or threatened,
      against
      the Company and there are no proceedings pending or threatened against the
      Company before or by
      any
      federal or state commission, regulatory body or administrative agency or other
      governmental body wherein,
      either in any case or in the aggregate, an unfavorable ruling, decision or
      finding could materially
      adversely affect the business, franchise, licenses, permits, operations,
      financial condition or income
      of
      the Company which are not disclosed in the Subscription Documents.

     

    (vii)
      The
      issuance of the Equity is exempt from registration under the Securities Act
      of
      1933, as amended.

     

    (g)
      The
      Company shall have furnished to the Placement Agents a certificate of the Chief
      Executive
      Officer and the Chief Financial Officer of the Company dated as of each Issuance
      Date, in the form
      attached hereto as Exhibit A.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    All
      the
      opinions, letters, certificates and evidence mentioned above or elsewhere in
      this Agreement
      shall be deemed to be in compliance with the provisions hereof only if they
      are
      in form and substance satisfactory to counsel of the Placement Agents, whose
      approval shall not be unreasonably withheld.

     

    SECTION
      8. Termination.

     

    (a) This
      Agreement may be terminated by the either or both of the Placement Agents by
      notice to the Company in the event that the Company shall have failed or been
      unable to comply with any of the terms,
      conditions or provisions of this Agreement on the part of the Company to be
      performed, complied with
      or
      fulfilled within the respective times herein provided for, unless compliance
      therewith or performance
      or satisfaction thereof shall have been expressly waived by the applicable
      Placement Agent in
      writing.

     

    (b) This
      Agreement may be terminated by either or both of the the Placement Agents by
      notice to the Company at any time if, in the sole judgment of such Placement
      Agent, the Offering or the sale or the payment
      for or the delivery of the Units is rendered impracticable or inadvisable
      because (i) additional material
      governmental restrictions not in force and effect on the date hereof shall
      have
      been imposed upon
      trading in securities generally, or minimum or maximum prices shall have been
      generally established,
      or trading in securities generally on the Over-The-Counter Bulletin Board shall
      have been suspended or a general banking moratorium shall have been established
      by federal or New York State authorities,
      (ii) a war, major hostilities, terrorist or similar activity, act of God or
      other calamity shall have
      occurred which materially adversely affects the ability of the Placement Agents
      to perform their obligations
      hereunder, (iii) of a Material Adverse Effect or (iv) either Placement Agent,
      in
      its respective sole discretion, shall be dissatisfied with the results of its
      due diligence investigation.

     

    (c)
      Any
      termination of this Agreement pursuant to this section shall be without
      liability of any character
      (including, but not limited to, loss of anticipated profits or consequential
      damages) on the part of
      any
      party hereto, except that the Company shall remain obligated to pay the costs
      and expenses provided
      to be paid by it specified in Section 4(e) through the date of termination,
      and
      the Company shall be
      obligated to pay all losses, claims, damages or liabilities, joint or several,
      payable by the Company under
      Section 5(a).

     

    SECTION
      9. Finders.
      The
      Company and the Placement Agents mutually represent that they know
      of
      no third party who rendered any service in connection with the introduction
      of
      the Company to the
      Placement Agents and who is making a claim against anyone for a “finder’s fee”
or similar type of fee in
      connection with the Offering. Each party hereby indemnifies the other against
      any claims by any person
      known to it and not known to the other parties hereto, who shall claim to have
      rendered services in
      connection with the introduction of the Company to the Placement Agents or
      to
      have such a claim and who
      shall
      make a claim for a fee in connection therewith.

     

    SECTION
      10. Placement
      Agent’s Representations and Warranties. The
      Placement Agents, each individually
      with respect to themselves, represent and warrant to and agree with the Company
      that:

     

    (a)
      The
      Placement Agent is registered as a broker-dealer with the Securities and
      Exchange Commission
      and is a member in good standing of the National Association of Securities
      Dealers, Inc. (“NASD”).

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    (b) The
      Placement Agent will not effect offers or sales of the Units in any jurisdiction
      unless it or its
      representative is duly licensed to effect offers and sales in such jurisdiction
      and the offer and sale of the Units are registered or exempt from registration
      in such jurisdiction.

     

    (c) The
      Placement Agent has duly authorized this Agreement and this Agreement is the
      valid, binding
      and enforceable obligation of the Placement Agent.

     

    (d) In
      making
      any offer of the Units, the Placement Agent will not make any material
representation
      to potential investors not contained in the Subscription Documents which has
      not
      been authorized
      in writing by the Company.

     

    (e) The
      Placement Agent shall not utilize any general advertising or solicitation to
      offer the Units.

     

    SECTION
      11. Notice.
      Except
      as
      otherwise expressly provided in this Agreement, (a) whenever
      notice is required by the provisions of this Agreement to be given to the
      Company, such notice
      shall be given in writing, addressed to the Company at the address set forth
      in
      the Subscription Documents,
      with a copy to David L. Kagel, Esq., 1801 Century Park East, Suite 2500, Los
      Angeles, CA
      90067
      and (b) whenever notice is required by the provisions of this Agreement to
      be
      given to the Placement
      Agent, such notice shall be in writing addressed to the Placement Agent at
      the
      address set forth
      above, with a copy to Feldman Weinstein Smith LLP, 420 Lexington Avenue, Suite
      2620, New York,
      NY
      10170, Attn: Joseph Smith, Esq.

     

    SECTION
      12. Miscellaneous.

     

    (a) This
      Agreement is made solely for the benefit of the Placement Agents, the Company
      and any controlling
      person referred to in Section 15 of the Securities Act, and their respective
      successors and assigns,
      and no other person shall acquire or have any right under or by virtue of this
      Agreement. The term
      “successor” or the term “successors and assigns” as used in this Agreement shall
      not include any purchaser,
      as such, of any of the Units.

     

    (b) The
      headings in this Agreement are for reference only and shall not limit or
      otherwise affect any
      of
      the terms or provisions hereof.

     

    (c) The
      provisions of this Agreement shall be deemed severable, so that if any part,
      section or provision hereof shall be declared unlawful or unenforceable, the
      remaining parts, sections or provisions hereof
      shall not be affected thereby and shall remain in full force and
      effect.

     

    (d) This
      Agreement shall be deemed to have been drafted jointly by the parties
      hereto.

     

    (e)
      The
      Placement Agents shall have the right to associate themselves with such other
      members of
      the
      NASD and/or foreign investment firms duly licensed, if required, in their
      respective locales offering
      the Units only offshore to the United States as additional agents as the
      Placement Agent may elect,
      in
      its sole discretion. Such additional agents may become selected dealers subject
      to this Agreement
      in the sole discretion of the Placement Agents by signing a Selected Dealer
      Agreement in form
      satisfactory to the Placement Agents. The Placement Agents, each individually,
      shall have the right to
      share
      any compensation due to them hereunder, with such additional agents and in
      such
      amounts as the applicable
      Placement Agent deems fit, in its sole judgment. In addition, such additional
      agents shall be afforded
      the same indemnification by the Company as offered to the Placement Agents
      hereunder.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    (f) The
      validity, interpretation and construction of this Agreement, and of each part
      hereof, will be
      governed by the local laws of the State of New York, without giving effect
      to
      its conflict of law principles or rules. In the event of a dispute, the parties
      hereto agree to be bound by the arbitration procedures
      of the American Arbitration Association, and that such arbitration shall take
      place in the New York City metropolitan area. In actions not involving
      collection by a Placement Agent of compensation and/or
      reimbursement expenses, the prevailing party shall be reimbursed by the
      nonprevailing party for all
      reasonable attorney’s fees and costs (including all arbitration costs) incurred
      by the prevailing party in resolving
      such dispute. In any action in which a Placement Agent seeks compensation and/or
      reimbursement
      of expenses, the Company shall reimburse such Placement Agent for all costs
      associated with
      such
      action (including but not limited to reasonable attorney fees) as and when
      the
      Placement Agent provides
      the Company with invoices for such costs and expenses.

     

    (g) This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original and
      all
      of which together will constitute one and the same instrument. This Agreement
      may be executed by
      facsimile signatures or scanned electronic mail (e-mail)
      attachment.

     

    (h) Westminster
      shall not be obligated to provide advice or perform services to the Company
      that
are
      not
      specifically addressed in this Agreement and/or the engagement letter between
      the Company and Westminster Securities Corp. effective as of April 10, 2006
      and
      as amended on June 27, 2007 (the “Engagement Letter”), and TriPoint shall not be
      obligated to provide advice or perform services to the Company
      that are not specifically addressed in this Agreement. The obligations of the
      Placement Agents
      described in this Agreement and the Engagement Letter, as applicable, consist
      solely of best efforts
      services to the Company. In no event shall the Placement Agents be required
      or
      permitted without express authorization by this Agreement or the Engagement
      Letter to make decisions for the Company or to provide legal or accounting
      services. All final decisions with respect to acts of the Company or its
      affiliates, whether or not made pursuant to or in reliance upon information
      or
      advice furnished by the Placement Agents hereunder, shall be those of the
      Company or such affiliates, and the Placement Agents shall under no
      circumstances be liable for any expense incurred or loss suffered by the Company
      as a consequence
      of such decisions.

     

    (i) This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective
      successors and authorized assigns. Any attempt by either party to assign any
      rights, duties, or obligations
      which may arise under this Agreement without the prior written consent of the
      other party shall
      be
      void.

     

    (j) This
      Agreement contains the entirety of the agreements between the parties with
      respect to the Offering,
      and no party is relying on any agreement, representation, warranty, or other
      understanding not expressly stated in this Agreement with respect to such
      Offering. Notwithstanding the foregoing, the Engagement
      Letter shall continue to remain in full force and effect, as supplemented herein
      with the respect
      to the Offering, and shall survive any termination of this
      Agreement.

     

    (k) The
      parties acknowledge that certain provisions of this Agreement must survive
      any
termination
      or expiration thereof in order to be fair and equitable to the party to whom
      any
      promise or duty
      to
      perform is owed under such provision prior to such termination or expiration
      of
      the Agreement. Therefore,
      the parties agree that the provisions of Sections 1, 2, 3, 4, 5, 7, 8(c), 9,
      10,
      11, and 12 shall survive
      the termination or expiration of this Agreement for the period required to
      meet
      and satisfy any obligations
      and promises arising therein and thereunder

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    
 

    [SIGNATURE
      PAGE TO PLACEMENT AGENT AGREEMENT FOR TECHNOCONCEPTS,

    INC.]

     

    Please
      confirm that the foregoing correctly sets forth the Agreement between the
      Placement Agents
      and the Company.

     

    
      	 TECHNOCONCEPTS,
              INC.	 	 
	 	 	 
	 	 	 
	By:	 	
            
	
              
                

              

            	 	
            
	 	 	
            

    

     

    We
      hereby
      confirm as of the date hereof that the above letter sets forth the agreement
      between the Company,
      the other Placement Agent, and us.

    
       

      
        	WESTMINSTER
                SECURITIES CORPORATION  
	 	 	 
	 	 	 
	By:	 	
              
	
                
                  
John
                  P. O’Shea, Chairman & CEO

              	 	
              
	 	 	
              

      

       

      
        
           

          
            	TRIPOINT
                    GLOBAL
                    EQUITIES, LLC	 	 
	 	 	 
	 	 	 
	By:	 	
                  
	
                    
                      
Mark
                      Elenowitz, CEO

                  	 	
                  
	 	 	
                  

          

           

          
            
               

            

            
              -14-

              
                

              

            

            
               

            

          

           

        

      

    

    EXHIBIT
      A

     

    FORM
      OF OFFICER’S CERTIFICATE

     

    [Date]

     

    Westminster
      Securities Corporation 

    100
      Wall
      Street, 7th
      Floor

    New
      York,
      NY 10005

     

    Ladies
      and Gentlemen:

     

    We,
      the
      Chief Executive Officer and Chief Financial Officer of TechnoConcepts, Inc.
      (the
“Company”), in
      connection with the execution and delivery by the Company of each Subscription
      Agreement (the "Subscription
      Agreements"), by and among the Company and the investors identified on each
      signature page
      thereto (the “Investors”) as of the date above (“Closing”), do hereby certify as
      follows (Capitalized terms
      not
      otherwise defined herein are defined as set forth in the Subscription
      Agreements.):

     

    (i) The
      representations and warranties of the Company in each Subscription Agreement
      are
true
      and
      correct in all material respects at and as of the Closing and the Company has
      complied in all material
      respects with all the agreements and satisfied all the conditions on its part
      to
      be performed or satisfied
      at or prior to the Closing.

     

    (ii) The
      Subscription Documents and any amendments and supplements thereto, and all
      statements
      contained therein, are true and correct, and neither the Subscription Documents
      nor any amendment
      or supplement thereto includes any untrue statement of a material fact or omits
      to state any material
      fact required to be stated therein in light of the circumstances in which they
      were made or necessary
      to make the statements therein not misleading, and since the Commencement Date,
      there has occurred
      no event required to be set forth in amended or supplemented Subscription
      Documents which has
      not
      been so set forth.

     

    Very
      truly yours,

    
      	 	 	 	 
	 	 	 	 
	 	 	 	 
	
              Antonio
                E. Turgeon  

            	 	 	Michael Handelman
	
              Chief
                Executive Officer 

            	 	 	
              Chief
                Financial Officer

            
	 	 	 	 

    

     

    
      
         

      

      
        -15-

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