REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
May 5, 1999, by and between MICROVISION, INC. a Washington corporation (the
"Company"), and CREE RESEARCH, INC., a North Carolina corporation (the
"Investor").
RECITAL
WHEREAS, the Investor is purchasing shares of the Company's common stock,
no par value per share ("Common Stock") pursuant to that certain Stock Purchase
Agreement, dated the date hereof (the "Purchase Agreement").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Definitions
For purposes of this Agreement:
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means the shares of Common Stock
purchased by Investor pursuant to the Purchase Agreement;
(c) The term "Closing" means the closing of the transactions contemplated
by the Purchase Agreement;
(d) The term "Closing Date" means May 6, 1999.
(e) The term "Holder" means any person owning Registrable Securities who is
a party to this Agreement as of the date hereof or who may be added as a party
hereto pursuant to the terms of this Agreement; and
(f) The term "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the
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Securities and Exchange Commission (the "SEC") that similarly permits inclusion
or incorporation of substantial information by reference to other documents
filed by the Company with the SEC.
2. Form S-3 Registration
(a) The Company shall file a registration statement on Form S-3 covering
the resale of the Registrable Securities within ninety (90) days of the Closing
Date, provided that the Company is a registrant entitled to use Form S-3 to
register the Registrable Securities for such resale. The Company shall cause
such Form S-3 to become effective as soon as practicable thereafter and to
remain effective until the second anniversary of the Closing, subject to Section
2(b) below.
(b) If, at a time at which the Company would otherwise be obligated to
register Registrable Securities or to maintain the effectiveness of any such
registration, there shall occur one or more events that, in the reasonable
judgment of the Board of Directors of the Company, (A) would be required to be
publicly disclosed in order to cause such registration statement to contain the
required disclosure; and (B) cannot be so disclosed without material adverse
consequences to the Company, (i) the Company shall furnish to the Investor a
certificate to that effect signed by the President of the Company; and (ii) the
Company may defer filing of such registration statement or, if such registration
statement is effective, may require any Holder of Registrable Securities to
refrain from making any offers or sales in reliance on such registration
statement for a period reasonably required in the circumstances but not to
exceed 90 days; provided, however, that the Company shall require any Holder to
refrain from such offers and sales for any such period not more than once in the
twelve-month period following the Closing Date; and, provided further, that each
Holder shall be free to sell any of the Registrable Securities held by such
Holder during the period commencing on April 6, 2000 and expiring on the first
anniversary hereof ("Selling Period") if, prior to the Selling Period there has
not been a period of thirty consecutive (30) days during which such Holder was
free to sell Registrable Securities pursuant to an effective registration
statement of the Company that was not subject to a suspension notice issued
pursuant to this Section 2(b).
(c) Notwithstanding anything to the contrary in this Section 2, the Company
shall not be required to register or qualify the Registrable Securities in any
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration or qualification.
(d) All reasonable expenses incurred in connection with a registration
pursuant to this Section 2, including, without limitation, all registration,
filing, qualification, printing and accounting fees, shall be borne by the
Company.
(e) The Company represents and warrants that it meets the requirements for
the use of Form S-3 for registration of the sale by the Investor of the
Registrable Securities and the
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Company shall use its reasonable best efforts to file all reports required to be
filed by the Company with the SEC in a timely manner so as to maintain its
eligibility for the use of Form S-3.
3. Obligations of the Company.
Subject to the terms and conditions set forth in Section 2, when required
by this Agreement to register any Registrable Securities, the Company shall, as
promptly as reasonably possible:
(a) Prepare and file with the SEC a registration statement covering such
Registrable Securities and cause such registration statement to become effective
as soon as practicable thereafter, and keep such registration statement
continuously effective until the second anniversary of the Closing or such
shorter period as will terminate when all the Registrable Securities covered by
the registration statement have been sold.
(b) Prepare and file with the SEC any amendments and supplements to the
registration statement and the prospectus used in connection with it needed to
comply with the Securities Act with respect to the sale of all Registrable
Securities covered by such registration statement.
(c) Give the Holders the number of copies of preliminary and final
prospectuses, in conformity with the requirements of the Securities Act, and
other documents that they reasonably request to facilitate the sale of their
Registrable Securities.
(d) Use its best efforts to register and qualify the Registrable Securities
covered by such registration statement under securities or Blue Sky laws of such
jurisdictions that the Holders request, provided that the Company shall not be
required in connection therewith to qualify to do business or to file a general
consent to service of process in any such jurisdictions.
(e) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(f) Cause all Registrable Securities registered hereunder to be listed on
each securities exchange or market on which similar securities issued by the
Company are then listed.
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4. Currency of Registration and Public Information.
In case any Registrable Securities are registered pursuant to this
Agreement, to the extent permitted by law, the Company will register such
Registrable Securities for offer on a continuous basis until the second
anniversary of Closing and, during that period will maintain the currency of all
registration and other public information required by law in connection with
sales of Registrable Securities, except that the Company shall not be obligated
to maintain the currency of such registration and public information during the
period referred to in Section 2(b).
5. Information by Holder; Copies of Prospectus.
The Holder or Holders of Registrable Securities included in any
registration pursuant to this Agreement shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request and as shall be required in connection with such registration. In
connection with any such registration, the Company shall furnish to such Holder
or Holders such numbers of copies as it or they may request, in order to
facilitate the disposition of Registrable Securities owned by them, of any
prospectus or preliminary prospectus prepared in conformity with the Securities
Act.
6. Indemnification.
(a) To the extent permitted by law, the Company will indemnify each Holder,
each of its officers and directors and partners, and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, with respect
to which registration, qualification or compliance has been effected pursuant to
Section 2, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, and the Company will reimburse or pay for the account of each
such Holder, each of its officers and directors, each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred (as and when incurred)
in connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue
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statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person or underwriter and
stated to be specifically for use therein.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
or pay for the account of the Company, such Holders, such directors, officers,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred (as and when incurred) in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (which approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 6 except to the extent that the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
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(d) The obligations of the Company and the Holders under this Section 6
shall survive the completion of any offering of Registrable Securities in a
registration statement pursuant to this Agreement.
7. Transferability of Registration Rights
The rights to cause the Company to register Registrable Securities pursuant
to this Agreement may be transferred by a Holder to a transferee or assignee
only with the transfer or assignment of all, but not less than all, of such
Holder's Registrable Securities. A transferee or assignee of registration rights
pursuant to this Section 7 shall, upon such transfer or assignment, be deemed a
"Holder" under this Agreement, provided that (i) the Company is, within a
reasonable period of time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; (ii) such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act; and (iii) the transferee or assignee
executes an endorsement to this Agreement agreeing to be bound by all the terms
and conditions hereof as Holder.
8. "Market Stand-Off" Agreement.
(a) If requested by the Company and an underwriter managing an underwritten
offering of the Company's securities, each Holder agrees that, except for such
sales, transfers and other dispositions which, in the aggregate, do not exceed
1% of the Company's outstanding Common Stock at the time of effectiveness, such
Holder shall not sell or otherwise transfer or dispose of any Registrable
Securities held by such Holder without the prior written consent of the Company
and such underwriter for a period not to exceed ninety (90) days following the
effective date of a registration statement of the Company filed under the
Securities Act (the "Lock-up Period"); provided, however, that no such Holder
shall be subject to such restriction if any other holder of the Company's
securities who holds a greater or equal percentage of the Company's outstanding
Common Stock than such Holder is not similarly restricted; and, provided
further, that each Holder shall be free to sell any of the Registrable
Securities held by such Holder during the Selling Period if, prior to the
Selling Period there has not been a period of thirty consecutive (30) days
during which such Holder was free to sell Registrable Securities pursuant to an
effective registration statement of the Company that was not subject to a
suspension notice issued pursuant to Section 2(b).
(b) Such agreement shall apply to any underwritten registration of the
Company.
(c) The obligations described in this Section 8 shall not apply to a
registration relating solely to the sale of securities to participants in a
stock option or stock purchase plan, a registration on any form that does not
include substantially the same information that would be required to be included
in a registration statement covering the sale of the Registrable
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Securities, or a registration on Form S-4. The Company may impose stop-transfer
instructions with respect to the Registrable Securities subject to the foregoing
restriction until the end of the Lock-up Period. The Company may not waive or
terminate its rights under any market stand-off agreement with any employee,
director, Holder, or other shareholder unless each Holder is granted a similar
waiver on a pro rata basis or unless the Holders of a majority of the
Registrable Securities consent to such waiver or termination.
9. Notices
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or upon deposit with the United
States Post Office, postage prepaid, registered or certified with return receipt
requested and addressed to the party to be notified at the address indicated for
such party on the signature page hereof or on Schedule A hereto, or at such
other address as such party may designate by ten days' advance written notice to
the other parties given in the foregoing manner.
10. Amendments and Waivers
Any term of this Agreement may be amended and the observance of any term
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the Holders of not less than 80% of the Registrable Securities. Additional
Holders may be added to this Agreement with such consent by adding a Schedule A
hereto listing each such Holder's name and address and adding a signature page
executed by such additional Holder.
11. Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
12. Governing Law
This Agreement shall be governed by and construed under the laws of the
State of Washington as applied to agreements among Washington residents entered
into and to be performed entirely within the State of Washington.
13. Counterparts
This Agreement may be executed in two or more counterparts, each of which
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shall be deemed an original, but all of which together shall constitute one and
the same instrument.
14. Entire Agreement
This Agreement constitutes the full and entire understanding and agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first above written.
COMPANY:
MICROVISION, INC.
By:_________________________________________
Its: ___________________________________
INVESTOR:
CREE RESEARCH, INC.
By:_________________________________________
Its: ___________________________________
