Document:

To:   Laurus Master Fund, Ltd.
      c/o M&C Corporate Services Limited
      P.O. Box 309 GT
      Ugland House
      South Church Street
      George Town
      Grand Cayman, Cayman Islands

Date: April 7, 2006

To Whom It May Concern:

      1. To secure the payment of all Obligations (as hereafter defined),
AUXILIO, INC., a Nevada corporation (the "Company"), each of the other
undersigned parties (other than Laurus Master Fund, Ltd., ("Laurus")) and each
other entity that is required to enter into this Master Security Agreement (each
an "Assignor" and, collectively, the "Assignors") hereby assigns and grants to
Laurus a continuing security interest in all of the following property now owned
or at any time hereafter acquired by such Assignor, or in which such Assignor
now has or at any time in the future may acquire any right, title or interest
(the "Collateral"): all cash, cash equivalents, accounts, accounts receivable,
deposit accounts (including without limitations those accounts subject to (i)
the Control Agreement dated April 7, 2006, by and among UBS Financial Services
Inc., the Company and Laurus, and (ii) the Control Agreement dated April 7,
2006, by and among Wells Fargo & Company, the Company and Laurus), inventory,
equipment, goods, fixtures, documents, instruments (including, without
limitation, promissory notes), contract rights, commercial tort claims set forth
on Exhibit B to this Master Security Agreement, general intangibles (including,
without limitation, payment intangibles and an absolute right to license on
terms no less favorable than those currently in effect among such Assignor's
affiliates), chattel paper, supporting obligations, investment property
(including, without limitation, all partnership interests, limited liability
company membership interests and all other equity interests owned by any
Assignor), letter-of-credit rights, trademarks, trademark applications,
tradestyles, patents, patent applications, copyrights, copyright applications
and other intellectual property in which such Assignor now has or hereafter may
acquire any right, title or interest, all proceeds and products thereof
(including, without limitation, proceeds of insurance) and all additions,
accessions and substitutions thereto or therefor. In the event any Assignor
wishes to finance the acquisition in the ordinary course of business of any
hereafter acquired equipment and has obtained a written commitment from an
unrelated third party financing source to finance such equipment, Laurus shall
release its security interest on such hereafter acquired equipment so financed
by such third party financing source. Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings provided such terms in the
Securities Purchase Agreement referred to below. All items of Collateral which
are defined in the UCC shall have the meanings set forth in the UCC. For
purposes hereof, the term "UCC" means the Uniform Commercial Code as the same
may, from time to time, be in effect in the State of New York; provided, that in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Laurus'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions of this Agreement relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions; provided further, that to the extent that the UCC is used to define
any term herein and such term is defined differently in different Articles or
Divisions of the UCC, the definition of such term contained in Article or
Division 9 shall govern.

      2. The term "Obligations" as used herein shall mean and include all debts,
liabilities and obligations owing by each Assignor to Laurus arising under, out
of, or in connection with: (i) that certain Securities Purchase Agreement dated
as of the date hereof by and between the Company and Laurus (the "Securities
Purchase Agreement") and (ii) the Related Agreements referred to in the
Securities Purchase Agreement (the Securities Purchase Agreement and each
Related Agreement as each may be amended, modified, restated or supplemented
from time to time, collectively, the "Documents"), and in connection with any
documents, instruments or agreements relating to or executed in connection with
the Documents or any documents, instruments or agreements referred to therein or
otherwise, and in connection with any other indebtedness, obligations or
liabilities of each such Assignor to Laurus, whether now existing or hereafter
arising, direct or indirect, liquidated or unliquidated, absolute or contingent,
due or not due and whether under, pursuant to or evidenced by a note, agreement,
guaranty, instrument or otherwise, including, without limitation, obligations
and liabilities of each Assignor for post-petition interest, fees, costs and
charges that accrue after the commencement of any case by or against such
Assignor under any bankruptcy, insolvency, reorganization or like proceeding
(collectively, the "Debtor Relief Laws") in each case, irrespective of the
genuineness, validity, regularity or enforceability of such Obligations, or of
any instrument evidencing any of the Obligations or of any collateral therefor
or of the existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of the Obligations in any
case commenced by or against any Assignor under any Debtor Relief Law.

      3. Each Assignor hereby jointly and severally represents, warrants and
covenants to Laurus that:

            (a) it is a corporation, partnership or limited liability company,
      as the case may be, validly existing, in good standing and formed under
      the respective laws of its jurisdiction of formation set forth on Schedule
      A, and each Assignor will provide Laurus thirty (30) days' prior written
      notice of any change in any of its respective jurisdiction of formation;

            (b) its legal name is as set forth in its Certificate of
      Incorporation or other organizational document (as applicable) as amended
      through the date hereof and as set forth on Schedule A, and it will
      provide Laurus thirty (30) days' prior written notice of any change in its
      legal name;

                                       2
<PAGE>

            (c) its organizational identification number (if applicable) is as
      set forth on Schedule A hereto, and it will provide Laurus thirty (30)
      days' prior written notice of any change in its organizational
      identification number;

            (d) it is the lawful owner of its Collateral and it has the sole
      right to grant a security interest therein and will defend the Collateral
      against all claims and demands of all persons and entities;

            (e) it will keep its Collateral free and clear of all attachments,
      levies, taxes, liens, security interests and encumbrances of every kind
      and nature ("Encumbrances"), except (i) Encumbrances securing the
      Obligations and (ii) Encumbrances securing indebtedness of each such
      Assignor not to exceed $50,000 in the aggregate for all such Assignors so
      long as all such Encumbrances are removed or otherwise released to Laurus'
      satisfaction within ten (10) days of the creation thereof;

            (f) it will, at its and the other Assignors' joint and several cost
      and expense keep the Collateral in good state of repair (ordinary wear and
      tear excepted) and will not waste or destroy the same or any part thereof
      other than ordinary course discarding of items no longer used or useful in
      its or such other Assignors' business;

            (g) it will not, without Laurus' prior written consent, sell,
      exchange, lease or otherwise dispose of any Collateral, whether by sale,
      lease or otherwise, except for the sale of inventory in the ordinary
      course of business and for the disposition or transfer in the ordinary
      course of business during any fiscal year of obsolete and worn-out
      equipment or equipment no longer necessary for its ongoing needs, having
      an aggregate fair market value of not more than $25,000 and only to the
      extent that:

                  (i) the proceeds of each such disposition are used to acquire
            replacement Collateral which is subject to Laurus' first priority
            perfected security interest, or are used to repay the Obligations or
            to pay general corporate expenses; or

                  (ii) following the occurrence of an Event of Default which
            continues to exist the proceeds of which are remitted to Laurus to
            be held as cash collateral for the Obligations;

            (h) it will insure or cause the Collateral to be insured in Laurus'
      name (as an additional insured and loss payee) against loss or damage by
      fire, theft, burglary, pilferage, loss in transit and such other hazards
      as Laurus shall specify in amounts and under policies by insurers
      acceptable to Laurus and all premiums thereon shall be paid by such
      Assignor and the policies delivered to Laurus. If any such Assignor fails
      to do so, Laurus may procure such insurance and the cost thereof shall be
      promptly reimbursed by the Assignors, jointly and severally, and shall
      constitute Obligations;

            (i) it will at all reasonable times allow Laurus or Laurus'
      representatives free access to and the right of inspection of the
      Collateral;

                                       3
<PAGE>

            (j) such Assignor (jointly and severally with each other Assignor)
      hereby indemnifies and saves Laurus harmless from all loss, costs, damage,
      liability and/or expense, including reasonable attorneys' fees, that
      Laurus may sustain or incur to enforce payment, performance or fulfillment
      of any of the Obligations and/or in the enforcement of this Master
      Security Agreement or in the prosecution or defense of any action or
      proceeding either against Laurus or any Assignor concerning any matter
      growing out of or in connection with this Master Security Agreement,
      and/or any of the Obligations and/or any of the Collateral except to the
      extent caused by Laurus' own gross negligence or willful misconduct (as
      determined by a court of competent jurisdiction in a final and
      nonappealable decision); and

            (k) all commercial tort claims (as defined in the Uniform Commercial
      Code as in effect in the State of New York) held by any Assignor are set
      forth on Schedule C to this Master Security Agreement; each Assignor
      hereby agrees that it shall promptly, and in any event within five (5)
      Business Days after the same is acquired by it, notify Laurus of any
      commercial tort claim acquired by it and unless otherwise consented to in
      writing by Laurus, it shall enter into a supplement to this Master
      Security Agreement granting to Laurus a security interest in such
      commercial tort claim, securing the Obligations.

      4. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Master Security Agreement:

            (a) any covenant or any other term or condition of this Master
      Security Agreement is breached in any material respect and such breach, to
      the extent subject to cure, shall continue without remedy for a period of
      fifteen (15) days after the occurrence thereof;

            (b) any representation or warranty, or statement made or furnished
      to Laurus under this Master Security Agreement by any Assignor or on any
      Assignor's behalf should prove to any time be false or misleading in any
      material respect on the date as of which made or deemed made;

            (c) the loss, theft, substantial damage, destruction, sale or
      encumbrance to or of any of the Collateral or the making of any levy,
      seizure or attachment thereof or thereon except to the extent:

                  (i) such loss is covered by insurance proceeds which are used
            to replace the item or repay Laurus; or

                  (ii) said levy, seizure or attachment does not secure
            indebtedness in excess of $100,000 in the aggregate for all
            Assignors and such levy, seizure or attachment has been removed or
            otherwise released within ten (10) days of the creation or the
            assertion thereof;

            (d) an Event of Default shall have occurred under and as defined in
      any Document.

                                       4
<PAGE>

      5. Upon the occurrence of any Event of Default and at any time thereafter,
Laurus may declare all Obligations immediately due and payable and Laurus shall
have the remedies of a secured party provided in the UCC as in effect in the
State of New York, this Agreement and other applicable law. Upon the occurrence
of any Event of Default and at any time thereafter, Laurus will have the right
to take possession of the Collateral and to maintain such possession on any
Assignor's premises or to remove the Collateral or any part thereof to such
other premises as Laurus may desire. Upon Laurus' request, each Assignor shall
assemble or cause the Collateral to be assembled and make it available to Laurus
at a place designated by Laurus. If any notification of intended disposition of
any Collateral is required by law, such notification, if mailed, shall be deemed
properly and reasonably given if mailed at least ten (10) days before such
disposition, postage prepaid, addressed to the applicable Assignor either at
such Assignor's address shown herein or at any address appearing on Laurus'
records for such Assignor. Any proceeds of any disposition of any of the
Collateral shall be applied by Laurus to the payment of all expenses in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other legal expenses and disbursements and the reasonable expenses of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such proceeds may be applied by Laurus toward the payment of the Obligations in
such order of application as Laurus may elect, and each Assignor shall be liable
for any deficiency. For the avoidance of doubt, following the occurrence and
during the continuance of an Event of Default, Laurus shall have the immediate
right to withdraw any and all monies contained in any deposit account in the
name of any Assignor and controlled by Laurus and apply same to the repayment of
the Obligations (in such order of application as Laurus may elect). The parties
hereto each hereby agree that the exercise by any party hereto of any right
granted to it or the exercise by any party hereto of any remedy available to it
(including, without limitation, the issuance of a notice of redemption, a
borrowing request and/or a notice of default), in each case, hereunder, under
the Securities Purchase Agreement or under any other Related Agreement which has
been publicly filed with the Securities and Exchange Commission shall not
constitute confidential information and no party shall have any duty to the
other party to maintain such information as confidential.

      6. If any Assignor defaults in the performance or fulfillment of any of
the terms, conditions, promises, covenants, provisions or warranties on such
Assignor's part to be performed or fulfilled under or pursuant to this Master
Security Agreement, Laurus may, at its option without waiving its right to
enforce this Master Security Agreement according to its terms, immediately or at
any time thereafter and without notice to any Assignor, perform or fulfill the
same or cause the performance or fulfillment of the same for each Assignor's
joint and several account and at each Assignor's joint and several cost and
expense, and the cost and expense thereof (including reasonable attorneys' fees)
shall be added to the Obligations and shall be payable on demand with interest
thereon at the highest rate permitted by law, or, at Laurus' option, debited by
Laurus from any other deposit accounts in the name of any Assignor and
controlled by Laurus.

      7. Each Assignor appoints Laurus, any of Laurus' officers, employees or
any other person or entity whom Laurus may designate as such Assignor's
attorney, with power to execute such documents in each such Assignor's behalf
and to supply any omitted information and correct patent errors in any documents
executed by any Assignor or on any Assignor's behalf; to file financing
statements against such Assignor covering the Collateral (and, in connection
with the filing of any such financing statements, describe the Collateral as
"all assets and all personal property, whether now owned and/or hereafter
acquired" (or any substantially similar variation thereof)); to sign such
Assignor's name on public records; and to do all other things Laurus deems
necessary to carry out this Master Security Agreement. Each Assignor hereby
ratifies and approves all acts of the attorney and neither Laurus nor the
attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision). This power being coupled with an interest,
is irrevocable so long as any Obligations remain unpaid.

                                       5
<PAGE>

      8. No delay or failure on Laurus' part in exercising any right, privilege
or option hereunder shall operate as a waiver of such or of any other right,
privilege, remedy or option, and no waiver whatever shall be valid unless in
writing, signed by Laurus and then only to the extent therein set forth, and no
waiver by Laurus of any default shall operate as a waiver of any other default
or of the same default on a future occasion. Laurus' books and records
containing entries with respect to the Obligations shall be admissible in
evidence in any action or proceeding, shall be binding upon each Assignor for
the purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof. Laurus shall have the right to enforce any one or
more of the remedies available to Laurus, successively, alternately or
concurrently. Each Assignor agrees to join with Laurus in executing such
documents or other instruments to the extent required by the UCC in form
satisfactory to Laurus and in executing such other documents or instruments as
may be required or deemed necessary by Laurus for purposes of affecting or
continuing Laurus' security interest in the Collateral.

      9. The Assignors shall jointly and severally pay all of Laurus'
out-of-pocket costs and expenses, including reasonable fees and disbursements of
in-house or outside counsel and appraisers, in connection with the preparation,
execution and delivery of the Documents, and in connection with the prosecution
or defense of any action, contest, dispute, suit or proceeding concerning any
matter in any way arising out of, related to or connected with any Document. The
Assignors shall also jointly and severally pay all of Laurus' reasonable fees,
charges, out-of-pocket costs and expenses, including fees and disbursements of
counsel and appraisers, in connection with (a) the preparation, execution and
delivery of any waiver, any amendment thereto or consent proposed or executed in
connection with the transactions contemplated by the Documents, (b) Laurus'
obtaining performance of the Obligations under the Documents, including, but not
limited to the enforcement or defense of Laurus' security interests, assignments
of rights and liens hereunder as valid perfected security interests, (c) any
attempt to inspect, verify, protect, collect, sell, liquidate or otherwise
dispose of any Collateral, (d) any appraisals or re-appraisals of any property
(real or personal) pledged to Laurus by any Assignor as Collateral for, or any
other Person as security for, the Obligations hereunder and (e) any
consultations in connection with any of the foregoing. The Assignors shall also
jointly and severally pay Laurus' customary bank charges for all bank services
(including wire transfers) performed or caused to be performed by Laurus for any
Assignor at any Assignor's request or in connection with any Assignor's loan
account (if any) with Laurus. All such costs and expenses together with all
filing, recording and search fees, taxes and interest payable by the Assignors
to Laurus shall be payable on demand and shall be secured by the Collateral. If
any tax by any nation or government, any state or other political subdivision
thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (each, a "Governmental Authority") is or may be imposed on or as a
result of any transaction between any Assignor, on the one hand, and Laurus on
the other hand, which Laurus is or may be required to withhold or pay, the
Assignors hereby jointly and severally indemnify and hold Laurus harmless in
respect of such taxes, and the Assignors will repay to Laurus the amount of any
such taxes which shall be charged to the Assignors' account; and until the
Assignors shall furnish Laurus with indemnity therefor (or supply Laurus with
evidence satisfactory to it that due provision for the payment thereof has been
made), Laurus may hold without interest any balance standing to each Assignor's
credit (if any) and Laurus shall retain its liens in any and all Collateral.

                                       6
<PAGE>

      10. THIS MASTER SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. All of the rights, remedies, options, privileges and
elections given to Laurus hereunder shall inure to the benefit of Laurus'
successors and assigns. The term "Laurus" as herein used shall include Laurus,
any parent of Laurus', any of Laurus' subsidiaries and any co-subsidiaries of
Laurus' parent, whether now existing or hereafter created or acquired, and all
of the terms, conditions, promises, covenants, provisions and warranties of this
Agreement shall inure to the benefit of each of the foregoing, and shall bind
the representatives, successors and assigns of each Assignor.

      11. Each Assignor hereby consents and agrees that the state and federal
courts located in the County of New York, State of New York shall have exclusive
jurisdiction to hear and determine any claims or disputes between Assignor, on
the one hand, and Laurus, on the other hand, pertaining to this Master Security
Agreement or to any matter arising out of or related to this Master Security
Agreement, provided, that Laurus and each Assignor acknowledge that any appeals
from those courts may have to be heard by a court located outside of the County
of New York, State of New York, and further provided, that nothing in this
Master Security Agreement shall be deemed or operate to preclude Laurus from
bringing suit or taking other legal action in any other jurisdiction to collect,
the Obligations, to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Laurus.
Each Assignor expressly submits and consents in advance to such jurisdiction in
any action or suit commenced in any such court, and each Assignor hereby waives
any objection which it may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens. Each Assignor hereby waives personal
service of the summons, complaint and other process issues in any such action or
suit and agrees that service of such summons, complaint and other process may be
made by registered or certified mail addressed to such assignor at the address
set forth on the signature lines hereto and that service so made shall be deemed
completed upon the earlier of such Assignor's actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid.

      The parties desire that their disputes be resolved by a judge applying
such applicable laws. Therefore, to achieve the best combination of the benefits
of the judicial system and of arbitration, the parties hereto waive all rights
to trial by jury in any action, suite, or proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between Laurus, and/or
any Assignor arising out of, connected with, related or incidental to the
relationship established between them in connection with this Master Security
Agreement or the transactions related hereto.

                                       7
<PAGE>

      12. It is understood and agreed that any person or entity that desires to
become an Assignor hereunder, or is required to execute a counterpart of this
Master Security Agreement after the date hereof pursuant to the requirements of
any Document, shall become an Assignor hereunder by (x) executing a Joinder
Agreement in form and substance satisfactory to Laurus, (y) delivering
supplements to such exhibits and annexes to such Documents as Laurus shall
reasonably request and (z) taking all actions as specified in this Master
Security Agreement as would have been taken by such Assignor had it been an
original party to this Master Security Agreement, in each case with all
documents required above to be delivered to Laurus and with all documents and
actions required above to be taken to the reasonable satisfaction of Laurus.

      13. All notices from Laurus to any Assignor shall be sufficiently given if
mailed or delivered to such Assignor's address set forth below.

                                       8
<PAGE>

                                          Very truly yours,
                                          AUXILIO, INC.

                                          By: ____________________
                                          Name:
                                          Title:
                                          Address:

                                          AUXILIO SOLUTIONS, INC.

                                          By: ____________________
                                          Name:
                                          Title:
                                          Address:

                                          PEOPLEVIEW, INC.

                                          By: ____________________
                                          Name:
                                          Title:
                                          Address:

                                          ACKNOWLEDGED:

                                          LAURUS MASTER FUND, LTD.

                                          By:______________________
                                          Name:
                                          Title

                                       9
<PAGE>

                                   SCHEDULE A

--------------------------------------------------------------------------------
          Entity                 Jurisdiction of             Organization
                                    Formation            Identification Number
--------------------------------------------------------------------------------
Auxilio, Inc.               Nevada
--------------------------------------------------------------------------------
Auxilio Solutions, Inc.     California
--------------------------------------------------------------------------------
PeopleView, Inc.            Delaware
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

<PAGE>

                                   SCHEDULE B

                             COMMERCIAL TORT CLAIMS

                                       11REGISTRATION RIGHTS AGREEMENT

      This  Registration  Rights  Agreement  (this  "Agreement")  is made  and
entered  into as of April 7, 2006,  by and  between  Auxilio,  Inc.,  a Nevada
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").

      This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchaser and the Company (as
amended, modified or supplemented from time to time, the "Securities Purchase
Agreement"), and pursuant to the Note and the Warrants referred to therein.

      The Company and the Purchaser hereby agree as follows:

      1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means shares of the Company's common stock, par value
$0.001 per share.

            "Effectiveness Date" means (i) with respect to the initial
Registration Statement required to be filed hereunder, a date no later than one
hundred eighty (180) days following the date hereof; (ii) with respect to each
post-effective amendment to the Registration Statement required to be filed
hereunder, a date no later than thirty (30) days following the applicable Filing
Date; and (iii) with respect to each additional Registration Statement required
to be filed hereunder, a date no later than thirty (30) days following the
applicable Filing Date.

            "Effectiveness Period" has the meaning set forth in Section 2(a).

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.

            "Filing Date" means, with respect to (i) the Registration Statement
required to be filed hereunder in respect of the shares of Common Stock issuable
upon conversion of the Note, a date no later than sixty (60) days following the
date hereof, (ii) the shares of Common Stock issuable upon exercise of any
Warrant, the date which is sixty (60) days after the date of the issuance of
such Warrant, and (iii) the shares of Common Stock issuable to the Holder as a
result of adjustments to the Fixed Conversion Price or Exercise Price, as the
case may be, made pursuant to the Note or the Warrant or otherwise, thirty (30)
days after the occurrence such event or the date of the adjustment of the Fixed
Conversion Price or Exercise Price, as the case may be. With respect to any
post-effective amendment that is required to be made due to the Company's filing
of certain reports and filings under Section 13 or 15(d) of the Exchange Act,
the "Filing Date" shall be five (5) days following the earlier of (a) date of
filing of such report or filing, or (b) the date such report or filing is
required to be made (giving effect to any extensions permitted under the
Exchange Act or the Securities Act)

<PAGE>

            "Holder" or "Holders" means the Purchaser or any of its affiliates
or transferees to the extent any of them hold Registrable Securities, other than
those purchasing Registrable Securities in a market transaction.

            "Indemnified Party" has the meaning set forth in Section 5(c).

            "Indemnifying Party" has the meaning set forth in Section 5(c).

            "Note" has the meaning set forth in the Securities Purchase
Agreement.

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

            "Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

            "Registrable Securities" means the shares of Common Stock issued
upon the conversion of the Note and issuable upon exercise of the Warrants.

            "Registration Statement" means each registration statement required
to be filed hereunder, including the Prospectus therein, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

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

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

            "Securities Act" means the Securities Act of 1933, as amended, and
any successor statute.

            "Securities Purchase Agreement" has the meaning given to such term
in the Preamble hereto.

                                       2
<PAGE>

            "Trading Market" means any of the NASD Over The Counter Bulletin
Board, the NASDAQ Capital Market, the NASDAQ National Markets System, the
American Stock Exchange or the New York Stock Exchange.

            "Warrants" means the Common Stock purchase warrants issued in
connection with the Securities Purchase Agreement, whether on the date hereof or
thereafter.

      2. Registration.

            (a) On or prior to the Filing Date, the Company shall prepare and
      file with the Commission a Registration Statement covering the Registrable
      Securities for a selling stockholder resale offering to be made on a
      continuous basis pursuant to Rule 415. The Registration Statement shall be
      on Form SB-2 (except if the Company is not then eligible to register for
      resale the Registrable Securities on Form SB-2, in which case such
      registration shall be on another appropriate form in accordance herewith).
      The Company shall cause each Registration Statement to become effective
      and remain effective as provided herein. The Company shall use its best
      efforts to cause each Registration Statement to be declared effective
      under the Securities Act as promptly as possible after the filing thereof,
      but in any event no later than the Effectiveness Date. The Company shall
      use its reasonable commercial efforts to keep each Registration Statement
      continuously effective under the Securities Act until the date which is
      the earlier date of when (i) all Registrable Securities have been sold or
      (ii) all Registrable Securities covered by such Registration Statement may
      be sold immediately without registration under the Securities Act and
      without volume restrictions pursuant to Rule 144(k), as determined by the
      counsel to the Company pursuant to a written opinion letter to such
      effect, addressed and acceptable to the Company's transfer agent and the
      affected Holders (the "Effectiveness Period").

            (b) Each Purchaser acknowledges that as of the date of this
      Agreement the Company is not eligible to use Form S-3 and must, therefore,
      use Form SB-2. As such, the Company will be required to regularly update
      its Form SB-2 upon the filing of certain reports or filings required by
      Section 13(a) or 15(d) of the Exchange Act. Each Purchaser further
      acknowledges that upon the filings of any post-effective amendment the
      Registration Statement required to be filed hereunder may not be deemed
      effective until such time as the post-effective amendment has been
      declared effective by the Commission. During such time the Purchaser will
      be unable to use the prospectus contained therein for the purpose of
      reselling its Registrable Securities. In the event that the Company must
      file a post-effective amendment to the Registration Statement, the Company
      shall use its best efforts to cause the post-effective amendment to be
      declared effective under the Securities Act within a reasonable amount of
      time after the Filing Date.

            (c) Within three business days of the applicable Effectiveness Date,
      the Company shall cause its counsel to issue a blanket opinion in the form
      attached hereto as Exhibit A, to the transfer agent stating that the
      shares are subject to an effective registration statement and can be
      reissued free of restrictive legend upon notice of a sale by the Purchaser
      and confirmation by the Purchaser that it has complied with the prospectus
      delivery requirements, provided that the Company has not advised the
      transfer agent orally or in writing that the opinion has been withdrawn.
      Copies of the blanket opinion required by this Section 2(b) shall be
      delivered to the Purchaser within the time frame set forth above.

                                       3
<PAGE>

      3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:

            (a) prepare and file with the Commission a Registration Statement
      with respect to such Registrable Securities, respond as promptly as
      possible to any comments received from the Commission, and use its best
      efforts to cause the Registration Statement to become and remain effective
      for the Effectiveness Period with respect thereto, and promptly provide to
      the Purchaser copies of all filings and Commission letters of comment
      relating thereto;

            (b) prepare and file with the Commission such amendments and
      supplements to the Registration Statement and the Prospectus used in
      connection therewith as may be necessary to comply with the provisions of
      the Securities Act with respect to the disposition of all Registrable
      Securities covered by such Registration Statement and to keep such
      Registration Statement effective until the expiration of the Effectiveness
      Period applicable to such Registration Statement;

            (c) furnish to the Purchaser such number of copies of the
      Registration Statement and the Prospectus included therein (including each
      preliminary Prospectus) as the Purchaser reasonably may request to
      facilitate the public sale or disposition of the Registrable Securities
      covered by the Registration Statement;

            (d) use its best efforts to register or qualify the Purchaser's
      Registrable Securities covered by such Registration Statement under the
      securities or "blue sky" laws of such jurisdictions within the United
      States as the Purchaser may reasonably request, provided, however, that
      the Company shall not for any such purpose be required to qualify
      generally to transact business as a foreign corporation in any
      jurisdiction where it is not so qualified or to consent to general service
      of process in any such jurisdiction;

            (e) list the Registrable Securities covered by such Registration
      Statement with any securities exchange on which the Common Stock of the
      Company is then listed;

            (f) immediately notify the Purchaser at any time when a Prospectus
      relating thereto is required to be delivered under the Securities Act, of
      the happening of any event of which the Company has knowledge as a result
      of which the Prospectus contained in such 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 not misleading in light of the circumstances then
      existing; and

            (g) make available for inspection by the Purchaser and any attorney,
      accountant or other agent retained by the Purchaser, all publicly
      available, non-confidential financial and other records, pertinent
      corporate documents and properties of the Company, and cause the Company's
      officers, directors and employees to supply all publicly available,
      non-confidential information reasonably requested by the attorney,
      accountant or agent of the Purchaser.

                                       4
<PAGE>

      4. Registration Expenses. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (in an amount not to exceed $20,000 per registration
unless otherwise agreed), are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "Selling Expenses." The Company shall only be
responsible for all Registration Expenses.

      5. Indemnification.

            (a) In the event of a registration of any Registrable Securities
      under the Securities Act pursuant to this Agreement, the Company will
      indemnify and hold harmless the Purchaser, and its officers, directors and
      each other person, if any, who controls the Purchaser within the meaning
      of the Securities Act, against any losses, claims, damages or liabilities,
      joint or several ("Losses"), to which the Purchaser, or such persons may
      become subject under the Securities Act or otherwise, insofar as such
      Losses (or actions in respect thereof) arise out of or are based upon any
      untrue statement or alleged untrue statement of any material fact
      contained in any Registration Statement under which such Registrable
      Securities were registered under the Securities Act pursuant to this
      Agreement, any preliminary Prospectus or final Prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are
      based upon 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, and will reimburse the Purchaser, and each such
      person for any reasonable legal or other expenses incurred by them in
      connection with investigating or defending any such Losses; provided,
      however, that the Company will not be liable in any such case if and to
      the extent that any such Losses arise out of or are based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so
      made in conformity with information furnished by or on behalf of the
      Purchaser or any such person in writing specifically for use in any such
      document. Each Purchaser acknowledges that upon the filings of any
      post-effective amendment the Registration Statement required to be filed
      hereunder may not be deemed effective until such time as the
      post-effective amendment has been declared effective by the Commission.
      During such time the Purchaser will be unable to use the prospectus
      contained therein for the purpose of reselling its Registrable Securities.
      The Company shall not be liable for any sales made by any Purchaser during
      the period of time commencing on the filing of the post-effective
      amendment and ending on the date in which the SEC declares the
      post-effective amendment to be effective under the Securities Act.

                                       5
<PAGE>

            (b) In the event of a registration of the Registrable Securities
      under the Securities Act pursuant to this Agreement, the Purchaser will
      indemnify and hold harmless the Company, and its officers, directors and
      each other person, if any, who controls the Company within the meaning of
      the Securities Act, against all Losses, to which the Company or such
      persons may become subject under the Securities Act or otherwise, insofar
      as such Losses (or actions in respect thereof) arise out of or are based
      upon any untrue statement or alleged untrue statement of any material fact
      which was furnished in writing by the Purchaser to the Company expressly
      for use in (and such information is contained in) the Registration
      Statement under which such Registrable Securities were registered under
      the Securities Act pursuant to this Agreement, any preliminary Prospectus
      or final Prospectus contained therein, or any amendment or supplement
      thereof, or arise out of or are based upon 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, and will
      reimburse the Company and each such person for any reasonable legal or
      other expenses incurred by them in connection with investigating or
      defending any such Losses, provided, however, that the Purchaser will be
      liable in any such case if and only to the extent that any such Losses
      arise out of or are based upon an untrue statement or alleged untrue
      statement or omission or alleged omission so made in conformity with
      information furnished in writing to the Company by or on behalf of the
      Purchaser specifically for use in any such document. Notwithstanding the
      provisions of this paragraph, the Purchaser shall not be required to
      indemnify any person or entity in excess of the amount of the aggregate
      net proceeds received by the Purchaser in respect of Registrable
      Securities in connection with any such registration under the Securities
      Act.

            (c) Promptly after receipt by a party entitled to claim
      indemnification hereunder (an "Indemnified Party") of notice of the
      commencement of any action, such Indemnified Party shall, if a claim for
      indemnification in respect thereof is to be made against a party hereto
      obligated to indemnify such Indemnified Party (an "Indemnifying Party"),
      notify the Indemnifying Party in writing thereof, but the omission so to
      notify the Indemnifying Party shall not relieve it from any liability
      which it may have to such Indemnified Party other than under this Section
      5(c) and shall only relieve it from any liability which it may have to
      such Indemnified Party under this Section 5(c) if and to the extent the
      Indemnifying Party is prejudiced by such omission. In case any such action
      shall be brought against any Indemnified Party and it shall notify the
      Indemnifying Party of the commencement thereof, the Indemnifying Party
      shall be entitled to participate in and, to the extent it shall wish, to
      assume and undertake the defense thereof with counsel satisfactory to such
      Indemnified Party, and, after notice from the Indemnifying Party to such
      Indemnified Party of its election so to assume and undertake the defense
      thereof, the Indemnifying Party shall not be liable to such Indemnified
      Party under this Section 5(c) for any legal expenses subsequently incurred
      by such Indemnified Party in connection with the defense thereof; if the
      Indemnified Party retains its own counsel, then the Indemnified Party
      shall pay all fees, costs and expenses of such counsel, provided, however,
      that, if the defendants in any such action include both the Indemnified
      Party and the Indemnifying Party and the Indemnified Party shall have
      reasonably concluded that there may be reasonable defenses available to it
      which are different from or additional to those available to the
      Indemnifying Party or if the interests of the Indemnified Party reasonably
      may be deemed to conflict with the interests of the Indemnifying Party,
      the Indemnified Party shall have the right to select one separate counsel
      and to assume such legal defenses and otherwise to participate in the
      defense of such action, with the reasonable expenses and fees of such
      separate counsel and other expenses related to such participation to be
      reimbursed by the Indemnifying Party as incurred.

                                       6
<PAGE>

            (d) In order to provide for just and equitable contribution in the
      event of joint liability under the Securities Act in any case in which
      either (i) the Purchaser, or any officer, director or controlling person
      of the Purchaser, makes a claim for indemnification pursuant to this
      Section 5 but it is judicially determined (by the entry of a final
      judgment or decree by a court of competent jurisdiction and the expiration
      of time to appeal or the denial of the last right of appeal) that such
      indemnification may not be enforced in such case notwithstanding the fact
      that this Section 5 provides for indemnification in such case, or (ii)
      contribution under the Securities Act may be required on the part of the
      Purchaser or such officer, director or controlling person of the Purchaser
      in circumstances for which indemnification is provided under this Section
      5; then, and in each such case, the Company and the Purchaser will
      contribute to the aggregate Losses to which they may be subject (after
      contribution from others) in such proportion so that the Purchaser is
      responsible only for the portion represented by the percentage that the
      public offering price of its securities offered by the Registration
      Statement bears to the public offering price of all securities offered by
      such Registration Statement, provided, however, that, in any such case,
      (A) the Purchaser will not be required to contribute any amount in excess
      of the public offering price of all such securities offered by it pursuant
      to such Registration Statement; and (B) no person or entity guilty of
      fraudulent misrepresentation (within the meaning of Section 10(f) of the
      Act) will be entitled to contribution from any person or entity who was
      not guilty of such fraudulent misrepresentation

      6. Representations and Warranties.

            (a) The Common Stock is registered pursuant to Section 12(b) or
      12(g) of the Exchange Act and, except with respect to certain matters
      which the Company has disclosed to the Purchaser on Schedule 4.21 to the
      Securities Purchase Agreement, the Company has timely filed all proxy
      statements, reports, schedules, forms, statements and other documents
      required to be filed by it under the Exchange Act. The Company has filed
      (i) its Annual Report on Form 10-KSB for its fiscal year ended December
      31, 2004 and (ii) its Quarterly Report on Form 10-QSB for the fiscal
      quarters ended March 30, 2005, June 30, 2005 and September 30, 2005
      (collectively, the "SEC Reports"). Each SEC Report was, at the time of its
      filing, in substantial compliance with the requirements of its respective
      form and none of the SEC Reports, nor the financial statements (and the
      notes thereto) included in the SEC Reports, as of their respective filing
      dates, contained any untrue statement of a material fact or omitted 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. The financial statements of the Company
      included in the SEC Reports comply as to form in all material respects
      with applicable accounting requirements and the published rules and
      regulations of the Commission or other applicable rules and regulations
      with respect thereto. Such financial statements have been prepared in
      accordance with generally accepted accounting principles ("GAAP") applied
      on a consistent basis during the periods involved (except (i) as may be
      otherwise indicated in such financial statements or the notes thereto or
      (ii) in the case of unaudited interim statements, to the extent they may
      not include footnotes or may be condensed) and fairly present in all
      material respects the financial condition, the results of operations and
      the cash flows of the Company and its subsidiaries, on a consolidated
      basis, as of, and for, the periods presented in each such SEC Report.

                                       7
<PAGE>

            (b) The Common Stock is quoted for trading on the NASDAQ Over The
      Counter Bulletin Board and satisfies all requirements for the continuation
      of such quotation, and the Company shall do all things necessary for the
      continuation of such quotation. The Company has not received any notice
      that its Common Stock will no longer be quoted on the NASDAQ Over The
      Counter Bulletin Board (except for prior notices which have been fully
      remedied) or that the Common Stock does not meet all requirements for the
      continuation of such listing.

            (c) Neither the Company, nor any of its affiliates, nor any person
      acting on its or their behalf, has directly or indirectly made any offers
      or sales of any security or solicited any offers to buy any security under
      circumstances that would cause the offering of the Securities pursuant to
      the Securities Purchase Agreement to be integrated with prior offerings by
      the Company for purposes of the Securities Act which would prevent the
      Company from selling the Common Stock pursuant to Rule 506 under the
      Securities Act, or any applicable exchange-related stockholder approval
      provisions, nor will the Company or any of its affiliates or subsidiaries
      take any action or steps that would cause the offering of the Securities
      to be integrated with other offerings.

            (d) The Warrants, the Note and the shares of Common Stock which the
      Purchaser may acquire pursuant to the Warrants and the Note are all
      restricted securities under the Securities Act as of the date of this
      Agreement. The Company will not issue any stop transfer order or other
      order impeding the sale and delivery of any of the Registrable Securities
      at such time as such Registrable Securities are registered for public sale
      or an exemption from registration is available, except as required by
      federal or state securities laws.

            (e) The Company understands the nature of the Registrable Securities
      issuable upon the conversion of the Note and the exercise of the Warrant
      and recognizes that the issuance of such Registrable Securities may have a
      potential dilutive effect. The Company specifically acknowledges that its
      obligation to issue the Registrable Securities is binding upon the Company
      and enforceable regardless of the dilution such issuance may have on the
      ownership interests of other shareholders of the Company.

            (f) Except for agreements made in the ordinary course of business,
      there is no agreement that has not been filed with the Commission as an
      exhibit to a registration statement or to a form required to be filed by
      the Company under the Exchange Act, the breach of which could reasonably
      be expected to have a material and adverse effect on the Company and its
      subsidiaries, or would prohibit or otherwise interfere with the ability of
      the Company to enter into and perform any of its obligations under this
      Agreement in any material respect.

                                       8
<PAGE>

            (g) The Company will at all times have authorized and reserved a
      sufficient number of shares of Common Stock for the full conversion of the
      Note and exercise of the Warrants.

      7. Miscellaneous.

            (a) Remedies. In the event of a breach by the Company or by a
      Holder, of any of their respective obligations under this Agreement, each
      Holder or the Company, as the case may be, in addition to being entitled
      to exercise all rights granted by law and under this Agreement, including
      recovery of damages, will be entitled to specific performance of its
      rights under this Agreement.

            (b) No Piggyback on Registrations. Except as and to the extent
      specified in Schedule 7(b) hereto, neither the Company nor any of its
      security holders (other than the Holders in such capacity pursuant hereto)
      may include securities of the Company in any Registration Statement other
      than the Registrable Securities, and the Company shall not after the date
      hereof enter into any agreement providing any such right for inclusion of
      shares in the Registration Statement to any of its security holders.
      Except as and to the extent specified in Schedule 7(b) hereto, the Company
      has not previously entered into any agreement granting any registration
      rights with respect to any of its securities to any person or entity that
      have not been fully satisfied.

            (c) Compliance. Each Holder covenants and agrees that it will comply
      with the prospectus delivery requirements of the Securities Act as
      applicable to it in connection with sales of Registrable Securities
      pursuant to the Registration Statement.

            (d) Discontinued Disposition. Each Holder agrees by its acquisition
      of such Registrable Securities that, upon receipt of a notice from the
      Company of the occurrence of a Discontinuation Event (as defined below),
      such Holder will forthwith discontinue disposition of such Registrable
      Securities under the applicable Registration Statement until such Holder's
      receipt of the copies of the supplemented Prospectus and/or amended
      Registration Statement or until it is advised in writing (the "Advice") by
      the Company that the use of the applicable Prospectus may be resumed, and,
      in either case, has received copies of any additional or supplemental
      filings that are incorporated or deemed to be incorporated by reference in
      such Prospectus or Registration Statement. The Company may provide
      appropriate stop orders to enforce the provisions of this paragraph. For
      purposes of this Agreement, a "Discontinuation Event" shall mean (i) when
      the Commission notifies the Company whether there will be a "review" of
      such Registration Statement and whenever the Commission comments in
      writing on such Registration Statement (the Company shall provide true and
      complete copies thereof and all written responses thereto to each of the
      Holders); (ii) any request by the Commission or any other Federal or state
      governmental authority for amendments or supplements to such Registration
      Statement or Prospectus or for additional information; (iii) the issuance
      by the Commission of any stop order suspending the effectiveness of such
      Registration Statement covering any or all of the Registrable Securities
      or the initiation of any Proceedings for that purpose; (iv) the receipt by
      the Company of any notification with respect to the suspension of the
      qualification or exemption from qualification of any of the Registrable
      Securities for sale in any jurisdiction, or the initiation or threatening
      of any Proceeding for such purpose; and/or (v) the occurrence of any event
      or passage of time that makes the financial statements included in such
      Registration Statement ineligible for inclusion therein or any statement
      made in such Registration Statement or Prospectus or any document
      incorporated or deemed to be incorporated therein by reference untrue in
      any material respect or that requires any revisions to such Registration
      Statement, Prospectus or other documents so that, in the case of such
      Registration Statement or Prospectus, as the case may be, it will not
      contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading.

                                       9
<PAGE>

            (e) Piggy-Back Registrations. If at any time after the date hereof
      there is not an effective Registration Statement covering all of the
      Registrable Securities required to be covered hereunder and the Company
      shall determine to prepare and file with the Commission a registration
      statement relating to an offering for its own account or the account of
      others under the Securities Act of any of its equity securities, other
      than on Form S-4 or Form S-8 (each as promulgated under the Securities
      Act) 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
      employee benefit plans, then the Company shall send to each Holder written
      notice of such determination and, if within fifteen (15) days after
      receipt of such notice, any such Holder shall so request in writing, the
      Company shall include in such registration statement all or any part of
      such Registrable Securities such Holder requests to be registered to the
      extent the Company may do so without violating registration rights of
      others which exist as of the date of this Agreement, subject to customary
      underwriter cutbacks applicable to all holders of registration rights and
      subject to obtaining any required consent of any selling stockholder(s) to
      such inclusion under such registration statement.

            (f) Amendments and Waivers. The provisions of this Agreement,
      including the provisions of this sentence, may not be amended, modified or
      supplemented, and waivers or consents to departures from the provisions
      hereof may not be given, unless the same shall be in writing and signed by
      the Company and the Holders of the then outstanding Registrable
      Securities. Notwithstanding the foregoing, a waiver or consent to depart
      from the provisions hereof with respect to a matter that relates
      exclusively to the rights of certain Holders and that does not directly or
      indirectly affect the rights of other Holders may be given by Holders of
      at least a majority of the Registrable Securities to which such waiver or
      consent relates; provided, however, that the provisions of this sentence
      may not be amended, modified, or supplemented except in accordance with
      the provisions of the immediately preceding sentence.

            (g) Notices. Any notice or request hereunder may be given to the
      Company or the Purchaser at the respective addresses set forth below or as
      may hereafter be specified in a notice designated as a change of address
      under this Section 6(g). Any notice or request hereunder shall be given by
      registered or certified mail, return receipt requested, hand delivery,
      overnight mail, Federal Express or other national overnight next day
      carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices
      and requests shall be, in the case of those by hand delivery, deemed to
      have been given when delivered to any party to whom it is addressed, in
      the case of those by mail or overnight mail, deemed to have been given
      three (3) business days after the date when deposited in the mail or with
      the overnight mail carrier, in the case of a Courier, the next business
      day following timely delivery of the package with the Courier, and, in the
      case of a telecopy, when confirmed. The address for such notices and
      communications shall be as follows:

                                       10
<PAGE>

      If to the Company:                Auxilio, Inc.
                                        27401 Los Altos, Suite 100
                                        Mission Viejo, CA 92691
                                        Attention:  Paul T. Anthony
                                        Facsimile:  949-614-0701

                                        with a copy to:

                                        Stradling Yocca Carlson & Rauth
                                        660 Newport Center Drive, Suite 1600
                                        Newport Beach, CA 92660
                                        Attention:  Michael E. Flynn, Esq.
                                        Facsimile:  949-725-4100

      If to a Purchaser:                To the address set forth under such
                                        Purchaser name on the signature pages
                                        hereto.

      If to any other Person who is
      then the registered Holder:       To the address of such Holder as it
                                        appears in the stock transfer books
                                        of the Company

      or such other address as may be designated in writing hereafter in
      accordance with this Section 7(g) by such Person.

            (h) Successors and Assigns. This Agreement shall inure to the
      benefit of and be binding upon the successors and permitted assigns of
      each of the parties and shall inure to the benefit of each Holder. The
      Company may not assign its rights or obligations hereunder without the
      prior written consent of each Holder. Each Holder may assign their
      respective rights hereunder in the manner and to the persons and entities
      as permitted under the Note and the Securities Purchase Agreement, but
      only if (a) the Company is, within a reasonable time after such transfer
      or assignment, furnished with written notice of the name and address of
      such transferee or assignee and the securities with respect to which such
      registration rights are being transferred or assigned, (b) after such
      transfer or assignment, the further disposition of such securities by the
      transferee or assignee is restricted under the Securities Act and
      applicable state securities laws, (c) at or before the time the Company
      received the written notice contemplated by clause (a) of this sentence,
      the transferee or assignee agrees in writing with the Company to be bound
      by all of the provisions contained herein, and (d) the transferee or
      assignee is an "accredited investor" as that term is defined in Rule 501
      of Regulation D.

                                       11
<PAGE>

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

            (j) Governing Law, Jurisdiction and Waiver of Jury Trial. THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
      PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
      The Company hereby consents and agrees that the state or federal courts
      located in the County of New York, State of New York shall have exclusion
      jurisdiction to hear and determine any Proceeding between the Company, on
      the one hand, and the Purchaser, on the other hand, pertaining to this
      Agreement or to any matter arising out of or related to this Agreement;
      provided, that the Purchaser and the Company acknowledge that any appeals
      from those courts may have to be heard by a court located outside of the
      County of New York, State of New York, and further provided, that nothing
      in this Agreement shall be deemed or operate to preclude the Purchaser
      from bringing a Proceeding in any other jurisdiction to collect the
      obligations, to realize on the Collateral or any other security for the
      obligations, or to enforce a judgment or other court order in favor of the
      Purchaser. The Company expressly submits and consents in advance to such
      jurisdiction in any Proceeding commenced in any such court, and the
      Company hereby waives any objection which it may have based upon lack of
      personal jurisdiction, improper venue or forum non conveniens. The Company
      hereby waives personal service of the summons, complaint and other process
      issued in any such Proceeding and agrees that service of such summons,
      complaint and other process may be made by registered or certified mail
      addressed to the Company at the address set forth in Section 7(g) and that
      service so made shall be deemed completed upon the earlier of the
      Company's actual receipt thereof or three (3) days after deposit in the
      U.S. mails, proper postage prepaid. The parties hereto desire that their
      disputes be resolved by a judge applying such applicable laws. Therefore,
      to achieve the best combination of the benefits of the judicial system and
      of arbitration, the parties hereto waive all rights to trial by jury in
      any Proceeding brought to resolve any dispute, whether arising in
      contract, tort, or otherwise between the Purchaser and/or the Company
      arising out of, connected with, related or incidental to the relationship
      established between then in connection with this Agreement. If either
      party hereto shall commence a Proceeding to enforce any provisions of this
      Agreement, the Securities Purchase Agreement or any other Related
      Agreement, then the prevailing party in such Proceeding shall be
      reimbursed by the other party for its reasonable attorneys' fees and other
      costs and expenses incurred with the investigation, preparation and
      prosecution of such Proceeding.

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

                                       12
<PAGE>

            (l) Severability. If any term, provision, covenant or restriction of
      this Agreement is held by a court of competent jurisdiction to be invalid,
      illegal, void or unenforceable, the remainder of the terms, provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected, impaired or invalidated, and the
      parties hereto shall use their reasonable efforts to find and employ an
      alternative means to achieve the same or substantially the same result as
      that contemplated by such term, provision, covenant or restriction. It is
      hereby stipulated and declared to be the intention of the parties that
      they would have executed the remaining terms, provisions, covenants and
      restrictions without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

            (m) Headings. The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

                   [Balance of page intentionally left blank;
                             signature page follows]

                                       13
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

AUXILIO, INC.                            LAURUS MASTER FUND, LTD.

By:                                      By:
      ------------------------------           ------------------------------
Name:                                    Name:
      ------------------------------           ------------------------------
Title:                                   Title:
      ------------------------------           ------------------------------

Address for Notices:                     Address for Notices:

27401 Los Altos, Suite 100               825 Third Avenue, 14th Floor
Mission Viejo, CA 92691                  New York, NY 10022
Attention:  Paul Anthony                 Attention:  David Grin
Facsimile:  949-614-0701                 Facsimile:  212-541-4434

                                       14
<PAGE>

                                    EXHIBIT A

                                  LEGAL OPINION

<PAGE>

                                   Schedule A

                                                         Shares
          Selling Stockholder                         Being Offered
          -------------------                         -------------

<PAGE>

                                  SCHEDULE 7(b)
                                  -------------

(a)

            (1) In March 2006, the Company borrowed $250,000 from Cambria
      Investment Fund L.P. under the Revolving Loan Agreement. This borrowing
      earned Cambria the right to receive warrants to purchase 75,000 shares of
      the Company's common stock at the market price, as 17,500 shares vest for
      every multiple of $50,000 borrowed under the Revolving Loan Agreement with
      the Company. Total warrants issued to Cambria under this note is 162,500.

            (2) On December 28, 2004, Auxilio entered into a Revolving Loan and
      Security Agreement with Mr. Michael D. Vanderhoof. Mr. Vanderhoof is a
      director of the Company. Under the agreement, the Company can borrow up to
      $500,000. As of March 31, 2005, the Company had borrowed $500,000 under
      the Revolving Loan. During the three months ended March 31, 2005, the
      Company issued 50,000 warrants at $2.50 per share to Mr. Vanderhoof. All
      amounts owed on The Revolving Loan and Security Agreement have been repaid
      and the debt facility expired on December 10, 2005.

            (3) On December 10, 2004 the Company issued a warrant agreement to
      Paul T. Anthony, Chief Financial Officer, to purchase 330,000 shares of
      the Company's common stock at an exercise price of $1.95 per share, which
      was equal to the fair market value of the Company's common stock on the
      date of issuance.

            (4) During 2004 the Board of Directors approved and issued warrant
      agreements to purchase 715,000 shares of the Company's common stock to
      three officers at an exercise price of $0.30 per share, which is equal to
      the price the Company sold shares in a private placement. The warrants
      granted are restricted from vesting for a minimum of one year, while
      certain shares only vest pursuant to certain earning targets being
      achieved, and accordingly, the intrinsic value measurement will be made
      when the earnings targets are met. A total of 640,000 shares subject to
      the warrants have vested and 75,000 have been cancelled.

            (5) The Company granted a warrant agreement to purchase 5,000 shares
      at $0.30 per share in April 2004 to a "finder" whom introduced the Company
      to Workstream.

             (10) The Company granted a warrant agreement to purchase 8,333
      shares at $12.00 per share in May 2000 to David Belcher whom performed
      services for the Company.

            The warrants set forth above state that: "If (but without any
      obligation to do so) the Company proposes to register (including for this
      purpose a registration effected by the Company for shareholders other than
      the Holder) any of its stock under the Securities Act of 1934 in
      connection with the public offering of such securities solely for cash
      (other than a registration on Form S?4, Form S?8 or any successors thereto
      or a registration in which the only stock being registered is Common Stock
      issuable upon conversion of debt securities which are also being
      registered), the Company shall, at such time, promptly give the Holder
      written notice of such registration. Upon the written request of the
      Holder given within fifteen (15) days after mailing of such notice by the
      Company, the Company shall, subject to the provisions of Section 5(a),
      below, cause to be registered under the Securities Act all of the Warrant
      Shares."

<PAGE>

(b) The warrants and shares of common stock issued in the Company's July 2005
Private Placement have registration rights. The registration rights granted to
these securities are as follows: "If at any time or from time to time, the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders (other than a
registration relating solely to employee stock option or purchase plans or
relating solely to an SEC Rule 145 transaction or to debt securities), the
Company will (i) promptly give to each Purchaser written notice thereof; and
(ii) subject to Section 4(a) below, include in such registration (and any
related qualification under state securities laws or other compliance), and in
any underwriting involved therein, all the Shares specified in a written request
or requests, received within twenty (20) days after such written notice from the
Company, by any Purchaser or Purchasers. (a) If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Purchasers as a part of the
written notice given pursuant to Section 4. In such event the right of any
Purchaser to registration pursuant to Section 4 shall be conditioned upon the
inclusion of such Purchaser's Shares in the underwriting. All Purchasers
proposing to distribute their securities shall (together with the Company and
other holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding any
other provision of this Section 4, if the underwriter determines that marketing
factors require a limitation of the number of Shares to be included in the
registration, such limitation shall be done on a pro rata basis based on the
total number of Shares held by the Purchasers and based on the total number of
securities entitled to registration held by other persons or organizations
selling securities pursuant to registration rights granted them by the Company.
The Company shall advise all Purchasers of Shares which would otherwise be
registered and underwritten pursuant hereto of any such limitations, and the
number of Shares that may be included in the registration. If any Purchaser
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any securities
excluded or withdrawn from such underwriting shall not be transferred prior to
90 days after the effective date of the registration statement for such
underwriting, or such shorter period as the underwriter may require."

                                       18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]