FORM OF

                          REGISTRATION RIGHTS AGREEMENT


         THIS REGISTRATION RIGHTS AGREEMENT  ("Agreement") is entered into as of
September  ___,  2000,  by and  between SI  DIAMOND  TECHNOLOGY,  INC.,  a Texas
corporation  (the  "Company")  and the  subscriber  (hereinafter  referred to as
"Subscriber" or "Investor") to the Company's offering ("Offering") of its Common
Stock pursuant to the Regulation D Subscription  Agreements  between the Company
and the Subscriber (the "Subscription Agreements") executed as of September ___,
2000.

         1.       Definitions. For purposes of this Agreement:
                  -----------

                  (a) The terms  "register",  "registered,"  and  "registration"
refer  to a  registration  effected  by  preparing  and  filing  a  registration
statement or similar  document with the Securities and Exchange  Commission (the
"SEC") in compliance with the Securities Act of 1933, as amended (the "Act") and
pursuant to Rule 415 under the Act or any successor rule, and the declaration or
ordering of effectiveness of such registration statement or document;

                  (b) The term "Registrable  Securities" means the shares of the
Company's  Common Stock,  together with any capital stock issued in  replacement
of, in exchange  for or  otherwise  in respect of such Common Stock (the "Common
Stock"),  issued to Subscriber in the offering as identified in the Subscription
Agreements);

                  (c) The term  "Holder"  means any person  owning or having the
right to acquire Registrable Securities or any permitted assignee thereof;

                  (d) The terms "Offering" and "Closing" shall have the meanings
ascribed to them in the Subscription Agreements.

         2.       Voluntary Registration.
                  ----------------------

                  (a) Notwithstanding any other obligation as identified in this
Agreement,  the Company  shall use its  reasonable  best efforts to  voluntarily
register all of the  Registrable  Securities  received by the Holder pursuant to
the Subscription  Agreements (the "Holder's Shares") under the Act and any state
acts  within  forty-five  (45)  days  from  the  date  of  this  Agreement  (the
"Post-Effective  Amendment  Registration  Period")  by  filing a  post-effective
amendment to the Company's  Registration  Statement on Form S-3 previously filed
with the SEC on July 17, 2000 (the "Registration Statement").

                  (b) The Holder whose Holder's Shares are to be included in any
registration  statement or amended  registration to be filed by the Company with
the SEC pursuant to the Act and this  Agreement  shall  furnish the Company with
such appropriate  information as the Company shall reasonably request in writing
concerning  the  Holder as is




<PAGE>

necessary for the Company to comply with the disclosure requirements of the Act,
and the rules and regulations  promulgated  thereunder.  Following the effective
date of any such registration statement,  the Company shall, upon the reasonable
request  of  the  Holder,   supply  such  number  of  prospectuses  meeting  the
requirements  of the Act as shall be  requested  by such  Holder to permit  such
Holder  to make a public  offering  of all the  shares of such  Holder  included
therein.  The Company shall  exercise good faith efforts to qualify the Holder's
Shares for sale in such states as the Holder shall reasonably designate.

         3. Obligations to Increase the Number of Available Shares. In the event
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that the number of shares  available  under the  amendment  to the  Registration
Statement to be filed pursuant to Section 2 above is  insufficient  to cover all
of the Holder's Registrable Securities then outstanding, then:

                  (a) If the Company's efforts pursuant to the foregoing Section
2(a) result in less than seventy-five percent (75%) of the Holder's Shares being
registered  under the Act,  then and in that event,  the Company  shall use it's
best reasonable efforts to file a new registration  statement so as to cover all
of the Holder's Shares then  outstanding.  The Company shall file such amendment
or new registration  within sixty (60) days of the date that the  Post-Effective
Amendment Registration Period under Section 2 expires; or

                  (b) If the Company's  efforts pursuant to the foregoing clause
(a) result in  seventy-five  percent (75%) or more of the Holder's  Shares being
registered  under the Act,  then and in that  event,  if the Company at any time
thereafter elects, or proposes,  to register any of its authorized capital stock
under the Act with the SEC  pursuant  to which  shares of the  Company's  Common
Stock owned by any  shareholder  of the Company may be  registered,  the Company
shall give prompt  written notice (the  "Registration  Notice") to the Holder of
its intentions to register the Common Stock.  Within fifteen (15) days after the
Registration  Notice shall have been given to the Holder,  the Holder shall give
written  notice to the Company  (the  "Holder's  Notice")  stating the number of
Registrable  Shares the Holder  desires the Company to  register  (the  Holder's
Shares"). The Company shall use its best efforts to register the Holder's Shares
under the Act and any state acts.

                  (c) Anything contained herein to the contrary notwithstanding,
the  Company  has the right to  withdraw  and  discontinue  registration  of the
Holder's Shares at any time prior to the effective date of any such registration
statement  if  the   registration   of  the  Holder's  Shares  is  withdrawn  or
discontinued.

         4.       Obligations of the Company.  Whenever  required under this
                  --------------------------
Agreement to effect the registration of any Registrable Securities,  the Company
shall, as expeditiously as reasonably possible:

                  (a)  Prepare  and file with the SEC a  registration  statement
with respect to such  Registrable  Securities  and use its best efforts to cause
such registration statement to become effective.

<PAGE>

                  (b)  Prepare  and  file  with  the  SEC  such  amendments  and
supplements to such registration statement and the prospectus used in connection
with  such  registration  statement  as may be  necessary  to  comply  with  the
provisions of the Act with respect to the disposition of all securities  covered
by such registration statement.

                  (c) With respect to any registration  statement filed pursuant
to this Agreement,  keep such registration statement effective until the earlier
of (i) the date upon which the Holders of Registrable Securities covered by such
registration statement shall have sold such Registrable Securities;  or (ii) one
(1) year after the date of the Closing of the Offering.

                  (d)  Furnish  to the  Holders  such  numbers  of  copies  of a
prospectus,   including  a  preliminary  prospectus,   in  conformity  with  the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.

                  (e)  Use  its  best   efforts  to  register  and  qualify  the
securities covered by such registration statement under such other securities or
Blue Sky laws of such  jurisdictions  as shall be  reasonably  requested  by the
Holders of the Registrable  Securities  covered by such registration  statement,
provided that the Company shall not be required in connection  therewith or as a
condition  thereto  to qualify to do  business  or to file a general  consent to
service of process in any such states or jurisdictions.

                  (f) As promptly as  practicable  after  becoming aware of such
event, notify each Holder of the happening of any event of which the Company has
knowledge,  as a result of which the  prospectus  included  in the  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material  fact  required to be stated  therein or  necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading,  and use its best efforts promptly to prepare a supplement
or amendment to the  Registration  Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request.

                  (g) Provide  Holders  with  written  notice of the date that a
registration  statement registering the resale of the Registrable  Securities is
declared effective by the SEC.

                  (h) Provide Holders and their  representatives the opportunity
to conduct a reasonable due diligence inquiry of Company's  pertinent  financial
and other records and make  available its officers,  directors and employees for
questions  regarding such information as it relates to information  contained in
the registration  statement,  subject to all information received by the Holders
and their representatives being kept confidential.

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<PAGE>

         5.  Furnish  Information.  It shall  be a  condition  precedent  to the
             --------------------
obligations  of the Company to take any action  pursuant to this  Agreement with
regard to each selling  Holder that such selling  Holders  shall  furnish to the
Company such information regarding themselves,  the Registrable  Securities held
by them, and the intended  method of disposition of such  securities as shall be
required  to effect  the  registration  of their  Registrable  Securities  or to
determine  that  registration  is not  required  pursuant  to Rule  144 or other
applicable provision of the Act.

         6.  Expenses of  Registration.  All expenses,  other than  underwriting
             -------------------------
discounts  and  commissions  and fees and  expenses  of counsel  to the  selling
Holders,  incurred in connection with the  registrations  pursuant to Section 2,
including (without limitation) all registration,  filing and qualification fees,
printers'  and  accounting  fees,  fees and  disbursements  of  counsel  for the
Company, shall be borne by the Company.

         7.       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
and hold  harmless each Holder,  the officers and directors of each Holder,  any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls  such  Holder  or  underwriter  within  the  meaning  of the Act or the
Securities  Exchange  Act of 1934,  as amended  (the "1934  Act"),  against  any
losses,  claims,  damages,  or liabilities  (joint or several) to which they may
become  subject  under  the Act,  the 1934 Act or other  federal  or state  law,
insofar as such losses,  claims,  damages, or liabilities (or actions in respect
thereof)  arise  out of or are  based  upon  any  of the  following  statements,
omissions or violations  (collectively a "Violation"):  (i) any untrue statement
or alleged untrue  statement of a material fact  contained in such  registration
statement,  including any preliminary  prospectus or final prospectus  contained
therein or any amendments or supplements  thereto,  (ii) the omission or alleged
omission to state  therein a material  fact  required to be stated  therein,  or
necessary to make the statements therein not misleading,  or (iii) any violation
by the Company of the Act, the 1934 Act, any state securities law or any rule or
regulation  promulgated under the Act, the 1934 Act or any state securities law;
and  the  Company  will  reimburse  each  such  Holder,   officer  or  director,
underwriter  or controlling  person for any legal or other  expenses  reasonably
incurred by them in connection  with  investigating  or defending any such loss,
claim,  damage,  liability,  or action;  provided,  however,  that the indemnity
agreement  contained in this  subsection 7(a) shall not apply to amounts paid in
settlement  of any such  loss,  claim,  damage,  liability,  or  action  if such
settlement is effected  without the consent of the Company  (which consent shall
not be unreasonably withheld),  nor shall the Company be liable in any such case
for any such loss,  claim,  damage,  liability,  or action to the extent that it
arises out of or is based upon a Violation  which occurs in reliance upon and in
conformity with written  information  furnished  expressly for use in connection
with such  registration by any such Holder,  officer,  director,  underwriter or
controlling person.

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<PAGE>

                  (b) To the  extent  permitted  by law,  each  selling  Holder,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors,  each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act, any
underwriter  and any  other  Holder  selling  securities  in  such  registration
statement or any of its  directors  or officers or any person who controls  such
Holder, against any losses,  claims,  damages, or liabilities (joint or several)
to which the  Company or any such  director,  officer,  controlling  person,  or
underwriter or controlling person, or other such Holder or director,  officer or
controlling  person may  become  subject,  under the Act,  the 1934 Act or other
federal or state law, insofar as such losses,  claims,  damages,  or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, 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 by such
Holder  expressly for use in connection  with such  registration;  and each such
Holder will  reimburse any legal or other  expenses  reasonably  incurred by the
Company and any such  director,  officer,  controlling  person,  underwriter  or
controlling person, other Holder,  officer,  director,  or controlling person in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability, or action; provided,  however, that the indemnity agreement contained
in this  subsection  7(b) shall not apply to amounts paid in  settlement  of any
such loss,  claim,  damage,  liability or action if such  settlement is effected
without the  consent of the  Holder,  which  consent  shall not be  unreasonably
withheld;  provided, that, in no event shall any indemnity under this subsection
7(b) exceed the net purchase  price of securities  sold by such Holder under the
registration statement.

                  (c) Promptly after receipt by an indemnified  party under this
Section  7  of  notice  of  the  commencement  of  any  action   (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made  against any  indemnifying  party under this Section 7, 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  the  defense  thereof  with  counsel  mutually
satisfactory to the parties; provided,  however, that an indemnified party shall
have the right to retain its own counsel,  with the reasonably incurred fees and
expenses  of  one  such  counsel  to be  paid  by  the  indemnifying  party,  if
representation  of  such  indemnified  party  by  the  counsel  retained  by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel  in such  proceeding.  The  failure  to  deliver  written  notice to the
indemnifying  party within a  reasonable  time of the  commencement  of any such
action, if prejudicial to its ability to defend such action,  shall relieve such
indemnifying  party of any liability to the indemnified party under this Section
7, but the omission so to deliver written notice to the indemnifying  party will
not  relieve  it of any  liability  that it may  have to any  indemnified  party
otherwise than under this Section 7.

                  (d) In the event that the indemnity  provided in paragraph (a)
or (b) of this Section 7 is unavailable to or  insufficient  to hold harmless an
indemnified  party for any


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<PAGE>

reason,  the  Company  and  each  Holder  of  Registrable  Securities  agree  to
contribute to the aggregate claims,  losses,  damages and liabilities (including
legal or other expenses  reasonably incurred in connection with investigating or
defending same) (collectively  "Losses") to which the Company and one or more of
the Holders of Registrable  Securities  may be subject in such  proportion as is
appropriate  to reflect  the  relative  fault of the  Company and the Holders in
connection  with the  statements  or  omissions  which  resulted in such Losses;
provided,  however,  that in no case  shall any  Holder be  responsible  for any
amount in excess of the net purchase  price of  securities  sold by it under the
registration  statement.  Relative  fault shall be  determined  by  reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by the  Holders.  The  Company  and the Holders  agree that it
would not be just and  equitable if  contribution  were  determined  by pro rata
allocation or any other method of allocation  which does not take account of the
equitable  considerations  referred to above.  Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution  from any
person who was not guilty of such fraudulent misrepresentation.  For purposes of
this  Section 7, each  person who  controls a holder of  Registrable  Securities
within the meaning of either the Act or the 1934 Act and each director, officer,
partner,  employee  and  agent  of a  Holder  shall  have  the  same  rights  to
contribution as such holder, and each person who controls the Company within the
meaning of either the Act or the 1934 Act and each director of the Company,  and
each  officer of the Company who has signed the  registration  statement,  shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).

                  (e) The  obligations  of the Company  and  Holders  under this
Section 7 shall survive the  redemption  and  conversion,  if any, of the Common
Stock,   the  completion  of  any  offering  of  Registrable   Securities  in  a
registration statement under this Agreement, and otherwise.

         8. Reports Under Securities Exchange Act of 1934. With a view to making
            ---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated  under the Act and
any other rule or  regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without  registration,  the Company
agrees to:

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

                  (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and

                  (c)  furnish to any  Holder,  so long as the  Holder  owns any
Registrable  Securities,  forthwith upon request (i) a written  statement by the
Company,  if true,  that it has complied with the reporting  requirements of SEC
Rule 144,  the Act and the 1934 Act,  (ii) a copy of the most  recent  annual or
quarterly report of the Company and such other reports and



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<PAGE>

documents so filed by the Company,  and (iii) such other  information  as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration.

         9.  Notices.  All notices  required or permitted  under this  Agreement
             -------
shall be made in writing signed by the party making the same,  shall specify the
section  under  this  Agreement  pursuant  to which it is  given,  and  shall be
addressed if to (i) the Company at: 3006 Longhorn Boulevard,  Suite 107, Austin,
Texas 78758, Telephone No. (512) 339-5020, Facsimile No. (512) 248-620-5037, and
(ii) the  Holders  at their  respective  last  address  as the party  shall have
furnished  in writing as a new  address  to be  entered  on such  register.  Any
notice, except as otherwise provided in this Agreement, shall be made by fax and
shall be deemed given at the time of transmission of the facsimile.

         10. Termination. This Agreement shall terminate on the earlier to occur
             -----------
of (a) the date  that is one (1) year  from the date of the  Closing  or (b) the
date the  resale by  Holders  of all  Registrable  Securities  described  in any
registration  statement  filed  pursuant to this  Agreement  is  completed;  but
without  prejudice  to (i) the  parties'  rights and  obligations  arising  from
breaches of this  Agreement  occurring  prior to such  termination or (ii) other
indemnification obligations under this Agreement.

         11.  Assignment.  No  assignment,  transfer or  delegation,  whether by
              ----------
operation of law or otherwise, of any rights or obligations under this Agreement
by the  Company or any  Holder,  respectively,  shall be made  without the prior
written  consent of the  majority  in  interest  of the  Holders or the  Company
respectively;  provided  that the  rights of a Holder  may be  transferred  to a
subsequent  holder  of  the  Holder's  Registrable   Securities  (provided  such
transferee  shall provide to the Company,  a writing executed by such transferee
agreeing to be bound as a Holder by the terms of this  Agreement);  and provided
further  that the Company may  transfer  its rights and  obligations  under this
Agreement to a purchaser of all or a substantial  portion of its business if the
obligations of the Company under this  Agreement are assumed in connection  with
such  transfer,  either by merger or other  operation  of law (which may include
without  limitation a transaction  whereby the Registrable  Shares are converted
into securities of the successor in interest) or by specific assumption executed
by the transferee.

         12.      Miscellaneous.
                  -------------

                  (a)      Governing  Law. This  Agreement  shall be governed by
                           --------------
and construed in accordance  with the laws of the State of Texas without  giving
effect to conflict of laws.

                  (b)  Successors  and  Assigns.  Except as  otherwise  provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon,  the  successors,  assigns,  heirs,  executors and  administrators  of the
parties hereto.


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<PAGE>

                  (c) Delays or Omissions.  No delay or omission to exercise any
right,  power or remedy accruing to any holder of any Registrable  Shares,  upon
any breach or default of the Company under this Agreement, shall impair any such
right,  power or remedy of such holder nor shall it be  construed to be a waiver
of any such  breach or  default,  or an  acquiescence  therein,  or of or in any
similar  breach or  default  thereunder  occurring,  nor shall any waiver of any
single  breach or  default  be deemed a waiver  of any other  breach or  default
thereafter  occurring.  Any waiver,  permit,  consent or approval of any kind or
character  on the  part of any  holder  of any  breach  or  default  under  this
Agreement,  or any  waiver  on  the  part  of any  party  of any  provisions  of
conditions of this Agreement,  must be in writing and shall be effective only to
the extent  specifically set forth in such writing.  All remedies,  either under
this  Agreement,  or by law  or  otherwise  afforded  to any  holder,  shall  be
cumulative and not alternative.

                  (d) Counterparts. This Agreement may be executed in any number
of  counterparts,  each  of  which  may be  executed  by  less  than  all of the
Investors,  each of which shall be  enforceable  against  the  parties  actually
executing such  counterparts,  and all of which  together  shall  constitute one
instrument.

                  (e) Severability.  In the case any provision of this Agreement
shall  be  invalid,  illegal  or  unenforceable,   the  validity,  legality  and
enforceability  of the remaining  provisions shall not in any way be affected or
impaired thereby.


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<PAGE>

         The foregoing  Registration  Rights  Agreement is hereby executed as of
the date first above written.

                                        SI DIAMOND TECHNOLOGY, INC.

                                        By: _______________________________
                                        Name:______________________________
                                        Title: ____________________________



                               SUBSCRIBER(S)

                                        Subscriber's Name:


                                        By:__________________________________


                                        By:__________________________________



                                    Address: