Exhibit 10.2

 

EXHIBIT B

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of [·], 2010, by and among Xplore Technologies Corp., a Delaware corporation
(the “Company”), and the persons executing this Agreement as Majority
Noteholders (as defined below), for themselves and on behalf of the Noteholders
under the Exchange Agreement (as defined below) (collectively, the “Investors”
and each individually, an “Investor”).

 

WHEREAS, the Company and the other parties hereto wish to provide certain
arrangements with respect to the registration of shares of common stock, $0.001
par value, of the Company (the “Common Stock”) under the Securities Act (as
defined below);

 

WHEREAS, the Company and certain of the Investors who are signatories thereto
(the “Majority Noteholders”) have entered into an Exchange Agreement, dated
November 3, 2010 (the “Exchange Agreement”), pursuant to which, subject to the
terms and conditions therein, such Investors are converting and exchanging all
of the outstanding indebtedness of the Company under those certain Note Purchase
Agreements, dated September 5, 2008, February 27, 2009 and November 5, 2009,
each as amended, for, and the Company is issuing, shares of the Company’s
Series D Participating Convertible Preferred Stock, par value $0.001 per share
(the “Series D Preferred Stock”);

 

WHEREAS, it is a condition to the obligations of the Investors under the
Exchange Agreement that this Agreement be executed by the parties hereto, and
the parties are willing to execute this Agreement and to be bound by the
provisions hereof.

 

NOW THEREFORE, for good and valuable consideration; the receipt and sufficiency
of which is hereby acknowledged by the parties, the parties hereby agree as
follows:

 

1.             Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:

 

“Commission” means the United States Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

 

“Investor Permitted Transferee” means any affiliate of an Investor or any entity
or investment vehicle, including a partnership, in which an Investor and/or its
affiliates has a majority economic interest or which is managed by an Investor
or any of its affiliates or any transfer in accordance with the provisions of
Section 9.1 of the Exchange Agreement.

 

“Preferred Shares” means shares of Series D Preferred Stock issued to the
Investors pursuant to the Exchange Agreement, or by way of a stock dividend,
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.

 

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“Registration Expenses” means the expenses so described in Section 5.

 

“Registrable Stock” means (a) any shares of Common Stock issued or issuable upon
conversion of the Series D Preferred Stock owned by the Investors at any time,
and (b) any shares of Common Stock issued or issuable with respect to any shares
described in subsection (a) above by way of a stock dividend, stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization, but excluding such shares of Common Stock which have
been (i) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (ii) publicly sold pursuant to Rule 144.

 

“Rule 144” means Rule 144 promulgated under the Securities Act or any successor
rule thereto or any complementary rule thereto (such as Rule 144A).

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

 

“Selling Expenses” means the expenses so described in Section 5.

 

2.             Demand Registration Rights.  (a)      At any time following the
closing of the transactions contemplated by the Exchange Agreement, the holders
of Registrable Stock constituting at least twenty percent (20%) of the total
shares of Registrable Stock then outstanding may request the Company to register
under the Securities Act all or any portion of the shares of Registrable Stock
held by such requesting holder or holders for sale in the manner specified in
such notice, provided that the aggregate offering price, as such amount is
determined on the cover page of the registration statement, shall not be less
than $2,000,000.  Such request shall specify the intended method of disposition
thereof by such holder or holders, including (i) the registration requested is
for an underwritten offering and (ii) if the Company is eligible for
registration on Form S-3, whether the registration statement covering such
Registrable Stock shall be a “shelf” and provide for the sale by the holder or
holders thereof of the Registrable Stock from time to time on a delayed or
continuous basis under Rule 415 under the Securities Act. For purposes of this
Section 2 and Sections 5, 9(a) and 9(d), the term “Registrable Stock” shall be
deemed to include the number of shares of Registrable Stock which have been
issued to or would be issuable to a holder of Preferred Shares upon conversion
of all Preferred Shares held by such holder at such time, provided, however,
that the only securities which the Company shall be required to register
pursuant hereto shall be shares of Common Stock, and provided, further, however,
that, in any underwritten public offering contemplated by this Section 2 or
Section 3, the holders of Preferred Shares shall be entitled to sell such
Preferred Shares to the underwriters for conversion and sale of the shares of
Common Stock issued upon conversion thereof.  In the event that any registration
pursuant to this Section 2 shall be, in whole or in part, an underwritten public
offering of Common Stock, the number of shares of Registrable Stock to be
included in such an underwriting may be reduced (pro rata among the requesting
holders based upon the number of shares of Registrable Stock beneficially owned
by such holders) if and to the extent that, in the good faith opinion of the
managing underwriter of such offering, inclusion would adversely affect the
marketing of the Registrable Stock to be sold; provided, however, that such
number of shares of Registrable Stock shall not be reduced if any shares are to
be included in

 

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such underwriting for the account of any person other than requesting holders of
Registrable Stock.

 

(b)           Following receipt of any notice under this Section 2, the Company
shall immediately notify all holders of Registrable Stock from whom notice has
not been received and shall use all reasonable commercial efforts to register
under the Securities Act, for public sale in accordance with the method of
disposition specified in such notice from requesting holders, the number of
shares of Registrable Stock specified in such notice (and in all notices
received by the Company from other holders within 30 days after receiving of
such notice by the Company).  If such method of disposition shall be an
underwritten public offering, the holders of a majority of the shares of
Registrable Stock to be sold in such offering may designate the managing
underwriter of such offering, subject to the approval of the Company, which
approval shall not be unreasonably withheld or delayed.  The Investors shall
have up to three (3) demand registrations on Form S-1 or any successor thereof
and up to four (4) demand registrations on Form S-3 or any successor thereof
pursuant to this Section 2, provided, however, that the Company shall not be
obligated to effect more than two such registrations in any 12-month period,
provided, further, that such obligation shall be deemed satisfied only when a
registration statement covering all shares of Registrable Stock specified in
notices received as aforesaid or such lesser amount required by the Commission
pursuant to a comment letter, for sale in accordance with the method of
disposition specified by the requesting holders, shall have become effective and
the holders requesting such registration are able to register and sell at least
seventy-five percent (75%) of the Registrable Stock allowed by the Commission to
be registered in such registration and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto.

 

(c)           The Company shall use its commercially reasonable efforts to
qualify under the provisions of the Securities Act for registration on Form S-3
or any successor thereto. Promptly following the date on which the Company
becomes eligible for registration on Form S-3 or any successor thereto, the
Company shall notify the holders of the Registrable Stock.

 

(d)           The Company may postpone for a period of up to 45 days the filing
of any registration requested pursuant to this Section 2 if the Board of
Directors of the Company in good faith determines that such registration would
require the public disclosure of any plan, proposal or agreement by the Company
with respect to any financing, acquisition, recapitalization, reorganization or
other material transaction, the disclosure of which would be materially adverse
to the Company, and such determination is evidenced by the affirmative vote of a
majority of the entire Board of Directors and included in the minutes of the
meetings of the Company’s Board of Directors; provided, however, that the
Company may not exercise such right of postponement for an aggregate number of
days greater than 60 during any 12-month period and shall not register any
securities for its own account or that of any other stockholder during such
postponement period (except with respect to registration statements on
Forms S-4, S-8 (or any successor forms thereto) or another form not available
for registering the Registrable Stock for sale to the public).  In addition to
the foregoing, if any registration request under this Section 2 is received at
such time when the age of the Company’s audited financial statements would
become non-conforming under Rule 3-12 of Regulation S-X at the time the Company
is requested to file a registration statement pursuant to the terms hereof, then
the Company shall not be obligated to file any such registration statement until
the 10th day following the release of the

 

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Company’s audited financial statements for the most recently completed fiscal
year.  Notwithstanding anything to the contrary herein, the Company shall not be
required to prepare audited financial statements to be filed in connection with
such registration statement for any period year except for a fiscal year ending
March 31.

 

(e)           The Company shall be entitled to include in any registration
statement referred to in this Section 2, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account (to the extent that the inclusion of
such shares by the Company shall not adversely affect the offering), and shall
not be entitled to include shares held by any persons other than the holders of
Registrable Stock.

 

3.             Piggyback Registration Rights.  If the Company at any time (other
than pursuant to Section 2) proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to registration
statements on Forms S-4, S-8 (or any successor forms thereto) or another form
not available for registering the Registrable Stock for sale to the public),
each such time it will give prompt written notice to all holders of outstanding
Registrable Stock of its intention to do so. Upon the written request of any
such holder, received by the Company within 30 days after the giving of any such
notice by the Company, to register any of its Registrable Stock, the Company
will use its best efforts to cause the Registrable Stock, as to which
registration shall have been so requested, to be included in the securities to
be covered by the registration statement proposed to be filed by the Company,
all to the extent required to permit the sale or other disposition by the holder
of such Registrable Stock so registered. In the event that any registration
pursuant to this Section 3 shall be, in whole or in part, an underwritten public
offering of Common Stock, the number of shares of Registrable Stock to be
included in such an underwriting may be reduced if and to the extent that, in
the good faith opinion of the managing underwriter of such offering, inclusion
would adversely affect the marketing of the securities to be sold by the Company
therein. In the event that the managing underwriter on behalf of all
underwriters limits the number of shares to be included in a registration
pursuant to this Section 3, or shall otherwise require a limitation of the
number of shares to be included in the registration, then the Company will
include in such registration:

 

(i)            first, securities proposed by the Company to be sold for its own
account;

 

(ii)           second, shares of Registrable Stock requested to be included by
holders pursuant to this Section 3; and

 

(iii)          third, securities requested to be included by any other holders,

 

provided, however, that such number of shares of Registrable Stock shall not be
reduced if any shares are to be included in such underwriting for the account of
any person other than the Company or requesting holders of Registrable Stock and
provided further, that in no event shall the Registrable Stock requested to be
included by holders pursuant to this Section 3 constitute less than twenty
percent (20%) of all shares to be registered in such registration (in such
event, the Company agrees to reduce the shares of Common Stock it proposes to
register for its own

 

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account in order to assure that such Registrable Stock constitute at least
twenty percent (20%) of the shares to be registered).  The securities to be
included in any such registration pursuant to clause (ii) above shall be
allocated on a pro rata basis among the requesting holders based upon the number
of shares of Registrable Stock then held by such holders. Notwithstanding the
foregoing provisions, the Company may withdraw any registration statement
referred to in this Section 3 without thereby incurring any liability to the
holders of Registrable Stock.

 

4.             Registration Procedures.  If and whenever the Company is required
by the provisions of Sections 2 or 3 to use its reasonable best efforts to
effect the registration of any shares of Registrable Stock under the Securities
Act, the Company will, as expeditiously as possible:

 

(a)           prepare and promptly, and in any event within 45 days after the
request for registration has been delivered to the Company, file with the
Commission a registration statement with respect to such securities and use
reasonable best efforts to cause such registration statement to become and
remain effective for the Period of Distribution contemplated thereby (determined
as hereinafter provided);

 

(b)           prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the Period of Distribution and comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Stock covered by such
registration statement in accordance with the sellers’ intended method of
disposition set forth in such registration statement for such Period of
Distribution;

 

(c)           furnish to each seller of Registrable Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Registrable Stock covered by such registration statement;

 

(d)           use its reasonable best efforts to register or qualify the
Registrable Stock covered by such registration statement under the securities or
“blue sky” laws of such jurisdictions as the sellers of Registrable Stock or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall 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)           use its reasonable best efforts to list the Registrable Stock
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;

 

(f)            provide a transfer agent and registrar for all such Registrable
Stock not later than the effective date of such registration statement;

 

(g)           immediately notify each seller of Registrable Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the

 

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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 at the request of
any such seller prepare and furnish to such seller a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Stock, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;

 

(h)           if the offering is underwritten and at the request of any seller
of Registrable Stock, furnish on the date that Registrable Stock is delivered to
the underwriters for sale pursuant to such registration: (i) an opinion dated
such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such seller, stating that
such registration statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or financial or statistical data contained therein) and
(C) to such other effects as reasonably may be requested by counsel for the
underwriters or by such seller or its counsel, and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters or sellers reasonably may
request;

 

(i)            use its reasonable best efforts to cooperate with the sellers in
the disposition of the Registrable Stock covered by such registration statement,
including without limitation in the case of an underwritten offering causing key
executives of the Company and its subsidiaries to participate under the
direction of the managing underwriter in a “road show” scheduled by such
managing underwriter in such locations and of such duration as in the judgment
of such managing underwriter are appropriate for such underwritten offering;

 

(j)            in connection with the preparation and filing of each
registration statement registering Registrable Stock under the Securities Act,
and before filing any such registration statement or any other document in
connection therewith, give the participating holders and their underwriters, if
any, and their respective counsel and accountants, the opportunity to review and
comment on such registration statement, each prospectus included therein or
filed with the Commission, each amendment thereof or supplement thereto and any
related underwriting agreement or other document to be filed, and give each of
the aforementioned persons such access to its books and records, including all
financial and other records, pertinent corporate

 

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documents and properties of the Company, and such opportunities to discuss the
business of the Company with its officers, directors and employees and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such holders, underwriters, counsel or
accountants, to conduct a reasonable investigation within the meaning of the
Securities Act; and

 

(k)           otherwise comply with the Securities Act, the Exchange Act and any
other applicable rules and regulations of the Commission, and make available to
its securities holders, as soon as reasonably practicable, an earning statement
covering the period of at least 12 months after the effective date of such
registration statement, which earning statement shall satisfy Section 11(a) of
the Securities Act and any applicable regulations thereunder, including
Rule 158.

 

For purposes of Sections 4(a) and 4(b), the “Period of Distribution” of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the Period of Distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby and 240 days after the effective
date thereof or in the case of a registration requested to be a “shelf”, for as
long as requested to the extent permitted by applicable law.

 

In connection with each registration hereunder, the sellers of Registrable Stock
will furnish to the Company in writing such information with respect to
themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.

 

In connection with each registration pursuant to Sections 2 or 3 covering an
underwritten public offering, the Company and each seller agree to enter into a
written underwriting agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company’s size and investment stature;
provided, however, that (i) the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of the
underwriters shall also be made to and for the benefit of such sellers of
Registrable Stock, (ii) no seller shall be required to make, and the Company
shall ensure that no underwriter requires any seller to make, any
representations and warranties to or agreements with any underwriter in a
registration effected pursuant to Sections 2 or 3 other than customary
representations, warranties and agreements relating to such seller’s title to
Registrable Stock and authority to enter into the underwriting agreement,
(iii) the liability of each seller of Registrable Stock with respect of any
indemnification, contribution or other obligation of such seller of Registrable
Stock arising under such underwriting agreement (x) shall be limited to losses
arising out of or based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, incorporated document or other such disclosure document or other
document or report, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such seller of Registrable Stock
expressly for inclusion therein and (y) shall not in any event exceed an amount
equal to the net proceeds to such seller of Registrable Stock (after

 

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deduction of all underwriters’ discounts and commissions) from the disposition
of the Registrable Securities disposed of by such seller of Registrable Stock
pursuant to such registration.

 

5.             Expenses.  All expenses incurred by the Company in performing or
complying with Sections 2, 3, and 4, including, without limitation, all
Commission, stock exchange, Nasdaq or Financial Industry Regulatory
Authority, Inc. (“FINRA”) registration and filing fees (including, without
limitation, fees and expenses incurred in connection with the listing of the
Common Stock of the Company on any securities exchange or exchanges or Nasdaq),
printing, distribution and related expenses, fees and disbursements of counsel
and independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
“blue sky” laws and the rules of FINRA or any securities exchange, transfer
taxes, fees of transfer agents and registrars, costs of insurance and all
reasonable fees and disbursements of one counsel for the sellers of Registrable
Stock, but excluding any Selling Expenses, are called “Registration Expenses.”
All underwriting discounts and selling commissions applicable to the sale of
Registrable Stock are called “Selling Expenses.”

 

The Company will pay all Registration Expenses in connection with each
registration statement under Sections 2 or 3. All Selling Expenses in connection
with each registration statement under Sections 2 or 3 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers as they may agree.

 

6.             Indemnification and Contribution.  (a)  In the event of a
registration of any of the Registrable Stock under the Securities Act pursuant
to Sections 2 or 3, the Company will indemnify and hold harmless each seller of
Registrable Stock thereunder, each underwriter of such Registrable Stock
thereunder, the managers, members, partners, officers, directors, agents,
advisors and employees of each of them (collectively, the “Representatives”) and
each other person, if any, who controls or is alleged to control such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, settlement amounts paid, fines, costs
(including, without limitation, attorneys’ fees) (individually a “Loss” and
collectively, the “Losses”), joint or several, to which such seller,
underwriter, controlling person or their respective Representatives 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 Stock were registered under the
Securities Act pursuant to Sections 2 or 3, 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, or arises out of or are based upon any violation or
alleged violation of any federal, state or other law, rule or regulation
relating to any action or inaction in connection therewith, and will reimburse
each such seller, each such underwriter and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss or action, provided, however, that the
Company will not be liable to any such indemnitee if and to the extent that any
such Loss arises solely out of or is based solely upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information with respect to such indemnitee furnished by

 

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such indemnitee in writing specifically for use in such registration statement
or prospectus.  The indemnification and contribution obligations of the Company
contained in this Section 6 shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified person and shall
survive any transfer of Registrable Stock.

 

(b)           In the event of a registration of any of the Registrable Stock
under the Securities Act pursuant to Sections 2 or 3, each seller of such
Registrable Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all Losses, joint or several, to which the Company or such officer,
director, underwriter or controlling person 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 the registration statement under
which such Registrable Stock was registered under the Securities Act pursuant to
Sections 2 or 3, 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 officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Loss, provided, however,
that such seller will be liable hereunder in any such case if and only to the
extent that any such Loss arises solely out of or is based solely upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with information pertaining to such seller, as
such, furnished in writing to the Company by such seller specifically for use in
such registration statement or prospectus, and provided, further, however, that
the liability of each seller hereunder shall be limited to the proportion of any
such Loss which is equal to the proportion that the public offering price of the
shares sold by such seller under such registration statement bears to the total
public offering price of all securities sold thereunder, but not in any event to
exceed the net proceeds received by such seller from the sale of Registrable
Stock covered by such registration statement (after deduction of all
underwriters’ discounts and commissions and all other expenses and damages paid
by such seller in connection with the registration in question). Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any such director, officer, underwriter or
controlling person and shall survive any transfer of Registrable Stock.

 

(c)           Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, 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 6 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 6 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

 

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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 6 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, 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 a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.  No indemnifying party,
in the defense of any such claim or litigation, shall, except with the consent
of each indemnified party, consent to entry of any judgment or enter into any
settlement unless such judgment or settlement includes as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation, includes only
money damages (as opposed to equitable relief) and does not include any
statement as to the fault or culpability of such indemnified party.

 

(d)           In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 6 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 6 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this
Section 6; then, and in each such case, the Company and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that such
holder is responsible for the portion represented by the percentage that the
aggregate public offering price of its Registrable Stock offered by the
registration statement bears to the aggregate public offering price of all
securities offered by such registration statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such holder will be required to contribute any amount in excess of
the net proceeds received by it from the sale of all such Registrable Stock
offered by it pursuant to such registration statement (after deduction of all
underwriters’ discounts and commissions and all other damages and expenses paid
by such seller in connection with the registration in question); and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.

 

7.             Changes in Common Stock or Series D Preferred Stock.  If, and as
often as, there is any change in the Common Stock or the Series D Preferred
Stock by way of a stock split, stock dividend, combination or reclassification,
or through a merger, consolidation, reorganization or recapitalization, or by
any other means, appropriate adjustment shall be made

 

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in the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock or the Series D Preferred Stock as so
changed.

 

8.             Rule 144 Reporting.  With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Stock to the public without registration, the
Company agrees to:

 

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

 

(b)           use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

 

(c)           furnish to each holder of Registrable Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
such holder to sell any Registrable Stock without registration.

 

9.             Holdback Agreement.  During the term of this Agreement, each
Investor agrees not to effect any public sale or distribution (including sales
pursuant to Rule 144, short sales and other derivative transactions) of equity
securities of the Company, or any securities, options or rights convertible into
or exchangeable for such securities, during the 90-day period beginning on the
effective date of the registration under the Securities Act of any underwritten
public offering (except as part of such registration), to the extent requested
in writing by the managing underwriter in the public offering made pursuant to
such registration.

 

10.           Miscellaneous.

 

(a)           Successors and Assigns.  All covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of all of the parties hereto, the Noteholders (as such term is
defined in the Exchange Agreement) and their respective successors and assigns
(including without limitation transferees of any Preferred Shares or Registrable
Stock), whether so expressed or not, provided, however, that the rights
conferred herein on the holders of Preferred Shares or Registrable Stock to
require the registration of shares of Registrable Stock shall only inure to the
benefit of a transferee of Preferred Shares or Registrable Stock if (i) there is
transferred to such transferee shares representing at least two percent (2%) of
the outstanding shares of Registrable Stock (assuming the conversion of all
Preferred Shares into Registrable Stock) or (ii) such transferee is an Investor
Permitted Transferee or a partner, shareholder or affiliate of a party hereto. 
Transfer of registration rights to an Investor Permitted Transferee or to a
partner, member or shareholder of any Investor will be without restriction as to
minimum shareholding.  Any transferee to whom rights under this Agreement are
transferred shall (i) as a condition to such transfer, deliver to the Company a
written instrument by which such transferee agrees to be bound by the
obligations

 

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imposed upon holders under this Agreement to the same extent as if such
transferee were a holder under this Agreement and (ii) be deemed to be a holder
hereunder.

 

(b)           Notices.  All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered by nationally recognized
overnight courier, mailed by certified or registered mail, return receipt
requested, or sent by facsimile, addressed as follows:

 

(i)            if to the Company or any Investor, at the address of such party
set forth on the signature pages to the Exchange Agreement, as the case may be;

 

with copies (which shall not constitute notice) to:

 

Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, New York 10036
Attention: Jonathan J. Russo, Esq.
Facsimile No.: (212) 858-1500

 

and

 

Phillips & Reiter, PLLC

6805 Capital of Texas Highway North, Suite 318

Austin, Texas  78731

Attention: J. William Wilson, Esq.
Facsimile No.: (512) 646-1106

 

(ii)           if to any subsequent holder of Preferred Shares, to it at such
address as may have been furnished to the Company in writing by such holder;

 

or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares or
Registrable Stock) or to the holders of Preferred Shares or Registrable Stock
(in the case of the Company) in accordance with the provisions of this
paragraph.

 

(c)           Governing Law.  This Agreement and all disputes arising out of or
relating to this Agreement, its subject matter, the performance of the parties
of their respective obligations hereunder or the claimed breach hereof, whether
in tort, contract or otherwise, shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to its conflict of law
principles.

 

(d)           Amendments, Waivers and Consents.  This Agreement may not be
amended or modified, and no provision hereof may be waived, without the written
consent of the Company and the holders of at least a majority of the outstanding
shares of Registrable Stock (assuming the conversion of all Preferred Shares
into Registrable Stock).  The Company shall deliver copies of such consent to
any holders who did not execute the same. Neither this Agreement, nor any
provision hereof, may be changed, waived, discharged or terminated orally or by
course of dealing, but only by an instrument in writing.

 

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(e)           No Waivers.  No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

 

(f)            Headings.  The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.

 

(g)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any person who, after the
date hereof, acquires shares of Preferred Stock shall become a party to this
Agreement as a “Investor” and a holder of “Registrable Stock” for all purposes
hereunder, all upon execution by such person and the Company of a counterpart of
this Agreement.

 

(h)           Termination of Registration Rights.  The obligations of the
Company to register shares of Registrable Stock under Sections 2 or 3 shall
terminate as to each holder of Registrable Stock that is an Affiliate (as
defined in Rule 144), and such shares will no longer be considered Registrable
Stock, upon the earlier of (a) the date such holder is not an Affiliate (as
defined in Rule 144) of the Company and such holder owns less than one percent
(1%) of the Company’s outstanding Common Stock (on an converted basis) or
(b) seven years from the date hereof.  The obligations of the Company to
register shares of Registrable Stock under Sections 2 or 3 shall terminate as to
all other holders of Registrable Stock, and such shares will no longer be
considered Registrable Stock, three years from the date hereof.

 

(i)            Additional Registration Rights.  The Company shall not grant to
any additional registration rights after the date hereof without the consent of
the Investors holding at least the majority of the Registrable Stock unless such
registrations rights are subordinate in all respects to the Investors’ rights
contained herein.

 

(j)            Company Registration.  In the event that the registration
requirements under the Securities Act are amended or eliminated to accommodate a
“Company registration” or similar approach, this Agreement shall be deemed
amended to the extent necessary to reflect such changes and the intent of the
parties hereto with respect to the benefits and obligations of the parties, and
in such connection, the Company shall use its reasonable best efforts to provide
holders of Registrable Stock equivalent benefits to those provided under this
Agreement.

 

(k)           Cumulative Remedies.  None of the rights, powers or remedies
conferred upon the Investors on the one hand or the Company on the other hand
shall be mutually exclusive, and each such right, power or remedy shall be
cumulative and in addition to every other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under this
Agreement.  The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any

 

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breach of obligations contained in this Agreement and hereby agrees to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 

(l)            Jurisdiction.  Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought in any
federal or state court located in the County of New York in the State of New
York, and each of the parties hereby consents to the jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.  Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 9(b) (other
than by facsimile transmission) shall be deemed effective service of process on
such party.

 

(m)          Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, THE INVESTORS AND THE COMPANY HEREBY WAIVE, AND
COVENANT THAT NEITHER THE COMPANY NOR THE INVESTORS WILL ASSERT, ANY RIGHT TO
TRIAL BY JURY ON ANY ISSUE IN ANY PROCEEDING, WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE, IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, ANY OTHER AGREEMENT OR THE SUBJECT
MATTER HEREOF OR THEREOF OR IN ANY WAY CONNECTED WITH, RELATED OR INCIDENTAL TO
THE DEALINGS OF THE INVESTORS AND THE COMPANY HEREUNDER OR THEREUNDER, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN TORT OR CONTRACT
OR OTHERWISE. The Company acknowledges that it has been informed by the
Investors that the provisions of this Section 9(m) constitute a material
inducement upon which the Investors are relying and will rely in entering into
this Agreement. Any Investor or the Company may file an original counterpart or
a copy of this Section 9(m) with any court as written evidence of the consent of
the Investors and the Company to the waiver of the right to trial by jury.

 

(n)           Third Party Beneficiaries.  Nothing in this Agreement, express or
implied, is intended to or will confer upon any other person not a party hereto
any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, except that (i) any Noteholder (as defined in the Exchange Agreement)
who is not a signatory hereto and (ii) any transferee that is an Investor
Permitted Transferee in each case are express third party beneficiaries of this
Agreement and may rely on and enforce provisions of this Agreement as if such
person were a party hereto.

 

(o)           Severability.  If any provision of this Agreement shall be held to
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other

 

14

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provision of this Agreement, and this Agreement shall be carried out as if any
such illegal, invalid or unenforceable provision were not contained herein.

 

[Remainder of Page Intentionally Left Blank]

 

15

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.

 

 

 

THE COMPANY

 

 

 

 

 

XPLORE TECHNOLOGIES CORP.

 

 

 

 

 

By:

 

 

Name:

Michael J. Rapisand

 

Title:

Chief Financial Officer

 

 

Signature Page to Registration Rights Agreement

 

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.

 

 

 

INVESTOR

 

 

 

 

 

By:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Signature Page to Registration Rights Agreement

 

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