Document:

Series B and Series C Preferred Stock Purchase Agreement dated March 3, 2005

 Exhibit 10.48 
  
 ADD-VISION, INC. 
 SERIES B AND SERIES C PREFERRED STOCK PURCHASE AGREEMENT 
  
 THIS SERIES B AND SERIES C PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of March 3, 2005, by and among
Add-Vision, Inc., a Delaware corporation (the “Company”), and the persons and entities listed on the attached Schedule A who become signatories to this Agreement (each, an “Investor” and,
collectively, the “Investors”). 
  
 RECITALS 
  
 A. The Company’s Board of
Directors has adopted the Amended and Restated Certificate of Incorporation (the “Restated Certificate”) in the form attached hereto as Exhibit A which, among other matters, establishes the rights,
preferences, and privileges of the Company’s $0.0001 par value Series B Preferred Stock (the “Series B Preferred”) and the Company’s $0.0001 par value Series C Preferred Stock (the “Series C
Preferred”). 
  
 B. The Company desires to sell to
the Investors up to 4,302,634 shares of Series B Preferred (the “Series B Shares”) and 2,036,068 shares of Series C Preferred (the “Series C Shares”, and together with the Series B Shares, the
“Shares”), and the Investors desire to purchase the Shares from the Company, subject to the terms and conditions set forth in this Agreement. 
  
 THE PARTIES AGREE AS FOLLOWS: 
  
 1. Purchase and Sale of Preferred Stock. 
  
 1.1 Issuance of Preferred Stock. Subject to the terms and conditions of this Agreement, the Company shall issue and sell to each Investor,
and such Investor agrees to purchase from the Company, such number and series of Shares designated opposite such Investor’s name on Schedule A for the purchase price set forth on Schedule A. 
  
 1.2 Closing. The initial closing of the purchase and sale of
the Shares shall take place at the offices of Allen Matkins Leck Gamble & Mallory LLP, Three Embarcadero Center, 12th Floor, San Francisco, CA 94111, on March 3, 2005, at 11:00 a.m. (the “Closing”) or at such other place
and time as the Company and Majority Investors mutually agree. At the Closing, each Investor shall purchase that number and series of Shares designated opposite such Investor’s name on Schedule A for the purchase price set forth opposite
such Investor’s name on Schedule A. At the Closing, the Company shall deliver to each Investor a certificate representing the Shares which that Investor is purchasing against delivery to the Company by such Investor at the Closing of (a)
an executed counterpart of this Agreement and each applicable Transactional Agreement and (b) the purchase price for such Shares as set forth on Schedule A by wire transfer to the Company’s account at Bank of America, cancellation of
indebtedness or check payable to the Company, except that, in the case of the purchase by Cambridge Display Technology Limited 

 
or an Affiliate thereof (“CDT”) of 4,302,634 shares of Series B Preferred, the execution and delivery by CDT to the Company of the
Licence Agreement shall constitute payment in full for such Series B Shares; provided, however, that if the rights to the “Uniax Patent” (as defined in the Licence Agreement) as contemplated by Section 2.4 of the Licence Agreement have not
been granted by CDT on or prior to the Closing, then the Company shall deliver to CDT (a) a certificate representing 2,151,317 shares of the Series B Shares on the Closing and (b) a certificate representing an additional 2,151,317 shares of the
Series B Shares at a Subsequent Closing (as defined in Section 1.3 hereof) contingent upon CDT’s grant of the rights to the Uniax Patent as contemplated by Section 2.4 of the Licence Agreement. 
  
 1.3 Subsequent Closings. If less than all of the Shares are
sold at the Closing, then the Company shall hold subsequent closings (each, a “Subsequent Closing”) for the purchase and sale of such unsold Shares to, in the case of any such Shares that are Series B Shares, CDT and, in the
case of any such Shares that are Series C Shares, to current stockholders of the Company or such other persons as the Company may approve; provided, however, that (a) no such person shall be a competitor of CDT, as determined in good faith by CDT
upon consultation with the Company based upon whether or not such person is engaged or plans to be engaged in the development, manufacture or marketing of light-emitting diode technology for use in flat panel displays and other applications,
including electroluminescent devices, photodetectors or photovoltaics, and materials or components thereof, (b) if the Company has not sold the full number of Series C Shares contemplated to be sold hereunder by June 30, 2005 (or such later date as
the Company may designate with the approval of CDT, the “Final Closing Date”), the Company shall, to the extent necessary to issue the full number of Series C Shares contemplated to be sold hereunder, (i) issue Series C
Shares in accordance with Section 2 of the “Convertible Notes” (as defined in Section 6.12 hereof) and/or (ii) sell Series C Shares to Robert Wood, the Company’s Chairman (or such other person or persons designated by Mr. Wood,
subject to clause (a) above), the purchase price for which shall be provided from the amounts deposited pursuant to the Escrow Agreement, (c) no Subsequent Closing for any Series C Shares may be held after the Final Closing Date without the approval
of CDT, and (d) no Series C Shares may be issued at a price less than $1.23 per share without the approval of CDT. Upon the sale of the full number of Series C Shares contemplated to be sold hereunder, CDT agrees to promptly acknowledge notice
thereof pursuant to the Escrow Agreement. Schedule A shall be revised by the Company to reflect the sale of Shares at any Subsequent Closing, with the purchasers of such Shares to be treated as Investors for all purposes hereunder. At each
Subsequent Closing, each new Investor shall purchase that number and series of Shares designated opposite such Investor’s name on Schedule A for the purchase price set forth opposite such Investor’s name on Schedule A. At
each Subsequent Closing, the Company shall deliver to each new Investor a certificate representing the Shares which that Investor is purchasing against delivery to the Company by such Investor at such Subsequent Closing of (a) an executed
counterpart of this Agreement and each applicable Transactional Agreement and (b) the purchase price for such Shares as set forth on Schedule A by wire transfer, cancellation of indebtedness or check payable to the Company. 
  

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 2. Definitions. For purposes of this Agreement the following terms shall have the following
meanings: 
  
 2.1 “Affiliate” means with
respect to any person or entity (a “Person”) any Person which, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any partner, officer, director, or
member of such Person and any venture capital fund now or hereafter existing which is controlled by or under common control with one or more general partners or shares the same management company with such Person. 
  
 2.2 “CDT Side Letter” shall mean the side letter
agreement between the Company and CDT, dated as of the date of the Closing, in the form attached as Exhibit G hereto. 
  
 2.3 “Chairman Letters” shall mean the letter or letters from Robert Wood, the Company’s Chairman, reasonably satisfactory to
CDT, as to certain representations and the subordination of certain of the Company’s debt. 
  
 2.4 “Commission” shall mean the Securities and Exchange Commission. 
  
 2.5 “Company’s knowledge” shall mean the actual knowledge after reasonable investigation of the
officers of the Company. 
  
 2.6 “Environmental
Laws” shall mean any law, regulation, or other applicable requirement relating to (a) releases or threatened release of Hazardous Substance; (b) pollution or protection of employee health or safety, public health or the
environment; or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances. 
  
 2.7 “Escrow Agreement” shall mean the agreement among the Company, Robert Wood, the Company’s Chairman, and the escrow
agent named therein, dated as of the date of the Closing, in the form attached as Exhibit B hereto. 
  
 2.8 “Financial Statements” shall mean the Company’s unaudited balance sheet as of December 31, 2004 and its unaudited
statement of operations, stockholders’ equity and cash flows for the fiscal year then ended. 
  
 2.9 “GAAP” shall mean United States generally accepted accounting principles. 
  
 2.10 “Indemnification Agreement” shall mean the
agreement between the Company and certain directors of the Company, dated as of the date of the Closing, in the form attached as Exhibit C hereto. 
  
 2.11 “Intellectual Property” shall mean patents, trade names, trademarks, service marks, mask works, copyrights, trade secrets and
any other intellectual or industrial property rights recognized in any jurisdiction in the United States or elsewhere, and any application for or registration of any of the foregoing. 
  

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 2.12 “Key Employee” means any executive-level employee (including division
director and Vice President level positions) as well as any employee who either alone or in concert with others develops, invents, programs or designs any Intellectual Property (as hereinafter defined). As of the Closing, the Company’s only Key
Employee is Matthew Wilkinson. 
  
 2.13 “Licence
Agreement” shall mean the Licence Agreement between the Company and CDT, dated as of the date of the Closing, in the form attached as Exhibit D hereto. 
  
 2.14 “Majority Investors” shall mean, at any time, the Investor(s) who purchase, or are scheduled to
purchase, a majority of the Shares, at such time. 
  
 2.15
“Material Adverse Event” shall mean a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, prospects or results of operations of the Company. 

 
 2.16 “Preferred Stock” shall mean the Series A
Preferred (as defined in Section 3.2(a) hereof), the Series B Preferred and the Series C Preferred. 
  
 2.17 “Rights Agreement” shall mean the Investor Rights Agreement, dated as of the date of the Closing, in the form attached as
Exhibit E hereto. 
  
 2.18 “Schedule of
Exceptions” shall mean the schedule of exceptions to the representations and warranties of the Company in Section 3 of this Agreement. The Schedule of Exceptions is attached as Schedule B hereto. The Schedule of Exceptions is
arranged in sections corresponding to the numbered and lettered sections and subsections contained in Section 3 hereof, and the disclosures in any section or subsection of the Schedule of Exceptions shall qualify other sections and subsections in
Section 3 hereof only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections. 
  
 2.19 “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder. 
  
 2.20
“Transactional Agreements” shall mean this Agreement, the Escrow Agreement, the Indemnification Agreement, the Chairman Letters, the CDT Side Letter, the Licence Agreement and the Rights Agreement. 
  
 3. Representations and Warranties of the Company to Investors.
Except as set forth in the Schedule of Exceptions, the Company hereby represents and warrants to each Investor that: 
  
 3.1 Corporate Organization and Authority. The Company: 
  
 (a) is a corporation duly organized, validly existing, authorized to exercise all its corporate powers, rights and
privileges, and in good standing under the laws of the State of Delaware; 
  

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 (b) has the corporate power and corporate authority to own and operate its properties and to carry on
its business as now conducted; and 
  
 (c) is qualified as a
foreign corporation in all jurisdictions in which such qualification is required; provided, however, that the Company need not be qualified in a jurisdiction in which its failure to qualify would not constitute a Material Adverse Event. 

 
 3.2 Capitalization. The Company’s authorized capital
consists of: 
  
 (a) Preferred Stock. 9,500,000
shares of Preferred Stock, with a par value of $0.0001 per share, of which 2,500,000 shares are designated as Series A Preferred Stock (the “Series A Preferred”), 1,999,059 of which are duly and validly issued, fully paid,
non-assessable, and outstanding immediately prior to the Closing, 4,500,000 shares are designated as Series B Preferred, none of which shall be issued or outstanding immediately prior to the Closing, and 2,300,000 shares are designated as Series C
Preferred, none of which shall be issued or outstanding immediately prior to the Closing. 
  
 (b) Common Stock. 12,500,000 shares are designated as Common Stock (the “Common Stock”), of which 880,153 shares are duly and validly issued, fully paid, non-assessable, and
outstanding immediately prior to the Closing, and 44,593 shares are designated as Class A Common Stock (the “Class A Common”), all of which are duly and validly issued, fully paid, non-assessable, and outstanding immediately
prior to the Closing. 
  
 (c) Other Securities. The
Company has reserved: (i) 4,302,634 shares of Series B Preferred for issuance pursuant to the terms of this Agreement; (ii) 2,036,068 shares of Series C Preferred for issuance pursuant to the terms of this Agreement; (iii) 2,500,000 shares of Common
Stock for issuance upon conversion of the authorized Series A Preferred; (iv) 4,500,000 shares of Common Stock for issuance upon conversion of the authorized Series B Preferred; (v) 2,500,000 shares of Common Stock for issuance upon conversion of
the authorized Series C Preferred; (vi) 499,765 shares of Series A Preferred for issuance pursuant to outstanding warrants; (vii) 237,356 shares of Common Stock for issuance pursuant to outstanding warrants; and (viii) 600,000 shares of Common Stock
for issuance under the Company’s 2003 Stock Option/Stock Issuance Plan. 
  
 (d) Capitalization Table. Section 3.2 of the Schedule of Exceptions sets forth the capitalization of the Company immediately following the Initial Closing, including the number of shares of the
following: (i) issued and outstanding Common Stock; (ii) issued stock options; (iii) stock options not yet issued but reserved for issuance; (iv) each series of Preferred Stock; and (v) warrants or stock purchase rights, if any. Except for (A) the
conversion privileges of the Shares to be issued under this Agreement, (B) the rights provided in the Rights Agreement, and (C) the securities and rights described in Section 3.2 of this Agreement and Section 3.2 of the Schedule of Exceptions, there
are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock or
Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock. 
  

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 (e) Rights and Restrictions. All outstanding shares of the Company’s Common Stock and
all shares of the Company’s Common Stock underlying outstanding options are subject to (i) a right of first refusal in favor of the Company upon any proposed transfer (other than transfers to any spouse, issue or spouse thereof, trust for the
benefit of such persons, or otherwise for estate planning purposes); and (ii) a lock-up or market standoff agreement of not less than 180 days following the Company’s initial public offering pursuant to a registration statement filed with the
Commission under the Securities Act, subject to extension as provided in Section 2.14 of the Rights Agreement. None of the Company’s stock purchase agreements or stock option documents contains a provision for acceleration of vesting (or lapse
of a repurchase right) upon the occurrence of any event or combination of events. The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant,
repricing, or any other means. 
  
 3.3 Subsidiaries.
The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association or other business entity. The Company is not a participant in any
joint venture, partnership or similar arrangement. 
  
 3.4
Corporate Power. The Company shall have at the Closing and at each Subsequent Closing all requisite legal and corporate power and authority to execute and deliver the Transactional Agreements to which it is a party, to sell and issue
the Shares hereunder, to issue the Common Stock issuable upon conversion of the Shares, and to carry out and perform its obligations under the terms of the Transactional Agreements to which it is a party. 
  
 3.5 Authorization. All corporate action on the part of the
Company, its officers, directors, and stockholders necessary for the authorization, execution, delivery, and performance of all obligations under the Transactional Agreements to which it is a party, and for the authorization, issuance, and delivery
of the Shares and of the Common Stock issuable upon conversion of the Shares has been taken. The Transactional Agreements to which it is a party constitute legally binding and valid obligations of the Company enforceable in accordance with their
respective terms, except to the extent that such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other laws of general application relating to or affecting enforcement of creditors’ rights and
laws concerning equitable remedies. 
  
 3.6 Validity of
Shares. The Shares, when issued, sold, and delivered in accordance with the terms and for the consideration expressed in this Agreement, shall be duly and validly issued (including, without limitation, issued in compliance with applicable
federal and state securities laws), fully paid and non-assessable. The Common Stock issuable upon conversion of the Shares has been duly and validly reserved for issuance and, assuming such Common Stock is issued to the Investors, upon issuance in
accordance with the Restated Certificate, shall be duly and validly issued, fully paid and non-assessable and shall be free of any liens or encumbrances other than any liens or encumbrances created by or imposed thereon by the holders; provided,
however, that the Shares (and the Common Stock issuable upon conversion thereof) shall be subject to restrictions on transfer under state and/or federal securities laws. 
  

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 3.7 Financial Statements; Liabilities. 
  
 (a) The Company has delivered the Financial Statements to the Investors.

  
 (b) The Financial Statements fairly and accurately present
the Company’s financial position as of those dates and the results of operations and changes in its financial position for such periods then ended, and have been prepared in accordance with GAAP applied on a consistent basis, subject in the
case of the unaudited financial statements to normal year-end adjustments. 
  
 (c) There are no debts, liabilities or claims against the Company, contingent or otherwise, of a nature required to be reflected in a balance sheet prepared in accordance with GAAP that are not currently reflected in
the Financial Statements, other than (i) debts, liabilities and claims that have been incurred or otherwise arose in the ordinary course of business and which, individually or in the aggregate, do not exceed $25,000, and (ii) debts, liabilities and
claims identified in Section 3.7 of the Schedule of Exceptions that have been incurred after the date of such balance sheet. Section 3.7 of the Schedule of Exceptions identifies all debts, liabilities and claims not reflected in such balance sheet,
by category or general description and, if ascertainable, the aggregate amount thereof or maximum amount payable thereunder, together with the due dates for payment of any such debts for money borrowed, other than any such debts, liabilities and
claims that have been incurred or otherwise arose after the date of such balance sheet in the ordinary course of business and which, individually or in the aggregate, do not exceed $25,000. 
  
 (d) The Company maintains and will continue to maintain, adhere to and
enforce a system of internal accounting controls that are effective in providing assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. 
  
 3.8 Litigation. There is no action, suit, proceeding, or
investigation pending or, to the Company’s knowledge, threatened, nor is there any basis therefor known to the Company, (a) that questions the validity of the Transactional Agreements to which it is a party or the Company’s right to enter
into the Transactional Agreements to which it is a party or to consummate the transactions contemplated thereby or (b) to the Company’s knowledge, that would reasonably be expected to constitute, either individually or in the aggregate, a
Material Adverse Event. Neither the Company nor, to the Company’s knowledge, any of its officers or directors, is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality that would reasonably be expected to constitute, either individually or in the aggregate, a Material Adverse Event. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or
threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, or any information or techniques
allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. 
  
  

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 3.9 Patents and Other Proprietary Rights. To the knowledge of the Company, the Company owns
or possesses sufficient legal rights to all Intellectual Property as is necessary to the conduct of the Company’s business as now conducted and as presently proposed to be conducted, without any known conflict with, or infringement of,
the rights of others. To the Company’s knowledge, no product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or conflict with or infringe any intellectual property
rights of any other party. Other than with respect to commercially available software products under standard end-user object code license agreements, there are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership
interests of any kind relating to the foregoing, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other person or entity. The Company has not received any
communications alleging that the Company has violated or, by conducting its business, would violate any of the Intellectual Property of any other person or entity. The Company has obtained and possesses valid licenses to use all of the software
programs present on the computers and other software-enabled electronic devices that it owns or leases or that it has otherwise provided to its employees for their use in connection with the Company’s business. To the Company’s knowledge,
it will not be necessary to use any inventions of any of its employees (or persons it currently intends to hire) made prior to their employment by the Company. Each Key Employee has assigned to the Company all Intellectual Property rights he or she
owns that are related to the Company’s business as now conducted. Section 3.9 of the Schedule of Exceptions lists all Intellectual Property of the Company. For purposes of this Section 3.9, the Company shall be deemed to have knowledge of a
patent right if the Company has actual knowledge of the patent right or would be found to be on notice of such patent right as determine by reference to United States patent laws. 
  
 3.10 Employee Matters. 
  
 (a) As of the date hereof, the Company employs three full-time employees and one part-time employee and engages two
consultants or independent contractors. 
  
 (b) To the
Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that
would materially interfere with such employee’s ability to promote the interest of the Company or that would materially conflict with the Company’s business. Neither the execution or delivery of the Transactional Agreements to which it is
a party, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as now conducted and as presently proposed to be conducted, will, to the Company’s knowledge, conflict
with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated. 
  

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 (c) The Company is not delinquent in payments to any of its employees, consultants, or independent
contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants, or independent contractors. The Company
has complied with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification, collective bargaining, and the payment and withholding of
taxes and other sums as required by law except where noncompliance with any applicable law would not result in a Material Adverse Event. The Company has withheld and paid to the appropriate governmental entity or is holding for payment not yet due
to such governmental entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties, or other sums for failure to comply with any of the foregoing. 
  
 (d) To the Company’s knowledge, no Key Employee intends to terminate
employment with the Company or is otherwise likely to become unavailable to continue as a Key Employee, nor does the Company have a present intention to terminate the employment of any Key Employee. The employment of each employee of the Company is
terminable at the will of the Company. Except as set forth in Section 3.10 of the Schedule of Exceptions or as required by law, upon termination of the employment of any such employees, no severance or other payments will become due. Except as set
forth in Section 3.10 of the Schedule of Exceptions, the Company has no policy, practice, plan, or program of paying severance pay or any form of severance compensation in connection with the termination of employment services. 
  
 (e) Section 3.10 of the Schedule of Exceptions sets forth each employee
benefit plan maintained, established or sponsored by the Company, or which the Company participates in or contributes to, which is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The
Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied in all material respects with
all applicable laws for any such employee benefit plan. 
  
 (f)
The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the
knowledge of the Company, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Company’s knowledge, threatened, which could
constitute a Material Adverse Event, nor is the Company aware of any labor organization activity involving its employees. 
  
 (g) To the Company’s knowledge, none of the officers or directors of the Company during the previous five years has been (i) subject to voluntary or
involuntary petition under the federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent or similar officer by a court for his business or property; (ii) convicted in a criminal proceeding or named as a
subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) subject to any order, judgment, or decree (not 

  

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subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise
imposing limits or conditions on his engagement in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or (iv) found by a court of competent jurisdiction in a
civil action or by the Commission or the Commodity Futures Trading Commission to have violated any federal or state securities, commodities, or unfair trade practices law, which such judgment or finding has not been subsequently reversed, suspended,
or vacated. 
  
 3.11 Governmental and Third Party
Consents. Subject to the accuracy of Investors’ representations in Section 4 of this Agreement, no consent, approval, order, or authorization of, or registration, qualification, designation, declaration, or filing with, any federal,
state, local, or provincial governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Agreement, except for the (a) filing of the Restated Certificate, (b) timely
filing of the notice required pursuant to Section 25102(f) of the California Corporate Securities Law of 1968, as amended, or Regulation D of the Securities Act, and (c) such other filings as are required by the securities laws of those states in
which Investors are resident. 
  
 3.12 Permits. The
Company has all franchises, permits, licenses, and any similar governmental authority necessary for the conduct of its business as now being conducted by it, the lack of which would constitute a Material Adverse Event, and believes it can obtain,
without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted. The Company is not in default in any material respect under any of such franchises, permits, license, or other similar authority.

  
 3.13 Environmental and Safety Laws. Except as
could not reasonably be expected to constitute a Material Adverse Event (a) the Company is and has been in compliance with all Environmental Laws; (b) there has been no release or threatened release of any pollutant, contaminant or toxic or
hazardous material, substance or waste, or petroleum or any fraction thereof, (each, a “Hazardous Substance”) on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there
have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of
hazardous or toxic waste sites published by any governmental authority in the United States; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or
stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The
Company has made available to the Investors true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental
studies or assessments. 
  
 3.14 Brokers and
Finders. The Company has not retained any investment banker, broker, or finder in connection with the transactions contemplated by this Agreement. 
  

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 3.15 Compliance with Other Instruments. Except as could not reasonably be expected to
constitute a Material Adverse Event, the Company is not in violation or default (a) of any provisions of its Restated Certificate or Bylaws, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d)
under any lease, agreement, contract or purchase order to which it is a party or by which it is bound that is required to be listed on the Schedule of Exceptions, or, of any provision of federal or state statute, rule or regulation applicable to the
Company. The execution, delivery and performance of the Transactional Agreements to which it is a party and the consummation of the transactions contemplated by the Transactional Agreements to which it is a party will not result in any such
violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event which results
in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or material license applicable to the Company. 
  
 3.16 Agreements; Actions. 
  
 (a) Except for the Transactional Agreements or as otherwise set forth in
Section 3.16 of the Schedule of Exceptions, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve (i) obligations (contingent or otherwise) of,
or payments to, the Company in the aggregate in excess of $50,000, (ii) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other person or affect the Company’s exclusive right to develop,
manufacture, assemble, distribute, market or sell its products, or (iii) indemnification by the Company with respect to infringements of its Intellectual Property. 
  
 (b) Except as otherwise set forth in Section 3.16 of the Schedule of Exceptions, the Company has not (i) declared or paid
any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iii) sold, exchanged or
otherwise disposed of any of its assets or rights, other than the sale of its inventory or the disposal of its office equipment in the ordinary course of business. 
  
 (c) The Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. 

 
 (d) The Company has not engaged in the past three months in any
discussion with any representative of any corporation, partnership, trust, joint venture, limited liability company, association or other entity, or any individual, regarding (i) a sale of all or substantially all of the Company’s assets, or
(ii) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person. 
  
 For the purposes of Section 3.16(a) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions
involving the same person or entity (including persons or entities the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsection. 

 
  

 11 

 3.17 Conflicts of Interest. 
  
 (a) Other than (i) employee benefits, standard director and officer indemnification agreements approved by the Board of
Directors, and the purchase of shares of the Company’s capital stock and the issuance of options to purchase shares of the Company’s Common Stock, in each instance, approved by the Board of Directors, and (ii) the Transactional Agreements,
there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, or Key Employees, or any Affiliate thereof. 
  
 (b) The Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their
respective spouses or children or to any Affiliate of any of the foregoing, other than as set forth in Section 3.17 of the Schedule of Exceptions or in connection with expenses or advances of expenses incurred in the ordinary course of business or
employee relocation expenses. None of the Company’s directors, officers or employees, or any Affiliate of the foregoing (i) are, directly or indirectly, indebted to the Company or, (ii) to the Company’s knowledge, have any direct or
indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that directors, officers, employees
or stockholders of the Company and their respective Affiliates may own stock in (but not exceeding two percent of the outstanding capital stock of) publicly traded companies that may compete with the Company. 
  
 3.18 Rights of Registration and Voting Rights. Except as
provided in the Rights Agreement, the Company is not under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding
securities. To the Company’s knowledge, except as contemplated in Schedule 3.18, no stockholder of the Company has entered into any agreements with respect to the voting of capital shares of the Company. 
  
 3.19 Absence of Liens. The property and assets that the Company
owns are free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business
and do not materially impair the Company’s ownership or use of such property or assets. With respect to the property and assets it leases, the Company is in compliance with such leases and, to its knowledge, holds a valid leasehold interest
free of any liens, claims or encumbrances other than those of the lessors of such property or assets. 
  
 3.20 Changes. Since December 31, 2004, there has not been: 
  
 (a) any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in
the Financial Statements, except changes in the ordinary course of business that have not caused, in the aggregate, a Material Adverse Event; 
  

 12 

 (b) any damage, destruction or loss, whether or not covered by insurance, that would constitute a
Material Adverse Event; 
  
 (c) any waiver or compromise by the
Company of a valuable right or of a material debt owed to it; 
  
 (d) any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and the satisfaction or discharge of which would not constitute a Material Adverse
Event; 
  
 (e) any material change to a material contract or
agreement by which the Company or any of its assets is bound or subject; 
  
 (f) any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder; 
  
 (g) any resignation or termination of employment of any officer or Key Employee of the Company; 
  
 (h) any sale, assignment or transfer of any Intellectual Property that could
reasonably be expected to result in a Material Adverse Event; 
  
 (i) receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company; 
  
 (j) to the Company’s knowledge, any other event or condition of any character, other than events affecting the economy or the Company’s
industry generally, that could reasonably be expected to result in a Material Adverse Event; or 
  
 (k) any arrangement or commitment by the Company to do any of the things described in this Section 3.20. 
  
 3.21 Tax Returns and Payments. There are no federal, state,
county, local or foreign taxes dues and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign taxes of the Company which are due, whether or not assessed or disputed. There
have been no examinations or audits of any tax returns or reports by any applicable federal, state, local or foreign governmental agency. The Company has duly and timely filed all federal, state, county, local and foreign tax returns required to
have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year. 
  
 3.22 Insurance. Section 3.22 of the Schedule of Exceptions provides a complete list of the Company’s insurance policies currently in
effect. 
  
 3.23 Confidential Information and Invention
Assignment Agreements. Each current Key Employee and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms delivered 

  

 13 

 
to counsel for the Investors (the “Confidential Information Agreements”). Each consultant to the Company has executed and delivered
to the Company an agreement providing for the assignment of inventions and protection of Company confidential information in substance materially equivalent to the Confidential Information Agreements. No current Key Employee, officer or consultant
of the Company has excluded works or inventions from his or her assignment of inventions pursuant to such agreements. The Company is not aware that any of its Key Employees, officers or consultants is in violation thereof. 
  
 3.24 Corporate Documents. The Restated Certificate and Bylaws
of the Company are in the form provided to the Investors. The copy of the minute books of the Company provided to the Investors contains minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by
the directors and stockholders since the date of incorporation and accurately reflects in all material respects all actions by the directors (and any committee of directors) and stockholders with respect to all transactions referred to in such
minutes. 
  
 3.25 Real Property Holding Corporation.
The Company is not now and has never been a “United States real property holding corporation” as defined in the Code and any applicable regulations promulgated thereunder. The Company has filed with the Internal Revenue Service all
statements, if any, with its United States income tax returns which are required under such regulations. 
  
 3.26 Disclosure. The Company has made available to the Investors all the information reasonably available to the Company that the Investors
have requested for deciding whether to acquire the Shares, including certain of the Company’s projections describing its proposed business plan (the “Business Plan”). To the Company’s knowledge, no representation or
warranty of the Company contained in this Agreement, as qualified by the Schedule of Exceptions, and no certificate furnished or to be furnished to Investors at the Closing contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. The Business Plan was prepared in good faith; however, the Company does not warrant that it
will achieve any results projected in the Business Plan. It is understood that this representation is qualified by the fact that the Company has not delivered to the Investors, and has not been requested to deliver, a private placement or similar
memorandum or any written disclosure of the types of information customarily furnished to purchasers of securities. 
  
 3.27 Facilitating Compliance. The Company will perform such acts as CDT shall request as reasonably necessary or advisable to permit CDT to
comply with all laws and regulations applicable to U.S. publicly reporting companies, including but not limited to (a) the Securities Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder, (b) the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder, including but not limited to the implementation or modification by the Company of such internal control structure and
procedures for financial reporting as CDT reasonably requires for its compliance with Section 404 thereof, and (c) the Nasdaq Marketplace Rules. 
  

 14 

 4. Representations and Warranties of the Investors. Each Investor, severally and not
jointly, represents and warrants to the Company as follows: 
  
 4.1 Authorization. When executed and delivered by such Investor, and assuming execution and delivery by the Company, the Transactional Agreements to which such Investor is a party shall each constitute a valid obligation of
such Investor, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of
creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies, or (b) to the extent the indemnification provisions contained in the Investor Rights
Agreement or the Indemnification Agreement may be limited by applicable federal or state securities laws. 
  
 4.2 Brokers and Finders. The Investor has not retained any investment banker, broker, or finder in connection with the transactions
contemplated by this Agreement. 
  
 4.3 Investment.
This Agreement is made with such Investor in reliance upon its representation to the Company, which by such Investor’s execution of this Agreement, Investor hereby confirms, that the Shares to be received by such Investor shall be acquired for
investment for Investor’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and that such Investor has no present intention of selling, granting any participation in, or otherwise
distributing any of the Shares. By executing this Agreement, such Investor further represents that it has no contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participation to such person or to any third
person, with respect to any of the Shares. 
  
 4.4 No Public
Market. Such Investor understands and acknowledges that the offering of the Shares pursuant to this Agreement shall not be registered under the Securities Act on the grounds that the offering and sale of securities contemplated by this
Agreement are exempt from registration pursuant to Section 4(2) or Section 3(b) of the Securities Act, and that the Company’s reliance upon such exemption is predicated upon such Investor’s representations as set forth in this Agreement.
Such Investor further understands that no public market now exists for any of the securities issued by the Company and that the Company has given no assurances that a public market shall ever exist for the Company’s securities. 
  
 4.5 Limitations on Transferability. Such Investor covenants
that in no event shall it dispose of any of the Shares (other than pursuant to Rule 144 promulgated by the Commission under the Securities Act (“Rule 144”) or any similar or analogous rule or pursuant to the terms of the
Rights Agreement) unless and until (a) such Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and (b) if requested by
the Company, such Investor shall have furnished the Company with an opinion of counsel satisfactory in form and substance to the Company and the Company’s counsel to the effect that (x) such disposition shall not require registration under the
Securities Act and (y) appropriate action necessary for compliance with the Securities Act and any applicable state, local, or foreign law has been taken. Notwithstanding the limitations set forth in the foregoing sentence, if such Investor is a

  

 15 

 
partnership it may transfer Shares to its constituent partners or a retired partner of such partnership who retires after the date hereof, or to the estate
of any such partner or retired partner or transfer by gift, will, or intestate succession to any such partner’s spouse or lineal descendants or ancestors without the necessity of registration or opinion of counsel if the transferee agrees in
writing to be subject to the terms of this Agreement to the same extent if such transferee were an Investor; provided, however, that Investor hereby covenants not to effect such transfer if such transfer either would invalidate the securities laws
exemptions pursuant to which the Shares were originally offered and sold or would itself require registration and/or qualification under the Securities Act or applicable state securities laws. Each certificate evidencing the Shares transferred as
above provided shall bear the appropriate restrictive legends set forth in Section 5 of this Agreement, except that such certificate shall not bear such legend if the transfer was made in compliance with Rule 144 or if the opinion of counsel
referred to above is to the further effect that such legend is not required in order to establish compliance with any provisions of the Securities Act. 
  
 4.6 Experience. Such Investor represents that: (a) it has such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its prospective investment in the Shares; (b) it has received all of the information that it has requested from the Company and that it considers necessary or appropriate for deciding whether to obtain the
Shares; (c) it has had the opportunity to discuss the Company’s business, management, and financial affairs with the Company’s management, (d) it has the ability to bear the economic risks of its prospective investment; and (e) it is able,
without materially impairing its financial condition, to hold the Shares for an indefinite period of time and to suffer a complete loss on its investment. 
  
 4.7 Accredited Investor. Such Investor presently qualifies and shall as of the Closing and each Subsequent Closing in which it participates
qualify as an “accredited investor” within the meaning of Regulation D of the rules and regulations promulgated under the Securities Act. 
  
 4.8 Confidentiality. Such Investor agrees that it shall keep confidential and shall not use, disclose or divulge any information which such
Investor may obtain from the Company, pursuant to financial statements, reports and other materials submitted by the Company as required hereunder or under any other documents, or pursuant to information rights granted under the Rights Agreement or
any other documents, unless such information is known, or until such information becomes known, to the public through no act or omission of such Investor or its agents, or unless the Company gives written consent to such Investor’s release of
such information, except that no such written consent shall be required (and such Investor shall be free to release such information) if such information is to be provided to such Investor’s counsel or accountant, or to an officer, director,
general partner, limited partner, shareholder or stockholder, investment counselor or advisor, or employee of such Investor with a need to know such information; provided that any such counsel, accountant, officer, director, general partner, limited
partner, shareholder or stockholder, investment counselor or advisor, or employee shall be bound by the provisions of this Section 4.8. Notwithstanding the foregoing, this Section 4.8 shall not apply (a) to information which such Investor rightfully
obtains from a third party with the right to make such disclosure, provided that such Investor complies with the restrictions 

  

 16 

 
imposed by the third party, (b) to information which is in such Investor’s possession prior to the time of disclosure by the Company and is not subject
to a confidentiality obligation, and (c) to the minimum extent the disclosure of such information is required by or reasonably considered advisable by such Investor under law, governmental or regulatory authority or court order, including in
connection with reports filed with the Commission under Securities Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, provided that when feasible such Investor shall
provide to the Company notice thereof and a reasonable opportunity to seek confidential treatment of such information, it being understood, however, that the filing with the Commission by such Investor of this Agreement (with the Schedules and
Exhibits redacted) and the Licence Agreement shall not be subject to the obligation to provide the Company with such notice nor to the right of the Company to seek such confidential treatment. 
  
 5. Legends. 
  
 5.1 Federal Legends. All certificates evidencing the Shares
shall bear such restrictive legends as the Company and the Company’s counsel deem necessary or advisable under applicable law or pursuant to this Agreement, including, without limitation, the following: 
  
 “THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND ARE “RESTRICTED SECURITIES” AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT, OR (II) IN COMPLIANCE WITH RULE 144, OR (III) PURSUANT TO AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION, THAT SUCH REGISTRATION OR COMPLIANCE
IS NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.” 
  
 5.2 Other Legends. The certificates evidencing the Shares shall also bear any legend required by the Commissioner of Corporations of the State of California or required pursuant to any state, local, or foreign law governing
such securities. 
  
 6. Conditions of Investors’
Obligations at Closing. The obligations of each Investor under Section 1 of this Agreement are subject to the fulfillment at or before the Closing and each Subsequent Closing of each of the following conditions, any of which may be waived in
writing by such Investor: 
  
 6.1 Representations and
Warranties. The representations and warranties of the Company and its Affiliates contained in Section 3 of this Agreement and in the Transactional Agreements shall be true and complete on and as of the date of the Closing and each Subsequent
Closing, as applicable, with the same effect as if made on and as of the date of the Closing or each Subsequent Closing, as applicable. 
  

 17 

 6.2 Performance. The Company shall have performed or fulfilled in all material respects all
agreements, obligations, and conditions contained herein required to be performed or fulfilled by the Company before the Closing and each Subsequent Closing, and the President of the Company shall deliver to such Investor at such Closing a
certificate, dated the date of such Closing, certifying that the conditions specified in Section 6 hereof have been fulfilled, as well as that the representations and warranties of the Company contained in Section 3 hereof shall be true and complete
with the same effect as if made on and as of the date of the Closing, in each case on and as of the date of the Closing. 
  
 6.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States
or any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be duly obtained effective as of the Closing and each Subsequent Closing. 
  
 6.4 Restated Certificate. The Company shall have filed the
Restated Certificate with the Secretary of State of the State of Delaware, and the Restated Certificate shall be in full force and effect on the Closing and each Subsequent Closing. 
  
 6.5 Transactional Agreements. The Company shall have executed and delivered to such Investor all of the
Transactional Agreements to which such Investor is a party. 
  
 6.6 Repayment of Debt. The Company shall have repaid all of its liabilities, debt and claims that are due at or before the Closing and each Subsequent Closing, as applicable, as and to the extent specified in Section 3.7 of
the Schedule of Exceptions, and shall furnish satisfactory evidence thereof to such Investor. 
  
 6.7 Opinion of Company Counsel. Such Investor shall have received from Allen Matkins Leck Gamble & Mallory LLP, counsel for the Company, an opinion, dated as of the Closing, and, in the case of any
Subsequent Closing for Series B Shares, dated as of the date of such Subsequent Closing for Series B Shares, in substantially the form attached as Exhibit F hereto. 
  
 6.8 Board of Directors. Immediately following the Closing, the authorized size of the Board shall be six, and
the Board shall be comprised of at least two directors appointed by CDT. 
  
 6.9 Secretary’s Certificate. The Secretary of the Company shall have delivered to such Investor at the Closing a certificate certifying (i) the Bylaws of the Company, (ii) resolutions of the Board
of Directors of the Company approving the Transactional Agreements to which the Company is a party and the transactions contemplated under the Transactional Agreements, and (iii) resolutions of the stockholders of Company approving the Restated
Certificate. 
  
 6.10 Proceedings and Documents. All
corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to such Investor, and such Investor (or its counsel) shall have
received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents may include good standing certificates. 
  
  

 18 

 6.11 Preemptive Rights. The Company shall have fully satisfied (including with respect to
rights of timely notification) or obtained enforceable waivers in respect of any preemptive or similar rights directly or indirectly affecting any of its securities. 
  
 6.12 Delivery of Convertible Notes. Robert Wood, the Company’s Chairman, shall have made loans to the
Company in the aggregate amount of $500,000, mandatorily convertible into Series C Shares, evidenced by convertible notes (the “Convertible Notes”) in form and substance satisfactory to CDT, which such Convertible Notes shall
not be waived, amended or otherwise modified without the consent of CDT and the parties thereto. 
  
 6.13 CDT Side Letter. CDT shall have received from the Company a side letter agreement, dated as of the Closing, in substantially the form
attached as Exhibit G hereto. 
  
 7. Conditions of
the Company’s Obligations at Closing. The obligations of the Company under Section 1 of this Agreement to each Investor are subject to the fulfillment at or before the Closing and each Subsequent Closing of each of the following
conditions, any of which may be waived in writing by the Company: 
  
 7.1 Representations and Warranties. The representations and warranties of such Investor contained in Section 4 of this Agreement shall be true in all material respects on and as of the Closing and each Subsequent Closing with
the same effect as if made on and as of the Closing. 
  
 7.2
Blue Sky Compliance. The Company shall have complied with and be effective under the securities laws of the State of California and any other applicable states as necessary to offer and sell the Shares to such Investor. 
  
 7.3 Restated Certificate. The Restated Certificate shall have
been filed with the Secretary of State of the State of Delaware and shall be in full force and effect on the Closing. 
  
 7.4 Licence Agreement. The Company and CDT shall have entered into the Licence Agreement. 
  
 7.5 Rights Agreement. The Company and such Investor shall have
entered into the Rights Agreement. 
  
 7.6 Legal
Matters. All material matters of a legal nature which pertain to the Transactional Agreements and the transactions contemplated hereby and thereby shall have been reasonably approved by counsel to the Company. 
  

 19 

 8. Miscellaneous. 
  
 8.1 Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California, excluding those laws that direct the application of the laws of another jurisdiction. 
  
 8.2 Headings. The headings of the sections of this Agreement are for convenience and shall not be considered in construing or determining
the interpretation of this Agreement. 
  
 8.3
Notices. Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery or delivery by courier, or on the first business day after transmission if sent by
confirmed facsimile transmission or electronic mail transmission, or five days after deposit in the United States mail, by registered or certified mail, postage prepaid, addressed (a) if to the Company, as set forth below the Company’s name on
the signature page of this Agreement, and (b) if to an Investor, at such Investor’s address as set forth below such Investors name on the signature pages of this Agreement, or at such other address as the Company or such Investor may designate
by 10 days’ advance written notice to the other parties hereto. 
  
 8.4 Survival of Warranties. Subject to applicable statutes of limitations, the warranties and representations of the parties contained in or made pursuant to this Agreement shall survive the execution and delivery of this
Agreement and the Closing and any Subsequent Closing; provided, however, that such representations and warranties need only be accurate as of the date of such execution and delivery and as of the Closing and any Subsequent Closing. 
  
 8.5 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of, or a written instrument signed by; (a) the Company and
(b) persons who after the Closing shall hold a majority of the aggregate of (i) the then outstanding Shares purchased pursuant to this Agreement and (ii) the then outstanding Common Stock into which such Shares have been converted, other than Common
Stock which has been sold to the public. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon the Company and the Investors and their respective successors and assigns. Notwithstanding the foregoing, the Company
may amend Schedule A of this Agreement to add new Investors at Subsequent Closings, in accordance with Section 1.3 of this Agreement. 
  
 8.6 California Securities Laws. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 
  
  

 20 

 8.7 Finders’ Fees. Each of the Company and the Investors shall indemnify the other
against all liabilities incurred by the indemnifying party with respect to claims related to investment banking or finders’ fees in connection with the transactions contemplated by this Agreement, arising out of arrangements between the party
asserting such claims and the indemnifying party, and all costs and expenses (including reasonable fees of counsel) of investigating and defending such claims, for which the indemnifying party or any of its officers, employee or representatives is
responsible. 
  
 8.8 Expenses. The Company and the
Investors shall bear their respective legal and other fees and expenses with respect to this Agreement and the transactions contemplated hereby. 
  
 8.9 Attorney’s Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of the
Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 
  
 8.10 Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
  
 8.11 Entire Agreement; Successors and Assigns. This Agreement (and the Schedules and Exhibits hereto)
constitutes the entire agreement of the parties with regard to the subject matter hereof and supersedes any and all prior negotiations, correspondence, understandings and agreements among the parties regarding the subject matter hereof. Subject to
the exceptions specifically set forth in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective executors, administrators, heirs, successors, and assigns of the parties.

  
 8.12 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. 
  
 [Remainder of Page Intentionally Left Blank] 
  
  

 21 

 IN WITNESS WHEREOF, the parties hereto have executed this Series B and Series C Preferred Stock Purchase
Agreement as of the date first above written. 
  

					
	Company:	 	ADD-VISION, INC.
	 	 	a Delaware corporation
		
	 	 	 /s/ Matthew C. Wilkinson

	 	 	Matthew C. Wilkinson
	 	 	President and Chief Executive Officer
			
	 	 	Address:	 	1500 Green Hills Rd., Suite 206
	 	 	 	 	Scotts Valley, CA 95066
		
	Investors:	 	CAMBRIDGE DISPLAY TECHNOLOGY LIMITED
		
	 	 	 /s/ Stephen Beverley John Chandler

	 	 	Stephen Beverley John Chandler
	 	 	Director
			
	 	 	Address:	 	Building 2020
	 	 	 	 	Cambourne Business Park
	 	 	 	 	Cambridge CB3 6DW
	 	 	 	 	United KingdomEmployment agreement between the company and Michael E. Foss

 Exhibit 10.17 
  
 Circuit City Stores, Inc. 
 Employment
Agreement for Michael E. Foss 
  
 This EMPLOYMENT
AGREEMENT is made, entered into, and is effective as of the 6th day of February, 2004 (the “Effective Date”), by and between Circuit City Stores, Inc. (the “Company”) and Michael E. Foss (the
“Executive”). 
  
 WHEREAS, the Company desires to employ
the Executive as Senior Vice President of Circuit City Stores, Inc.; 
  
 WHEREAS, the Company recognizes the Executive’s intimate knowledge and experience in the business of the Company, and desires to secure the employment of the Executive in the role of Senior Vice President of the Company; 
  
 WHEREAS, the Executive will develop and/or come in contact with the
Company’s proprietary and confidential information which is not readily available to the public, and which is of great importance to the Company and is treated by the Company as secret and confidential information; and 
  
 WHEREAS, the Company desires to modify certain terms of Executive’s
employment agreement. 
  
 NOW, THEREFORE, in consideration of the
Executive’s continued employment and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows: 
  
 Article 1. Term
of Employment 
  
 The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment as Senior Vice President of the Company, in accordance with the terms and conditions set forth herein, for an initial period of eighteen (18) months, commencing as of the Effective Date of this
Agreement as indicated above (the “Initial Term”); subject, however, to earlier termination as expressly provided herein. 
  
 The Initial Term shall automatically be renewed for additional periods of one (1) year each at the end of the Initial Term, and then again after each
successive year thereafter (collectively, the “Renewal Periods,” which, together with the Initial Term, constitute the “Term” of this Agreement). However, either party may terminate this Agreement at the end of the Initial Term,
or at the end of any Renewal Period, by giving the other party written notice of intent not to renew, delivered at least forty-five (45) days prior to the end of the Initial Term or any Renewal Period. For purposes of this Agreement, an
“Employment Year” shall mean any twelve (12) month period during the Term of this Agreement beginning on the Effective Date or on any anniversary thereof. 
  
 Article 2. Position and Responsibilities 
  
 During the Term of this Agreement, the Executive agrees to serve as Senior Vice President of the Company. In his capacity as Senior Vice President of the
Company, the Executive shall report directly to the Chief Executive Officer and shall have the duties and responsibilities of Senior Vice President of the Company and such other duties and responsibilities not inconsistent with the performance of
his duties as Senior Vice President of the Company. 
  
 Article 3. Standard of
Care 
  
 During the term of this Agreement, the Executive
agrees to devote substantially his full-time attention and energies to the Company’s business. The Executive covenants, warrants, and represents that he shall: 
  

	 	(a)	Devote his full and best efforts and talents full time to the performance of his employment obligations and duties for the Company; 

	 	(b)	Exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties; 

  

	 	(c)	Comply with all rules, regulations, and policies established or issued by the Company; and 

  

	 	(d)	Refrain from taking advantage, for himself or others, of any corporate opportunities of the Company. 

  
 Article 4. Other Employment. 
  
 The Executive shall not, during the term hereof, be interested directly or indirectly, in any manner, as partner, officer, director, investor,
stockholder, advisor, employee, or in any other capacity, in any other business similar to Company’s business for the Executive’s personal advantage or benefit or that of others. Any other employment or position which might reasonably be
deemed contrary to the best interests of the Company is prohibited. During the term of employment hereunder, the Executive agrees to obtain the Company’s written consent prior to entering into any other occupation, even if dissimilar to that of
the Company. Such consent may be granted or withheld, in the Company’s absolute discretion. Nothing herein contained shall be deemed to prevent or limit the right of the Executive to invest in the capital stock or other securities of any
corporation whose stock or securities are regularly traded on any public exchange, nor shall anything herein contained be deemed to prevent the Executive from investing in real estate for his own benefit (so long as such investment (a) is not
related to or in support of any entity engaged in a business similar to that of the Company or (b) does not detract from the Executive’s performance of his duties and obligations hereunder). 
  
 Article 5. Compensation and Benefits 
  
 As remuneration for all services to be rendered by the Executive during the
Employment Period, and as consideration for complying with the covenants herein, the Company shall pay and provide to the Executive the following: 
  
 5.1. Base Salary. During the Term of this Agreement, the Company shall pay the Executive a Base Salary in an amount which shall be established and
approved by the Compensation Committee of the Board of Directors; provided, however, that such Base Salary shall be established at a rate of not less than $425,000 per year. This Base Salary shall be subject to all appropriate federal and state
withholding taxes and payable in accordance with the normal payroll practices of the Company. The Base Salary shall be reviewed at least annually following the Effective Date of this Agreement, while the Term of this Agreement is in force, to
ascertain whether, in the judgment of the Compensation Committee, such Base Salary should be changed. If changed, the Base Salary as stated above shall, likewise, be changed for all purposes of this Agreement. 
  
 5.2. Annual Bonus. In addition to his Base Salary, the Executive shall
be entitled to participate in the Company’s short-term incentive program, as such program may exist from time to time during the Term of this Agreement. 
  
 Under the Company’s short-term incentive plan, the Executive has the opportunity to earn an annual bonus with respect to any fiscal year of the
Company (“Annual Bonus”). The Annual Bonus, if earned with respect to a particular fiscal year, will generally be in an amount that is not less than forty percent (40%) of the Executive’s Base Salary for the fiscal year with respect
to which the Annual Bonus is being paid (the “Minimum Bonus Rate”) and is commensurate with the position of Senior Vice President of the Company. 

 The award and amount of any Annual Bonus shall be determined under the Company’s short-term
incentive plan, at the sole discretion of the Company’s Compensation Committee. If the Minimum Bonus Rate is changed, it shall, likewise, be changed for all purposes of this Agreement. 
  
 5.3. Long-Term Incentives. During the Term of this Agreement, the
Executive shall be eligible to participate in the Company’s long-term incentive plan, to the extent that the Board of Directors of the Company or the Compensation Committee, in their discretion, determines is appropriate. The Board of Directors
will make its determination consistent with the methodology used by the Company for compensating its comparably situated employees. 
  
 5.4. Retirement Benefits. During the Term of this Agreement, the Company shall provide to the Executive the opportunity for participation in all
Company pension, insurance, fringe benefit, and executive compensation plans and programs, subject to the eligibility and participation requirements of such plans. 
  
 5.5. Employee Benefits. During the Term of this Agreement, the Company shall provide the Executive all benefits, as
commensurate with the position of Senior Vice President of the Company, but at a minimum not less than those provided by the Company to other comparably situated employees subject to the eligibility requirements and other provisions of such
arrangements. Such benefits may include group term life insurance, comprehensive health and major medical insurance, dental and life insurance, and short-term and long-term disability. 
  
 5.6. Perquisites. During the Term of this Agreement, the Company shall provide to the Executive, at the
Company’s cost, all perquisites, which are commensurate with the position Senior Vice President of the Company. 
  
 5.7. Right to Change Plans. By reason of Articles 5.5 and 5.6 herein, the Company shall not be obligated to institute, maintain, or refrain from
changing, amending, or discontinuing any benefit plan or perquisite, so long as such changes are similarly applicable to comparably situated employees. 
  
 Article 6. Expenses 
  
 During the Term of this Agreement, the Company shall pay or reimburse the Executive for all ordinary and necessary expenses, in a reasonable amount, which
the Executive incurs in performing his duties under this Agreement including, but not limited to, travel, entertainment, professional dues and subscriptions, and all dues, fees, and expenses associated with membership in various professional,
business, and civic associations and societies in which the Company finds that the Executive’s participation is in the best interests of the Company. The payment of reimbursement of expenses shall be subject to such rules concerning
documentation of expenses and the type or magnitude of such expenses as the Compensation Committee of the Board of Directors may establish from time to time. 
  
 Article 7. Employment Termination 
  
 7.1. Termination Due to Retirement or Death. In the event the Executive’s employment ends by reason of Retirement (defined as voluntary
“Normal Retirement” under the then established definitions and rules of the Company’s tax-qualified retirement plan) or the Executive’s death during the term of this Agreement, the Executive’s benefits shall be determined in
accordance with the Company’s retirement, survivor’s benefits, insurance, and/or other applicable programs of the Company then in effect. In addition, all stock grants, except performance-based grants in the case of Retirement, will become
immediately vested and may be exercised by the Executive, the Executive’s personal representatives, distributees, legatees, or estate at any time before the expiration date of the grant. 
  
 The Effective Date of Termination due to Retirement or death shall be (a)
ninety (90) days following the date the Executive provides the Company with written notice that the Executive is ending employment by reason of Retirement or (b) on the Executive’s date of death, as the case may be. Upon the Effective Date of
Termination, the Company shall be obligated to pay the Executive or, if applicable, the 

 
Executive’s estate; (a) any Base Salary or Annual Bonus that was accrued but not yet paid as of the Effective Date of Termination; plus (b) a pro rata
share of the Annual Bonus for the Employment Year in which the Effective Date of Termination occurs (calculated by multiplying (i) the Base Salary in effect on the Effective Date of Termination by (ii) the Minimum Bonus Rate in effect on the
Effective Date of Termination and by (iii) a fraction, the numerator of which is the number of full completed days in the Employment Year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365)); and
(c) all other rights and benefits that the Executive is vested in, pursuant to other plans and programs of the Company. 
  
 7.2. Termination Due to Disability. The Company shall have the right to terminate the Executive’s employment for disability. For the purposes
of this Agreement, disability shall mean any physical or mental illness or injury that causes the Executive to be unable to substantially perform the Executive’s normal duties; provided however that the Executive shall not be considered
disabled until: (i) the Executive has been so disabled for 180 days during any period of twelve (12) consecutive months; (ii) the Executive’s attending physician shall have furnished to the Company certification that the return of the Executive
to his normal duties is impossible or improbable; or (iii) the Executive is determined to be totally disabled by the disability insurer then insuring the Executive, if any. 
  
 The Effective Date of Termination due to Disability shall be specified, in a written notice, by the Executive’s
immediate manager, and such written notice shall be delivered to the Executive, but shall be no less than thirty (30) calendar days after the delivery of such written notice to the Executive. Upon the Effective Date of Termination, the Company shall
be obligated to pay the Executive [or, if applicable, the Executive’s estate]: (a) any salary that was accrued but not yet paid as of the Effective Date of Termination; (b) the unpaid Annual Bonus, if any, with respect to the calendar year
preceding the Effective Date of Termination (such Annual Bonus, if any, to be determined in the manner it would have been determined and payable at the time it would have been payable under Article 5.2 had there been no termination of the Employment
Period); (c) a pro rata share of target Annual Bonus for the calendar year in which the Effective Date of Termination occurs (the calculation of which the Annual Bonus is multiplied by a fraction, the numerator of which is the number of full
completed days in the bonus plan year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365)); and (d) all other rights and benefits that the Executive is vested in, pursuant to other plans and
programs of the Company. 
  
 It is expressly understood that the
Disability of the Executive for a period of one hundred eighty (180) calendar days or less in the aggregate during any period of twelve (12) consecutive months, in the absence of any reasonable expectation that his Disability will exist for more
than such a period of time, shall not constitute a failure by him to perform his duties hereunder and shall not be deemed a breach or default, and the Executive shall receive full compensation for any such period of Disability or for any other
temporary illness or incapacity during the term of this Agreement. 
  
 If the employment of the Executive terminates because of Disability, all of the Executive’s outstanding stock grants, excluding restricted stock grants issued under a performance based plan, will become immediately vested, effective as
of the date of the Executive’s disability. Then, the Executive, the Executive’s personal representatives, distributees, or legatees may exercise the Executive’s grants at any time before the expiration date of the grant. 

 
 7.3. Voluntary Termination by the Executive. The Executive may
terminate his employment and this Agreement at any time by giving the Company at least forty-five (45) days written notice. The Company reserves the right to require the Executive not to work during the notice period but shall pay the Executive his
full Base Salary, at the rate then in effect as provided in Article 5.1 herein, [through the notice period] or [through the last day of the Executive’s employment] plus all other benefits to which the Executive has a vested right on the last
day of employment (for purposes of this paragraph, the Executive shall not be paid any Annual Bonus with respect to the fiscal year in which voluntary termination under this Article 7.3 occurs). The Company thereafter shall have no further
obligations under this Agreement. 

 7.4. Involuntary Termination by the Company Without Cause. The Company may terminate the
Executive’s employment, at any time, for any reason other than death, Disability, Retirement, or for “cause”, by providing the Executive with at least forty-five (45) days written notice. 
  

	 	(a)	The Company’s decision not to renew this Agreement at the Expiration Date of the Initial Term or any Renewal Period shall be deemed an involuntary termination without cause;
provided, however, that for purposes of this Article 7.4(a), no variation, alteration, modification, cancellation, change or amendment made to this Agreement pursuant to Article 12.3 or 12.4 at a time other than the Expiration Date of the Initial
Term or any Renewal Period, shall be deemed an involuntary termination without Cause. 

  

	 	(b)	Upon the Effective Date of Termination specified by the Company for termination by the Company without cause, the Company shall pay to the Executive, in equal monthly installments
over the following twenty-four (24) month period an amount equal to the product of two (2) times both the Executive’s Base Salary and the Executive’s target Annual Bonus established for the fiscal year in which the Executive’s
Effective Date of Termination occurs. The Company shall also pay to the Executive the amount equal to a pro rata share of the Executive’s target Annual Bonus for the calendar year in which the Effective Date of Termination occurs (the
calculation of which the Annual Bonus is multiplied by a fraction, the numerator of which is the number of full completed days in the bonus plan year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five
(365)). In addition, the Company shall continue, at the same cost to the Executive as existed as of the Effective Date of Termination, all health and welfare benefit plan participation for two (2) full years following the Executive’s
termination of employment; provided, however, that the applicable COBRA “period of coverage” under any plan subject to Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), or Sections 601 through 609 of
the Employee Retirement Income Security Act of 1974 (ERISA) shall begin as of the Effective Date of Termination. 

  

	 	(c)	The Company shall also provide the Executive with outplacement services not to exceed a cost of fifty thousand dollars ($50,000). 

  

	 	(d)	Any unvested stock options or any outstanding restricted stock, excluding restricted stock grants issued under a performance based plan, that would become vested (that is,
transferable and non-forfeitable) if the Executive remained an employee through the Initial Term or the then current Renewal Period of this Agreement will become vested as of the date of the Executive’s termination of employment. The Executive
must satisfy the tax withholding requirements. 

  

	 	(e)	The Executive will be credited with age and service credit through the end of the Initial Term or current Renewal Period of this Agreement for purposes of computing benefits under
the Company’s pension, medical and other benefit plans, and the Company will continue the Executive’s coverage under the Company’s benefit plans as if the Executive remained employed through the end of the term of this Agreement.
Notwithstanding the foregoing, if crediting such age and service credit or continued coverage could adversely affect the tax qualification or tax treatment of a benefit plan, or otherwise have adverse legal ramifications to either the plan or the
Company, the Company may pay the Executive a lump sum cash amount that reasonably approximates the after-tax value to the Executive of such age and service credit and continued coverage through the end of the term of this Agreement, in lieu of
giving such credit and continued coverage. 

  
 The
Company thereafter shall have no further obligations under this Agreement. 
  
 7.5. Termination For Cause. Nothing in this Agreement shall be construed to prevent the Company from terminating the Executive’s employment under this Agreement, without notice or liability for doing so,
for “Cause.” 

 For purposes of this Agreement, “Cause” means: 
  

	 	(a)	The Executive’s material breach of this Agreement, which breach is not cured within ten (10) days of receipt by the Executive of written notice from the Company specifying the
breach; 

  

	 	(b)	The Executive’s gross negligence in the performance of his material duties hereunder, intentional nonperformance or intentional misperformance of such duties, misconduct or
refusal to abide by or comply with the directives of the Board, his superior officers, or the Company’s policies and procedures, which actions continue for a period of ten (10) days after receipt by the Executive of written notice of the need
to cure or cease; 

  

	 	(c)	Conviction of a felony or other crime involving moral turpitude; 

  

	 	(d)	The Executive engaging in illegal conduct, dishonesty or fraud with respect to the business or affairs of the Company that in the reasonable judgment of the Company materially and
adversely affects the operations or reputation of the Company; 

  

	 	(e)	Failure of the Executive to disclose to the Executive’s manager a conflict of interest, of which the Executive knew or, with reasonable diligence, would have known, in
connection with any transaction entered into on behalf of the Company; or 

  

	 	(f)	Failure of the Executive to agree to a modification of this Agreement, pursuant to paragraph 12.3 below, when the purpose of the modification is to comply with applicable federal,
state and/or local laws or regulations, or when such modification is designed to further define the restrictions of Article 8 or otherwise enhance the enforcement of Article 8 without increasing the scope of the Article 8 restrictions.

  
 In the event this Agreement is terminated for
Cause, the Company shall pay the Executive his Base Salary through the Effective Date of Termination for cause and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits) he would otherwise have been
entitled to receive under this Agreement. The Company thereafter shall have no further obligations under this Agreement. 
  
 7.6. Termination for Good Reason. At any time during the term of this Agreement, the Executive may terminate this Agreement for Good Reason (as
defined below) by giving the Company forty-five (45) days written notice, which notice sets forth in detail the facts and circumstances claimed to provide a basis for such termination. However, Company shall, at its option, have thirty (30) days
from receipt of such written notice to cure any event or circumstance that could constitute Good Reason. 
  
 If Company chooses not to cure, the Effective Date of Termination for Good Reason shall occur upon the expiration of the forty-five (45) days prior notice
period that is specified by the Executive in the written notice, and the Company shall pay and provide to the Executive the benefits set forth in this Article 7.6. 
  
 For purposes of this Agreement, Good Reason shall mean, without the Executive’s express written consent, the occurrence
of any one (1) or more of the following: 
  

	 	(a)	Failing to maintain the Executive’s participation in the Company’s annual bonus and long-term incentive plan in a manner that is consistent with other similarly situated
Executive employees of the Company; or 

  

	 	(b)	 Failing to maintain the Executive’s benefits under, or relative level of participation in, the 

 
Company’s employee benefit or retirement plans, perquisites, policies, practices, or arrangements in which the Executive participates as of the
Effective Date of this Agreement at a level consistent with other similarly situated Executive employees of the Company; 
  

	 	(c)	Reducing the Executive’s Base Salary; 

  

	 	(d)	Terminating the Executive’s employment otherwise than as expressly permitted by this Agreement; or 

  

	 	(e)	Failing to comply with and satisfy Article 10.1 by requiring any successor to the Company to assume and agree to perform the Company’s obligations hereunder.

  
 Upon the Effective Date of Termination, the
Executive shall be entitled to receive the same payments and benefits as he is entitled to receive following an involuntary termination of his employment by the Company without Cause, as specified in Article 7.4 herein. Said payment shall commence
within forty-five (45) calendar days following the Effective Date of Termination. 
  
 The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness, 
  
 Article 8. Noncompetition and Confidentiality 
  

	 	8.1.	Noncompetition. 

  

	 	(a)	During the Executive’s employment and for a period of two (2) years following the last day of the Executive’s employment, the Executive shall not directly or indirectly
compete with the Company by engaging, in a competitive capacity, in any business that is engaged in the same or similar business of the Company in one or more Metropolitan Statistical Areas (“MSAs”) in which the Company is doing business
on the last day of the Executive’s employment. A business will not be considered to be in competition with the Company for purposes of this paragraph 8.1(a) or paragraph 8.1(b) below if: 

  

	 	(i)	The business or the operating unit of the business in which the Executive is employed or with which the Executive is associated (collectively the “Business Unit”) is not
engaged in the retail sales of consumer electronics; 

  

	 	(ii)	If sales of the Business Unit’s products or services in the retail sales and service of consumer electronics constitute less than ten percent (10%) of such Business Unit’s
sales; or 

  

	 	(iii)	If the sales of the Business Unit in the retail sales and service of consumer electronics do constitute more than ten percent (10%) of the sales of the Business Unit, but there is
no geographic overlap between such Business Unit’s and the Company’s business locations. 

  
 Notwithstanding the foregoing, nothing herein shall be deemed to prevent or limit the right of the Executive to invest in the capital stock or other
securities of any corporation whose stock or securities are regularly traded on any public exchange, nor shall anything herein contained be deemed to prevent Employee from investing in real estate for his own benefit (as long as such investment is
not related to or in support of any entity engaged in the same or similar business as the Company in competition with the Company in one or more MSA’s in which the Company is doing business during the Executive’s employment). 

 

	 	(b)	 During the Executive’s employment and for a period of two (2) years following the last day of the Executive’s employment, the Executive shall not directly
or indirectly compete 

 
with the Company by engaging, in a competitive capacity, in any business engaged in the same or similar business of the Company in one or more MSAs where, on
the last day of the Executive’s employment, the Company is engaged in real estate site selection or has taken further steps toward the commencement of operations in the future, of which the Executive is aware. 
  

	 	(c)	The Executive agrees that competition, as set forth in Article 8.1(a) above, shall include, but not be limited to, engaging in competitive activity, as an individual, as a partner,
as a joint venturer with any other person or entity, or as an employee, agent, or representative of any other person or entity. 

  

	 	(d)	It is the specific intent of the parties that the Executive shall be restricted from competing directly or indirectly with any segment of the Company’s business in which the
Executive engaged prior to the last day of his employment and from any segment of the Company’s business about which the Executive acquired proprietary or confidential information during the course of his employment. 

 

	 	(e)	If any provision of this Article 8.1 relating to the time period, geographic area or scope of restricted activities shall be declared by a court of competent jurisdiction to exceed
the maximum time period, geographic area or scope of activities, as applicable, that such court deems reasonable and enforceable, said time period, geographic area or scope of activities shall be deemed to be, and thereafter shall become, the
maximum time period, scope of activities or largest geographic area that such court deems reasonable and enforceable and this Agreement shall automatically be considered to have been amended and revised to reflect such determination.

  

	 	(f)	The Executive and the Company have examined in detail this Covenant Not to Compete and agree that the restraint imposed upon the Executive is reasonable in light of the legitimate
interests of the Company, and it is not unduly harsh upon the Executive’s ability to earn a livelihood. 

  
 8.2. Non-Solicitation of Employees. The Executive agrees that during the Executive’s employment with the Company and for a period of two (2)
years following the last day of the Executive’s employment, the Executive shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of the Company to leave the Company for any reason whatsoever or hire
any individual employed by the Company. For purposes of this Article 8.2, employee shall mean any individual employed by the Company on the last day of the Executive’s employment or within the three-month period prior to the last day of the
Executive’s employment. 
  
 8.3. Confidentiality. The
Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed
at substantial cost and effort to the Company. The Executive agrees to hold in strict confidence and safeguard any information of or about the Company gained by the Executive in any manner or from any source during the Executive’s employment.
The Executive shall not, without the prior written consent of the Company, at any time, directly or indirectly, divulge, furnish, use, disclose or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may
be required in the regular course of the Executive’s employment), either during the Executive’s employment with the Company or subsequent to the last day of the Executive’s employment, any Protected Information, or cause any such
information of the Company to enter the public domain. 
  
 The
Executive understands and agrees that any information, data and/or trade secrets about Company or its suppliers and/or distributors is the property of the Company and is essential to the protection of the Company’s goodwill and to the
maintenance of the Company’s competitive position and accordingly should be kept secret. For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of or about the
Company, and any other 

 
information of the Company, including, customer lists (including potential customers), sources of supply, processes, plans, materials, pricing information,
internal memoranda, marketing plans, promotional plans, internal policies, research, purchasing, accounting and financial information, computer programs, hardware, software, and products and services which may be developed from time to time by the
Company and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by the Company or lawfully obtained from
third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information. 
  
 Nothing contained in this Article is intended to reduce in any way protection available to the Company pursuant to the Uniform Trade Secrets Act as
adopted in Virginia or any other state or other applicable laws which prohibit the misuse or disclosure of confidential or proprietary information. 
  
 8.4. Acknowledgement of Covenants. The parties hereto acknowledge that the Executive’s services are of a special, extraordinary, and
intellectual character which gives him unique value, and that the business of the Company and its subsidiaries is highly competitive, and that violation of any of the covenants provided in this Article 8 would cause immediate, immeasurable, and
irreparable harm, loss, and damage to the Company not adequately compensable by a monetary award. The Executive acknowledges that the time, scope of activities and geographical area restrained by the provisions of this Article 8 are reasonable and
do not impose a greater restraint than is necessary to protect the goodwill of the Company’s business. The Executive further acknowledges that he/she and the Company have negotiated and bargained for the terms of this Agreement and that the
Executive has received adequate consideration for entering into this Agreement. In the event of any such breach or threatened breach by the Executive of any one or more of such covenants, the Company shall be entitled to such equitable and
injunctive relief as may be available to restrain the Executive from violating the provisions hereof. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available at law or in equity for such breach or
threatened breach, including the recovery of damages and the immediate termination of the employment of the Executive hereunder for cause. 
  
 Article 9. Change in Control 
  
 9.1. Change in Control. This Article 9 shall not become effective, and the Company shall have no obligation hereunder, if the employment of the
Executive with the Company shall terminate prior to a Change in Control (as defined in Article 9.2 below) of the Company. 
  
 9.2. Definition of Change in Control. Change in Control of the Company means, and shall be deemed to have occurred, upon the first to occur of any
of the following events: 
  

	 	(a)	The acquisition by any individual, entity, or group (a “Person”), including a “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), but excluding an Affiliate (as defined below) of the Company, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of thirty-five percent (35%)
or more of either: (i) the then outstanding shares of common stock of the Circuit City Group (the “Outstanding Common Stock”); or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally
in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from the Company (excluding an acquisition resulting from the exercise of an option, conversion right, or
exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company); (B) any acquisition by the Company; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company; or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Article 9.2; 

  

	 	(b)	 Individuals who, as of the Effective Date, constitute the Board of Directors (the 

 
“Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the
Company subsequent to the Effective Date, whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of
the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board; 
  

	 	(c)	The consummation of a reorganization, merger or consolidation of the Company or sale or other disposition of all or substantially all of the assets of the Company (a “Corporate
Transaction”); excluding, however, a Corporate Transaction pursuant to which: (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Common Stock and the Outstanding Voting
Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation, which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of
the Outstanding Common Stock and the Outstanding Voting Securities, as the case may be; (ii) no Person (other than: the Company; any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Common Stock
or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, twenty-five percent (25%) or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors; and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of
the members of the board of directors of the corporation resulting from such Corporate Transaction; or 

  

	 	(d)	The consummation of a plan of complete liquidation, dissolution, or sale of substantially all the assets of the Company. 

  
 For purposes of this Article 9, “Affiliate” shall mean with
reference to a specified Person, any Person that directly or indirectly through one (1) or more intermediaries controls or is controlled by or is under common control with the specified Person. For purposes of this definition, “control”
(including, with correlative meaning, the terms “controlled by” and “under common control with”), as used in respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction
of management and policies of such Person, whether through ownership of voting securities or by contract or otherwise. 
  
 9.3. Change-in-Control Severance Benefits. If at any time during the Term of this Agreement there is a Change in Control of the Company and the
Executive’s employment is terminated for any reason other than death, Disability, Retirement, Voluntary Termination other than Good Reason or Cause within the two (2) year period following the Change in Control or the Executive voluntarily
terminates for any reason in the thirteenth month following a Change in Control of the Company, the Company shall provide to the Executive the following: 
  

	 	(a)	Base Salary and all other benefits due him as if he/she had remained an employee pursuant to Article 5 through the remainder of the month in which the termination occurs, less
applicable withholding taxes and other authorized payroll deductions; 

	 	(b)	The amount equal to a pro rata share of target Annual Bonus for the fiscal year in which the Effective Date of Termination occurs (the calculation of which the Annual Bonus is
multiplied by a fraction, the numerator of which is the number of full completed days in the bonus plan year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365); 

  

	 	(c)	A lump-sum severance allowance in an amount that is equal to the product of three (3) times both the Executive’s Base Salary at the rate in effect immediately prior to the
termination and the Executive’s target Annual Bonus established for the fiscal year in which the Executive’s termination of employment occurs; 

  

	 	(d)	Continuation at the same cost to the Executive as existed as of the Effective Date of Termination of Agreement of all health, welfare, and benefit plan participation for three (3)
full years following employment termination; 

  

	 	(e)	Provision of outplacement services for the Executive not to exceed a cost of fifty thousand dollars ($50,000); 

  

	 	(f)	A lump-sum payment equal to the three (3) year costs of perquisites outlined in Article 5.6 above; and 

  

	 	(g)	Any unvested stock options or any outstanding restricted stock, excluding restricted stock grants issued under a performance based plan, that would become vested (that is,
transferable and non-forfeitable) if the Executive remained an employee through the Initial Term or the then current Renewal Period of this Agreement will become vested as of the date of the Executive’s termination of employment. The Executive
must satisfy the tax withholding requirements. 

  
 9.4. Excise Tax Equalization Payment. In the event that the Executive becomes entitled to severance benefits under this Agreement or any other agreement with or plan of the Company (in the aggregate, the “Total Payments”),
if any of the Total Payments will [be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code] or any similar excise tax that may hereafter be imposed), the Company shall pay to the Executive in cash an additional amount
(the “Gross-Up Payment”), such that the net amount retained by the Executive after deduction of any Excise Tax upon the Total Payments and any federal, state, and local income tax and Excise Tax upon the Gross-Up Payment provided for by
this Article 9.4 (including FICA and FUTA), shall be equal to the Total Payments. The Company shall make such payment to the Executive as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from
such date. 
  
 For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive’s residence on the Effective Date of Termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

  
 The Company’s Compensation Committee shall determine,
based upon the advice of the Company’s independent certified public accountants, whether any payments or benefits hereunder are subject to the Excise Tax. 
  

9.5. Subsequent Recalculation. In the event the Internal Revenue Service adjusts the computation of the Company under Article 9.4 herein so that
the Executive did not receive the greatest net benefit, the Company shall reimburse the Executive for the full amount necessary to make the Executive whole, plus a market rate of interest, as determined by the Compensation Committee. 

 Article 10. Assignment 
  

10.1. Assignment by Company. This Agreement may and shall be assigned or transferred to, and shall be binding upon and shall inure to the
benefit of, any successor of the Company, and any such successor shall be deemed substituted for all purposes of the “Company” under the terms of this Agreement. As used in this Agreement, the term “successor” shall mean any
person, firm, corporation, or business entity which, at any time, whether by merger, purchase, or otherwise, acquires all or substantially all of the assets or the business of the Company. In addition, the obligations of the Executive under Articles
8 and 12 of this Agreement shall continue after the termination of the Executive’s employment and shall be binding on the Executive’s heirs, executors, legal representatives and assigns. 
  
 Failure of the Company to obtain the agreement of any successor to be bound
by the terms of this Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement, and shall immediately entitle the Executive to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled in the event of a Termination of Employment for Good Reason as provided by Article 7.6. Except as provided herein, the Company may not otherwise assign this Agreement. 
  
 10.2. Assignment by Executive. The services to be provided by the
Executive to the Company hereunder are personal to the Executive, and the Executive’s duties may not be assigned by the Executive; provided, however, that this Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, and administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amounts payable to the Executive hereunder remain outstanding, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, in the absence of such designee, to the Executive’s estate. 
  
 Article 11. Dispute Resolution and Notice 
  
 11.1. Issue Resolution. Except for actions initiated by the Company
to enjoin a breach by, and/or recover damages from the Executive related to violation of any of the restrictive covenants in Article 8 of this Agreement, which Company may bring in an appropriate court of law or equity, any disagreement between the
Executive and the Company concerning anything covered by this Agreement or concerning other terms or conditions of the Executive’s employment or the termination of the Executive’s employment will be settled by final and binding arbitration
pursuant to the Company’s Associate Issue Resolution Program. The Dispute Resolution Agreement and the Dispute Resolution Rules and Procedures are incorporated herein by reference as if set forth in full in this Agreement. The decision of the
arbitrator will be final and binding on both the Executive and the Company and may be enforced in a court of appropriate jurisdiction. 
  
 11.2. Notice. Any notices, requests, demands, or other communications provided for by this Agreement shall be sufficient if in writing, and if sent
by registered or certified mail to the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices. 
  
 Article 12. Miscellaneous 
  
 12.1. Entire Agreement. This Agreement supersedes any prior agreements or understandings, oral or written, between the parties hereto, with respect
to the subject matter hereof, and constitutes the entire agreement of the parties with respect thereto. Without limiting the generality of the foregoing sentence, this Agreement completely supersedes any and all prior employment agreements entered
into by and between the Company, and the Executive, and all amendments thereto, in their entirety. 

 12.2. Return of Materials. Upon the termination of the Executive’s employment with the
Company, however such termination is effected, the Executive shall promptly deliver to Company all property, records, materials, documents, and copies of documents concerning the Executive’s business and/or its customers (hereinafter
collectively “Company Materials”) which the Executive has in his possession or under his control at the time of termination of his employment. The Executive further agrees not to take or extract any portion of Company Materials in written,
computer, electronic or any other reproducible form without the prior written consent of the Chief Executive Officer. 
  
 12.3. Modification. This Agreement shall not be varied, altered, modified, canceled, changed, or in any way amended except by mutual agreement of
the parties in a written instrument executed by the parties hereto or their legal representatives. 
  
 12.4. Severability. It is the intention of the parties that the provisions of the restrictive covenants herein shall be enforceable to the fullest
extent permissible under the applicable law. If any clause or provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term hereof, then the remainder of this Agreement shall not
be affected thereby, and in lieu of each clause or provision of this Agreement which is illegal, invalid or unenforceable, there shall be added, as a part of this Agreement, a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and as may be legal, valid, and enforceable. 
  
 12.5. Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement. 
  
 12.6. Tax Withholding. The Company may withhold from any benefits payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling. 
  
 12.7. Restrictive Covenants of the Essence. The restrictive covenants
of the Executive set forth herein are of the essence of this Agreement; they shall be construed as independent of any other provision in this Agreement; and the existence of any claim or cause of action of the Executive against the Company, whether
predicated on this Agreement or not, shall not constitute a defense to the enforcement by the Company of the restrictive covenants contained herein. The Company shall at all times maintain the right to seek enforcement of these provisions whether or
not the Company has previously refrained from seeking enforcement of any such provision as to the Executive or any other individual who has signed an agreement with similar provisions. 
  
 12.8 Beneficiaries. The Executive may designate one (1) or more persons or entities as the primary and/or contingent
beneficiaries of any amounts to be received under this Agreement. Such designation must be in the form of a signed writing acceptable to the Chief Executive Officer. The Executive may make or change such designation at any time. 
  
 12.9. Payment Obligation Absolute. The Company’s obligation to
make the payments and the arrangement provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the
Company may have against the Executive or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final, and the Company shall not seek to
recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever. 
  
 The Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this
Agreement, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under this Agreement; provided, however, that continued
health, welfare, and benefit plan participation pursuant to Article 7.4 or Article 9.3 herein shall be discontinued in the event the Executive becomes eligible to receive substantially similar benefits from a successor employer. 

 12.10. Contractual Rights to Benefits. This Agreement establishes and vests in the Executive a
contractual right to the benefits to which he is entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds
or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder. 
  
 Article 13. Governing Law 
  
 To the extent not preempted by federal, law, the provisions of this Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Virginia, without reference to Virginia’s choice of law statutes or
decisions. 
  
 IN WITNESS WHEREOF, the Executive and the Company
have executed this Agreement as of the Effective Date. 
  
 CIRCUIT CITY STORES,
INC. 
  

			
	By:	 	 /s/ W. Alan McCollough

	 	 	W. Alan McCollough
	 	 	Chairman, President and Chief Executive Officer

  
 EXECUTIVE: 
  

	
	 /s/ Michael E. Foss

	Michael E. Foss, SSN:

  
 ATTEST: 
  

	
	 /s/ Gay L. Curtin

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