textech_sb2-ex1008.htm


    EXHIBIT
      10.8

     

    REGISTRATION
      RIGHTS
      AGREEMENT

     

    REGISTRATION
      RIGHTS AGREEMENT (this “Agreement”), dated as of
      September 28, 2006, by and among Textechnologies Inc., a
      [              ]
      corporation with its headquarters located at
      [                            ]
      (the “Company”), and
      each of the undersigned (together with their respective affiliates and any
      assignee or transferee of all of their respective rights hereunder, the “Initial
      Investors”).

    


    WHEREAS:

     

    A.           In
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the “Securities Purchase Agreement”), the Company
      has agreed, upon the terms and subject to the conditions contained therein,
      to
      issue and sell to the Initial Investors (i) secured convertible notes in
      the aggregate principal amount of up to One Million Five Hundred Thousand
      Dollars ($1,500,000) (the “Notes”) that are convertible into shares of the
      Company’s common stock (the “Common Stock”), upon the terms and subject to the
      limitations and conditions set forth in such Notes and (ii) warrants (the
“Warrants”) to acquire an aggregate of 10,000,000 shares of Common Stock, upon
      the terms and conditions and subject to the limitations and conditions set
      forth
      in the Warrants; and

     

    B.           To
      induce the Initial Investors to execute and deliver the Securities Purchase
      Agreement, the Company has agreed to provide certain registration rights under
      the Securities Act of 1933, as amended, and the rules and regulations
      thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable
      state securities laws;

     

    NOW,
      THEREFORE, in
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and each of the Initial Investors hereby agree
      as follows:

     

    1.           DEFINITIONS.

     

    a.           As
      used in this Agreement, the following terms shall have the following
      meanings:

     

    (i)           “Investors”
means
      the Initial
      Investors and any transferee or assignee who agrees to become bound by the
      provisions of this Agreement in accordance with Section 9 hereof.

     

    (ii)           “register,”
“registered,”
and
“registration”
refer
      to a
      registration effected by preparing and filing a Registration Statement or
      Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
      1933 Act or any successor rule providing for offering securities on a continuous
      basis (“Rule 415”), and
      the declaration or ordering of effectiveness of such Registration Statement
      by
      the United States Securities and Exchange Commission (the “SEC”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)           “Registrable
      Securities” means
      the Conversion Shares issued or issuable upon conversion or otherwise pursuant
      to the Notes and Additional Notes (as defined in the Securities Purchase
      Agreement) including, without limitation, Damages Shares (as defined in the
      Notes) issued or issuable pursuant to the Notes, shares of Common Stock issued
      or issuable in payment of the Standard Liquidated Damages Amount (as defined
      in
      the Securities Purchase Agreement), shares issued or issuable in respect of
      interest or in redemption of the Notes in accordance with the terms thereof)
      and
      any shares of capital stock issued or issuable as a dividend on or in exchange
      for or otherwise with respect to any of the foregoing.

     

    (iv)           “Registration
      Statement” means
      a registration statement of the Company under the 1933 Act.

     

    b.           Capitalized
      terms used herein and not otherwise defined herein shall have the respective
      meanings set forth in the Securities Purchase Agreement or the Convertible
      Note.

     

    2.           REGISTRATION.

     

    a.           Mandatory
      Registration.  The Company shall prepare, and, on or
      prior to thirty (30) days from the date of Closing (as defined in the Securities
      Purchase Agreement) (the “Filing Date”), file with the
      SEC a Registration Statement on Form SB-2 (or, if Form SB-2 is not then
      available, on such form of Registration Statement as is then available to effect
      a registration of the Registrable Securities, subject to the consent of the
      Initial Investors, which consent will not be unreasonably withheld) covering
      the
      resale of the Registrable Securities underlying the Notes issued or issuable
      pursuant to the Securities Purchase Agreement, which Registration Statement,
      to
      the extent allowable under the 1933 Act and the rules and regulations
      promulgated thereunder (including Rule 416), shall state that such Registration
      Statement also covers such indeterminate number of additional shares of Common
      Stock as may become issuable upon conversion of or otherwise pursuant to the
      Notes to prevent dilution resulting from stock splits, stock dividends or
      similar transactions.  The number of shares of Common Stock initially
      included in such Registration Statement shall be no less than an amount equal
      to
      the sum of the number of Conversion Shares that are then issuable upon
      conversion of the Notes and Additional Notes (based on the Variable Conversion
      Price as would then be in effect and assuming the Variable Conversion Price
      is
      the Conversion Price at such time), without regard to any limitation on the
      Investor’s ability to convert the Notes.  The Company acknowledges
      that the number of shares initially included in the Registration Statement
      represents a good faith estimate of the maximum number of shares issuable upon
      conversion of the Notes.

     

    b.           Underwritten
      Offering.  If any offering pursuant to a Registration
      Statement pursuant to Section 2(a) hereof involves an underwritten offering,
      the
      Investors who hold a majority in interest of the Registrable Securities subject
      to such underwritten offering, with the consent of a majority-in-interest of
      the
      Initial Investors, shall have the right to select one legal counsel and an
      investment banker or bankers and manager or managers to administer the offering,
      which investment banker or bankers or manager or managers shall be reasonably
      satisfactory to the Company.

     

    
      
        
        

      

      
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    c.           Payments
      by the
      Company.  The Company shall use its best efforts to
      obtain effectiveness of the Registration Statement as soon as
      practicable.  If (i) the Registration Statement(s) covering the
      Registrable Securities required to be filed by the Company pursuant to Section
      2(a) hereof is not filed by the Filing Date or declared effective by the SEC
      on
      or prior to one hundred and five (105) days from the date of Closing (as defined
      in the Securities Purchase Agreement), or (ii) after the Registration
      Statement has been declared effective by the SEC, sales of all of the
      Registrable Securities cannot be made pursuant to the Registration Statement,
      or
      (iii) the Common Stock is not listed or included for quotation on the
      Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap
      Market (“Nasdaq
      SmallCap”), the New York Stock Exchange (the “NYSE”) or the American
      Stock
      Exchange (the “AMEX”)
      after being so listed or included for quotation, or (iv) the Common Stock
      ceases to be traded on the Over-the-Counter Bulletin Board (the “OTCBB”) or on the Pinksheets
      (“Pinksheets”) or any equivalent replacement exchange prior to being listed or
      included for quotation on one of the aforementioned markets, then the Company
      will make payments to the Investors in such amounts and at such times as shall
      be determined pursuant to this Section 2(c) as partial relief for the damages
      to
      the Investors by reason of any such delay in or reduction of their ability
      to
      sell the Registrable Securities (which remedy shall not be exclusive of any
      other remedies available at law or in equity).  The Company shall pay
      to each holder of the Notes or Registrable Securities an amount equal to the
      then outstanding principal amount of the Notes (and, in the case of holders
      of
      Registrable Securities, the principal amount of Notes from which such
      Registrable Securities were converted) (“Outstanding Principal
      Amount”), multiplied by the Applicable Percentage (as defined below)
      times the sum of:  (i) the number of months (prorated for partial
      months) after the Filing Date or the end of the aforementioned one hundred
      and
      five (105) day period and prior to the date the Registration Statement is
      declared effective by the SEC, provided, however, that there shall be excluded
      from such period any delays which are solely attributable to changes required
      by
      the Investors in the Registration Statement with respect to information relating
      to the Investors, including, without limitation, changes to the plan of
      distribution, or to the failure of the Investors to conduct their review of
      the
      Registration Statement pursuant to Section 3(h) below in a reasonably prompt
      manner; (ii) the number of months (prorated for partial months) that sales
      of
      all of the Registrable Securities cannot be made pursuant to the Registration
      Statement after the Registration Statement has been declared effective
      (including, without limitation, when sales cannot be made by reason of the
      Company’s failure to properly supplement or amend the prospectus included
      therein in accordance with the terms of this Agreement, but excluding any days
      during an Allowed Delay (as defined in Section 3(f)); and (iii) the number
      of
      months (prorated for partial months) that the Common Stock is not listed or
      included for quotation on the OTCBB, Pinksheets, Nasdaq, Nasdaq SmallCap, NYSE
      or AMEX or that trading thereon is halted after the Registration Statement
      has
      been declared effective.  The term “Applicable Percentage” means
      two hundredths (.015).  (For example, if the Registration Statement
      becomes effective one (1) month after the end of such one hundred and five
      (105)
      day period, the Company would pay $5,000 for each $250,000 of Outstanding
      Principal Amount.  If thereafter, sales could not be made pursuant to
      the Registration Statement for an additional period of one (1) month, the
      Company would pay an additional $5,000 for each $250,000 of Outstanding
      Principal Amount.)  Such amounts shall be paid in cash or, at the
      Company’s option, in shares of Common Stock priced at the Conversion Price (as
      defined in the Notes) on such payment date.

     

    
      
        
        

      

      
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    d.           Piggy-Back
      Registrations.  Subject to the last sentence of this
      Section 2(d), if at any time prior to the expiration of the Registration Period
      (as hereinafter defined) the Company shall determine to file with the SEC a
      Registration Statement relating to an offering for its own account or the
      account of others under the 1933 Act of any of its equity securities (other
      than
      on Form S-4 or Form S-8 or their then equivalents relating to equity securities
      to be issued solely in connection with any acquisition of any entity or business
      or equity securities issuable in connection with stock option or other bonafide,
      employee
      benefit plans), the Company shall send to each Investor who is entitled to
      registration rights under this Section 2(d) written notice of such determination
      and, if within fifteen (15) days after the effective date of such notice, such
      Investor shall so request in writing, the Company shall include in such
      Registration Statement all or any part of the Registrable Securities such
      Investor requests to be registered, except that if, in connection with any
      underwritten public offering for the account of the Company the managing
      underwriter(s) thereof shall impose a limitation on the number of shares of
      Common Stock which may be included in the Registration Statement because, in
      such underwriter(s)’ judgment, marketing or other factors dictate such
      limitation is necessary to facilitate public distribution, then the Company
      shall be obligated to include in such Registration Statement only such limited
      portion of the Registrable Securities with respect to which such Investor has
      requested inclusion hereunder as the underwriter shall permit. Any exclusion
      of
      Registrable Securities shall be made pro rata among the Investors seeking to
      include Registrable Securities in proportion to the number of Registrable
      Securities sought to be included by such Investors; provided, however,
      that the
      Company shall not exclude any Registrable Securities unless the Company has
      first excluded all outstanding securities, the holders of which are not entitled
      to inclusion of such securities in such Registration Statement or are not
      entitled to pro rata inclusion with the Registrable Securities; and provided, further,
however,
      that, after
      giving effect to the immediately preceding proviso, any exclusion of Registrable
      Securities shall be made pro rata with holders of other securities having the
      right to include such securities in the Registration Statement other than
      holders of securities entitled to inclusion of their securities in such
      Registration Statement by reason of demand registration rights.  No
      right to registration of Registrable Securities under this Section 2(d) shall
      be
      construed to limit any registration required under Section 2(a)
      hereof.  If an offering in connection with which an Investor is
      entitled to registration under this Section 2(d) is an underwritten offering,
      then each Investor whose Registrable Securities are included in such
      Registration Statement shall, unless otherwise agreed by the Company, offer
      and
      sell such Registrable Securities in an underwritten offering using the same
      underwriter or underwriters and, subject to the provisions of this Agreement,
      on
      the same terms and conditions as other shares of Common Stock included in such
      underwritten offering.  Notwithstanding anything to the contrary set
      forth herein, the registration rights of the Investors pursuant to this Section
      2(d) shall only be available in the event the Company fails to timely file,
      obtain effectiveness or maintain effectiveness of any Registration Statement
      to
      be filed pursuant to Section 2(a) in accordance with the terms of this
      Agreement.

     

    
      
        
        

      

      
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    e.           Eligibility
      for Form S-3,
      SB-2 or S-1; Conversion to Form S-3.  The Company
      represents and warrants that it meets the requirements for the use of Form
      S-3,
      SB-2 or S-1 for registration of the sale by the Initial Investors and any other
      Investors of the Registrable Securities.   The Company agrees to
      file all reports required to be filed by the Company with the SEC in a timely
      manner so as to remain eligible or become eligible, as the case may be, and
      thereafter to maintain its eligibility, for the use of Form S-3.  If
      the Company is not currently eligible to use Form S-3, not later than fifteen
      (15) business days after the Company first meets the registration eligibility
      and transaction requirements for the use of Form S-3 (or any successor form)
      for
      registration of the offer and sale by the Initial Investors and any other
      Investors of Registrable Securities, the Company shall file a Registration
      Statement on Form S-3 (or such successor form) with respect to the Registrable
      Securities covered by the Registration Statement on Form SB-2 or Form S-1,
      whichever is applicable, filed pursuant to Section 2(a) (and include in such
      Registration Statement on Form S-3 the information required by Rule 429 under
      the 1933 Act) or convert the Registration Statement on Form SB-2 or Form S-1,
      whichever is applicable, filed pursuant to Section 2(a) to a Form S-3 pursuant
      to Rule 429 under the 1933 Act and cause such Registration Statement (or such
      amendment) to be declared effective no later than thirty (30) days after
      filing.  In the event of a breach by the Company of the provisions of
      this Section 2(e), the Company will be required to make payments pursuant to
      Section 2(c) hereof.

     

    3.           OBLIGATIONS
      OF THE
      COMPANY.

     

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

     

    a.           The
      Company shall prepare promptly, and file with the SEC not later than the Filing
      Date, a Registration Statement with respect to the number of Registrable
      Securities provided in Section 2(a), and thereafter use its best efforts to
      cause such Registration Statement relating to Registrable Securities to become
      effective as soon as possible after such filing but in no event later than
      one
      hundred and five (105) days from the date of Closing), and keep the Registration
      Statement effective pursuant to Rule 415 at all times until such date as is
      the
      earlier of (i) the date on which all of the Registrable Securities have been
      sold and (ii) the date on which the Registrable Securities (in the opinion
      of
      counsel to the Initial Investors) may be immediately sold to the public without
      registration or restriction (including, without limitation, as to volume by
      each
      holder thereof) under the 1933 Act (the “Registration Period”), which
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any 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 not misleading.

     

    
      
        
        

      

      
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    b.           The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to the Registration Statements and
      the prospectus used in connection with the Registration Statements as may be
      necessary to keep the Registration Statements effective at all times during
      the
      Registration Period, and, during such period, comply with the provisions of
      the
      1933 Act with respect to the disposition of all Registrable Securities of the
      Company covered by the Registration Statements until such time as all of such
      Registrable Securities have been disposed of in accordance with the intended
      methods of disposition by the seller or sellers thereof as set forth in the
      Registration Statements.  In the event the number of shares available
      under a Registration Statement filed pursuant to this Agreement is insufficient
      to cover all of the Registrable Securities issued or issuable upon conversion
      of
      the Notes, the Company shall amend the Registration Statement, or file a new
      Registration Statement (on the short form available therefor, if applicable),
      or
      both, so as to cover all of the Registrable Securities, in each case, as soon
      as
      practicable, but in any event within fifteen (15) days after the necessity
      therefor arises (based on the market price of the Common Stock and other
      relevant factors on which the Company reasonably elects to rely).  The
      Company shall use its best efforts to cause such amendment and/or new
      Registration Statement to become effective as soon as practicable following
      the
      filing thereof, but in any event within thirty (30) days after the date on
      which
      the Company reasonably first determines (or reasonably should have determined)
      the need therefor.  The provisions of Section 2(c) above shall be
      applicable with respect to such obligation, with the one hundred and five (105)
      days running from the day the Company reasonably first determines (or reasonably
      should have determined) the need therefor.

     

    c.           The
      Company shall furnish to each Investor whose Registrable Securities are included
      in a Registration Statement and its legal counsel (i) promptly (but in no
      event more than two (2) business days) after the same is prepared and publicly
      distributed, filed with the SEC, or received by the Company, one copy of each
      Registration Statement and any amendment thereto, each preliminary prospectus
      and prospectus and each amendment or supplement thereto, and, in the case of
      the
      Registration Statement referred to in Section 2(a), each letter written by
      or on
      behalf of the Company to the SEC or the staff of the SEC, and each item of
      correspondence from the SEC or the staff of the SEC, in each case relating
      to
      such Registration Statement (other than any portion of any thereof which
      contains information for which the Company has sought confidential treatment),
      and (ii) promptly (but in no event more than two (2) business days) after
      the Registration Statement is declared effective by the SEC, such number of
      copies of a prospectus, including a preliminary prospectus, and all amendments
      and supplements thereto and such other documents as such Investor may reasonably
      request in order to facilitate the disposition of the Registrable Securities
      owned by such Investor.  The Company will immediately notify each
      Investor by facsimile of the effectiveness of each Registration Statement or
      any
      post-effective amendment.  The Company will promptly respond to any
      and all comments received from the SEC (which comments shall promptly be made
      available to the Investors upon request), with a view towards causing each
      Registration Statement or any amendment thereto to be declared effective by
      the
      SEC as soon as practicable, shall promptly file an acceleration request as
      soon
      as practicable (but in no event more than two (2) business days) following
      the
      resolution or clearance of all SEC comments or, if applicable, following
      notification by the SEC that any such Registration Statement or any amendment
      thereto will not be subject to review and shall, if required by SEC Rules,
      promptly file with the SEC a final prospectus as soon as practicable (but in
      no
      event more than two (2) business days) following receipt by the Company from
      the
      SEC of an order declaring the Registration Statement effective.  In
      the event of a breach by the Company of the provisions of this Section 3(c),
      the
      Company will be required to make payments pursuant to Section 2(c)
      hereof.

     

    
      
        
        

      

      
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    d.           The
      Company shall use reasonable efforts to (i) register and qualify the
      Registrable Securities covered by the Registration Statements under such other
      securities or “blue sky” laws of such jurisdictions in the United States as the
      Investors who hold a majority in interest of the Registrable Securities being
      offered reasonably request, (ii) prepare and file in those jurisdictions
      such amendments (including post-effective amendments) and supplements to such
      registrations and qualifications as may be necessary to maintain the
      effectiveness thereof during the Registration Period, (iii) take such other
      actions as may be necessary to maintain such registrations and qualifications
      in
      effect at all times during the Registration Period, and (iv) take all other
      actions reasonably necessary or advisable to qualify the Registrable Securities
      for sale in such jurisdictions; provided, however,
      that the
      Company shall not be required in connection therewith or as a condition thereto
      to (a) qualify to do business in any jurisdiction where it would not
      otherwise be required to qualify but for this Section 3(d), (b) subject
      itself to general taxation in any such jurisdiction, (c) file a general
      consent to service of process in any such jurisdiction, (d) provide any
      undertakings that cause the Company undue expense or burden, or (e) make
      any change in its charter or bylaws, which in each case the Board of Directors
      of the Company determines to be contrary to the best interests of the Company
      and its shareholders.

     

    e.           In
      the event Investors who hold a majority-in-interest of the Registrable
      Securities being offered in the offering (with the approval of a
      majority-in-interest of the Initial Investors) select underwriters for the
      offering, the Company shall enter into and perform its obligations under an
      underwriting agreement, in usual and customary form, including, without
      limitation, customary indemnification and contribution obligations, with the
      underwriters of such offering.

     

    f.           As
      promptly as practicable after becoming aware of such event, the Company shall
      notify each Investor of the happening of any event, of which the Company has
      knowledge, as a result of which the prospectus included in any Registration
      Statement, as then in effect, includes an untrue statement of a material fact
      or
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, and use its best efforts promptly
      to
      prepare a supplement or amendment to any Registration Statement to correct
      such
      untrue statement or omission, and deliver such number of copies of such
      supplement or amendment to each Investor as such Investor may reasonably
      request; provided that, for not more than ten (10) consecutive trading days
      (or
      a total of not more than twenty (20) trading days in any twelve (12) month
      period), the Company may delay the disclosure of material non-public information
      concerning the Company (as well as prospectus or Registration Statement
      updating) the disclosure of which at the time is not, in the good faith opinion
      of the Company, in the best interests of the Company (an “Allowed Delay”); provided,
      further, that the Company shall promptly (i) notify the Investors in
      writing of the existence of (but in no event, without the prior written consent
      of an Investor, shall the Company disclose to such investor any of the facts
      or
      circumstances regarding) material non-public information giving rise to an
      Allowed Delay and (ii) advise the Investors in writing to cease all sales
      under such Registration Statement until the end of the Allowed Delay. Upon
      expiration of the Allowed Delay, the Company shall again be bound by the first
      sentence of this Section 3(f) with respect to the information giving rise
      thereto.

     

    
      
        
        

      

      
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      g.           The
        Company shall use its best efforts to prevent the issuance of any stop order
        or
        other suspension of effectiveness of any Registration Statement, and, if
        such an
        order is issued, to obtain the withdrawal of such order at the earliest possible
        moment and to notify each Investor who holds Registrable Securities being
        sold
        (or, in the event of an underwritten offering, the managing underwriters)
        of the
        issuance of such order and the resolution thereof.

       

    

    h.           The
      Company shall permit a single firm of counsel designated by the Initial
      Investors to review such Registration Statement and all amendments and
      supplements thereto (as well as all requests for acceleration or effectiveness
      thereof) a reasonable period of time prior to their filing with the SEC, and
      not
      file any document in a form to which such counsel reasonably objects and will
      not request acceleration of such Registration Statement without prior notice
      to
      such counsel.  The sections of such Registration Statement covering
      information with respect to the Investors, the Investor’s beneficial ownership
      of securities of the Company or the Investors intended method of disposition
      of
      Registrable Securities shall conform to the information provided to the Company
      by each of the Investors.

     

    i.           The
      Company shall make generally available to its security holders as soon as
      practicable, but not later than one hundred and five (105) days after the close
      of the period covered thereby, an earnings statement (in form complying with
      the
      provisions of Rule 158 under the 1933 Act) covering a twelve-month period
      beginning not later than the first day of the Company’s fiscal quarter next
      following the effective date of the Registration Statement.

     

    j.           At
      the request of any Investor, the Company shall furnish, on the date that
      Registrable Securities are delivered to an underwriter, if any, for sale in
      connection with any Registration Statement or, if such securities are not being
      sold by an underwriter, on the date of effectiveness thereof (i) an
      opinion, dated as of such date, from counsel representing the Company for
      purposes of such Registration Statement, in form, scope and substance as is
      customarily given in an underwritten public offering, addressed to the
      underwriters, if any, and the Investors and (ii) a letter, dated such date,
      from the Company’s independent certified public accountants in form and
      substance as is customarily given by independent certified public accountants
      to
      underwriters in an underwritten public offering, addressed to the underwriters,
      if any, and the Investors.

     

    
      
        
        

      

      
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      k.           The
        Company shall make available for inspection by (i) any Investor,
        (ii) any underwriter participating in any disposition pursuant to a
        Registration Statement, (iii) one firm of attorneys and one firm of
        accountants or other agents retained by the Initial Investors, (iv) one
        firm of attorneys and one firm of accountants or other agents retained by
        all
        other Investors, and (v) one firm of attorneys retained by all such
        underwriters (collectively, the “Inspectors”) all pertinent
        financial and other records, and pertinent corporate documents and properties
        of
        the Company, including without limitation, records of conversions by other
        holders of convertible securities issued by the Company and the issuance
        of
        stock to such holders pursuant to the conversions (collectively, the “Records”), as shall be
        reasonably deemed necessary by each Inspector to enable each Inspector to
        exercise its due diligence responsibility, and cause the Company’s officers,
        directors and employees to supply all information which any Inspector may
        reasonably request for purposes of such due diligence; provided, however,
        that each
        Inspector shall hold in confidence and shall not make any disclosure (except
        to
        an Investor) of any Record or other information which the Company determines
        in
        good faith to be confidential, and of which determination the Inspectors
        are so
        notified, unless (a) the disclosure of such Records is necessary to avoid
        or correct a misstatement or omission in any Registration Statement,
        (b) the release of such Records is ordered pursuant to a subpoena or other
        order from a court or government body of competent jurisdiction, or (c) the
        information in such Records has been made generally available to the public
        other than by disclosure in violation of this or any other
        agreement.  The Company shall not be required to disclose any
        confidential information in such Records to any Inspector until and unless
        such
        Inspector shall have entered into confidentiality agreements (in form and
        substance satisfactory to the Company) with the Company with respect thereto,
        substantially in the form of this Section 3(k).  Each Investor agrees
        that it shall, upon learning that disclosure of such Records is sought in
        or by
        a court or governmental body of competent jurisdiction or through other means,
        give prompt notice to the Company and allow the Company, at its expense,
        to
        undertake appropriate action to prevent disclosure of, or to obtain a protective
        order for, the Records deemed confidential.  Nothing herein (or in any
        other confidentiality agreement between the Company and any Investor) shall
        be
        deemed to limit the Investor’s ability to sell Registrable Securities in a
        manner which is otherwise consistent with applicable laws and
        regulations.

       

    

    l.           The
      Company shall hold in confidence and not make any disclosure of information
      concerning an Investor provided to the Company unless (i) disclosure of
      such information is necessary to comply with federal or state securities laws,
      (ii) the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release
      of such information is ordered pursuant to a subpoena or other order from a
      court or governmental body of competent jurisdiction, or (iv) such
      information has been made generally available to the public other than by
      disclosure in violation of this or any other agreement.  The Company
      agrees that it shall, upon learning that disclosure of such information
      concerning an Investor is sought in or by a court or governmental body of
      competent jurisdiction or through other means, give prompt notice to such
      Investor prior to making such disclosure, and allow the Investor, at its
      expense, to undertake appropriate action to prevent disclosure of, or to obtain
      a protective order for, such information.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      m.           The
        Company shall (i) cause all the Registrable Securities covered by the
        Registration Statement to be listed on each national securities exchange
        on
        which securities of the same class or series issued by the Company are then
        listed, if any, if the listing of such Registrable Securities is then permitted
        under the rules of such exchange, or (ii) to the extent the securities of
        the same class or series are not then listed on a national securities exchange,
        secure the designation and quotation, of all the Registrable Securities covered
        by the Registration Statement on Nasdaq or, if not eligible for Nasdaq, on
        Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap, on the
        OTCBB
        and, without limiting the generality of the foregoing, to arrange for at
        least
        two market makers to register with the National Association of Securities
        Dealers, Inc. (“NASD”)
        as such with respect to such Registrable Securities.

       

      n.           The
        Company shall provide a transfer agent and registrar, which may be a single
        entity, for the Registrable Securities not later than the effective date
        of the
        Registration Statement.

       

      o.           The
        Company shall cooperate with the Investors who hold Registrable Securities
        being
        offered and the managing underwriter or underwriters, if any, to facilitate
        the
        timely preparation and delivery of certificates (not bearing any restrictive
        legends) representing Registrable Securities to be offered pursuant to a
        Registration Statement and enable such certificates to be in such denominations
        or amounts, as the case may be, as the managing underwriter or underwriters,
        if
        any, or the Investors may reasonably request and registered in such names
        as the
        managing underwriter or underwriters, if any, or the Investors may request,
        and,
        within three (3) business days after a Registration Statement which includes
        Registrable Securities is ordered effective by the SEC, the Company shall
        deliver, and shall cause legal counsel selected by the Company to deliver,
        to
        the transfer agent for the Registrable Securities (with copies to the Investors
        whose Registrable Securities are included in such Registration Statement)
        an
        instruction in the form attached hereto as Exhibit 1 and an opinion
        of
        such counsel in the form attached hereto as Exhibit 2.

       

    

    p.           At
      the request of the holders of a majority-in-interest of the Registrable
      Securities, the Company shall prepare and file with the SEC such amendments
      (including post-effective amendments) and supplements to a Registration
      Statement and any prospectus used in connection with the Registration Statement
      as may be necessary in order to change the plan of distribution set forth in
      such Registration Statement.

     

    q.           From
      and after the date of this Agreement, the Company shall not, and shall not
      agree
      to, allow the holders of any securities of the Company to include any of their
      securities, in excess of 1,000,000 shares of Common Stock, in any Registration
      Statement under Section 2(a) hereof or any amendment or supplement thereto
      under
      Section 3(b) hereof without the consent of the holders of a majority-in-interest
      of the Registrable Securities.

     

    r.           The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Investors of Registrable Securities pursuant
      to a
      Registration Statement.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    4.           OBLIGATIONS
      OF THE
      INVESTORS.

     

    In
      connection with the registration of the Registrable Securities, the Investors
      shall have the following obligations:

     

    a.           It
      shall be a condition precedent to the obligations of the Company to complete
      the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of a particular Investor that such Investor shall furnish to the
      Company such information regarding itself, the Registrable Securities held
      by it
      and the intended method of disposition of the Registrable Securities held by
      it
      as shall be reasonably required to effect the registration of such Registrable
      Securities and shall execute such documents in connection with such registration
      as the Company may reasonably request.  At least three (3) business
      days prior to the first anticipated filing date of the Registration Statement,
      the Company shall notify each Investor of the information the Company requires
      from each such Investor.

     

    b.           Each
      Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of the Registration Statements hereunder, unless
      such Investor has notified the Company in writing of such Investor’s election to
      exclude all of such Investor’s Registrable Securities from the Registration
      Statements.

     

    c.           In
      the event Investors holding a majority-in-interest of the Registrable Securities
      being registered (with the approval of the Initial Investors) determine to
      engage the services of an underwriter, each Investor agrees to enter into and
      perform such Investor’s obligations under an underwriting agreement, in usual
      and customary form, including, without limitation, customary indemnification
      and
      contribution obligations, with the managing underwriter of such offering and
      take such other actions as are reasonably required in order to expedite or
      facilitate the disposition of the Registrable Securities, unless such Investor
      has notified the Company in writing of such Investor’s election to exclude all
      of such Investor’s Registrable Securities from such Registration
      Statement.

     

    d.           Each
      Investor agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Section 3(f) or 3(g), such
      Investor will immediately discontinue disposition of Registrable Securities
      pursuant to the Registration Statement covering such Registrable Securities
      until such Investor’s receipt of the copies of the supplemented or amended
      prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
      Company, such Investor shall deliver to the Company (at the expense of the
      Company) or destroy (and deliver to the Company a certificate of destruction)
      all copies in such Investor’s possession, of the prospectus covering such
      Registrable Securities current at the time of receipt of such
      notice.

     

    e.           No
      Investor may participate in any underwritten registration hereunder unless
      such
      Investor (i) agrees to sell such Investor’s Registrable Securities on the
      basis provided in any underwriting arrangements in usual and customary form
      entered into by the Company, (ii) completes and executes all
      questionnaires, powers of attorney, indemnities, underwriting agreements and
      other documents reasonably required under the terms of such underwriting
      arrangements, and (iii) agrees to pay its pro rata share of all
      underwriting discounts and commissions and any expenses in excess of those
      payable by the Company pursuant to Section 5 below.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    5.           EXPENSES
      OF
      REGISTRATION.

     

    All
      reasonable expenses, other than underwriting discounts and commissions, incurred
      in connection with registrations, filings or qualifications pursuant to Sections
      2 and 3, including, without limitation, all registration, listing and
      qualification fees, printers and accounting fees, the fees and disbursements
      of
      counsel for the Company, and the reasonable fees and disbursements of one
      counsel selected by the Initial Investors pursuant to Sections 2(b) and 3(h)
      hereof shall be borne by the Company.

     

    6.           INDEMNIFICATION.

     

    In
      the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

     

    a.           To
      the extent permitted by law, the Company will indemnify, hold harmless and
      defend (i) each Investor who holds such Registrable Securities,
      (ii) the directors, officers, partners, employees, agents and each person
      who controls any Investor within the meaning of the 1933 Act or the Securities
      Exchange Act of 1934, as amended (the “1934 Act”), if any,
      (iii) any underwriter (as defined in the 1933 Act) for the Investors, and
      (iv) the directors, officers, partners, employees and each person who
      controls any such underwriter within the meaning of the 1933 Act or the 1934
      Act, if any (each, an “Indemnified Person”), against
      any joint or several losses, claims, damages, liabilities or expenses
      (collectively, together with actions, proceedings or inquiries by any regulatory
      or self-regulatory organization, whether commenced or threatened, in respect
      thereof, “Claims”) to
      which any of them may become subject insofar as such Claims arise out of or
      are
      based upon: (i) any untrue statement or alleged untrue statement of a material
      fact in a Registration Statement or the omission or alleged omission to state
      therein a material fact required to be stated or necessary to make the
      statements therein not misleading;
      (ii) any untrue statement or alleged untrue statement of a material fact
      contained in any preliminary prospectus if used prior to the effective date
      of
      such Registration Statement, or contained in the final prospectus (as amended
      or
      supplemented, if the Company files any amendment thereof or supplement thereto
      with the SEC) or the omission or alleged omission to state therein any material
      fact necessary to make the statements made therein, in light of the
      circumstances under which the statements therein were made, not misleading;
      or
      (iii) any violation or alleged violation by the Company of the 1933 Act, the
      1934 Act, any other law, including, without limitation, any state securities
      law, or any rule or regulation thereunder relating to the offer or sale of
      the
      Registrable Securities (the matters in the foregoing clauses (i) through (iii)
      being, collectively, “Violations”).  Subject
      to the restrictions set forth in Section 6(c) with respect to the number of
      legal counsel, the Company shall reimburse the Indemnified Person, promptly
      as
      such expenses are incurred and are due and payable, for any reasonable legal
      fees or other reasonable expenses incurred by them in connection with
      investigating or defending any such Claim.  Notwithstanding anything
      to the contrary contained herein, the indemnification agreement contained in
      this Section 6(a): (i) shall not apply to a Claim arising out of or based upon
      a
      Violation which occurs in reliance upon and in conformity with information
      furnished in writing to the Company by any Indemnified Person or underwriter
      for
      such Indemnified Person expressly for use in connection with the preparation
      of
      such Registration Statement or any such amendment thereof or supplement thereto,
      if such prospectus was timely made available by the Company pursuant to Section
      3(c) hereof; (ii) shall not apply to amounts paid in settlement of any Claim
      if
      such settlement is effected without the prior written consent of the Company,
      which consent shall not be unreasonably withheld; and (iii) with respect to
      any
      preliminary prospectus, shall not inure to the benefit of any Indemnified Person
      if the untrue statement or omission of material fact contained in the
      preliminary prospectus was corrected on a timely basis in the prospectus, as
      then amended or supplemented, such corrected prospectus was timely made
      available by the Company pursuant to Section 3(c) hereof, and the Indemnified
      Person was promptly advised in writing not to use the incorrect prospectus
      prior
      to the use giving rise to a Violation and such Indemnified Person,
      notwithstanding such advice, used it.  Such indemnity shall remain in
      full force and effect regardless of any investigation made by or on behalf
      of
      the Indemnified Person and shall survive the transfer of the Registrable
      Securities by the Investors pursuant to Section 9.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    b.           In
      connection with any Registration Statement in which an Investor is
      participating, each such Investor agrees severally and not jointly to indemnify,
      hold harmless and defend, to the same extent and in the same manner set forth
      in
      Section 6(a), the Company, each of its directors, each of its officers who
      signs
      the Registration Statement, each person, if any, who controls the Company within
      the meaning of the 1933 Act or the 1934 Act, any underwriter and any other
      shareholder selling securities pursuant to the Registration Statement or any
      of
      its directors or officers or any person who controls such shareholder or
      underwriter within the meaning of the 1933 Act or the 1934 Act (collectively
      and
      together with an Indemnified Person, an “Indemnified Party”), against
      any Claim to which any of them may become subject, under the 1933 Act, the
      1934
      Act or otherwise, insofar as such Claim arises out of or is based upon any
      Violation by such Investor, in each case to the extent (and only to the extent)
      that such Violation occurs in reliance upon and in conformity with written
      information furnished to the Company by such Investor expressly for use in
      connection with such Registration Statement; and subject to Section 6(c) such
      Investor will reimburse any legal or other expenses (promptly as such expenses
      are incurred and are due and payable) reasonably incurred by them in connection
      with investigating or defending any such Claim; provided, however,
      that the
      indemnity agreement contained
      in this Section 6(b) shall not apply to amounts paid in settlement of any Claim
      if such settlement is effected  without the prior written consent of
      such Investor, which consent shall not be unreasonably withheld; provided, further,
however,
      that the
      Investor shall be liable under this Agreement (including this Section 6(b)
      and
      Section 7) for only that amount as does not exceed the net proceeds to such
      Investor as a result of the sale of Registrable Securities pursuant to such
      Registration Statement.  Such indemnity shall remain in full force and
      effect regardless of any investigation made by or on behalf of such Indemnified
      Party and shall survive the transfer of the Registrable Securities by the
      Investors pursuant to Section 9. Notwithstanding anything to the contrary
      contained herein, the indemnification agreement contained in this Section 6(b)
      with respect to any preliminary prospectus shall not inure to the benefit of
      any
      Indemnified Party if the untrue statement or omission of material fact contained
      in the preliminary prospectus was corrected on a timely basis in the prospectus,
      as then amended or supplemented.

     

    c.           Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action (including any governmental action),
      such Indemnified Person or Indemnified Party shall, if a Claim in respect
      thereof is to be made against any indemnifying party under this Section 6,
      deliver to the indemnifying party a written notice of the commencement thereof,
      and the indemnifying party shall have the right to participate in, and, to
      the
      extent the indemnifying party so desires, jointly with any other indemnifying
      party similarly noticed, to assume control of the defense thereof with counsel
      mutually satisfactory to the indemnifying party and the Indemnified Person
      or
      the Indemnified Party, as the case may be; provided, however,
      that an
      Indemnified Person or Indemnified Party shall have the right to retain its
      own
      counsel with the fees and expenses to be paid by the indemnifying party, if,
      in
      the reasonable opinion of counsel retained by the indemnifying party, the
      representation by such counsel of the Indemnified Person or Indemnified Party
      and the indemnifying party would be inappropriate due to actual or potential
      differing interests between such Indemnified Person or Indemnified Party and
      any
      other party represented by such counsel in such proceeding.  The
      indemnifying party shall pay for only one separate legal counsel
      for  the Indemnified Persons or the Indemnified Parties, as
      applicable, and such legal counsel shall be selected by Investors holding a
      majority-in-interest of the  Registrable Securities included in the
      Registration Statement to which the Claim relates (with the approval of a
      majority-in-interest of the Initial Investors), if the Investors are entitled
      to
      indemnification hereunder, or the Company, if the Company is entitled to
      indemnification hereunder, as applicable.  The failure to deliver
      written notice to the indemnifying party within a reasonable time of the
      commencement of any such action shall not relieve such indemnifying party of
      any
      liability to the Indemnified Person or Indemnified Party under this Section
      6,
      except to the extent that the indemnifying party is actually prejudiced in
      its
      ability to defend such action.  The indemnification required by this
      Section 6 shall be made by periodic payments of the amount thereof during the
      course of the investigation or defense, as such expense, loss, damage or
      liability is incurred and is due and payable.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    7.           CONTRIBUTION.

     

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided, however,
      that
      (i) no contribution shall be made under circumstances where the maker would
      not have been liable for indemnification under the fault standards set forth
      in
      Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
      be
      entitled to contribution from any seller of Registrable Securities who was
      not
      guilty of such fraudulent misrepresentation, and (iii)contribution (together
      with any indemnification or other obligations under this Agreement) by any
      seller of Registrable Securities shall be limited in amount to the net amount
      of
      proceeds received by such seller from the sale of such Registrable
      Securities.

     

    8.           REPORTS
      UNDER THE 1934
      ACT.

     

    With
      a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the investors to sell securities of the Company to the public
      without registration (“Rule
      144”), the Company agrees to:

     

    a.           make
      and keep public information available, as those terms are understood and defined
      in Rule 144;

     

    b.           file
      with the SEC in a timely manner all reports and other documents required of
      the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company’s obligations under Section 4(c) of the Securities Purchase
      Agreement) and the filing of such reports and other documents is required for
      the applicable provisions of Rule 144; and

     

    c.           furnish
      to each Investor so long as such Investor owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company that it has complied
      with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act,
      (ii) a copy of the most recent annual or quarterly report of the Company
      and such other reports and documents so filed by the Company, and
      (iii) such other information as may be reasonably requested to permit the
      Investors to sell such securities pursuant to Rule 144 without
      registration.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    9.           ASSIGNMENT
      OF REGISTRATION
      RIGHTS.

     

    The
      rights under this Agreement shall be automatically assignable by the Investors
      to any transferee of all or any portion of Registrable Securities if:
      (i) the Investor 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 assignee is
      restricted under the 1933 Act and applicable state securities laws, (iv) at
      or
      before the time the Company receives the written notice contemplated by clause
      (ii) of this sentence, the transferee or assignee agrees in writing with the
      Company to be bound by all of the provisions contained herein, (v) such transfer
      shall have been made in accordance with the applicable requirements of the
      Securities Purchase Agreement, and (vi) such transferee shall be an “accredited investor” as that
      term defined in Rule 501 of Regulation D promulgated under the 1933
      Act.

     

    10.           AMENDMENT
      OF REGISTRATION
      RIGHTS.

     

    Provisions
      of this Agreement may be amended and the observance thereof may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only with written consent of the Company, each of the Initial
      Investors (to the extent such Initial Investor still owns Registrable
      Securities) and Investors who hold a majority interest of the Registrable
      Securities.  Any amendment or waiver effected in accordance with this
      Section 10 shall be binding upon each Investor and the Company.

     

    11.           MISCELLANEOUS.

     

    a.           A
      person or entity is deemed to be a holder of Registrable Securities whenever
      such person or entity owns of record such Registrable Securities.  If
      the Company receives conflicting instructions, notices or elections from two
      or
      more persons or entities with respect to the same Registrable Securities, the
      Company shall act upon the basis of instructions, notice or election received
      from the registered owner of such Registrable Securities.

     

    b.           Any
      notices required or permitted to be given under the terms hereof shall be sent
      by certified or registered mail (return receipt requested) or delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile and shall be effective five days after being placed in the mail,
      if
      mailed by regular United States mail, or upon receipt, if delivered personally
      or by courier (including a recognized overnight delivery service) or by
      facsimile, in each case addressed to a party.  The addresses for such
      communications shall be:

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    If
      to the
      Company:

     

    Textechnologies
      Inc.

     

     

    Attention:
      Chief Executive Officer

                    Telephone:

                    Facsimile: 

     

     

                    With
      a copy
      to:

     

     

    Attention:

    Telephone:

    Facsimile:

     

    If
      to an
      Investor: to the address set forth immediately below such Investor’s name on the
      signature pages to the Securities Purchase Agreement.

     

    With
      a
      copy to:

     

    Ballard
      Spahr Andrews & Ingersoll, LLP

    1735
      Market Street

    51st
      Floor

    Philadelphia,
      Pennsylvania  19103

    Attention:  Gerald
      J. Guarcini, Esq.

    Telephone:  215-865-8625

    Facsimile:  215-864-8999

     

    c.           Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    d.           
      THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
      PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF
      CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
      JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK
      WITH
      RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED
      INTO
      IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
      BOTH
      PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
      MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE
      THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
      IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT
      OR
      PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
      PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT
      A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
      CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
      OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN
      ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES
      AND
      EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
      CONNECTION WITH SUCH DISPUTE.

     

    e.           In
      the event that any provision of this Agreement is invalid or unenforceable
      under
      any applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law.  Any provision
      hereof which may prove invalid or unenforceable under any law shall not affect
      the validity or enforceability of any other provision hereof.

     

    f.           This
      Agreement, the Notes and the Securities Purchase Agreement (including all
      schedules and exhibits thereto) constitute the entire agreement among the
      parties hereto with respect to the subject matter hereof and
      thereof.  There are no restrictions, promises, warranties or
      undertakings, other than those set forth or referred to herein and
      therein.  This Agreement and the Securities Purchase Agreement
      supersede all prior agreements and understandings among the parties hereto
      with
      respect to the subject matter hereof and thereof.

     

    g.           Subject
      to the requirements of Section 9 hereof, this Agreement shall be binding upon
      and inure to the benefit of the parties and their successors and
      assigns.

     

    h.           The
      headings in this Agreement are for convenience of reference only and shall
      not
      form part of, or affect the interpretation of, this Agreement.

     

    i.           This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement
      and shall become effective when counterparts have been signed by each party
      and
      delivered to the other party.  This Agreement, once executed by a
      party, may be delivered to the other party hereto by facsimile transmission
      of a
      copy of this Agreement bearing the signature of the party so delivering this
      Agreement.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

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

     

    k.           Except
      as otherwise provided herein, all consents and other determinations to be made
      by the Investors pursuant to this Agreement shall be made by Investors holding
      a
      majority of the Registrable Securities, determined as if the all of the Notes
      then outstanding have been converted into for Registrable
      Securities.

     

    l.           The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to each Investor by vitiating the intent and purpose of the
      transactions contemplated hereby.  Accordingly, the Company
      acknowledges that the remedy at law for breach of its obligations under this
      Agreement will be inadequate and agrees, in the event of a breach or threatened
      breach by the Company of any of the provisions under this Agreement, that each
      Investor shall be entitled, in addition to all other available remedies in
      law
      or in equity, and in addition to the penalties assessable herein,  to
      an injunction or injunctions restraining, preventing or curing any breach of
      this Agreement and to enforce specifically the terms and provisions hereof,
      without the necessity of showing economic loss and without any bond or other
      security being required.

     

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

     

    


     

     

    


     

    


     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the
      Company and the undersigned Initial Investors have caused this Agreement to
      be
      duly executed as of the date first above written.

     

    TEXTECHNOLOGIES
      INC.

     

    


    By:
/s/
      Peter
      Maddocks                                            


    
      Peter
        Maddocks

      Chief
        Executive Officer

    

    


    


    AJW
      PARTNERS, LLC

     

    By:  SMS
      Group, LLC

     

    /s/
      Corey S.
      Ribotsky                                                


    Corey
      S.
      Ribotsky

     

    Manager

     

    AJW
      OFFSHORE,
      LTD.

    By:  First
      Street Manager II, LLC

    


    /s/
      Corey S.
      Ribotsky                                                

    Corey
      S.
      Ribotsky

    Manager

    


    


    AJW
      QUALIFIED PARTNERS,
      LLC

     

    By:  AJW
      Manager, LLC

     

    /s/
      Corey S.
      Ribotsky                                                

    Corey
      S.
      Ribotsky

    Manager

    


    


    NEW
      MILLENNIUM CAPITAL PARTNERS II,
      LLC

     

    By:  First
      Street Manager II, LLC

     

    /s/
      Corey S.
      Ribotsky                                                

    Corey
      S.
      Ribotsky

    Manager

     

    19