Exhibit 10.2

 

VUZIX CORPORATION

SERIES A PREFERED STOCK

INVESTOR’S RIGHTS AGREEMENT

 

This Series A Preferred Stock Investor’s Rights Agreement (this “Agreement”) is
made and entered into as of January 2, 2015, by and between Vuzix Corporation, a
Delaware corporation (the “Company”) and Intel Corporation, a Delaware
corporation (“Purchaser”).

 

This Agreement is made pursuant to the Series A Preferred Stock Purchase
Agreement, dated as of the date hereof, between the Company and Purchaser (the
“Purchase Agreement”).

 

The Company and each Purchaser hereby agrees as follows:

 

1.Definitions.

 

Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement.

 

As used in this Agreement, the following terms shall have the following
meanings:

 

“Advice” shall have the meaning set forth in Section 7(d).

 

“Effectiveness Date” means, with respect to the Initial Registration Statement
required to be filed hereunder, May 31, 2015, and with respect to any additional
Registration Statements which may be required pursuant to Section 2(c) or
Section 3(c), the 90th calendar day following the date on which an additional
Registration Statement is required to be filed hereunder; provided, however,
that in the event the Company is notified by the Commission that one or more of
the above Registration Statements will not be reviewed or is no longer subject
to further review and comments, the Effectiveness Date as to such Registration
Statement shall be the fifth Trading Day following the date on which the Company
is so notified if such date precedes the dates otherwise required above,
provided, further, if such Effectiveness Date falls on a day that is not a
Trading Day, then the Effectiveness Date shall be the next succeeding Trading
Day.

 

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

 

“Exchange Act” means the Securities and Exchange Act of 1934, as amended.

 

“Event” shall have the meaning set forth in Section 2(d).

 

“Event Date” shall have the meaning set forth in Section 2(d).

 

“Filing Date” means (i) with respect to the Initial Registration Statement
required hereunder, the earlier of February 14, 2015 and the 45th calendar day
following the Closing Date, and (ii) with respect to any additional Registration
Statements which may be required pursuant to Section 2(c) or Section 3(c), no
later than the 5th Business Day after the earliest practical date on which the
Company is permitted by SEC Guidance to file such additional Registration
Statement related to the Registrable Securities.

 

 

 

  

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

 

“Indemnified Party” shall have the meaning set forth in Section 6(c).

 

“Indemnifying Party” shall have the meaning set forth in Section 6(c).

 

“Initial Registration Statement” means the initial Registration Statement filed
pursuant to this Agreement.

 

“Losses” shall have the meaning set forth in Section 6(a).

 

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

 

“Registrable Securities” means, as of any date of determination, (a) all of the
shares of Common Stock then issuable upon conversion of the Series A Preferred
Stock (the “Conversion Shares”), (b) all shares of Common Stock issuable as
dividends or other distributions with respect to the Series A Preferred Stock
(the “Dividend Shares”), and (c) all shares of Common Stock, and all shares of
Common Stock then issuable upon conversion or exercise of any other securities,
issued to the Holders with respect to the preemptive rights and other rights
contained in the Purchase Agreement, including, but not limited to, the rights
granted pursuant to Sections 4.15, 4.16 and 4.21 of the Purchase Agreement (the
“Preemptive Shares”), and (d) any securities issued or then issuable upon any
stock split, dividend or other distribution, recapitalization or similar event
with respect; provided, however, that any such Registrable Securities shall
cease to be Registrable Securities (and the Company shall not be required to
maintain the effectiveness of any, or file another, Registration Statement
hereunder with respect thereto) for so long as (x) a Registration Statement with
respect to the sale of such Registrable Securities is declared effective by the
Commission under the Securities Act and such Registrable Securities have been
disposed of by the Holder in accordance with such effective Registration
Statement, or (y) such Registrable Securities have been previously sold in
accordance with Rule 144.

 

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“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Section 2(a) and any additional registration statements
contemplated by Section 2(c) or Section 3(c), including (in each case) the
Prospectus, amendments and supplements to any such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in any such registration statement.

 

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

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“SEC Guidance” means (i) any publicly-available written or oral guidance of the
Commission staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Selling Stockholder Questionnaire” shall have the meaning set forth in Section
3(a).

 

“Series A Preferred Stock” means the Series A Preferred Stock of the Company,
par value $0.001 per share.

 

2.Company Registration.

 

(a)         On or prior to each Filing Date, the Company shall prepare and file
with the Commission a Registration Statement covering the resale of all of the
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith, subject to the provisions of
Section 2(e)). Subject to the terms of this Agreement, the Company shall use its
best efforts to cause a Registration Statement filed under this Agreement
(including, without limitation, under Section 3(c)) to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event no later than the applicable Effectiveness Date, and shall use its
best efforts to keep such Registration Statement continuously effective under
the Securities Act until all Registrable Securities covered by such Registration
Statement have been sold, thereunder or pursuant to Rule 144 (the “Effectiveness
Period”). The Company shall telephonically request effectiveness of a
Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The
Company shall immediately notify the Holders via facsimile or by e-mail of the
effectiveness of a Registration Statement on the same Trading Day that the
Company telephonically confirms effectiveness with the Commission, which shall
be the date requested for effectiveness of such Registration Statement. The
Company shall, within the time constraints proscribed by Rule 424 of the
Securities Act, file a final Prospectus with the Commission if so required by
Rule 424. Failure to so notify the Holder within one (1) Trading Day of such
notification of effectiveness or failure to file a final Prospectus (if
required) as foresaid shall be deemed an Event under Section 2(d).

 

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(b)          Notwithstanding the registration obligations set forth in Section
2(a), if the Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be registered for
resale as a secondary offering on a single registration statement, the Company
agrees to promptly inform each of the Holders thereof and use its commercially
reasonable efforts to file amendments to the Initial Registration Statement as
required by the Commission, covering the maximum number of Registrable
Securities permitted to be registered by the Commission, on Form S-1 or such
other form available to register for resale the Registrable Securities as a
secondary offering, subject to the provisions of Section
2(e); provided, however, that prior to filing such amendment, the Company shall
be obligated to use diligent efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, Compliance and Disclosure Interpretation
612.09.

 

(c)          Notwithstanding any other provision of this Agreement and subject
to the payment of liquidated damages pursuant to Section 2(d), if the Commission
or any SEC Guidance sets forth a limitation on the number of Registrable
Securities permitted to be registered on a particular Registration Statement as
a secondary offering (and notwithstanding that the Company used diligent efforts
to advocate with the Commission for the registration of all or a greater portion
of Registrable Securities), unless otherwise directed in writing by a Holder as
to its Registrable Securities, the number of Registrable Securities to be
registered on such Registration Statement will be reduced as follows:

 

i.First, the Company shall reduce or eliminate any securities to be included by
any Person other than a Holder;

 

ii.Second, the Company shall reduce Registrable Securities represented by
Dividend Shares (applied, in the case that some Dividend Shares may be
registered, to the Holders on a pro rata basis based on the total number of
Dividend Shares held by such Holders);

 

iii.Third, the Company shall reduce Registrable Securities represented by
Preemptive Shares (applied, in the case that some Preemptive Shares may be
registered, to the Holders on a pro rata basis based on the total number of
Preemptive Shares held by such Holders); and

 

iv.Fourth, the Company shall reduce Registrable Securities represented by
Conversion Shares (applied, in the case that some Conversion Shares may be
registered, to the Holders on a pro rata basis based on the total number of
Conversion Shares held by such Holders).

 

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In the event of a cutback hereunder, the Company shall give the Holder at least
five (5) Trading Days prior written notice along with the calculations as to
such Holder’s allotment. In the event the Company amends the Initial
Registration Statement in accordance with the foregoing, the Company will use
its best efforts to file with the Commission, as promptly as allowed by
Commission or SEC Guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-3 or such
other form available to register for resale those Registrable Securities that
were not registered for resale on the Initial Registration Statement, as
amended.

 

(d)          If: (i) the Initial Registration Statement is not filed on or prior
to its Filing Date (if the Company files a Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) herein, the Company shall be deemed to have not
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act,
within five (5) Trading Days of the date that the Company is notified (orally or
in writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed” or will not be subject to further review, or
(iii) prior to the effective date of a Registration Statement, the Company fails
to file a pre-effective amendment and otherwise respond in writing to comments
made by the Commission in respect of such Registration Statement within twenty
(20) Business Days after the receipt of comments by or notice from the
Commission that such amendment is required in order for such Registration
Statement to be declared effective, or (iv) a Registration Statement registering
for resale all of the Registrable Securities is not declared effective by the
Commission by the Effectiveness Date of the Initial Registration Statement, or
(v) after the effective date of a Registration Statement, such Registration
Statement ceases for any reason to remain continuously effective as to all
Registrable Securities included in such Registration Statement, or the Holders
are otherwise not permitted to utilize the Prospectus therein to resell such
Registrable Securities, for more than fifteen (15) calendar days or more than an
aggregate of thirty (30) calendar days (which need not be consecutive calendar
days) during any 12-month period (any such failure or breach being referred to
as an “Event”, and for purposes of clauses (i) and (iv), the date on which such
Event occurs, and for purpose of clause (ii) the date on which such five (5)
Trading Day period is exceeded, and for purpose of clause (iii) the date which
such twenty (20) day period is exceeded, and for purpose of clause (v) the date
on which such fifteen (15) or thirty (30) calendar day period, as applicable, is
exceeded being referred to as “Event Date”), then, in addition to any other
rights the Holders may have hereunder or under applicable law, on each such
Event Date and on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as
partial liquidated damages and not as a penalty, equal to one-half percent
(0.5%) of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for the Registrable Securities held by Holder on each such
Event Date. The maximum aggregate liquidated damages payable to a Holder
pursuant to this Section 2(d) shall be 10% of the aggregate Subscription Amount
paid by such Holder pursuant to the Purchase Agreement. If the Company fails to
pay any partial liquidated damages pursuant to this Section in full within seven
days after the date payable, the Company will pay interest thereon at a rate of
16% per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Holder, accruing daily from the date such partial
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro rata basis for any portion of a month prior to the
cure of an Event.

 

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(e)          If Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale of
the Registrable Securities on another appropriate form and (ii) undertake to
register the Registrable Securities on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the Commission.

 

(f)           If, at any time during the Effectiveness Period, there is not an
effective Registration Statement covering all of the Registrable Securities and
the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with the Company’s stock option or other
employee benefit plans, then the Company shall deliver to each Holder a written
notice of such determination and, if within fifteen days after the date of the
delivery of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered, subject to the
provisions set forth below in this Section 3(f), provided however, that
notwithstanding any other provisions of this Section 2(g), if the Commission or
any SEC Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered on such Registration Statement (and notwithstanding
that the Company used diligent efforts to advocate with the Commission for the
registration of all or a greater portion of the Registrable Securities), unless
otherwise directed in writing by a Holder as to its Registrable Securities, the
number of Registrable Securities to be registered on such Registration Statement
will be reduced according to the cut-back provisions provided for in Section
2(c). The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 3(f) before the effective date of such
registration, whether or not any Holder has elected to include Registrable
Securities in such registration. If any applicable registration statement under
this Section 3(f) involves an underwritten offering of the Company’s equity
securities, the Company shall not be required to include any of the Registrable
Securities of a Holder in such underwriting unless such Holder accepts the terms
of the underwriting as agreed upon between the Company and its underwriters, and
then only in such quantity as the underwriters in their sole discretion
determine will not jeopardize the success of the offering by the Company. If the
total number of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the number of securities to
be sold (other than by the Company) that the underwriters in their reasonable
discretion determine is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters and the
Company in their sole discretion determine will not jeopardize the success of
the offering. If the underwriters determine that less than all of the
Registrable Securities requested to be registered can be included in such
offering, then the Company will promptly so advise each Holder of Registrable
Securities that has requested registration, and will include in such
registration: first, Company securities which the Company desires to include in
such registration; and second, Registrable Securities requested to be included
therein, allocated pro rata among the holders of Registrable Securities based on
the number of Registrable Securities with respect to which each such holder has
requested registration (provided, that in no event shall the Registrable
Securities included in such offering be less than 30% of the Registrable
Securities requested to be included in such offering by the Holders thereof);
and third, other securities requested to be included in such registrations,
allocated pro rata among the holders thereof based on the number of such other
securities with respect to which such holder has requested registration; in each
case until the aggregate number of securities included in such registration is
equal to the number thereof that, in the opinion of such managing underwriter,
can be sold without adversely affecting the marketability thereof.

 

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3.           Registration Procedures. In connection with the Company’s
registration obligations hereunder, the Company shall:

 

(a)          Not less than five (5) Trading Days prior to the filing of each
Registration Statement and not less than one (1) Trading Day prior to the filing
of any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent
registered public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the Securities Act.
Notwithstanding the above, the Company shall not be obligated to provide the
Holders advance copies of any universal shelf registration statement registering
securities in addition to those required hereunder, or any Prospectus prepared
thereto. The Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities shall reasonably object in good faith,
provided that, the Company is notified of such objection in writing no later
than five (5) Trading Days after the Holders have been so furnished copies of a
Registration Statement or one (1) Trading Day after the Holders have been so
furnished copies of any related Prospectus or amendments or supplements thereto.
Each Holder agrees to furnish to the Company a completed questionnaire in the
form attached to this Agreement as Annex A (a “Selling Stockholder
Questionnaire”) on a date that is not less than two (2) Trading Days prior to
the Filing Date or by the end of the fourth (4th) Trading Day following the date
on which such Holder receives draft materials in accordance with this Section.

 

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(b)          (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities, (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to a Registration Statement
or any amendment thereto and provide as promptly as reasonably possible to the
Holders true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement (provided that, the Company
shall excise any information contained therein which would constitute material
non-public information regarding the Company or any of its Subsidiaries), and
(iv) comply in all material respects with the applicable provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by a Registration Statement during the applicable
period in accordance (subject to the terms of this Agreement) with the intended
methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented.

 

(c)          If during the Effectiveness Period, the number of Registrable
Securities at any time exceeds 100% of the number of shares of Common Stock then
registered in a Registration Statement (other than for limitations set forth in
Section 2(c)), then the Company shall file as soon as reasonably practicable,
but in any case prior to the applicable Filing Date, an additional Registration
Statement covering the resale by the Holders of not less than the number of such
Registrable Securities.

 

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(d)          Notify the Holders of Registrable Securities to be sold (which
notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than one (1) Trading Day prior to such filing) and (if requested
by any such Person) confirm such notice in writing no later than one (1) Trading
Day following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed,
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement, and (C) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose, (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided, however, in no event shall any such notice
contain any information which would constitute material, non-public information
regarding the Company or any of its Subsidiaries.

 

(e)          Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

 

(f)           Furnish to each Holder, without charge, at least one conformed
copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished in physical
form.

 

(g)          Subject to the terms of this Agreement, the Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant to Section
3(d).

 

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(h)          The Company shall cooperate with any broker-dealer through which a
Holder proposes to resell its Registrable Securities in effecting a filing with
the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as
requested by any such Holder and the Company or any such broker-dealer shall pay
the filing fee required by such filing within two (2) Business Days of request
therefor.

 

(i)           Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that, the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

 

(j)           If requested by a Holder, cooperate with such Holder to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Holder may
request.

 

(k)          Upon the occurrence of any event contemplated by Section 3(d), as
promptly as reasonably possible under the circumstances taking into account the
Company’s good faith assessment of any adverse consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement
or amendment, including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will 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, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its best efforts to
ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under this
Section 3(k) to suspend the availability of a Registration Statement and
Prospectus, subject to the payment of partial liquidated damages otherwise
required pursuant to Section 2(d), for a period not to exceed 60 calendar days
(which need not be consecutive days) in any 12-month period.

 

(l)           Comply with all applicable rules and regulations of the
Commission.

 

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(m)         From and after the date the Company becomes eligible to use Form
S-3, the Company shall use its best efforts to maintain eligibility for use of
Form S-3 (or any successor form thereto) for the registration of the resale of
Registrable Securities.

 

(n)          The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the
natural persons thereof that have voting and dispositive control over the
shares. During any periods that the Company is unable to meet its obligations
hereunder with respect to the registration of the Registrable Securities solely
because any Holder fails to furnish such information within three Trading Days
of the Company’s request, any liquidated damages that are accruing at such time
as to such Holder only shall be tolled and any Event that may otherwise occur
solely because of such delay shall be suspended as to such Holder only, until
such information is delivered to the Company.

 

4.           Additional Obligations Regarding Registrations.

 

(a)          Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it
(unless an exemption therefrom is available) in connection with sales of
Registrable Securities pursuant to a Registration Statement.

 

(b)          By its acquisition of Registrable Securities, each Holder agrees
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(d)(iii) through (vi), such Holder will
forthwith discontinue disposition of such Registrable Securities under a
Registration Statement until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company agrees and acknowledges that any periods during which
the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section 2(d).

 

(c)          Neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company
other than the Registrable Securities in any Registration Statements.

 

11

 

  

5.           Registration Expenses. All fees and expenses incident to the
performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses of the Company’s counsel and
independent registered public accountants) (A) with respect to filings made with
the Commission, (B) with respect to filings required to be made with any Trading
Market on which the Common Stock is then listed for trading, (C) in compliance
with applicable state securities or Blue Sky laws reasonably agreed to by the
Company in writing (including, without limitation, fees and disbursements of
counsel for the Company in connection with Blue Sky qualifications or exemptions
of the Registrable Securities) and (D) if not previously paid by the Company in
connection with an Issuer Filing, with respect to any filing that may be
required to be made by any broker through which a Holder intends to make sales
of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the
broker is receiving no more than a customary brokerage commission in connection
with such sale, (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions of any Holder or, except to
the extent provided for in the Transaction Documents, any legal fees or other
costs of the Holders.

 

6.           Indemnification.

 

(a)          Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees (and any other Persons with a functionally equivalent role of a
Person holding such titles, notwithstanding a lack of such title or any other
title) of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, members, stockholders, partners, agents and
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles, notwithstanding a lack of such title or any other title) of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to (1) any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading or (2) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state securities law, or
any rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or in any
amendment or supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an
outdated, defective or otherwise unavailable Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated, defective or
otherwise unavailable for use by such Holder and prior to the receipt by such
Holder of the Advice contemplated in Section 7(d), but only if and to the extent
that following the receipt of the Advice the misstatement or omission giving
rise to such Loss would have been corrected. The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified person and shall survive the transfer of any Registrable Securities
by any of the Holders in accordance with Section 7(h).

 

12

 

  

(b)          Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with any applicable prospectus delivery requirements of the
Securities Act through no fault of the Company or (y) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement, any
Prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading (i) to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company expressly for inclusion in such Registration Statement or such
Prospectus or (ii) to the extent, but only to the extent, that such information
relates to such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or in any
amendment or supplement thereto or (iii) in the case of an occurrence of an
event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only
to the extent, related to the use by such Holder of an outdated, defective or
otherwise unavailable Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated, defective or otherwise unavailable for
use by such Holder and prior to the receipt by such Holder of the Advice
contemplated in Section 7(d), but only if and to the extent that following the
receipt of the Advice the misstatement or omission giving rise to such Loss
would have been corrected. In no event shall the liability of any selling Holder
under this Section 6(b) be greater in amount than the dollar amount of the net
proceeds actually received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

13

 

  

(c)          Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that, the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding, or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that, the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) not to be entitled to indemnification
hereunder.

 

14

 

  

(d)          Contribution. If the indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other fees or expenses incurred by such party in connection with any Proceeding
to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party
in accordance with its terms.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), no Holder shall be required
to contribute pursuant to this Section 6(d), in the aggregate, any amount in
excess of the amount by which the net proceeds actually received by such Holder
from the sale of the Registrable Securities subject to the Proceeding exceeds
the amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.

 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

7.           Confidentiality; Disclosures.

 

(a)           Confidential Information. The disclosure and exchange of
Confidential Information (as defined in the CNDA) between the Company and
Purchaser (including any Purchaser board observer) shall be governed solely by
the terms of the Corporate Non-Disclosure Agreement No. 11663, dated November 7,
2014, and Intel Capital Equity Corporate Non-Disclosure Agreement No. 70107714,
dated December 23, 2014 (collectively, the “CNDA”) executed between the Company
and Purchaser; provided, however, that the disclosure and exchange of
confidential information between the Company and Purchaser that is specifically
covered by another agreement (other than a Transaction Document) executed
between the Company and Purchaser shall be governed by the terms of such other
agreement. The Company agrees that no confidentiality obligation or restriction
contained in any of the Transaction Documents (except for this Agreement) shall
be binding upon Purchaser.

 

15

 

  

(b)          Disclosure. The terms and conditions of the definitive agreements,
including their existence, would be considered confidential information and
would not be disclosed by the Company to any third party except in accordance
with the provisions set forth in this Section 7(b). No announcement regarding
the terms of the Transaction Documents or Purchaser in a press release,
conference, advertisement, announcement, professional or trade publication, mass
marketing materials or otherwise to the general public, other than in filings
required by the Exchange Act may be made without the prior written consent of
Purchaser. The Company and Purchaser have agreed, or will agree prior to the
Closing, upon the form of a press release to be issued by the Company following
the Closing. Notwithstanding the foregoing, (a) the Company or Purchaser may
disclose any of the terms of the Transaction Documents to its current or bona
fide prospective investors, employees, investment bankers, lenders, accountants
and attorneys, in each case only where such persons or entities are subject to
appropriate nondisclosure obligations; (b) Purchaser may disclose its investment
in the Company and the terms of the investment to third parties or to the public
at its sole discretion, and, if it does so, the Company would have the right to
disclose to third parties any information disclosed in a press release or other
public announcement by Purchaser; and (c) the Company may disclose, if required
by applicable law, rules or regulations, in its Exchange Act filings that
Purchaser is an investor in the Company, provided that the final form of the
disclosure is approved in advance in writing by Purchaser. To the extent
required by the rules and regulations of the SEC, upon the advice of counsel,
the Company may file the definitive agreements as exhibits to its Exchange Act
reports; provided, however, that the Company agrees to seek confidential
treatment of any portions of those documents as reasonably requested by
Purchaser, and provided further, that the Company provide Purchaser with drafts
of confidential treatment requests and redacted copies of the agreements at
least three (3) business days prior to the filing thereof. In the event that the
Company is requested or becomes legally compelled (including, without
limitation, pursuant to securities laws and regulations other than as set forth
above) to disclose the existence or the terms of the Transaction Documents in
contravention of the provisions of this Section 7, the Company shall provide
Purchaser with prompt written notice of that fact so that the appropriate party
may seek (with the cooperation and reasonable efforts of the other parties) a
protective order, confidential treatment or other appropriate remedy. In such
event, the Company shall furnish only that portion of the information which is
legally required and shall exercise reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded such information to the
extent reasonably requested by Purchaser.

 

16

 

  

8.           Board Matters.

 

(a)          Composition of Board. At the Closing, the board of directors of the
Company (the “Board”) will consist of seven (7) members, including the two (2)
individuals nominated and elected by Purchaser as the holder of a majority of
the Series A Preferred Stock (the “Series A Directors”), unless such individuals
have not yet been nominated by the Purchaser prior to the Closing, in which case
there shall be two vacancies at the time of the Closing and the Series A
Directors shall take their seats upon the nomination and election by Purchaser,
and the Company shall take all necessary actions to cause such individuals to be
appointed to the Board. Each Series A Director will be appropriately qualified
to serve as a director of the Company, as reasonably determined by Purchaser. At
least one of the Series A Directors shall qualify as an “independent director”
as that term is used in the listing rules or requirements applicable to the
Company or, if no such rules or requirements are applicable, then the Nasdaq
listing rules and requirements. Subject to the foregoing provisions of this
Section 8(a), for so long as the holders of Series A Preferred Stock have the
right as a separate class pursuant to the Certificate of Designation to nominate
and elect one or more directors to the Board, the Company shall take all
necessary actions and any and all times to cause such individuals so nominated
and elected as Series A Directors to be appointed to the Board.

 

(b)          Board Observer. The Company will permit a representative of
Purchaser (the “Observer”), in addition to the Series A Directors, to attend all
meetings of the Board, including executive sessions thereof, of the Board and
all committees thereof (whether in person, telephonic or other) in a non-voting,
observer capacity and shall provide to Purchaser, concurrently with the members
of the Board, and in the same manner, notice of such meeting and a copy of all
materials provided to such members. A majority of the Board may request that the
Observer recuse himself or herself from portions of meetings of the Board or
omit to provide the Observer with certain information if such members of the
Board believe in good faith, based on the advice of Company counsel, that such
recusal or omission is necessary in order to (a) preserve the Company’s
attorney-client privilege, (b) fulfill the Company’s obligations with respect to
confidential or proprietary information of third parties, provided, however,
that the Observer shall not be so excluded unless all other persons whose
receipt of such materials or presence at a meeting would result in a violation
of such third party confidentiality obligations are also excluded, or (c) avoid
a conflict of interest in the event that the Board intends to discuss or vote
upon or distribute any materials with respect to a matter in which Purchaser has
a material business or financial interest (other than by reason of its interest
as a stockholder) that would pose a conflict of interest for Purchaser as
determined in good faith by the Board based upon the advice of the Company’s
legal counsel.

 

(c)          Director Compensation; Meeting Expenses. The Company will
compensate each Series A Director in the same manner and to the same extent as
it compensates its other non-employee directors. If a Series A Director is an
employee of Purchaser or any of its Affiliates, the Company will pay the
applicable compensation behalf of such Series A Director to Purchaser. The
Company shall reimburse the reasonable out-of-pocket expenses of the Observer
and the Series A Directors incurred in connection with attending all meetings of
the Board and committees thereof.

 

17

 

  

(d)          D&O Insurance; Indemnification. The Company will maintain directors
and officers liability insurance with a carrier and in an amount customary for
the Company’s industry and size of business, as determined by the Board, and
will enter into a customary indemnification agreement in a form reasonably
acceptable to Purchaser with the Series A Directors. The Company agrees, and its
indemnification agreements shall provide, that its indemnification obligations
to the Series A Directors are primary, and indemnification, if any, provided to
the Series A Directors by Purchaser shall be secondary. Prior to any merger,
consolidation, change of control or other similar transaction in which the
Company is not the surviving entity, or the sale or transfer by the Company of
all or substantially all of its assets, the Company will require that any
successor (whether by merger, operation of law or otherwise) to the Company
assume the Company’s obligations under this Section 8(d) for a period of at
least six years.

 

9.           Disclaimer of Corporate Opportunities. The Company acknowledges
that Purchaser may have, from time to time, information that may be of interest
to the Company (“Information”) including, by way of example only,
(a) Purchaser’s technologies, plans and services, (b) current and future
investments and acquisitions Purchaser has made, may make, may consider or may
become aware of with respect to other companies and other technologies, products
and services, including, without limitation, technologies, products and services
that may be competitive with the Company’s, and (c) developments with respect to
the technologies, products and services, and plans and strategies relating
thereto, of other companies, including, without limitation, companies that may
be competitive with the Company. The Company, as a material part of the
consideration for this Agreement, hereby (a) agrees that Purchaser, the Observer
and the non-independent Series A Director shall have no duty to disclose any
Information to the Company or permit the Company to participate in any projects
or investments based on any Information, or to otherwise take advantage of any
opportunity that may be of interest to the Company if it were aware of such
Information, (b) waives, to the fullest extent permitted by law, any claim based
on the corporate opportunity doctrine or otherwise that could limit Purchaser’s
ability to pursue opportunities based on such Information or that would require
Purchaser, the Observer or the non-independent Series A Director to disclose any
such Information to the Company or offer any opportunity relating thereto to the
Company, and (c) renounces, to the fullest extent permitted by law, any interest
or expectancy of the Company in, or in being offered an opportunity to
participate in, any such opportunities.

 

10.         Public Filings. The Company shall deliver to an individual
designated by Purchaser (a) copies of the Company's 10-K's, 10-Q's, 8-K's and
Annual Reports to Shareholders promptly after such documents are filed with the
Securities and Exchange Commission, (b) thirty days prior to the end of each
fiscal year, a copy of the Company’s strategic plan and operating budget (with
variance analysis) forecasting the Company’s revenues, expenses, and cash
position on a month-to-month basis for the upcoming fiscal year and (c) copies
of the Company’s monthly financial statements promptly after they are available.

 

18

 

  

11.         Significant Transactions. The Company shall notify Purchaser
promptly, and in any event within 24 hours, of (i) the receipt of any third
party proposal to acquire more than 10% of the voting stock of the Company and
(ii) any decision by the Board to commence a process intended to lead to a
proposal by a third party with respect to the acquisition of more than 10% of
the voting stock of the Company (a “Significant Transaction Process”). Upon
notification by the Company to the Purchaser of the commencement of any
Significant Transaction Process, the Company shall be obligated to permit
Purchaser to participate in such process as a potential investor or acquirer of
the Company, if Purchaser so elects, on the same terms and conditions as any
third party participant. The Company shall not enter into any agreement with any
third party that would restrict the Company’s ability to comply with any of the
provisions of this Section 11, and represents that it is not a party to any such
agreement.

 

12.         Business Combination Statutes. Prior to the Closing, the Company and
the Board have taken such actions as are necessary to exempt Purchaser and any
of its Affiliates from the provisions of Section 203 of the Delaware General
Corporation Law or otherwise render inapplicable any other interested
shareholder, business combination or control share acquisition or any other
similar statute or provision in the Certificate of Incorporation or Bylaws, and
following the Closing, the Company and the Board shall continue to take any
actions that are necessary to ensure that Purchaser and its Affiliates remain
exempt, and refrain from taking any such actions that may have the opposite
impact.

 

13.         Miscellaneous.

 

(a)          Remedies. In the event of a breach by the Company or by a Holder of
any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
shall be entitled to specific performance of its rights under this Agreement.
Each of the Company and each Holder agrees that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by
it of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it
shall not assert or shall waive the defense that a remedy at law would be
adequate.

 

(b)          Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of a majority of the then outstanding Registrable Securities (for
purposes of clarification, this includes any Registrable Securities issuable
upon exercise or conversion of any Security). If a Registration Statement does
not register all of the Registrable Securities pursuant to a waiver or amendment
done in compliance with the previous sentence, then the number of Registrable
Securities to be registered for each Holder shall be reduced pro rata among all
Holders and each Holder shall have the right to designate which of its
Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of a
Holder or some Holders and that does not directly or indirectly affect the
rights of other Holders may be given only by such Holder or Holders of all of
the Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the first sentence of
this Section 13(b). No consideration shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement.

 

19

 

  

(c)          Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.

 

(d)          Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign (except by merger) its rights or obligations hereunder without the prior
written consent of all of the Holders of the then outstanding Registrable
Securities. The Purchaser may assign this Agreement and its rights and
obligations hereunder to an Affiliate. Each Holder may assign its respective
rights and obligations under Sections 2 through 6 of this Agreement in the
manner and to the Persons as permitted under Section 5.6 of the Purchase
Agreement.

 

(e)          No Inconsistent Agreements. Neither the Company nor any of its
Subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its Subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. Except as set forth on Schedule 13(e),
neither the Company nor any of its Subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

 

(f)           Execution and Counterparts. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

(g)          Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.

 

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

 

20

 

  

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

 

(j)           Headings. The headings in this Agreement are for convenience only,
do not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

 

(k)          Independent Nature of Holders’ Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of group or entity, or create a presumption that the
Holders are in any way acting in concert or as a group or entity with respect to
such obligations or the transactions contemplated by this Agreement or any other
matters, and the Company acknowledges that the Holders are not acting in concert
or as a group, and the Company shall not asset any such claim, with respect to
such obligations or transactions. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. The use of a single
agreement with respect to the obligations of the Company contained was solely in
the control of the Company, not the action or decision of any Holder, and was
done solely for the convenience of the Company and not because it was required
or requested to do so by any Holder. It is expressly understood and agreed that
each provision contained in this Agreement is between the Company and a Holder,
solely, and not between the Company and the Holders collectively and not between
and among Holders.

 

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(Signature Page Follows)

 

21

 

 

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Series A
Preferred Stock Investor’s Rights Agreement as of the date first written above. 

 

VUZIX CORPORATION,

a Delaware corporation

  By:     Name:   Title: 

 

INTEL CORPORATION,

a Delaware corporation

  By:     Name:      Title:   

 

[SIGNATURE PAGE TO VUZIX CORPORATION SERIES A PREFERRED STOCK INVESTOR’S RIGHTS
AGREEMENT]