Exhibit 10.2

 

STOCK PLEDGE AGREEMENT

 

This STOCK PLEDGE AGREEMENT dated as of March 7, 2005 (this “Pledge Agreement”),
is made and entered into by Microvision, Inc., a Delaware corporation
(“Pledgor”), in favor of Paulson Capital Corporation, an Oregon corporation
(“Secured Party”).

 

RECITALS

 

A. Secured Party has agreed to loan $1,000,000 to Pledgor (the “Loan”). In
consideration for the Loan, Pledgor has agreed to issue to Secured Party a
Non-Recourse Secured Promissory Note, substantially in the form of Exhibit A, in
the amount of $1,000,000 (the “Note”) evidencing Pledgor’s obligation to repay
the Loan.

 

B. To secure payment of the Note, Pledgor has agreed to pledge 405,000 shares of
Common Stock of Lumera Corporation, a Delaware corporation, (“Lumera”), to
Secured Party (the “Shares”).

 

C. In connection Pledgor’s pledge of the Shares, Pledgor has agreed to cause
Lumera to file a registration statement with the Securities and Exchange
Commission covering the Shares.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, Pledgor agree as follows:

 

1. Pledge. As security for the prompt and complete payment of the principal of
and interest on the Note, Pledgor hereby delivers, pledges and assigns to
Secured Party and creates in Secured Party a security interest in the Shares
(the Shares sometimes referred to herein as the “Pledged Securities”). Pledgor
agrees that in the event Pledgor shall become entitled to any redemption
proceeds or distribution of stock or other securities in respect of the Pledged
Securities, such redemption proceeds or distribution of stock or other
securities will be additional security under this Pledge Agreement.

 

2. Delivery of Stock. To protect the security interests created under Section 1
above, Secured Party shall retain the certificates representing the Pledged
Securities. Pledgor will deliver to Secured Party executed blank stock powers in
the forms attached as Exhibit B for use in the event the Pledged Securities are
sold or transferred in accordance with the provisions of this Pledge Agreement.

 

3. Release of Collateral. Secured Party shall release its security interest upon
payment in full of the principal of and interest on the Note, this Pledge
Agreement shall terminate, and Pledgor shall be entitled to the return of the
Pledged Securities that have not been sold or otherwise applied pursuant to the
provisions of this Pledge Agreement.

 

--------------------------------------------------------------------------------

4. Administration of Security. The following provisions shall govern the
administration of the Pledged Securities:

 

(a) So long as the Note is not in default, Pledgor shall be entitled to act with
respect to the Pledged Securities in any manner not inconsistent with this
Pledge Agreement or the Note, including, without limitation, to exercise all
voting rights.

 

(b) At any time any amount is due and unpaid under the Note, if Pledgor shall
have received or shall have become entitled to receive, any cash payments or
other distributions in respect of the Pledged Securities, then, and in each
case, Pledgor shall deliver to Secured Party such amount in partial payment of
the principal of and interest due on the Note, with such amounts to be applied
to accrued interest or principal payable under the Note, as applicable.

 

(c) Pledgor shall immediately upon request by Secured Party and in confirmation
of the security interests hereby created, execute and deliver to Secured Party
such further instruments, deeds, transfers, assurances and agreements, in form
and substance as Secured Party shall request, including any financing statement
and amendments thereto, or any other documents, as required under Oregon law and
any other applicable law to protect the security interests created hereunder.

 

5. Remedies in Case of an Event of Default.

 

(a) In case an Event of Default (as defined in the Note) shall have occurred and
be continuing, Secured Party shall have all of the remedies of a secured party
under the Oregon Uniform Commercial Code and, without limiting the foregoing,
shall have the right to sell, assign and deliver the whole or, from time to
time, any part of the Pledged Securities, or any interest in any part thereof,
at any private sale or at public auction, with or without demand of performance
or other demand, advertisement or notice of the time or place of sale or
adjournment thereof or otherwise (except Secured Party shall give ten (10) days’
notice to Pledgor of the time and place of any sale pursuant to this Section 5),
for cash, on credit or for other property, for immediate or future delivery, and
for such price or prices and on such terms as Secured Party shall, in their
discretion, determine. Pledgor hereby waives and releases any and all right or
equity of redemption whether before or after sale hereunder. At any such sale
Secured Party may bid for and purchase the whole or any part of the Pledged
Securities so sold free from any such right or equity of redemption. Secured
Party shall apply the proceeds of any such sale first to the payment of all
costs and expenses, including reasonable attorneys’ fees, incurred by Secured
Party in enforcing their rights under this Pledge Agreement and then to the
payment of interest on and principal of the Note, with such payments to be
applied to accrued interest or principal payable under the Note, in Secured
Party’ discretion, and the Shares shall be reissued in the name of the
purchaser.

 

(b) Pledgor recognizes that Secured Party may be unable to effect a public sale
of all or a part of the Pledged Securities by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the “Act”), or in the rules
and regulations promulgated thereunder. Pledgor represents to Secured Party that
it has entered into a Registration Rights Agreement with Lumera substantially in
the form set forth in Exhibit C (the “Registration Rights Agreement”) and that
the Registration Rights Agreement is a valid and binding agreement of Lumera,
enforceable against Lumera in accordance with its terms. Unless and until all
the

 

2

--------------------------------------------------------------------------------

principal of and interest on the Note is paid, Pledgor agrees, to take such
action as may be required to cause Lumera to file a registration statement under
the Act with respect to the resale of the Shares (the “Registration Statement”)
and to take such other action as may be required to cause the Shares to be
resellable pursuant to the Registration Statement at all times during the period
(the “Registration Period”) beginning June 5, 2005, or beginning on July 5, 2005
if the Securities and Exchange Commission reviews the Registration Statement,
and ending on the first anniversary of the date hereof, including, but not
limited to the prompt and diligent exercise all of its rights under the
Registration Rights Agreement. Pledgor agrees to indemnify and hold harmless
Secured Party from and against any loss resulting from the failure of Lumera to
have caused the Shares to be resellable without restriction at all times during
the Registration Period, other than periods in which Lumera suspends the use of
the Registration Statement as provided in the Registration Rights Agreement. For
the purpose of the foregoing sentence, any such loss shall be conclusively
deemed to be the difference between the highest sale price of Lumera Common
Stock during the Registration Period in which the Shares were required to be,
and were not, resellable without restriction and the closing sale price on the
first anniversary of the date hereof or such earlier date on which the Shares
become resellable without restriction. Pledgor acknowledges and agrees that
Secured Party’s rights under this Section 5(b) are enforceable notwithstanding
that the Note is non-recourse. The obligations of Pledgor under this 5(b) are
expressly contingent upon the Secured Party’s providing information with respect
to such party and it’s intended method of distribution as is required under
applicable law and to the Secured Party agreeing to customary indemnification of
Lumera and Pledgor for claims based solely on such information (capped at the
net proceeds received by the Secured Party on sales pursuant to the Registration
Statement).

 

(c) If any other consent, approval or authorization of any state, municipal or
other governmental department, agency or authority should be necessary to
effectuate any sale or disposition by Secured Party pursuant to this Section 5
of the Pledged Securities, or any partial disposition of the Pledged Securities,
Pledgor will execute all such applications and other instruments as may be
required in connection with securing any such consent, approval or
authorization, and will otherwise use their best efforts to secure the same.

 

(d) Neither failure nor delay on the part of Secured Party to exercise any
right, remedy, power or privilege provided for herein or by statute or at law or
in equity shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege.

 

6. Pledgors’s Obligations Not Affected. The obligations of Pledgor under this
Pledge Agreement shall remain in full force and effect without regard to, and
shall not be impaired or affected by: (a) any subordination, amendment or
modification of or addition or supplement to the Note, or any assignment or
transfer of the Note; (b) any exercise or non-exercise by Secured Party of any
right, remedy, power or privilege under or in respect of this Pledge Agreement
or the Note, or any waiver of any such right, remedy, power or privilege; (c)
any waiver, consent, extension, indulgence or other action or inaction in
respect of this Pledge Agreement or the Note, or any assignment or transfer of
any thereof; or (d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like, of Secured Party or their
successors, whether or not Pledgor shall have notice or knowledge of any of the
foregoing.

 

3

--------------------------------------------------------------------------------

7. Transfer by Pledgor. Pledgor will not sell, assign, transfer or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber the Pledged Securities or any interest therein.

 

8. Attorney-in-Fact. Secured Party or its successor is hereby appointed the
attorney-in-fact of Pledgor for the purpose of carrying out the provisions of
this Pledge Agreement and taking any action and executing any instrument which
Secured Party reasonably may deem necessary or advisable to accomplish the
purposes hereof.

 

9. Miscellaneous. Secured Party and its assigns shall have no obligation in
respect of the Pledged Securities, except to hold and dispose of the same in
accordance with the terms of this Pledge Agreement. Neither this Pledge
Agreement nor any provisions hereof may be amended, modified, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the amendment, modification, waiver, discharge or
termination is sought. The provisions of this Pledge Agreement shall be binding
upon the successors and assigns of Pledgor. The captions in this Pledge
Agreement are for convenience of reference only and shall not define or limit
the provisions hereof. This Pledge Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Oregon, without regard
to the conflicts of laws rules thereof. This Pledge Agreement may be executed
simultaneously in several counterparts, each of which is an original, but all of
which together shall constitute one instrument.

 

IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to be
executed and delivered on the date first above written.

 

PLEDGOR Microvision, Inc. By:   /s/    RICHARD F. RUTKOWSKI            

Name:

  Richard F. Rutkowski    

Title:

  Chief Executive Officer

 

4