INVESTOR RIGHTS AGREEMENT

INVESTOR RIGHTS AGREEMENT

This INVESTOR RIGHTS AGREEMENT (this "Agreement" ) is made as of June 1 2005, by and among LightPath Technologies, Inc., a Delaware corporation (the "Company" ), Shadow Capital, LLC, a Kansas limited liability company, and Whitney B. Garlinghouse (each an "Investor" and together the "Investors" )

WHEREAS, the Company desires to sell to the Investors, and the Investors desire to purchase, an aggregate of 350,000 shares of Common Stock of the Company (the " Shares ") and 5-year warrants, exercisable to purchase an aggregate of 140,000 shares of Common Stock at $4.30 per share (the " Purchased Warrant "), upon the terms and conditions set forth in that certain Unit Subscription Agreement, dated of even date herewith, among the Company, the Investors and Kent Garlinghouse (the "Unit Subscription Agreement" ); and

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

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

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

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

"Board of Directors" shall mean the board of directors of the Company.

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

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

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

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

"Excluded Stock" shall mean shares of Common Stock issued or issuable by the Corporation (i) to employees, directors or consultants pursuant to any equity compensation plan approved by the Company's stockholders, including all existing equity plans for the benefit of employees, (ii) to bona fide leasing companies, strategic partners (the primary purpose of which issuance was not to raise capital), or major commercial lenders, (iii) as the purchase price in a bona fide acquisition or merger (including reasonable fees paid in connection therewith) or (iv) upon issuance upon conversion or exercise of the Purchased Warrants or other Convertible Securities outstanding on the date hereof.

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

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

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

"Registrable Shares" shall mean any Shares and any Registrable Warrant Shares

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

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

"SEC" shall mean the Securities and Exchange Commission.

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

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

"Warrant Exercisable Date" shall mean March 1, 2006.

1. 2. Effectiveness . This Agreement shall become effective upon the Closing.
   3. Mandatory Registration .

                        (a)         As soon as practicable, but in no event more than 60 days, after the Closing, the Company will prepare and file with the SEC a registration statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement that is then available to effect a registration of all Registrable Shares) for the purpose of registering under the Securities Act all of the Registrable Shares for resale by, and for the account of, the Investors as selling stockholder thereunder (the "Registration Statement" ). The Registration Statement shall permit the Investors to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, any or all of the Registrable Shares. Such Registration Statement also shall cover, to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Shares.

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

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

(d)         The Company shall be required to keep the Registration Statement, as amended, effective until such date that is the earlier of (i) 3-1/2 years after the Warrant Exercisable Date, (ii) the date when all of the Registrable Shares registered thereunder shall have been sold, or (iii) such time as all the Registrable Shares held by the Investor can be sold pursuant to Rule 144(k) without volume limitations and without compliance with the registration requirements of the Securities Act (such date is referred to herein as the "Mandatory Registration Termination Date" ). Thereafter, the Company shall be entitled to withdraw the Registration Statement and the Investor shall have no further right to offer or sell any of the Registrable Shares pursuant to the Registration Statement (or any prospectus relating thereto).

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

1. 4. Obligations of the Company . In connection with the Company's obligation under Section 3 hereof to file a Registration Statement with the SEC and to use its reasonable efforts to cause the Registration Statement to become effective as soon as practicable after filing, the Company shall, as expeditiously as reasonably possible, subject to Section 9 hereof:
   5. 1. Prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective until the Mandatory Registration Termination Date;
      2. Furnish to the selling Investors such reasonable number of copies of the Registration Statement, prospectus and preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents (including, without limitation, prospectus amendments and supplements as are prepared by the Company in accordance with Section 4(a) above) as the selling Investors may reasonably request, in order to facilitate the public or other disposition of the selling Investors' Registrable Shares;
      3. Use reasonable efforts to register and qualify the Registrable Shares covered by the Registration Statement under such other securities or Blue Sky laws of all states requiring such securities or Blue Sky registration or qualification, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; and
      4. Use reasonable efforts to cause all such Registrable Shares registered hereunder to be listed on each securities exchange (including without limitation any Nasdaq market) on which securities of the same class issued by the Company are then listed.
   6. Furnish Information .

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

(b)         The Registration Statement will provide for a plan of distribution with respect to the Registrable Shares substantially as follows: The Registrable Shares may be sold from time to time by the Investors, or by pledgees, donees, transferees or other successors in interest. Such sales may be made on one or more exchanges or in the over-the-counter market, or otherwise at prices and at terms then prevailing or at prices related to the then-current market price, or in negotiated transactions. The Registrable Shares may be sold by one or more of the following: (i) a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (ii) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to the resale registration statement; (iii) an exchange distribution in accordance with the rules of such exchange; (iv) ordinary brokerage transactions and transactions in which the broker solicits purchasers; and (v) transactions between sellers and purchasers without a broker/dealer. In addition, any securities covered by the Registration Statement which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to the Registration Statement. However, the selling Investors may not engage in short sales, short sales versus the box, puts and calls or other transactions in securities of the issuer or derivatives thereof, and may not sell and deliver the shares in connection therewith. In effecting sales, brokers or dealers engaged by the selling Investors may arrange for other brokers or dealers to participate. Brokers or dealers will receive commissions or discounts the from selling Investor in amounts to be negotiated immediately prior to the sale.

1. 6. Expenses of Registration . All expenses incurred by the Company in connection with the registration of the Registrable Shares pursuant to this Agreement (excluding underwriting, brokerage and other selling commissions and discounts), including without limitation all registration and qualification and filing fees, printing expenses, fees and disbursements of counsel for the Company, and the Legal Fee set forth and limited in Section 6.9 of the Unit Subscription Agreement, shall be borne by the Company.
   7. Indemnification .
   8. 1. To the extent permitted by law, the Company will indemnify and hold harmless each selling Investor against any losses, claims, damages or liabilities to which it may become subject under the Securities Act, the Exchange Act, and other federal or state securities laws, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in the Registration Statement, in any preliminary prospectus or final prospectus relating thereto or in any amendments or supplements to the Registration Statement or any such preliminary prospectus or final prospectus, (ii) arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) arise out of any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any other federal or state securities law; and wil