8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

December 28, 2005

Date of Report (Date of earliest event reported)

SYNTAX-BRILLIAN CORPORATION

(Exact Name of Registrant as Specified in Charter)

DELAWARE	000-50289	05-0567906
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1600 N. DESERT DRIVE
TEMPE, ARIZONA
85281

(Address of Principal Executive Offices) (Zip Code)

(602) 389-8888

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

     On December 28, 2005, we entered into a securities purchase agreement with several institutional investors to sell shares of our 6% redeemable convertible preferred stock (the “Preferred Stock”) and warrants to purchase shares of our common stock (the “Warrants”). On December 29, 2005, we issued and sold pursuant to the securities purchase agreement 3,200,000 shares of Preferred Stock and Warrants to purchase 1,600,000 shares of common stock for gross proceeds of $16,000,000 (the “Private Placement”). A copy of the securities purchase agreement is filed herewith as Exhibit 10.36

     The rights, privileges, and preferences of the Preferred Stock are set forth in the Certificate of Designations filed with the Delaware Secretary of State, a copy of which is filed herewith as Exhibit 3.4 and is incorporated herein by reference. The Preferred Stock is convertible into shares of our common stock at any time at the option of the holders at an initial conversion price of $5.00 per share, which is subject to adjustment upon the occurrence of certain corporate events or upon a future issuance of securities by us at a price below the conversion price. The holders of Preferred Stock are entitled to cumulative dividends that accrue monthly, beginning on March 29, 2006, at a rate of $0.30 per share. The Preferred Stock is also mandatorily redeemable. Beginning on January 29, 2007, we are required to redeem outstanding shares of Preferred Stock at a rate of 250,000 shares each month at a price of $5.00 per share (subject to certain adjustments) plus any accrued and unpaid dividends until all outstanding shares of Preferred Stock are redeemed. We may elect to pay the dividends and redemption payments in shares of our common stock instead of cash, provided we meet certain conditions set forth in the Certificate of Designations The Preferred Stock has a liquidation preference over the holders of our common stock so that, if we liquidate, dissolve, or wind up our business, the holders of Preferred Stock are entitled to a liquidation payment of $5.00 per share (subject to certain adjustments) plus any accrued and unpaid dividends prior to any distributions being made to our common stock holders. The holders of Preferred Stock are also entitled to this liquidation payment upon any change of control of our business as defined in the Certificate of Designations.

     Pursuant to the securities purchase agreement, the purchasers of our Preferred Stock received Warrants to purchase an aggregate of 1,600,000 shares of our common stock. The Warrants have an exercise price of $5.00 per share (subject to certain adjustments) and are exercisable immediately. The form of warrant is filed herewith as Exhibit 4.13.

     In connection with the issuance of the Preferred Stock and the Warrants, we entered into a registration rights agreement. Pursuant to the registration rights agreement, we are required to file a registration statement under the Securities Act of 1933 covering the resale of the common stock issued upon conversion of the Preferred Stock, upon exercise of the Warrants, or issued in lieu of cash for payment of dividends or redemption payments on the Preferred Stock. We will pay all expenses incurred in connection with the registration, except for underwriting discounts and commissions. A copy of the registration rights agreement is attached hereto as Exhibit 4.14.

Item 3.02. Unregistered Sales of Equity Securities.

     The disclosure provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 3.02 with respect to the terms and sale of the Preferred Stock and the Warrants. The sale of the Preferred Stock and issuance of the Warrants were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. In this

regard, the securities were sold to a limited number of institutional purchasers that made representations to us that (1) the securities were being acquired by the purchasers for investment only and not with view to of for sale in connection with any distribution of the securities, (2) the purchasers had such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluating the merits and risks of their investment, and (3) the purchasers are “accredited investors” within the meaning of the Securities Act. The closing of the sale of the Preferred Stock and issuance of the Warrants occurred on December 29, 2005. We intend to use the net proceeds from the sale of the Preferred Stock and Warrants for working capital and general corporate purposes, and we may use up to $4,075,000 of the net proceeds to repay our outstanding senior secured indebtedness. We paid a fee of $1,120,000 to C.E. Unterberg, Towbin as compensation for its services in connection with the financing.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

     The disclosure provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 5.03 with respect to the terms and conditions of the Preferred Stock issued in the financing. On December 29, 2005, we filed a Certificate of Designations with the Delaware Secretary of State to designate 3,400,000 shares of our preferred stock as 6% Redeemable Convertible Preferred Stock.

Item 9.01. Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired.
	Not applicable.
(b)	Pro Forma Financial Information.
	Not applicable.
(c)	Shell Company Transactions.
	Not applicable.
(c)	Exhibits.

Exhibit
Number	Description
3.4	Certificate of Designations of 6% Redeemable Convertible Preferred Stock.
4.13	Form of Warrant issued in connection with the Securities Purchase Agreement forming Exhibit 10.36.
4.14	Registration Rights Agreement, dated as of December 29, 2005, by and among the Registrant and the purchasers named therein.
10.36	Securities Purchase Agreement, dated as of December 28, 2005, among the Registrant and the purchasers named therein.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SYNTAX-BRILLIAN CORPORATION
Date: January 3, 2006	By:	/s/ Wayne A. Pratt
		Wayne A. Pratt
		Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
3.4	Certificate of Designations of 6% Redeemable Convertible Preferred Stock.
4.13	Form of Warrant issued in connection with the Securities Purchase Agreement forming Exhibit 10.36.
4.14	Registration Rights Agreement, dated as of December 29, 2005, by and among the Registrant and the purchasers named therein.
10.36	Securities Purchase Agreement, dated as of December 28, 2005, among the Registrant and the purchasers named therein.

EX-3.4

                                                                     EXHIBIT 3.4

                           CERTIFICATE OF DESIGNATIONS
                                       OF
                                 PREFERRED STOCK
                                       OF
                           SYNTAX-BRILLIAN CORPORATION

                                TO BE DESIGNATED
                    6% REDEEMABLE CONVERTIBLE PREFERRED STOCK

                        Pursuant to Section 151(g) of the
                General Corporation Law of the State of Delaware

      The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted by the Board of Directors of Syntax-Brillian Corporation, a Delaware
corporation (the "Corporation"):

      "RESOLVED, that pursuant to the authority conferred on the Board of
Directors of the Corporation (the "Board of Directors") by the Corporation's
Certificate of Incorporation, the issuance of a series of preferred stock, par
value $0.001 per share, of the Corporation which shall consist of 3,400,000
shares of preferred stock be, and the same hereby is, authorized; and the Chief
Executive Officer of the Corporation be, and he hereby is, authorized and
directed to execute and file with the Secretary of State of the State of
Delaware a Certificate of Designations of Preferred Stock of the Corporation
fixing the designations, powers, preferences and rights of the shares of such
series, and the qualifications, limitations or restrictions thereof (in addition
to the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, set forth in the Certificate of
Incorporation which may be applicable to the Corporation's preferred stock), as
follows:

      1. NUMBER OF SHARES; DESIGNATION. A total of 3,400,000 shares of preferred
   stock, par value $0.001 per share, of the Corporation is hereby designated as
   6% Redeemable Convertible Preferred Stock (the "Series"). Shares of the
   Series ("Preferred Shares") will be issued pursuant to the terms of a
   Securities Purchase Agreement, dated as of December 28, 2005, by and among
   the Corporation and the Purchasers named therein (the "Purchase Agreement").
   Capitalized terms used herein and not otherwise defined have the respective
   meanings set forth in paragraph 11 hereof.

      2. RANK. The Series shall, with respect to payment of dividends,
   redemption payments and rights upon liquidation, dissolution or winding-up of
   the affairs of the Corporation, rank:



      (i)   Senior and prior to the Common Stock, par value $0.001 per share, of
            the Corporation (the "Common Stock"), and any additional series of
            preferred stock which may in the future be issued by the Corporation
            and are designated in the amendment to the Certificate of
            Incorporation or the certificate of designations establishing such
            additional preferred stock as ranking junior to the Preferred
            Shares. Any shares of the Corporation's capital stock which are
            junior to the Preferred Shares with respect to the payment of
            dividends are hereinafter referred to as "Junior Dividend Shares"
            and any shares which are junior to the Preferred Shares with respect
            to redemption payments and rights upon liquidation, dissolution or
            winding-up of the affairs of the Corporation are hereinafter
            referred to as "Junior Liquidation Shares".

      (ii)  Pari passu with any additional series of preferred stock which may
            in the future be issued by the Corporation and are designated in the
            amendment to the Certificate of Incorporation or the certificate of
            designations establishing such additional preferred stock as ranking
            equal to the Preferred Shares or which do not state they are Junior
            Dividend Shares or Senior Dividend Shares (as defined below). Any
            shares of the Corporation's capital stock which are equal to the
            Preferred Shares with respect to the payment of dividends are
            hereinafter referred to as "Parity Dividend Shares" and any shares
            which are equal to the Preferred Shares with respect to redemption
            payments and rights upon liquidation, dissolution or winding-up of
            the affairs of the Corporation are hereinafter referred to as
            "Parity Liquidation Shares".

      (iii) Junior to any additional series of preferred stock which may in the
            future be issued by the Corporation and are designated in the
            amendment to the Certificate of Incorporation or the certificate of
            designations establishing such additional preferred stock as ranking
            senior to the Preferred Shares. Any shares of the Corporation's
            capital stock which are senior to the Preferred Shares with respect
            to the payment of dividends are hereinafter referred to as "Senior
            Dividend Shares" and any shares which are senior to the Preferred
            Shares with respect to redemption payments and rights upon
            liquidation, dissolution or winding-up of the affairs of the
            Corporation are hereinafter referred to as "Senior Liquidation
            Shares".

   The Corporation may not issue additional shares of preferred stock which are
   not (a) Junior Stock (as defined in paragraph 3(c) below) or (b) both Parity
   Liquidation Shares and Parity Dividend Shares without the consent of the
   holders of a majority of the Preferred Shares.

      3. DIVIDENDS. (a) The dividend rate on Preferred Shares shall be $0.30 per
   share per annum. Dividends on Preferred Shares shall be fully cumulative,
   accruing, without interest, from the date of original issuance of the Series
   through the date of redemption or conversion thereof, and shall be payable in
   arrears on March 29, June 29, September 29 and December 29 of each year,
   commencing March 29, 2006, except that if such date is not a Business Day
   then the dividend shall be payable on the first immediately succeeding
   Business Day (each such date being hereinafter referred to as a "Dividend

                                       2



   Payment Date"). Dividends on the Preferred Shares shall be paid in cash;
   provided, however, if all of the Stock Payment Conditions are met on the
   applicable Dividend Payment Date, the Corporation may pay such dividends, at
   the Corporation's option, in fully paid and nonassessable shares of Common
   Stock (such dividends paid in such form being herein called "PIK Dividends").
   PIK Dividends shall be paid by delivering to each record holder of Preferred
   Shares a number of shares of Common Stock ("PIK Dividend Shares") determined
   by dividing (x) the total aggregate dollar amount of dividends accrued and
   unpaid with respect to Preferred Shares owned by such record holder on the
   record date for the applicable Dividend Payment Date (rounded to the nearest
   whole cent) by (y) the PIK Dividend Price. In order to deliver PIK Dividend
   Shares in lieu of cash on a Dividend Payment Date, the Corporation must
   deliver, on or before the tenth (10th) Business Day immediately prior to such
   date, written notice to each Holder of Preferred Shares stating that the
   Corporation wishes to do so (a "PIK Stock Dividend Notice"). The Company may
   indicate in the PIK Stock Dividend Notice that the election contained therein
   shall continue for later Dividend Payment Dates until revised. In the event
   that the Corporation does not deliver a PIK Stock Dividend Notice on or
   before such fifteenth (15th) day, the Corporation will be deemed to have
   elected to pay the related dividend in cash. Each Holder shall promptly
   thereafter deliver to the Corporation instructions designating whether such
   Holder wishes to receive delivery of its PIK Dividend Shares in physical
   certificates (and, if so, at what address) or through the Depository Trust
   Company ("DTC"), as long as no legend is required by the terms of the
   Purchase Agreement to be imprinted on such PIK Dividend Shares (and, if so,
   the account number to be credited). If the Corporation wishes to deliver PIK
   Dividend Shares in lieu of cash with respect to accrued dividends, it must do
   so with respect to all (but not less than all) of such dividends. A PIK Stock
   Dividend Notice, once delivered by the Corporation, shall be irrevocable
   unless the Corporation ceases to satisfy all of the Stock Payment Conditions
   at any time after delivering such PIK Stock Dividend Notice, in which case
   such notice shall be deemed revoked and the dividend to which such notice
   relates shall be payable in cash on the Dividend Payment Date. The
   Corporation shall not issue fractional shares of Common Stock to which
   Holders may become entitled pursuant to this subparagraph, but in lieu
   thereof, the Corporation shall round the number of shares to be issued to the
   nearest whole number. Each dividend shall be paid to the Holders of record of
   Preferred Shares as they appear on the stock register of the Corporation on
   the record date, not less than 10 nor more than 60 days preceding the
   applicable Dividend Payment Date, as shall be fixed by the Board of
   Directors. Dividends payable on each Dividend Payment Date shall be computed
   on the basis of a 360-day year of twelve 30-day months and rounded to the
   nearest cent. Dividends on account of arrearages for any past Dividend
   Payment Date may be declared and paid at any time, without reference to any
   scheduled Dividend Payment Date, to holders of record on such date, not
   exceeding 45 days preceding the payment date thereof, as may be fixed by the
   Board of Directors of the Corporation. Dividends shall accrue regardless of
   whether the Corporation has earnings, whether there are funds legally
   available therefor and/or whether declared. No interest shall be payable with
   respect to any dividend payment that may be in arrears. Holders of Preferred
   Shares called for redemption between the close of business on a dividend
   payment record date and the close of business on the corresponding Dividend
   Payment Date shall, in lieu of receiving such dividend on the Dividend
   Payment Date

                                       3



   fixed therefor, receive such dividend payment on the date fixed for
   redemption together with all other accrued and unpaid dividends to the date
   fixed for redemption. The Holders shall not be entitled to any dividends
   other than the dividends provided for in this paragraph 3.

      (b) No dividends, except as described in the next sentence, shall be
   declared or paid or set apart for payment on any Parity Dividend Shares for
   any period unless full cumulative dividends have been or contemporaneously
   are declared and paid or declared and set aside for payment for all accrued
   dividends with respect to the Series through the most recent Dividend Payment
   Date ending on or prior to the date of payment. Unless dividends accrued and
   payable but unpaid on Preferred Shares and any Parity Dividend Shares at the
   time outstanding have been paid in full, all dividends declared by the
   Corporation upon Preferred Shares or Parity Dividend Shares shall be declared
   pro rata with respect to all such shares, so that the amounts of any
   dividends declared on Preferred Shares and the Parity Dividend Shares shall
   in all cases bear to each other the same ratio that, at the time of the
   declaration, all accrued but unpaid dividends on Preferred Shares and the
   other Parity Dividend Shares, respectively, bear to each other.

      (c) If at any time the Corporation has failed to (x) pay or set apart for
   payment all accrued dividends on any Preferred Shares through the then most
   recent Dividend Payment Date and (y) set apart for payment an amount in cash
   equal to the scheduled dividend payments for each of the next two Dividend
   Payment Dates, the Corporation shall not, and shall not permit any
   corporation or other entity directly or indirectly controlled by the
   Corporation to:

      (i)   declare or pay or set aside for payment any dividend or other
            distribution on or with respect to any Junior Dividend Shares,
            whether in cash, securities, obligations or otherwise (other than
            dividends or distributions paid in shares of capital stock of the
            Corporation ranking junior to Preferred Shares both as to the
            payment of dividends and as to rights in liquidation, dissolution or
            winding-up of the affairs of the Corporation ("Junior Stock"), or
            options, warrants or rights to subscribe for or purchase shares of
            Junior Stock); or

      (ii)  redeem, purchase or otherwise acquire, or pay into, set apart money
            or make available for a sinking or other analogous fund for the
            redemption, purchase or other acquisition of, any Preferred Shares
            (unless all of the Preferred Shares are concurrently redeemed),
            Parity Dividend Shares, Parity Liquidation Shares or shares of
            Junior Stock for any consideration (except by conversion into or
            exchange for Junior Stock); provided, however, that this restriction
            shall not apply to the repurchase of shares of Common Stock from
            employees, officers, directors, consultants or other persons
            performing services for the Corporation or any subsidiary pursuant
            to agreements under which the Corporation has the option to
            repurchase such shares at cost or at cost plus interest at a rate
            not to exceed nine percent (9%) per annum, or, if lower than cost,
            at fair market value, upon the occurrence of certain events, such as
            the termination of employment; and provided further, that the total
            amount applied to the

                                       4



            repurchase of shares of Common Stock shall not exceed $100,000
            during any twelve month period,

   unless, in each such case, all dividends accrued on Preferred Shares through
   the most recent Dividend Payment Date and on any Parity Dividend Shares have
   been or contemporaneously are declared and paid in full.

      (d) Any reference to "distribution" contained in this paragraph 3 shall
   not be deemed to include any distribution made in connection with any
   liquidation, dissolution or winding-up of the Corporation, whether voluntary
   or involuntary.

      4. LIQUIDATION. (a) The liquidation value per Preferred Share, in case of
   the voluntary or involuntary liquidation, dissolution or winding-up of the
   affairs of the Corporation, shall be an amount equal to $5.00, subject to
   adjustment in the event of a stock split, stock dividend or similar event
   applicable to the Series, plus an amount equal to the cash value of dividends
   accrued and unpaid thereon, whether or not declared, to the payment date (the
   "Liquidation Value").

      (b) In the event of any voluntary or involuntary liquidation, dissolution
   or winding-up of the Corporation (a "Liquidation Event"), the Holders (i)
   shall not be entitled to receive the Liquidation Value of the shares held by
   them until the liquidation value of all Senior Liquidation Shares shall have
   been paid in full, and (ii) shall be entitled to receive the Liquidation
   Value of such shares held by them in preference to and in priority over any
   distributions upon the Junior Liquidation Shares. Upon payment in full of the
   Liquidation Value to which the Holders are entitled, the Holders will not be
   entitled to any further participation in any distribution of assets by the
   Corporation. If the assets of the Corporation are not sufficient to pay in
   full the Liquidation Value payable to the Holders and the liquidation value
   payable to the holders of any Parity Liquidation Shares, the holders of all
   such shares shall share ratably in such distribution of assets in accordance
   with the amounts that would be payable on the distribution if the amounts to
   which the Holders and the holders of Parity Liquidation Shares are entitled
   were paid in full.

      (c) For purposes of this paragraph 4, a Change of Control shall be treated
   as a Liquidation Event and shall entitle each Holder to receive, upon the
   consummation of such Change of Control, and at such Holder's option, cash in
   an amount equal to the Liquidation Value of such Holder's Preferred Shares.

      (d) The Corporation shall, no later than the date on which a Liquidation
   Event occurs or is publicly announced, deliver in accordance with the notice
   provisions of the Purchase Agreement written notice of any Liquidation Event,
   stating the payment date or dates when and the place or places where the
   amounts distributable in such circumstances shall be payable, not less than
   30 days prior to any payment date stated therein, to each Holder.

      (e) Whenever the distribution provided for in this paragraph 4 shall be
   payable in securities or property other than cash, the value of such
   distribution shall be the fair

                                       5



   market value of such securities or other property as determined in good faith
   by the Independent Directors.

      5. MANDATORY REDEMPTION. (a) On each Monthly Redemption Date, the
   Corporation shall redeem a total of 250,000 of the Preferred Shares (the
   "Monthly Redemption"), on a pro rata basis among all of the Holders. The
   Corporation shall effect each such Monthly Redemption on each applicable
   Monthly Redemption Date by paying in cash, in exchange for each Preferred
   Share to be redeemed, a sum equal to the Liquidation Value per each such
   Preferred Share (the "Monthly Redemption Amount"); provided, however, if all
   of the Stock Payment Conditions are met on the applicable Monthly Redemption
   Date, the Corporation may pay such Monthly Redemption Amount, at the
   Corporation's option, in fully paid and nonassessable shares of Common Stock
   (such Monthly Redemption Amount paid in such form being herein called "PIK
   Redemption Payments"). PIK Redemption Payments shall be paid by delivering to
   each Holder of Preferred Shares a number of shares of Common Stock
   ("Redemption Shares") determined by dividing (x) the total Monthly Redemption
   Amount with respect to all Preferred Shares to be redeemed from such Holder
   on the applicable Monthly Redemption Date (rounded to the nearest whole cent)
   by (y) the Redemption Price as of the applicable Monthly Redemption Date. In
   order to deliver Redemption Shares in lieu of cash on a Monthly Redemption
   Date, the Corporation must deliver, on or before the fifteenth (15th)
   calendar day immediately prior to such date, written notice to each Holder of
   Preferred Shares stating that the Corporation wishes to do so (a "PIK Stock
   Redemption Notice"). In the event that the Corporation does not deliver a PIK
   Stock Redemption Notice on or before such fifteenth (15th) day, the
   Corporation will be deemed to have elected to pay the related Monthly
   Redemption Amount in cash. The Company may indicate in the PIK Stock
   Redemption Notice that the election contained therein shall continue for
   later Monthly Redemption Dates until revised. Each Holder shall promptly
   thereafter deliver to the Corporation instructions designating whether such
   Holder wishes to receive delivery of its Redemption Shares in physical
   certificates (and, if so, at what address) or through the DTC, as long as no
   legend is required by the terms of the Purchase Agreement to be imprinted on
   such Redemption Shares (and, if so, the account number to be credited). If
   the Corporation wishes to deliver Redemption Shares in lieu of cash with
   respect to any Holder of Preferred Shares to be redeemed, it must do so with
   respect to all (but not less than all) Holders of Preferred Shares to be
   redeemed. A PIK Stock Redemption Notice, once delivered by the Corporation,
   shall be irrevocable unless the Corporation ceases to satisfy all of the
   Stock Payment Conditions at any time after delivering such PIK Stock
   Redemption Notice, in which case such notice shall be deemed revoked and the
   Preferred Shares to which such notice relates shall be redeemed in cash on
   the applicable Monthly Redemption Date. The Corporation shall not issue
   fractional shares of Common Stock to which Holders may become entitled
   pursuant to this subparagraph, but in lieu thereof, the Corporation shall
   round the number of shares to be issued to the nearest whole number.

      (b) If any Holder of Preferred Shares shall, prior to the close of
   business on a Monthly Redemption Date, give written notice to the Corporation
   pursuant to paragraph 7 below of the conversion of any or all of the
   Preferred Shares to be redeemed held by the Holder, then the related Monthly
   Redemption shall not become effective as to such

                                       6



   Preferred Shares to be converted and such conversion shall become effective
   as provided in paragraph 7 below.

      6. NO OTHER REDEMPTION RIGHTS OR OBLIGATIONS. Except as provided in
   paragraph 5, the Preferred Shares shall not be redeemable, whether by the
   Corporation, at the request of any Holder, or otherwise.

         7. CONVERSION.

      (a) Right to Convert. Each Holder shall have the right to convert, at any
   time and from time to time after the Closing Date, all or any part of the
   Preferred Shares held by such Holder into such number of fully paid and
   non-assessable shares of Common Stock (the "Conversion Shares") as is
   determined in accordance with the terms hereof (a "Conversion").

      (b) Conversion Notice. In order to convert Preferred Shares, a Holder
   shall send to the Corporation by facsimile transmission, at any time prior to
   3:00 p.m., Pacific Time, on the Business Day on which such Holder wishes to
   effect such Conversion (the "Conversion Date"), a notice of conversion in
   substantially the form attached as Annex I hereto (a "Conversion Notice"),
   stating the number of Preferred Shares to be converted, the amount of
   dividends accrued (but remaining unpaid) thereon, and a calculation of the
   number of shares of Common Stock issuable upon such Conversion in accordance
   with the formula set forth in paragraph 7(c) below setting forth the basis
   for each component thereof, including the details relating to any adjustments
   made to the Conversion Price. The Holder shall promptly thereafter send the
   Conversion Notice and the certificate or certificates being converted to the
   Corporation. Upon receipt of the certificate or certificates representing the
   Preferred Shares to be converted, the Corporation shall issue a new
   certificate for Preferred Shares to the Holder in the event that less than
   all of the Preferred Shares represented by a certificate are converted;
   provided, however, that the failure of the Corporation to deliver such new
   certificate shall not affect the right of the Holder to submit a further
   Conversion Notice with respect to such Preferred Shares and, in any such
   case, the Holder shall be deemed to have submitted the original of such new
   certificate at the time that it submits such further Conversion Notice.
   Except as otherwise provided herein, upon delivery of a Conversion Notice by
   a Holder in accordance with the terms hereof, such Holder shall, as of the
   applicable Conversion Date, be deemed for all purposes to be the record owner
   of the Common Stock to which such Conversion Notice relates. In the case of a
   dispute between the Corporation and a Holder as to the calculation of the
   Conversion Price or the number of Conversion Shares issuable upon a
   Conversion (including, without limitation, the calculation of any adjustment
   to the Conversion Price following any adjustment thereof), the Corporation
   shall issue to such Holder the number of Conversion Shares that are not
   disputed within the time periods specified in paragraph 7(d) below and shall
   submit the disputed calculations to a certified public accounting firm of
   national reputation (other than the Corporation's regularly retained
   accountants) within three (3) Business Days following the Corporation's
   receipt of such Holder's Conversion Notice. The Corporation shall cause such
   accountant to calculate the Conversion Price as provided herein and to notify
   the Corporation and such Holder of the results in writing no later than five
   (5) Business Days following the day on which such accountant received the
   disputed calculations (the "Dispute

                                       7



   Procedure"). Such accountant's calculation shall be deemed conclusive absent
   manifest error. The fees of any such accountant shall be borne by the party
   whose calculations were most at variance with those of such accountant.

      (c) Number of Conversion Shares. The number of Conversion Shares to be
   delivered by the Corporation to a Holder pursuant to a Conversion shall be
   determined by dividing (i) the aggregate Liquidation Value of such Holder's
   Preferred Shares to be converted by (ii) the Conversion Price in effect on
   the applicable Conversion Date.

      (d) Delivery of Conversion Shares. The Corporation shall, no later than
   the close of business on the third (3rd) Business Day following the later of
   (i) the date on which the Corporation receives a Conversion Notice from a
   Holder by facsimile transmission pursuant to paragraph 7(b), above, and (ii)
   the date on which the Corporation receives the related Preferred Shares
   certificate (such third Business Day, the "Delivery Date"), issue and deliver
   or cause to be delivered to such Holder the number of Conversion Shares
   determined pursuant to paragraph 7(c) above (without any restrictive legend
   if permitted by the terms of the Purchase Agreement); provided, however, that
   any Conversion Shares that are the subject of a Dispute Procedure shall be
   delivered no later than the close of business on the third (3rd) Business Day
   following the determination made pursuant thereto.

      (e) Delivery Procedures. As long as the Corporation's designated transfer
   agent (the "Transfer Agent") participates in the DTC's Fast Automated
   Securities Transfer program ("FAST") and no restrictive legend is required
   pursuant to the terms of the Purchase Agreement, the Corporation shall effect
   delivery of Conversion Shares to the Holder by crediting the account of the
   Holder or its nominee at DTC (as specified in the applicable Conversion
   Notice) with the number of Conversion Shares required to be delivered, no
   later than the close of business on the applicable Delivery Date. In the
   event that the Transfer Agent is not a participant in FAST or if the Holder
   so specifies in its Conversion Notice or otherwise in writing on or before
   the Conversion Date, the Corporation shall effect delivery of Conversion
   Shares by delivering to the Holder or its nominee physical certificates
   representing such Conversion Shares, no later than the close of business on
   such Delivery Date. Conversion Shares delivered to the Holder shall not
   contain any restrictive legend unless such legend is required pursuant to the
   terms of the Purchase Agreement. If any Conversion would create a fractional
   Conversion Share, such fractional Conversion Share shall be disregarded and
   the number of Conversion Shares issuable upon such Conversion, in the
   aggregate, shall be the nearest whole number of Conversion Shares.

      (f) Failure to Deliver Conversion Shares. (i) In the event that, for any
   reason, a Holder has not received certificates representing the number of
   Conversion Shares specified in the applicable Conversion Notice, without any
   restrictive legend (except to the extent a restrictive legend is required by
   the terms of the Purchase Agreement) on or before the Delivery Date therefor
   (a "Conversion Default"), and such failure to deliver certificates continues
   for two (2) Business Days following the delivery of written notice thereof
   from such Holder (such second Business Day following such written notice
   being referred to herein as the "Conversion Default Date"), the Corporation
   shall pay to such Holder

                                       8



   payments ("Conversion Default Payments") in the amount of (A) "N" multiplied
   by (B) the aggregate Liquidation Value of the Preferred Shares which are the
   subject of such Conversion Default multiplied by (C) one percent (1%), where
   "N" equals the number of days elapsed between the Conversion Default Date and
   the date on which all of the certificates representing such Conversion Shares
   (without any restrictive legend to the extent permitted by the terms of the
   Purchase Agreement) are issued and delivered to such Holder. Amounts payable
   hereunder shall be paid to the Holder in immediately available funds on or
   before the fifth (5th) Business Day of the calendar month immediately
   following the calendar month in which such amounts have accrued.

            (ii) In the event of a Conversion Default, a Holder may, upon
   written notice to the Corporation, regain on the date of such notice the
   rights of such Holder under the Preferred Shares that are the subject of such
   Conversion Default. In such event, such Holder shall retain all of such
   Holder's rights and remedies with respect to the Corporation's failure to
   deliver such Conversion Shares (including without limitation the right to
   receive the cash payments specified in paragraph 7(f)(i) above through the
   date of such written notice).

            (iii) The Holders' rights and remedies hereunder are cumulative, and
   no right or remedy is exclusive of any other. In addition to any other
   remedies provided herein, each Holder shall have the right to pursue actual
   damages for the Corporation's failure to issue and deliver Conversion Shares
   timely after the applicable Delivery Date, including, without limitation,
   damages relating to any purchase of shares of Common Stock by or on behalf of
   such Holder in order to make delivery on a sale effected in anticipation of
   receiving Conversion Shares, such damages to be in an amount equal to (A) the
   aggregate amount paid by such Holder for the shares of Common Stock so
   purchased minus (B) the aggregate amount received by such Holder upon the
   sale of such Conversion Shares, and such Holder shall have the right to
   pursue all other remedies available to it at law or in equity (including,
   without limitation, a decree of specific performance and/or injunctive
   relief).

      (g) Adjustments. The Conversion Price shall be subject to adjustment from
   time to time as follows:

      (i)   In the event that the Corporation shall (A) pay a dividend or make a
            distribution, in shares of Common Stock, on any class of Capital
            Stock of the Corporation or any subsidiary which is not directly or
            indirectly wholly owned by the Corporation, (B) split or subdivide
            its outstanding Common Stock into a greater number of shares, or (C)
            combine its outstanding Common Stock into a smaller number of
            shares, then in each such case the Conversion Price in effect
            immediately prior thereto shall be adjusted so that the holder of
            each share of the Series thereafter surrendered for conversion shall
            be entitled to receive the number of shares of Common Stock that
            such holder would have owned or have been entitled to receive after
            the occurrence of any of the events described above had such share
            of the Series been converted immediately prior to the occurrence of
            such event. An adjustment made pursuant to this paragraph 7(g)(i)
            shall become effective immediately after the close of business on
            the record date in the case of a dividend or distribution (except as
            provided in paragraph 7(l) below) and shall become

                                       9



            effective immediately after the close of business on the effective
            date in the case of such subdivision, split or combination, as the
            case may be. Any shares of Common Stock issuable in payment of a
            dividend shall be deemed to have been issued immediately prior to
            the close of business on the record date for such dividend for
            purposes of calculating the number of outstanding shares of Common
            Stock under clause (ii) below.

      (ii)  In the event that the Corporation shall issue or distribute New
            Securities, in any such case at a price per share less than $5.00 or
            that would entitle the holders of the New Securities to subscribe
            for or purchase shares of Common Stock at a per share price less
            than $5.00 (provided that the issuance of Common Stock upon the
            exercise of New Derivative Securities will not cause an adjustment
            in the Conversion Price if no such adjustment would have been
            required at the time such New Derivative Security was issued), then
            the Conversion Price in effect immediately prior thereto shall be
            adjusted so that the Conversion Price shall equal the price at which
            the Corporation issues or distributes such New Securities (or the
            price at which the holders of the New Securities are entitled to
            subscribe for or purchase shares of Common Stock). Each such
            adjustment shall be made successively whenever any such New
            Securities are issued. In determining whether any New Derivative
            Securities entitle the holders to subscribe for or purchase shares
            of Common Stock at a price per share less than $5.00, there shall be
            taken into account any consideration received by the Corporation for
            such New Derivative Securities, the value of such consideration, if
            other than cash, to be determined in good faith by the Independent
            Directors, whose determination shall be conclusive and described in
            a certificate filed with the records of corporate proceedings of the
            Corporation. Notwithstanding the foregoing, in no event shall an
            adjustment be made under this subsection (ii) if such adjustment
            would result in raising the then-effective Conversion Price.

      (iii) No adjustment in the Conversion Price shall be required unless the
            adjustment would require an increase or decrease of at least 1% in
            the Conversion Price then in effect; provided, however, that any
            adjustments that by reason of this paragraph 7(g)(iii) are not
            required to be made shall be carried forward and taken into account
            in any subsequent adjustment. All calculations under this paragraph
            7(g) shall be made to the nearest cent or nearest 1/100th of a
            share.

      (iv)  Notwithstanding anything to the contrary set forth in this paragraph
            7(g), no adjustment shall be made to the Conversion Price upon any
            Exempt Issuance.

      (v)   The Corporation from time to time may reduce the Conversion Price by
            any amount for any period of time in the discretion of the Board of
            Directors.

      (vi)  In the event that, at any time as a result of an adjustment made
            pursuant to paragraph 7(g)(i) or 7(g)(ii) above, the holder of any
            share of the Series thereafter surrendered for conversion shall
            become entitled to receive any shares of the Corporation other than
            shares of the Common Stock, thereafter

                                      10



            the number of such other shares so receivable upon conversion of any
            share of the Series shall be subject to adjustment from time to time
            in a manner and on terms as nearly equivalent as practicable to the
            provisions with respect to the Common Stock contained in paragraphs
            7(g)(i) through 7(g)(v) above, and the other provisions of this
            paragraph 7(g)(vi) with respect to the Common Stock shall apply on
            like terms to any such other shares.

      (h) In case of any reclassification of the Common Stock (other than in a
   transaction to which paragraph 7(g)(i) applies), any consolidation of the
   Corporation with, or merger of the Corporation into, any other entity, any
   merger of another entity into the Corporation (other than a merger that does
   not result in any reclassification, conversion, exchange or cancellation of
   outstanding shares of Common Stock of the Corporation), any sale or transfer
   of all or substantially all of the assets of the Corporation or any
   compulsory share exchange, pursuant to which share exchange the Common Stock
   is converted into other securities, cash or other property, then lawful
   provision shall be made as part of the terms of such transaction whereby the
   holder of each share of the Series then outstanding shall have the right
   thereafter, during the period such share shall be convertible, to convert
   such share only into the kind and amount of securities, cash and other
   property receivable upon the reclassification, consolidation, merger, sale,
   transfer or share exchange by a holder of the number of shares of Common
   Stock of the Corporation into which a share of the Series might have been
   converted immediately prior to the reclassification, consolidation, merger,
   sale, transfer or share exchange assuming that such holder of Common Stock
   failed to exercise rights of election, if any, as to the kind or amount of
   securities, cash or other property receivable upon consummation of such
   transaction, subject to adjustment as provided in paragraph 7(g) above
   following the date of consummation of such transaction. As a condition to any
   such transaction, the Corporation or the person formed by the consolidation
   or resulting from the merger or which acquires such assets or which acquires
   the Corporation's shares, as the case may be, shall make provisions in its
   articles or certificate of incorporation or other constituent document to
   establish such right. The certificate or articles of incorporation or other
   constituent document shall provide for adjustments which, for events
   subsequent to the effective date of the certificate or articles of
   incorporation or other constituent document, shall be as nearly equivalent as
   may be practicable to the adjustments provided for in this paragraph 7. The
   provisions of this paragraph 7(h) shall similarly apply to successive
   reclassifications, consolidations, mergers, sales, transfers or share
   exchanges.

      (i) If:

      (i)   the Corporation shall take any action which would require an
            adjustment in the Conversion Price pursuant to Section 7(g); or

      (ii)  the Corporation shall authorize the granting to the holders of its
            Common Stock generally of rights, warrants or options to subscribe
            for or purchase any shares of any class or any other rights,
            warrants or options; or

                                      11



      (iii) there shall be any reclassification or change of the Common Stock
            (other than a subdivision or combination of its outstanding Common
            Stock or a change in par value) or any consolidation, merger or
            statutory share exchange to which the Corporation is a party and for
            which approval of any stockholders of the Corporation is required,
            or the sale or transfer of all or substantially all of the assets of
            the Corporation; or

      (iv)  there shall be a voluntary or involuntary dissolution, liquidation
            or winding-up of the Corporation;

   then, the Corporation shall cause to be delivered to each Holder in
   accordance with the notice provisions of the Purchase Agreement, as promptly
   as possible, but at least 20 calendar days prior to the applicable date
   hereinafter specified, a notice stating (A) the date on which a record is to
   be taken for the purpose of such dividend, distribution or granting of
   rights, warrants or options or, if a record is not to be taken, the date as
   of which the holders of Common Stock of record to be entitled to such
   dividend, distribution or rights, warrants or options are to be determined,
   or (B) the date on which such reclassification, change, consolidation,
   merger, statutory share exchange, sale, transfer, dissolution, liquidation or
   winding-up is expected to become effective or occur, and the date as of which
   it is expected that holders of Common Stock of record shall be entitled to
   exchange their shares of Common Stock for securities or other property
   deliverable upon such reclassification, change, consolidation, merger,
   statutory share exchange, sale, transfer, dissolution, liquidation or
   winding-up. Failure to give such notice or any defect therein shall not
   affect the legality or validity of the proceedings described in this
   paragraph 7(i).

      (j) Whenever the Conversion Price is adjusted as herein provided, the
   Corporation shall promptly cause a notice of the adjusted Conversion Price to
   be delivered to each Holder.

      (k) In any case in which paragraph 7(g) provides that an adjustment shall
   become effective immediately after a record date for an event and the date
   fixed for such adjustment pursuant to paragraph 7(g) occurs after such record
   date but before the occurrence of such event, the Corporation may defer until
   the actual occurrence of such event issuing to the holder of any Preferred
   Shares converted after such record date and before the occurrence of such
   event the additional shares of Common Stock issuable upon such conversion by
   reason of the adjustment required by such event over and above the Common
   Stock issuable upon such conversion before giving effect to such adjustment.

      (l) In case the Corporation shall take any action affecting the Common
   Stock, other than actions described in this paragraph 7, which in the opinion
   of the Board of Directors would materially adversely affect the conversion
   right of the Holders, the Conversion Price may be adjusted, to the extent
   permitted by law, in such manner, if any, and at such time, as the Board of
   Directors may determine to be equitable in the circumstances; provided,
   however, that in no event shall (i) the Board of Directors be

                                      12



   required to take any such action and (ii) any such action result in an
   increase in the Conversion Price.

      (m) Notwithstanding anything herein to the contrary, the Corporation shall
   not issue any Conversion Shares, PIK Dividend Shares, or Redemption Shares
   which, when aggregated with all Conversion Shares, PIK Dividend Shares,
   Redemption Shares, and shares of Common Stock issued upon exercise of
   outstanding warrants to purchase Common Stock held by the Holders of the
   Series (the "Warrant Shares") issued prior to such date of issuance, would
   exceed 19.999% of the number of shares of Common Stock outstanding on the
   business day immediately preceding the date hereof (such number of shares,
   the "Issuable Maximum"). If, on the date of conversion or issuance, as
   applicable, of the Conversion Shares, PIK Dividend Shares, or Redemption
   Shares as set forth herein, (i) the Conversion Price, PIK Dividend Price, or
   Redemption Price, as applicable, in effect is such that the shares issuable
   upon conversion of the Conversion Shares, PIK Dividend Shares, Redemption
   Shares, and any Warrant Shares, together with the aggregate number of shares
   of Common Stock that would then be issuable upon conversion, exercise or
   issuance in full of all then outstanding Conversion Shares, PIK Dividend
   Shares, Redemption Shares, or Warrant Shares would exceed the Issuable
   Maximum, and (ii) the Corporation's stockholders shall not have previously
   approved the issuance of 20% or more of the Corporation's capital stock in
   connection with the transactions contemplated by the Purchase Agreement (the
   "Stockholder Approval"), then the Company shall issue to the Holder
   requesting conversion of Preferred Shares a number of shares of Common Stock
   equal to such Holder's pro-rata portion of the Issuable Maximum and, with
   respect to the remainder of the Preferred Shares then held by such Holder for
   which conversion would result in an issuance of shares of Common Stock in
   excess of such Holder's pro-rata portion of the Issuable Maximum (the "Excess
   Shares"), the Corporation shall be prohibited from issuing such Excess
   Shares, and shall notify the holder of the reason therefor. The Preferred
   Shares would be unconvertible to such extent until and unless Stockholder
   Approval is subsequently obtained, but shall otherwise remain in full force
   and effect.

      8. STATUS OF SHARES. All Preferred Shares that are at any time redeemed or
   converted pursuant to paragraph 5 or 7 above, and all Preferred Shares that
   are otherwise reacquired by the Corporation and subsequently canceled by the
   Board of Directors, shall be retired and shall not be subject to reissuance.

      9. VOTING RIGHTS. Except as otherwise provided herein and as otherwise
   required by law, the Preferred Shares shall have no voting rights.

      10. RESTRICTIONS AND LIMITATIONS. So long as any Preferred Shares remain
   outstanding, the Corporation, shall not, without the vote or written consent
   by the holders of at least a majority of the outstanding Preferred Shares,
   voting together as a single class:

      (i)   Redeem, purchase or otherwise acquire for value (or pay into or set
            aside for a sinking or other analogous fund for such purpose) any
            share or shares of its Capital Stock, except for (a) a transaction
            in which all outstanding shares of preferred stock are concurrently
            redeemed, purchased or otherwise acquired,

                                      13



            (b) conversion into or exchange for Junior Stock, or (c) redemption
            in accordance with paragraph 5 hereof; provided, however, that this
            restriction shall not apply to the repurchase of shares of Common
            Stock from employees, officers, directors, consultants or other
            persons performing services for the Corporation or any subsidiary
            pursuant to agreements under which the Corporation has the option to
            repurchase such shares at cost or at cost plus interest at a rate
            not to exceed nine percent (9%) per annum, or, if lower than cost,
            at fair market value, upon the occurrence of certain events, such as
            the termination of employment; and provided further, that the total
            amount applied to the repurchase of shares of Common Stock shall not
            exceed $100,000 during any twelve month period;

      (ii)  Authorize or issue, or obligate itself to issue, any debt security,
            or otherwise incur indebtedness for borrowed money, other than (A)
            to a strategic investor in connection with a strategic commercial
            agreement or transaction as determined by the Independent Directors,
            (B) pursuant to a commercial borrowing, commercial secured lending
            or commercial lease financing transaction approved by the
            Independent Directors, or (c) pursuant to the acquisition of another
            corporation or entity by the Corporation by consolidation, merger,
            purchase of all or substantially all of the assets, or other
            reorganization;

      (iii) alter, modify or amend the terms of the Series in any way;

      (iv)  create or issue any securities of the Corporation ranking pari passu
            with or senior to the Preferred Shares either as to the payment of
            dividends or as to redemption or rights in liquidation, dissolution
            or winding-up of the affairs of the Corporation;

      (v)   increase the authorized number of shares of the Series;

      (vi)  re-issue any Preferred Shares which have been converted or redeemed
            in accordance with the terms hereof;

      (vii) issue any shares of the Series except pursuant to the terms of the
            Purchase Agreement;

      (viii) enter into any definitive agreement or commitment with respect to
            any of the foregoing; or

      (ix)  cause or permit any Subsidiary to engage in or enter into any
            definitive agreement or commitment with respect to any of the
            foregoing.

      In the event that the Holders of at least a majority of the outstanding
   Preferred Shares agree to allow the Corporation to alter or change the
   rights, preferences or privileges of the Series pursuant to applicable law,
   no such change shall be effective to the extent that, by its terms, such
   change applies to less than all of the Preferred Shares then outstanding.

                                      14



      11. CERTAIN DEFINITIONS. As used in this Certificate, the following terms
   shall have the following respective meanings:

      "Affiliate" of any specified person means any other person directly or
   indirectly controlling or controlled by or under common control with such
   specified person. For purposes of this definition, "control" when used with
   respect to any person means the power to direct the management and policies
   of such person, directly or indirectly, whether through the ownership of
   voting securities or otherwise; and the term "controlling" and "controlled"
   having meanings correlative to the foregoing.

      "Business Day" means any day except a Saturday, Sunday or day on which
   banking institutions are legally authorized to close in Tempe, Arizona.

      "Capital Stock" of any person or entity means any and all shares,
   interests, rights to purchase, warrants, options, participations or other
   equivalents of or interests in the common stock or preferred stock of such
   person or entity, including, without limitation, partnership and membership
   interests.

      "Change of Control" means the existence or occurrence of any of the
   following: (a) the sale, conveyance or disposition of all or substantially
   all of the assets of the Corporation; (b) the effectuation of a transaction
   or series of related transactions in which more than fifty percent (50%) of
   the voting power of the Corporation is disposed of (other than as a direct
   result of normal, uncoordinated trading activities in the Common Stock
   generally); (c) the consolidation, merger or other business combination of
   the Corporation with or into any other entity, immediately following which
   the prior stockholders of the Corporation fail to own, directly or
   indirectly, at least fifty percent (50%) of the voting equity of the
   surviving entity; (d) a transaction or series of transactions in which any
   person or "group" (as such term is used in Sections 13(d) and 14(d) of the
   Exchange Act) acquires more than fifty percent (50%) of the voting equity of
   the Corporation; or (e) a transaction or series of transactions that
   constitutes or results in a "going private transaction" (as defined in
   Section 13(e) of the Exchange Act and the regulations of the Commission
   issued thereunder).

      "Conversion Price" means $5.00, as adjusted from time to time pursuant to
   the terms of paragraph 7.

      "Current Market Price" means, when used with respect to any security as of
   any date, the volume weighted average price of such security on the ten (10)
   consecutive trading days immediately preceding (but not including) such date
   as reported for consolidated transactions with respect to securities listed
   on the principal national securities exchange on which such security is
   listed or admitted to trading or, if such security is not listed or admitted
   to trading on any national securities exchange, the volume weighted average
   price of such security on the ten (10) consecutive trading days immediately
   preceding (but not including) such date in the over-the-counter market, as
   reported by the National Association of Securities Dealers, Inc. Automated
   Quotations System or such other system then in use or, if such security is
   not quoted by any such organization, the volume weighted average price of
   such security as of the ten (10) consecutive trading days

                                      15



   immediately preceding (but not including) such date determined by an
   Independent Financial Expert. An "Independent Financial Expert" shall mean a
   reputable accounting, appraisal or investment banking firm that is, in the
   reasonable judgment of the Independent Directors, qualified to perform the
   task for which such firm has been engaged hereunder, is nationally recognized
   and disinterested and Independent with respect to the Corporation and its
   affiliates and is reasonably acceptable to Holders owning a majority of the
   outstanding Preferred Shares. "Independent" shall mean any person or entity
   that (A) is in fact independent, (B) does not have any direct financial
   interest or any material indirect financial interest in the Corporation or
   any of its subsidiaries, or in any Affiliate of the Corporation or any of its
   subsidiaries (other than as a result of holding securities of the Corporation
   in trading accounts), and (C) is not an officer, employee, promoter, trustee,
   partner, director or person performing similar functions for the Corporation
   or any of its subsidiaries or any Affiliate of the Corporation or any of its
   subsidiaries.

      "Exempt Issuance" means the issuance of:

      (a) shares of capital stock of the Corporation issued or issuable upon
   conversion or exercise of any currently outstanding securities (but not any
   amendment or modification to such currently outstanding securities after the
   date hereof) or any New Securities issued in accordance with the Purchase
   Agreement (including the Conversion Shares, the Warrant Shares, the PIK
   Dividend Shares and the Redemption Shares);

      (b) shares of capital stock issued and issuable as payment for outstanding
   interest under the Corporation's outstanding 7% convertible debentures and 4%
   convertible debentures;

      (c) shares or options or warrants for Common Stock granted to officers,
   directors and employees of, and consultants to, the Corporation or its
   subsidiaries pursuant to stock option or purchase plans or other compensatory
   agreements approved by the Board of Directors, or pursuant to the Syntax
   Groups Corporation 2005 Stock Incentive Plan;

      (d) shares of Common Stock or preferred stock issued in connection with
   any pro rata stock split, stock dividend (including PIK Dividend Shares) or
   recapitalization by the Corporation;

      (e) shares of capital stock, or options or warrants to purchase capital
   stock, issued to a strategic investor in connection with a strategic
   commercial agreement as determined by the Board of Directors;

      (f) shares of capital stock, or options or warrants to purchase capital
   stock, issued to an investor in connection with a joint venture arrangement
   where the Corporation is a participant;

      (g) shares of capital stock, or options or warrants to purchase capital
   stock, issued pursuant to the acquisition of another corporation or entity by
   the Corporation by consolidation, merger, purchase of all or substantially
   all of the assets, or other

                                      16



   reorganization in which the Corporation acquires, in a single transaction or
   series of related transactions, all or substantially all of the assets of
   such other corporation or entity or fifty percent (50%) or more of the voting
   power of such other corporation or entity or fifty percent (50%) or more of
   the equity ownership of such other corporation or entity;

      (h) shares of capital stock issued in an underwritten public securities
   offering pursuant to a registration statement filed under the Securities Act
   of 1933, as amended;

      (i) shares of capital stock, or options or warrants to purchase capital
   stock, issued to current or prospective customers or suppliers of the
   Corporation approved by the Board of Directors as compensation or
   accommodation in lieu of other payment, compensation or accommodation to such
   customer or supplier;

      (j) shares of capital stock, or warrants to purchase capital stock, issued
   to any person that provides services to the Corporation as compensation
   therefor pursuant to an agreement approved by the Board of Directors;

      (k) shares of capital stock, or options or warrants to purchase capital
   stock, offered in a transaction where the purchase of such securities by any
   Holder would cause such transaction to fail to comply with applicable federal
   or state securities laws or would cause an applicable registration or
   qualification exemption to fail to be available to the Corporation; provided,
   however, that this clause (k) shall apply only to the Holder or Holders who
   would cause any such failure, and not to any of the other Holders; and

      (l) securities issuable upon conversion or exercise of the securities set
   forth in paragraphs (a) - (k) above.

      "Holder" means any holder of Preferred Shares, all of such holders being
   the "Holders".

      "Independent Directors" means directors that (i) are not 5% or greater
   stockholders of the Corporation or the designee of any such stockholder; (ii)
   are not officers or employees of the Corporation, any of its subsidiaries or
   of a stockholder referred to above in clause (i); (iii) are not Related
   Persons; and (iv) do not have relationships that, in the opinion of the Board
   of Directors, would interfere with their exercise of independent judgment in
   carrying out the responsibilities of the directors.

      "Monthly Redemption Date" means January 29, 2007 and the first (1st)
   Business Day of each month thereafter and ending upon the full redemption of
   all of the Preferred Shares.

      "New Derivative Securities" means New Securities that are rights,
   warrants, options or convertible or exchangeable securities.

      "New Securities" means any Common Stock or preferred stock, whether or not
   authorized on the date hereof, and rights, options or warrants to purchase
   Common Stock

                                      17



   or preferred stock and securities of any type whatsoever that are, or may
   become, convertible into Common Stock or preferred stock.

      "PIK Dividend Price" means 0.85 multiplied by the Current Market Price of
   the Common Stock as of the applicable Dividend Payment Date.

      "Purchase Agreement" means that certain Securities Purchase Agreement
   dated as of December 28, 2005, by and among the Corporation and the
   Purchasers named therein.

      "Redemption Price" means 0.85 multiplied by the Current Market Price of
   the Common Stock as of the applicable Monthly Redemption Date.

      "Registration Rights Agreement" means that certain Registration Rights
   Agreement dated as of December 28, 2005, by and among the Corporation and the
   Purchasers named therein.

      "Related Person" means an individual related to an officer, director or
   employee of the Corporation or any of its Affiliates which relation is by
   blood, marriage or adoption and not more remote than first cousin.

      "Stock Payment Conditions" means all of the following:

            (a) a Registration Statement (as defined in the Registration Rights
      Agreement) covering the PIK Dividend Shares and the Redemption Shares to
      be issued, as applicable, shall have been declared effective and shall
      continue to be effective and available to each Holder;

            (b) (i) the Common Stock shall be listed on the American Stock
      Exchange, the New York Stock Exchange, or the Nasdaq National Market, or
      shall be quoted on the OTC Bulletin Board or in the "Pink Sheets", and
      trading in the Common Stock on such market or exchange shall not then be
      suspended, (ii) the Corporation shall be in compliance, in all material
      respects, with each of the quantitative and qualitative listing standards
      and requirements (without regards to any specified grace periods) of such
      market, and (iii) the Corporation shall not have received any notice from
      such market that the Corporation may not be in such compliance; and

            (c) the PIK Dividend Shares or Redemption Shares, as applicable,
      when issued will be duly authorized, validly issued, and nonassessable.

                                      18



      IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly
   executed on its behalf by its undersigned Chief Financial Officer this 29th
   day of December, 2005.

                                                     /s/ Wayne A. Pratt
                                                     --------------------------
                                                     Wayne A. Pratt,
                                                     Chief Financial Officer

                                      19



                                                                         ANNEX I

                                CONVERSION NOTICE

The undersigned hereby elects to convert shares of 6% Redeemable Convertible
Preferred Stock (the "PREFERRED STOCK"), represented by stock certificate No(s).
__________, into shares of common stock ("COMMON Stock") of Syntax-Brillian
Corporation (the "COMPANY") according to the terms and conditions of the
Certificate of Designations and Securities Purchase Agreement relating to the
Preferred Stock (the "CERTIFICATE OF DESIGNATIONS"), as of the date written
below. Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Certificate of Designations.

                               Conversion Date:_________________________________

                               Number of Shares of
                               Preferred Stock to be Converted:_________________

                               Amount of Accrued Dividends:_____________________

                               Applicable Conversion Price:_____________________

                               Number of Shares of
                               Common Stock to be Issued:_______________________

                               Name of Holder:__________________________________

                               Address:_________________________________________
                                       _________________________________________
                                       _________________________________________

                               Signature:_______________________________________
                                         Name:
                                         Title:

[ ] The Holder represents to the Company that the resale or transfer of the
Conversion Shares represented hereby was effected via delivery of a prospectus
pursuant to the registration statement and was in compliance with any applicable
state securities or blue sky laws. (check box if applicable)

Holder Requests Delivery to be made: (check one)

[ ]    By Delivery of Physical Certificates to the Above Address

[ ]    Through Depository Trust Corporation
       (Account__________________________________)

                                      20

EX-4.13

                                                                    EXHIBIT 4.13

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT SECURED
BY SUCH SECURITIES.

THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.

                           SYNTAX-BRILLIAN CORPORATION

                                     Warrant
                   for the Purchase of Shares of Common Stock
                          (par value $0.001 per share)

No. ______                                                        ______ Shares

      THIS CERTIFIES that, for value received, _____________, whose address is
_________________________ (together with any person or entity to which this
Warrant (or any portion hereof) may be transferred, the "Holder"), is entitled
to subscribe for and purchase from Syntax-Brillian Corporation, a Delaware
corporation (the "Company"), upon the terms and conditions set forth herein,
______ shares of the Company's common stock, par value $0.001 per share ("Common
Stock"), at a price of $5.00 per share (subject to adjustment as set forth
herein, the "Exercise Price"). As used herein the term "Warrant" shall mean and
include this Warrant and any Common Stock or warrants hereafter issued as a
consequence of the exercise or transfer of this Warrant in whole or in part.

                                       1



      The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth. The Warrant Shares are entitled to the
benefits, and subject to the obligations, set forth in (i) the Registration
Rights Agreement among the Company, the Holder and certain other parties dated
concurrently herewith (the "Registration Rights Agreement"), and (ii) the
Securities Purchase Agreement among the Company, the Holder and certain other
parties dated concurrently herewith (the "Purchase Agreement").

      1. Exercise Period. This Warrant may be exercised at any time or from time
to time during the period commencing at 10:00 A.M. Pacific Time on December __,
2005, and ending at 5:00 P.M. Pacific Time on December __, 2010 (the "Exercise
Period").

      2. Procedure for Exercise; Effect of Exercise.

            (a) Cash Exercise. This Warrant may be exercised, in whole or in
part, by the Holder during normal business hours on any business day during the
Exercise Period by (i) the presentation and surrender of this Warrant to the
Company at its principal executive office along with a duly executed Notice of
Exercise (in the form attached hereto) specifying the number of Warrant Shares
to be purchased, and (ii) delivery of payment to the Company of the Exercise
Price for the number of Warrant Shares specified in the Notice of Exercise by
cash, wire transfer of immediately available funds to a bank account specified
by the Company, or by certified or bank cashier's check.

            (b) Cashless Exercise. This Warrant may also be exercised by the
Holder through a cashless exercise, as described in this Section 2(b). In such
case, this Warrant may be exercised, in whole or in part, by the Holder during
normal business hours on any business day during the Exercise Period by the
presentation and surrender of this Warrant to the Company at its principal
office along with a duly executed Notice of Exercise specifying the number of
Warrant Shares to be applied to such exercise. The number of shares of Common
Stock to be issued upon exercise of this Warrant pursuant to this Section 2(b)
shall equal the value of this Warrant (or the portion thereof being canceled)
computed as of the date of delivery of this Warrant to the Company using the
following formula:

            X =    Y(A-B)
                   ------
                     A

     Where:

            X = the number of shares of Common Stock to be issued to Holder
                under this Section 2(b);

            Y = the number of Warrant Shares identified in the Notice of
                Exercise as being applied to the subject exercise;

            A = the Current Market Price on such date; and

            B = the Exercise Price on such date

For purposes of this Section 2(b), Current Market Price shall have the
definition provided in Section 6(g).

                                       2



      The Company acknowledges and agrees that this Warrant was issued on the
date set forth at the end of this Warrant. Consequently, the Company
acknowledges and agrees that, if the Holder conducts a cashless exercise
pursuant to this Section 2(b), the period during which the Holder held this
Warrant may, for purposes of Rule 144 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), be "tacked" to the period during which
the Holder holds the Warrant Shares received upon such cashless exercise.

      Notwithstanding the foregoing, the Holder may conduct a cashless exercise
pursuant to this Section 2(b) only after the first anniversary of the initial
issuance date of this Warrant, and then only in the event that a registration
statement covering the resale of the Warrant Shares is not then effective at the
time that the Holder wishes to conduct such cashless exercise.

            (c) Company's Response; Effect of Exercise. Upon receipt by the
Company of a copy of a Notice of Exercise (including a copy received via
facsimile), the Company shall immediately send to the Holder, via facsimile, a
confirmation of receipt of such Notice of Exercise. Upon receipt by the Company
of this Warrant and the original Notice of Exercise, together with proper
payment of the Exercise Price, as provided in this Section 2, the Company or its
designated transfer agent (the "Transfer Agent"), as applicable, shall, within
three (3) business days following the date of receipt by the Company of the
original Notice of Exercise (so long as this Warrant and the proper payment of
the Exercise Price are received by the Company on or before such third business
day), issue and deliver to the Depository Trust Company ("DTC") account on the
Holder's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as
specified in the Notice of Exercise, registered in the name of the Holder or its
designee, for the number of shares of Common Stock to which the Holder shall be
entitled. Notwithstanding the foregoing to the contrary, the Company or its
Transfer Agent shall only be obligated to issue and deliver the shares to the
DTC on the Holder's behalf via DWAC if (A) a registration statement covering the
resale of the Warrant Shares has been declared effective by the Securities and
Exchange Commission, (B) the exercise of this Warrant is in connection with a
sale, and (C) the Holder has complied with the applicable prospectus delivery
requirements. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the right of the Holder to purchase the balance of the
Warrant Shares subject to purchase hereunder. Upon receipt by the Company of
this Warrant and a Notice of Exercise, together with proper payment of the
Exercise Price, as provided in this Section 2, the Company agrees that such
Warrant Shares shall be deemed to be issued to the Holder as the record holder
of such Warrant Shares as of the close of business on the date on which this
Warrant has been surrendered and payment has been made for such Warrant Shares
in accordance with this Warrant and the Holder shall be deemed to be the holder
of record of the Warrant Shares, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder.

      3. Registration of Warrants; Transfer of Warrants. Any Warrants issued
upon the transfer or exercise in part of this Warrant shall be numbered and
shall be registered in a warrant register as they are issued. The Company shall
be entitled to treat the registered holder of any Warrant on the warrant
register as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of

                                       3



any other person, and shall not be liable for any registration or transfer of
Warrants which are registered or to be registered in the name of a fiduciary or
the nominee of a fiduciary unless made with the actual knowledge that a
fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by its duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the person entitled thereto. This Warrant may be
exchanged, at the option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares, upon surrender
to the Company or its duly authorized agent.

      4. Restrictions on Transfer. (a) The Holder, as of the date of issuance
hereof, represents to the Company that such Holder is acquiring the Warrants for
its own account and not with a view to the distribution thereof or of the
Warrant Shares. Notwithstanding any provisions contained in this Warrant to the
contrary, this Warrant and the related Warrant Shares shall not be transferable
except pursuant to the proviso contained in the following sentence or upon the
conditions specified in this Section 4, which conditions are intended, among
other things, to insure compliance with the provisions of the Securities Act and
applicable state law in respect of the transfer of this Warrant or such Warrant
Shares. The Holder by acceptance of this Warrant agrees that the Holder will not
transfer this Warrant or the related Warrant Shares prior to delivery to the
Company of an opinion of the Holder's counsel (as such opinion and such counsel
are described in Section 4(b) hereof) or until registration of such Warrant
Shares under the Securities Act has become effective or after a sale of such
Warrant or Warrant Shares has been consummated pursuant to Rule 144 or Rule 144A
under the Securities Act; provided, however, that the Holder may freely transfer
this Warrant or such Warrant Shares (without delivery to the Company of an
opinion of counsel) (i) to one of its nominees, affiliates or a nominee thereof,
(ii) to a pension or profit-sharing fund established and maintained for its
employees or for the employees of any affiliate, (iii) from a nominee to any of
the aforementioned persons as beneficial owner of this Warrant or such Warrant
Shares, (iv) to a qualified institutional buyer, so long as such transfer is
effected in compliance with Rule 144A under the Securities Act, or (v) to an
accredited investor (as such term is defined in Regulation D under the
Securities Act).

            (b) The Holder, by its acceptance hereof, agrees that prior to any
transfer of this Warrant or of the related Warrant Shares (other than as
permitted by Section 4(a) hereof or pursuant to a registration under the
Securities Act), the Holder will give written notice to the Company of its
intention to effect such transfer, together with an opinion of such counsel for
the Holder in form reasonably acceptable to the Company, to the effect that the
proposed transfer of this Warrant and/or such Warrant Shares may be effected
without registration under the Securities Act. Upon delivery of such notice and
opinion to the Company, the Holder shall be entitled to transfer this Warrant
and/or such Warrant Shares in accordance with the intended method of disposition
specified in the notice to the Company.

                                       4



            (c) Each stock certificate representing Warrant Shares issued upon
exercise or exchange of this Warrant shall bear the following legend unless the
opinion of counsel referred to in Section 4(b) states such legend is not
required:

      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
      OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
      ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
      COUNSEL TO THE TRANSFEROR TO SUCH EFFECT. SUCH SECURITIES MAY BE PLEDGED
      IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
      BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
      "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT."

The Holder understands that the Company may place, and may instruct any transfer
agent or depository for the Warrant Shares to place, a stop transfer notation in
the securities records in respect of the Warrant Shares.

      5. Reservation of Shares. The Company shall at all times during the
Exercise Period reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of providing for the exercise of the rights
to purchase all Warrant Shares granted pursuant to the Warrants, such number of
shares of Common Stock as shall, from time to time, be sufficient therefor. The
Company covenants that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price therefor, and
all shares of Common Stock issuable upon conversion of this Warrant, shall be
validly issued, fully paid, non-assessable, and free of preemptive rights, and
free from all taxes, claims, liens, charges and other encumbrances.

      6. Exercise Price Adjustments. The Exercise Price shall be subject to
adjustment from time to time as follows:

            (a) (i) In the event that the Company shall (A) pay a dividend or
make a distribution, in shares of Common Stock, on any class of capital stock of
the Company or any subsidiary which is not directly or indirectly wholly owned
by the Company, (B) split or subdivide its outstanding Common Stock into a
greater number of shares, or (C) combine its outstanding Common Stock into a
smaller number of shares, then in each such case the Exercise Price in effect
immediately prior thereto shall be adjusted so that the Holder of this Warrant
thereafter surrendered for exercise shall be entitled to receive the number of
shares of Common Stock that such Holder would have owned or have been entitled
to receive after the occurrence of any of the events described above had this
Warrant been exercised immediately prior to the

                                       5



occurrence of such event. An adjustment made pursuant to this paragraph 6(a)(i)
shall become effective immediately after the close of business on the record
date in the case of a dividend or distribution (except as provided in paragraph
6(f) below) and shall become effective immediately after the close of business
on the effective date in the case of such subdivision, split or combination, as
the case may be. Any shares of Common Stock issuable in payment of a dividend
shall be deemed to have been issued immediately prior to the close of business
on the record date for such dividend for purposes of calculating the number of
outstanding shares of Common Stock under clause (ii) below.

               (ii) In the event that the Company shall issue or distribute any
Common Stock or preferred stock, whether or not authorized on the date hereof,
and rights, options or warrants to purchase Common Stock or preferred stock and
securities of any type whatsoever that are, or may become, convertible into
Common Stock or preferred stock ("New Securities"), in any such case at a price
per share less than $5.00 or that would entitle the holders of the New
Securities to subscribe for or purchase shares of Common Stock at less than
$5.00 per share (provided that the issuance of Common Stock upon the exercise of
New Securities that are rights, warrants, options or convertible or exchangeable
securities ("New Derivative Securities") will not cause an adjustment in the
Exercise Price if no such adjustment would have been required at the time such
New Derivative Security was issued), then the Exercise Price in effect
immediately prior thereto shall be adjusted so that the Exercise Price shall
equal the price at which the Company issues or distributes such New Securities
(or the price at which the holders of the New Securities are entitled to
subscribe for or purchase shares of Common Stock). Each such adjustment shall be
made successively whenever any such New Securities are issued. In determining
whether any New Derivative Securities entitle the holders to subscribe for or
purchase shares of Common Stock at less than $5.00 per share, there shall be
taken into account any consideration received by the Company for such New
Derivative Securities, the value of such consideration, if other than cash, to
be determined in good faith by the Board of Directors of the Company (the "Board
of Directors"), whose determination shall be conclusive and described in a
certificate filed with the records of corporate proceedings of the Company.
Notwithstanding the foregoing, in no event shall an adjustment be made under
this subsection (ii) if such adjustment would result in raising the
then-effective Exercise Price.

               (iii) No adjustment in the Exercise Price shall be required
unless the adjustment would require an increase or decrease of at least 1% in
the Exercise Price then in effect; provided, however, that any adjustments that
by reason of this Section 6(a) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 6(a) shall be made to the nearest cent or nearest 1/100th of
a share.

               (iv) Notwithstanding anything to the contrary set forth in this
Section 6(a), no adjustment shall be made to the Exercise Price upon any Exempt
Issuance. "Exempt Issuance" means the issuance of: (A) shares of capital stock
of the Company issued or issuable upon conversion or exercise of any currently
outstanding securities (but not any amendment or modification to such currently
outstanding securities after the date hereof) or any New Securities issued in
accordance with the Purchase Agreement (including the Conversion Shares, the
Warrant Shares, the PIK Dividend Shares and the Redemption Shares, as such terms
are defined in Section 6(j)); (B) shares of capital stock

                                       6



issued and issuable as payment for outstanding interest under the Company's
outstanding 7% convertible debentures and 4% convertible debentures; (C) shares
or options or warrants for Common Stock granted to officers, directors and
employees of, and consultants to, the Company or its subsidiaries pursuant to
stock option or purchase plans or other compensatory agreements approved by the
Board of Directors, or pursuant to the Syntax Groups Company 2005 Stock
Incentive Plan; (D) shares of Common Stock or preferred stock issued in
connection with any pro rata stock split, stock dividend (including PIK Dividend
Shares) or recapitalization by the Company; (E) shares of capital stock, or
options or warrants to purchase capital stock, issued to a strategic investor in
connection with a strategic commercial agreement as determined by the Board of
Directors; (F) shares of capital stock, or options or warrants to purchase
capital stock, issued to an investor in connection with a joint venture
arrangement where the Company is a participant; (G) shares of capital stock, or
options or warrants to purchase capital stock, issued pursuant to the
acquisition of another corporation or entity by the Company by consolidation,
merger, purchase of all or substantially all of the assets, or other
reorganization in which the Company acquires, in a single transaction or series
of related transactions, all or substantially all of the assets of such other
corporation or entity or fifty percent (50%) or more of the voting power of such
other corporation or entity or fifty percent (50%) or more of the equity
ownership of such other corporation or entity; (H) shares of capital stock
issued in an underwritten public securities offering pursuant to a registration
statement filed under the Securities Act; (I) shares of capital stock, or
options or warrants to purchase capital stock, issued to current or prospective
customers or suppliers of the Company approved by the Board of Directors as
compensation or accommodation in lieu of other payment, compensation or
accommodation to such customer or supplier; (J) shares of capital stock, or
warrants to purchase capital stock, issued to any person that provides services
to the Company as compensation therefor pursuant to an agreement approved by the
Board of Directors; (K) shares of capital stock, or options or warrants to
purchase capital stock, offered in a transaction where the purchase of such
securities by the Holder would cause such transaction to fail to comply with
applicable federal or state securities laws or would cause an applicable
registration or qualification exemption to fail to be available to the Company;
and (L) securities issuable upon conversion or exercise of the securities set
forth in clauses (A) - (K) above.

               (v) The Company from time to time may reduce the Exercise Price
by any amount for any period of time in the discretion of the Board of
Directors.

               (vi) In the event that, at any time as a result of an adjustment
made pursuant to Sections 6(a)(i) through 6(a)(iv) above, the Holder of any
Warrant thereafter surrendered for exercise shall become entitled to receive any
shares of the Company other than shares of the Common Stock, thereafter the
number of such other shares so receivable upon exercise of any such Warrant
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Sections 6(a)(i) through 6(a)(v) above, and the other
provisions of this Section 6(a) with respect to the Common Stock shall apply on
like terms to any such other shares.

            (b) In case of any reclassification of the Common Stock (other than
in a transaction to which Section 6(a)(i) applies), any consolidation of the
Company with, or merger of the Company into, any other entity, any merger of
another entity into the Company (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation

                                       7



of outstanding shares of Common Stock of the Company), any sale or transfer of
all or substantially all of the assets of the Company or any compulsory share
exchange, pursuant to which share exchange the Common Stock is converted into
other securities, cash or other property, then lawful provision shall be made as
part of the terms of such transaction whereby the Holder of this Warrant shall
have the right thereafter, during the Exercise Period, to exercise this Warrant
and obtain only the kind and amount of securities, cash and other property
receivable upon the reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of Common Stock of the
Company into which this Warrant might have been exercisable immediately prior to
the reclassification, consolidation, merger, sale, transfer or share exchange
assuming that such holder of Common Stock failed to exercise rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon consummation of such transaction, subject to adjustment as
provided in Section 6(a) above following the date of consummation of such
transaction. As a condition to any such transaction, the Company or the person
formed by the consolidation or resulting from the merger or which acquires such
assets or which acquires the Company's shares, as the case may be, shall make
provisions in its articles or certificate of incorporation or other constituent
document to establish such right. The certificate or articles of incorporation
or other constituent document shall provide for adjustments which, for events
subsequent to the effective date of the certificate or articles of incorporation
or other constituent document, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The provisions of
this Section 6(b) shall similarly apply to successive reclassifications,
consolidations, mergers, sales, transfers or share exchanges.

            (c) If:

                  (i)   the Company shall take any action which would require an
                        adjustment in the Exercise Price pursuant to Section
                        6(a); or

                  (ii)  the Company shall authorize the granting to the holders
                        of its Common Stock generally of rights, warrants or
                        options to subscribe for or purchase any shares of any
                        class or any other rights, warrants or options; or

                  (iii) there shall be any reclassification or change of the
                        Common Stock (other than a subdivision or combination of
                        its outstanding Common Stock or a change in par value)
                        or any consolidation, merger or statutory share exchange
                        to which the Company is a party and for which approval
                        of any stockholders of the Company is required, or the
                        sale or transfer of all or substantially all of the
                        assets of the Company; or

                  (iv)  there shall be a voluntary or involuntary dissolution,
                        liquidation or winding up of the Company;

then, in each such case, the Company shall cause to be mailed to each Holder at
such Holder's address as shown on the books of the transfer agent for the
Warrants, as promptly as possible, but at least 20 calendar days prior to the
applicable date hereinafter specified, a notice stating

                                       8



(A) the date on which a record is to be taken for the purpose of such dividend,
distribution or granting of rights, warrants or options, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights, warrants or options are to be
determined, or (B) the date on which such reclassification, change,
consolidation, merger, statutory share exchange, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
statutory share exchange, sale, transfer, dissolution, liquidation or winding
up. Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 6(c).

            (d) Whenever the Exercise Price is adjusted as herein provided, the
Company shall promptly cause a notice of the adjusted Exercise Price to be
mailed to each Holder.

            (e) In any case in which Section 6(a) provides that an adjustment
shall become effective immediately after a record date for an event and the date
fixed for such adjustment pursuant to Section 6(a) occurs after such record date
but before the occurrence of such event, the Company may defer until the actual
occurrence of such event issuing to the Holder of any Warrants exercised after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
exercise before giving effect to such adjustment.

            (f) In case the Company shall take any action affecting the Common
Stock, other than actions described in this Section 6, which in the opinion of
the Board of Directors would materially adversely affect the exercise right of
the Holders, the Exercise Price may be adjusted, to the extent permitted by law,
in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances; provided, however, that in no
event shall (i) the Board of Directors be required to take any such action and
(ii) any such action result in an increase in the Exercise Price.

            (g) For the purpose of any computation under Section 2(b) or this
Section 6, the "Current Market Price" per share of Common Stock on any date
means the volume weighted average price of the Common Stock on the ten (10)
consecutive trading days immediately preceding (but not including) such date as
reported for consolidated transactions with respect to securities listed on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted to trading
on any national securities exchange, the volume weighted average price of the
Common Stock on the ten (10) consecutive trading days immediately preceding (but
not including) such date in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System or
such other system then in use or, if the Common Stock is not quoted by any such
organization, the volume weighted average price of the Common Stock as of the
ten (10) consecutive trading days immediately preceding (but not including) such
date determined by an Independent Financial Expert. An "Independent Financial
Expert" shall mean a reputable accounting, appraisal or investment banking firm
that

                                       9



is, in the reasonable judgment of the Board of Directors, qualified to perform
the task for which such firm has been engaged hereunder, is nationally
recognized and disinterested and Independent with respect to the Company and its
affiliates and is reasonably acceptable to holders owning a majority of all of
the outstanding Warrants issued pursuant to the Purchase Agreement.
"Independent" shall mean any person or entity that (i) is in fact independent,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Company or any of its subsidiaries, or in any
affiliate of the Company or any of its subsidiaries (other than as a result of
holding securities of the Company in trading accounts), and (iii) is not an
officer, employee, promoter, trustee, partner, director or person performing
similar functions for the Company or any of its subsidiaries or any affiliate of
the Company or any of its subsidiaries.

            (h) Upon each adjustment of the Exercise Price (other than an
adjustment under Section 6(a)(iii)), this Warrant shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of shares
(calculated to the nearest thousandth) obtained by dividing (i) the product
obtained by multiplying the number of shares purchasable upon exercise of this
Warrant prior to adjustment of the number of shares by the Exercise Price in
effect prior to adjustment of the Exercise Price, by (ii) the Exercise Price in
effect after such adjustment of the Exercise Price.

            (i) The Company shall not be required to issue fractions of shares
of Common Stock or other capital stock of the Company upon the exercise of this
Warrant, but in lieu thereof, the Company shall round the number of shares to be
issued to the nearest whole number.

            (j) Notwithstanding anything herein to the contrary, the Company
shall not issue any Warrant Shares which, when aggregated with all shares of
Common Stock (the "Conversion Shares") issuable upon conversion of the Company's
6% Redeemable Convertible Preferred Stock (the "Preferred Stock"), any shares of
Common Stock issued upon payment of dividends on the Preferred Stock (the "PIK
Dividend Shares"), and any shares of Common Stock issued upon redemption of the
Preferred Stock (the "Redemption Shares") issued prior to such date of issuance,
would exceed 19.999% of the number of shares of Common Stock outstanding on the
business day immediately preceding the date hereof (such number of shares, the
"Issuable Maximum"). If, on the date of exercise of this Warrant as set forth
herein, (i) the Exercise Price in effect is such that the shares issuable upon
exercise of this Warrant, and any Conversion Shares, PIK Dividend Shares, and
Redemption Shares, together with the aggregate number of shares of Common Stock
that would then be issuable upon conversion, exercise or issuance in full of all
then outstanding Conversion Shares, PIK Dividend Shares, Redemption Shares, or
Warrant Shares would exceed the Issuable Maximum, and (ii) the Company's
stockholders shall not have previously approved the issuance of 20% or more of
the Company's capital stock in connection with the transactions contemplated by
the Purchase Agreement (the "Stockholder Approval"), then the Company shall
issue to the Holder requesting exercise of this Warrant a number of shares of
Common Stock equal to the Holder's pro-rata portion of the Issuable Maximum and,
with respect to the remainder of this Warrant then held by the Holder for which
exercise would result in an issuance of shares of Common Stock in excess of the
Holder's pro-rata portion of the Issuable Maximum (the "Excess Shares"), the
Company shall be prohibited from issuing such Excess Shares, and shall notify
the Holder of the reason

                                      10



therefor. This Warrant would be unexercisable to such extent until and unless
Stockholder Approval is subsequently obtained, but shall otherwise remain in
full force and effect.

            7. Transfer Taxes. The issuance of any shares or other securities
upon the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.

            8. Loss or Mutilation of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of any Warrant (and upon surrender of any Warrant if mutilated), and
upon reimbursement of the Company's reasonable incidental expenses, the Company
shall execute and deliver to the Holder thereof a new Warrant of like date,
tenor, and denomination.

            9. No Rights as a Stockholder. The Holder of any Warrant shall not
have, solely on account of such status, any rights of a stockholder of the
Company, either at law or in equity, or to any notice of meetings of
stockholders or of any other proceedings of the Company, except as provided in
this Warrant.

            10. Governing Law. This Warrant shall be construed in accordance
with the laws of the State of Texas applicable to contracts made and performed
within such State, without regard to principles of conflicts of law.

                                      * * *

Dated:   December __, 2005

                                                    SYNTAX-BRILLIAN CORPORATION

                                                     By:________________________
                                                         Wayne A. Pratt,
                                                         Chief Financial Officer

                                       11


                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)

            FOR VALUE RECEIVED, ___________________ hereby sells, assigns, and
transfers unto ________________ a Warrant to purchase __________ shares of
Common Stock, par value $0.001 per share, of Syntax-Brillian Corporation (the
"Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint ____________________ attorney to
transfer such Warrant on the books of the Company, with full power of
substitution.

                                             Dated:_____________________

                                             By:______________________________
                                                           Signature

      The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Warrant in every particular, without alteration or
enlargement or any change whatsoever.



To:    Syntax-Brillian Corporation
       1600 North Desert Drive
       Tempe, Arizona 85281-1230
       Attention:  Chief Executive Officer

                               NOTICE OF EXERCISE

      The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ by [tendering cash or delivering a certified check or bank
cashier's check, payable to the order of the Company] [surrendering ______
shares of Common Stock received upon exercise of the attached Warrant, which
shares have a Current Market Price equal to such payment] in accordance with the
terms thereof.

                     _____________________________________
                     _____________________________________
                     _____________________________________
                    (Print Name, Address and Social Security
                          or Tax Identification Number)

Holder requests delivery to be made: (check one)

[ ]   By delivery of physical certificates in the name above and delivered to
      the above address

[ ]   Through Depository Trust Corporation, if eligible
      (Account )_____________________________________)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

                                                Dated:__________________________

                                                By:_____________________________
                                                           Print Name

                                                ________________________________
                                                           Signature

Address:
_____________________________________
_____________________________________
_____________________________________

EX-4.14

                                                                    EXHIBIT 4.14

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (this "Agreement") is made and
entered into as of December 29, 2005, by and among Syntax-Brillian Corporation,
a Delaware corporation (the "Company"), and the persons and entities listed on
Exhibit A hereto (each, a "Purchaser" and, collectively, the "Purchasers").

         WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of December 28, 2005 (the "Purchase Agreement"),
the Company has agreed to issue and sell to the Purchasers the Company's 6%
Redeemable Convertible Preferred Stock, par value $0.001 per share (the
"Preferred Stock"), and Warrants to purchase shares of its Common Stock; and

         WHEREAS, to induce the Purchasers to execute and deliver the Purchase
Agreement and to purchase the Preferred Stock and the Warrants, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, with respect to the Conversion Shares, the Warrant Shares, the PIK
Dividend Shares and the Redemption Shares.

         NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and other good and valuable consideration, the
receipt and legal adequacy of which are hereby acknowledged by the parties, the
Company and the Purchasers hereby agree as follows:

      1. Definitions.

         Capitalized terms used but not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:

         "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.

         "Blackout Period" shall have the meaning set forth in Section 3(1).

         "Board" shall have the meaning set forth in Section 3(1).

         "Business Day" means any day except Saturday, Sunday and any day which
is a legal holiday or a day on which banking institutions in the State of
Arizona generally are authorized or required by law or other government actions
to close.



         "Commission" means the Securities and Exchange Commission.

         "Common Stock" means the Company's Common Stock, $0.001 par value.

         "Conversion Shares" shall have the meaning set forth in the definition
of "Registrable Securities."

         "Effectiveness Date" means with respect to the Registration Statement
the earlier of (i) the 90th day following the Closing Date (or the 120th day
following the Closing Date in the event that the Registration Statement is
reviewed by the Commission), before which the Company will cause the
Registration Statement to become effective, and (ii) the 5th Business Day after
the date on which the Commission informs the Company (a) that the Commission
will not review the Registration Statement, or (b) that the Company may request
the acceleration of the effectiveness of the Registration Statement.

         "Effectiveness Period" shall have the meaning set forth in Section 2.

         "Event" shall have the meaning set forth in Section 8(d).

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Holder" means, collectively, each holder from time to time of
Registrable Securities including, without limitation, each Purchaser and its
assignees. To the extent this Agreement refers to an election, consent, waiver,
request or approval of or by the Holder, such reference shall mean an election,
consent, waiver, request or approval by the holders of a majority in interest of
the then-outstanding Registrable Securities (on an as exercised basis).

         "Indemnified Party" shall have the meaning set forth in Section 6(c).

         "Indemnifying Party" shall have the meaning set forth in Section 6(c).

         "Liquidated Damages" shall have the meaning set forth in Section 8(d).

         "Losses" shall have the meaning set forth in Section 6(a).

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

         "PIK Dividend Shares" shall have the meaning set forth in the
definition of "Registrable Securities."

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

         "Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities

                                      -2-



covered by the Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.

         "Redemption Shares" shall have the meaning set forth in the definition
of "Registrable Securities."

         "Registrable Securities" means (a) all shares of Common Stock issuable
upon conversion of the Preferred Stock (collectively, the "Conversion Shares");
(b) all shares of Common Stock issuable upon exercise of the Warrants
(collectively, the "Warrant Shares"); (c) all shares of Common Stock issuable in
payment of dividends on the Preferred Stock (collectively, the "PIK Dividend
Shares"); (d) all shares of Common Stock issuable upon redemption of the
Preferred Stock (collectively, the "Redemption Shares"); and (e) any securities
issued or issuable upon any stock split, stock dividend, recapitalization or
similar event with respect to the foregoing and any other securities issued in
exchange of or replacement of the foregoing; until, in each such case (i) a
Registration Statement covering the Conversion Shares, the Warrant Shares, the
PIK Dividend Shares and the Redemption Shares has been declared effective by the
Commission and continues to be effective during the Effectiveness Period, or
(ii) such Conversion Shares, Warrant Shares, PIK Dividend Shares, or Redemption
Shares are sold in compliance with Rule 144 or may be sold pursuant to Rule
144(k), after which time such shares shall not be Registrable Securities.

         "Registration Statement" means the registration statement, including
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement, for
the resale of the Registrable Securities required to be filed by the Company
with the Commission pursuant to this Agreement.

         "Required Filing Date" means the forty-fifth (45th) day immediately
following the Closing Date.

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

         "Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Special Counsel" means any one firm of special counsel to Holder, for
which Holder will be reimbursed by the Company pursuant to the Purchase
Agreement.

         "Warrant Shares" shall have the meaning set forth in the definition of
"Registrable Securities."

                                      -3-



      2. Registration. On or prior to the Required Filing Date, the Company
shall prepare and file with the Commission a Registration Statement covering the
resale of the Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance with the Securities Act and the rules
promulgated thereunder) and shall contain (except if otherwise directed by the
Purchasers) the "Plan of Distribution" substantially in the form attached hereto
as Exhibit B. The Company shall (i) not permit any securities other than the
Registrable Securities to be included in the Registration Statement (except for
securities which are subject to written registration rights agreements entered
into by the Company prior to December 15, 2005), (ii) cause the Registration
Statement to be declared effective under the Securities Act (including filing
with the Commission a request for acceleration of effectiveness in accordance
with Rule 461 promulgated under the Securities Act within five (5) Business Days
after the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that the Registration Statement will not be
"reviewed," or not be subject to further review) as soon as possible after the
filing thereof, but in any event prior to the Effectiveness Date, and (iii) keep
such Registration Statement continuously effective under the Securities Act for
a period of two years from the Closing Date (the "Effectiveness Period").

      3. Registration Procedures; Company's Obligations.

         In connection with the registration of the Registrable Securities, the
Company shall:

         (a) Prepare and file with the Commission on or prior to the Required
Filing Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, then
such registration shall be on another appropriate form in accordance with the
Securities Act and the Rules promulgated thereunder), and cause the Registration
Statement to become effective and remain effective as provided herein; provided,
however, that not less than three (3) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated therein by
reference), the Company shall (i) furnish to the Holder and any Special Counsel,
copies of all such documents proposed to be filed, which documents (other than
those incorporated by reference) will be subject to the timely review of and
comment by such Special Counsel, and (ii) at the request of the Holder cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
such Special Counsel, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file the Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the Holder
or any Special Counsel shall reasonably object in writing within three (3)
Business Days of their receipt thereof.

         (b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or

                                      -4-



any similar provisions then in force) promulgated under the Securities Act;
(iii) respond promptly to any comments received from the Commission with respect
to the Registration Statement or any amendment thereto and promptly provide to
the Holder upon request of the Holder true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holder set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.

         (c) Notify the Holder of Registrable Securities to be sold and any
Special Counsel promptly (and, in the case of (i)(A) below, not less than three
(3) Business Days prior to such filing and, in the case of (i)(C) below, no
later than the first Business Day following the date on which the Registration
Statement becomes effective) and (if requested by any such Person) confirm such
notice in writing no later than three (3) Business Days following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed, (B) when the Commission
notifies the Company whether there will be a "review" of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement, and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

         The Company shall promptly furnish to the Special Counsel upon its
request, without charge, (i) any correspondence from the Commission or the
Commission's staff to the Company or its representatives relating to any
Registration Statement, and (ii) promptly after the same is prepared and filed
with the Commission, a copy of any written response to the correspondence
received from the Commission.

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

         (e) Furnish to the Holder and any Special Counsel upon request, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto,

                                      -5-



including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.

         (f) Promptly deliver to the Holder and any Special Counsel upon
request, without charge, as many copies of the Registration Statement,
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by the selling Holder in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any amendment
or supplement thereto. Should the Holder offer or sell the Registrable
Securities, such Holder agrees to comply with all applicable securities laws.

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

         (h) Cooperate with the Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement and to enable such Registrable Securities to be in
such denominations and registered in such names as the Holder may request at
least two (2) Business Days prior to any sale of Registrable Securities.

         (i) Upon the occurrence of any event contemplated by Section 3(c)(v),
promptly prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

         (j) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on any securities exchange,
quotation system, market or over-the-counter bulletin board, if any, on which
the same securities issued by the Company are then listed as and when required
pursuant to the Purchase Agreement.

         (k) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than forty-

                                      -6-



five (45) days after the end of any twelve (12) month period (or ninety (90)
days after the end of any twelve (12) month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of the Company
after the effective date of the Registration Statement, which statement shall
conform to the requirements of Rule 158.

         (l) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may suspend effectiveness of
a Registration Statement and suspend the sale of Registrable Securities under a
Registration Statement one (1) time every three (3) months or three (3) times in
any twelve month period, provided that the Company may not suspend its
obligation for more than thirty (30) days in the aggregate in any twelve month
period if suspension is for any of the reasons listed above or sixty (60) days
in the aggregate in any twelve month period for any other reason (each, a
"Blackout Period"); provided, however, that no such suspension shall be
permitted for more than twenty (20) consecutive days, arising out of the same
set of facts, circumstances or transactions.

         (m) Within two (2) Business Days after the Registration Statement which
includes the Registrable Securities is ordered effective by the Commission, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the transfer agent for such Registrable Securities (with copies to the Holder
whose Registrable Securities are included in such Registration Statement)
confirmation that the Registration Statement has been declared effective by the
Commission in the form attached hereto as Exhibit C.

      4. Registration Procedures; Holder's Obligations

         In connection with the registration of the Registrable Securities, the
Holder shall:

         (a) Furnish to the Company a completed Questionnaire in the form
attached as Exhibit D not less than five Business Days prior to the Required
Filing Date or by the end of the three Business Days following the date on which
the Holder receives draft materials in accordance with Section 3(a).

         (b) If the Registration Statement refers to the Holder by name or
otherwise as the holder of any securities of the Company, have the right to
require (if such reference to the Holder by name or otherwise is not required by
the Securities Act or any similar federal statute then in force) the deletion of
the reference to the Holder in any amendment or supplement to the Registration
Statement that will be filed or prepared subsequent to the time that such
reference ceases to be required.

         (c) (i) not sell any Registrable Securities under the Registration
Statement until it has received copies of the Prospectus as then amended or
supplemented as contemplated in Section 3(f) and notice from the Company that
such Registration Statement and any post-effective amendments thereto have
become effective as contemplated by Section 3(c), (ii) comply with the
prospectus delivery requirements of the Securities Act as applicable to it in

                                      -7-



connection with sales of Registrable Securities pursuant to the Registration
Statement, and (iii) furnish to the Company information regarding such Holder
and the distribution of such Registrable Securities as is required by law to be
disclosed in the Registration Statement, and the Company may exclude from such
registration the Registrable Securities of the Holder if it fails to furnish
such information within a reasonable time prior to the filing of each
Registration Statement, supplemented Prospectus and/or amended Registration
Statement.

         (d) upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(m), forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until the Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
Section 3(i), or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement.

         Each Holder hereby (i) acknowledges to the Company that the Commission
currently takes the position that coverage of short sales of shares of Common
Stock "against the box" made prior to the Effectiveness Date with any security
covered by any Prospectus is a violation of Section 5 of the Securities Act, as
set forth in Item 65, Section 5 under Section A, of the Manual of Publicly
Available Telephone Interpretations, dated June 1997, compiled by the Office of
Chief Counsel, Division of Corporation Finance, (ii) agrees (on behalf of itself
or any Person over which it has direct control) not to use any of the securities
covered by any Prospectus to cover any short sales, hedging or similar
transactions with the same economic effect as a short sale, made prior to the
Effectiveness Date, and (iii) agrees to comply with Regulation M under the
federal securities laws.

      5. Registration Expenses

         All reasonable fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, the following: (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with each securities exchange or other market on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission or with the NASD pursuant to
NASD Conduct Rule 2710, if required, and (C) in compliance with state securities
or Blue Sky laws); (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is requested by the holders of a
majority of the Registrable Securities included in the Registration Statement);
(iii) messenger, telephone and delivery expenses of the Company; (iv) fees and
disbursements of counsel for the Company; and (v) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this

                                      -8-



Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.

      6. Indemnification

         (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Purchaser,
its permitted assignees, officers, directors, agents, brokers (including brokers
who offer and sell Registrable Securities as principal as a result of a pledge
or any failure to perform under a margin call of Common Stock), investment
advisors and employees, each Person who controls any such Purchaser or permitted
assignee (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees of each
such controlling Person, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all claims, losses,
damages, liabilities, penalties, judgments, costs (including, without
limitation, costs of investigation) and expenses (including, without limitation,
reasonable attorneys' fees and expenses) (collectively, "Losses"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Prospectus, as
supplemented or amended, if applicable, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except (i) to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon
information regarding the Holder furnished in writing to the Company by the
Holder expressly for use therein, which information was reviewed and expressly
approved by the Holder or Special Counsel expressly for use in the Registration
Statement, such Prospectus or form of Prospectus or in any amendment or
supplement thereto, or (ii) as a result of the failure of the Holder to deliver
a Prospectus, as amended or supplemented, to a purchaser in connection with an
offer or sale. The Company shall notify the Holder promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of an Indemnified Party (as defined in Section 6(c) hereof) and shall
survive the transfer of the Registrable Securities by the Holder.

         (b) Indemnification by Purchaser. Each Purchaser and its permitted
assignees shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all Losses, as incurred,
arising out of or relating to (i) the failure of the Holder to deliver a
Prospectus, as amended or supplemented, to a purchaser in connection with a
purchase or sale, (ii) the Holder's use of a representation or prospectus other
than the Prospectus, as amended or supplemented, in connection with a purchase
or sale, or (iii) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus, as supplemented or
amended, if applicable, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make

                                      -9-



the statements therein (in the case of any Prospectus or form of Prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that (A) such
untrue statement or omission is contained in or omitted from any information so
furnished in writing by the Holder or the Special Counsel to the Company
specifically for inclusion in the Registration Statement or such Prospectus, and
(B) such information was reasonably relied upon by the Company for use in the
Registration Statement, such Prospectus or such form of Prospectus or, to the
extent that such information relates to the Holder or the Holder's proposed
method of distribution of Registrable Securities, was reviewed and expressly
approved in writing by the Holder expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus Supplement.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable under this Section 6(b) for only that amount as does not exceed the net
proceeds to the Holder as a result of the sale of Registrable Securities
pursuant to such Registration Statement.

         (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity pursuant to Section
6(a) or 6(b) hereunder (an "Indemnified Party"), such Indemnified Party promptly
shall notify the Person from whom indemnity is sought (the "Indemnifying Party)
in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.

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

         All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend

                                      -10-



such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder or pursuant to applicable law).

         (d) Contribution. If a claim for indemnification under Section 6(a) or
6(b) is unavailable to an Indemnified Party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 6(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for under
Section 6(a) or 6(b) was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable or required to contribute under this Section 6(d) for only that amount as
does not exceed the net proceeds to the Holder as a result of the sale of
Registrable Securities pursuant to the Registration Statement.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of 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.

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

      7. Rule 144.

         As long as the Holder owns Registrable Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. As long as the Holder owns Registrable Securities, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act,
it will prepare and furnish to the Holder and make publicly available in
accordance with Rule 144(c)

                                      -11-



promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act, as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as the Holder
may reasonably request, all to the extent required from time to time to enable
the Holder to sell Conversion Shares, Warrant Shares, PIK Dividend Shares and
Redemption Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions of counsel to the Company
referred to in the Purchase Agreement. Upon the request of any Holder, the
Company shall deliver to such Holder a written certification of a duly
authorized officer as to whether it has complied with such requirements.

      8. Miscellaneous.

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

         (b) No Inconsistent Agreements. Neither the Company nor any of its
Affiliates has as of the date hereof entered into, nor shall the Company or any
of its Affiliates, on or after the date of this Agreement, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holder in this Agreement or otherwise conflicts with the
provisions hereof. Without limiting the generality of the foregoing, without the
written consent of the Holder, after the date hereof the Company shall not grant
to any Person the right to request the Company to register any securities of the
Company under the Securities Act if the rights so granted are inconsistent with
the rights granted to the Holder set forth herein, or otherwise prevent the
Company with complying with all of its obligations hereunder.

         (c) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holder in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement (except for
securities held by other security holders which are subject to written
registration rights agreements entered into by the Company prior to December 15,
2005, which securities may be included in the Registration Statement).

         (d) Failure to File Registration Statement and Other Events. The
Company and the Holder agree that the Holder will suffer damages if the
Registration Statement is not filed on or prior to the Required Filing Date or
is not declared effective by the Commission on or prior to the Effectiveness
Date and maintained in the manner contemplated herein during the Effectiveness
Period or if certain other events occur. The Company and the Holder further
agree that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly,

                                      -12-



if (i) the Registration Statement is not filed on or prior to the Required
Filing Date, or is not declared effective by the Commission on or prior to the
Effectiveness Date, or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 461 promulgated under the
Securities Act within five (5) Business Days after the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be "reviewed," or not subject to further review,
or (iii) the Registration Statement is filed with and declared effective by the
Commission but thereafter (otherwise than as permitted by item (iv) below)
ceases to be effective or available as to all Registrable Securities for 30 days
during the Effectiveness Period, without being succeeded within a reasonable
period by a subsequent Registration Statement filed with and declared effective
by the Commission, or (iv) the Company suspends the use of the Prospectus
forming a part of such Registration Statement for more than thirty (30) days in
any period of 365 consecutive days if the Company suspends in reliance on its
ability to do so due to the existence of a development that, in the good faith
discretion of the Board, makes it appropriate to so suspend or which renders the
Company unable to comply with the Commission requirements, or the Company
suspends the use of the Prospectus forming a part of such Registration Statement
for more than sixty (60) days in any period of 365 consecutive days for any
other reason, or (v) during the Effectiveness Period, trading in the Common
Stock shall be suspended for any reason for more than three (3) consecutive
Business Days, or (vi) the Company has breached Section 3(m) of this Agreement
(any such failure or breach being referred to as an "Event"), the Company shall
pay as liquidated damages for such failure or breach and not as a penalty (the
"Liquidated Damages") to the Holder (or to its assignees, as the case may be) an
amount equal to two percent (2%) of the purchase price of the Preferred Stock
and the Warrants paid by the initial Holder pursuant to the Purchase Agreement
for each thirty (30) day period, pro rated for any period less than thirty (30)
days, following the Event until the applicable Event has been cured. Payments to
be made pursuant to this Section 8(d) shall be due and payable in cash in
arrears at the end of each thirty (30) day period. The parties agree that the
Liquidated Damages represent a reasonable estimate on the part of the parties,
as of the date of this Agreement, of the amount of damages that may be incurred
by the Holder if the Registration Statement is not filed on or prior to the
Required Filing Date or has not been declared effective by the Commission on or
prior to the Effectiveness Date and maintained in the manner contemplated herein
during the Effectiveness Period or if any other Event as described herein has
occurred.

         (e) Consent to Jurisdiction. The Company and each Purchaser (i) hereby
irrevocably submit to the exclusive jurisdiction of the United States District
Court for the Northern District of Texas and the courts of the State of Texas
located in Dallas County for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or the Purchase Agreement, (ii)
hereby waive, and agree not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper, and (iii) hereby waive
any and all rights they may have to a trial by jury with respect to any suit,
action or proceeding based on, or arising out of, under, or in connection with,
this Agreement. The Company and each Purchaser consent to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 8(e) shall affect or limit any right to serve
process in any other manner permitted by law.

                                      -13-



         (f) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Purchasers.

         (g) Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (i) upon hand delivery by telecopy or facsimile at the address or
number designated below (if delivered on a Business Day during normal business
hours where such notice is to be received), or the first Business Day following
such delivery (if delivered other than on a Business Day during normal business
hours where such notice is to be received), or (ii) on the second Business Day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:

            (x) if to the Company:

                Syntax-Brillian Corporation
                1600 North Desert Drive
                Tempe, Arizona 85281-1230

                Attention:  Vincent F. Sollitto, Jr., Chief Executive Officer
                Telecopier:  (602) 389-8801

             with a copy to:

                Greenberg Traurig, LLP

                2375 East Camelback Road

                Phoenix, Arizona 85016

                Attention:  Robert S. Kant, Esq.
                Telecopier: (602) 445-8100

            (y) if to any Purchaser:

                At the address of such Purchaser set forth on Exhibit A to
                this Agreement.

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice.

         (h) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of the Holder and its successors and assigns. The
Company may not assign this Agreement or any of its respective rights or
obligations hereunder without the prior written consent of the Purchasers Each
Purchaser may assign its rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

         (i) Assignment of Registration Rights. The rights of the Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance

                                      -14-



with the terms of this Agreement, shall be assignable by each Holder to any
transferee of the Holder of all or a portion of the shares of Registrable
Securities if: (i) the Holder agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment; (ii) the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (A) the name and address of such transferee or assignee, and (B) the
securities with respect to which such registration rights are being transferred
or assigned; (iii) following such transfer or assignment the further disposition
of such securities by the transferee or assignees is restricted under the
Securities Act and applicable state securities laws; (iv) at or before the time
the Company receives the written notice contemplated by clause (ii) of this
Section, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions of this Agreement; and (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement and shall be for no less than 10% of the Registrable Securities. In
addition, the Holder shall have the right to assign its rights hereunder to any
other Person with the prior written consent of the Company, which consent shall
not be unreasonably withheld, conditioned or delayed. The rights to assignment
shall apply to the Holder (and to subsequent) successors and assigns. In the
event of an assignment pursuant to this Section 8(i), the Purchaser shall pay
all incremental costs and expenses incurred by the Company in connection with
filing a Registration Statement (or an amendment to the Registration Statement)
to register the shares of Registrable Securities assigned to any assignee or
transferee of the Purchaser.

         (j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

         (k) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to principles of
conflicts of law thereof. This Agreement shall not be interpreted or construed
with any presumption against the party causing this Agreement to be drafted.

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

         (m) Termination. Except as otherwise specifically set forth herein,
this Agreement shall terminate on the earlier to occur of (i) the date on which
all Registrable Securities have been sold pursuant to the Registration
Statement, or (ii) the date on which all remaining Registrable Securities may be
sold without restriction pursuant to Rule 144(k) of the Securities Act.

         (n) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or

                                      -15-



restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

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

      [Remainder of page intentionally left blank. Signature pages to follow.]

                                      -16-



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

                                            SYNTAX-BRILLIAN CORPORATION

                                            By:      /s/ Wayne A. Pratt
                                               ---------------------------------
                                                     Wayne A. Pratt,
                                                     Chief Financial Officer

               [SIGNATURES OF PURCHASERS TO FOLLOW ON NEXT PAGES.]



                                   PURCHASERS:

                  GRYPHON MASTER FUND, L.P.

                  By:  Gryphon Partners, L.P., its General Partner

                    By:  Gryphon Management Partners, L.P., its General Partner

                       By:  Gryphon Advisors, L.L.C., its General Partner

                                        By:      /s/ E.B. Lyon, IV
                                            ------------------------------------
                                                 E.B. Lyon, IV, Authorized Agent

                  GSSF MASTER FUND, LP

                  By:  Gryphon Special Situations Fund, LP, its General Partner

                    By:  GSSF Management Partners, LP, its General Partner

                       By:  GSSF, LLC, its General Partner

                                        By:      /s/ E.B. Lyon, IV
                                            ------------------------------------
                                                E.B. Lyon, IV, Authorized Agent

                  [ADDITIONAL PURCHASER SIGNATURE PAGES FOLLOW]



                           Name of Purchaser: Enable Growth Partners

                                            By: /s/ Mitch Levine
                                               --------------------------------
                                                     Name: Mitch Levine
                                                           --------------------
                                                     Title: Managing Partner
                                                           --------------------



                           Name of Purchaser: Enable Opportunity Partners

                                            By: /s/ Mitch Levine
                                               ---------------------------------
                                                     Name: Mitch Levine
                                                          ----------------------
                                                     Title: Managing Partner
                                                           ---------------------


                           Name of Purchaser: Hudson Bay Fund, L.P.

                                            By: /s/ Yoav Roth
                                               ---------------------------------

                                                     Name:  Yoav Roth
                                                          ----------------------
                                                     Title: Portfolio Manager
                                                           ---------------------



                      Name of Purchaser: DKR SoundShore Oasis Holding Fund Ltd.

                                            By: /s/ Fred Leif
                                               ---------------------------------

                                                     Name: Fred Leif
                                                          ----------------------

                                                     Title: Director
                                                           ---------------------



                         Name of Purchaser: Castle Creek Technology Partners LLC

                                            By: /s/ Stephen D. Friend
                                               ---------------------------------

                                                     Name: Stephen D. Friend
                                                          ----------------------

                                                     Title: Managing Director
                                                           ---------------------



                           Name of Purchaser: Bushido Capital Master Fund, LP

                                          By: Bushido Capital Partners, Ltd.,
                                              its General Partner


                                           By: /s/ Christopher Rossman
                                               ----------------------------

                                                     Name: Christopher Rossman
                                                           -------------------

                                                     Title: Managing Director
                                                           -------------------


                           Name of Purchaser: Nite Capital LP

                                By:      /s/ Keith A. Goodman
                                     -------------------------------------------

                                         Name:    Keith A. Goodman

                                         Title:   Manager of the General Partner



                           Name of Purchaser: Iroquois Master Fund Ltd.

                                            By: /s/ Joshua Silverman
                                                --------------------------------

                                                     Name: Joshua Silverman
                                                           ---------------------

                                                     Title: Authorized Signatory
                                                            --------------------



                           Name of Purchaser: Longview Special Finance Inc.

                                            By: /s/ Francois Morax
                                                --------------------------------

                                                     Name: Francois Morax
                                                           ---------------------

                                                     Title: Director
                                                            --------------------



                           Name of Purchaser: Lagunitas Partners LP

                                            By: /s/ Jon D. Gruber
                                               ---------------------------------
                                                     Name: Gruber & McBaine
                                                           Capital Management
                                                          ----------------------
                                                     Title: General Partner
                                                           ---------------------


                           Name of Purchaser: Jon D. and Linda W. Gruber Trust

                                            By: /s/ Jon D. Gruber
                                               ---------------------------------
                                                     Name: Jon D. Gruber
                                                          ----------------------
                                                     Title: Trustee
                                                           ---------------------


                           Name of Purchaser: Gruber & McBaine International

                                            By: /s/ Jon D. Gruber
                                                --------------------------------

                                                     Name: Gruber & McBaine
                                                           Capital Management
                                                          ----------------------

                                                     Title: Investment Adviser
                                                           ---------------------



                           Name of Purchaser: WesTech Electronics Limited

                                            By: /s/ Tan Chin Hock
                                                --------------------------------

                                                     Name: Tan Chin Hock
                                                          ----------------------

                                                     Title: CFO
                                                           ---------------------



                                    EXHIBIT A
                                   PURCHASERS

Gryphon Master Fund, L.P.
100 Crescent Court
Suite 490
Dallas, Texas  75201
Fax No.: (214) 871-6711
Attn:  Ryan R. Wolters

With a copy to:

Warren W. Garden, P.C.
100 Crescent Court, Suite 490
Dallas, Texas  75201
Fax No.: (214) 871-6711
Attn:  Warren W. Garden, Esq.

GSSF Master Fund, LP
100 Crescent Court
Suite 475
Dallas, Texas  75201
Fax No.: (214) 871-6711
Attn:  Timothy M. Stobaugh

With a copy to:

Warren W. Garden, P.C.
100 Crescent Court, Suite 490
Dallas, Texas  75201
Fax No.: (214) 871-6711
Attn:  Warren W. Garden, Esq.

Enable Growth Partners
One Ferry Building, Suite 255
San Francisco, CA  94111
Fax: 415-677-1580
Attn: Mitch Levine

Enable Opportunity Partners
One Ferry Building, Suite 255
San Francisco, CA  94111
Fax: 415-677-1580
Attn: Mitch Levine



Hudson Bay Fund, L.P.
120 Broadway, 40th Floor
New York, NY 10271
Fax no. 212-571-1279
Attn: Yoav Roth, May Lee

DKR SoundShore Oasis Holding Fund Ltd.
c/o DKR Capital Partners L.P.
1281 East Main Street
Stamford, CT 06902
Attn: Rajni A. Narasi
Fax. 203-324-8489

Castle Creek Technology Partners LLC
111 West Jackson Blvd.
20th Floor
Chicago, IL 60604
Fax: (312) 692-7551
Attn: Stephen Friend

Bushido Capital Master Fund, LP
c/o Bushido Capital Partners
275 Seventh Avenue, Suite 2000
New York, NY 10001
Fax No.: (646) 486-6885
Attn.: Christopher Rossman

Nite Capital LP
c/o Nite Capital, LLC
100 E. Cook Ave., Suite 201
Libertyville, IL 60048
Fax 247-968-4648
Attn: Keith Goodman

Iroquois Master Fund Ltd.
641 Lexington Ave., 26th Floor
New York, NY 10022
Attn: Joshua Silverman
Fax: (212) 207-7452

                                      A-2



Longview Special Finance Inc.
Trident Chambers
PO Box 146
Road Toad, Tortola
British Virgin Islands
Fax: 284-494-3754

Lagunitas Partners LP
c/o Gruber & McBaine Capital Management
50 Osgood Place-PH
San Francisco, CA 94133
Attn: Christine Arroyo
Fax: (415) 956-7858

Jon D. and Linda W. Gruber Trust
c/o Gruber & McBaine Capital Management
50 Osgood Place-PH
San Francisco, CA 94133
Attn: Christine Arroyo
Fax: (415) 956-7858

Gruber & McBaine International
c/o Gruber & McBaine Capital Management
50 Osgood Place-PH
San Francisco, CA 94133
Attn: Christine Arroyo
Fax: (415) 956-7858

WesTech Electronics Limited
No. 34 Kaki Bukit Crescent
Kaki Bukit Teckpark 1
Singapore 416263

                                      A-3



                                    EXHIBIT B

                              PLAN OF DISTRIBUTION

      We are registering the shares of Common Stock on behalf of the Selling
Stockholders. The Common Stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:

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

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

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

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

      -     privately negotiated transactions;

      -     settlement of short sales entered into after the effective date of
            the registration statement of which this prospectus is a part;

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

      -     a combination of any such methods of sale;

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

      -     any other method permitted pursuant to applicable law.

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

      Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.

                                      B-1



      In connection with the sale of the Common Stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
Common Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the Common Stock short and deliver these
securities to close out their short positions, or loan or pledge the Common
Stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

      The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholder has
informed the Company that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).

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

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

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

                                      B-2



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

                                      B-3



                                    EXHIBIT C

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]
___________________
___________________
___________________
Attn:  ____________

                Re:  Syntax-Brillian Corporation

Ladies and Gentlemen:

      We are counsel to Syntax-Brillian Corporation, a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of December
__, 2005, by and among the Company and the purchasers (the "PURCHASERS" and the
"HOLDERS") named therein pursuant to which the Company issued to the Purchasers
its 6% Redeemable Convertible Preferred Stock and other securities. Pursuant to
the Purchase Agreement, the Company has also entered into a Registration Rights
Agreement with the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), dated as of
December __, 2005, pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), under the Securities Act of 1933, as amended (the "1933 ACT"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ___________, 2005, the Company filed a Registration Statement on
Form S-3 (File No. 333-________) (the "REGISTRATION STATEMENT") with the
Securities and Exchange Commission (the "SEC") relating to the resale of the
Registrable Securities which names the Holders as selling stockholders
thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of, the Registration Statement.

                                                     Very truly yours,

                                                     By:

cc:      [PURCHASERS]

                                      C-1



                                    EXHIBIT D

                                 FORM OF SELLING
                          SECURITYHOLDER QUESTIONNAIRE

                           SYNTAX-BRILLIAN CORPORATION

                      Selling Securityholder Questionnaire

      The undersigned holder of 6% Redeemable Convertible Preferred Stock and
warrants to purchase shares of common stock, par value $0.001 per share (the
"Common Stock"), of Syntax-Brillian Corporation, a Delaware corporation (the
"Company"), (the "Registrable Securities") understands that the Company has
filed or intends to file with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (the "Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement, dated as of
December __, 2005 (the "Registration Rights Agreement"), among the Company and
the Purchasers named therein. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.

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

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

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

QUESTIONNAIRE

1.    Name.

      (a)   Full Legal Name of Selling Securityholder:

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

                                      D-1



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

2.    Address for Notices to Selling Securityholder:

             Telephone:
             Fax:
             Contact Person:

3.    Beneficial Ownership of Registrable Securities:

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

4.    Broker-Dealer Status:

      (a)   Are you a broker-dealer?

            [ ]  Yes    [ ]  No

      (b)   If "yes" to Section 4(a), did you receive your Registrable
            Securities as compensation for investment banking services to the
            Company?

            [ ]  Yes    [ ]  No

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

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

            [ ]  Yes    [ ]  No

                                      D-2



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

            [ ]  Yes    [ ]  No

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

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

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

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

6.    Relationships with the Company:

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

      State any exceptions here:

      The undersigned agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective. By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

                                      D-3



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

Dated:                                      Beneficial Owner:

                                            By:
                                            Name:
                                            Title:

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

                           Greenberg Traurig, LLP
                           2375 E. Camelback Road, Suite 700
                           Phoenix, Arizona  85016
                           Attn:  Robert S. Kant
                           Facsimile:  (602) 445-8100

                                      D-4

EX-10.36

                                                                   EXHIBIT 10.36

                               SECURITIES PURCHASE

                                    AGREEMENT

                          DATED AS OF DECEMBER 28, 2005

                                      AMONG

                           SYNTAX-BRILLIAN CORPORATION

                                       AND

                       THE PURCHASERS LISTED ON EXHIBIT A



                                TABLE OF CONTENTS



                                                                                                              PAGE
                                                                                                              ----
                                                                                                           
ARTICLE I Purchase and Sale of Preferred Stock and Warrants...............................................      1

     Section 1.1    Purchase and Sale of Preferred Stock and Warrants.....................................      1
     Section 1.2    Closing...............................................................................      1
     Section 1.3    Warrants..............................................................................      1
     Section 1.4    Conversion Shares and Warrant Shares..................................................      2

ARTICLE II Representations and Warranties.................................................................      2

     Section 2.1    Representations and Warranties of the Company.........................................      2
     Section 2.2    Representations and Warranties of the Purchasers......................................     13

ARTICLE III Covenants.....................................................................................     16

     Section 3.1    Disclosure of Transactions and Other Material Information.............................     16
     Section 3.2    Registration..........................................................................     16
     Section 3.3    Inspection Rights.....................................................................     16
     Section 3.4    Compliance with Laws..................................................................     17
     Section 3.5    Keeping of Records and Books of Account...............................................     17
     Section 3.6    Other Agreements......................................................................     17
     Section 3.7    Right of Participation................................................................     17
     Section 3.8    Reservation of Shares.................................................................     20
     Section 3.9    Non-public Information................................................................     20
     Section 3.10   S-3 Eligibility.......................................................................     20
     Section 3.11   Beneficial Ownership Restrictions.....................................................     20
     Section 3.12   Trading Market Limitations............................................................     20

ARTICLE IV Conditions.....................................................................................     21

     Section 4.1    Conditions Precedent to the Obligation of the Company to Close and to Sell the
                    Shares and Warrants on the Closing Date...............................................     21
     Section 4.2    Conditions Precedent to the Obligation of the Purchasers to Close and to Purchase
                    the Shares and Warrants on the Closing Date...........................................     22

ARTICLE V Transfer Restrictions and Legends...............................................................     24

ARTICLE VI Termination....................................................................................     26

     Section 6.1    Termination by Mutual Consent.........................................................     26
     Section 6.2    Effect of Termination.................................................................     26

ARTICLE VII Indemnification...............................................................................     26


                                      -i-


                                                                                                            
     Section 7.1    General Indemnity.....................................................................     26
     Section 7.2    Indemnification Procedure.............................................................     26

ARTICLE VIII Miscellaneous................................................................................     27

     Section 8.1    Fees and Expenses.....................................................................     27
     Section 8.2    Specific Enforcement; Consent to Jurisdiction.........................................     28
     Section 8.3    Entire Agreement; Amendment...........................................................     28
     Section 8.4    Notices...............................................................................     29
     Section 8.5    Waivers...............................................................................     29
     Section 8.6    Headings..............................................................................     29
     Section 8.7    Successors and Assigns................................................................     30
     Section 8.8    No Third Party Beneficiaries..........................................................     30
     Section 8.9    Governing Law.........................................................................     30
     Section 8.10   Survival..............................................................................     30
     Section 8.11   Counterparts..........................................................................     30
     Section 8.12   Severability..........................................................................     30
     Section 8.13   Further Assurances....................................................................     30
     Section 8.14   Independent Nature of Purchasers' Obligations and Rights..............................     30



                                      -ii-


                          SECURITIES PURCHASE AGREEMENT

      This SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
December 28, 2005, by and among Syntax-Brillian Corporation, a Delaware
corporation (the "Company"), and the entities listed on Exhibit A hereto (each,
a "Purchaser" and collectively, the "Purchasers"), for the purchase by and sale
to the Purchasers of shares of the Company's 6% Redeemable Convertible Preferred
Stock, par value $0.001 per share (the "Preferred Stock"), and warrants to
purchase shares of the Company's common stock, par value $0.001 per share (the
"Common Stock").

      The parties hereto agree as follows:

                                   ARTICLE I

                PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS

            Section 1.1 Purchase and Sale of Preferred Stock and Warrants. Upon
the following terms and conditions, the Company shall issue and sell to the
Purchasers, and each Purchaser shall, severally but not jointly, purchase from
the Company, (i) shares of Preferred Stock (the "Shares"), and (ii) warrants to
purchase shares of Common Stock, in substantially the form attached hereto as
Exhibits B (the "Warrants"), in each case, as set forth opposite each such
Purchaser's name on Exhibit A hereto, for an aggregate purchase price to the
Company from all Purchasers of up to $17,000,000 (the "Purchase Price"). The
Company and the Purchasers are executing and delivering this Agreement in
accordance with and in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the "Securities Act"), including
Regulation D ("Regulation D"), and/or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect
to any or all of the investments to be made hereunder.

            Section 1.2 Closing. The closing of the sale to and purchase by each
Purchaser of the Shares and Warrants (the "Closing") shall take place at the
offices of Warren W. Garden, P.C. located at 100 Crescent Court, Suite 490,
Dallas, Texas 75201 at 10:00 a.m., Central Time, (i) on or before December 31,
2005, provided, that all of the conditions set forth in Sections 4.1 and 4.2
hereof shall have been fulfilled or waived in accordance herewith, or (ii) at
such other time and place or on such date as the Purchasers and the Company may
agree upon (the "Closing Date"). At the Closing, the Company shall deliver to
each Purchaser copies of the stock certificates and original agreements
evidencing the Shares and Warrants being purchased by it on the Closing Date
which shall be registered in such Purchaser's name as stated on Exhibit A
hereto, against delivery to the Company of payment by certified check or wire
transfer in an amount equal to that amount set forth opposite such Purchaser's
name on Exhibit A hereto under the heading "Dollar Amount of Investment at
Closing".

            Section 1.3 Warrants. At the Closing, the Company shall issue to
each Purchaser such number of Warrants to purchase shares of Common Stock as is
set forth opposite



such Purchaser's name on Exhibit A hereto. The Warrants shall be exercisable for
five (5) years from the date of issuance and shall have an initial exercise
price equal to $5.00.

            Section 1.4 Conversion Shares and Warrant Shares. The Company has
authorized and has reserved, and covenants to continue to reserve, free of
preemptive rights and other similar contractual rights of stockholders, a number
of its authorized but unissued shares of Common Stock equal to the aggregate
number of shares of Common Stock necessary to effect the conversion of all the
Shares and the exercise of all the Warrants. Any shares of Common Stock issuable
upon conversion of the Shares (and such shares when issued) are herein referred
to as the "Conversion Shares". Any shares of Common Stock issuable upon exercise
of the Warrants (and such shares when issued) are herein referred to as the
"Warrant Shares". The Shares, the Conversion Shares, the Warrants, the Warrant
Shares, the PIK Dividend Shares (as defined in the Registration Rights
Agreement) and the Redemption Shares (as defined in the Registration Rights
Agreement) are sometimes collectively referred to herein as the "Securities".

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

            Section 2.1 Representations and Warranties of the Company. In order
to induce the Purchasers to enter into this Agreement and to purchase the Shares
and Warrants, the Company hereby makes the following representations and
warranties to the Purchasers, subject in each case to any exceptions identified
in the Schedule of Exceptions attached hereto:

            (a) Organization, Good Standing and Power. The Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power to own,
lease and operate its properties and assets and to conduct its business as it is
now being conducted. The Company does not have any Subsidiaries (as defined in
Section 2.1(g)) or own securities of any kind in any other entity, except as
disclosed in the Commission Documents (as defined in Section 2.1(f)) or on
Schedule 2.1(g). The Company and each such Subsidiary is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except for any jurisdiction(s) (alone or in the
aggregate) in which the failure to be so qualified would not have a Material
Adverse Effect. For the purposes of this Agreement, "Material Adverse Effect"
means any adverse effect on the business, results of operations, properties,
prospects or financial condition of the Company and its Subsidiaries, taken as a
whole, and which is material to the Company and its Subsidiaries, taken as a
whole, or which is likely to materially hinder the performance by the Company of
its obligations hereunder and under the other Transaction Documents (as defined
in Section 2.1(b) hereof).

            (b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and perform this Agreement, the
Certificate of Designations establishing the Shares in the form of Exhibit D
attached hereto (the "Certificate of Designations"), the Registration Rights
Agreement in the form of Exhibit E attached hereto (the "Registration Rights
Agreement"), the Warrants, and all other agreements and documents

                                      -2-


contemplated hereby and thereby and executed by the Company or to which the
Company is party (collectively, the "Transaction Documents"), and to issue and
sell the Shares and the Warrants in accordance with the terms hereof. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by it of the transactions contemplated thereby have been
duly and validly authorized by all necessary corporate action, and no further
consent or authorization of the Company, its Board of Directors or its
stockholders is required. This Agreement has been duly executed and delivered by
the Company. The other Transaction Documents will have been duly executed and
delivered by the Company at the Closing. Each of the Transaction Documents
constitutes, or shall constitute when executed and delivered, a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor's rights and remedies or by other equitable principles of general
application.

            (c) Capitalization. The authorized capital stock of the Company and
the shares thereof currently issued and outstanding as of December 27, 2005, are
set forth on Schedule 2.1(c) hereto. All of the outstanding shares of the
Company's Common Stock and any other security of the Company have been duly and
validly authorized. Except as disclosed in the Commission Documents, no shares
of Common Stock or any other security of the Company are entitled to preemptive
rights or registration rights and there are no outstanding options, warrants,
scrip, rights to subscribe to, call or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company. Furthermore, except as disclosed in the Commission
Documents, there are no contracts, commitments, understandings, or arrangements
by which the Company is or may become bound to issue additional shares of the
capital stock of the Company or options, securities or rights convertible into
shares of capital stock of the Company. Except (i) for customary transfer
restrictions contained in agreements entered into by the Company in order to
sell restricted securities, or (ii) as disclosed in the Commission Documents,
the Company is not a party to or bound by any agreement or understanding
granting registration or anti-dilution rights to any individual, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind (a "Person") with
respect to any of its equity or debt securities. The Company is not a party to,
and it has no knowledge of, any agreement or understanding restricting the
voting or transfer of any shares of the capital stock of the Company. The offer
and sale of all capital stock, convertible securities, rights, warrants, or
options of the Company issued prior to the Closing have complied with all
applicable federal and state securities laws, and no holder of such securities
has a right of rescission or claim for damages with respect thereto which could
have a Material Adverse Effect. The Company has furnished or made available to
the Purchasers true and correct copies of the Company's Certificate of
Incorporation, as amended, and as in effect on the date hereof (the
"Certificate"), and the Company's Bylaws, as amended, and as in effect on the
date hereof (the "Bylaws").

            (d) Issuance of Securities. The Shares and the Warrants to be issued
at the Closing have been duly authorized by all necessary corporate action and,
when paid for or issued in accordance with the terms hereof, the Shares shall be
validly issued and outstanding, fully paid and nonassessable and free and clear
of all liens, encumbrances and rights of refusal of any

                                      -3-


kind and the holders shall be entitled to all rights accorded to a holder of
Preferred Stock. When the Conversion Shares are issued and paid for in
accordance with the terms of the Preferred Stock, such shares will be duly
authorized by all necessary corporate action and validly issued and outstanding,
fully paid and nonassessable, free and clear of all liens, encumbrances and
rights of refusal of any kind and the holders shall be entitled to all rights
accorded to a holder of Common Stock. When the Warrant Shares are issued and
paid for in accordance with the terms of the Warrants, such shares will be duly
authorized by all necessary corporate action and validly issued and outstanding,
fully paid and nonassessable, free and clear of all liens, encumbrances and
rights of refusal of any kind and the holders shall be entitled to all rights
accorded to a holder of Common Stock. When the PIK Dividend Shares are issued in
accordance with the terms of the Certificate of Designations, such shares will
be duly authorized by all necessary corporate action and validly issued and
outstanding, fully paid and nonassessable, free and clear of all liens,
encumbrances and rights of refusal of any kind and the holders shall be entitled
to all rights accorded to a holder of Common Stock. When the Redemption Shares
are issued in accordance with the terms of the Certificate of Designations, such
shares will be duly authorized by all necessary corporate action and validly
issued and outstanding, fully paid and nonassessable, free and clear of all
liens, encumbrances and rights of refusal of any kind and the holders shall be
entitled to all rights accorded to a holder of Common Stock.

            (e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) violate any
provision of the Certificate or Bylaws or any Subsidiary's comparable charter
documents, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries'
respective properties or assets are bound, (iii) create or impose a lien,
mortgage, security interest, charge or encumbrance of any nature on any property
or asset of the Company or any of its Subsidiaries under any agreement or any
commitment to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or by which any of their
respective properties or assets are bound, or (iv) assuming the accuracy of the
representations and warranties of the Purchasers set forth in Section 2.2,
result in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected, except, in all cases other than violations pursuant to clauses (i)
or (iv) (with respect to federal and state securities laws) above, for such
conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The business of the Company and its Subsidiaries is not being
conducted in violation of any laws, ordinances or regulations of any
governmental entity, except for possible violations which singularly or in the
aggregate do not and would not have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is required under federal, state, foreign or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under the
Transaction Documents or issue and sell the Securities in accordance with the
terms hereof or thereof (other

                                      -4-


than any filings which may be required to be made by the Company with the
Securities and Exchange Commission (the "Commission") prior to or subsequent to
the Closing, or state securities administrators subsequent to the Closing, or
any registration statement which may be filed pursuant hereto or thereto).

            (f) Commission Documents; Financial Statements. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the Commission pursuant to the reporting requirements of the Exchange
Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange
Act (all of the foregoing, including filings incorporated by reference therein,
and all filings made pursuant to the Securities Act, including the Company's
Joint Proxy Statement/Prospectus filed with the Commission on October 24, 2005,
being referred to herein as the "Commission Documents"). The Company has
delivered or made available (through the SEC EDGAR website) to the Purchasers
true and complete copies of the Commission Documents filed with the Commission
since May 14, 2003. The Company has not provided to the Purchasers any material
non-public information or other information which, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company but which
has not been so disclosed, other than with respect to the transactions
contemplated by this Agreement. At the time of its filing, the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005
(the "Form 10-Q") complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder and other federal, state and local laws, rules and regulations
applicable to such documents, and the Form 10-Q did not contain any untrue
statement of a material fact or 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. At the time of its
filing, the Company's Annual Report on Form 10-K, as amended, for the fiscal
year ended December 31, 2004 (the "Form 10-K") complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder and other federal, state and local laws, rules
and regulations applicable to such documents, and, at the time of its filing,
the Form 10-K did not contain any untrue statement of a material fact or 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. As of their respective dates (taking into account all
restatements thereof in subsequent Commission Documents), the financial
statements of the Company included in the Commission Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements (taking into account
all restatements thereof in subsequent Commission Documents) have been prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the Notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its Subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

                                      -5-


            (g) Subsidiaries. Schedule 2.1(g) hereto sets forth each Subsidiary
of the Company, showing the jurisdiction of its incorporation or organization
and showing the percentage of each Person's ownership of the outstanding stock
or other interests of such Subsidiary. For the purposes of this Agreement,
"Subsidiary" shall mean any Person of which at least a majority of the
securities or other ownership interest having ordinary voting power (absolutely
or contingently) for the election of directors or other Persons performing
similar functions are at the time owned directly or indirectly by the Company
and/or any of its other Subsidiaries. All of the outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly issued, and are
fully paid and nonassessable. There are no outstanding preemptive, conversion or
other rights, options, warrants or agreements granted or issued by or binding
upon any Subsidiary for the purchase or acquisition of any shares of capital
stock of any Subsidiary or any other securities convertible into, exchangeable
for or evidencing the rights to subscribe for any shares of such capital stock.
Neither the Company nor any Subsidiary is subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of the
capital stock of any Subsidiary or any convertible securities, rights, warrants
or options of the type described in the preceding sentence. Neither the Company
nor any Subsidiary is party to, nor has any knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of any
Subsidiary.

            (h) No Material Adverse Change. Since September 30, 2005, the
Company has not experienced or suffered any Material Adverse Effect.

            (i) No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those set forth on the balance sheet included in the
Form 10-K or in the Commission Documents, or incurred in the ordinary course of
the Company's or its Subsidiaries respective businesses since December 31, 2004,
and which, individually or in the aggregate, do not or would not have a Material
Adverse Effect on the Company or its Subsidiaries.

            (j) No Undisclosed Events or Circumstances. Since September 30,
2005, no event or circumstance has occurred or exists with respect to the
Company or its Subsidiaries or their respective businesses, properties,
prospects, operations or financial condition, which, under applicable law, rule
or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed.

            (k) Indebtedness. Schedule 2.1(k) hereto sets forth as of the date
hereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments. For
purposes of this Agreement: (x) "Indebtedness" of any Person means, without
duplication (A) any indebtedness for borrowed money in excess of $100,000, (B)
any obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business) in excess of $100,000, (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) any obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) any indebtedness in
excess of $100,000 created or arising under any conditional sale or other title

                                      -6-


retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with GAAP, consistently applied for the periods covered thereby, is
classified as a capital lease with a present value in excess of $100,000, (G)
all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; and (y) "Contingent Obligation" means, as to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto in excess of
$100,000 due under leases required to be capitalized in accordance with GAAP.
Neither the Company nor any Subsidiary is in default with respect to any
Indebtedness.

            (l) Title to Assets. Each of the Company and the Subsidiaries has
good and valid title to all of its real and personal property, free and clear of
any mortgages, pledges, charges, liens, security interests or other encumbrances
of any nature whatsoever, except as disclosed in the Commission Documents or
such that, individually or in the aggregate, do not have a Material Adverse
Effect. All leases to real and personal property of the Company and each of its
Subsidiaries are valid and subsisting and in full force and effect.

            (m) Actions Pending. There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the knowledge of the Company, threatened against the Company or any
Subsidiary which questions the validity of this Agreement or any of the other
Transaction Documents or any of the transactions contemplated hereby or thereby
or any action taken or to be taken pursuant hereto or thereto. There is no
action, suit, claim, investigation, arbitration, alternate dispute resolution
proceeding or other proceeding pending or, to the knowledge of the Company,
threatened against or involving the Company, any Subsidiary or any of their
respective properties or assets, which individually or in the aggregate, would
have a Material Adverse Effect. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company or any Subsidiary or, to the knowledge of
the Company, any officers or directors of the Company or any Subsidiary in their
capacities as such, which individually, or in the aggregate, would have a
Material Adverse Effect.

            (n) Compliance with Law. The business of the Company and the
Subsidiaries has been and is presently being conducted in accordance with all
applicable federal, state and local governmental laws, rules, regulations and
ordinances, except as set forth in the Commission Documents or such that,
individually or in the aggregate, the noncompliance therewith would not

                                      -7-


have a Material Adverse Effect. The Company and each of its Subsidiaries have
all franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now
being conducted by it unless the failure to possess such franchises, permits,
licenses, consents and other governmental or regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

            (o) Taxes. The Company and each of the Subsidiaries has accurately
prepared and filed all federal, state and other tax returns required by law to
be filed by it, has paid or made provisions for the payment of all taxes shown
to be due and all additional assessments, and adequate provisions have been and
are reflected in the financial statements of the Company and the Subsidiaries
for all current taxes and other charges to which the Company or any Subsidiary
is subject and which are not currently due and payable. None of the federal
income tax returns of the Company or any Subsidiary have been audited by the
Internal Revenue Service. The Company has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether federal or state)
of any nature whatsoever, whether pending or threatened against the Company or
any Subsidiary for any period, nor of any basis for any such assessment,
adjustment or contingency.

            (p) Certain Fees. The Company has not employed any broker or finder
or incurred any liability for any brokerage or investment banking fees,
commissions, finders' structuring fees, financial advisory fees or other similar
fees in connection with the Transaction Documents.

            (q) Disclosure. To the best of the Company's knowledge, neither this
Agreement or the Schedules hereto nor any other documents, certificates or
instruments furnished to the Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading.

            (r) Intellectual Property. The Company and each of the Subsidiaries
owns or possesses valid licenses under all the Proprietary Rights owned by it
and have no knowledge that such rights are in conflict with the rights of
others. As of the date of this Agreement, neither the Company nor any of its
Subsidiaries has received any written notice that any Proprietary Rights have
been declared unenforceable or otherwise invalid by any court or governmental
agency. As of the date of this Agreement, there is, to the knowledge of the
Company, no material existing infringement, misuse or misappropriation of any
Proprietary Rights by others. From September 30, 2005 to the date of this
Agreement, neither the Company nor any of its Subsidiaries has received any
written notice alleging that the operation of the business of the Company or any
of its Subsidiaries infringes in any material respect upon the intellectual
property rights of others. "Proprietary Rights" shall mean patents, trademarks,
domain names (whether or not registered) and any patentable improvements or
copyrightable derivative works thereof, websites and intellectual property
rights relating thereto, service marks, trade names, copyrights, licenses and
authorizations, and all rights with respect to the foregoing.

                                      -8-


            (s) Environmental Compliance. The Company and each of its
Subsidiaries have obtained all material approvals, authorization, certificates,
consents, licenses, orders and permits or other similar authorizations of all
governmental authorities, or from any other Person, that are required under any
Environmental Laws, the absence of which would have a Material Adverse Effect.
"Environmental Laws" shall mean all applicable laws relating to the protection
of the environment including, without limitation, all requirements pertaining to
reporting, licensing, permitting, controlling, investigating or remediating
emissions, discharges, releases or threatened releases of hazardous substances,
chemical substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature. The Company has
all necessary governmental approvals required under all Environmental Laws and
used in its business or in the business of any of its Subsidiaries, except for
such instances as would not individually or in the aggregate have a Material
Adverse Effect. The Company and each of its Subsidiaries are also in compliance
with all other limitations, restrictions, conditions, standards, requirements,
schedules and timetables required or imposed under all Environmental Laws.
Except for such instances as would not individually or in the aggregate have a
Material Adverse Effect, there are no past or present events, conditions,
circumstances, incidents, actions or omissions relating to or in any way
affecting the Company or its Subsidiaries that violate or may violate any
Environmental Law after the Closing or that may give rise to any Environmental
Liabilities, or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study or investigation (i) under any Environmental Law, or
(ii) based on or related to the manufacture, processing, distribution, use,
treatment, storage (including, without limitation, underground storage tanks),
disposal, transport or handling, or the emission, discharge, release or
threatened release of any hazardous substance. "Environmental Liabilities" means
all liabilities of a Person (whether such liabilities are owed by such Person to
governmental authorities, third parties or otherwise) whether currently in
existence or arising hereafter which arise under or relate to any Environmental
Law.

            (t) Books and Records; Internal Accounting Controls. The books,
records and documents of the Company and its Subsidiaries accurately reflect in
all material respects the information relating to the business of the Company
and the Subsidiaries, the location and collection of their assets, and the
nature of all transactions giving rise to the obligations or accounts receivable
of the Company or any Subsidiary. The Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient, in the reasonable
judgment of the Company's Board of Directors, to provide reasonable assurance
that (i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate actions are taken with respect to any differences.

            (u) Material Agreements. Except for the Transaction Documents, or
those that are included as exhibits to the Commission Documents, neither the
Company nor any Subsidiary is a party to any written or oral contract,
instrument, agreement, commitment, obligation, plan or

                                      -9-


arrangement, a copy of which would be required to be filed with the Commission
(collectively, "Material Agreements") if the Company or any Subsidiary were
registering securities under the Securities Act. The Company and each of its
Subsidiaries has in all material respects performed all the obligations required
to be performed by them to date under the foregoing agreements, have received no
notice of default and, to the best of the Company's knowledge, are not in
default under any Material Agreement now in effect, the result of which could
cause a Material Adverse Effect. No written or oral contract, instrument,
agreement, commitment, obligation, plan or arrangement of the Company or of any
Subsidiary limits or shall limit the payment of dividends on its Common Stock.

            (v) Transactions with Affiliates. Except as disclosed in the
Commission Documents, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts or arrangements or other continuing
transactions between (a) the Company, any Subsidiary or any of their respective
customers or suppliers, on the one hand, and (b) on the other hand, any officer,
employee, consultant or director of the Company, or any of its Subsidiaries, or
any Person owning 5% or more of the capital stock of the Company or any
Subsidiary or any member of the immediate family of such Person, officer,
employee, consultant, director or 5% or greater stockholder or any corporation
or other entity controlled by such officer, employee, consultant, director or
stockholder.

            (w) Securities Act of 1933. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Section 2.2, the
Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and sale of the
Securities hereunder. Neither the Company nor anyone acting on its behalf,
directly or indirectly, has or will sell, offer to sell or solicit offers to buy
any of the Securities, or similar securities to, or solicit offers with respect
thereto from, or enter into any preliminary conversations or negotiations
relating thereto with, any Person, or has taken or will take any action so as to
bring the issuance and sale of any of the Securities under the registration
provisions of the Securities Act and applicable state securities laws. Neither
the Company nor any of its Affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of any of the Securities. For purposes of this Agreement,
"Affiliate" means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such
Person. For the purposes of this definition, "control," when used with respect
to any Person, means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "affiliated," "controlling" and "controlled" have meanings correlative to
the foregoing.

            (x) Governmental Approvals. Except for the filing of any notice
prior or subsequent to each Closing that may be required under applicable state
and/or federal securities laws (which if required, shall be filed on a timely
basis), no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution or delivery of the Shares and the
Warrants, or for the performance by the Company of its obligations under the
Transaction Documents.

                                      -10-


            (y) Employees. Neither the Company nor any Subsidiary has any
collective bargaining arrangements or agreements covering any of its employees.
Except as set forth in the Commission Documents, neither the Company nor any
Subsidiary has any employment contract, agreement regarding proprietary
information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be
employed or engaged by the Company or such Subsidiary, which contract or
agreement is required to be disclosed in the Commission Documents but which is
not so disclosed. Since September 30, 2005, no officer, consultant or key
employee of the Company or any Subsidiary whose termination, either individually
or in the aggregate, could have a Material Adverse Effect, has terminated or, to
the knowledge of the Company, has any present intention of terminating his or
her employment or engagement with the Company or any Subsidiary.

            (z) Absence of Certain Developments. Except as set forth in the
Commission Documents, since September 30, 2005, neither the Company nor any
Subsidiary has:

                  (i) issued any stock, bonds or other corporate securities or
any rights, options or warrants with respect thereto other than under the
Company's stock option/stock issuance plans;

                  (ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities incurred in the
ordinary course of business which are comparable in nature and amount to the
current liabilities incurred in the ordinary course of business during the
comparable portion of its prior fiscal year, as adjusted to reflect the current
nature and volume of the Company's or such Subsidiary's business;

                  (iii) discharged or satisfied any lien or encumbrance or paid
any obligation or liability (absolute or contingent), other than current
liabilities paid in the ordinary course of business;

                  (iv) declared or made any payment or distribution of cash or
other property to stockholders with respect to its stock, or purchased or
redeemed, or made any agreements so to purchase or redeem, any shares of its
capital stock;

                  (v) sold, assigned or transferred any other tangible assets,
or canceled any debts or claims, except in the ordinary course of business;

                  (vi) sold, assigned or transferred any patent rights,
trademarks, trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights, or disclosed any proprietary confidential
information to any Person except in the ordinary course of business or to the
Purchasers or their representatives;

                  (vii) suffered any substantial losses or waived any rights of
material value, whether or not in the ordinary course of business, or suffered
the loss of any material amount of prospective business;

                  (viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices;

                                      -11-


                  (ix) made capital expenditures or commitments therefor that
aggregate in excess of $75,000;

                  (x) entered into any other transaction other than in the
ordinary course of business, or entered into any other material transaction,
whether or not in the ordinary course of business;

                  (xi) made charitable contributions or pledges in excess of
$25,000;

                  (xii) suffered any material damage, destruction or casualty
loss, whether or not covered by insurance;

                  (xiii) experienced any material problems with labor or
management in connection with the terms and conditions of their employment;

                  (xiv) effected any two or more events of the foregoing kind
which in the aggregate would cause a Material Adverse Effect; or

                  (xv) entered into an agreement, written or otherwise, to take
any of the foregoing actions.

            (aa) Use of Proceeds. The proceeds from the sale of the Shares and
the Warrants shall be used by the Company for working capital purposes only, and
shall not be used to repay any outstanding Indebtedness or any loans due to any
officer, director, Affiliate or insider of the Company, other than up to
$4,075,000 which may be used to repay Indebtedness under the Company's senior
secured debentures.

            (bb) Public Utility Holding Company Act and Investment Company Act
Status. The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. The Company is not, and as a result of and immediately upon each
Closing will not be, an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.

            (cc) ERISA. No liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any Plan by the Company or any of its
Subsidiaries which is or would cause a Material Adverse Effect. The execution
and delivery of this Agreement and the issue and sale of the Shares and the
Warrants will not involve any transaction which is subject to the prohibitions
of Section 406 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"); provided that, if any Purchaser, or any Person that owns a beneficial
interest in any Purchaser, is an "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA) with respect to which the Company is a "party
in interest" (within the meaning of Section 3(14) of ERISA), the requirements of
Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in this
Section 2.1(cc), the term "Plan" shall mean an "employee pension benefit plan"
(as defined in Section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any Subsidiary or by any trade or business, whether

                                      -12-


or not incorporated, which, together with the Company or any Subsidiary, is
under common control, as described in Section 414(b) or (c) of the Code.

            (dd) Sarbanes-Oxley. The Company is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective and
applicable to it as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of
the date hereof, except where such noncompliance would not have, individually or
in the aggregate, a Material Adverse Effect.

            Section 2.2 Representations and Warranties of the Purchasers. Each
of the Purchasers hereby makes the following representations and warranties to
the Company with respect solely to itself and not with respect to any other
Purchaser:

            (a) Organization and Standing of the Purchasers. If such Purchaser
is an entity, such Purchaser is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.

            (b) Authorization and Power. Such Purchaser has the requisite power
and authority to enter into and perform the Transaction Documents and to
purchase the Shares and Warrants being sold to it hereunder. The execution,
delivery and performance of the Transaction Documents by such Purchaser and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate, limited liability company or partnership
action, and no further consent or authorization of such Purchaser or its Board
of Directors, stockholders, members, managers or partners, as the case may be,
is required. This Agreement has been duly authorized, executed and delivered by
such Purchaser. Each of the Transaction Documents constitute, or shall
constitute when executed and delivered, valid and binding obligations of such
Purchaser enforceable against such Purchaser in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor's rights and remedies or by other equitable principles of general
application.

            (c) Acquisition for Investment. Such Purchaser is purchasing the
Shares and acquiring the Warrants (and would acquire the underlying Common
Stock) solely for its own account and not with a view to or for sale in
connection with the distribution thereof. Such Purchaser does not have a present
intention to sell any of the Securities, nor a present arrangement (whether or
not legally binding) or intention to effect any distribution of any of the
Securities to or through any Person; provided, however, that by making the
representations herein and subject to Section 2.2(e) below, such Purchaser does
not agree to hold any of the Securities for any minimum or other specific term
and reserves the right to pledge any of the Securities for margin purposes
and/or to dispose of any of the Securities at any time in accordance with
federal and state securities laws applicable to such disposition. Such Purchaser
acknowledges that it (i) has such knowledge and experience in financial and
business matters such that such Purchaser is capable of evaluating the merits
and risks of its investment in the Company, (ii) is able to bear the financial
risks associated with an investment in the Securities, and (iii) has been given
full access to such records of the Company and the Subsidiaries and to

                                      -13-


the officers of the Company and the Subsidiaries as it has deemed necessary or
appropriate to conduct its due diligence investigation.

            (d) Rule 144. Such Purchaser understands that the Securities must be
held indefinitely unless such Securities are registered under the Securities Act
or an exemption from registration is available. Such Purchaser acknowledges that
it is familiar with Rule 144 of the rules and regulations of the Commission, as
amended, promulgated pursuant to the Securities Act ("Rule 144"), and that such
Purchaser has been advised that Rule 144 permits resales only under certain
circumstances. Such Purchaser understands that to the extent that Rule 144 is
not available, such Purchaser will be unable to sell any Securities without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.

            (e) General. Such Purchaser understands that the Securities are
being offered and sold in reliance on a transactional exemption from the
registration requirements of federal and state securities laws and the Company
is relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein in order to determine the applicability of such exemptions and the
suitability of such Purchaser to acquire the Securities. Such Purchaser
understands that no United States federal or state agency or any government or
governmental agency has passed upon or made any recommendation or endorsement of
the Securities.

            (f) Opportunities for Additional Information. Such Purchaser
acknowledges that such Purchaser has had the opportunity to ask questions of and
receive answers from, or obtain additional information from, the executive
officers of the Company concerning the financial and other affairs of the
Company, and to the extent deemed necessary in light of such Purchaser's
personal knowledge of the Company's affairs, such Purchaser has asked such
questions and received answers to the full satisfaction of such Purchaser, and
such Purchaser desires to invest in the Company.

            (g) No General Solicitation. Such Purchaser acknowledges that the
Securities were not offered to such Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which such Purchaser was invited by any of the foregoing means of
communications.

            (h) Accredited Investor. Such Purchaser is an accredited investor
(as defined in Rule 501 of Regulation D), and such Purchaser has such experience
in business and financial matters that it is capable of evaluating the merits
and risks of an investment in the Securities. Such Purchaser acknowledges that
an investment in the Securities is speculative and involves a high degree of
risk.

            (i) Certain Trading Activity. During the period beginning on the
date such Purchaser was initially contacted by the Company or an agent thereof
with respect to a prospective investment in the Company and ending on the date
hereof, such Purchaser has not engaged in any Short Sales (as defined in
Regulation SHO under the federal securities laws) of

                                      -14-


shares of the Common Stock. Such Purchaser, severally and not jointly with the
other Purchasers, understands and acknowledges that the Commission currently
takes the position that coverage of Short Sales of shares of the Common Stock
"against the box" with the Securities purchased hereunder prior to the effective
date of the Registration Statement is a violation of Section 5 of the Securities
Act, as set forth in Item 65, Section 5 under Section A, of the Manual of
Publicly Available Telephone Interpretations, dated June 1997, compiled by the
Office of Chief Counsel, Division of Corporate Finance. Accordingly, such
Purchaser hereby agrees (on behalf of itself or any Person over which it has
direct control) not to use any of the Securities to cover any Short Sales made
prior to the effective date of the Registration Statement. Additionally, such
Purchaser agrees (i) to comply with Regulation M under the federal securities
laws, and (ii) not to engage in Short Sales of the shares of Common Stock in
contravention of state and federal securities laws. Notwithstanding the
foregoing, no Purchaser makes any representation, warranty or covenant hereby
that it will not engage in Short Sales in the securities of the Company after
the time that the transactions contemplated by this Agreement are first publicly
announced. In addition, it is understood and agreed by the Company (A) that none
of the Purchasers has been asked to agree, nor has any Purchaser agreed, to
desist from purchasing or selling, long and/or short, securities of the Company,
or "derivative" securities based on securities issued by the Company or to hold
the Securities for any specified term, (B) that past or future open market or
other transactions by any Purchaser, including Short Sales, and specifically
including, without limitation, Short Sales or derivative transactions, before or
after the closing of this or future private placement transactions, may
negatively impact the market price of the Company's publicly-traded securities,
(C) that any Purchaser, and counter-parties in "derivative" transactions to
which any such Purchaser is a party, directly or indirectly, presently may have
a "short" position in the Common Stock, and (D) that each Purchaser shall not be
deemed to have any affiliation with or control over any arm's length
counter-party in any "derivative" transaction.

            (j) Waiver of Rights. As of the date hereof, certain Purchasers are
holders of the Company's 4% convertible debentures (the "Debentures") and/or
warrants to purchase shares of the Company's common stock issued in connection
with the Debentures. Under Section 4.14(a) of that certain Securities Purchase
Agreement dated as of July 12, 2005 among the Company and the other purchasers
named therein (the "July Purchase Agreement"), the purchasers were provided
certain rights concerning the filing of registration statements by the Company
and the issuance by the Company of the Company's common stock (or securities
convertible into shares of the Company's common stock) after the date that the
registration statement filed by the Company covering the shares of Company
common stock issuable upon conversion of the Debentures and exercise of the
related warrants was declared effective by the Commission. Each Purchaser who is
party to the July Purchase Agreement hereby acknowledges and agrees that, by
executing and delivering this Agreement, such Purchaser forever waives any and
all rights it may have under Section 4.14(a) of the July Purchase Agreement in
connection with the transactions contemplated by this Agreement.

                                      -15-


                                  ARTICLE III

                                    COVENANTS

      The Company covenants with each Purchaser as follows, which covenants are
for the benefit of each Purchaser and its respective permitted assignees (and,
where expressly so indicated, the respective Purchasers severally and not
jointly covenant with and for the benefit of the Company as follows).

            Section 3.1 Disclosure of Transactions and Other Material
Information. On or before 8:30 a.m., New York City time, on the second Business
Day (as used herein, the term "Business Day" shall mean any day except a
Saturday, Sunday or day on which banking institutions are legally authorized to
close in Tempe, Arizona) immediately following the Closing Date, the Company
shall file a Current Report on Form 8-K with the Commission describing the terms
of the transactions contemplated by the Transaction Documents and including as
exhibits to such Current Report on Form 8-K this Agreement, the Warrants, the
Certificate of Designations, and the Registration Rights Agreement, in the form
required by the Exchange Act (the "8-K Filing"). From and after the filing of
the 8-K Filing with the Commission, no Purchaser shall be in possession of any
material, nonpublic information received from the Company, any of its
Subsidiaries or any of their respective officers, directors, employees or agents
that is not disclosed in the 8-K Filing. The Company shall not, and shall cause
each of its Subsidiaries and its and each of their respective officers,
directors, employees and agents not to, provide any Purchaser with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and
after the filing of the 8-K Filing with the Commission without the express
written consent of such Purchaser. Neither the Company nor any Purchaser shall
issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Purchaser, to make any press release
or other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith, and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) above, the Purchasers shall be consulted by the Company (although the
consent of the Purchasers shall not be required) in connection with any such
press release or other public disclosure prior to its release).

            Section 3.2 Registration. The Company will cause its Common Stock to
continue to be registered under Section 12(b) or 12(g) of the Exchange Act, will
comply in all respects with its reporting and filing obligations under the
Exchange Act, will comply with all requirements related to any registration
statement filed pursuant to the Registration Rights Agreement, and will not take
any action or file any document (whether or not permitted by the Securities Act
or the rules promulgated thereunder) to terminate or suspend such registration
or to terminate or suspend its reporting and filing obligations under the
Exchange Act or Securities Act, except as permitted herein.

            Section 3.3 Inspection Rights. In the event the Registration
Statement is not effective or has been suspended, the Company shall permit,
during normal business hours and upon reasonable request and reasonable notice,
each Purchaser or any employees, agents or representatives thereof, so long as
such Purchaser shall be obligated hereunder to purchase the

                                      -16-


Shares or shall beneficially own the Shares or Conversion Shares, or shall own
Warrant Shares or the Warrants which, in the aggregate, represent more than two
percent (2%) of the total combined voting power of all Company voting securities
then outstanding, to (subject to an appropriate non-disclosure agreement)
examine and make reasonable copies of and extracts from the records and books of
account of, and visit and inspect, the properties, assets, operations and
business of the Company and any Subsidiary, and to discuss the affairs, finances
and accounts of the Company and any Subsidiary with any of its officers,
consultants, directors, and key employees.

            Section 3.4 Compliance with Laws. The Company shall comply, and
cause each Subsidiary to comply, with all applicable laws, rules, regulations
and orders, the noncompliance with which could have a Material Adverse Effect.

            Section 3.5 Keeping of Records and Books of Account. The Company
shall keep and cause each Subsidiary to keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Company and
its Subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

            Section 3.6 Other Agreements. The Company shall not enter into any
agreement in which the terms of such agreement would restrict or impair the
right or ability of the Company or any Subsidiary to perform under any
Transaction Document.

            Section 3.7 Right of Participation.

            (a) Subject only to any prior rights of the Company's holders of
those certain 7% Convertible Debentures due April 20, 2008 and those certain 4%
Convertible Debentures due July 12, 2008, until the first anniversary of the
Closing Date, each Purchaser (including for such purposes its assigns) shall
have the right to participate in any financing of the Company or any of its
Subsidiaries of Common Stock or securities convertible into Common Stock (a
"Subsequent Financing") up to an amount of the Subsequent Financing equal to
100% of the Subsequent Financing (the "Participation Maximum").

            (b) At least five Business Days prior to the closing of the
Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing ("Pre-Notice"), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a "Subsequent Financing Notice"). Upon the
request of a Purchaser, and only upon a request by such Purchaser, for a
Subsequent Financing Notice, the Company shall promptly, but no later than one
Business Day after such request, deliver a Subsequent Financing Notice to such
Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
the proposed terms of such Subsequent Financing, the amount of proceeds intended
to be raised thereunder, the person with whom such Subsequent Financing is
proposed to be effected, and attached to which shall be a term sheet or similar
document relating thereto.

                                      -17-


            (c) Any Purchaser desiring to participate in such Subsequent
Financing must provide written notice to the Company by not later than 5:30 p.m.
(New York City time) on the fifth Business Day after all of the Purchasers have
received the Pre-Notice that the Purchaser is willing to participate in the
Subsequent Financing, the amount of the Purchaser's participation, and that the
Purchaser has such funds ready, willing, and available for investment on the
terms set forth in the Subsequent Financing Notice. If the Company receives no
notice from a Purchaser as of such fifth Business Day, then such Purchaser shall
be deemed to have notified the Company that it does not elect to participate.

            (d) If by 5:30 p.m. (New York City time) on the fifth Business Day
after all of the Purchasers have received the Pre-Notice, notifications by the
Purchasers of their willingness to participate in the Subsequent Financing (or
to cause their designees to participate) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and to the Persons
set forth in the Subsequent Financing Notice.

            (e) If by 5:30 p.m. (New York City time) on the fifth Business Day
after all of the Purchasers have received the Pre-Notice, the Company receives
responses to a Subsequent Financing Notice from Purchasers seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Purchaser
shall have the right to purchase the greater of (i) their Pro Rata Portion (as
defined below) of the Participation Maximum and (ii) the difference between the
Participation Maximum and the aggregate amount of participation by all other
Purchasers. "Pro Rata Portion" is the ratio of (A) the Shares and Warrants
purchased on the Closing Date by a Purchaser participating under this Section
3.7 and (B) the sum of the aggregate Shares and Warrants purchased on the
Closing Date by all Purchasers participating under this Section 3.7.

            (f) The Company must provide the Purchasers with a second Subsequent
Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 3.7, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within 60 Business Days
after the date of the initial Subsequent Financing Notice.

            (g) Notwithstanding the foregoing, this Section 3.7 shall not apply
in respect of an Exempt Issuance. "Exempt Issuance" means the issuance of:

                  (i) shares of capital stock of the Company issued or issuable
upon conversion or exercise of any currently outstanding securities (but not any
amendment or modification to such currently outstanding securities after the
date hereof) or any New Securities issued in accordance with this Agreement
(including the Conversion Shares, the Warrant Shares, the PIK Dividend Shares
and the Redemption Shares);

                  (ii) shares of capital stock issued and issuable as payment
for outstanding interest under the Company's outstanding 7% convertible
debentures and 4% convertible debentures;

                                      -18-


                  (iii) shares or options or warrants for Common Stock granted
to officers, directors and employees of, and consultants to, the Company or its
Subsidiaries pursuant to stock option or purchase plans or other compensatory
agreements approved by the Board of Directors, or pursuant to the Syntax Groups
Corporation 2005 Stock Incentive Plan;

                  (iv) shares of Common Stock or Preferred Stock issued in
connection with any pro rata stock split, stock dividend (including PIK Dividend
Shares) or recapitalization by the Company;

                  (v) shares of capital stock, or options or warrants to
purchase capital stock, issued to a strategic investor in connection with a
strategic commercial agreement as determined by the Board of Directors;

                  (vi) shares of capital stock, or options or warrants to
purchase capital stock, issued to an investor in connection with a joint venture
arrangement where the Company is a participant;

                  (vii) shares of capital stock, or options or warrants to
purchase capital stock, issued pursuant to the acquisition of another
corporation or entity by the Company by consolidation, merger, purchase of all
or substantially all of the assets, or other reorganization in which the Company
acquires, in a single transaction or series of related transactions, all or
substantially all of the assets of such other corporation or entity or fifty
percent (50%) or more of the voting power of such other corporation or entity or
fifty percent (50%) or more of the equity ownership of such other corporation or
entity;

                  (viii) shares of capital stock issued in an underwritten
public securities offering pursuant to a registration statement filed under the
Securities Act;

                  (ix) shares of capital stock, or options or warrants to
purchase capital stock, issued to current or prospective customers or suppliers
of the Company approved by the Board of Directors as compensation or
accommodation in lieu of other payment, compensation or accommodation to such
customer or supplier;

                  (x) shares of capital stock, or warrants to purchase capital
stock, issued to any Person that provides services to the Company as
compensation therefor pursuant to an agreement approved by the Board of
Directors;

                  (xi) shares of capital stock, or options or warrants to
purchase capital stock, offered in a transaction where purchase of such
securities by any Purchaser would cause such transaction to fail to comply with
applicable federal or state securities laws or would cause an applicable
registration or qualification exemption to fail to be available to the Company;
provided, however, that this clause (xi) shall apply only to the Purchaser or
Purchasers who would cause any such failure, and not to any of the other
Purchasers; and

                  (xii) securities issuable upon conversion or exercise of the
securities set forth in paragraphs (i) - (xi) above.

                                      -19-


            Section 3.8 Reservation of Shares. So long as the Shares or Warrants
remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, the maximum number of
shares of Common Stock to effect the conversion of the Shares and the exercise
of the Warrants.

            Section 3.9 Non-public Information. Neither the Company nor any of
its officers or agents shall disclose any material non-public information about
the Company to any Purchaser, and no Purchaser or any of its Affiliates,
officers or agents will solicit any material non-public information from the
Company.

            Section 3.10 S-3 Eligibility. The Company shall use its commercially
reasonable efforts to remain eligible to use a Form S-3 registration statement.

            Section 3.11 Beneficial Ownership Restrictions.

            (a) Notwithstanding anything to the contrary set forth in this
Agreement or any other Transaction Document (including, without limitation, the
Warrants and the Certificate of Designations), at no time may a Purchaser
convert or exercise a Security if the number of shares of Common Stock to be
issued pursuant to such conversion or exercise, when aggregated with all other
shares of Common Stock owned by such Purchaser at such time, would result in
such Purchaser beneficially owning (as determined in accordance with Section
13(d) of the Exchange Act, and the rules thereunder) in excess of 4.99% of the
then issued and outstanding shares of Common Stock outstanding at such time;
provided, however, that any Purchaser may waive this Section 3.11(a) by so
indicating on the signature page to this Agreement, any such waiver to be
effective on and as of the date of this Agreement.

            (b) Notwithstanding anything to the contrary set forth in this
Agreement or any other Transaction Document (including, without limitation, the
Warrants and the Certificate of Designations), at no time may a Purchaser
convert or exercise a Security if the number of shares of Common Stock to be
issued pursuant to such conversion or exercise, when aggregated with all other
shares of Common Stock owned by such Purchaser at such time, would result in
such Purchaser beneficially owning (as determined in accordance with Section
13(d) of the Exchange Act, and the rules thereunder) in excess of 9.99% of the
then issued and outstanding shares of Common Stock outstanding at such time.

            Section 3.12 Trading Market Limitations. Notwithstanding anything
herein to the contrary, the Company shall not issue any Conversion Shares or
Warrant Shares which, when aggregated with any Conversion Shares, Warrant
Shares, PIK Dividend Shares and Redemption Shares issued prior to such date of
issuance, would exceed 19.999% of the number of shares of Common Stock
outstanding on the Business Day immediately preceding the Closing Date (such
number of shares, the "Issuable Maximum"). If on the date of conversion of
Shares or exercise of Warrants (a) the applicable Conversion Price or Exercise
Price, as applicable, in effect is such that the shares issuable upon conversion
of the Shares or exercise of the Warrants together with the aggregate number of
shares of Common Stock that would then be issuable upon conversion in full of
all then outstanding Shares and Warrants would exceed the Issuable Maximum, and
(b) the Company's stockholders shall not have previously approved the issuance
of 20% or more of

                                      -20-


the Company's capital stock in connection with the transactions contemplated by
the Transaction Documents (the "Shareholder Approval"), then the Company shall
issue to the Purchaser requesting conversion of Shares or exercise of Warrants a
number of shares of Common Stock equal to such Purchaser's pro-rata portion of
the Issuable Maximum and, with respect to the remainder of the Shares or
Warrants then held by such Purchaser for which conversion or exercise would
result in an issuance of shares of Common Stock in excess of such Purchaser's
pro-rata portion of the Issuable Maximum (the "Excess Shares"), the Company
shall be prohibited from issuing such Excess Shares, and shall notify the
Purchaser of the reason therefor. The Shares and Warrants would be unconvertible
and unexercisable to such extent until and unless Shareholder Approval is
subsequently obtained, but shall otherwise remain in full force and effect. If
Shareholder Approval is required under this Section 3.12, the Company shall use
commercially reasonable efforts to obtain, as promptly as practicable,
Shareholder Approval that is necessary to issue shares of Common Stock in excess
of the Issuable Maximum.

                                   ARTICLE IV

                                   CONDITIONS

            Section 4.1 Conditions Precedent to the Obligation of the Company to
Close and to Sell the Shares and Warrants on the Closing Date. The obligation
hereunder of the Company to close and issue and sell the Shares and the Warrants
to the Purchasers on the Closing Date is subject to the satisfaction or waiver,
at or before the Closing, of the conditions set forth below. These conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion.

            (a) Accuracy of the Purchasers' Representations and Warranties. The
representations and warranties of each Purchaser shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.

            (b) Performance by the Purchasers. Each Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing Date.

            (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

            (d) Delivery of Purchase Price. The Purchase Price for the Shares
and Warrants being purchased at the Closing shall have been delivered to the
Company at the Closing.

                                      -21-


            (e) Delivery of Transaction Documents. The Transaction Documents to
which the Purchasers are party shall have been duly executed and delivered by
the Purchasers to the Company.

            Section 4.2 Conditions Precedent to the Obligation of the Purchasers
to Close and to Purchase the Shares and Warrants on the Closing Date. The
obligation hereunder of the Purchasers to purchase the Shares and Warrants on
the Closing Date and consummate the transactions contemplated by this Agreement
is subject to the satisfaction or waiver, at or before the Closing, of each of
the conditions set forth below. These conditions are for each Purchaser's sole
benefit and may be waived by such Purchaser at any time in its sole discretion.

            (a) Accuracy of the Company's Representations and Warranties. Each
of the representations and warranties of the Company in this Agreement and in
each of the other Transaction Documents shall be true and correct in all
material respects as of the Closing Date, except for representations and
warranties that speak as of a particular date, which shall be true and correct
in all material respects as of such date.

            (b) Performance by the Company. The Company shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.

            (c) No Suspension, Etc. Trading in the Company's Common Stock shall
not have been suspended by the Commission (except for any suspension of trading
of limited duration agreed to by the Company, which suspension shall be
terminated prior to the Closing), and, at any time prior to the Closing Date,
trading in securities generally as reported by Bloomberg Financial Markets
("Bloomberg") shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported by Bloomberg,
nor shall a banking moratorium have been declared either by the United States or
California State authorities, nor shall there have occurred any national or
international calamity or crisis of such magnitude in its effect on any
financial market which, in each case, in the reasonable judgment of the
Purchasers, makes it impracticable or inadvisable to purchase the Shares and the
Warrants being purchased on the Closing Date.

            (d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

            (e) No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any Subsidiary, or any of the officers, directors or
other Affiliates of the Company or any Subsidiary, unless by or at the behest of
a Purchaser, seeking to restrain, prevent or change the transactions
contemplated by this Agreement, or seeking damages in connection with such
transactions.

                                      -22-


            (f) Opinion of Counsel. The Purchasers shall have received an
opinion of counsel to the Company, dated the Closing Date, in the form of
Exhibit C hereto.

            (g) Warrants and Shares. The Company shall have delivered to the
Purchasers the originally executed Warrants (in such denominations as each
Purchaser may request) and shall have provided copies of certificates
representing the Shares (in such denominations as each Purchaser may request)
being acquired by the Purchasers at the Closing, and the originals of such
certificates shall be delivered to the Purchasers no later than the fifth
Business Day following the Closing.

            (h) Certificate of Designations. As of the Closing Date, the Company
shall have filed with the Delaware Secretary of State the Certificate of
Designations.

            (i) Reservation of Shares. As of the Closing Date, the Company shall
have reserved out of its authorized and unissued Preferred Stock, solely for the
purpose of effecting the issuance of the Shares, a number of shares of Preferred
Stock equal to the aggregate number of the Shares. As of the Closing Date, the
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the Shares and the
exercise of the Warrants, a number of shares of Common Stock equal to the number
of Conversion Shares and the number of Warrant Shares issuable upon conversion
of the Preferred Stock and the exercise of the Warrants, respectively, assuming
all of the Warrants were granted on the Closing Date (after giving effect to the
Warrants to be issued on the Closing Date and assuming the Warrants were fully
exercisable on such date regardless of any limitation on the timing or amount of
such exercises).

            (j) Officer's Certificate. On the Closing Date, the Company shall
have delivered to the Purchasers a certificate of an executive officer of the
Company, dated as of the Closing Date, confirming the accuracy of the Company's
representations, warranties and covenants as of the Closing Date and confirming
the compliance by the Company with the conditions precedent set forth in Section
4.2 as of the Closing Date.

            (k) Fees and Expenses. As of the Closing Date, all Purchasers' fees
and expenses contractually required to be paid by the Company shall have been or
authorized to be paid by the Company as of the Closing Date.

            (l) Registration Rights Agreement. The Company shall have entered
into the Registration Rights Agreement.

            (m) Material Adverse Effect. No Material Adverse Effect shall have
occurred since the date of this Agreement.

                                      -23-


                                   ARTICLE V

                        TRANSFER RESTRICTIONS AND LEGENDS

            Section 5.1 (a) The Securities may only be disposed of in compliance
with state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement, to the
Company, to an Affiliate of a Purchaser or in connection with a pledge permitted
by Section 5.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor, to the effect that
such transfer does not require registration of such transferred Securities under
the Securities Act. As a condition of transfer, any such transferee shall agree
in writing to be bound by the terms of this Agreement and shall have the rights
of a Purchaser under this Agreement and the Registration Rights Agreement.

            (b) The Purchasers agree to the imprinting, so long as is required
by this Section 5.1(b), of a legend on any of the Securities in the following
form:

      THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT. THESE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN
WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT.

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

                                      -24-


            (c) Certificates evidencing the Conversion Shares, the Warrant
Shares, the PIK Dividend Shares and the Redemption Shares shall not contain any
legend (including the legend set forth in Section 5.1(b)), (i) while a
registration statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, or (ii) following
any sale of such Conversion Shares, Warrant Shares, PIK Dividend Shares or
Redemption Shares pursuant to Rule 144, or (iii) if such Conversion Shares,
Warrant Shares, PIK Dividend Shares or Redemption Shares are eligible for sale
under Rule 144(k), or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission). The Company shall cause
its counsel to issue a legal opinion to the Company's transfer agent promptly
after the Effectiveness Date (as defined in the Registration Rights Agreement)
if required by the Company's transfer agent to effect the removal of the legend
hereunder. If all or any portion of a Share or Warrant is converted or exercised
at a time when there is an effective registration statement to cover the resale
of the Conversion Shares, Warrant Shares, PIK Dividend Shares or Redemption
Shares, such Conversion Shares, Warrant Shares, PIK Dividend Shares or
Redemption Shares shall be issued free of all legends. The Company agrees that
following the Effectiveness Date or at such time as such legend is no longer
required under this Section 5.1(c), it will, no later than three (3) Business
Days following the delivery by a Purchaser to the Company or the Company's
transfer agent of a certificate representing Conversion Shares, Warrant Shares,
PIK Dividend Shares or Redemption Shares, as the case may be, issued with a
restrictive legend (such date, the "Legend Removal Date"), deliver or cause to
be delivered to such Purchaser a certificate representing such Securities that
is free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to any transfer agent of the
Company that enlarge the restrictions on transfer set forth in this Section 5.1.

            (d) In addition to such Purchaser's other available remedies, the
Company shall pay to a Purchaser, in cash, as liquidated damages and not as a
penalty, for each $1,000 of Conversion Shares, Warrant Shares, PIK Dividend
Shares and/or Redemption Shares (based on the closing price of the Common Stock
on the date such Securities are submitted to the Company's transfer agent)
subject to Section 5.1(c), $10 per Business Day (increasing to $20 per Business
Day five (5) Business Days after such damages have begun to accrue) for each
Business Day commencing two (2) Business Days after the Legend Removal Date
until such certificate is delivered in proper form. Nothing herein shall limit
such Purchaser's right to pursue actual damages for the Company's failure to
deliver certificates representing any Securities as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.

            (e) Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 5.1 is predicated upon the
Company's reliance that the Purchaser will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom.

                                      -25-


                                   ARTICLE VI

                                   TERMINATION

            Section 6.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing Date by the mutual written consent
of the Company and the Purchasers.

            Section 6.2 Effect of Termination. In the event of termination by
the Company or the Purchasers, written notice thereof shall forthwith be given
to the other party and the transactions contemplated by this Agreement shall be
terminated without further action by any party. If this Agreement is terminated
as provided in Section 6.1 herein, this Agreement shall become void and of no
further force and effect, except for Sections 8.1 and 8.2, and Article VII
herein. Nothing in this Section 6.2 shall be deemed to release the Company or
any Purchaser from any liability for any breach under this Agreement, or to
impair the rights of the Company or such Purchaser to compel specific
performance by the other party of its obligations under this Agreement.

                                  ARTICLE VII

                                 INDEMNIFICATION

            Section 7.1 General Indemnity. The Company agrees to indemnify and
hold harmless each Purchaser (and its respective directors, officers, employees,
Affiliates, agents, successors and assigns) from and against any and all losses,
liabilities, deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys' fees, charges and disbursements) incurred by
each Purchaser or any such Person as a result of any inaccuracy in or breach of
the representations, warranties or covenants made by the Company herein. The
Purchasers severally but not jointly agree to indemnify and hold harmless the
Company and its directors, officers, employees, Affiliates, agents, successors
and assigns from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys' fees, charges and disbursements) incurred by the Company as result of
any inaccuracy in or breach of the representations, warranties or covenants made
by the Purchasers herein, in an amount not to exceed the Purchaser's investment
amount set forth on Exhibit A.

            Section 7.2 Indemnification Procedure. Any party entitled to
indemnification under this Article VII (an "indemnified party") will give
written notice to the indemnifying party of any matters giving rise to a claim
for indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article VII except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the

                                      -26-


indemnifying party may exist with respect to such action, proceeding or claim,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such Person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent. Notwithstanding anything in this Article VII to the
contrary, the indemnifying party shall not, without the indemnified party's
prior written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
indemnified party or which does not include, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the indemnified party of a
release from all liability in respect of such claim. The indemnification
required by this Article VII shall be made by periodic payments of the amount
thereof during the course of investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred, so long as the
indemnified party irrevocably agrees to refund such moneys if it is ultimately
determined by a court of competent jurisdiction that such party was not entitled
to indemnification. The indemnity agreements contained herein shall be in
addition to (a) any cause of action or similar rights of the indemnified party
against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.

                                  ARTICLE VIII

                                  MISCELLANEOUS

            Section 8.1 Fees and Expenses. Each party shall pay the fees and
expenses of its advisors, counsel, accountants and other experts, if any, and
all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement; provided,
however, that the Company shall pay a flat $40,000 to Gryphon Master Fund, L.P.
("Gryphon"), the lead Purchaser, to reimburse Gryphon for the fees and expenses
(including attorneys' fees and expenses) incurred by it in connection with its
due diligence review of the Company and the preparation, negotiation, execution,
delivery and performance of this Agreement and the other Transaction Documents
and the transactions contemplated

                                      -27-


thereunder, $20,000 of which has already been paid and is non-refundable, and
the remaining $20,000 of which shall be due and payable in cash at the Closing
(and only if the Closing occurs). If the Closing occurs, the Company hereby
authorizes and directs Gryphon to deduct $20,000 from the Purchase Price to be
paid by Gryphon at Closing in payment and satisfaction of such remaining $20,000
due and payable by the Company at Closing.

            Section 8.2 Specific Enforcement; Consent to Jurisdiction.

            (a) The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement or the other Transaction Documents were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement or the other Transaction
Documents and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.

            (b) The Company and each Purchaser (i) hereby irrevocably submit to
the exclusive jurisdiction of the United States District Court sitting in the
Northern District of Texas and the courts of the State of Texas located in
Dallas, Texas, County for the purposes of any suit, action or proceeding arising
out of or relating to this Agreement or any of the other Transaction Documents
or the transactions contemplated hereby or thereby, (ii) hereby waive, and agree
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper, and (iii) hereby waive any and all rights they
may have to a trial by jury with respect to any suit, action or proceeding based
on, or arising out of, under, or in connection with, this Agreement. The Company
and each Purchaser consent to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section 8.2 shall affect or limit any right to serve process in any other manner
permitted by law. The Company and the Purchasers hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
the Shares, the Warrants or any Transaction Document, shall be entitled to
reimbursement for reasonable legal fees from the non-prevailing party.

            Section 8.3 Entire Agreement; Amendment. This Agreement and the
Transaction Documents contain the entire understanding and agreement of the
parties with respect to the matters covered hereby and, except as specifically
set forth herein or in the other Transaction Documents, neither the Company nor
any Purchaser make any representation, warranty, covenant or undertaking with
respect to such matters, and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein;
provided, however, that any non-disclosure agreement is not so superseded. No
provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the holders of at least a majority in
interest of the then-outstanding Shares, and no provision hereof may be waived
other than by a written instrument signed by the party against whom enforcement
of any such amendment or waiver is sought. No such amendment shall be effective
to the extent that it applies to less than all of the holders of the Shares then
outstanding. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or

                                      -28-


modification of any provision of any of the Transaction Documents unless the
same consideration is also offered to all of the parties to the Transaction
Documents or holders of Shares, as the case may be. Notwithstanding the
foregoing or any other provision of this Agreement to the contrary, in no event
may Section 3.11 hereof be amended under any circumstances whatsoever.

            Section 8.4 Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a Business Day during normal
business hours where such notice is to be received), or the first Business Day
following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received), or (b) on the second
Business Day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:

If to the Company:                  Syntax-Brillian Corporation
                                    1600 North Desert Drive
                                    Tempe, Arizona 85281-1230
                                    Attention: Vincent F. Sollitto, Jr.,
                                    Chief Executive Officer
                                    Telecopier:  (602) 389-8801

with copies (which copies
shall not constitute notice
to the Company) to:                 Greenberg Traurig, LLP
                                    2375 East Camelback Road
                                    Phoenix, Arizona 85016
                                    Attention:  Robert S. Kant, Esq.
                                    Telecopier: (602) 445-8100

If to any Purchaser:                At the address of such Purchaser set forth
                                    on Exhibit A to this Agreement.

      Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party hereto.

            Section 8.5 Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.

            Section 8.6 Headings. The article, section and subsection headings
in this Agreement are for convenience only and shall not constitute a part of
this Agreement for any other purpose and shall not be deemed to limit or affect
any of the provisions hereof.

                                      -29-


            Section 8.7 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
After the Closing, the assignment by a party to this Agreement of any rights
hereunder shall not affect the obligations of such party under this Agreement.
After the Closing, the Purchasers, in compliance with all applicable securities
laws, may assign the Shares, the Warrants and their rights under this Agreement
and the other Transaction Documents and any other rights hereto and thereto
without the consent of the Company.

            Section 8.8 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person (other than indemnified parties, as contemplated
by Article VII).

            Section 8.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Texas, without
giving effect to the choice of law provisions. This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.

            Section 8.10 Survival. The representations and warranties of the
Company and the Purchasers contained in Sections 2.1(o) and 2.1(s) shall survive
indefinitely and those contained in Article II, with the exception of Sections
2.1(o) and 2.1(s), shall survive the execution and delivery hereof and each
Closing until the date two (2) years from the Closing Date, and the agreements
and covenants set forth in Articles I, III, V, VII and VIII of this Agreement
shall survive the execution and delivery hereof and the Closing hereunder.

            Section 8.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered (including by facsimile and/or by photocopy) to the
other parties hereto, it being understood that all parties need not sign the
same counterpart.

            Section 8.12 Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, would
be valid, legal and enforceable to the maximum extent possible.

            Section 8.13 Further Assurances. From and after the date of this
Agreement, upon the request of the Purchasers or the Company, the Company and
each Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the other
Transaction Documents.

            Section 8.14 Independent Nature of Purchasers' Obligations and
Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the

                                      -30-


obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Purchaser Transaction Document. Nothing contained herein or in any other
Purchaser Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser confirms that it has independently
participated in the negotiation of the transactions contemplated hereby with the
advice of its own counsel and advisors. Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser (other than
Gryphon and GSSF Master Fund, LP ("GSSF")) hereby agrees and acknowledges that
(a) Warren W. Garden, P.C. was retained solely by Gryphon and GSSF in connection
with its due diligence review of the Company and the preparation, negotiation,
execution, delivery and performance of this Agreement and the other Transaction
Documents and the transactions contemplated thereunder, and in such capacity has
provided legal services solely to Gryphon and GSSF, (b) Warren W. Garden, P.C.
has not represented, nor will it represent, any Purchaser (other than Gryphon
and GSSF) in connection with the preparation, negotiation, execution, delivery
and performance of this Agreement or the other Transaction Documents or the
transactions contemplated thereunder, and (c) each Purchaser (other than Gryphon
and GSSF) should, if it wishes counsel with respect to the preparation,
negotiation, execution, delivery and performance of this Agreement or the other
Transaction Documents or the transactions contemplated thereunder, retain its
own independent counsel with respect thereto.

    [Remainder of page intentionally left blank. Signature pages to follow.]

                                      -31-


      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers or agents as of the date
first above written.

                           SYNTAX-BRILLIAN CORPORATION

                           By:      /s/ Wayne A. Pratt
                              ---------------------------------------------
                                    Wayne A. Pratt, Chief Financial Officer

               [SIGNATURES OF PURCHASERS TO FOLLOW ON NEXT PAGES.]

                                      -32-


                   PURCHASERS:

                   GRYPHON MASTER FUND, L.P.

                      By: Gryphon Partners, L.P., its General Partner

                        By: Gryphon Management Partners, L.P.,
                                  its General Partner

                           By:  Gryphon Advisors, L.L.C., its General Partner

                              By:  /s/ E.B. Lyon, IV
                                 ----------------------------------------------
                                   E.B. Lyon, IV, Authorized Agent

            [X]   Check box and initial if the foregoing Purchaser wishes to
                  waive the provisions of Section 3.11(a). ______ (initial here)

                   GSSF MASTER FUND, LP

                   By: Gryphon Special Situations Fund, LP, its General Partner

                      By: GSSF Management Partners, LP, its General Partner

                         By: GSSF, LLC, its General Partner

                            By:      /s/ E.B. Lyon, IV
                               ---------------------------------------
                                     E.B. Lyon, IV, Authorized Agent

            [X]   Check box and initial if the foregoing Purchaser wishes to
                  waive the provisions of Section 3.11(a). ______ (initial here)

                                      -33-


                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                             Enable Growth Partners

                             By: /s/ Mitch Levine
                                -----------------------------------
                             Name:  Mitch Levine
                             Title: Managing Partner

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)

                                      -34-


                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                             Enable Opportunity Partners

                             By: /s/ Mitch Levine
                                -----------------------------------
                             Name:  Mitch Levine
                             Title: Managing Partner

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Hudson Bay Fund, L.P.

                          By: /s/ Yoav Roth
                             -----------------------------------
                          Name: Yoav Roth
                          Title: Portfolio Manager

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          DKR SoundShore Oasis Holding Fund Ltd.

                          By: /s/ Fred Leif
                             -----------------------------------
                          Name: Fred Leif
                          Title: Director

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Castle Creek Technology Partners LLC

                          By: /s/ Stephen D. Friend
                             -----------------------------------
                          Name: Stephen D. Friend
                          Title: Managing Director

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Bushido Capital Master Fund, LP

                          By: Bushido Capital Partners, Ltd.

                              By: /s/ Christopher Rossman
                                  -----------------------------
                                  Name: Christopher Rossman
                                  Title: Managing Director

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Nite Capital LP

                          By:    /s/ Keith A. Goodman
                             -----------------------------------
                          Name:  Keith A. Goodman
                          Title: Manager of the General Partner

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Iroquois Master Fund Ltd.

                          By: /s/ Joshua Silverman
                             ___________________________________
                          Name: Joshua Silverman
                          Title: Authorized Signatory

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Longview Special Finance Inc.

                          By:  /s/ Francois Morax
                               -------------------------
                          Name:  Francois Morax
                          Title: Director

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                          Lagunitas Partners LP

                          By:    /s/ Jon D. Gruber
                             -----------------------------------
                          Name:  Gruber & McBaine Capital Management
                          Title: General Partner

                        [ ]   Check box and initial if the foregoing Purchaser
                              wishes to waive the provisions of Section 3.11(a).
                              ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                       Jon D. and Linda W. Gruber Trust

                       By: /s/ Jon D. Gruber
                          -----------------------------------
                       Name: Jon D. Gruber
                       Title: Trustee

                       [ ] Check box and initial if the foregoing Purchaser
                           wishes to waive the provisions of Section 3.11(a).
                           ______ (initial here)



                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                      Gruber & McBaine International

                      By: /s/ Jon D. Gruber
                         -----------------------------------
                      Name: Gruber & McBaine Capital Management
                      Title: Investment Advisor

                      [ ] Check box and initial if the foregoing Purchaser
                          wishes to waive the provisions of Section 3.11(a).
                          ______ (initial here)


                     [SIGNATURE PAGES FOR OTHER PURCHASERS]

                      WesTech Electronics Limited

                      By: /s/ Tan Chin Hock
                         -----------------------------------
                      Name: Tan Chin Hock
                      Title: CFO

                      [ ] Check box and initial if the foregoing Purchaser
                          wishes to waive the provisions of Section 3.11(a).
                          ______ (initial here)