REGISTRATION RIGHTS AGREEMENT

 

	This REGISTRATION RIGHTS AGREEMENT (this"Agreement"), dated as of June 22, 2009, is by and betweenMICROVISION, INC., a Delaware corporation (the "Company"), andMAX DISPLAY ENTERPRISEs LIMITED, a limited liability company formed under thelaws of the British Virgin Islands (the "Investor").

	A.	The Company has agreed, on the terms and subject tothe conditions set forth in the Securities Purchase Agreement, dated as of June22, 2009 (the "Securities Purchase Agreement"), to issue andsell to the Investor named therein (A) shares of the Company's common stock, parvalue $0.001 per share (the "Common Stock") and (B) the Warrantin the form attached to the Securities Purchase Agreement (the"Warrant").

		

	B.	The Warrant is exercisable into shares of CommonStock (the "Warrant Shares") in accordance with their terms.

	 In consideration of the Investor entering into theSecurities Purchase Agreement, and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties agree asfollows:

	1.	DEFINITIONS.

	For purposes of this Agreement, the following terms shallhave the meanings specified:

	"Business Day" means any day other thana Saturday, a Sunday or a day on which the Nasdaq Global Market or the TaiwanStock Exchange is closed or on which banks in the City of New York or Taiwan arerequired or authorized by law to be closed.

	"Commission" means the Securities andExchange Commission.

	"Effective Date" means the date on whichthe Registration Statement is declared effective by the Commission.

	"Holder" means any person owning orhaving the right to acquire, through exercise of the Warrant or otherwise,Registrable Securities, including initially the Investor and thereafter anypermitted assignee thereof.

	"Registrable Securities" means (i) theShares and the Warrant Shares and any other shares of Common Stock issuablepursuant to the terms of the Securities Purchase Agreement or the Warrant, and(ii) any shares of capital stock issued or issuable from time to time (with anyadjustments) in replacement of, in exchange for or otherwise in respect of theShares or the Warrant Shares.

	"Registration Deadline" means the lastday of the 120-day period following the Closing Date.

	"Registration Period" has the meaningset forth in Section 2(b).

	"Registration Statement" means aregistration statement or statements prepared in compliance with the SecuritiesAct pursuant to Section 2(a).

	"Required Holders" means the Holders ofa majority of the Registrable Securities that are either then outstanding or areissuable on exercise of the Warrant then outstanding (without regard to anylimitation on such exercise).

	Capitalized terms used herein and not otherwise definedshall have the respective meanings specified in the Securities PurchaseAgreement.

	 

	2.	REGISTRATION.

		(a)	Filing of Registration Statement.  Assoon as practicable but in no event later than 30 days after the Closing (the"Filing Deadline"), the Company shall prepare and file with theCommission a Registration Statement on Form S-3 pursuant to Rule 415 under theSecurities Act covering the resale of a number of shares of RegistrableSecurities equal to the sum of (i) the aggregate number of Shares issued underthe Securities Purchase Agreement plus (ii) the aggregate number ofshares of Common Stock issuable on the Closing Date pursuant to the exercise ofthe Warrant (such number to be determined using the Exercise Price in effect onsuch date and without regard to any restriction on the ability to exercise theWarrant as of such date).  Such Registration Statement shall state, to theextent permitted by Rule 416 under the Securities Act, that it also covers suchindeterminate number of additional shares of Common Stock as may become issuableupon the exercise of the Warrant as a result of adjustments pursuant to theWarrant.  In the event that Form S-3 is not available for the registration ofthe resale of Registrable Securities hereunder, the Company shall (x) registerthe resale of the Registrable Securities on another appropriate form reasonablyacceptable to the Required Holders and (y) undertake to register the RegistrableSecurities on Form S-3 as soon as such form is available, provided that theCompany shall maintain the effectiveness of the Registration Statement then ineffect until such time as a Registration Statement on Form S-3 covering theRegistrable Securities has been declared effective by the Commission or is nolonger required to be maintained effective hereunder.  

		(b)	Effectiveness.  The Company shall useits best efforts to cause the Registration Statement to become effective as soonas practicable, but in no event later than the Registration Deadline.  TheCompany shall maintain the effectiveness of each Registration Statement filedpursuant to this Agreement until the earlier to occur of (i) the date on whichall of the Registrable Securities eligible for resale thereunder have beenpublicly sold pursuant to either the Registration Statement or Rule 144, (ii)the date on which all of the Registrable Securities remaining to be sold undersuch Registration Statement (in the reasonable opinion of counsel to theCompany) may be immediately sold to the public under Rule 144 or any successorprovision, and (iii) the third (3rd) anniversary of the Closing Date(the period beginning on the Closing Date and ending on the earlier to occur of(i), (ii) and (iii) above being referred to herein as the "RegistrationPeriod").

		(c) 	Registration of Other Securities.  Inno event shall the Company include any securities other than RegistrableSecurities on any Registration Statement filed by the Company on behalf of theHolders pursuant to the terms hereof.

		

	3.	OBLIGATIONS OF THE COMPANY.

	In addition to performing its obligations hereunder,including without limitation those pursuant to Section 2 above, the Companyshall, with respect to each Registration Statement:

 	 	(a)	prepare and file with the Commission suchamendments and supplements to such Registration Statement and the prospectusused in connection with such Registration Statement as may be necessary tocomply with the provisions of the Securities Act or to maintain theeffectiveness of such Registration Statement during the Registration Period, oras may be reasonably requested by a Holder in order to incorporate informationconcerning such Holder or such Holder's intended method of distribution; 

		(b)	promptly following the Closing, use its bestefforts to secure the listing on the Nasdaq Global Market of all RegistrableSecurities and provide each Holder with reasonable evidence thereof;

	

		(c)	so long as a Registration Statement iseffective covering the resale of the applicable Registrable Securities owned bya Holder, furnish to each Holder such number of copies of the prospectusincluded in such Registration Statement, including a preliminary prospectus, inconformity with the requirements of the Securities Act, and such other documentsas such Holder may reasonably request in order to facilitate the disposition ofsuch Holder's Registrable Securities;

		(d)	use commercially reasonable efforts toregister or qualify the Registrable Securities under the securities or"blue sky" laws of such jurisdictions within the United States asshall be reasonably requested from time to time by a Holder, and do any and allother acts or things which may reasonably be necessary or advisable to enablesuch Holder to consummate the public sale or other disposition of theRegistrable Securities in such jurisdictions; *provided* that the Companyshall not be required in connection therewith or as a condition thereto toqualify to do business or to file a general consent to service of process in anysuch jurisdiction;

		(e)	notify each Holder promptly after becomingaware of the occurrence of any event as a result of which the prospectusincluded in such Registration Statement, as then in effect, contains an untruestatement of material fact or omits to state a material fact required to bestated therein or necessary to make the statements therein not misleading inlight of the circumstances then existing, and as promptly as practicable prepareand file with the Commission and furnish to each Holder a reasonable number ofcopies of a supplement or an amendment to such prospectus as may be necessary sothat such prospectus does not contain an untrue statement of material fact oromit to state a material fact required to be stated therein or necessary to makethe statements therein not misleading in light of the circumstances thenexisting; 

		(f)	use commercially reasonable efforts to preventthe issuance of any stop order or other order suspending the effectiveness ofsuch Registration Statement and, if such an order is issued, to use commerciallyreasonable efforts to obtain the withdrawal thereof at the earliest possibletime and to notify each Holder in writing of the issuance of such order and theresolution thereof;

		(g)	furnish to each Holder, on the date that suchRegistration Statement, or any successor registration statement, becomeseffective, a letter, dated such date, signed by an officer of the Company or ofoutside counsel to the Company (and reasonably acceptable to such Holder)addressed to such Holder, confirming such effectiveness and, to the knowledge ofsuch officer or counsel, the absence of any stop order;

		(h)	provide to each Holder and its representativesthe reasonable opportunity to conduct, subject to confidentiality agreementsreasonably acceptable to the Company, a reasonable inquiry of the Company'sfinancial and other records during normal business hours and make availableduring normal business hours and with reasonable advance notice its officers,directors and employees for questions regarding information which such Holdermay reasonably request in order to fulfill any due diligence obligation on itspart; 

		(i)	permit counsel for each Holder to review suchRegistration Statement and all amendments and supplements thereto, and anycomments made by the staff of the Commission concerning such Holder and/or thetransactions contemplated by the Securities Purchase Agreement and the Company'sresponses thereto, within a reasonable period of time prior to the filingthereof with the Commission (or, in the case of comments made by the staff ofthe Commission, within a reasonable period of time following the receipt thereofby the Company); and

		(j)	 in the event that, at any time, the number ofshares available under the Registration Statement is insufficient to cover thesum of (i) the aggregate number of Shares plus (ii) the aggregate number ofWarrant Shares that are Registrable Securities then outstanding or issuableunder the Warrant (such number to be determined using the Exercise Price ineffect at such time and without regard to any restriction on the ability toexercise the Warrant), the Company shall promptly amend such RegistrationStatement or file a new registration statement, in any event as soon aspracticable, but not later than the tenth (10th) Business Day following noticefrom a Holder of the occurrence of such event, so that such RegistrationStatement or such new registration statement, or both, covers no less than thesum of (i) the aggregate number of Shares plus (ii) the aggregate number of theWarrant Shares that are Registrable Securities eligible for resale thereunder.The Company shall use its best efforts to cause such amendment and/or newRegistration Statement to become effective as soon as practicable following thefiling thereof. Any Registration Statement filed pursuant to this Section 3(j)shall state that, to the extent permitted by Rule 416 under the Securities Act,such Registration Statement also covers such indeterminate number of additionalshares of Common Stock as may become issuable upon exercise of the Warrant inorder to prevent dilution resulting from stock splits, stock dividends orsimilar events. Unless and until such amendment or new Registration Statementbecomes effective, each Holder shall have the rights described in Section 2(c)above.

	

	4.	PERMITTED SUSPENSION.

		(a)  Black-Out Period.  Notwithstandingthe Company's obligations under this Agreement, if in the good faith judgment ofthe Company, following consultation with legal counsel, it would be detrimentalto the Company or its stockholders for resales of Registrable Securities to bemade pursuant to the Registration Statement due to the existence of a materialdevelopment involving the Company which the Company would be obligated todisclose in the Registration Statement, which disclosure would be premature orotherwise inadvisable at such time or would have a Material Adverse Effect uponthe Company and its stockholders, the Company shall have the right to suspendthe use of the Registration Statement for a period of not more than thirty (30)days (the "Black-out Period"); *provided, however*, thatthe Company may so defer or suspend the use of the Registration Statement for nomore than forty five (45) days in the aggregate in any twelve-month period.

		(b)	Suspension.  Notwithstanding anythingto the contrary contained herein or in the Securities Purchase Agreement, if theuse of the Registration Statement is suspended by the Company, the Company shallpromptly give written notice of the suspension to each Holder and shall promptlynotify each Holder in writing as soon as the use of the Registration Statementmay be resumed.

	5.	OBLIGATIONS OF EACH HOLDER.

	In connection with the registration of RegistrableSecurities pursuant to a Registration Statement, and as a condition to theCompany's obligations under Section 2 hereof, each Holder shall:  

		(a)  timely furnish to the Company in writing (i) acompleted shareholder questionnaire and (ii) such information in writingregarding itself and the intended method of disposition of such RegistrableSecurities, in each case, as the Company shall reasonably request in order toeffect the registration thereof; 

		(b)  upon receipt of any notice from the Company ofthe happening of any event of the kind described in Sections 3(e) or 3(f) or ofthe commencement of a Black-out Period, immediately discontinue any sale orother disposition of such Registrable Securities pursuant to such RegistrationStatement until the filing of an amendment or supplement as described in Section3(e) or withdrawal of the stop order referred to in Section 3(f), or thetermination of the Black-out Period, as the case may be, and maintain theconfidentiality of such notice and its contents; 

		(c)  to the extent required by applicable law,deliver a prospectus to the purchaser of such Registrable Securities; 

		(d)  notify the Company when it has sold all of theRegistrable Securities held by it; and

(e)  notify the Company in the event that any informationsupplied by such Holder in writing for inclusion in such Registration Statementor related prospectus is untrue or omits to state a material fact required to bestated therein or necessary to make such information not misleading in light ofthe circumstances then existing; immediately discontinue any sale or otherdisposition of such Registrable Securities pursuant to such RegistrationStatement until the filing of an amendment or supplement to such prospectus asmay be necessary so that such prospectus does not contain an untrue statement ofmaterial fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading in light of thecircumstances then existing; and use commercially reasonable efforts to assistthe Company as may be appropriate to make such amendment or supplement effectivefor such purpose.

	6.	INDEMNIFICATION.

	In the event that any Registrable Securities are includedin a Registration Statement under this Agreement:

		(a)	To the extent permitted by law, the Companyshall indemnify and hold harmless each Holder, the officers, directors,employees, agents and representatives of such Holder, and each person, if any,who controls such Holder within the meaning of the Securities Act or theSecurities Exchange Act of 1934, as amended (the "ExchangeAct"), against any losses, claims, damages, liabilities or reasonableout-of-pocket expenses (whether joint or several) (collectively, includingreasonable legal expenses or other expenses reasonably incurred in connectionwith investigating or defending same, "Losses"), insofar as anysuch Losses arise out of or are based upon (i) any untrue statement or allegeduntrue statement of a material fact contained in such Registration Statementunder which such Registrable Securities were registered, including anypreliminary prospectus or final prospectus contained therein or any amendmentsor supplements thereto, or (ii) the omission or alleged omission to statetherein a material fact required to be stated therein, or necessary to make thestatements therein, in light of the circumstances under which they were made,not misleading.  Subject to the provisions of Section 6(c), the Company willreimburse such Holder, and each such officer, director, employee, agent,representative or controlling person, for any reasonable legal expenses or otherout-of-pocket expenses as reasonably incurred by any such entity or person inconnection with investigating or defending any Loss; *provided, however*,that the foregoing indemnity shall not apply to amounts paid in settlement ofany Loss if such settlement is effected without the consent of the Company(which consent shall not be unreasonably withheld), nor shall the Company beobligated to indemnify any person for any Loss to the extent that such Loss is(i) based upon and is in conformity with written information furnished by suchperson expressly for use in such Registration Statement or (ii) based on afailure of such person to deliver or cause to be delivered the final prospectuscontained in the Registration Statement and made available by the Company, ifsuch delivery is required by applicable law.  The Company shall not enter intoany settlement of a Loss that does not provide for the unconditional release ofsuch Holder from all liabilities and obligations relating to such Loss.

		(b)	To the extent permitted by law, each Holderwho is named in such Registration Statement as a selling stockholder, actingseverally and not jointly, shall indemnify and hold harmless the Company, theofficers, directors, employees, agents and representatives of the Company, andeach person, if any, who controls the Company within the meaning of theSecurities Act or the Exchange Act, against any Losses to the extent (and onlyto the extent) that any such Losses are based upon and in conformity withwritten information furnished by such Holder expressly for use in suchRegistration Statement. Subject to the provisions of Section 6(c), such Holderwill reimburse any legal or other expenses as reasonably incurred by the Companyand any such officer, director, employee, agent, representative, or controllingperson, in connection with investigating or defending any such Loss;*provided, however*, that the foregoing indemnity shall not apply toamounts paid in settlement of any such Loss if such settlement is effectedwithout the consent of such Holder (which consent shall not be unreasonablywithheld); and *provided, further*, that, in no event shall any indemnityunder this Section 6(b) exceed the gross proceeds resulting from the sale of theRegistrable Securities sold by such Holder under such RegistrationStatement.

		(c)	Promptly after receipt by an indemnified partyunder this Section 6 of notice of the commencement of any action (including anygovernmental action), such indemnified party will, if a claim in respect thereofis to be made against any indemnifying party under this Section 6, promptlydeliver to the indemnifying party a written notice of the commencement thereofand the indemnifying party shall have the right to participate in and to assumethe defense thereof with counsel selected by the indemnifying party andreasonably acceptable to the indemnified party; *provided, however*, thatan indemnified party shall have the right to retain its own counsel, with thereasonably incurred fees and expenses of one such counsel for all indemnifiedparties to be paid by the indemnifying party, if representation of suchindemnified party by the counsel retained by the indemnifying party would beinappropriate under applicable standards of professional conduct due to actualor potential conflicting interests between such indemnified party and any otherparty represented by such counsel in such proceeding.  The failure to deliverwritten notice to the indemnifying party within a reasonable time of thecommencement of any such action, to the extent prejudicial to its ability todefend such action, shall relieve such indemnifying party of any liability tothe indemnified party under this Section 6 with respect to such action, but theomission so to deliver written notice to the indemnifying party will not relieveit of any liability that it may have to any indemnified party otherwise thanunder this Section 6 or with respect to any other action unless the indemnifyingparty is materially prejudiced as a result of not receiving such notice.

		(d)	In the event that the indemnity provided inSections 6(a) or 6(b) is unavailable or insufficient to hold harmless anindemnified party for any reason for the losses referred to therein, the Companyand each Holder agree, severally and not jointly, to contribute to the aggregateLosses to which the Company or such Holder may be subject in such proportion asis appropriate to reflect the relative fault of the Company and such Holder inconnection with the statements or omissions which resulted in such Losses;*provided, however*, that in no case shall such Holder be responsible forany amount in excess of the net proceeds resulting from the sale of theRegistrable Securities sold by it under the Registration Statement.  Relativefault shall be determined by reference to whether any alleged untrue statementor omission relates to information provided by the Company or by such Holder.The Company and each Holder agree that it would not be just and equitable ifcontribution were determined by *pro rata* allocation or any other methodof allocation which does not take account of the equitable considerationsreferred to above.  Notwithstanding the provisions of this Section 6(d), noperson guilty of fraudulent misrepresentation (within the meaning of Section11(f) of the Securities Act) shall be entitled to contribution from any personwho is not guilty of such fraudulent misrepresentation.  For purposes of thisSection 6, each person who controls a Holder within the meaning of either theSecurities Act or the Exchange Act and each officer, director, employee, agentor representative of such Holder shall have the same rights to contribution assuch Holder, and each person who controls the Company within the meaning ofeither the Securities Act or the Exchange Act and each officer, director,employee, agent or representative of the Company shall have the same rights tocontribution as the Company, subject in each case to the applicable terms andconditions of this Section 6(d).

		(e)	The obligations of the Company and each Holderunder this Section 6 shall survive the exercise of the Warrants in full,the completion of any offering or sale of Registrable Securities pursuant to aRegistration Statement under this Agreement, or otherwise.  In addition,obligations of the Company under this Section 6 are in addition to any liabilitythat the Company may have to any Holder.

	7.	REPORTS.

		With a view to making available to each Holder thebenefits of Rule 144 and any other similar rule or regulation of the Commissionthat may at any time permit such Holder to sell securities of the Company to thepublic without registration, the Company agrees to use commercially reasonableefforts (until all of the Registrable Securities have been sold under aRegistration Statement or pursuant to Rule 144) to:

		(a)	make and keep public information available, asthose terms are understood and defined in Rule 144; 

		(b)	file with the Commission in a timely mannerall reports and other documents required of the Company under the Securities Actand the Exchange Act; and

		(c) 	furnish to such Holder, so long as suchHolder owns any Registrable Securities, promptly upon written request (i) awritten statement by the Company, if true, that it has complied with thereporting requirements of Rule 144, the Securities Act and the Exchange Act,(ii) to the extent not publicly available through the Commission's EDGARdatabase, a copy of the most recent annual or quarterly report of the Companyand such other reports and documents so filed by the Company with theCommission, and (iii) such other information as may be reasonably requested bysuch Holder in connection with such Holder's compliance with any rule orregulation of the Commission which permits the selling of any such securitieswithout registration.

		

	8. 	MISCELLANEOUS.

		(a)	Expenses of Registration.  Except asotherwise provided in the Securities Purchase Agreement, all reasonableexpenses, other than underwriting discounts and commissions and fees andexpenses of counsel and other advisors to each Holder, incurred in connectionwith the registrations, filings or qualifications described herein, including(without limitation) all registration, filing and qualification fees, printers'and accounting fees, the fees and disbursements of counsel for the Company, andthe fees and disbursements incurred in connection with the letter described inSection 3(g),  shall be borne by the Company.

		(b)	Amendment; Waiver.  Except as expresslyprovided herein, neither this Agreement nor any term hereof may be amended orwaived except pursuant to a written instrument executed by the Company and the Required Holders. Any amendment or waiver effectedin accordance with this Section 8(b) shall be binding upon each Holder, eachfuture Holder and the Company.  Any waiver or consent shall be effective only inthe specific instance and for the specific purpose for which given.  The failureof any party to exercise any right or remedy under this Agreement or otherwise,or the delay by any party in exercising such right or remedy, shall not operateas a waiver thereof.

		(c)	Notices.  Any notice, demand or requestrequired or permitted to be given by the Company or a Holder pursuant to theterms of this Agreement shall be in writing and shall be deemed delivered (i)when delivered personally or by verifiable facsimile transmission or electronicmail, unless such delivery is made on a day that is not a Business Day, in whichcase such delivery will be deemed to be made on the next succeeding Business Dayand (ii) on the third (3rd) Business Day after timely delivery to aninternational overnight courier, addressed as follows:

		If to the Company:

		Microvision, Inc.

		6222 185th Avenue NE

		Redmond, WA  98052

		Attn:	General Counsel

		Tel:  	(425) 415-6847

		Fax: 	(425) 936-4411

		

		with a copy (which shall not constitute notice)to:

Ropes & Gray LLP

One International Place

Boston, MA  02110

Attn:	Joel F. Freedman

Tel:	(617) 951-7000

Fax:	(617) 951-7050

and ifto a Holder, to such address as shall be designated by such Holder in writing tothe Company. 

		(d)	Assignment.  Upon the transfer of anyWarrant or Registrable Securities by a Holder, the rights of such Holderhereunder with respect to such securities so transferred shall be assignedautomatically to the transferee thereof, and such transferee shall thereupon bedeemed to be a "Holder" for purposes of this Agreement, as long as:(i) the Company is, within a reasonable period of time following such transfer,furnished with written notice of the name and address of such transferee, (ii)the transferee agrees in writing with the Company to be bound by all of theprovisions hereof, and (iii) such transfer is made in accordance with theapplicable requirements of the Securities Purchase Agreement or the Warrant, asapplicable.

		(e)	Counterparts.  This Agreement may beexecuted in any number of counterparts, each of which shall be deemed anoriginal, and all of which together shall constitute one and the sameinstrument.  This Agreement may be executed and delivered by facsimiletransmission.

		(f)	Governing Law.  This Agreement shall begoverned by and construed under the laws of the State of Washington applicableto contracts made and to be performed entirely within the State of Washington.Each party hereby irrevocably submits to the non-exclusive jurisdiction of thestate and federal courts sitting in the State of Washington for the adjudicationof any dispute hereunder or in connection herewith or with any transactioncontemplated hereby and hereby irrevocably waives, and agrees not to assert inany such suit, action or proceeding, any claim that it is not personally subjectto the jurisdiction of any such court, that such suit, action or proceeding isbrought in an inconvenient forum or that the venue of such suit, action orproceeding is improper.  Each party hereby irrevocably waives personal serviceof process and consents to process being served in any such suit, action orproceeding by mailing a copy thereof to such party at the address in effect fornotices to it under this Agreement and agrees that such service shall constitutegood and sufficient service of process and notice thereof.  Nothing containedherein shall be deemed to limit in any way any right to serve process in anymanner permitted by law.

		(g)	Holder of Record.  A person is deemedto be a Holder whenever such person owns or is deemed to own of recordRegistrable Securities.  If the Company receives conflicting instructions,notices or elections from two or more persons with respect to the sameRegistrable Securities, the Company shall act upon the basis of instructions,notice or election received from the record owner of such RegistrableSecurities.

(h)	Entire Agreement. ThisAgreement and the other Transaction Documents constitute the entire agreementbetween the parties with regard to the subject matter hereof and thereof,superseding all prior agreements or understandings, whether written or oral,between or among the parties.  

(i)	Headings.  The headings usedin this Agreement are used for convenience only and are not to be considered inconstruing or interpreting this Agreement.

(j)	Third Party Beneficiaries.This Agreement is intended for the benefit of the parties hereto and theirrespective permitted successors and assigns, and is not for the benefit of, normay any provision hereof be enforced by, any other person.

 

 

 

 

[Signature Pages to Follow]

	IN WITNESS WHEREOF, the undersigned have executed thisRegistration Rights Agreement as of the date first-above written.

	

MICROVISION, INC.

 

By: 	__/s/ Jeff T. Wilson_________

     	Name:  Jeff T. Wilson

     	Title:  Chief Financial Officer