Document:

Exhibit 4.1

 

WARRANT AGREEMENT

 

THIS WARRANT AGREEMENT is
dated March 5, 2003, between Microvision, Inc., a Washington corporation (the
“Company”) and the Company, acting as warrant agent (in such capacity, the
“Warrant Agent”).

 

WHEREAS, the Company proposes
to issue warrants (collectively, the “Warrants”) to acquire up to 528,843
shares, subject to adjustment as provided herein, of common stock, no par value
(“Common Stock”), of the Company (collectively, the “Warrant Shares”);

 

WHEREAS, each Warrant shall
represent the right to purchase from the Company, at an initial price of $6.50
per share (the “Exercise Price”), the number of shares specified on the
certificates evidencing the Warrants (the “Warrant Certificates”); and

 

WHEREAS, the Company is
willing to serve as Warrant Agent in connection with the issuance of Warrant
Certificates and the other matters as provided herein.

 

NOW, THEREFORE, in
consideration of the foregoing and for the purpose of defining the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company, the Warrant Agent and the record holders from time to time of
the Warrants (the “Holders”), the parties hereby agree as follows:

 

1.  Definitions.  For the purposes hereof, the following terms
shall have the following meanings:

 

“Business Day” means any day except Saturday, Sunday and any day
which shall be a federal legal holiday in the United States or a day on which
banking institutions in the State of Washington are authorized or required by law
or other government action to close.

 

“Date of Exercise” means the date on which the Holder shall have
delivered to the Company (i) a Warrant Certificate, (ii) the Form of
Election to Purchase attached thereto (with the Warrant Exercise Log attached
to it), appropriately completed and duly signed, and (iii) payment of the
Exercise Price in accordance with Section 12 for the number of Warrant
Shares so indicated by the Holder to be purchased.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expiration Date” means
March 5, 2008, subject to the extension provisions in Section 13.

 

“Market Price” of a share of
Common Stock on any date shall mean, (i) if the shares of Common Stock are
traded on the Nasdaq National Market or Nasdaq SmallCap Market, the last bid
price reported on that date; (ii) if the shares of Common Stock are no longer
quoted on Nasdaq and are listed on any national securities exchange, the last
sale price of the Common stock reported by such exchange on that date; (iii) if
the shares of Common Stock are not quoted on a any such market or listed on any
such exchange and the shares of Common Stock are traded in the over-the-counter
market, the last price reported on such day by the OTC Bulletin Board or 

 

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the Bulletin Board Exchange; (iv) if the
shares of Common Stock are not quoted on a any such market, listed on any such
exchange or quoted on the OTC Bulletin Board or the Bulletin Board Exchange,
then the last price quoted on such day in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); or (v) if
none of clauses (i)-(iv) are applicable, then as determined, in good faith, by
the Board of Directors of the Company.

 

“Person” means a corporation, association, partnership, limited
liability corporation, organization, business, individual, government or
political subdivision thereof or governmental agency.

 

“Trading Day” means (i) a day on which the shares of Common
Stock are traded on the Nasdaq National Market, Nasdaq SmallCap Market, New
York Stock Exchange or American Stock Exchange on which the shares of Common
Stock are then listed or quoted, or (ii) if the shares of Common Stock are
not listed on a any such exchange or market, a day on which the shares of
Common Stock are traded in the over-the-counter market, as reported by the OTC
Bulletin Board or the Bulletin Board Exchange, or (iii) if the shares of
Common Stock are not quoted on the OTC Bulletin Board or the Bulletin Board
Exchange, a day on which the shares of Common Stock are quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices); provided, that in the event that the shares of Common Stock
are not listed or quoted as set forth in clause (i), (ii) or
(iii) hereof, then Trading Day shall mean a Business Day.

 

2.  Form of Warrant Certificates.  The Warrant Certificates shall be issued in registered form only
as definitive Warrant Certificates and shall be substantially in the form
attached hereto as Exhibit A, shall be dated the date of issuance thereof (whether
upon initial issuance, register of transfer, exchange or replacement) and shall
bear such legends and endorsements typed, stamped, printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement.

 

3.  Execution and Delivery of Warrant Certificates.  Warrant Certificates evidencing
Warrants to purchase the number of shares of Common Stock specified on each
Warrant Certificate shall be executed, on or after the date of this Agreement,
by the Company and delivered to the Warrant Agent for countersignature, and the
Warrant Agent shall thereupon countersign and deliver such Warrant Certificates
to the purchasers thereof on or about the date of issuance.  The Warrant Agent is hereby authorized to countersign
and deliver Warrant Certificates as required by this Section 3.  The Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose
unless so countersigned.

 

4.  Registration of Warrant.  The Company shall register each Warrant
Certificate delivered by the Warrant Agent to a Holder, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the
name of the Holder thereof from time to time. 
The Company may deem and treat the registered Holder of each Warrant
Certificate as the absolute owner of the Warrants represented thereby for the
purpose of any exercise thereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

 

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5.  Registration of Transfers.  The Company shall register the transfer of
any portion of a Warrant Certificate in the Warrant Register, upon surrender of
the Warrant Certificate, with the Form of Assignment attached thereto duly
completed and signed, to the Company at its address specified herein.  Upon any such registration or transfer, a
new Warrant Certificate substantially in the form attached hereto as Exhibit A
(any such new Warrant Certificate, a “New Warrant Certificate”), evidencing the
portion of the Warrant Certificate so transferred shall be issued to the
transferee and a New Warrant Certificate evidencing the remaining portion of
the Warrant  Certificate not so
transferred, if any, shall be issued to the transferring Holder.  The delivery of the New Warrant Certificate
by the Company to the transferee thereof shall be deemed to constitute
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant Certificate.

 

6.  Term of Warrants.  Warrants shall be exercisable by the
registered Holder at any time and from time to time on or after September 6,
2003 to and including the Expiration Date. 
At 5:00 p.m., Seattle time on the Expiration Date, any portion of a
Warrant not exercised prior thereto shall be and become void and of no value.

 

7.  Exercise of Warrants
and Delivery of Warrant Shares.  A registered Holder may exercise the
Warrants if there is a then effective registration statement covering
the issuance of the Warrant Shares. 
Otherwise, a registered Holder may only exercise the Warrants after
making customary representations requested by the Company regarding investment
intent and accredited status, and agreeing to customary transfer restrictions
requested by the Company to ensure compliance by the Company with applicable
securities laws.  At such times, and
upon such representations and agreements, if applicable, upon surrender of a
Warrant Certificate and delivery of the Form of Election to Purchase (with the
Warrant Shares Exercise Log attached) to the Company at its address for notice
set forth in Section 16, and upon payment of the Exercise Price multiplied
by the number of Warrant Shares that the Holder intends to purchase thereunder
(which must be a whole number) in accordance with Section 12 (the “Aggregate
Exercise Price”), the Company shall promptly issue and deliver to the Holder a
certificate for the Warrant Shares issuable upon such exercise.  Any Person so designated by the Holder to
receive Warrant Shares shall be deemed to have become holder of record of such
Warrant Shares as of the Date of Exercise of the relevant Warrant
Certificate.  For so long as there is a
then effective registration statement covering the issuance of the Warrant
Shares, the Warrant Shares shall be issued free of all restrictive legends, and
the Company shall, upon request of the Holder, if available, use commercially
reasonable efforts to deliver Warrant Shares hereunder electronically through
the Depository Trust Corporation or another established clearing corporation
performing similar functions.  If there
is not a then effective registration statement covering the issuance of the
Warrant Shares, the Warrant Shares shall be issued in certificated form and
include customary legends regarding transfer restrictions deemed appropriate by
the Company.  If fewer than all Warrant
Shares issuable upon exercise of the relevant Warrant Certificate are purchased
on such Date of Exercise, then the Company will execute and deliver to the Holder
or its assigns a New Warrant Certificate (dated the date thereof) evidencing
the unexercised portion of the relevant Warrant Certificate.

 

8.  Charges, Taxes and Expenses.  Issuance and delivery of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax, or transfer agent fee in respect of the issuance of such
certificates, all of which taxes shall be paid by the

 

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Company; provided,
however, that the Company shall not be obligated to pay any tax which may be
payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder.  The Holder shall be responsible
for all other tax liabilities that may arise as a result of holding or
transferring any Warrant Certificate or receiving Warrant Shares upon exercise
thereof.

 

9.  Replacement of Warrant
Certificate.  If any Warrant
Certificate is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution for such Warrant Certificate, a New
Warrant Certificate, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  Applicants for
a New Warrant Certificate under such circumstances shall also comply with such
other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe.

 

10.  Reservation
of Warrant Shares.  The
Company covenants that it will at all times reserve and keep available out of
its authorized but unissued and otherwise unreserved Common Stock, solely for
the purpose of enabling it to issue Warrant Shares upon exercise of all
outstanding Warrants as herein provided, the number of Warrant Shares which are
then issuable and deliverable upon the exercise of all outstanding Warrants
(taking into account the adjustments and restrictions of Section 11). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized and issued, and be fully
paid and nonassessable.

 

11.  Certain
Adjustments.  The Exercise
Price and number of Warrant Shares issuable upon exercise of each Warrant then outstanding
are subject to adjustment from time to time as set forth in this Section 11.

 

(a)  Stock
Dividends and Splits.  If the
Company, (i) pays a stock dividend on its Common Stock,
(ii) subdivides outstanding shares of Common Stock into a greater number
of shares, or (iii) combines outstanding shares of Common Stock into a lesser
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after
such event.  Any adjustment made
pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of shareholders
entitled to receive such dividend, and any adjustment pursuant to
clause (ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or combination.

 

(b)  Extraordinary
Transactions.  If,
(i) the Company effects any merger or consolidation of the Company with or
into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer by the Company is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (in any such case, an “Extraordinary
Transaction”), then each

 

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Holder’s Warrants will become the right
thereafter to receive, upon exercise of his or her Warrants, the same amount
and kind of securities, cash or property as such Holder would have been
entitled to receive upon the occurrence of such Extraordinary Transaction if it
had been, immediately prior to such Extraordinary Transaction, the holder of
the number of Warrant Shares then issuable upon exercise in full of the
relevant Warrant (the “Alternate Consideration”) in lieu of Common Stock.  The aggregate Exercise Price for each Warrant
will not be affected by any such Extraordinary Transaction, but the Company
shall apportion such aggregate Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. 
If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Extraordinary Transaction, then each
Holder, to the extent practicable, shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of his or her Warrant
following such Extraordinary Transaction. 
In addition, at the request of each Holder, upon surrender of such
Holder’s Warrant, any successor to the Company or surviving entity in such
Extraordinary Transaction shall issue to such Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder’s right to purchase the
Alternate Consideration for the aggregate Exercise Price upon exercise
thereof.  Each Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Extraordinary Transaction.

 

(c)  Number of
Warrant Shares. 
Simultaneously with any adjustment to the Exercise Price pursuant to
paragraphs (a) or (b) of this Section, the number of Warrant Shares
that may be purchased upon exercise of each Warrant shall be increased or
decreased proportionately, as the case may be, so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of
Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.

 

(d)  Calculations.  All calculations under this Section 11
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable.

 

(e)  Notice of
Adjustments.  Upon the
occurrence of each adjustment pursuant to this Section 11, the Company at
its expense will promptly calculate such adjustment in accordance with the
terms of this Agreement and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted
number of Warrant Shares or type of Alternate Consideration issuable upon
exercise of each Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based.  The Company will
promptly deliver to each Holder who makes a request in writing, a copy of each
such certificate.

 

(f)  Notice of
Corporate Events.  If the
Company (i) declares a dividend or any other distribution of cash, securities
or other property in respect of its Common Stock (other than a dividend payable
solely in shares of Common Stock) or (ii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to each Holder a notice describing the material terms and
conditions of such dividend, distribution or transaction.  Notwithstanding anything to the contrary in
this Section 11(f), the failure to deliver any notice under this Section 11(f)
or any defect therein shall not affect the validity of the corporate action
required to be described in such notice. 
Until the exercise of its, his or her Warrant or any portion of such
Warrant, a Holder shall not have nor exercise any rights by virtue of ownership
of a Warrant as a shareholder of the Company (including without limitation the

 

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right to notification of shareholder meetings
or the right to receive any notice or other communication concerning the
business and affairs of the Company other than as provided in this
Section 11(f)).

 

12.  Payment
of Exercise Price.  The
Holder shall pay the Aggregate Exercise Price by wire transfer of immediately
available funds, pursuant to wire instructions sent by the Company at the
written request of the Holder.

 

13.  Black-out Period.  The Company shall use its reasonable best
efforts to keep a registration statement with respect to the issuance of the
Warrant Shares in effect until the Expiration Date or such shorter period that
will terminate when all the Warrants have been exercised, and during such time
period shall use reasonable best efforts to obtain the prompt withdrawal of any
stop order suspending the effectiveness of any such registration statement.  Notwithstanding the foregoing, the Company
shall not be required to amend or supplement any registration statement, any
related prospectus or any document incorporated by reference therein.  At any time during which the Warrant Shares
are included in a then-effective registration statement, the Company may
suspend the ability of the Holders to exercise Warrants in any manner
contemplated by this Agreement, for a reasonable period or periods (a
“Black-out Period”), in the event that (i) an event occurs and is continuing as
a result of a which the registration statement including the Warrant Shares,
any related prospectus or any document incorporated therein by reference as
then amended or supplement would, in the Company’s good faith judgment, contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which the were made, not misleading, and (ii)(A) the
Company determined in its good faith judgment that the disclosure of such event
at such time would be to the detriment of the business, operations or prospects
of the Company or (B) the disclosure otherwise relates to a business
transaction which has not yet been publicly disclosed.  Notwithstanding the foregoing provisions of
this Section 13, (i) if a Black-out Period is in effect on the Expiration Date,
then the Expiration Date shall be extended for the number of calendar days
covered by such Black-out Period (but in no event more than ten (10) days
beyond the end of such Black-Out Period) and (ii) (A) the aggregate number of
days covered by Black-out Periods shall not exceed ninety (90) in a particular
calendar year and (B) a Black-out Period may not be in effect for more than
thirty (30) consecutive days.

 

14.  No Fractional
Shares.  No fractional shares
will be issued in connection with any exercise of a Warrant.  In lieu of any fractional shares which would
otherwise be issuable, the Company shall pay cash equal to the product of such
fraction multiplied by the Market Price on the Date of Exercise.

 

15.  Exchange
Act Filings.  The Holder
agrees and acknowledges that it shall have sole responsibility for making any
applicable filings with the U.S. Securities and Exchange Commission pursuant to
Sections 13 and 16 of the Exchange Act as a result of its acquisition of any
Warrant and the Warrant Shares and any future retention or transfer thereof.

 

16.  Notices.  Any and all notices or other communications
or deliveries hereunder (including without limitation any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section prior to
5:00 p.m. (Seattle time) on a Trading Day, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section on a day that
is not a Trading Day or later than 5:00 p.m. (Seattle time) on any Trading

 

6

 

Day, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to
be given.  The addresses for such
communications shall be:

 

	
  if to the Company:

  	
   

  	
  Microvision, Inc.

  19910 North Creek Parkway

  Bothell, Washington, 98011-3008

  Attn: Chief Financial Officer

  Facsimile No.: (425) 481-6795

  
	
   

  	
   

  	
   

  
	
  if to the Holder:

  	
   

  	
  to the address or
  facsimile number appearing on the Warrant Register or such other address or
  facsimile number as the Holder may provide to the Company in accordance with
  this Section 16.

  

 

17.  Warrant
Agent.

 

(a)  The Company and the Warrant Agent hereby agree
that the Warrant Agent will serve as an agent of the Company as set forth in
this Agreement.

 

(b)  The Warrant Agent shall not by any act
hereunder be deemed to make any representation as to validity or authorization
of the Warrants or the Warrant Certificates (except as to its countersignature
thereon) or of any securities or other property delivered upon exercise of any
Warrant, or as to the number or kind or amount of securities or other property
deliverable upon exercise of any Warrant or the correctness of the
representations of the Company made in such certificates that the Warrant Agent
receives.

 

(c)  The Warrant Agent shall not have any duty to
calculate or determine any required adjustments with respect to the Exercise
Price or the kind and amount of securities or other property receivable by
Holders upon the exercise of Warrants, nor to determine the accuracy or
correctness of any such calculation.

 

(d)  The Warrant Agent shall not (i) be liable
for any recital or statement of fact contained herein or in the Warrant
Certificates or for any action taken, suffered or omitted by it in good faith
in the belief that any Warrant Certificate or any other document or any
signature is genuine or properly authorized, (ii) be responsible for any
failure by the Company to comply with any of its obligations contained in this
Agreement or in the Warrant Certificates, (iii) be liable for any act or
omission in connection with this Agreement except for its own gross negligence
or willful misconduct or (iv) have any responsibility to determine whether a
transfer of a Warrant complies with applicable securities laws.

 

(e)  The Warrant Agent is hereby authorized to
accept instructions with respect to the performance of its duties hereunder
from the Chief Executive Officer, the President, any Vice President, the
Treasurer, or the Secretary or any Assistant Secretary of the Company and to
apply to any such officer for written instructions (which will then be promptly
given) and the Warrant Agent shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with the instructions of
any such officer, except for its own gross negligence or willful misconduct,
but in its discretion the Warrant Agent may in lieu thereof accept other

 

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evidence of such or may require
such further or additional evidence as it may deem reasonable.

 

(f)  The Warrant Agent may exercise any of the
rights and powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys, agents or employees, provided reasonable
care has been exercised in the selection and in the continued employment of any
persons.  The Warrant Agent shall not be
under any obligation or duty to institute, appear in or defend any action, suit
or legal proceeding in respect hereof, unless first indemnified to its
satisfaction.  The Warrant Agent shall
promptly notify the Company in writing of any claim made or action, suit or
proceeding instituted against or arising out of or in connection with this
Agreement.

 

(g)  The Company will take such action as may
reasonably be required by the Warrant Agent in order to enable it to carry out
or perform its duties under this Agreement.

 

(h)  The Warrant Agent shall act solely as agent
of the Company hereunder. The Warrant Agent shall only be liable for the
failure to perform such duties as are specifically set forth herein.

 

(i)  The Warrant Agent may consult with legal
counsel satisfactory to it (who may be legal counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company or to
any Holder for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.

 

(j)  The Company agrees to pay to the Warrant
Agent compensation for all services rendered by the Warrant Agent hereunder as
the Company and the Warrant Agent may agree from time to time, and to reimburse
the Warrant Agent for reasonable expenses incurred in connection with the
execution and administration of this Agreement (including the reasonable
compensation and expenses of its counsel), and further agrees to indemnify the
Warrant Agent for, and hold it harmless against, any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct on its part,
arising out of or in connection with the acceptance and administration of this
Agreement.

 

(k)  The Warrant Agent, and any shareholder,
director, officer or employee of the Warrant Agent, may buy, sell or deal in
any of the Warrants or other securities of the Company or its Affiliates or
become pecuniarily interested in transactions in which the Company or its
Affiliates may be interested, or contract with or lend money to the Company or
its Affiliates or otherwise act as fully and freely as though it were not the
Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other
Person.

 

(l)  No resignation or removal of the Warrant
Agent and no appointment of a successor warrant agent shall become effective
until the acceptance of appointment by the successor warrant agent as provided
herein.  The Warrant Agent may resign its
duties and be discharged from all further duties and liability hereunder
(except liability arising as a result of the Warrant Agent’s own gross
negligence or willful misconduct) after giving written notice to the Company.
The Company may remove the Warrant Agent upon written notice, and the Warrant
Agent shall thereupon in like manner be discharged from all further duties and
liabilities hereunder, except as aforesaid. The Warrant Agent shall, at the
Company’s expense, cause to be mailed (by first class

 

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mail, postage prepaid) to each
Holder of a Warrant at such Holder’s last address as shown on the register of
the Company maintained by the Warrant Agent a copy of said notice of
resignation or notice of removal, as the case may be.  Upon such resignation or removal, the Company shall appoint in
writing a new warrant agent. If the Company fails to do so within a period of
30 days after it has been notified in writing of such resignation by the
resigning Warrant Agent or after such removal, then the resigning Warrant Agent
or the Holder of any Warrant may apply to any court of competent jurisdiction
for the appointment of a new warrant agent. 
After acceptance in writing of such appointment by the new warrant
agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant
Agent.  Not later than the effective
date of any such appointment, the Company shall give notice thereof to the resigning
or removed Warrant Agent.  Failure to
give any notice provided for in this Section 17(l), however, or any defect
therein, shall not affect the legality or validity of the resignation of the
Warrant Agent or the appointment of a new warrant agent, as the case may be.

 

(m)  Any corporation into which the Warrant Agent
or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party or any corporation to which the Warrant Agent transfers substantially all
of its corporate trust business shall be a successor Warrant Agent under this
Agreement without any further act, provided that such corporation (i) would be
eligible for appointment as successor to the Warrant Agent under the provisions
of Section 17(l) or (ii) is a wholly owned subsidiary of the Warrant
Agent. Any such successor Warrant Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by first class mail, postage prepaid)
to each Holder in accordance with Section 16.

 

18.  Miscellaneous.

 

(a)  Successors
and Assigns.  This Agreement
shall be binding on and inure to the benefit of the Company, the Warrant Agent
and the Holders, and their respective successors and assigns.  Subject to the preceding sentence, nothing
in this Agreement shall be construed to give to any Person other than the
Company, the Warrant Agent and the Holders any legal or equitable right, remedy
or cause of action under this Agreement.

 

(b)  Amendments
and Waivers.  The Company
may, without the consent of the Holders, by supplemental agreement or
otherwise, (i) make any changes or corrections in this Agreement that are
required to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein or (ii)
add to the covenants and agreements of the Company for the benefit of the
Holders, or surrender any rights or power reserved to or conferred upon the
Company in this Agreement; provided that, in the case of (i) or (ii), such changes
or corrections shall not adversely affect the interests of Holders of then
outstanding Warrants in any material respect. 
The Company may, with the consent, in writing or at a meeting, of the
Holders of outstanding Warrants exercisable for two-thirds of the Warrant
Shares, amend in any way, by supplemental agreement or otherwise, this
Agreement and/or all of the outstanding Warrant Certificates; provided,
however, that no such amendment shall adversely affect any Holder differently
than it affects all other Holders, unless such Holder consents thereto.  The Warrant Agent shall at the request of
the Company, and without need of independent inquiry as to whether such
supplemental agreement is permitted by the terms of this Section 18(b),
join with the Company in the execution and delivery of any such supplemental
agreements, but shall not be required to join in such execution and delivery
for such

 

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supplemental agreement to become effective.

 

(c)  Choice of
Law, etc.  All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with
the internal laws of the State of Washington, without regard to the principles
of conflicts of law thereof.  Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby.  If either party shall commence an action or
proceeding to enforce any provisions of this Agreement, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

 

(d)  Interpretation.  The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.

 

(e)  Severability.  In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefor, and upon so agreeing,
shall incorporate such substitute provision in this Agreement.

 

[The remainder of this
page has been left intentionally blank.]

 

10

 

IN WITNESS WHEREOF, the
parties has caused this Agreement to be duly executed by its authorized officer
as of the date first indicated above.

 

	
   

  	
  MICROVISION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Richard Rutkowski

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MICROVISION, INC.,
  in its capacity as Warrant Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Richard Raisig

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

11

 

Exhibit A

 

EXERCISABLE ON OR AFTER SEPTEMBER 6, 2003

AND ON OR BEFORE THE EXPIRATION DATE

 

	
  No. 
            

  	
   

  	
  Warrant to Purchase
             Shares

  

 

Warrant Certificate

 

WARRANTS TO ACQUIRE COMMON STOCK OF MICROVISION,
INC.

 

This
Warrant Certificate certifies
that,                            ,
or registered assigns, is the registered holder of a Warrant (the “Warrant”) to
acquire from Microvision, Inc., a Washington corporation (the “Company”), the
number of fully paid and non-assessable shares of Common Stock, no par value,
of the Company (the “Common Stock”) specified above for consideration equal to
the Exercise Price (as defined in the Warrant Agreement) per share of Common
Stock.  The Exercise Price and number of
shares of Common Stock and/or type of securities or property issuable upon
exercise of the Warrant are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.  The Warrant evidenced by this Warrant Certificate shall not be
exercisable after and shall terminate and become void as of 5:00 P.M., Seattle
time, on the Expiration Date.

 

The
Warrant evidenced by this Warrant Certificate is part of a duly authorized
issue of warrants expiring on the Expiration Date entitling the Holder hereof
to receive shares of Common Stock, no par value, of the Company (the “Common
Stock”), and is issued or to be issued pursuant to a Warrant Agreement dated
March 5, 2003 (the “Warrant Agreement”), duly executed and delivered by the
Company to the Company, as warrant agent (the “Warrant Agent”, which term
includes any successor Warrant Agent under the Warrant Agreement), which
Warrant Agreement is hereby incorporated by reference in and made a part of
this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the Holders (“Holders” meaning, from time to
time, the registered holders of the warrant issued thereunder).  To the extent any provisions of this Warrant
Certificate conflicts with any provision of the Warrant Agreement, the
provisions of the Warrant Agreement shall apply.  A copy of the Warrant Agreement may be obtained by the Holder
hereof upon written request to the Company at 19910 North Creek Parkway,
Bothell, Washington, 98011, Attention: 
General Counsel.  Capitalized
terms not defined herein have the meanings ascribed thereto in the Warrant
Agreement.

 

This
Warrant may be exercised, in whole or in part, at any time on or after
September 6, 2003 and on or before the Expiration Date, subject to the
terms of the Warrant Agreement including, but not limited to, Section 13
thereof, by surrendering this Warrant Certificate, with the Form of Election to
Purchase set forth hereon properly completed and executed, together with
payment of the Aggregate Exercise Price in accordance with Section 12 of
the Warrant Agreement.  Each exercise
must be for a whole number of Warrant Shares. 
In the event that

 

1

 

upon any exercise
of the Warrant evidenced hereby the number of shares of Common Stock acquired
shall be less than the total number of shares of Common Stock which may be
purchased pursuant to this Warrant, there shall be issued to the Holder hereof
or such Holder’s assignee a new Warrant Certificate evidencing the unexercised
portion of this Warrant.

 

The
Warrant Agreement provides that upon the occurrence of certain events the
Exercise Price set forth on this Warrant Certificate may, subject to certain
conditions, be adjusted, and that upon the occurrence of certain events the
number of shares of Common Stock and/or the type of securities or other
property issuable upon the exercise of this Warrant shall be adjusted.  No fractions of a share of Common Stock will
be issued upon the exercise of this Warrant, but the Company will pay the cash
value thereof determined as provided in the Warrant Agreement.

 

Warrant
Certificates, when surrendered at the office of the Warrant Agent by the
registered Holder thereof in person or by such Holder’s legal representative or
attorney duly appointed and authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate the right to purchase a
like number of Warrant Shares.

 

Each
taker and holder of this Warrant Certificate, by taking or holding the same,
consents and agrees that the holder of this Warrant Certificate when duly
endorsed in blank may be treated by the Company, the Warrant Agent and all
other persons dealing with this Warrant Certificate as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby or the person entitled to the transfer hereof on the
register of the Company maintained by the Warrant Agent, any notice to the
contrary notwithstanding, provided that until such transfer on such register,
the Company and the Warrant Agent may treat the registered Holder hereof as the
owner for all purposes.

 

This
Warrant does not entitle any Holder to any of the rights of a shareholder of
the Company.

 

This
Warrant Certificate and the Warrant Agreement are subject to amendment as
provided in the Warrant Agreement.

 

This
Warrant Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Warrant Agent.

 

[The remainder of this page has been left
intentionally blank.]

 

2

 

IN
WITNESS WHEREOF, the undersigned have caused this Certificate to be executed as
of the date set forth below.

 

	
   

  	
  MICROVISION,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard
  Rutkowski

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
  DATED:  March 

  	
   

  	
  ,
  2003

  	
   

  
	
   

  	
   

  
	
  Countersigned:

  MICROVISION, INC.,

  as Warrant Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Richard
  Raisig

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
									

 

3

 

FORM OF ELECTION TO PURCHASE

 

To Microvision, Inc.:

 

In accordance with the
Warrant Certificate enclosed with this Form of Election to Purchase, the
undersigned hereby irrevocably elects to exercise the Warrant with respect to
                  
Warrant Shares in accordance with the terms of the Warrant Agreement, and has
sent via wire transfer to the account the Company the amount of
$             in
immediately available funds, which sum represents the Aggregate Exercise Price
(as defined in the Warrant Agreement) for the number of shares of Common Stock
to which this Form of Election to Purchase relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

 

The undersigned requests
that certificates for the shares of Common Stock issuable upon this exercise be
issued in the name of

 

	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

 

Social Security or Tax I.D. No.:
                                                   

 

4

 

Warrant Shares Exercise Log

 

	
  Date

  	
   

  	
  Number of

  Warrant Shares

  Available to be

  Exercised

  	
   

  	
  Number of

  Warrant

  Shares

  Exercised

  	
   

  	
  Number of

  Warrant Shares

  Remaining to be

  Exercised

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

5

 

FORM OF ASSIGNMENT

 

[To
be completed and signed only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto
               
the right represented by the within Warrant Certificate to purchase
                    
shares of Common Stock of Microvision, Inc. to which the within Warrant
Certificate relates and appoints
                       
attorney to transfer said right on the books of Microvision, Inc. with
full power of substitution in the premises.

 

	
  Dated:                        ,    

  
	
   

  
	
   

  
	
   

  	
  (Signature must conform in
  all respects to name of holder as specified on the front page of the Warrant
  Certificate)

  
	
   

  
	
   

  	
  Address of Transferee

  
	
   

  
	
   

  
	
  In the presence of:

  

 

6Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of
March 3, 2003, by and between Microvision, Inc., a Washington corporation
(the “Company”), and the investor named on the signature page hereof
(the “Investor”).

 

WITNESSETH

 

WHEREAS, the Company has filed with the Securities and Exchange
Commission (the “Commission”) the Registration Statement (as defined
below) relating to the offer and sale from time to time of the Company’s
securities, including shares of its Common Stock, no par value (“Common
Stock”), and warrants to purchase shares of Common Stock;

 

WHEREAS, the Company is offering for sale shares of Common Stock (the “Offered
Shares”) and warrants to purchase shares of Common Stock (“Offered Warrants”)
under a warrant agreement and certificate, in substantially the form attached
hereto as Exhibit A, pursuant to the Registration Statement; and

 

WHEREAS, the Investor desires to purchase from the Company Offered
Shares and Offered Warrants on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the recitals (which are deemed to
be a part of this Agreement), mutual covenants, representations, warranties and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.               Definitions.  As used herein, the following terms have the
meanings indicated:

 

“Person” shall mean any individual, partnership, limited
liability company, joint venture, firm, corporation, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.

 

“Prospectus” shall mean the prospectus forming a part of the
Registration Statement and the prospectus supplement relating to the Offered
Shares, Offered Warrants, and shares of Common Stock issuable upon exercise of
the Offered Warrants, in the form first filed pursuant to Rule 424(b) under the
Securities Act, as amended (the “Securities Act”), as further amended or
supplemented at the relevant time, and shall include all information and
documents incorporated by reference in such prospectus.

 

“Registration Statement” shall mean the registration statement
on Form S-3 (File No. 333-102244), including a prospectus, relating to the
offer and sale of certain of the Company’s securities, including its Common
Stock and warrants, which was declared effective by the Commission on February
12, 2003.  References herein to the term
“Registration Statement” as of any date shall mean such effective registration
statement, as amended or supplemented to such date, including all information
and documents incorporated by reference therein as of such date.

 

2.               Purchase of
Common Stock.  Subject and pursuant
to the terms and conditions set forth in this Agreement, the Company agrees
that it will issue and sell to the Investor and the

 

 

Investor agrees that it will purchase from
the Company (i) the number of Offered Shares set forth on Schedule I
attached hereto (the “Investor Shares”) and (ii) Offered Warrants (“Investor
Warrants”) to purchase the number of shares of Common Stock set forth on Schedule
I attached hereto (the “Warrant Shares”) at an exercise price per
Warrant Share set forth on Schedule I hereto.  The aggregate purchase price for the Investor Shares and Investor
Warrants (excluding proceeds received upon exercise of the Investor Warrants)
(the “Aggregate Purchase Price”) and the purchase price per Investor
Share and accompanying Investor Warrant is set forth on Schedule I
hereto.  The closing of the purchase and
sale of the Investor Shares and Investor Warrants will be on the date and at
the time set forth on Schedule I hereto, or such other date or time as
the parties may agree upon in writing (the “Closing”).

 

3.               Deliveries at
Closing.

 

(a)                      Deliveries
by the Investor.  At the Closing,
the Investor shall deliver to the Company the Aggregate Purchase Price by wire
transfer of immediately available funds to an account designated by the Company
as set forth on Schedule I hereto, which funds will be delivered to the
Company in consideration of the Investor Shares and Investor Warrants issued at
the Closing.

 

(b)                     Deliveries
by the Company.  At the Closing, the
Company shall deliver to the Investor the Investor Shares through The
Depository Trust Company DWAC system to the account that the Investor has
specified in writing to the Company and the Investor Warrants in the name of
the Investor (or a nominee designated in writing by the Investor).

 

4.               Representations,
Warranties, Covenants and Agreements.

 

(a)          Investor
Representations, Warranties and Covenants. 
The Investor represents, warrants and agrees as follows:

 

(1)          The Investor has
received and reviewed copies of the Registration Statement and the Prospectus,
including all documents and information incorporated by reference therein and
amendments thereto, and understands that no Person has been authorized to give
any information or to make any representations that were not contained in the
Registration Statement and the Prospectus, and the Investor has not relied on
any such other information or representations in making a decision to purchase
the Investor Shares.  The Investor
hereby consents to receiving delivery of the Registration Statement and the
Prospectus, including all documents and information incorporated by reference
therein and amendments thereto, by electronic mail.  The Investor understands that an investment in the Company
involves a high degree of risk for the reasons, among others, set forth under
the captions “RISK FACTORS” in the Prospectus.

 

(2)          The Investor
acknowledges that it has sole responsibility for its own due diligence
investigation and its own investment decision, and that in connection with its
investigation of the accuracy of the information contained or incorporated by
reference in the Registration Statement and

 

2

 

the Prospectus and its investment decision,
the Investor has not relied on any representation or information not set forth
in this Agreement, the Registration Statement or the Prospectus, on the selling
agent (William Blair & Company, L.L.C.) or any Person affiliated with the
selling agent, or the Company or on the fact that any other Person has decided
to invest in the Offered Shares.

 

(3)          The execution and
delivery of this Agreement by the Investor and the performance of this
Agreement and the consummation by the Investor of the transactions contemplated
hereby have been duly authorized by all necessary (corporate, partnership or
limited liability in the case of a corporation, partnership or limited
liability company) action of the Investor, and this Agreement, when duly
executed and delivered by the Investor, will constitute a valid and legally
binding instrument, enforceable in accordance with its terms against the
Investor, except as enforcement hereof may be limited by the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws or court
decisions affecting enforcement of creditors’ rights generally and except as
enforcement hereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).

 

(4)          No state, federal or
foreign regulatory approvals, permits, licenses or consents or other
contractual or legal bligations are required for the Investor to enter into
this Agreement or purchase the Investor Shares.

 

(b)         Company
Representations, Warranties and Covenants. 
The Company hereby represents, warrants and agrees as follows:

 

(1)          The Company has been
duly incorporated and has a valid existence and the authorization to transact
business as a corporation under the laws of the State of Washington, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except for such
jurisdictions wherein the failure to be so qualified and in good standing would
not individually or in the aggregate have a material adverse effect on the
business, results of operations or financial condition of the Company and its
subsidiaries taken as a whole (a “Material Adverse Effect”); and each
subsidiary of the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except for such
jurisdictions wherein the failure to be so qualified and in good standing would
not individually or in the aggregate have a Material Adverse

 

3

 

Effect. 
Lumera Corporation, a Washington corporation (“Lumera”), is the
Company’s only subsidiary.

 

(2)          This Agreement has been
duly authorized, executed and delivered by the Company, and the Investor
Warrants have been duly authorized, and will be duly executed and delivered, by
the Company; and this Agreement and the Investor Warrants, when duly executed
and delivered by the parties hereto or thereto, will constitute valid and
legally binding instruments of the Company enforceable in accordance with their
terms, except as enforcement hereof or thereof may be limited by the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws or court
decisions affecting enforcement of creditors’ rights generally and except as
enforcement hereof or thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).

 

(3)          The Investor Shares have
been duly authorized by the Company, and when issued and delivered by the
Company against payment therefor as contemplated by this Agreement, the
Investor Shares will be validly issued, fully paid and nonassessable, and will
conform to the description of the Common Stock contained in the
Prospectus.  The Warrant Shares have
been duly authorized by the Company and enough Warrant Shares have been
reserved by the Company for issuance upon exercise of the Investor Warrants.  Upon exercise in accordance with the
Investor Warrants, the Warrant Shares will be validly issued, fully paid and
nonassessable and will conform to the description of the Common Stock contained
in the Prospectus.  The Investor
Warrants when issued and delivered by the Company as contemplated hereby will
conform to the description of Company warrants contained in the Prospectus.

 

(4)          The execution and
delivery of this Agreement do not, and the execution and delivery of the
Investor Warrants and the issuance and sale by the Company of the Investor
Shares, Investor Warrants and Warrant Shares and the compliance by the Company
with the terms hereof and thereof will not, (i) violate the Articles of
Incorporation (as amended to date) of the Company or the By-Laws (as amended to
date) of the Company, (ii) result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of their properties or assets are
subject, or (iii) result in a violation of, or failure to be in compliance
with, any applicable statute or any order, judgment, decree, rule or regulation
of any court or governmental, regulatory or self-regulatory agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except where such breach, violation, default or the
failure to be in compliance would not individually or in the aggregate have a
Material Adverse Effect or adversely affect the ability of the Company to issue
and sell the Investor Shares, Investor Warrants and Warrant Shares; and no
consent, approval, authorization, order, registration, filing or qualification
of or with any such court or governmental, regulatory or

 

4

 

self-regulatory agency or body is required
for the valid authorization, execution, delivery and performance by the Company
of this Agreement or the Investor Warrants or the issuance of the Investor
Shares, Investor Warrants or Warrant Shares, except for such consents,
approvals, authorizations, registrations, filings or qualifications as may be
required under the Securities Act or state securities or “blue sky” laws or
have been or will be obtained or made in connection with the listing of the
Investor Shares and Warrant Shares on the Nasdaq National Market.

 

(5)          The Company meets the
requirements for the use of Form S-3 under the Securities Act for the primary
issuance of securities.  The
Registration Statement has been declared effective by the Commission and at the
time it became effective, and as of the date hereof, the Registration Statement
complied and complies with Rule 415 under the Securities Act.  No stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the Company’s knowledge, threatened by the
Commission.  On the effective date of
the Registration Statement, the Registration Statement complied, on the date of
the Prospectus, the Prospectus will comply, and at the date of the Closing, the
Registration Statement and the Prospectus will comply, in all material respects
with the applicable provisions of the Securities Act and the applicable rules
and regulations of the Commission thereunder; on the effective date of the
Registration Statement, the Registration Statement did not, on the date of the
Prospectus, the Prospectus did not, and at the date of the Closing, the
Registration Statement and the Prospectus will not, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made (with respect to the Prospectus), not
misleading; and when filed with the Commission, the documents incorporated by
reference in the Registration Statement and the Prospectus, taken as a whole,
complied or will comply in all material respects with the applicable provisions
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the applicable rules and regulations of the Commission thereunder.  There is no material document of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that is not described or
filed as required.

 

(6)          The consolidated
financial statements and financial schedules of the Company included or
incorporated by reference in the Registration Statement and the Prospectus have
been prepared in conformity with generally accepted accounting principles
(except, with respect to the unaudited consolidated financial statements, for
the footnotes and subject to customary audit adjustments) applied on a
consistent basis, are consistent in all material respects with the books and
records of the Company, and accurately present in all material respects the
consolidated financial position, results of operations and cash flow of the
Company and its subsidiaries as of and for the periods covered thereby.

 

5

 

(7)          Neither the Company nor
any of its subsidiaries has sustained since the respective dates of the latest
audited financial statements included in the Registration Statement and
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Registration Statement
and Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been any
material change in the capital stock or long-term debt of the Company or any of
its subsidiaries, the Company and its subsidiaries have not incurred any
material liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there has not
been any material adverse change in or affecting the general affairs,
management, financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries considered as a whole, otherwise than as
disclosed in or contemplated by the Registration Statement and Prospectus.

 

(8)          Other than as disclosed
in the Prospectus, there are no legal, governmental or regulatory proceedings
pending to which the Company or any of its subsidiaries is a party or of which
any material property of the Company or any of its subsidiaries is the subject
which, taking into account the likelihood of the outcome, the damages or other
relief sought and other relevant factors, would individually or in the
aggregate reasonably be expected to have a Material Adverse Effect or adversely
affect the ability of the Company to issue and sell the Investor Shares,
Investor Warrants and Warrant Shares; to the best of the Company’s knowledge,
no such proceedings are threatened or contemplated by governmental or
regulatory authorities or threatened by others.

 

(9)          The Company and each of
its subsidiaries have good and marketable title to all the real property and
owns all other properties and assets, reflected as owned in the financial
statements included in the Registration Statement and the Prospectus, subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except those,
if any, reflected in such financial statements or which are not material to the
Company and its subsidiaries taken as a whole. 
The Company and each of its subsidiaries hold their respective leased
real and personal properties under valid and binding leases, except where the
failure to do so would not reasonably be expected to individually or in the
aggregate have a Material Adverse Effect.

 

(10)    The Company has filed all
necessary federal and state income and franchise tax returns and has paid all
taxes shown as due thereon, and there is no tax deficiency that has been, or to
the knowledge of the Company might be, asserted against the Company or any of
its properties or assets that would in the aggregate or individually reasonably
be expected to have a Material Adverse Affect.

 

6

 

(11)    There are no holders of
securities of the Company having preemptive rights to purchase Common
Stock.  There are no holders or
beneficial owners of securities of the Company having rights to registration
thereof whose securities have not been previously registered or who have not
waived such rights with respect to the registration of the Company’s securities
on the Registration Statement, except where the failure to obtain such waiver
would not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.

 

(12)    The Company has not taken and
will not take any action that constitutes or is designed to cause or result, or
which might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Offered Shares.

 

(13)    Other than as disclosed in the
Prospectus (but not including the disclosure under the captions “Risk
Factors – We could face lawsuits related to our use of the scanned beam
technology or other technologies. 
Defending these suits would be costly and time consuming.  An adverse outcome in any such matters could
limit our ability to commercialize our technology and products, our revenues,
and increase our operating costs” and “Risk Factors – If we and our licensors
are unable to obtain effective intellectual property protection for our
products and technology, we may be unable to compete with other companies”),
the Company together with its subsidiaries owns and possesses all right, title
and interest in and to, or, to the Company’s knowledge, has duly licensed from
third parties, all patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary rights
(“Intellectual Property”) material to the business of the Company and
each of its subsidiaries taken as a whole as currently conducted and as
described in the Prospectus.  To the
Company's knowledge and except as would not individually or in the aggregate
have a Material Adverse Effect, there is no infringement or other violation by
third parties of any of the Intellectual Property of the Company.  Neither the Company nor any of its
subsidiaries has received any notice of infringement or misappropriation from
any third party that has not been resolved or disposed of and, to the Company’s
knowledge, neither the Company nor any of its subsidiaries has infringed or
misappropriated the Intellectual Property of any third party, which
infringement or misappropriation would individually or in the aggregate have a
Material Adverse Effect.  Further, there
is no pending or, to the Company's knowledge and except as would not individually
or in the aggregate have a Material Adverse Effect, threatened action, suit,
proceeding or claim by governmental authorities or others that the Company is
infringing a patent, and there is no pending or, to the Company’s knowledge and
except as would not individually or in the aggregate have a Material Adverse
Effect, threatened legal or administrative proceeding relating to patents and
patent applications of the Company, other than proceedings initiated by the
Company before the United States Patent and Trademark Office and the patent offices
of certain foreign jurisdictions which are in the ordinary course of patent
prosecution.  To the Company's
knowledge, the patent applications

 

7

 

of the Company presently on file disclose
patentable subject matter, and the Company is not aware of any inventorship
challenges, any interference which has been declared or provoked, or any other
material fact that (i) would preclude the issuance of patents with respect to
such applications, or (ii) would lead such counsel to conclude that such
patents, when issued, would not be valid and enforceable in accordance with
applicable regulations.

 

(14)    Except as disclosed in the Prospectus, neither the Company nor any of
its subsidiaries is in violation of any statute, any rule, regulation, decision
or order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances 
(collectively, the “Environmental Laws”), owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have Material Adverse Effect; and the Company
is not aware of any pending investigation which might lead to such a claim.

 

(15)    The conduct of the business of
the Company and each of its subsidiaries is in compliance in all respects with
applicable laws, rules and regulations of governmental and regulatory bodies,
except where the failure to be in compliance would not individually or in the
aggregate have a Material Adverse Effect.

 

(16)    The Company is not, and does
not intend to conduct its business in a manner in which it would become, an
“investment company” as defined in Section 3(a) of the Investment Company Act
of 1940, as amended.

 

(17)    All offers and sales of the
Company’s capital stock prior to the date hereof were at all relevant times
registered pursuant to the Securities Act or exempt from the registration requirements
of the Securities Act and were duly registered with or the subject of an
available exemption from the registration requirements of the applicable state
securities or blue sky laws, except where the failure to do so would not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect.

 

(18)    The Company and its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) material transactions are executed in
accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; and (iii) the recorded accounting for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.  The Company and its subsidiaries also maintain a system of
disclosure controls and procedures designed to ensure that information required
to be disclosed

 

8

 

by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and
forms.

 

(19)    The Company has filed with the
Nasdaq National Market a Notification of Listing of Additional Shares with
respect to the Investor Shares and Warrant Shares within the time period
required by the rules of the Nasdaq National Market.

 

(20)    The Company will indemnify and
hold harmless the Investor against and in respect of any claim for brokerage or
other commissions relating to this Agreement, based in any way on agreements,
arrangements or understandings made or claimed to have been made by the Company
with any third party, including William Blair & Company, L.L.C.

 

(21)    Neither the Company nor, to
the Company’s knowledge, any other Person acting on its behalf has provided the
Investor or its agents or counsel with any information that the Company
believes constitutes material, non-public information.

 

5.               Conditions.  The obligation of the Investor to purchase
and acquire the Investor Shares hereunder shall be subject to the condition
that all representations and warranties and other statements of the Company
shall be true and correct as of and on each of the date of this Agreement and
the date of the Closing, the condition that the Company shall have performed
all of its obligations hereunder theretofore to be performed, and the following
additional conditions:

 

(a)          The Prospectus shall
have been filed with the Commission pursuant to Rule 424(b) under the
Securities Act within the applicable time period prescribed for such filing, no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission, and the Investor shall
have received the Prospectus in accordance with the federal securities laws.

 

(b)         The Company shall have
performed all of its obligations set forth in the Selling Agent Agreement,
dated as of March 3, 2003, by and between the Company and William Blair &
Company, L.L.C., required to be performed by the Company thereunder on or prior
to the Closing.

 

6.               Miscellaneous.

 

(a)          Fees and Expenses.  Each of the parties hereto shall be
responsible for their own expenses incurred in connection with the transactions
contemplated hereby.

 

(b)         Binding Agreement;
Assignment.  This Agreement shall be
binding upon, and shall inure solely to the benefit of, each of the parties
hereto, and each of their respective heirs, executors, administrators,
successors and permitted assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. 
The Investor may not assign any of its rights or obligations

 

9

 

hereunder to any other person or entity
without the prior written consent of the Company.

 

(c)          Entire Agreement.  This Agreement, including Schedule I
hereto, constitutes the entire understanding between the parties hereto with
respect to the subject matter hereof and may be amended only by written
execution by both parties.  Upon
execution by the Company and the Investor, this Agreement shall be binding on
both parties hereto.

 

(d)           Consent To
Jurisdiction.  THIS AGREEMENT SHALL
BE ENFORCED, GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
PRINCIPLES.  FURTHERMORE, THE INVESTOR
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE FEDERAL OR STATE COURTS
LOCATED IN THE STATE OF NEW YORK IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH OF THE COMPANY AND THE INVESTOR (AND,
TO THE EXTENT PERMITTED BY LAW, ON BEHALF OF ITS AND THEIR EQUITY HOLDERS AND
CREDITORS) HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(e)          Notices.  All notices, requests, consents and other
communication hereunder shall be in writing, shall be mailed by first class
registered or certified mail, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:

 

if to the
Company, to:

  

Microvision, Inc.

19910 North Creek Parkway

Bothell, WA 98011-3008

Attn:      Chief
Executive Officer and General Counsel

 

with a copy
mailed to:

 

Ropes & Gray

One International Place

Boston, MA 02110-2624

Attn: Joel F. Freedman

 

or to such other Person at such other place
as the Company shall designate to the Investor in writing; and if to the
Investor, at its address as set forth at the end of this Agreement, or at such
other address or addresses as may have been furnished to the Company in
writing.

 

10

 

(f)            Counterparts.  This Agreement maybe executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one in the same agreement.

 

11

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

 

	
   

  	
  Microvision, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Accepted and agreed to as of the date

  	
   

  
	
  first above written:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Investor (Print)

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Telephone:

  	
   

  
	
  Facsimile:

  	
   

  
	
  Email Address:

  	
   

  
	
  Nominee (name in which Investor Shares and Investor Warrants are to
  be registered, if different than name of Investor):

  	
   

  
	
   

  	
   

  
	
  Address of Nominee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Taxpayer ID. Number:

  	
   

  
	
  (if acquired in the name of a nominee, the taxpayer ID. number of
  such nominee)

  	
   

  
	
   

  	
   

  
	
  Broker:

  	
   

  
	
  Broker Contact Name:

  	
   

  
	
  Broker Contact Telephone:

  	
   

  
	
  Broker Contact Facsimile:

  	
   

  
	
  Broker Contact E-mail Address:

  	
   

  
	
   

  	
   

  
	
  DTC account number:

  	
   

  
					

 

 

EXHIBIT A

 

Form of Warrant Agreement and Certificate

 

 

SCHEDULE I

to

Securities Purchase Agreement

 

Name of Investor:

 

Aggregate Purchase Price:

 

Number of Offered Shares to be
Purchased by Investor:

 

Purchase Price Per Share of Common
Stock and Accompanying Warrant:

 

Number of Warrant Shares:

 

Per Share Exercise Price:

 

Date and Time of Closing:  March 5, 2003 at 10 :00 a.m., Eastern Standard Time

 

 

WIRE INSTRUCTIONS

 

Aggregate Purchase Price to be wired to:

 

The Commerce Bank of Washington

601 Union Street, Suite 3600

Seattle, WA 98101

 

	
  Account  Name:

  	
  Microvision, Inc.

  
	
  Account Number:

  	
  001130420

  
	
  ABA Routing Number:

  	
  125008013

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