Document:

Unassociated Document

     

    EXHIBIT
10.2

    

    SECURITY
AGREEMENT

     

    THIS
SECURITY AGREEMENT (this “Agreement”) is entered into as
of June 8, 2009, by and between Vu1 Corporation, a California corporation (the “Company”), and
Full Spectrum Capital, LLC, a Washington limited liability company (“Lender”).

    

    A.           Pursuant
to that certain Term Sheet dated as of June 5, 2009 between the Company and
Lender (the “Term
Sheet”), Lender has agreed to provide for debt financing to the Company
in an amount of up to $7,000,000, on the terms and subject to the conditions
therein (the “Loan”).

    

    B.           Lender
desires to make an initial advance to the Company under the Loan in the amount
of $500,000, pursuant to a secured promissory note of even date herewith (the
“Secured Promissory
Note”), and the Company has agreed, for the purpose of securing payment
of the Loan, to grant Lender a first priority security interest in the Company’s
assets.

    

    For good
and valuable consideration, receipt and adequacy of which are hereby admitted
and acknowledged, the parties hereto agree as follows:

    

    
      	
              1.

            	
              Grant
      of Security Interest.

            

    

    

    In order
to secure the payment of any monies due to Lender under the Secured Promissory
Note (the “Obligations”), the Company
hereby grants to Lender and its successors and assigns, a first priority
security interest in all of the Collateral (defined below). This security
interest shall be subject to the terms and conditions of this Security
Agreement.

    

    
      	
              2.

            	
              Collateral

            

    

    

    The
“Collateral” subject to this Security Agreement means all of the Company’s
right, title and interest in, to and under all of the Company’s assets, whether
now owned or existing or hereafter acquired or arising, and wherever located
including, but not limited to the following.  all cash and cash
equivalents, accounts, deposit accounts, documents, inventory, equipment, goods,
documents, instruments (including, without limitation, promissory notes),
contract rights, general intangibles, chattel paper, supporting obligations,
investment property (including, without limitation, all equity interests owned
by the Company), letter-of-credit rights, trademarks, trademark applications,
tradestyles, patents, patent applications, copyrights, copyright applications
and other intellectual property in which the Company now has or hereafter may
acquire any right, title or interest, all proceeds and products thereof
(including, without limitation, proceeds of insurance) and all additions,
accessions and substitutions thereto or therefor.

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	
              3.

            	
              Perfection;
      Recordation

            

    

    

    The first
priority security interest granted herein shall be perfected by the filing of
appropriate Uniform Commercial Code Forms UCC-1 with the appropriate government
filing offices.  The parties agree to take all necessary actions to
record the security interest in the Company’s patents and trademarks by making
all necessary filings with the United States Patent and Trademark
Office.

    

    
      	
              4.

            	
              Rights
      and Remedies upon Event of Default.

            

    

    

    (a)           Upon
the occurrence, and during the continuation, of an Event of Default (as defined
in the Secured Promissory Note), Lender (at its election but without notice of
its election and without demand) may, except to the extent otherwise expressly
provided or required below, do any one or more of the following, all of which
are authorized by the Company.  For purposes of this Agreement,
references to the Uniform Commercial Code means the Uniform Commercial Code as
in effect in the State of Washington,

    

    (i)           Proceed
directly and at once, without notice, against the Company to collect and recover
the full amount or any portion of the Obligations, or against any security or
collateral for the Obligations

    

    (ii)           Without
notice to the Company (such notice being expressly waived), and without
constituting a retention of any collateral in satisfaction of an obligation
(within the meaning of Section 9505 of the Uniform Commercial Code), set off and
apply to the Obligations any and all (i) balances and deposits of the Company
held by Lender, or (ii) indebtedness at any time owing to or for the credit or
the account of the Company held by Lender;

    

    (iii)           Hold
or cause to be held, as cash collateral, any and all balances and deposits of
the Company held by Lender to secure the full and final repayment in cash of all
of the Obligations;

    

    (iv)           May
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein and in the Note or otherwise available to it, all the rights
and remedies available to it at law (including those of a secured party under
the Uniform Commercial Code) or in equity.

    

    (v)           Without
notice or demand, make such payments and do such acts as Lender considers
necessary or reasonable to protect its security interest in the
Collateral.  The Company agrees to assemble the Collateral if Lender
so requires, and to make the Collateral available to Lender as Lender may
designate.  The Company authorizes Lender to enter the premises where
the Collateral is located, to take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which is prior or superior to its security interest and to pay
all expenses incurred in connection therewith.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (vi)           Sell
all or any part of the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including the Company’s premises) as is commercially
reasonable. It is not necessary that the Collateral be present at any such sale.
The Company hereby agrees that 30 days’ notice of any intended sale or
disposition of the Collateral is reasonable. Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Company, which right
or equity is hereby waived or released to the extent permitted by
law;

    

    Except as
required by law, Lender may take any or all of the foregoing action without
demand, presentment, protest, advertisement or notice of any kind to or upon the
Company or any other person. The rights and remedies of Lender under this
Agreement, the Note, and all other agreements shall be cumulative. Lender shall
have all other rights and remedies not inconsistent herewith as provided under
the Uniform Commercial Code, by law, or in equity. No exercise by Lender of one
right or remedy shall be deemed an election, and no waiver by Lender of any
Event of Default on the Company’s part shall be deemed a continuing waiver. No
delay by Lender shall constitute a waiver, election, or acquiescence by
it.

    

    (b)           Application
of Collateral Proceeds.  The proceeds and/or avails of the Collateral,
or any part thereof, and the proceeds and the avails of any remedy hereunder (as
well as any other amounts of any kind held by Lender at the time of, or received
by Lender after, the occurrence of an Event of Default) shall be paid to and
applied as follows:

    

    (i)           First,
to the payment of reasonable costs and expenses of foreclosure or suit, if any,
and of such sale and the exercise of any other rights or remedies, reasonable
legal expenses and attorneys’ fees, incurred or made hereunder by
Lender;

    

    (ii)           Second,
to the payment to Lender of the Obligations (to be applied first to accrued
interest and second to outstanding principal); and

    

    (iii)           Third,
to the payment of the surplus, if any, to Company, its successors and assigns,
or to whomsoever may be lawfully entitled to receive the same.

    

    
      	
              5.

            	
              Lender’s
      Appointment as Attorney-in-Fact

            

    

    

    The Company appoints Lender, any of its
officers, as its attorney-in-fact, with power and authority in the place and
stead of the Company and in the name of the Company to execute such documents
and to supply any omitted information and correct patent errors in any documents
executed by the Company; to file financing statements against the Company
covering the Collateral (and, in connection with the filing of any such
financing statements, describe the Collateral as "all right, title and interest
in, to and under all of the Company’s assets and all personal property, whether
now owned and/or hereafter acquired” (or any similar variation thereof)); to
sign the Company’s name on public records; and to do all other things Lender
deems necessary to carry out this Security Agreement.  The Company
hereby ratifies and approves all acts of the attorney and neither Lender nor the
attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or
willful misconduct.  This power being coupled with an interest is
irrevocable so long as any Obligations remains unpaid.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              No
      Waiver; Cumulative Remedies.

            

    

    

    The
failure of Lender or the Company at any time to demand strict performance by the
other of any terms, covenants or conditions set forth herein, shall not be
construed as a continuing waiver or relinquishment thereof, and either party
may, at any time, demand strict and complete performance by the other of said
terms, covenants or conditions.  The rights and remedies provided in
this Agreement are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.

    

    
      	
              7.

            	
              Inspection.

            

    

    

    Lender (through any of its officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect the Company’s books and records and to check, test, and appraise the
Collateral in order to verify the Company’s financial condition or the amount,
quality, value, condition of, or any other matter relating to, the
Collateral.

    

    
      	
              8.

            	
              Liens
      and Encumbrances.

            

    

    

    The
Company represents and warrants that the Company has good and marketable title
to the Collateral, free and clear of any mortgage, pledge, lien, encumbrance,
charge, or other security interest other.

     

    
      	
              9.

            	
              Covenants.

            

    

    

    (a)           The
Company shall not sell, lease, transfer or otherwise dispose of any of the
Collateral, or attempt or contract to do so, other than (a) the sale of
inventory, (b) the granting of non-exclusive licenses in the ordinary course of
business, or (c) the disposal of surplus, worn-out or obsolete
equipment.

     

    (b)           The
Company shall not change its jurisdiction of organization, relocate its chief
executive office, principal place of business or its records, or allow the
relocation of any Collateral (other than to another location in Washington after
providing advance notice to the Lender) from such address(es) listed on the
signature page hereto without thirty (30) days prior written notice to
Lender.

     

    (c)           The
Company shall pay promptly when due all property and other taxes, assessments
and government charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Collateral, except to the extent
the validity thereof is being contested in good faith and adequate reserves are
being maintained in connection therewith.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              Miscellaneous.

            

    

    

    (a)           Notices.  Unless
otherwise provided, any notice required to be given hereunder shall be given in
writing and shall be deemed effectively delivered (i) upon personal
delivery to the party to be notified, (ii) upon confirmation of receipt by
fax by the party to be notified, (iii) one business day after deposit with
a reputable overnight courier, prepaid for overnight delivery, or
(iv) three days after deposit with the United States Post Office, postage
prepaid, registered or certified with return receipt requested.  The
address for any such party shall be the address of such party as set forth on
the signature page below or at such other address as such party may designate by
ten days advance written notice to the other party given in the foregoing
manner.

    

    (b)           Headings.  The
subject headings of the paragraphs of this Agreement are included for purposes
of convenience only and shall not affect the construction of interpretation of
any of its provisions.

    

    (c)           Severability.  In
the event that any of the terms of this Agreement are held to be partially or
wholly invalid or unenforceable for any reason whatsoever, such holdings shall
not affect, alter, modify or impair in any manner whatsoever, any of the other
terms, or the remaining portion of any term, held to be partially invalid or
unenforceable.

    

    (d)           Entire Agreement;
Amendments.  This Agreement, together with the Term Sheet, the
Secured Promissory Note, and any document or agreement entered into in
connection with or contemplated by the Term Sheet, constitute the entire
agreement between the parties, and contains all of the agreements between the
parties with respect to the subject matter hereof.  No change or
modification of this Agreement shall be valid unless the same shall be in
writing and signed by Lender and the Company.  No waiver of any
provision of this Agreement shall be valid unless in writing and signed by the
person or party against whom charged.

    

    (e)           Attorneys’
Fees.  In the event of any action brought by either party
against the other arising out of this Agreement, or for the purposes of
enforcing this Agreement or collection of any damages alleged to have resulted
to one of the parties by reason of the breach or failure of performance of the
other, the party prevailing in any such action shall be entitled to recover
reasonable attorneys’ fees and cost of suit as may be determined by the
court.

    

    (f)           Governing Law;
Venue.  This Agreement shall be governed by and construed under
the laws of the state of Washington without regard to principles of conflict of
laws.  The parties irrevocably consent to the jurisdiction and venue
of the state and federal courts located in King County, Washington in connection
with any action relating to this Agreement.

    

    (g)           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

     

    [Remainder
of Page Intentionally Left Blank; Signature Page Follows]

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    EXECUTED
by the parties hereto as of the day and year first above written.

     

    
      
        	
                COMPANY:

              	 
      
	 
      	
                VU1
      CORPORATION

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/
      Richard Herring

              
	 
      	
                Name:

              	
                Richard Herring

              
	 
      	
                Title:

              	
                Chief Technology Officer

              
	 
      	 
      	 
      
	 
      	
                Address:

              	
                557
      Roy Street, Suite 125

              
	 
      	 
      	
                Seattle,
      WA  98109

              
	 
      	
                Fax
      No.:

              	
                (____)
      ________________

              
	 
      	 
      	 
      
	
                LENDER:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	
                FULL
      SPECTRUM CAPITAL, LLC

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ R. Cale Sellers

              
	 
      	
                Name:

              	
                R.
      Cale Sellers

              
	 
      	
                Title:

              	
                Manager

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                Address:

              	
                24 Roy St. # 421

              
	 
      	 
      	
                Seattle, WA 98109

              
	 
      	
                Fax
      No.:

              	
                (____)
      ________________

              

      

    

     

    
      
        
        

      

      
        -6-EXHIBIT
10.3

       

    

    THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF.  THIS WARRANT AND THE COMMON SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

    

    VU1
CORPORATION

    

    Common
Stock Purchase Warrant

     

    
      
        
          	 
      	 
      
	
                   
      Warrant Number

                	
                  W-2009A-____

                   

                
	
                   
      Issue Date

                	
                  June
      8, 2009

                   

                
	
                   
      Expiration Date

                   

                	
                  June
      8, 2012

                
	
                   
      Name of Warrant Holder

                   

                	
                  Full Spectrum Capital, LLC

                
	
                   
      Number of Shares of Common Stock

                   
      (subject to adjustment as provided herein)

                   

                	
                  625,000 shares

                
	
                   
      Exercise Price per Share

                   

                	
                  $0.75

                

        

      

    

     

    Vu1
Corporation, a California corporation (the “Company”), for value received,
hereby certifies that the Warrant Holder identified above or its registered
assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company up to the number of shares of Company common stock, no
par value per share (the “Common Stock”), set forth above at the exercise price
per share set forth above, on the terms and conditions set forth
herein.  The number of shares of Common Stock issuable upon exercise
of this Warrant, and the exercise price per share, each as adjusted from time to
time pursuant to the provisions of this Warrant, are hereinafter referred to as
the “Warrant Stock” and the “Exercise Price,” respectively.

    

    1.           Manner of
Exercise.  This Warrant may be exercised in whole or in part by
delivering to the Company at its principal place of business (i) this
Warrant, (ii) the form of Election to Purchase attached hereto as Exhibit A duly
completed and executed by Holder, and (iii) cash, wire transfer, or bank
check payable to the Company, in the amount of the Exercise Price multiplied by
the number of shares for which this Warrant is being exercised (the “Purchase
Price”).  Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided herein or at such
later date as may be specified in the executed form of Election to
Purchase.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    2.           Delivery of Stock
Certificate.  As soon as practicable after the exercise of this
Warrant, in full or in part, and in any event within 10 days thereafter, the
Company at its expense will cause to be issued in the name of and deliver to the
Holder (a) a certificate or certificates for the number of fully paid and
nonassessable shares of Warrant Stock to which Holder shall be entitled upon
such exercise and (b) if applicable, a new Warrant of like tenor to
purchase up to that number of shares of Warrant Stock, if any, not previously
exercised by Holder.  Holder shall for all purposes be deemed to have
become the holder of record of such shares of Warrant Stock on the date on which
this Warrant was properly exercised in accordance with Section 1, irrespective
of the date of delivery of the certificate or certificates representing the
Warrant Stock; provided that, if the date of such exercise is a date when the
stock transfer books of the Company are closed, such person shall be deemed to
have become the holder of record of such shares of Warrant Stock at the close of
business on the next succeeding date on which the stock transfer books are
open.

    

    3.           Covenants.

    

    a.           Exercise
Shares.  The Company covenants and agrees that all Warrant Stock that
may be issued upon the exercise of the rights represented by this Warrant will,
upon issuance, be validly issued and outstanding, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issuance
thereof.  The Company further covenants and agrees that the Company
will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this
Warrant.  If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
exercise of this Warrant, the Company will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.

    

    b.           No
Impairment.  Except and to the extent as waived or consented to by the
Holder, the Company will not, by amendment of its Articles of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.

    

    c.           Notices
of Record Date.  In the event of any taking by the Company of a record
of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
the Company shall mail to the Holder, at least ten (10) days prior to the date
specified herein, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend or distribution.

    

    4.           Termination.

    

    To the
extent not earlier exercised, the Warrant evidenced hereby shall be void and of
no effect and all rights hereunder shall cease upon the earlier of
(a) 5:00 p.m. Pacific Time on the Expiration Date set forth above, or
(b) the closing of any merger, consolidation or other reorganization of the
Company with or into any other corporation or other business entity, or the sale
of all or substantially all of its assets, or the liquidation or dissolution of
the Company (each, a “Transaction”).  The Company shall provide Holder
with written notice not less than 30 days prior to the closing of any proposed
Transaction.  All restrictions set forth herein on the shares of
Warrant Stock issued upon exercise of any rights hereunder shall survive such
exercise and expiration of the rights granted hereunder.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    5.           Adjustments to
Warrant.

    

    a.           
In the event of changes in the outstanding Common Stock of the Company by reason
of stock dividends, splits, recapitalizations, reclassifications, combinations
or exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the total number,
class, and kind of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment.  The form of this Warrant
need not be changed because of any adjustment in the number of Warrant Shares
subject to this Warrant.

    

    b.           If
any change in the outstanding shares of Common Stock of the Company or any other
event occurs as to which the other provisions of this Section 5 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of the Warrant in accordance with such provisions,
then the Board of Directors of the Company shall make an adjustment in the
number and class of securities available under the Warrant, the Exercise Price
or the application of such provisions, so as to protect such purchase rights as
aforesaid.  The adjustment shall be such as to give the Holder of the
Warrant upon exercise for the same aggregate Exercise Price the total number,
class and security as he would have owned had the Warrant been exercised prior
to the event and had he continued to hold such securities until after the event
requiring adjustment.

    

    c.           Whenever
the Exercise Price or the number of Exercise Shares purchasable hereunder shall
be adjusted pursuant to this Section 5, the Company shall prepare a certificate
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated.
Such certificate shall be signed by its chief financial officer and shall be
delivered to the Holder.

    

    6.           Restrictions on
Transfer.  Neither this Warrant nor the Warrant Stock have been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
or any applicable state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a) there is an
effective registration statement under the Securities Act and applicable state
securities laws covering any such transaction involving said securities,
(b) the Company receives an opinion of legal counsel for Holder (concurred
in by legal counsel for the Company) stating that such transaction is exempt
from registration, or (c) the Company otherwise satisfies itself that such
transaction is exempt from registration.

    

    7.           Legend.  A
legend setting forth or referring to the restrictions stated in Section 6
shall be placed on this Warrant, any replacement hereof and any certificates
representing Warrant Stock, and a stop transfer restriction or order shall be
placed on the books of the Company and with any transfer agents against this
Warrant and shares of Warrant Stock until they may be legally sold or otherwise
transferred.

    

    8.           Fractional
Shares.  No fractional shares shall be issued upon the exercise
of the Warrant.  In lieu of fractional shares, the Company shall round
the number of shares to be issued upon exercise of this Warrant to the nearest
whole share.

    

    9.           Holder as
Owner.  Unless this Warrant is transferred or assigned, the
Company may deem and treat the Holder at all times as the absolute owner of the
Warrant evidenced hereby for all purposes regardless of any notice to the
contrary.

    

    10.         No Rights as
Shareholder.  This Warrant shall not entitle Holder to any
voting rights or any other rights as a shareholder of the Company, or to any
other rights whatsoever except the rights stated herein; and no dividend or
interest shall be payable or shall accrue in respect of this Warrant or the
shares purchasable hereunder unless, and until, and except to the extent that,
this Warrant shall be exercised.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    11.           Exchange or Destruction of
Warrant.  This Warrant is exchangeable, without expense to
Holder and upon delivery hereof to the Company, for Warrants of different
denominations entitling Holder to purchase shares of Warrant Stock equal in
total number and identical in type to the shares of Warrant Stock covered by
this Warrant.  In addition, upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of an affidavit and indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant, the Company at its expense will make and deliver a
new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant.

    

    12.           Notices.  Unless
otherwise provided, any notice, request or other document required or permitted
to be given or delivered to Holder hereof or the Company shall be given in
writing and shall be deemed effectively given (a) upon personal delivery to
the party to be notified, (b) upon confirmation of receipt by fax by the
party to be notified, or (c) upon receipt if delivered by prepaid overnight
delivery, courier service or registered or certified mail addressed, (i) if
to Holder, to the address of Holder most recently furnished in writing to the
Company and (ii) if to the Company, to the address set forth below, or in
either case at such other address as such party may designate by five days’
advance written notice to the other party given in the foregoing
manner.

    

    13.           Successors and
Assigns.  The terms and provisions of this Warrant shall be
binding upon the Company and Holder and their respective successors and assigns,
subject at all times to the restrictions set forth herein.

    

    14.           Applicable
Law.  The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of Washington.

    

    EXECUTED
as of the day and year first above written.

    

    
      
        	
                VU1
      CORORATION

              
	 
      
	
                By:

              	
                /

              
	 
      	
                Matt
      DeVries

              
	 
      	
                Chief
      Financial Officer

              
	 
      	 
      
	
                Address:

              	
                557
      Roy Street, Suite 125

              
	 
      	
                Seattle,
      Washington, 98109

              

      

    

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    Exhibit A to Common Stock
Purchase Warrant

    

    ELECTION
TO PURCHASE

    

    Vu1
Corporation

    4102
Linden Ave N., Suite 302

    Seattle,
Washington, 98103

    Attention:  Corporate
Secretary

    

    The
undersigned hereby irrevocably elects to purchase __________ shares of Common
Stock of Vu1 Corporation, a California corporation (the “Company”), issuable
upon the exercise of the attached Warrant, and requests that certificates for
such shares be issued in the name of and delivered to the undersigned at the
address stated below.  If said number of shares shall not be all the
shares which may be purchased pursuant to the attached Warrant, the Company
shall issue a new Warrant to the Holder evidencing the right of the Holder to
purchase the balance of such shares under terms identical to the attached
Warrant.

    

    The
undersigned hereby agrees with and represents to the Company that such shares of
Common Stock are acquired for investment and not with a view to, or for sale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended, and that the undersigned has no
present intention of distributing or reselling such shares.  The
undersigned acknowledges and agrees that the exercise of the attached Warrant
and the issuance and transfer of the Common Stock to be purchased are subject to
Sections 6 and 7 of the attached Warrant.

    

    
      
        
          	
                  Payment
      enclosed in the amount of:

                	
                  $_________________

                
	 
      	 
      
	
                  Dated:  ______________,
      20__

                	 
      
	 
      	 
      
	
                  Name
      of Holder of Warrant (please
      print):

                	
                  ________________________________

                
	 
      	 
      
	
                  Address:

                	
                  ________________________________

                  ________________________________

                  ________________________________

                   

                
	
                  Signature:

                	
                  ________________________________

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