PLACEMENT AGENCY AGREEMENT

This Placement Agency Agreement (this"Agreement") is made and entered into as of October 13, 2006 (the "EffectiveDate"), by and between VillageEDOCS, a California corporation (the "Company"),and Stonegate Securities, Inc., a Texas corporation ("Stonegate").

WHEREAS, the Company desires to retainStonegate as its placement agent, and Stonegate is willing to act in suchcapacity, in each case subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of thepremises and the mutual covenants herein contained, the Company and Stonegate(each a "Party" and collectively, the "Parties") hereby agree as follows:

The representations and warranties of the Company made tothe Purchasers as set forth in the Subscription Documents are herebyincorporated by reference as of the date of consummation of the sale of theSecurities (the "Closing") and all such representations and warranties arehereby deemed made by the Company directly to Stonegate as though set forth infull herein.  The company represents and warrants that it has full power andauthority to enter into this Agreement and to perform its obligationshereunder.  This Agreement is enforceable against the Company in accordancewith its terms, subject to applicable laws governing bankruptcy, insolvency andcreditors' rights generally.  The Agreement does not conflict with, violate,cause a default, right of termination, or acceleration (whether through thepassage of time or otherwise) under any contract, agreement, or understandingbinding upon the Company or any subsidiary of the Company.

The Company covenants and agrees as follows:

The Company hereby agrees that, for a period of one yearfrom the end of the Contract Period or other termination of this Agreement, theCompany will not enter into any agreement, transaction or arrangement with anyof the institutions (including their agents, principals and affiliates and theaccounts and funds which they manage or advise) which Stonegate has introduced,directly or indirectly, to the Company pursuant to a direct meeting, ortelephone call as prospective purchasers of the Securities in the Placements(collectively, the "Stonegate Contacts"), regardless of whether a transactionis consummated with such prospective purchasers, unless the Company notifiesStonegate in writing of the agreement, transaction or arrangement, and paysStonegate a fee equal to the Agency Fee plus all other compensation underSection 6 of this Agreement for securities of the Company sold to StonegateContacts.

THIS AGREEMENT SHALL BECONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PROVISIONS THEREOF.

Stonegate and the Company will attempt to settle anyclaim or controversy arising out of this Agreement through consultation andnegotiation in good faith and a spirit of mutual cooperation.  Any disputewhich the parties cannot resolve may then be submitted by either party tobinding arbitration in Dallas, Texas under the rules of the AmericanArbitration Association for resolution.  Nothing in this paragraph will preventeither party from resorting to judicial proceedings if (a) good faith effortsto resolve the dispute under these procedures have been unsuccessful or (b)interim relief from a court is necessary to prevent serious and irreparableinjury.

The failure or neglect of any party hereto to insist, inany one or more instances, upon the strict performance of any of the terms orconditions of this Agreement, or waiver by any party of strict performance ofany of the terms or conditions of this Agreement, shall not be construed as awaiver or relinquishment in the future of such term or condition, but the sameshall continue in full force and effect.

The benefits of this Agreement shall inure to the benefitof the Parties, their respective successors, assigns and representatives, andthe obligations and liabilities assumed in this Agreement by the Parties shallbe binding upon their respective successors and assigns.  This Agreement maynot be assigned by either Party without the express written consent of theother Party, which consent shall not be unreasonably withheld.

All notices and other communications required orpermitted to be given under this Agreement shall be in writing and shall bedelivered personally or sent by certified mail, return receipt requested,recognized overnight delivery service, or facsimile (with copy by first classmail) as follows:

| If to the Company:  VillageEDOCS    14471 Chambers Rd., Suite 105

Tustin, California  92780  Facsimile: () 

Attention: Mason Conner, CEO |
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| If to Stonegate:  Stonegate Securities, Inc.    5940 Sherry Lane, Suite 410    Dallas, Texas  75225  Facsimile: (214) 987-1981  Attention: Scott Griffith, President |
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Either Party may change its address or facsimile numberset forth above by giving the other Party notice of such change in accordancewith the provisions of this Section 13. A notice shall be deemed given (a) ifby personal delivery, on the date of such delivery, (b) if by certified mail,on the date shown on the applicable return receipt, (c) if by overnightdelivery service, on the day after the date delivered to the service, or (d) ifby facsimile, on the date of transmission.

The Parties intend that Stonegate's relationship to theCompany and the relationship of each director, officer, employee or agent ofStonegate to the Company shall be that of an independent contractor and not asan employee of the Company or an affiliate thereof.  Nothing contained in thisAgreement shall constitute or be construed to be or create a partnership orjoint venture between Stonegate and the Company or their respective successorsor assigns.  Neither Stonegate nor any director, officer, employee or agent ofStonegate shall be considered to be an employee of the Company by virtue of theservices provided hereunder.

Stonegate's obligations under this Agreement are subjectto the following general conditions:

The Section titles herein are for reference purposes onlyand do not control or affect the meaning or interpretation of any term orprovision hereof.

No alteration, amendment, change or addition hereto shallbe binding or effective unless the same is set forth in a writing signed by aduly authorized representative of each Party.

If it is finally determined that any term or provisionhereof is invalid or unenforceable, (a) the remaining terms and provisionshereof shall be unimpaired, and (b) the invalid or unenforceable term or provisionshall be replaced by a term or provision that is valid and enforceable and thatcomes as close as possible to expressing the intention of the invalid orunenforceable term or provision.

This Agreement embodies the entire agreement andunderstanding of the Parties and supersedes any and all prior agreements,arrangements and understandings relating to the matters provided for herein.

#  20.       COUNTERPARTS.    

This Agreement may be executed in one or morecounterparts, each of which shall be an original, but all of which togethershall be considered one and the same agreement.

[Remainder of PageIntentionally Left Blank]

IN WITNESS WHEREOF, this Agreement has beenexecuted as of the date first written above by duly authorized representativesof the Company and Stonegate.

| VILLAGEEDOCS  By: /s/ H. Jay Hill____________  Title: Exec. V.P. _____________          |
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| STONEGATE SECURITIES,  INC.  By: /s/ Robert Blakeley__________  Title: Managing Director_________ |
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EXHIBIT AForm of Representative's Warrant

[See attached]

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOTBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIESACT"), OR ANY OTHER SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICHOPINION IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCHREGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.

| Date: ______________ |  | Warrant to Purchase

***______***

Shares |
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VILLAGEEDOCS(Incorporated under the laws of the State of California)REPRESENTATIVE'S WARRANT FOR THE PURCHASE OF SHARES OFCOMMON STOCK Warrant Price: [price for the Securities sold in the placement]$____ per share, subject to adjustment as provided below.

THIS IS TO CERTIFY that, for value received, StonegateSecurities, Inc. ("Stonegate") and its assigns (collectively, the "Holder"), isentitled to purchase, subject to the terms and conditions hereinafter setforth, up to ***______*** shares of the common stock, par value $________ pershare ("Common Stock"), of VillageEDOCS, a California corporation (the"Company"), and to receive certificate(s) for the Common Stock so purchased. 

###   1.              **Exercise Period and Vesting**.  The exercise period is the periodbeginning on the date of this Warrant (the "Issuance Date") and ending at 5:00p.m., Dallas, Texas time, five years from the Issuance Date (the "ExercisePeriod").  This Warrant is vested in full as of the Issuance Date and isimmediately exercisable by Holder.  This Warrant will terminateautomatically and immediately upon the expiration of the Exercise Period.

###   2.              **Exercise of Warrant; Cashless Exercise**.  This Warrant may beexercised, in whole or in part, at any time and from time to time during theExercise Period.  Such exercise shall be accomplished by tender to the Companyof the purchase price set forth above as the warrant price (the "WarrantPrice"), either (a) in cash, by wire transfer or by certified check or bankcashier's check, payable to the order of the Company, or (b) by surrenderingsuch number of shares of Common Stock received upon exercise of this Warrantwith a current market price equal to the Warrant Price (a "Cashless Exercise"),together with presentation and surrender to the Company of this Warrant with anexecuted subscription in substantially the form attached hereto as Exhibit A(the "Subscription"). Upon receipt of the foregoing, the Company will deliver tothe Holder, as promptly as possible, a certificate or certificates representingthe shares of Common Stock so purchased, registered in the name of the Holder orits transferee (as permitted under Section 3 below).  With respect to anyexercise of this Warrant, the Holder will for all purposes be deemed to havebecome the holder of record of the number of shares of Common Stock purchasedhereunder on the date this Warrant, a properly executed Subscription and paymentof the Warrant Price is received by the Company (the "Exercise Date"),irrespective of the date of delivery of the certificate evidencing such shares,except that, if the date of such receipt is a date on which the stock transferbooks of the Company are closed, such person will be deemed to have become theholder of such shares at the close of business on the next succeeding date onwhich the stock transfer books are open.  Fractional shares of Common Stockwill not be issued upon the exercise of this Warrant.  In lieu of anyfractional shares that would have been issued but for the immediately precedingsentence, the Holder will be entitled to receive cash equal to the currentmarket price of such fraction of a share of Common Stock on the trading dayimmediately preceding the Exercise Date.  In the event this Warrant isexercised in part, the Company shall issue a new Warrant to the Holder coveringthe aggregate number of shares of Common Stock as to which this Warrant remainsexercisable for.

If the Holder elects to conduct a CashlessExercise, the Company shall cause to be delivered to the Holder a certificateor certificates representing the number of shares of Common Stock computedusing the following formula:

| X = Y (A-B)               A  Where:               X   =    the number of shares of Common Stock to be issued to  Holder;               Y   =    the portion of the Warrant (in number of shares of  Common                            Stock) being exercised by Holder (at the date of  such                            calculation);               A   =    the fair market value of one share of Common Stock on  the                            Exercise Date (as calculated below); and                B   =    Warrant Price (as adjusted to the date of such  calculation). |
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For purposes of the foregoing calculation,"fair market value of one share of Common Stock on the Exercise Date" shallmean:  (i) if the principal trading market for such securities is a national orregional securities exchange, the closing price on such exchange for the dayimmediately prior to such Exercise Date; (ii) if sales prices for shares ofCommon Stock are reported by the Nasdaq National Market System or Nasdaq SmallCap Market (or a similar system then in use), the last reported sales price forthe day immediately prior to such Exercise Date; or (iii) if neither (i) nor(ii) above are applicable, and if bid and ask prices for shares of Common Stockare reported in the over-the-counter market by Nasdaq (or, if not so reported,by the National Quotation Bureau), the average of the high bid and low askprices so reported for the ten (10) trading days immediately prior to suchExercise Date.  Additionally, in the case of (i) or (ii) above, at the sole andexclusive election of Stonegate, in any of the foregoing calculations of the"fair market value of one share of Common Stock on the Exercise Date",Stonegate may elect to use either:  (a) the closing price or last reportedsales price, as the case may be, for the day immediately prior to the exercisedate, OR (b) the arithmetic mean average of the closing prices or last reportedsales prices, as the case may be, over the last ten (10) business days. Stonegate's election shall be used in calculating "the fair market value of oneshare of Common Stock on the Exercise Date" in the above calculation. Notwithstanding (i), (ii), and (iii) above, if there is no reported closingprice, last reported sales price, or bid and ask prices, as the case may be,for the period in question, then the current market price shall be determinedas of the latest ten (10) day period prior to such day for which such closingprice, last reported sales price, or bid and ask prices, as the case may be,are available, unless such securities have not been traded on an exchange or inthe over-the-counter market for 30 or more days immediately prior to the day inquestion, in which case the current market price shall be determined in goodfaith by, and reflected in a formal resolution of, the Board of Directors ofthe Company.  The Company acknowledges and agrees that this Warrant was issuedon the Issuance Date.

###   3.              **Transferability and Exchange**.

####   (a)            This Warrant, and the Common Stock issuable upon the exercise hereof,may not be sold, transferred, pledged or hypothecated unless the Company shallhave been provided with an opinion of counsel, or other evidence reasonablysatisfactory to it, that such transfer is not in violation of the SecuritiesAct, and any applicable state securities laws.  Subject to the satisfaction ofthe aforesaid condition, this Warrant and the underlying shares of Common Stockshall be transferable from time to time by the Holder upon written notice tothe Company.  If this Warrant is transferred, in whole or in part, the Companyshall, upon surrender of this Warrant to the Company, deliver to eachtransferee a Warrant evidencing the rights of such transferee to purchase thenumber of shares of Common Stock that such transferee is entitled to purchasepursuant to such transfer.  The Company may place a legend similar to thelegend at the top of this Warrant on any replacement Warrant and on eachcertificate representing shares issuable upon exercise of this Warrant or anyreplacement Warrants.  Only a registered Holder may enforce the provisions ofthis Warrant against the Company.  A transferee of the original registeredHolder becomes a registered Holder only upon delivery to the Company of theoriginal Warrant and an original Assignment, substantially in the form setforth in Exhibit B attached hereto.

####   (b)           This Warrant is exchangeable upon its surrender by the Holder to the Company fornew Warrants of like tenor and date representing in the aggregate the right topurchase the number of shares purchasable hereunder, each of such new Warrantsto represent the right to purchase such number of shares as may be designated bythe Holder at the time of such surrender.

###   4.              **Adjustments to Warrant Price and Number of Shares Subject to Warrant**. The Warrant Price and the number of shares of Common Stock purchasable upon theexercise of this Warrant are subject to adjustment from time to time upon theoccurrence of any of the events specified in this Section 4.  For thepurpose of this Section 4, "Common Stock" means shares now or hereafterauthorized of any class of common stock of the Company and any other stock ofthe Company, however designated, that has the right to participate in anydistribution of the assets or earnings of the Company without limit as to pershare amount (excluding, and subject to any prior rights of, any class or seriesof preferred stock).

####   (a)            In case the Company shall (i) pay a dividend or make a distribution inshares of Common Stock or other securities, (ii) subdivide its outstandingshares of Common Stock into a greater number of shares, (iii) combine itsoutstanding shares of Common Stock into a smaller number of shares, or (iv) issueby reclassification of its shares of Common Stock other securities of theCompany, then the Warrant Price in effect at the time of the record date forsuch dividend or on the effective date of such subdivision, combination orreclassification, and/or the number and kind of securities issuable on suchdate, shall be proportionately adjusted so that the Holder of any Warrantthereafter exercised shall be entitled to receive the aggregate number and kindof shares of Common Stock (or such other securities other than Common Stock) ofthe Company, at the same aggregate Warrant Price, that, if such Warrant had beenexercised immediately prior to such date, the Holder would have owned upon suchexercise and been entitled to receive by virtue of such dividend, distribution,subdivision, combination or reclassification.  Such adjustment shall bemade successively whenever any event listed above shall occur.   

####   (b)           In case the Company shall fix a record date for the making of a distribution toall holders of Common Stock (including any such distribution made in connectionwith a consolidation or merger in which the Company is the survivingcorporation) of cash, evidences of indebtedness or assets, or subscriptionrights or warrants, the Warrant Price to be in effect after such record dateshall be determined by multiplying the Warrant Price in effect immediately priorto such record date by a fraction, the numerator of which shall be the currentmarket price per share of Common Stock on such record date, less the amount ofcash so to be distributed (or the fair market value (as determined in good faithby, and reflected in a formal resolution of, the Board of Directors of theCompany) of the portion of the assets or evidences of indebtedness so to bedistributed, or of such subscription rights or warrants, applicable to one shareof Common Stock, and the denominator of which shall be such current market priceper share of Common Stock.  Such adjustment shall be made successivelywhenever such a record date is fixed; and in the event that such distribution isnot so made, the Warrant Price shall again be adjusted to be the Warrant Pricewhich would then be in effect if such record date had not been fixed.

####   (c)            For the purpose of any computation under any subsection of this Section4, the "current market price" per share of Common Stock on any date shall bethe per share price of the Common Stock on the trading day immediately prior tothe event requiring an adjustment hereunder and shall be:  (i) if the principaltrading market for such securities is a national or regional securitiesexchange, the closing price on such exchange on such day; or (ii) if salesprices for shares of Common Stock are reported by the Nasdaq National MarketSystem or Small Cap Market System (or a similar system then in use), the lastreported sales price so reported on such day; or (iii) if neither (i) nor (ii)above are applicable, and if bid and ask prices for shares of Common Stock arereported in the over-the-counter market by Nasdaq (or, if not so reported, bythe National Quotation Bureau), the average of the high bid and low ask pricesso reported on such day.  Notwithstanding the foregoing, if there is noreported closing price, last reported sales price, or bid and ask prices, as thecase may be, for the day in question, then the current market price shall bedetermined as of the latest date prior to such day for which such closing price,last reported sales price, or bid and ask prices, as the case may be, areavailable, unless such securities have not been traded on an exchange or in theover-the-counter market for 30 or more days immediately prior to the day inquestion, in which case the current market price shall be determined in goodfaith by, and reflected in a formal resolution of, the Board of Directors of theCompany.    

####   (d)           Notwithstanding any provision herein to the contrary, no adjustment in theWarrant Price shall be required unless such adjustment would require an increaseor decrease of at least 1% in the Warrant Price; provided, however, that anyadjustments which by reason of this subsection (d) are not required to be madeshall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 4 shall be made to the nearest cent or thenearest one-hundredth of a share, as the case may be.

####   (e)            In the event that at any time, as a result of an adjustment made pursuant tosubsection (a) above, the Holder of any Warrant thereafter exercised shallbecome entitled to receive any shares of capital stock of the Company other thanshares of Common Stock, thereafter the number of such other shares so receivableupon exercise of any Warrant shall be subject to adjustment from time to time ina manner and on terms as nearly equivalent as practicable to the provisions withrespect to the shares of Common Stock contained in this Section 4, and the otherprovisions of this Warrant shall apply on like terms to any such other shares.

####   (f)            If the Company merges or consolidates into or with another corporationor entity, or if another corporation or entity merges into or with the Company(excluding such a merger in which the Company is the surviving or continuingcorporation and which does not result in any reclassification, conversion,exchange, or cancellation of the outstanding shares of Common Stock), or if allor substantially all of the assets or business of the Company are sold ortransferred to another corporation, entity, or person, then, as a condition tosuch consolidation, merger, or sale (a "Transaction"), lawful and adequateprovision shall be made whereby the Holder shall have the right from and afterthe Transaction to receive, upon exercise of this Warrant and upon the termsand conditions specified herein and in lieu of the shares of the Common Stockthat would have been issuable if this Warrant had been exercised immediatelybefore the Transaction, such shares of stock, securities, or assets as theHolder would have owned immediately after the Transaction if the Holder hadexercised this Warrant immediately before the effective date of the Transaction.

###   5.              **Registration Rights**.  The Company hereby grants to Holder, withrespect to the shares of Common Stock underlying this Warrant, registrationrights identical to those that are granted to Purchasers in the Placement (assuch terms are defined in that certain Placement Agency Agreement, dated as of__________, by and between the Company and Stonegate); it being specificallyagreed and understood that the shares of Common Stock underlying this Warrantwill be included in any registration statement filed by the Company whichincludes shares of Common Stock, or shares of Common Stock underlying anysecurities, issued to Purchasers in the Placement.    

###   6.              **Reservation of Shares**.  The Company agrees at all times toreserve and hold available out of its authorized but unissued shares of CommonStock the number of shares of Common Stock issuable upon the full exercise ofthis Warrant.  The Company further covenants and agrees that all shares ofCommon Stock that may be delivered upon the exercise of this Warrant will, upondelivery, be fully paid and nonassessable and free from all taxes, liens andcharges with respect to the purchase thereof hereunder.

###   7.              **Notices to Holder**.  Upon any adjustment of the Warrant Price (ornumber of shares of Common Stock purchasable upon the exercise of this Warrant)pursuant to Section 4, the Company shall promptly thereafter cause to be givento the Holder written notice of such adjustment.  Such notice shall include theWarrant Price (and/or the number of shares of Common Stock purchasable upon theexercise of this Warrant) after such adjustment, and shall set forth inreasonable detail the Company's method of calculation and the facts upon whichsuch calculations were based.  Where appropriate, such notice shall be given inadvance and included as a part of any notice required to be given under theother provisions of this Section 7.    

In the event of (a) any fixing by the Companyof a record date with respect to the holders of any class of securities of theCompany for the purpose of determining which of such holders are entitled todividends or other distributions, or any rights to subscribe for, purchase orotherwise acquire any shares of capital stock of any class or any othersecurities or property, or to receive any other right, (b) any capitalreorganization of the Company, or reclassification or recapitalization of thecapital stock of the Company or any transfer of all or substantially all of theassets or business of the Company to, or consolidation or merger of the Companywith or into, any other entity or person, or (c) any voluntary or involuntarydissolution or winding up of the Company, then and in each such event theCompany will give the Holder a written notice specifying, as the case may be(i) the record date for the purpose of such dividend, distribution, or right,and stating the amount and character of such dividend, distribution, or right;or (ii) the date on which any such reorganization, reclassification,recapitalization, transfer, consolidation, merger, conveyance, dissolution,liquidation, or winding up is to take place and the time, if any is to befixed, as of which the holders of record of Common Stock (or such capital stockor securities receivable upon the exercise of this Warrant) shall be entitledto exchange their shares of Common Stock (or such other stock securities) forsecurities or other property deliverable upon such event.  Any such noticeshall be given at least 10 days prior to the earliest date therein specified.

###   8.              **No Rights as a Stockholder**.  This Warrant does not entitle theHolder to any voting rights or other rights as a stockholder of the Company, norto any other rights whatsoever except the rights herein set forth.

###   9.              **Additional Covenants of the Company**.  For so long as the CommonStock is listed for trading on any regional or national securities exchange orNasdaq (National Market or Small Cap System), the Company shall, upon issuanceof any shares for which this Warrant is exercisable, at its expense, promptlyobtain and maintain the listing of such shares.  The Company shall alsocomply with the reporting requirements of Sections 13 and 15(d) of the ExchangeAct for so long as and to the extent that such requirements apply to the Company.

The Company shall not, by amendment of itsArticles of Incorporation or through any reorganization, transfer of assets,consolidation, merger, dissolution, issue or sale of securities, or any othervoluntary action, avoid or seek to avoid the observance or performance of anyof the terms of this Warrant.  Without limiting the generality of theforegoing, the Company (a) will at all times reserve and keep available, solelyfor issuance and delivery upon exercise of this Warrant, shares of Common Stockissuable from time to time upon exercise of this Warrant, (b) will not increasethe par value of any shares of capital stock receivable upon exercise of thisWarrant above the amount payable therefor upon such exercise, and (c) will takeall such actions as may be necessary or appropriate in order that the Companymay validly and legally issue fully paid and nonassessable stock. 

### 10.           **Successors and Assigns**.  This Agreement shall be binding upon andinure to the benefit of the Company, the Holder and their respective successorsand permitted assigns.>11.           **Notices**.  The Company agrees to maintain a ledger of theownership of this Warrant (the "Ledger").  Any notice hereunder shall be givenby registered or certified mail if to the Company, at its principal executiveoffice and, if to the Holder, to its address shown in the Ledger of theCompany; provided, however, that the Holder may at any time on three (3) dayswritten notice to the Company designate or substitute another address wherenotice is to be given.  Notice shall be deemed given and received after acertified or registered letter, properly addressed with postage prepaid, isdeposited in the U.S. mail.   

###   12.           **Severability**.  Every provision of this Warrant is intended to beseverable. If any term or provision hereof is illegal or invalid for any reasonwhatsoever, such illegality or invalidity shall not affect the remainder of thisWarrant.

###   13.           **Governing Law**.  This Warrant shall be governed by and construed inaccordance with the laws of the State of Texas without giving effect to theprinciples of choice of laws thereof.

###   14.           **Attorneys' Fees**.  In any action or proceeding brought to enforce anyprovision of this Warrant, the prevailing party shall be entitled to recoverreasonable attorneys' fees in addition to its costs and expenses and any otheravailable remedy.

###   15.           **Entire Agreement**.  This Warrant (including the Exhibits attachedhereto) constitutes the entire understanding between the Company and the Holderwith respect to the subject matter hereof, and supersedes all priornegotiations, discussions, agreements and understandings relating to suchsubject matter.

IN WITNESS WHEREOF, the Company has caused thisWarrant to be executed by its duly authorized officer as of the date first setforth above.

| VILLAGEEDOCS  By: _______________________________   Title:______________________________ |
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Exhibit ASUBSCRIPTION FORM

(To be Executed by the Holder to Exercise the Rights ToPurchase Common Stock Evidenced by the Within Warrant)

The undersigned hereby irrevocably subscribesfor _______ shares (the "Stock") of the Common Stock of VillageEDOCS (the"Company") pursuant to and in accordance with the terms and conditions of theattached Warrant (the "Warrant"), and hereby makes payment of $_______ thereforby [tendering cash, wire transferring or delivering a certified check or bankcashier's check, payable to the order of the Company] [surrendering _______shares of Common Stock received upon exercise of the Warrant, which shares havea current market price equal to such payment as required in Section 2 of theWarrant].  The undersigned requests that a certificate for the Stock be issued inthe name of the undersigned and be delivered to the undersigned at the addressstated below.  If the Stock is not all of the shares purchasable pursuant tothe Warrant, the undersigned requests that a new Warrant of like tenor for thebalance of the remaining shares purchasable thereunder be delivered to theundersigned at the address stated below.

In connection with the issuance of the Stock, Ihereby represent to the Company that I am acquiring the Stock for my ownaccount for investment and not with a view to, or for resale in connectionwith, a distribution of the shares within the meaning of the Securities Act of1933, as amended (the "Securities Act"). 

I understand that because the Stock has notbeen registered under the Securities Act, I must hold such Stock indefinitelyunless the Stock is subsequently registered and qualified under the SecuritiesAct or is exempt from such registration and qualification. I shall make notransfer or disposition of the Stock unless (a) such transfer or disposition canbe made without registration under the Securities Act by reason of a specificexemption from such registration and such qualification, or (b) a registrationstatement has been filed pursuant to the Securities Act and has been declaredeffective with respect to such disposition.  I agree that each certificaterepresenting the Stock delivered to me shall bear substantially the same as setforth on the front page of the Warrant.

I agree that each certificate representing theStock delivered to me shall bear substantially the same legend as set forth onthe front page of the Warrant.

I further agree that the Company may place stoporders on the certificates evidencing the Stock with the transfer agent, ifany, to the same effect as the above legend.  The legend and stop transfernotice referred to above shall be removed only upon my furnishing to theCompany of an opinion of counsel (reasonably satisfactory to the Company) tothe effect that such legend may be removed.

| Date:______________________ | Signed:_________________________   Address:________________________ 

 _______________________________ |
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Exhibit BASSIGNMENT(To be Executed by the Holder to Effect Transfer of the Attached Warrant)

For ValueReceived __________________________ hereby sells, assigns and transfers to_________________________ the Warrant attached hereto and the rightsrepresented thereby to purchase _________ shares of Common Stock in accordancewith the terms and conditions hereof, and does hereby irrevocably constituteand appoint _________________________ as attorney to transfer such Warrant onthe books of the Company with full power of substitution.

Dated:________________________             Signed:_____________________________

| Please print or  typewrite  name and address of  assignee:________________________ ________________________ ________________________ |  | Please insert Social  Security  or other Tax Identification  Number of Assignee:___________________________________ |
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APPENDIX IRegistration Rights 

###   1.              "**Affiliate**," of any specified Person means any other Person whodirectly, or indirectly through one or more intermediaries, is in control of, iscontrolled by, or is under common control with, such specified Person.  Forpurposes of this definition, control of a Person means the power, directly orindirectly, to direct or cause the direction of the management and policies ofsuch Person whether by contract, securities ownership or otherwise; and theterms "controlling" and "controlled" have the respective meanings correlative tothe foregoing.

###   2.              "**Commission**" means the Securities and Exchange Commission.

###   3.              "**Company**" shall mean VillageEDOCS

###   4.              "**Exchange Act**" means the Securities Exchange Act of 1934, asamended, and the rules and regulations of the Commission thereunder, or anysimilar successor statute.

###   5.              "**Holder**" means Stonegate Securities, Inc. and any permittedtransferee or assignee of Registrable Securities who agrees to become bound byall of the terms and provisions of this Appendix I.

###   6.              "**Person**" means any individual, partnership, corporation, limitedliability company, joint stock company, association, trust, unincorporatedorganization, or a government agency or political subdivision thereof.

###   7.              "**Placement**" means any offering of securities of the Companypursuant to which Holder serves as a placement agent or underwriter, whether ona best efforts basis or otherwise.     

###   8.              "**Prospectus**" means the prospectus (including any preliminaryprospectus and/or any final prospectus filed pursuant to Rule 424(b) under theSecurities Act and any prospectus that discloses information previously omittedfrom a prospectus filed as part of an effective registration statement in relianceon Rule 430A under the Securities Act) included in the Registration Statement,as amended or supplemented by any prospectus supplement with respect to theterms of the offering of any portion of the Registrable Securities covered bythe Registration Statement and by all other amendments and supplements to suchprospectus, including all material incorporated by reference in such prospectusand all documents filed after the date of such prospectus by the Company underthe Exchange Act and incorporated by reference therein.

###   9.              "**Public Offering**" means an offer registered with the Commission andthe appropriate state securities commissions by the Company of its Common Stockand made pursuant to the Securities Act.

###   10.           "**Registrable Securities**" means the shares of common stock issuedto Stonegate Securities, Inc. or its designated affiliates pursuant to theterms of the Placement Agency Agreement; provided, however, a share of commonstock shall cease to be a Registrable Security for purposes of this Appendix Iwhen it no longer is a Restricted Security.

###   11.           "**Registration Statement**" means a registration statement of theCompany filed on Form S-3 under the Securities Act providing for theregistration of, and the sale on a continuous or delayed basis by the holdersof, all of the Registrable Securities pursuant to Rule 415 under the SecuritiesAct, including the Prospectus contained therein and forming a part thereof, anyamendments to such registration statement and supplements to such Prospectus,and all exhibits and other material incorporated by reference in suchregistration statement and Prospectus.  In the event that Form S-3 isunavailable for such a registration, the Company shall use such other form as isavailable for such a registration.

###   12.           "**Restricted Security**" means any share of common stock except anythat (i) have been registered pursuant to an effective registration statementunder the Securities Act and sold in a manner contemplated by the prospectusincluded in such registration statement, (ii) have been transferred incompliance with the resale provisions of Rule 144 under the Securities Act (orany successor provision thereto) or is transferable pursuant to paragraph (k) ofRule 144 under the Securities Act (or any successor provision thereto), or (iii)otherwise has been transferred and are not subject to transfer restrictionsunder the Securities Act.

###   13.           "**Securities Act**" means the Securities Act of 1933, as amended, andthe rules and regulations of the Commission thereunder, or any similar successorstatute.

As used in this Section 2(b), "Computation Date" means thedate which is 90 days after the Initial Date and, if the Registration Statementto be filed by the Company pursuant to Section 2(a) has not theretofore beenfiled with the Commission or declared effective by the Commission, as the casemay be, each date which is 90 days after the previous Computation Date untilsuch Registration Statement is so filed or declared effective, as the case maybe.  Notwithstanding the above, if the Registration Statement covering theRegistrable Securities required to be filed by the Company pursuant to Section2(a) hereof is not filed with the Commission by the Filing Deadline, theCompany shall be in default of the terms of this Appendix I, and the Holdersshall be entitled to damages as set forth above.

(i)        Whenever the Companyproposes to register any of its Common Shares or any other common shares of theCompany under the Securities Act (other than a registration (A) pursuant to ademand registration under Section 2(a) herein, (B) on Form S-4 or otherappropriate, applicable form, including any successor or similar form(s), (C)relating to Common Shares or any other common shares of the Company issuableupon exercise of employee or consultant share options or in connection with anyemployee benefit or similar plan of the Company or (D) in connection with adirect or indirect acquisition by the Company of another Person or anytransaction with respect to which Rule 145 (or any successor provision) underthe Securities Act applies), whether or not for sale for its own account, itwill each such time, give prompt written notice at least 20 days prior to theanticipated filing date of the registration statement relating to suchregistration to the Holders, which notice shall set forth such Holders' rightsunder this Section 2(c) and shall offer the Holders the opportunity to includein such registration statement such number of Registrable Securities as theHolders may request.  Upon the written request of a Holder made within 10 daysafter the receipt of notice from the Company (which request shall specify thenumber of Registrable Securities intended to be disposed of by such Holders),the Company will use its best efforts to effect the registration under theSecurities Act of all Registrable Securities that the Company has been sorequested to register by the Holders, to the extent requisite to permit thedisposition of the Registrable Securities to be so registered; provided,however, that (A) if such registration involves a Public Offering, the Holdersmust sell their Registrable Securities to the underwriters on the same termsand conditions as apply to the Company and (B) if, at any time after givingwritten notice of its intention to register any Registrable Securities pursuantto this Section 2(c) and prior to the effective date of the registrationstatement filed in connection with such registration, the Company shalldetermine for any reason not to register such Registrable Securities, theCompany shall give written notice to the Holders and, thereupon, shall berelieved of its obligation to register any Registrable Securities in connectionwith such registration.  The Company's obligations under this Section 2(c)shall terminate on the date that the registration statement to be filed inaccordance with Section 2(a) is declared effective by the Commission. 

(ii)       If a registrationpursuant to this Section 2(c) involves a Public Offering and the managingunderwriter thereof advises the Company that, in its view, the number of CommonShares, if any, or other Common Shares that the Company and the Holders intendto include in such registration exceeds the largest number of Common Shares(including any other Common Shares or warrants of the Company) that can be soldwithout having an adverse effect on such Public Offering (the "MaximumOffering Size"), the Company will include in such registration only thatnumber of Common Shares which does not exceed the Maximum Offering Size, in thefollowing order of priorities: (1) first, all securities the Company proposesto sell for its own account, (2) second, up to the full number of securitiesproposed to be registered for the account of the holders of securities entitledto inclusion of their securities in the Registration Statement by reason ofdemand registration rights, and (3) third, the securities requested to beregistered by other holders of securities entitled to participate in theregistration, drawn from them pro-rata based on the number of shares each hasrequested to be included in such registration and the Holders pursuant to thisAppendix I.

If as a result of the proration provisions of this Section2(c)(ii), the Holders are not entitled to include all such RegistrableSecurities in such registration, such Holders may elect to withdraw theirrequest to include any Registrable Securities in such registration.  

Notwithstanding the foregoing, the Company shall have no obligationsunder this Section 2(c) hereof at any time that such Registrable Securities arethe subject of an effective registration statement.  

Notwithstanding the foregoing, the Company shall have noobligations under Section 3(l) through (q) unless it is effecting anunderwritten offering pursuant to Section 2(c).

| if to the Company, to: | VillageEDOCS    14471 Chambers Rd., Suite 105

Tustin, California  92780  Facsimile: ()  Attention: Mason Conner, CEO |
|------------------------|----------------------------------------------------------------------------------------------------------------------------|

| if to the Holders, to: | Stonegate Securities, Inc.

5940 Sherry Lane, Suite 410

Dallas, Texas 75225

Facsimile: (214) 987-1981

Attn: Scott Griffith, President |
|------------------------|------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                          |

The Company or any Holder may change the foregoing addressby notice given pursuant to this Section 10(c).

## (e)            This Appendix I shall be governed by and interpreted in accordance with the lawsof the State of Texas.

APPENDIX 2

EXCLUDEDPARTIES-AS DEFINED IN SECTION 6(f)

Dan Doyle

Larry Morgan

Al Williams

Joan Williams

Jim Townsend

Tommy Thorn

Richard Cohen

Rick Salas

Any bank note guaranteed by one of the above