Document:

<PAGE>

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF
SUCH ACT AND THE APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.

                  WARRANT TO PURCHASE [NUMBER OF SHARES] SHARES
                             OF THE COMMON STOCK OF
                         DIGITAL LIFESTYLES GROUP, INC.

WARRANT NO.:  2004-[____]                    DATE OF ISSUANCE: SEPTEMBER 9, 2004

      This certifies that [_________] or his, her or its permitted assigns (each
individually, a "HOLDER") for value received, shall be entitled to purchase from
Digital Lifestyles Group, Inc., a Delaware corporation (the "COMPANY"), having
its principal place of business at 1001 S. Capital of Texas Highway, Building I,
Suite 200, Austin, Texas 78746, a maximum of [_______] fully paid and
nonassessable shares of the Company's common stock, par value $0.03 per share
("COMMON STOCK"), for a purchase price equal to $0.475 per share (the "EXERCISE
PRICE") at any time, or from time to time, up to and including 5:00 p.m.,
Central Standard time on the date two years after the Registration Statement (as
defined below) is declared effective (the "EXPIRATION DATE"), upon (i) the
surrender to the Company at its principal place of business (or at such other
location as the Company may advise the Holder in writing) of this Warrant and a
Form of Subscription in substantially the form attached hereto duly completed
and executed and, (ii) if applicable, payment in cash or by check or other
consideration permitted pursuant to Section 1(b) hereof of the aggregate
Exercise Price for the number of shares for which this Warrant is being
exercised, determined in accordance with the provisions hereof. The Exercise
Price and the number of shares of Common Stock purchasable hereunder are subject
to adjustment as provided in Section 3 hereof.

      This Warrant is one of a series of Warrants issued for shares of Common
Stock of the Company pursuant to that certain Securities Purchase Agreement,
dated September 9, 2004, by and among the Company and various purchasers
(collectively, the "WARRANT SERIES").

      This Warrant is subject to the following terms and conditions:

1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.

      (a) General. This Warrant is exercisable at the option of the Holder of
record hereof, at any time or from time to time up to the Expiration Date for
all or any part of the shares of Common Stock (but not for a fraction of a
share) which may be purchased hereunder. The Company agrees that the shares of
Common Stock purchased under this Warrant shall be and are deemed to be issued
to the Holder hereof as the record owner of such shares as of the close of
business on the date on which (i) this Warrant shall have been surrendered,
properly endorsed, (ii) the completed, executed Form of Subscription shall have
been surrendered, and (iii) payment shall have been made to the Company for such
shares, in each case, at the Company's address set forth above (or at such other
location as the Company may advise the Holder in writing). Certificates for the
shares of Common Stock so purchased, together with any other securities or
property to which the Holder is entitled upon such exercise, shall be delivered
to the Holder by the Company at the Company's expense within a reasonable time
after the rights represented by this Warrant have been so exercised, and in any
event, within ten (10) days of such exercise. In case of a purchase of less than
all the shares that may be purchased under this Warrant, the Company shall
cancel this Warrant and execute and deliver a new Warrant or Warrants of like
tenor for the balance of the shares purchasable under the Warrant surrendered
upon such purchase, to the Holder hereof within a reasonable time. Each

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<PAGE>

stock certificate so delivered shall be in such denominations of Common Stock as
may be requested by the Holder hereof and shall be registered in the name of the
Holder.

      (b) Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock is
greater than the Exercise Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Form of Subscription and notice
of such election, in which event the Company shall issue to the Holder a number
of shares of Common Stock computed using the following formula:

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

      Where:

            X =   the number of shares of Common Stock to be issued to the
                  Holder;

            Y =   the number of shares of Common Stock purchasable under the
                  Warrant or, if only a portion of the Warrant is being
                  exercised, the portion of the Warrant being canceled (at the
                  date of such calculation);

            A =   the fair market value of one share of the Company's Common
                  Stock (at the date of such calculation); and

            B =   Exercise Price (as adjusted to the date of such
                  calculation).

For purposes of the above calculation, "FAIR MARKET VALUE" shall mean with
respect to the Common Stock on any date in question the average of the closing
sales prices per share of the Common Stock for the previous fifteen (15)
consecutive trading days (i) on the principal securities exchange or trading
market where the Common Stock is listed or traded or, if the foregoing does not
apply, (ii) in the over-the-counter market on the electronic bulletin board for
the Common Stock or, if, and only if, no trading price is reported for the
Common Stock, then (iii) its fair market value shall be as determined, in good
faith by the board of directors of the Company.

      (c) Common Stock Legend. Upon any exercise of the Warrants, certificates
representing the shares of Common Stock shall bear a restrictive legend
substantially identical to that set forth on the face of this Warrant.

2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES.

      The Company covenants and agrees that all shares of Common Stock that may
be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duty authorized, validly issued, fully paid and nonassessable and
free of all taxes, liens and charges with respect to the issue thereof. The
Company further covenants and agrees that, during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities

                                       2
<PAGE>

exchange upon which the Common Stock may be listed; provided, however, that the
Company shall not be required to effect a registration under Federal or State
securities laws with respect to such exercise.

3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.

      The Exercise Price and the number of shares (or amount of other securities
or property) purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in
this Section 3. This Section shall not require an adjustment to the Exercise
Price in connection with any dividends paid in cash or upon any sale of shares
of Common Stock for a per share price that is less than the Exercise Price.

      (a) Subdivision or Combination of Stock. If the Company shall effect a
stock dividend or stock split or subdivide its outstanding shares of Common
Stock into a greater number of shares, the Exercise Price in effect immediately
prior to such stock dividend, stock split or subdivision shall be
proportionately reduced, and conversely, if the Company shall effect a reverse
stock split or combine its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such reverse
stock split or combination shall be proportionately increased. Upon each
adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment, the
number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.

      (b) Dividends in Common Stock, Other Stock, Property, Reclassification. If
the holders of Common Stock (or any shares of stock or other securities at the
time receivable upon the exercise of this Warrant) shall have received or become
entitled to receive, without payment therefor,

            (i) Common Stock or any shares of stock or other securities that are
      directly or indirectly convertible into or exchangeable for Common Stock,
      or any rights or options to subscribe for, purchase or otherwise acquire
      any of the foregoing by way of dividend or other distribution (other than
      shares of Common Stock issued as a stock dividend, stock split or
      subdivision, adjustments in respect of which shall be covered by the terms
      of Section 3(a) above),

            (ii) any cash paid or payable otherwise than as a cash dividend
      (other than a liquidation or dissolution, which shall be covered by the
      terms of Section 3(d) below), or

            (iii) additional shares of Common Stock or additional stock or other
      securities or property (including cash) by way of spin-off, split-up,
      reclassification, recapitalization, reorganization, combination of shares
      or similar corporate rearrangement (other than shares of Common Stock
      issued as a stock dividend, stock split or subdivision, adjustments in
      respect of which shall be covered by the terms of Section 3(a) above),

then, and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable upon such exercise, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (ii) and (iii) above) which
such Holder would hold on the date of such exercise had such Holder been the
holder of record of such Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other additional
stock and other securities and property.

      (c) Reorganization, Reclassification, Consolidation, Merger or Sale. If
any reclassification, recapitalization or reorganization, or consolidation or
merger of the Company with another corporation,

                                       3
<PAGE>

or the sale of all or substantially all of its assets or other similar
transaction, shall be effected in such a way that holders of Common Stock shall
be entitled to receive, with respect to or in exchange for their shares of
Common Stock, securities or other assets or property (an "ORGANIC CHANGE") and
the Company is the resulting or surviving corporation of such Organic Change,
then, as a condition of such Organic Change, provisions shall be made by the
Company whereby the Holder hereof shall thereafter have the right to purchase
and receive (in lieu of the shares of the Common Stock of the Company
purchasable and receivable upon the exercise of this Warrant immediately prior
to such Organic Change) such shares of stock, securities or other assets or
property as may be issued or payable in connection with such Organic Change with
respect to or in exchange for the number of outstanding shares of such Common
Stock purchasable and receivable upon the exercise of this Warrant immediately
prior to such Organic Change. In the event of any Organic Change, appropriate
provision shall be made by the Company with respect to the rights and interests
of the Holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Exercise Price and of the
number of shares (or amount of stock, other securities or property) purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or property
thereafter deliverable upon the exercise hereof. In the event of any Organic
Change pursuant to which the Company is not the surviving or resulting
corporation, prior to the consummation thereof, the corporation resulting from
such Organic Change or the corporation purchasing such assets shall assume by
written instrument the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the Holder
may be entitled to purchase.

      (d) Liquidation or Dissolution. In the event of a proposed dissolution or
liquidation of the Company, this Warrant will terminate immediately prior to the
consummation of such proposed action, so long as the Company has delivered the
notice required by Section 3(f)(iv) below.

      (e) Certain Events. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment
in the number and class of shares or other securities or property available
under the Warrant, the Exercise Price or the application of such provisions, so
as to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate
Exercise Price the total number, class and kind of shares or other securities or
property as the Holder have owned had the Warrant been exercised prior to the
event and had the Holder continued to hold such shares until after the event
requiring adjustment.

      (f) Notices of Change.

            (i) Immediately upon any adjustment in the number or class of shares
      subject to this Warrant and of the Exercise Price, the Company shall give
      written notice thereof to the Holder, setting forth in reasonable detail
      and certifying the calculation of such adjustment,

            (ii) The Company shall give written notice to the Holder at least
      ten (10) business days prior to the date on which the Company closes its
      books or takes a record for determining rights to receive any dividends or
      distributions,

            (iii) The Company shall also give written notice to the Holder at
      least ten (10) business days prior to the date on which an Organic Change
      shall take place, and

            (iv) The Company shall give written notice to the Holder at least
      ten (10) business days prior to the effective date of any proposed
      liquidation or dissolution of the Company.

                                       4
<PAGE>

      (g) Calculations. All calculations under this Section 3 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

      (h) Adjustments. Notwithstanding any provision of this Section 3, no
adjustment of the Exercise Price shall be required if such adjustment is less
than $0.01; provided, however, that any adjustments that by reason of this
Section 3(h) are not required to be made shall be carried forward and taken into
account for purposes of any subsequent adjustment.

4. REGISTRATION RIGHTS.

      Shares of Common Stock issued upon exercise of this Warrant shall be
registrable and subject to the terms of that certain Registration Rights
Agreement dated as of date hereof by and among the Company and various
purchasers, by which the Company has agreed to file a registration statement for
the resale of the shares of Common Stock.

5. ISSUE TAX.

      The issuance of certificates for shares of Common Stock upon the exercise
of the Warrant shall be made without charge to the Holder of the Warrant for any
issue tax (other than any applicable income taxes) in respect thereof; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Holder of the Warrant being
exercised.

6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY.

      Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company or any other matters or any rights whatsoever as a
stockholder of the Company. Except as provided herein, no dividends or interest
shall be payable or accrue in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised. No provisions hereof, in
the absence of affirmative action by the Holder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the Holder
hereof shall give rise to any liability of such Holder for the Exercise Price or
as a stockholder of the Company, whether such liability is asserted by the
Company or by its creditors.

7. TRANSFER; DIVISION AND COMBINATION.

      (a) Transfer Restricted. This Warrant, and any rights hereunder, may not
be assigned or transferred, except as provided in the legend hereon and in
accordance with and subject to provisions of (i) all applicable state securities
laws, and (ii) the Securities Act, and the rules and regulations promulgated
thereunder. Any purported transfer or assignment made other than in accordance
with this Section 7 shall be null and void and of no force and effect.

      (b) Assignment. Any assignment permitted hereunder shall be made by
surrender of this Warrant to the Company at its principal place of business as
set forth above with a Form of Assignment in substantially the form attached
hereto duly completed and executed and funds sufficient to pay any transfer tax,
if any. In such event, the Company shall, without charge, execute and deliver a
new Warrant in the name of the assignee named in such instrument of assignment
in the amount so assigned and this Warrant shall be promptly canceled; provided,
however, that in the event that Holder hereof shall assign or transfer less
thank the full amount of this Warrant, a new Warrant evidencing the remaining
portion of

                                       5
<PAGE>

this Warrant not so assigned or transferred shall be issued in the name of the
Holder.

      (c) Division and Combination. This Warrant may divided or combined with
other Warrants upon presentation and surrender hereof at the principal place of
business of the Company as set forth above, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
signed by the Holder. Subject to compliance with Section 3(a), as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants of like tenor in exchange
for the Warrant or Warrants to be divided or combined in accordance with such
notice.

      (d) Non-Interference. The Company shall not close its books against the
transfer of this Warrant or any share of Common Stock issued or issuable upon
the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant.

8. REGISTER.

      The Company will maintain a register containing the names and addresses of
the registered Holders of the Warrants (the "WARRANT REGISTER"). The Holder may
change his or its address as shown on the Warrant Register at any time by giving
written notice to the Company requesting such change.

9. FRACTIONAL SHARES.

      No fractional shares shall be issued upon exercise of this Warrant. The
Company shall, in lieu of issuing any fractional share, pay the Holder entitled
to such fraction a sum in cash equal to such fraction multiplied by the then
effective Exercise Price.

10. MISCELLANEOUS.

      (a) No Impairment. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities, sale or
other transfer of any of its assets or properties, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereunder against
impairment. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the amount payable therefor on such exercise,
and (ii) will take all action that may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

      (b) Amendments. Any term of this Warrant may be amended with the written
consent of the Company and the Holders of Warrants constituting the Warrant
Series representing not less than fifty percent (50%) of the shares of Common
Stock issuable upon exercise of any and all outstanding Warrants constituting
the Warrant Series, even without the consent of the Holder. Any amendment
effected in accordance with this Section 10(b) shall be binding upon each Holder
of any of the Warrants constituting the Warrant Series, each future Holder of
all such Warrants, and the Company; provided, however, that no special
consideration or inducement may be given to any such Holder in connection with
such consent that is not given ratably to all such Holders, and that such
amendment must apply to all such Holders equally and ratably in accordance with
the number of shares of Common Stock issuable upon exercise of their Warrants.
The Company shall promptly give notice to all Holders of the Warrants
constituting the Warrant Series of any amendment effected in accordance with
this Section 10(b).

                                       6
<PAGE>

      (c) Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to each such Holder at its
address as on the Warrant Register or to the Company at the address indicated
therefor in the first paragraph of this Warrant or such other address as either
may from time to time provide to the other.

      (d) Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the covenants and
agreements of the Company shall inure to the benefit of the permitted successors
and assigns of the Holder hereof.

      (e) Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. THIS WARRANT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS BETWEEN RESIDENTS OF DELAWARE WHOLLY EXECUTED AND
WHOLLY PERFORMED THEREIN.

      (f) Lost Warrants. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

      (g) Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate. In any action or proceeding brought to enforce any provision
of this Warrant or where any provision hereof is validly asserted as a defense,
the successful party to such action or proceeding shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

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

                                              COMPANY:

                                              DIGITAL LIFESTYLES GROUP, INC.

                                              By:_______________________________
                                                 Name:__________________________
                                                 Title:_________________________

ATTEST:

____________________________
Secretary

                                       8
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION

                                                        Date: ___________, 200__

Digital Lifestyles Group, Inc.
1001 S. Capital of Texas Highway
Building I, Suite 210
Austin, Texas 78746

Attn: Chief Financial Officer

Ladies and Gentlemen:

[ ]   The undersigned hereby elects to exercise the warrant issued to it by
      Digital Lifestyles Group, Inc. (the "COMPANY') and dated September 9, 2004
      (the "WARRANT") and to purchase thereunder ________ shares of the Common
      Stock of the Company (the "SHARES") at a purchase price of $0.475 per
      Share for an aggregate purchase price of ______________Dollars ($ ) (the
      "EXERCISE PRICE"). Pursuant to the terms of the Warrant, the undersigned
      has delivered the Exercise Price herewith in full in cash or by certified
      check or wire transfer.

[ ]   The undersigned hereby elects to convert ________________percent (___%) of
      the value of the Warrant pursuant to the Net Exercise provisions of
      Section 1(b) of the Warrant.

In connection with the exercise of the Warrant to purchase the number of shares
specified above, undersigned makes the following representations and covenants:

      1. The undersigned is an "Accredited Investor," as such term is defined in
Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as
amended (the "SECURITIES ACT").

      2. The undersigned is purchasing the Shares for the undersigned's own
account, or for one or more investor accounts for which the undersigned is
acting as a fiduciary or agent, in each case for investment, and not with a view
to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act.

      3. The undersigned has had access to such financial and other information
concerning the Company and the Shares that the undersigned has deemed necessary
in connection with a decision to purchase the Shares, including an opportunity
to ask questions of and request information from the Company.

                                          Very truly yours,

                                          ____________________________________
                                          By:_________________________________
                                          Name:_______________________________
                                          Title:______________________________

                                       9
<PAGE>

                                    EXHIBIT B

                                 ASSIGNMENT FORM

    (To assign the foregoing Warrant, execute this form and supply required
                                  information.
                  Do not use this form to exercise the Warrant)

      FOR VALUE RECEIVED, hereby sells, assigns and transfers all of the rights
of the undersigned under the attached Warrant (No. 2004- _____) with respect to
the number of shares of Common Stock covered thereby set forth below, unto:

Name of Assignee                    Address                        No. of Shares

By:____________________________
   Name:_______________________
   Title:______________________

Signature Guaranteed:

By:____________________________

The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

                                       10<PAGE>

                            MASTER PRIVATE PLACEMENT
                                ENGAGEMENT LETTER

                                                      PERSONAL AND CONFIDENTIAL

                                                          August 31, 2004

Digital Lifestyles Group, Inc.
1001 S. Capital of Texas Hwy.
Building 1, Suite 210
Austin, Texas 78746

Attention:        Mr. Kent Savage, Chairman and Chief Executive Officer

Dear Kent:

You have indicated that Digital Lifestyles Group, Inc. (the "COMPANY") desires
to obtain financing for general corporate purposes. The purpose of this letter
(this "AGREEMENT") is to set forth the agreement between the Company and Tejas
Securities Group, Inc. ("TEJAS") regarding the services to be performed by
Tejas.

In connection with the proposed private placement (the "FINANCING") by the
Company of not less than 9,400,000 units (the "SECURITIES"), each unit ("UNIT")
consisting of one share of the Company's Common Stock ("SHARE") and a warrant
(on the terms hereinafter described) ("WARRANT") to purchase one-half of a
Share, priced at the arithmetic mean of the average of the closing sales price
of one share of Common Stock on the Nasdaq OTC Market for the five trading days
ending on the trading date immediately preceding the date of the closing of the
sale of the Securities ("MARKET VALUE") multiplied by (ii) 0.8 per Unit (the
"PER UNIT PRICE"), and on such other terms and conditions to be established by
mutual agreement at the time of sale, the Company and Tejas agree. The Warrants
will be for a term of two (2) years and have an exercise price equal to 110% of
Market Value per Share, which will be subject to adjustment in order to protect
the holders thereof against dilution in certain events.

1.       (a)      Prior to the sale of the Securities to any offeree or any
                  person advising such offeree, they shall: (i) be furnished
                  information by the Company pertaining to the Securities and
                  the terms and conditions of the Financing, and (ii) be given
                  the opportunity by the Company to ask questions and receive
                  answers concerning the Company and the Securities and the
                  terms and conditions of the Financing.

         (b)      The final offering documents signed in connection with the
                  placement of the Securities, including, but not limited to,
                  any stock purchase agreement or any private placement
                  memorandum (the "OFFERING DOCUMENTS"), will not contain any
                  untrue statement of a material fact or omit to state a
                  material fact necessary to make such information not
                  misleading.

         (c)      The Company covenants that it shall promptly notify Tejas if,
                  because of the occurrence of any event or condition, the
                  passing of time or otherwise, any of the

<PAGE>

                  Offering Documents, shall, prior to final purchase of the
                  Securities, contain any untrue statement of a material fact or
                  omit to state a material fact necessary to make the
                  statements, in light of the circumstances under which they
                  were made, not misleading. The Offering Documents shall be
                  amended in form and substance so that after giving effect to
                  such amendment, the Offering Documents will not contain any
                  untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements in light of the
                  circumstances under which they were made, not misleading.

         (d)      The Company shall furnish or make available to Tejas or its
                  authorized representatives any and all documentation and
                  information reasonably requested in connection with Tejas' due
                  diligence efforts regarding this placement.

         (e)      Except for the Securities and the issuance of stock options or
                  the underlying shares of common stock relating thereto
                  issuable pursuant to the Company Stock Option Plan or any
                  other shares of common stock underlying derivative securities
                  of the Company outstanding on the date hereof, the Company
                  shall not offer to sell any securities of the same class or
                  similar securities as the Securities from the date hereof
                  until after a period of six (6) months has elapsed after the
                  date of the last sale of the Securities unless the Company
                  shall have provided Tejas with a satisfactory opinion from the
                  Company's legal counsel as to whether the proposed offering
                  does not cause any violation of any securities laws, rules or
                  regulations.

2.       The Company hereby appoints Tejas as its exclusive agent to attempt to
         arrange the private placement of the Securities during the period
         commencing on the date of execution of this letter by the Company and
         ending on midnight, August 31, 2004 (the "OFFERING PERIOD"), which may
         be extended by mutual written agreement of the parties hereto;
         provided, however, that the Offering Period will automatically be
         extended until midnight, September 8, 2004 upon notice from Tejas that
         it has identified Investors interested in investing in the Securities
         who require the additional time to complete any closing documents or
         procedures (and any reference hereinafter to the Offering Period shall
         mean the Offering Period as so extended). Subject to the terms and
         conditions herein set forth, Tejas accepts such appointment and shall
         endeavor to find purchasers (the "INVESTORS") for all of the Securities
         who can satisfy the Company that they qualify as "accredited investors"
         pursuant to Rule 501 promulgated under the Securities Act of 1933 (the
         "1933 ACT"). Tejas makes no warranty or guaranty of its success in
         placing the Securities and there is no express or implied warranty and
         no liability to Tejas for failure to expend any particular level of
         effort. Tejas' agency hereunder is coupled with an interest and such
         agency shall continue until the termination of the Offering Period. The
         Company shall have the right to reject any and all proposed purchasers
         of the Securities for any reason the Company deems reasonable. This
         paragraph 2 and paragraphs 4, 5 and 7 below shall survive any
         termination of this Agreement. Notwithstanding the foregoing, in the
         event that a potential purchaser of the Securities (the "OFFEREE") is
         contacted by Tejas during the Offering Period and the Offeree purchases
         Securities from the Company after the expiration of the Offering
         Period, at any time during a period of twelve (12) months from the date
         of this Agreement, Tejas shall be entitled to the same fees and
         warrants provided for below with respect to such purchase had the
         purchase occurred during the Offering Period.

<PAGE>

3.       During the Offering Period, the Company shall not, directly or
         indirectly (except through Tejas), offer to sell, or attempt to offer
         or sell, or solicit any offer to buy, or otherwise negotiate in respect
         of, any of the Securities other than to existing stockholders,
         employees of the Company and other non-institutional potential
         purchasers contacted by the Company prior to the Offering Period (the
         "Company Purchasers").

4.       Upon the closing of the sale of Securities, the Company shall pay Tejas
         a fee in cash at closing equal to four percent (4%) of the aggregate
         proceeds from the sale of Securities to the Investors, which shall not
         include up to $1.1 million in proceeds from the Company Purchasers. At
         the end of the Offering Period (as the same may be extended), if the
         Company and the Investors have agreed on the form of closing documents
         and the Investors are ready and willing to purchase Securities with an
         aggregate purchase price of at least $3.9 million, but the Company
         Purchasers are not ready and willing to purchase Securities with an
         aggregate purchase price of at least $1.1 million and there is no
         closing of the sale of Securities, then the Company shall pay Tejas a
         fee equal to $40,000 and the expense reimbursement described in the
         following sentence. The Company also agrees to reimburse Tejas for all
         documented reasonable out-of-pocket expenses incurred on this project
         through the end of the Offering Period, subject to an aggregate limit
         of $15,000 ($25,000 if the Offering Period is extended) without prior
         written approval. Such expense reimbursement is not contingent upon the
         successful completion of the transaction contemplated hereunder and
         shall be payable upon the first to occur of the closing of the sale of
         the Securities or 30 days after billed by Tejas. The Company shall be
         responsible for, and shall make, all filings required with state
         securities administrators in connection with the Financing and to pay
         all costs and expenses (including legal and filing fees) in connection
         therewith.

5.       (a)      The Company agrees, for a price of one hundred dollars
                  ($100.00) to sell to Tejas, concurrently with, but subject to
                  and contingent on the consummation of the successful sale of
                  the Securities, Warrants exercisable into a number of Shares
                  equal to the sum of 1,000,000 and the number obtained by
                  dividing the gross proceeds from the sale of Securities in
                  excess of $5.0 Million by 5 (including for such purposes
                  Securities purchased by Company Purchasers). By way of
                  example, if Securities are sold resulting in aggregate
                  proceeds of $6,000,000, then Tejas will be entitled to a
                  warrant to purchase 1,200,000 Shares
                  (1,000,000+[1,000,000/5]). All Shares issuable upon the
                  exercise of such Warrants will be issuable out of the
                  authorized unissued shares of Common Stock of the Company.
                  Such Warrants will have a term of eight (8) years and may be
                  exercised as to all or any lesser number of Shares covered
                  thereby, commencing at the end of the Offering Period. Such
                  Warrants shall be transferable (subject to applicable
                  securities laws) and shall contain provisions that require
                  registration for re-sale of the underlying Common Stock, with
                  the registration to remain effective until all can be freely
                  sold without volume limitations under Rule 144(k), all
                  exercisable in whole or in part on a net cashless exercise
                  basis, with the exercise period extended for any period during
                  which the registration is lapsed.

<PAGE>

         (b)      The exercise price of the Warrants to be received by Tejas
                  shall be equal to the exercise price for the Warrants sold to
                  Investors in this Offering and shall except as noted in
                  paragraph 5(a) above, otherwise have the same terms and
                  conditions.

         (c)      Additionally, the Company agrees that Tejas will have, for a
                  period of twelve (12) months from the date of the Agreement ,
                  the right to participate on the same terms and conditions as
                  any other managing underwriter or placement agent in any
                  public offerings, private placements or other equity or debt
                  financings that may be undertaken by the Company in which the
                  Company's Common Stock or securities convertible into or
                  exercisable for Common Stock (including, without limitation,
                  convertible debt) is to be sold at a price, or with a
                  conversion or exercise price, less than $0.416 or at a
                  discount of greater than 30% of the fair market value of such
                  security, in each case on terms and conditions customary for
                  similar transactions. Tejas shall exercise such right within
                  twenty-four (24) hours of receipt of written notification from
                  the Company describing in sufficient detail the terms of such
                  financing. In the event of a breach of this subparagraph 5(c),
                  then Tejas will be entitled to receive the same fee it is
                  receiving under the Agreement for any such financings.

6.       Prior to the sale of any of the Securities, the Company shall make
         customary representations and warranties to Tejas and the purchasers of
         the Securities.

7.       The Company agrees to indemnify Tejas as set forth in Schedule I
         attached hereto, which is to be an integral part of this Agreement.

8.       Any dispute, controversy or claim arising out of, relating to, or in
         connection with, this Agreement or the breach, termination or validity
         hereof shall be settled by submission to arbitration before the
         National Association of Securities Dealers, Inc. ("NASD"), pursuant to
         the Code of Arbitration Procedure of that organization. All parties
         agree to the jurisdiction of the NASD for such purposes. If arbitration
         before the NASD is not available, the parties shall arbitrate pursuant
         to the rules of the American Arbitration Association.

9.       Except where otherwise herein provided all notices, information,
         consents and other communications required or permitted by the
         provisions of this Agreement to be given, sent by any party, shall be
         in writing and shall be deemed to be properly given when: (i) delivered
         personally to any of the hereinafter designated addressees or the named
         representatives thereof; (ii) mailed by prepaid certified or registered
         mail, return receipt requested; or (iii) when sent by telephone
         facsimile, telegram, cable or email; and in each instance addressed to
         such party at the respective address as follows (in each such case
         promptly confirmed with a copy thereof sent as in (ii)):

<PAGE>

If to the Company:                               If to Tejas:

Digital Lifestyles Group, Inc.                   Tejas Securities Group, Inc.
1001 S. Capital of Texas Hwy.                    2700 Via Fortuna, Suite 400
Building 1, Suite 210                            Austin, TX 78746
Austin, Texas 78746

<TABLE>
<S>               <C>                                         <C>                <C>
Attention:        Kent Savage                                 Attention:         John J. Gorman
                  Chairman and Chief Executive Officer                           Chairman
</TABLE>

Either party may at any time change its respectively designated address above by
giving notice thereof to the other parties hereto.

10.      The Company acknowledges that Tejas has been retained hereunder solely
         as an adviser to the Company, and not as an adviser to or agent of any
         other person, and that the Company's engagement of Tejas is as an
         independent contractor and not in any other capacity including as a
         fiduciary. Neither this engagement, nor the delivery of any advice in
         connection with this engagement, is intended to confer rights upon any
         persons not a party hereto (including security holders, employees or
         creditors of the Company) as against Tejas or our affiliates or their
         respective directors, officers, agents and employees.

11.      This agreement is governed by the laws of the State of Texas, without
         regard to conflicts of law principles, and will be binding upon and
         inure to the benefit of the Company and Tejas and their respective
         successors and assigns. This agreement may be executed in two or more
         counterparts, each of which shall be deemed to be an original, but all
         of which shall constitute one and the same agreement. Neither this
         Agreement nor any provisions hereof shall be modified except by an
         instrument in writing, signed by both parties.

If the foregoing correctly sets forth our understanding, please so indicate by
signing and returning to us the enclosed copy.

                                        Very truly yours,

                                        Tejas Securities Group, Inc.

                                    By: /s/ John J. Gorman
                                       ----------------------------------------
                                       John J. Gorman
                                       Chairman

Agreed to and accepted this 31st day of August

Digital Lifestyles Group, Inc.

By: /s/ Kent A. Savage
   ----------------------------------
   Kent A. Savage
   Chief Executive Officer

<PAGE>

                                   SCHEDULE I

1.       The person or entity (the "COMPANY") engaging the services of Tejas
         Securities Group, Inc. ("TEJAS") pursuant to the attached agreement
         (the "AGREEMENT") hereby agrees to indemnify and hold harmless Tejas
         and its affiliates, the respective directors, officers, employees, and
         agents of Tejas and its affiliates, and each other person or entity, if
         any, controlling Tejas or any of its affiliates (Tejas and each of the
         foregoing persons or entities being each referred to herein as an
         "INDEMNIFIED PARTY") from and against any and all losses, claims,
         damages and liabilities whatsoever, joint or several, and expenses
         incurred by them (including, without limitation reasonable fees and
         disbursements of counsel) to which any such Indemnified Party may
         become subject which (a) are related to or arise out of (i) action
         taken or omitted to be taken (including, without limitation, any untrue
         statements made or any statements omitted to be made) by the Company,
         or (ii) action taken or omitted to be taken by an Indemnified Party at
         the Company's direction; or (b) are otherwise related to or arise out
         of Tejas activities on the Company's behalf under the Agreement
         (INCLUDING, WITHOUT LIMITATION, ANY LOSSES, CLAIMS, ACTIONS, DAMAGES,
         LIABILITIES (WHETHER JOINT OR SEVERAL), AND EXPENSES ARISING OUT OF OR
         RESULTING FROM THE SOLE OR CONCURRENT NEGLIGENCE OF ANY INDEMNIFIED
         PARTY), and will reimburse any Indemnified Party for all reasonable
         expenses (including, without limitation, reasonable fees and
         disbursements of counsel) as they are incurred in connection with the
         investigation of, preparation for or defense of any pending or
         threatened claim or any action or proceeding arising therefrom,
         regardless of whether such Indemnified Party is a party and regardless
         of whether such claim, action or proceeding is initiated or brought by
         or on behalf of the Company. The Company will not be liable to any
         Indemnified Party under the foregoing indemnification provisions to the
         extent that any loss, claim, damage, liability or expense otherwise
         subject to indemnification under clause (b) above is finally judicially
         determined (after exhaustion of all appeals or rights to appeal) to
         have resulted primarily and directly from the willful misconduct or
         gross negligence of such Indemnified Party. The Company also agrees
         that no Indemnified Party shall have any liability (WHETHER DIRECT OR
         INDIRECT, IN CONTRACT OR TORT OR OTHERWISE, AND WHETHER ARISING OUT OF
         OR RESULTING FROM THE SOLE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY
         OR VICARIOUS LIABILITY OF SUCH INDEMNIFIED PARTY) to the Company or its
         security holders or creditors related to or arising out of the
         engagement of Tejas or its activities on behalf of the Company, except
         to the extent that any loss, claim, damage, liability or expense is
         finally judicially determined (after exhaustion of all appeals or
         rights to appeal) to have resulted primarily from the Indemnified
         Party's willful misconduct or gross negligence. The Company further
         agrees that it will not, without the prior written consent of any
         Indemnified Party in its sole discretion, settle or compromise or
         consent to the entry of any judgment in any pending or threatened
         claim, action, suit or proceeding in respect of which indemnification
         may be sought hereunder (whether or not any Indemnified Party is an
         active or potential party to such claim, action, suit or proceeding)
         unless such settlement, compromise or consent (a) includes an
         unconditional release of each affected Indemnified Party from all
         liability arising out of such claim, action, suit or proceeding, and
         (b) does not include a statement indicating, or an admission of, any
         fault, culpability, or a failure to act by any affected Indemnified
         Party.

2.       Promptly after receipt by an Indemnified Party of notice of any claim
         or complaint or the commencement of any action or proceeding with
         respect to which indemnification may be

<PAGE>

         sought hereunder, such Indemnified Party shall notify the Company in
         writing of such claim or complaint or of the commencement of such
         action or proceeding, but the failure to so notify the Company will not
         relieve the Company from any liability which it may have hereunder or
         otherwise, except to the extent that such failure results in the
         Company's forfeiture of material rights or defenses. If the Company so
         elects or is requested by such Indemnified Party, the Company will
         assume the defense of such action or proceeding, including without
         limitation, the employment of counsel satisfactory to such Indemnified
         Party in its sole discretion, and the payment of the fees and
         disbursements of such counsel. Each Indemnified Party shall have the
         right to employ separate counsel in any such action or proceeding and
         to participate in the defense thereof, but the fees and expenses of
         such separate counsel shall be at the expense of such Indemnified Party
         unless (a) the employment thereof has been specifically authorized by
         the Company; (b) the Company has failed to promptly assume or to
         diligently conduct the defense and employ counsel acceptable to such
         Indemnified Party in its sole discretion; or (c) the named parties, or
         parties threatened to be named, to any such action or proceeding
         (including, without limitation, any impleaded parties or parties
         threatened to be impleaded) include both such Indemnified Party and the
         Company, and such Indemnified Party shall have been advised by such
         counsel that there may be one or more legal defenses available to it
         which are different from or additional to those available to the
         Company (in each of which cases such Indemnified Party shall have the
         right to employ its own counsel and in each of such cases any fees and
         expenses of such counsel shall be paid by the Company). The Company
         shall pay the fees and expenses of legal counsel engaged in accordance
         with the foregoing provisions promptly after such fees and expenses are
         invoiced.

3.       In the event that an Indemnified Party is requested or required to
         appear as a witness or otherwise participate (including, without
         limitation, through deposition or other discovery) any action or
         proceeding brought by or on behalf of, or against, the Company in which
         such Indemnified Party is not named as a defendant, the Company agrees
         to reimburse Tejas or the Indemnified Party, as the case may be, for
         all reasonable expenses incurred by it, as incurred, in connection with
         such Indemnified Party's appearing and preparing to appear as such a
         witness, including, without limitation, the reasonable fees and
         disbursements of its legal counsel, and to compensate Tejas or the
         Indemnified Party, as the case may be, in an amount to be mutually
         agreed upon.

4.       If for any reason (other than as specified in the second sentence of
         Paragraph 1 above) the benefits of the foregoing indemnification or
         reimbursement provisions are unavailable to an Indemnified Party or
         insufficient to hold any Indemnified Party harmless in respect of any
         losses, claims, damages, liabilities or expenses (or actions in respect
         thereof) referred to herein, then the Company and Tejas shall
         contribute to the amount paid or payable by any of the Indemnified
         Parties as a result of such claim, damage, loss, liability or expense
         in such proportion as is appropriate to reflect not only the relative
         benefits received by the Company, on the one hand, and Tejas, on the
         other hand, from Tejas engagement under the Agreement referred to
         above, but also the relative fault of the Company, on the one hand, and
         Tejas, on the other hand, as well as any other relevant equitable
         considerations; provided, that Tejas obligation to make contribution
         will not exceed under any circumstances the amount of fees actually
         received by Tejas from the Company pursuant to the Agreement. The
         relative benefits received by the Company, on the one hand, and Tejas,
         on the other hand, shall be deemed to be in the same proportions as (i)
         the total value paid or proposed to be paid or received or

<PAGE>

         proposed to be received by the Company or its stockholders pursuant to
         the transaction, whether or not consummated, for which Tejas is engaged
         to render financial advisory services, bears to (ii) the fees paid or
         proposed to be paid to Tejas in connection with the Agreement. The
         relative fault of the Company, on the one hand, and Tejas, on the other
         hand, shall be determined by reference to, among other things, the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent the alleged act, statement or
         omission giving rise to such loss, claim, damage, liability or expense.
         The Company and Tejas agree that it would not be just and equitable if
         contribution were determined by pro rata allocation or by any other
         method of allocation which does not take account of the equitable
         considerations referred to above in this Paragraph 4. The amount paid
         or payable by an Indemnified Party as a result of the losses, claims,
         damages, liabilities or expense (or actions in respect thereof)
         referred to above in this Paragraph 4 shall be deemed to include any
         legal or other expenses incurred by such Indemnified Party in
         connection with investigating or defending any such claim. No person or
         entity guilty of fraudulent misrepresentation (within the meaning of
         Section II(f) of the Securities Act) shall be entitled to contribution
         from any person or entity who was not guilty of such fraudulent
         misrepresentation. If indemnification and reimbursement is available
         under the preceding Paragraphs of this Schedule I, that indemnification
         and reimbursement (in accordance with its terms) shall apply without
         regard to relative fault or other equitable considerations referred to
         in this Paragraph 4.

5.       The foregoing indemnification, reimbursement and contribution
         obligations of the Company shall be (i) cumulative of and in addition
         to any rights that any Indemnified Party may have at common law or
         otherwise, and (ii) APPLICABLE, TO THE EXTENT SET FORTH ABOVE,
         REGARDLESS OF WHETHER SOLE OR CONCURRENT NEGLIGENCE (OTHER THAN GROSS
         NEGLIGENCE), STRICT LIABILITY OR VICARIOUS LIABILITY OF ANY INDEMNIFIED
         PARTY IS ALLEGED OR PROVEN. No investigation or failure to investigate
         by an Indemnified Party shall impair the foregoing indemnification,
         reimbursement and contribution obligations of the Company or any right
         an Indemnified Party may have. The Company acknowledges and agrees that
         Tejas has been retained to provide certain services to the Company more
         specifically described in the Agreement. In such capacity, Tejas shall
         act as an independent contractor, and any duties of Tejas arising out
         of its engagement pursuant to the Agreement shall be owed solely to the
         Company.

6.       The Company hereby consents to personal jurisdiction and service and
         venue in any court in which any claim which is subject to the foregoing
         indemnification, reimbursement and (if applicable) contribution
         provisions is brought against any Indemnified Party.

7.       It is understood that, in connection with Tejas above-mentioned
         engagement, Tejas may also be engaged to act in one or more additional
         capacities, and that the terms of the original engagement or any such
         additional engagement may be embodied in one or more separate written
         agreements. The foregoing indemnification, reimbursement and (if
         applicable) contribution provisions shall apply to the original
         engagement, any such additional engagement and any modification of the
         original engagement or such additional engagement and shall survive, or
         remain in full force and effect following, the completion or any
         termination of Tejas' engagement(s).

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