Exhibit 10.2

 

INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of February 20,
2004 by and among LightPath Technologies, Inc., a Delaware corporation (the
“Company”) and (ii) the investors listed on Exhibit A hereto (collectively the
“Investors”)

 

WHEREAS, the Company desires to sell to the Investors, and the Investors desire
to purchase an aggregate of 550,000 shares of Common Stock of the Company (the
“Shares”) and 5-year warrants, exercisable to purchase an aggregate of 110,000
shares of Common Stock at $4.30 per share (the “Purchased Warrants”), upon the
terms and conditions set forth in that certain Unit Subscription Agreement,
dated of even date herewith, between the Company and the Investors (the “Unit
Subscription Agreement”); and

 

WHEREAS, the terms of the Unit Subscription Agreement provide that it shall be a
condition precedent to the closing of the transactions thereunder for the
Company and the Investors to execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties hereto hereby agree as follows:

 

1. Definitions. The following terms shall have the meanings provided below:

 

“Additional Shares” shall mean any additional shares of Common Stock which may
be issued or become issuable from time to time upon the exercise of a Purchased
Warrant, or a distribution with respect to, or in exchange for, or in
replacement of a Purchased Warrant, as a result of anti-dilution provisions of a
Purchased Warrant or otherwise.

 

“Board of Directors” shall mean the board of directors of the Company.

 

“Closing” shall have the meaning ascribed to such term in the Unit Subscription
Agreement.

 

“Common Stock” shall mean the Class A common stock, $.01 par value per share, of
the Company.

 

“Convertible Securities” means (i) options to purchase or rights to subscribe
for Common Stock, (ii) securities by their terms convertible into or
exchangeable for Common Stock or (iii) options to purchase or rights to
subscribe for such convertible or exchangeable securities.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
all of the rules and regulations promulgated thereunder.

 

“Excluded Stock” shall mean shares of Common Stock issued or issuable by the

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Corporation (i) to employees, directors or consultants pursuant to any equity
compensation plan approved by the Company’s stockholders, including all existing
equity plans for the benefit of employees, (ii) to bona fide leasing companies,
strategic partners, or major lenders, (iii) as the purchase price in a bona fide
acquisition or merger (including reasonable fees paid in connection therewith)
or (iv) upon issuance upon conversion or exercise of the Purchased Warrants or
other Convertible Securities outstanding on the date hereof.

 

“Holder” shall mean the Investors or any transferee of the Purchased Warrants or
Registrable Shares.

 

“Majority Holders” shall mean, at the relevant time of reference thereto, those
Holders holding more than fifty percent (50%) of the Registrable Shares held by
all of the Holders.

 

“Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
Holders of the Purchased Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Purchased Warrants, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to the terms of the Purchased Warrants or otherwise.

 

“Registrable Shares” shall mean any Shares and any Registrable Warrant Shares

 

“Registrable Warrant Shares” shall mean any shares of Common Stock or Other
Securities issued or issuable from time to time upon the exercise of a Purchased
Warrant, or a distribution with respect to, in exchange for, or in replacement
of a Purchased Warrant, including without limitation the Warrant Shares and
Additional Shares.

 

“Rule 144” shall mean Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.

 

“SEC” shall mean the Securities and Exchange Commission.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.

 

“Warrant Shares” shall mean any shares of Common Stock issued or issuable from
time to time upon the exercise of a Purchased Warrant.

 

“Warrant Exercisable Date” shall mean November 23, 2004.

 

2. Effectiveness. This Agreement shall become effective upon the Closing.

 

3. Mandatory Registration. (a) As soon as practicable, but in no event more than
30 days, after the Closing, the Company will prepare and file with the SEC a
registration statement on Form S-3 (or, if Form S-3 is not then available to the
Company, on such form of registration statement that is then available to effect
a registration of all Registrable Shares) for the purpose of registering under
the Securities Act all of the Registrable Shares for resale by, and

 

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for the account of, the Investors as selling stockholders thereunder (the
“Registration Statement”). The Registration Statement shall permit the Investors
to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act, any or all of the Registrable Shares. Such Registration
Statement also shall cover, to the extent allowable under the Securities Act and
the rules promulgated thereunder (including Rule 416), such indeterminate number
of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to the Registrable Shares.

 

(b) The Company agrees to use best efforts to cause the Registration Statement
to become effective as soon as practicable after filing.

 

(c) At least thirty (30) days prior to the Warrant Exercisable Date, the Company
shall prepare and file with the SEC one or more Registration Statements on Form
S-3 (the “New Registration Statements”) or amend the Registration Statement
filed pursuant to clause (b) above, if such Registration Statement has not
previously been declared effective (or, if Form S-3 is not then available to the
Company, on such form of registration statement as is then available to effect a
registration for resale of Registrable Warrant Shares or Additional Shares,
subject to the Investors’ consent) covering the resale of the Registrable
Warrant Shares or Additional Shares, as applicable, but only to the extent such
Registrable Warrant Shares or Additional Shares are not at the time covered by
an effective Registration Statement. The New Registration Statements need not
include Additional Shares which are not currently issuable at the time of filing
or effectiveness of the New Registration Statements, such as Additional Shares
which may be issuable as a result of anti-dilution provisions set forth in
Section 5 or 6 of the Purchased Warrants which have not been triggered at such
times; provided that such Additional Shares shall be included promptly in the
New Registration Statements by amendment or by filing a New Registration
Statement, as necessary, promptly after they become issuable. Unless otherwise
specifically provided herein, the term Registration Statement shall include
without limitation any New Registration Statement, as amended from time to time.
Such Registration Statement also shall cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Warrant Shares and Additional Shares. The Company agrees to use best efforts to
cause the Registration Statement, as amended from time to time, and each New
Registration Statement, as amended from time to time, to become effective as
soon as practicable after filing of each amendment and each New Registration
Statement.

 

(c) The Company shall be required to keep the Registration Statement, as
amended, effective until such date that is the earlier of (i) two years after
the Warrant Exercisable Date, (ii) the date when all of the Registrable Shares
registered thereunder shall have been sold, or (iii) such time as all the
Registrable Shares held by the Investors can be sold pursuant to Rule 144(k) and
without compliance with the registration requirements of the Securities Act
(such date is referred to herein as the “Mandatory Registration Termination
Date”). Thereafter, the Company shall be entitled to withdraw the Registration
Statement and the Investors shall have no further right to offer or sell any of
the Registrable Shares pursuant to the Registration Statement (or any prospectus
relating thereto).

 

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(d) Until the Registration Statement becomes effective, the Company shall not
grant any registration rights that are pari passu or senior to the registration
rights of the Investors under this Agreement. The Company represents that no
stockholders other than the Investors have the right to sell any Common Stock or
other securities of the Company pursuant to the Registration Statement.

 

4. Obligations of the Company. In connection with the Company’s obligation under
Section 3 hereof to file a Registration Statement with the SEC and to use its
reasonable efforts to cause the Registration Statement to become effective as
soon as practicable after filing, the Company shall, as expeditiously as
reasonably possible, subject to Section 9 hereof:

 

(a) Prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective until the Mandatory
Registration Termination Date;

 

(b) Furnish to the selling Investors such reasonable number of copies of the
Registration Statement, prospectus and preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents
(including, without limitation, prospectus amendments and supplements as are
prepared by the Company in accordance with Section 4(a) above) as the selling
Investors may reasonably request, in order to facilitate the public or other
disposition of such selling Investors’ Registrable Shares;

 

(c) Use reasonable efforts to register and qualify the Registrable Shares
covered by the Registration Statement under such other securities or Blue Sky
laws of all states requiring such securities or Blue Sky registration or
qualification, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions; and

 

(d) Use reasonable efforts to cause all such Registrable Shares registered
hereunder to be listed on each securities exchange (including without limitation
any Nasdaq market) on which securities of the same class issued by the Company
are then listed.

 

5. Furnish Information. (a) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement that the selling
Investors shall furnish to the Company such information regarding them and the
securities held by them as the Company shall reasonably request and as shall be
required in order to effect any registration by the Company pursuant to this
Agreement.

 

(b) The Registration Statement will provide for a plan of distribution with
respect to the Registrable Shares substantially as follows: The Registrable
Shares may be sold from time to time by the Investors, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one or
more exchanges or in the over-the-counter market, or otherwise at prices and at
terms then prevailing or at prices related to the then-current market price, or
in negotiated transactions. The Registrable Shares may be sold by one or more of
the following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the

 

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transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to the resale registration statement;
(c) an exchange distribution in accordance with the rules of such exchange; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (e) transactions between sellers and purchasers without a
broker/dealer. In addition, any securities covered by the Registration Statement
which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to the Registration Statement. However, the selling Investors may
not engage in short sales, short sales versus the box, puts and calls or other
transactions in securities of the issuer or derivatives thereof, and may not
sell and deliver the shares in connection therewith. In effecting sales, brokers
or dealers engaged by the selling Investors may arrange for other brokers or
dealers to participate. Brokers or dealers will receive commissions or discounts
from selling Investors in amounts to be negotiated immediately prior to the
sale.

 

6. Expenses of Registration. All expenses incurred by the Company in connection
with the registration of the Registrable Shares pursuant to this Agreement
(excluding underwriting, brokerage and other selling commissions and discounts),
including without limitation all registration and qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, and the
Legal Fee set forth and limited in Section 6.9 of the Unit Subscription
Agreement, shall be borne by the Company.

 

7. Indemnification.

 

(a) To the extent permitted by law, the Company will indemnify and hold harmless
each selling Investor (including the partners or officers, directors and
stockholders of such Investor), and each person, if any, who controls such
selling Investor within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the Securities Act, the Exchange Act, and other federal or state
securities laws, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (i) arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, in any preliminary prospectus or final prospectus
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, (ii) 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 (iii) arise out of any violation or alleged violation
by the Company of the Securities Act, the Exchange Act, any other federal or
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any other federal or state securities law; and will
reimburse such selling Investor, or such officer, director or controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 7(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld or delayed), nor shall
the Company be liable in any such case for any such loss, damage, liability or
action to the extent that it arises out of or is based upon an untrue statement
or alleged untrue statement or omission made in connection with the Registration
Statement, any preliminary prospectus or final prospectus relating thereto or
any amendments or supplements to the Registration Statement or any such
preliminary prospectus or final

 

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prospectus, in reliance upon and in conformity with written information
furnished expressly for use in connection with the Registration Statement or any
such preliminary prospectus or final prospectus by the selling Investors, any
broker/dealer acting on their behalf or controlling person with respect to them.

 

(b) To the extent permitted by law, each selling Investor will severally and not
jointly indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed the Registration Statement, each person, if any,
who controls the Company within the meaning of the Securities Act, or any
selling Investors, and all other selling Investors against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
controlling person or such other selling Investor may become subject to, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement or any preliminary prospectus or final prospectus,
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, 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, in each case to the extent and only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, in any preliminary prospectus
or final prospectus relating thereto or in any amendments or supplements to the
Registration Statement or any such preliminary prospectus or final prospectus,
in reliance upon and in conformity with written information furnished by the
selling Investor expressly for use in connection with the Registration
Statement, or any preliminary prospectus or final prospectus; and such selling
Investor will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, or other selling
Investor in connection with investigating or defending any such loss, claim,
damage, liability or action, provided, however, that the indemnity agreement
contained in this Section 7(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of those selling Investor(s) against which the request for
indemnity is being made (which consent shall not be unreasonably withheld or
delayed).

 

(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof
and the indemnifying party shall have the right to participate in and, to the
extent the indemnifying party desires, jointly with any other indemnifying party
similarly noticed, to assume at its expense the defense thereof with counsel
mutually satisfactory to the indemnifying parties with the consent of the
indemnified party which consent will not be unreasonably withheld, conditioned
or delayed. In the event that the indemnifying party assumes any such defense,
the indemnified party may participate in such defense with its own counsel and
at its own expense, provided, however, that the counsel for the indemnifying
party shall act as lead counsel in all matters pertaining to such defense or
settlement of such claim and the indemnifying party shall only pay for such
indemnified party’s reasonable legal fees and expenses for the period prior to
the date of its participation in such defense, and provided further, however,
that the indemnified party (together with all indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain

 

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one separate counsel, with the fees and expenses to be paid by the indemnifying
party, if the representation of the indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between the indemnified party and any other party
represented by such counsel in such proceeding. Notwithstanding the foregoing,
the indemnifying party shall not be obligated to pay the fees of more than one
separate counsel. The failure to notify an indemnifying party of the
commencement of any such action will not relieve such indemnifying party of any
liability to the indemnified party under this Section 7 (except to the extent
that such failure materially and adversely affects the indemnifying party’s
ability to defend such action), nor shall the omission so to notify an
indemnifying party relieve such indemnifying party of any liability which it may
have to any indemnified party otherwise other than under this Section 7. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement which does not include 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 and otherwise in form and substance reasonably satisfactory to the
indemnified party.

 

(d) If the indemnification provided in this Section 7 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that shall have resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

 

(e) The obligations of the Company and Investors under this Section 7 shall
survive the completion of any offering of Registrable Shares in a Registration
Statement under Section 3, and otherwise.

 

8. Reports Under the Exchange Act. With a view to making available to the
Investors the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit the Investors to sell the Registrable Shares to the
public without registration, the Company agrees to use reasonable efforts: (i)
to make and keep public information available, as those terms are understood and
defined in the General Instructions to Form S-3, or any successor or substitute
form, and in Rule 144, (ii) to file with the SEC in a timely manner all reports
and other documents required to be filed by an issuer of securities registered
under the Securities Act or the Exchange Act and (iii) undertake any additional
actions reasonably necessary to maintain the availability of the Registration
Statement or the use of Rule 144.

 

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9. Selling Procedures. Any sale of Registrable Shares pursuant to the
registration statement filed in accordance with Section 3 hereof shall be
subject to the following conditions and procedures:

 

(a) Updating the Prospectus.

 

(i) If the Company informs the selling Investor that the Registration Statement
or final prospectus then on file with the SEC is not current or otherwise does
not comply with the Securities Act, the Company shall use best efforts to
provide to the selling Investor a current prospectus that complies with the
Securities Act as soon as reasonably practicable.

 

(ii) If the Company requires more than ten (10) business days to update the
prospectus under Section 9(a)(i) above, the Company shall have the right to
delay the preparation of a current prospectus that complies with the Securities
Act without explanation to such Investor, subject to the limitations set forth
in Section 9(b) below, for a period of not more than forty-five (45) days (or
two periods which total not more than ninety (90) days in the aggregate) during
any twelve-month period.

 

(b) General. Notwithstanding the foregoing, upon receipt of any notice from the
Company of (i) any request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement for
amendments or supplements to the Registration Statement or related prospectus or
for additional information relating to the Registration Statement, (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iii) the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (iv) the happening of any event which makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
which requires the making of any changes in the Registration Statement or
prospectus so that, in the case of the Registration Statement, it will not
contain 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, and that in the case of the prospectus, it will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (v) that, in the judgment of the
Company’s Board of Directors, it is advisable to suspend use of the prospectus
for a discrete period of time due to pending corporate developments, public
filings with the Commission or that there exists material nonpublic information
about the Company that the Board of Directors, acting in good faith, determines
not to disclose in a registration statement, then the Company may suspend use of
the prospectus (each a “Suspension”), in which case the Company shall promptly
so notify each Investor and each Investor shall not dispose of Registrable
Shares covered by the Registration Statement or prospectus until copies of a
supplemented or amended prospectus are distributed to the Investors or until the
Investors are advised in writing by the Company that the use of the applicable
prospectus may be resumed; provided,

 

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however, that, notwithstanding the foregoing, the Company may suspend use of the
prospectus pursuant to Sections 9(a)(ii), 9(b)(iv) and 9(b)(v), and an Investor
may be prohibited from selling or otherwise disposing of the Registrable Shares
covered by the Registration Statement or prospectus, on not more than two
occasions in total during any twelve-month period and for no more than ninety
(90) days in the aggregate during any such twelve-month period. The Company
shall use its best efforts to ensure the use of the prospectus may be resumed as
soon as practicable. The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the securities for sale in any jurisdiction, at
the earliest practicable moment. The Company shall, upon the occurrence of any
event contemplated by clause (iv), prepare a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Shares being sold thereunder, such prospectus will not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.

 

10. Pre-emptive Rights. In the event that at any time after the date hereof the
Company proposes to issue additional shares of Common Stock or Convertible
Securities, other than Excluded Stock, the Company shall send a notice (an
“Additional Share Notice”) to the Holder setting forth the terms of such
proposed issuance. The Holder shall be entitled to purchase the proposed number
of shares of Common Stock or Convertible Securities, proposed to be issued in
proportion to the Holder’s Proportionate Percentage (as hereafter defined) on
substantially the same terms set forth in the Additional Share Notice by (a)
notice to the Company (the “Purchase Notice”) within 10 days of the date of the
Additional Share Notice and (b) payment of the price for such shares of Common
Stock or Convertible Securities, by wire transfer of immediately available funds
or such other method of payment as the Company may approve, within 10 days after
delivery to the Company of the Purchase Notice. The “Proportionate Percentage”
of the Holder means the percentage obtained by dividing (a) the aggregate number
shares of Common Stock held by the Holder by (b) the aggregate number of shares
of Common Stock of the Company then issued and outstanding.

 

11. Issuance of Certain Securities; Investors’ Securities Transactions.

 

(a) The Company shall not issue any (a) Convertible Securities or similar
securities that contain a provision that provides for any change or
determination of the applicable conversion price, conversion rate, or exercise
price (or a similar provision which might have a similar effect) based on any
determination of the Market Price or other value of the Company’s securities or
any other market based or contingent standard; provided that the Company shall
not be barred from agreeing to weighted average anti-dilution provisions similar
to those set forth in the Purchased Warrants, (b) any preferred stock, debt
instruments or similar securities or investment instruments providing for (i)
preferences or other payments substantially in excess of the original investment
by purchasers thereof or (ii) dividends, interest or similar payments other than
dividends, interest or similar payments computed on an annual basis and not in
excess, directly or indirectly, of the lesser of a rate equal to (A) twice the
interest rate on 10 year US Treasury Notes and (B) 20%.

 

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(b) An Investor shall not engage in open market or other transactions in the
Company’s securities that would cause such Investor, the Investors as a group,
or a group with which one or more of the Investors is affiliated or associated,
to acquire or obtain the right to acquire beneficial ownership of 20% or more of
the outstanding shares of the Company’s Common Stock.

 

12. Assignment. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns. In addition, and whether or not any express assignment shall have been
made, the provisions of this Agreement which are for the benefit of the
Investors shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities who has executed a copy of this Agreement
or otherwise indicated its agreement to be bound hereby. Without limitation on
the Investors’ rights to transfer Registrable Securities, the Company
acknowledges that any Investor may, at any time, transfer any of the Registrable
Securities which they may own, beneficially or of record, to (a) their
affiliates, or (b) their partner(s), investor(s), security holder(s) or
beneficial holder(s) pursuant to their organization documents or other
agreements, and that, upon the consummation of any such transfer, the provisions
of this Agreement shall be binding upon and inure to the benefit of each
transferee of such Registrable Securities.

 

13. Entire Agreement. This Agreement (including the exhibits hereto), the Unit
Subscription Agreement and the Purchased Warrants constitute and contain the
entire agreement and understanding of the parties with respect to the subject
matter hereof, and such agreements also supersede any and all prior
negotiations, correspondence, agreements or understandings with respect to the
subject matter hereof.

 

14. Miscellaneous.

 

(a) Amendments. This Agreement may not be amended, modified or terminated, and
no rights or provisions may be waived, except with the written consent of the
Majority Holders and the Company.

 

(b) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York. Each party hereby
irrevocably consents and submits to the jurisdiction of any New York State or
United States Federal Court sitting in the State of New York, County of New
York, over any action or proceeding arising out of or relating to this Agreement
and irrevocably consents to the service of any and all process in any such
action or proceeding by registered mail addressed to such party at its address
specified herein (or as otherwise noticed to the other party). Each party
further waives any objection to venue in New York and any objection to an action
or proceeding in such state and county on the basis of forum non conveniens.
Each party also waives any right to trial by jury.

 

(c) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns. This Agreement shall also be binding
upon and inure to the benefit of any transferee of any of the Registrable
Shares. Notwithstanding anything in this Agreement to the contrary, if at any
time any Investor shall cease to own any Registrable Shares, all of such
Investor’s rights under this Agreement shall immediately terminate.

 

10

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

(d) Notices

 

(i) Any notices, reports or other correspondence (hereinafter collectively
referred to as “correspondence”) required or permitted to be given hereunder
shall be sent by mail, courier (overnight or same day) or fax or delivered by
hand to the party to whom such correspondence is required or permitted to be
given hereunder (except that notices of Suspensions or stop orders must be made
by fax). Notice shall be deemed given three days after deposit in the mail,
immediately upon delivery if sent by courier or delivered by hand, or
immediately upon receipt if delivered by fax with electronic confirmation of
delivery.

 

(ii) All correspondence to the Company shall be addressed as follows:

  LightPath Technologies, Inc.

  2603 Challenger Tech Ct., Suite 100

  Orlando, Florida 32826

  Attention: Chief Executive Officer

  Fax number: (407) 823-9176

 

with a copy to:

 

  Baker & Hostetler LLP

  SunTrust Center, Suite 2300

  200 South Orange Avenue

  Orlando, Florida 32801-3432

  Attention: Jeff Decker

  Fax number: (407) 841-0168

 

(iii) All correspondence to any Investor shall be sent to the most recent
address furnished by the Investor to the Company.

 

(iv) Any Investor may change the address to which correspondence to it is to be
addressed by notification as provided for herein.

 

(e) Injunctive Relief. The parties acknowledge and agree that in the event of
any breach of this Agreement, remedies at law may be inadequate, and each of the
parties hereto shall be entitled to seek specific performance of the obligations
of the other parties hereto and such appropriate injunctive relief as may be
granted by a court of competent jurisdiction.

 

(f) Attorney’s Fees. If any action at law or in equity is necessary to enforce
or interpret any of the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys’ fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

 

(g) Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable under applicable law, such provision
shall be replaced with a provision that accomplishes, to the extent possible,
the original business purpose of such provision in a valid and enforceable
manner, and the balance of the Agreement shall be interpreted as if such
provision were so modified and shall be enforceable in accordance with its
terms.

 

11

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

(h) Counterparts. This Agreement may be executed in a number of counterparts,
any of which together shall for all purposes constitute one Agreement, binding
on all the parties hereto notwithstanding that all such parties have not signed
the same counterpart.

 

[Remainder of Page Intentionally Left Blank]

 

12

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[                                                             ]

By:

 

/s/ Orin Hirschman

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

Name: Orin Hirschman

Title:

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[ Paul Packer ]

By:

 

/s/ Paul Packer

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

Name: Paul Packer

Title:

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[ GLOBIS CAPITAL PARTNERS L.P. ]

By:

 

/s/ Paul Packer

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

Name: Paul Packer

Title: Managing Member

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[ RICHARD GROSSMAN ]

By:

 

/s/ Richard Grossman

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

Name: Richard Grossman

Title:

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[                                                             ]

By:

 

/s/ Joshua A. Hirsch

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

Name: Joshua A. Hirsch

Title: Dr.

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[                                                             ]

By:

 

/s/ James Kardon

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

Name: James Kardon

Title:

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[                                                             ]

By:

 

/s/ Hershel P. Berkowitz

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

Name: Hershel P. Berkowitz

Title: Rabbi

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[ ANTHONY ALTAMURA ]

By:

 

/s/ Anthony Altamura

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

Name:

Title:

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

SIGNATURE PAGE

TO

LIGHTPATH TECHNOLOGIES, INC.

 

INVESTOR RIGHTS AGREEMENT

 

Dated February 23, 2004

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

 

LIGHTPATH TECHNOLOGIES, INC.

By:

 

/s/ Kenneth Brizel

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

Name: Kenneth Brizel

Title: President and CEO

INVESTOR

[ Hewlett Fund ]

c/o SDC Capital LLC

20 East Sunrise Highway Suite 302

Valley Stream, NY 11581

By:

 

/s/ Jay Spinner

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

Name: Jay Spinner

Title: Director

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

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

Exhibit A

 

SCHEDULE OF INVESTORS

 

Orin Z. Hirschman

 

Paul Packer

 

Globis Capital Partners L.P.

 

Richard Grossman

 

Joshua Hirsch

 

James Kardon

 

Hershel Berkowitz

 

Anthony Altamura

 

Hewlett Fund