Exhibit 10.2


 


EXHIBIT B


 


REGISTRATION RIGHTS AGREEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4

















 


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


 


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


 


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


 


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


 


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


 


(d)           use its reasonable best efforts to register or
qualify the Registrable Stock covered by such registration statement under the
securities or “blue sky” laws of such jurisdictions as the sellers of
Registrable Stock or, in the case of an underwritten public offering, the
managing underwriter reasonably shall request, provided, however,
that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;


 


(e)           use its reasonable best efforts to list the
Registrable Stock covered by such registration statement with any securities
exchange on which the Common Stock of the Company is then listed;


 


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


 


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


 


5

















 


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


 


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


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


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


 


7

















 


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


 


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


 


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


 


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


 


8

















 


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


 


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


 


(c)           Promptly after receipt by an indemnified party
hereunder of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under this Section 6
and shall only relieve it from any liability which it may have to such
indemnified party under this Section 6 if and to the extent the
indemnifying party is prejudiced by such omission. In case any such action
shall be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel satisfactory to 


 


9

















 


such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 6 for any legal expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected, provided, however, that,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, the indemnified party shall have the right
to select a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.  No indemnifying party, in the defense of any
such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement unless
such judgment or settlement includes as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation, includes only money
damages (as opposed to equitable relief) and does not include any statement as
to the fault or culpability of such indemnified party.


 


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


 


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


 


10






 












 


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


 


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


 


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


 


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


 


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


 


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


 


10.           Miscellaneous.


 


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


 


11

















 


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


 


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


 


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


 


with
copies (which shall not constitute notice) to:


 


Pillsbury
Winthrop Shaw Pittman LLP 

1540 Broadway

New York, New York 10036

Attention: Jonathan J. Russo, Esq. 

Facsimile No.: (212) 858-1500


 


and


 


Phillips &
Reiter, PLLC


6805
Capital of Texas Highway North, Suite 318


Austin,
Texas  78731


Attention:
J. William Wilson, Esq.

Facsimile No.: (512) 646-1106


 


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


 


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


 


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


 


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


 


12

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


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


 


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


 


14

















 


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


 


[Remainder of Page Intentionally Left Blank]


 


15

















 


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


 


 


	
   

  	
  THE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  XPLORE
  TECHNOLOGIES CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Michael
  J. Rapisand

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  



 


 


Signature
Page to Registration Rights Agreement


 

















 


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


 


 


	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


Signature Page to Registration Rights Agreement