SECURITIES PURCHASE AGREEMENT
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SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of April 1,
1999, by and among MICROVISION, INC., a corporation organized under the laws of
the State of Washington (the "Company"), and the purchasers (the "Purchasers")
set forth on the execution pages hereof (the "Execution Pages").
WHEREAS:
A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act").
B. Each Purchaser desires to purchase, severally and not jointly, subject
to the terms and conditions stated in this Agreement, (i) shares of the
Company's common stock, no par value per share (the "Common Stock"), (ii)
warrants in the form attached hereto as Exhibit A (including any warrants issued
in replacement thereof, the "Series 1 Warrants"), to acquire shares of Common
Stock and (iii) warrants in the form attached hereto as Exhibit B (including any
warrants issued in replacement thereof, the "Series 2 Warrants", and, together
with the Series 1 Warrants, the "Warrants"), to acquire shares of Common Stock.
The shares of Common Stock issuable upon exercise of or otherwise pursuant to
the Warrants are referred to herein as the "Warrant Shares."
C. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement in
the form attached hereto as Exhibit C (the "Registration Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. CERTAIN DEFINITIONS.
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For purposes of this Agreement, the following terms shall have the meanings
ascribed to them as provided below:
"Adjustment Date" shall mean the earlier of (i) the date a registration
statement filed by the Company pursuant to Section 2(a) of the Registration
Rights Agreement is declared effective by the SEC; or (ii) in the event such
registration statement is not declared effective by the SEC within one hundred
eighty days following the Closing Date (as defined below), any single date
selected by the Purchasers, in their sole discretion, following such one hundred
eighty days.
"Adjustment Date Market Price" shall mean the lower of (i) the average
Closing Price during the ten (10) Trading Days ending on the Trading Day
immediately preceding the Adjustment Date or (ii) the Closing Price on the
Trading Day immediately preceding the Adjustment Date, and in each case,
appropriately adjusted to reflect any stock dividend, stock split or similar
transaction during either such period.
"Business Day" shall mean any day on which the principal United States
securities exchange or trading market on which the Common Stock is listed or
traded as reported by Bloomberg (as defined below) is open for trading.
"Closing Price" shall mean for the Common Stock as of any date, the closing
bid price of such security on the principal United States securities exchange or
trading market on which such security is listed or traded as reported by
Bloomberg Financial Markets (or a comparable reporting service of national
reputation selected by the Purchaser and reasonably acceptable to the Company if
Bloomberg Financial Markets is not then reporting closing bid prices of such
security) (collectively, "Bloomberg"), or if the foregoing does not apply, the
last reported sale price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
sale price is reported for such security by Bloomberg, the average of the bid
prices of any market makers for such security as reported in the "pink sheets"
by the National Quotation Bureau, Inc., in each case for such date or, if such
date was not a Trading Day (as defined below) for such security, on the next
preceding day which was a Trading Day. If the Closing Price cannot be calculated
for a share of Common Stock as of either of such dates on any of the foregoing
bases, the Closing Price of such security on such date shall be the fair market
value as reasonably determined by an investment banking firm selected by the
Purchaser and reasonably acceptable to the Company, with the costs of such
appraisal to be borne by the Company.
"Closing Shares" shall mean the shares of Common Stock to be issued and
sold by the Company and purchased by the Purchaser at the Closing (as defined
below).
"Investment Amount" shall mean the dollar amount to be invested in the
Company at the Closing pursuant to this Agreement by any Purchaser, as set forth
on the Execution Page hereto executed by such Purchaser.
"Market Price" shall mean, with respect to any date of determination, the
lower of (i) the average Closing Price during the ten (10) Trading Days ending
on the Trading Day immediately preceding such date of determination or (ii) the
Closing Price on the Trading Day immediately preceding such date of
determination, and in each case appropriately adjusted to reflect any stock
dividend, stock split or similar transaction during either such relevant period.
"Material Adverse Effect" shall mean any material adverse effect on (i) the
Securities, (ii) the ability of the Company to perform its obligations hereunder
(including the issuance of the Shares and the Warrants), under the Warrants
(including the issuance of the Warrant Shares) or under the Registration Rights
Agreement or (iii) the business, operations, properties, prospects or financial
condition of the Company and its subsidiaries, if any, taken as a whole.
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"Pro Rata Percentage" shall mean, with respect to any Purchaser, a
percentage computed by dividing such Purchaser's Investment Amount by the
aggregate Investment Amount of all Purchasers.
"SEC" means the United States Securities and Exchange Commission.
"Securities" shall mean the Shares, the Warrants and the Warrant Shares.
"Share Limit" shall mean 666,667 shares of Common Stock.
"Shares" shall mean the Closing Shares and the Adjustment Shares (as
defined in Section 2(c) below).
"Trading Day" shall mean a Business Day on which the Common Stock trades on
the principal United States securities exchange or trading market on which such
security is listed or traded as reported by Bloomberg.
2. PURCHASE AND SALE OF SHARES AND WARRANTS.
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a. Generally. Except as otherwise provided in this Section 2 and subject to
the satisfaction (or waiver) of the conditions set forth in Section 6 and
Section 7 below, each Purchaser shall purchase the number of Shares and Warrants
determined as provided in this Section 2, and the Company shall issue and sell
such number of Shares and Warrants to each Purchaser for such Purchaser's
Investment Amount as provided below.
b. Number of Closing Shares and Warrants; Form of Payment; Closing Date.
i. On the Closing Date (as defined below), the Company shall sell and
each Purchaser shall buy (A) the number of Closing Shares as is equal to the
quotient of (I) such Purchaser's Investment Amount divided by (II) $13.60875,
(B) Series 1 Warrants exercisable for such Purchaser's Pro Rata Percentage of
the aggregate number of shares of Common Stock for which Series 1 Warrants are
exercisable and (C) Series 2 Warrants exercisable for such Purchaser's Pro Rata
Percentage of the aggregate number of shares of Common Stock for which Series 2
Warrants are exercisable. On the Closing Date, each Purchaser shall pay the
Company an amount equal to such Purchaser's Investment Amount.
ii. On the Closing Date, each Purchaser shall pay its Investment
Amount by wire transfer to the Company, in accordance with the Company's written
wiring instructions against delivery of certificates representing the Closing
Shares and duly executed Warrants being purchased by such Purchaser, and the
Company shall deliver such Closing Shares and Warrants against delivery of the
such Purchaser's Investment Amount.
iii. Subject to the satisfaction (or waiver) of the conditions thereto
set forth in Section 6 and Section 7 below, the date and time of the sale of the
Closing Shares and the Closing Warrants pursuant to this Agreement (the
"Closing") shall be 2:00 p.m. New York City Time on April 1, 1999 or such other
date or time as the parties may mutually agree ("Closing Date"). The Closing
shall occur at the offices of Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx
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LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, or at such other place as the
parties may otherwise agree.
c. Adjustment Shares. If, on the Adjustment Date, the Adjustment Date
Market Price is less than $14.325, then, within three Business Days of the
Adjustment Date, the Company shall issue to each Purchaser a number of
additional whole shares of Common Stock (the "Adjustment Shares") equal to the
amount by which (I) the quotient of (x) such Purchaser's Investment Amount
divided by (y) ninety five percent (95%) of the Adjustment Date Market Price
exceeds (II) the number of Closing Shares purchased by such Purchaser on the
Closing Date; provided, however, that the Company shall not be required to issue
to any Purchaser a number of Adjustment Shares which, when aggregated with the
Closing Shares previously issued to such Purchaser, would exceed the product of
the Share Limit multiplied by such Purchaser's Pro Rata Percentage. The
Adjustment Shares shall be deemed to be outstanding as of the Adjustment Date.
3. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
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Each Purchaser severally and not jointly represents and warrants to the
Company as follows:
a. Purchase for Own Account. The Purchaser is purchasing the Securities for
the Purchaser's own account and not with a present view towards the distribution
thereof. Notwithstanding anything in this Section 3(a) to the contrary, by
making the foregoing representation, the Purchaser does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption from registration under the Securities
Act and any applicable state securities laws.
b. Information. The Purchaser has been furnished all materials relating to
the business, finances and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Purchaser.
The Purchaser has been afforded the opportunity to ask questions of the Company
and has received what the Purchaser believes to be satisfactory answers to any
such inquiries. The Purchaser understands that its investment in the Securities
involves a high degree of risk. Neither such inquiries nor any other due
diligence investigation conducted by the Purchaser or its counsel or any of its
representatives shall modify, amend or affect the Purchaser's right to rely on
the Company's representations and warranties contained in Section 4 below.
c. Governmental Review. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
d. Authorization; Enforcement. The Purchaser has the requisite power and
authority to enter into and perform its obligations under this Agreement and to
purchase the Shares and the Warrants in accordance with the terms hereof. This
Agreement has been duly and validly authorized, executed and delivered on behalf
of the Purchaser and is a valid and binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject
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to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity).
e. Transfer or Resale. The Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless (a) subsequently registered thereunder, or (b)
the Purchaser shall have delivered to the Company an opinion of counsel
reasonably acceptable to the Company (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
under an exemption from such registration, or (c) sold under Rule 144
promulgated under the Securities Act (or a successor rule), or (d) sold or
transferred to an affiliate of the Purchaser pursuant to an exemption under the
Securities Act; and (ii) neither the Company nor any other person is under any
obligation to register such Securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder, in each case, other than pursuant to the Registration Rights
Agreement.
f. Legends. Purchaser understands that the Shares and the Warrants and,
until such time as the Shares and Warrant Shares have been registered under the
Securities Act (including registration pursuant to Rule 416 thereunder) as
contemplated by the Registration Rights Agreement or otherwise may be sold by
Purchaser under Rule 144, the certificates for the Shares and Warrant Shares may
bear a restrictive legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
the securities laws of any state of the United States. The
securities represented hereby may not be offered or sold in
the absence of an effective registration statement for the
securities under applicable securities laws unless offered,
sold or transferred under an available exemption from the
registration requirements of those laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by state securities laws, (a) the sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder), or (b) such holder provides the Company with
an opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act or
(c) such holder provides the Company with reasonable assurances that such
Security can be sold under Rule 144(k). Purchaser agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been
removed, pursuant to an effective registration statement or under an exemption
from the registration requirements of the Securities Act. In the event the above
legend is removed from any Security and thereafter the effectiveness of a
registration statement covering such Security is suspended or the Company
determines that a supplement or amendment thereto is required by applicable
securities laws, then upon reasonable advance notice to Purchaser the Company
may require that the above
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legend be placed on any such Security and Purchaser shall cooperate in the
prompt replacement of such legend.
g. Accredited Investor Status. Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D. The Purchaser is not
registered as a broker or dealer under Section 15(a) of the Securities Exchange
Act of 1934, as amended, or a member of the NASD (as defined below).
h. Company Reliance. The Purchaser understands that the Closing Shares are
being offered and sold, the Warrants are being issued, and the Adjustment Shares
are being offered, to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Purchaser's
compliance with, the representations, warranties, agreements, acknowledgments,
and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Closing Shares and the Warrants and to receive an offer of the Adjustment
Shares.
i. Authorization. This Agreement has been duly and validly authorized,
executed, and delivered on behalf of the Purchaser and is a valid and binding
agreement of the Purchaser enforceable in accordance with its terms, subject to
general principles of equity and to bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to each Purchaser as follows:
a. Organization and Qualification. The Company is a corporation duly
organized and existing under the laws of the State of Washington, and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary and where the
failure so to qualify would have a Material Adverse Effect. The Company does not
have any subsidiaries.
b. Authorization; Enforcement. (i) The Company has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement, the Warrants and the Registration Rights Agreement, to issue and sell
the Shares and the Warrants in accordance with the terms hereof and to issue the
Warrant Shares upon exercise of the Warrants in accordance with the terms of the
Warrants; (ii) the execution, delivery and performance of this Agreement, the
Warrants and the Registration Rights Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Shares and the issuance of the Warrants, and the reservation for issuance and
issuance of the Warrant Shares) have been duly authorized by the Company's Board
of Directors and no further consent or authorization of the Company, its Board
of Directors or, except as set forth in Schedule 4(b), its shareholders is
required; (iii) this Agreement has been duly executed and delivered by the
Company; and (iv)
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this Agreement constitutes, and, upon execution and delivery by the Company of
the Registration Rights Agreement and the Warrants, such agreements will
constitute, valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
c. Capitalization. The capitalization of the Company as of the date hereof
is set forth on Schedule 4(c), including the authorized capital stock, the
number of shares issued and outstanding, the number of shares issuable and
reserved for issuance pursuant to the Company's stock option plans, the number
of shares issuable and reserved for issuance pursuant to securities exercisable
for, or convertible into or exchangeable for any shares of capital stock.
Schedule 4(c) also sets forth the number of Shares to be issued pursuant to the
terms hereof and the number of Warrant Shares to be issued upon the exercise of
the Warrants. All of such outstanding shares of capital stock have been, or upon
issuance will be, validly issued, fully paid and nonassessable. Except as set
forth on Schedule 4(c), no shares of capital stock of the Company (including the
Shares and the Warrant Shares) are subject to preemptive rights or any other
similar rights of the shareholders of the Company or any liens or encumbrances.
Except for the Securities and as disclosed in Schedule 4(c), as of the date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or exchangeable for, any
shares of capital stock of the Company, or arrangements by which the Company is
or may become bound to issue additional shares of capital stock of the Company,
and (ii) there are no agreements or arrangements under which the Company is
obligated to register the sale of any of its or their securities under the
Securities Act (except the Registration Rights Agreement). Except as set forth
on Schedule 4(c), there are no securities or instruments containing antidilution
or similar provisions that may be triggered by the issuance of the Securities in
accordance with the terms of this Agreement or the Warrants and the holders of
the securities and instruments listed on such Schedule 4(c) have waived any
rights they may have under such antidilution or similar provisions in connection
with the issuance of the Securities in accordance with the terms of this
Agreement or the Warrants. The Company has made available to each Purchaser true
and correct copies of the Company's Articles of Incorporation as in effect on
the date hereof ("Articles of Incorporation"), the Company's By-laws as in
effect on the date hereof (the "By-laws") and all other instruments and
agreements governing securities convertible into or exercisable or exchangeable
for capital stock of the Company, except for stock options granted under any
employee benefit plan or director stock option plan of the Company.
d. Issuance of Shares. The Shares are duly authorized and when issued and
paid for in accordance with the terms hereof, will be validly issued, fully paid
and non-assessable, and free from all taxes, liens, claims and encumbrances, and
will not be subject to preemptive rights or other similar rights of shareholders
of the Company and will not impose personal liability upon the holder thereof.
The Warrant Shares are duly authorized and reserved for issuance, and, upon
exercise of the Warrants in accordance with the terms thereof, will be validly
issued, fully paid and non-assessable and free from all taxes and liens, claims
and encumbrances and will not be subject to preemptive rights or other similar
rights of shareholders of the Company and will not impose personal liability
upon the holder thereof.
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e. No Conflicts. The execution, delivery and performance of this Agreement,
the Registration Rights Agreement and the Warrants by the Company, and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Shares and the Warrant Shares and the issuance of the Warrants) will not (i)
conflict with or result in a violation of the Articles of Incorporation or
By-laws or (ii) conflict with, or constitute a default (or an event which, with
notice or lapse of time or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument to which the Company is a party, or result in
a violation of any law, rule, regulation, order, judgment or decree (including
United States federal and state securities laws and regulations) applicable to
the Company or by which any property or asset of the Company is bound or
affected (except, with respect to clause (ii), for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). The
Company is in compliance with its Articles of Incorporation, By-laws and other
organizational documents and is not in default (and no event has occurred which,
with notice or lapse of time or both, would put the Company in default) under,
nor has there occurred any event giving others (with notice or lapse of time or
both) any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, except for
actual or possible violations, defaults or rights as would not, individually or
in the aggregate, have a Material Adverse Effect. The business of the Company is
not being conducted in violation of any law, ordinance or regulation of any
governmental entity, except for actual or possible violations, if any, the
sanctions for which either singly or in the aggregate would not have a Material
Adverse Effect. Except as specifically contemplated by this Agreement and as
required under the Securities Act and any applicable state securities laws, the
Company is not required to obtain any consent, approval, authorization or order
of, or make any filing or registration with, any court or governmental agency or
any regulatory or self regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement (including, without
limitation, the issuance and sale of the Shares and Warrants as provided
hereby), or the Warrants (including the issuance of the Warrant Shares), in each
case in accordance with the terms hereof or thereof. The Company is not in
violation of the listing requirements of the Nasdaq National Market ("NASDAQ")
and does not reasonably anticipate that the Common Stock will be delisted by
NASDAQ in the foreseeable future based on its rules (and interpretations
thereof) as currently in effect.
f. SEC Documents; Financial Statements. Since August 27, 1996, the Company
has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and has filed all registration
statements and other documents required to be filed by it with the SEC pursuant
to the Securities Act (all of the foregoing filed prior to the date hereof, and
all exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). The Company has made available to each Purchaser
true and complete copies of the SEC Documents, except for the exhibits and
schedules thereto and the documents incorporated therein. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement
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of a material fact or omitted 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, not misleading. Except as set forth on
Schedule 4(f), any statements made in any such SEC Documents that are or were
required to be updated or amended under applicable law have been so updated or
amended. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal and recurring year-end
audit adjustments). Except as set forth in the SEC Documents, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the date of such SEC Documents and
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected in such SEC Documents, which liabilities and obligations referred
to in clauses (i) and (ii), individually or in the aggregate, would not have a
Material Adverse Effect. The Company has made available to each Purchaser a
draft of its Form 10-K for its fiscal year ended December 31, 1998, including
the exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein (the "Draft 10-K"). The Draft 10-K
shall be deemed to be an SEC Document hereunder. The Company's Form 10-K for the
fiscal year ended December 31, 1998, which will be filed by the Company with the
SEC pursuant to the Exchange Act, will not differ in any material respect from
the Draft 10-K.
g. Absence of Certain Changes. Except as disclosed in the SEC Documents,
since December 31, 1998, there has been no change or development which
individually or in the aggregate has had or would have a Material Adverse
Effect.
h. Absence of Litigation. Except as disclosed in the SEC Documents, there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the Company's knowledge, threatened against or affecting the Company, or
any of its directors or officers in their capacities as such which would have a
Material Adverse Effect or which would adversely affect the validity,
enforceability of, or the authority or ability of the Company to perform its
obligations under this Agreement (including the issuance of the Shares and the
Warrants), the Registration Rights Agreement, the Warrants (including the
issuance of the Warrant Shares) or any other agreement or document delivered
pursuant hereto or thereto.
i. Intellectual Property. The Company owns or is licensed to use all
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, permits, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "Intangibles") necessary for the conduct
9
of its business as now being conducted. Except as set forth in Schedule 4(i),
the Company is not infringing or in conflict with any other person with respect
to any Intangibles which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
Except as set forth in Schedule 4(i), the Company has not received written
notice that it is infringing upon third party Intangibles. The Company has not
entered into any consent, indemnification, forbearance to xxx or settlement
agreements with respect to the validity of the Company's ownership or right to
use its Intangibles and there is no reasonable basis for any such claim to be
successful. The Intangibles are valid and enforceable, and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing. The Company has complied, in all
material respects, with its contractual obligations relating to the protection
of the Intangibles used pursuant to licenses. Except as set forth in Schedule
4(i), to the Company's knowledge, no person is infringing on or violating the
Intangibles owned or used by the Company.
j. Foreign Corrupt Practices. Neither the Company, nor any director,
officer, agent, employee or other person acting on behalf of the Company has, in
the course of such person's actions for, or on behalf of, the Company, used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the United
States Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
k. Environment. Except as disclosed in the SEC Documents (i) there is no
environmental liability, nor factors likely to give rise to any environmental
liability, affecting any of the properties of the Company that, individually or
in the aggregate, would have a Material Adverse Effect and (ii) the Company has
not violated or infringed any environmental law applicable to it now or
previously in effect, other than such violations or infringements that,
individually or in the aggregate, have not had and will not have a Material
Adverse Effect.
l. Title. The Company has good title in fee simple to all real property and
good title to all personal property owned by it which is material to the
business of the Company, in each case free and clear of all liens, encumbrances
and defects except for such defects in title that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Any real property and facilities held under lease by the Company are held by it
under valid, subsisting and enforceable leases with such exceptions which have
not had and will not have a Material Adverse Effect.
m. Insurance. The Company has its assets insured against loss or damage as
is appropriate to its business and assets, in such amounts and against such
risks as are customarily carried and insured against by owners of comparable
businesses and assets, and such insurance coverages will be continued in full
force and effect to and including the Closing Date other than those insurance
coverages in respect of which the failure to continue in full force and effect
could not reasonably be expected to have a Material Adverse Effect.
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n. Disclosure. All information relating to or concerning the Company set
forth in this Agreement or provided to the Purchaser pursuant to Section 3(b)
hereof and otherwise in connection with the transactions contemplated hereby is
true and correct in all material respects and the Company has not omitted to
state any material fact necessary in order to make the statements made herein or
therein, in light of the circumstances under which they were made, not
misleading; provided the Purchaser acknowledges that forward-looking information
provided to the Purchaser, including, but not limited to, projections of
revenues, income, or loss, capital expenditures, plans for product development
and cooperative arrangements, future operations, financing needs or plans of the
Company, is subject to change as a result of the factors set forth in Item 1.
"Considerations Relating to the Company's Business," set forth in the Draft 10-K
and in the Company's Annual Report on Form 10-K for the year ended December 31,
1998, to be filed with the SEC within 14 days from the Closing Date. No event or
circumstance has occurred or exists with respect to the Company or its business,
properties, operations, prospects or financial conditions, which has not been
publicly disclosed but, under applicable law, rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on the
date hereof by the Company under the Securities Act with respect to a primary
issuance of the Company's securities. The Company has not provided, and without
the Purchaser's consent thereto, will not hereafter provide to the Purchaser,
any information which, according to applicable law, rule or regulation, should
have been disclosed publicly by the Company but which has not been disclosed.
o. Acknowledgment Regarding the Purchaser's Purchase of the Securities. The
Company acknowledges and agrees that the Purchaser is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement or the transactions contemplated hereby, and the relationship
between the Company and the Purchaser is "arms length" and that any statement
made by the Purchaser or any of its representatives or agents in connection with
this Agreement and the transactions contemplated hereby is not advice or a
recommendation and is merely incidental to the Purchaser's purchase of
Securities and has not been relied upon by the Company, its officers or
directors in any way. The Company further represents to the Purchaser that the
Company's decision to enter into this Agreement has been based solely on an
independent evaluation by the Company and its representatives.
p. No Brokers. The Company has not engaged any person to which or to whom
brokerage commissions, finder's fees, financial advisory fees or similar
payments are or will become due in connection with this Agreement or the
transactions contemplated hereby except for HCM (as defined below) in accordance
with Section 5(e) hereof and Josephthal & Co. Inc. ("Josephthal"), whose
commissions and fees will be paid by the Company. The Company has agreed to
issue a stock purchase warrant to Josephthal in connection with the execution
and delivery of this Agreement (the "Josephthal Warrant") with an exercise price
per share greater than the market price of the Common Stock on NASDAQ on the
date of issuance thereof and on such other terms as are described in Schedule
4(p).
q. Tax Status. The Company has made or filed all federal, state and local
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
11
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes claimed to be due by the taxing authority of any jurisdiction. The
Company has not executed a waiver with respect to any statute of limitations
relating to the assessment or collection of any federal, state or local tax.
Except as set forth in Schedule 4(q), none of the Company's tax returns has been
or is being audited by any taxing authority.
r. No General Solicitation. Neither the Company nor any person
participating on the Company's behalf in the transactions contemplated hereby
has conducted any "general solicitation," as such term is defined in Regulation
D, with respect to any of the Securities being offered hereby.
s. No Integrated Offering. Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security
under circumstances that would require registration of the Securities being
offered hereby under the Securities Act or cause this offering of Securities to
be integrated with any prior offering of securities of the Company for purposes
of the Securities Act or any applicable stockholder approval provisions,
including, without limitation, Rule 4460(i) of the National Association of
Securities Dealers ("NASD") or any similar rule.
t. Year 2000. To the best of the Company's knowledge:
(i) All hardware and software products used by the Company in the
administration and the business operations of the Company will be able to
process date data (including, but not limited to, calculating, comparing
and sequencing) in a consistent manner from, into and between the twentieth
century (through 1999), the year 2000 and the twenty-first century,
including leap year calculations, when used in accordance with the product
documentation accompanying such hardware and software products.
(ii) All software developed and sold by the Company (other than third
party software) will be able to process date data (including, but not
limited to, calculating, comparing and sequencing) in a consistent manner
from, into and between the twentieth century (through 1999), the year 2000
and the twenty-first century, including leap year calculations, when used
in accordance with the product documentation accompanying such software.
5. COVENANTS.
---------
a. Best Efforts. The parties shall use their best efforts timely to satisfy
each of the conditions set forth in Section 6 and Section 7 of this Agreement.
b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect
to the Securities as required under Regulation D and to provide a copy thereof
to each Purchaser promptly after such filing. The Company shall, on or before
the Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Securities for sale to the
12
Purchasers pursuant to this Agreement under applicable securities or "blue sky"
laws of the states of the United States or obtain exemption therefrom, and shall
provide evidence of any such action so taken to each Purchaser on or prior to
the Closing Date.
c. Reporting Status. So long as the Purchaser beneficially owns any
Securities or has the right to acquire any Securities pursuant to this
Agreement, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and shall not terminate its status as an
issuer required to file reports under the Exchange Act even if the Exchange Act
or the rules and regulations thereunder would permit such termination.
d. Use of Proceeds. The Company shall use the net proceeds from the sale of
the Shares and the Warrants for the purposes set forth on Schedule 5(d), but in
no event shall the Company use such net proceeds to repurchase any outstanding
securities of the Company without the Purchasers' prior written consent.
e. Expenses. At the Closing, the Company shall reimburse Heights Capital
Management, Inc. ("HCM") for the out-of-pocket expenses reasonably incurred by
HCM and its affiliates and advisors in connection with the negotiation,
preparation, execution and delivery of this Agreement, the Registration Rights
Agreement, the Warrants and the other agreements to be executed in connection
herewith, including, without limitation, in conducting HCM's and its affiliates'
and advisors' reasonable due diligence and HCM's and its affiliates' reasonable
attorneys' fees and expenses (the "Expenses"). Notwithstanding the foregoing,
the Company shall not be obligated to reimburse HCM for more than $50,000 of
Expenses pursuant to this Section 5(e). The Company's obligation to reimburse
HCM may be satisfied, at the option of HCM, by crediting the amount of such
obligation against HCM's Investment Amount and thereby reducing the Investment
Amount to be paid (but not the amount of the Investment Amount) by HCM pursuant
to Section 2(b)(ii) by an amount equal to such obligation.
f. Financial Information. For a period of two (2) years following the last
Closing, the Company agrees to send the following reports to each Purchaser: (i)
within ten days after the filing with the SEC, a copy of its Annual Report on
Form 10-K, its Quarterly Reports on Form 10-Q, its proxy and information
statements and any Current Reports on Form 8-K and (ii) within one day after
release, copies of all press releases issued by the Company or any of its
subsidiaries, if any.
g. Reservation of Shares. The Company has and shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares of Common Stock to provide for the issuance of the maximum number of
Shares as provided in Section 2 hereof and the full exercise of the Warrants and
the issuance of the Warrant Shares in connection therewith and as otherwise
required hereby and by the Warrants. The Company shall not reduce the number of
shares reserved for issuance hereunder or upon the full exercise of the Warrants
(except as a result of any such issuance hereunder or exercise of Warrants)
without the consent of the Purchaser.
h. Listing. On the Closing Date, the Company shall have secured the listing
of the Shares and Warrant Shares, in each case, upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed or quoted (subject
13
to official notice of issuance) and shall maintain, so long as any other shares
of Common Stock shall be so listed, such listing of all Shares from time to time
issuable hereunder and all Warrant Shares from time to time issuable upon
exercise of the Warrants. The Company will use its best efforts to continue the
listing and trading of its Common Stock on NASDAQ, the New York Stock Exchange
("NYSE") or the American Stock Exchange ("AMEX") and will comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of the NYSE or any other exchanges, as applicable, and the NASD.
i. Corporate Existence. So long as any Purchaser beneficially owns any
Securities or the right to acquire any Securities pursuant to this Agreement,
the Company shall maintain its corporate existence, except in the event of a
merger, consolidation or sale of all or substantially all of the Company's
assets, as long as the surviving or successor entity in such transaction (i)
assumes the Company's obligations hereunder and under the Warrants and under the
agreements and instruments entered into in connection herewith and (ii) is a
publicly trading Company whose common stock is listed and trades on NASDAQ, the
NYSE or AMEX.
j. Additional Equity Capital; Right of First Offer. The Company agrees that
during the period beginning on the date hereof and ending on the date which is
180 days following the Closing Date (the "Lock-Up Period"), the Company will
not, without the prior written consent of HCM, contract with any party to obtain
additional financing in which any equity or equity-linked securities are issued
(including any debt financing with an equity component) pursuant to any offering
exempt from the registration requirements of the Securities Act which grants any
registration rights exercisable within one year of the Closing Date ("Future
Offerings"). The Company will not conduct any Future Offering during the period
beginning on the day following the expiration of the Lock-Up Period and ending
180 days following the expiration of the Lock-Up Period unless it shall have
first delivered to the Purchasers, at least ten business days prior to the
closing of such Future Offering, written notice describing the proposed Future
Offering, including the terms and conditions thereof, and providing each
Purchaser and its affiliates an option during the ten business day period
following delivery of such notice to purchase all of the securities being
offered in the Future Offering on the same terms as contemplated by such Future
Offering (the limitations referred to in this Section 5(j) are collectively
referred to as the "Capital Raising Limitations"). The Capital Raising
Limitations shall not apply to any transaction involving issuances of securities
as consideration in a merger, consolidation or acquisition of assets, or in
connection with any strategic partnership or joint venture (the primary purpose
of which is not to raise equity capital), or as consideration for the
acquisition of a business, product or license by the Company. The Capital
Raising Limitations also shall not apply to (i) the issuance of securities
pursuant to an underwritten public offering, (ii) the issuance of securities
upon exercise or conversion of the Company's options, warrants or other
convertible securities outstanding as of the date hereof or (iii) the grant of
additional options or warrants, or the issuance of additional securities, under
any duly authorized Company stock option, stock purchase or restricted stock
plan for the benefit of the Company's employees, consultants or directors.
k. No Integrated Offerings. The Company shall not make any offers or sales
of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of
14
Securities to be integrated with any other offering of securities by the Company
for purposes of any stockholder approval provision applicable to the Company or
its securities.
l. Certain Trading Restrictions. So long as the Company is in compliance in
all material respects with its obligations to the Purchasers pursuant to this
Agreement, the Registration Rights Agreement and the Warrants, each Purchaser
agrees that it and its affiliates over which such Purchaser is exercising
investment discretion shall not engage in short sales or other hedging
transactions relating to the Common Stock prior to the earlier of (i) the
Registration Deadline (as defined in the Registration Rights Agreement) or (ii)
the Adjustment Date, unless and only while the then highest current bid price of
the Common Stock, as reported on NASDAQ, is greater than $17.90625. To the
extent that the foregoing sentence permits short sales or other hedging
transactions, then such transactions may only be effected in accordance with
Rule 10a-1 under the Exchange Act to the extent applicable.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
----------------------------------------------
The obligation of the Company hereunder to issue and sell Shares and
Warrants to a Purchaser at the Closing hereunder is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions thereto;
provided, however, that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion.
a. The applicable Purchaser shall have executed the signature page to this
Agreement and the Registration Rights Agreement, and delivered the same to the
Company.
b. The applicable Purchaser shall have delivered (i) such Purchaser's
Investment Amount in accordance with Section 2(b) above.
c. The representations and warranties of the applicable Purchaser shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date, which representations and warranties shall be true and correct as
of such date), and the applicable Purchaser shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
applicable Purchaser at or prior to the Closing Date.
d. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
15
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE SHARES AND WARRANTS.
-------------------------------------------------------------------------
The obligation of each Purchaser hereunder to purchase Shares and Warrants
to be purchased by it hereunder is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for such Purchaser's sole benefit and may be waived by such
Purchaser at any time in such Purchaser's sole discretion:
a. The Company shall have executed the signature pages to this Agreement
and the Registration Rights Agreement, and delivered the same to the Purchaser.
b. The Company shall have delivered to the Purchaser duly executed
certificates representing the number of Closing Shares and duly executed
Warrants as provided in Section 2(b) above.
c. The Shares shall be authorized for quotation on NASDAQ and trading in
the Common Stock (or NASDAQ generally) shall not have been suspended or be under
threat of suspension by the SEC or NASDAQ.
d. The representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true and correct as of such
date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. The Purchaser shall have received a certificate, executed
on behalf of the Company by its Chief Financial Officer, dated as of the Closing
Date, to the foregoing effect.
e. No statute, rule, regulation, executive order, decree, ruling,
injunction, action, proceeding or interpretation shall have been enacted,
entered, promulgated, endorsed or adopted by any court or governmental authority
of competent jurisdiction or any self-regulatory organization, or the staff of
any thereof, having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
f. The Purchaser shall have received an opinion of the Company's counsel,
dated as of the Closing Date, in substantially the form of Exhibit D attached
hereto.
g. From the date of this Agreement through the Closing Date, there shall
not have occurred any Material Adverse Effect.
h. The Company shall have provided advance notice to the NASD of the
issuance of the Shares as contemplated by NASD Rule 4310(c)(17) and provided the
Purchaser with evidence of the Company's compliance with such Rule, or evidence
of the NASD's waiver of the applicable time period.
16
8. GOVERNING LAW MISCELLANEOUS.
---------------------------
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
the state courts located in New York, New York in any suit or proceeding based
on or arising under this Agreement and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in such courts. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company further agrees that service of process upon
the Company mailed by first class mail to the address set forth in Section 8(f)
shall be deemed in every respect effective service of process upon the Company
in any such suit or proceeding. Nothing herein shall affect the right of any
Purchaser to serve process in any other manner permitted by law. The Company
agrees that a final non-appealable judgment in any such suit or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.
b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments; Waiver. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement and no provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and the Purchaser. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision of or any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
17
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:
If to the Company:
Microvision, Inc.
0000 Xxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
With a copy to:
Stoel Rives LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxxxxxx X. Xxxx, Esq.
If to the Purchaser, to the address set forth under the Purchaser's name on the
Execution Page hereto executed by such Purchaser.
Each party shall provide notice to the other parties of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns. The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Purchasers. If any Purchaser endeavors to
assign its rights and obligations under this Agreement with respect to the
acquisition of the Adjustment Shares to any affiliate or third party, then such
assignee, by written instrument duly executed by such assignee, shall assume all
obligations of such Purchaser hereunder with respect to the acquisition of the
Adjustment Shares so assigned and shall make the same representations and
warranties with respect thereto as such Purchaser makes in this Agreement,
whereupon such Purchaser shall be relieved of any further obligations,
responsibilities, and liabilities with respect to the acquisition of such
Adjustment Shares, the right to the acquisition of which has been so assigned.
h. Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by any other
person.
18
i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in Sections 4, 5 and 8 shall survive the
Closing notwithstanding any due diligence investigation conducted by or on
behalf of the Purchasers. Moreover, none of the representations and warranties
made by the Company herein shall act as a waiver of any rights or remedies a
Purchaser may have under applicable federal or state securities laws. The
Company agrees to indemnify and hold harmless each Purchaser and each of such
Purchaser's officers, directors, employees, partners, members, agents and
affiliates for loss or damage relating to the Securities purchased hereunder
arising as a result of or related to any breach by the Company of any of its
representations or covenants set forth herein, including advancement of expenses
as they are incurred.
j. Publicity. The Company and each Purchaser shall have the right to review
and comment upon, before issuance any press releases, SEC, NASDAQ or NASD
filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior review of the Purchasers, to make any press release or SEC,
NASDAQ or NASD filings with respect to such transactions as is required by
applicable law and/or exchange regulations (although the Purchasers shall be
entitled to review and comment upon any such press release prior to its
release). Within five days after the Closing Date, the Company shall file a
Current Report on Form 8-K or other appropriate form with the SEC disclosing the
transactions contemplated hereby.
k. Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
l. Termination. In the event that the Closing Date shall not have occurred
on or before April 1, 1999, unless the parties agree otherwise, this Agreement
shall terminate at the close of business on such date. Notwithstanding any
termination of this Agreement, any party not in breach of this Agreement shall
preserve all rights and remedies it may have against another party hereto for a
breach of this Agreement prior to or relating to the termination hereof.
m. Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement, the Registration
Rights Agreement and the Warrants. As such, the language used herein and therein
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
party to this Agreement, the Registration Rights Agreement or the Warrants.
n. Equitable Relief. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Purchaser by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
hereunder will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement, that a Purchaser
shall be entitled, in addition to all other available remedies, to an injunction
restraining
19
any breach and requiring immediate issuance and transfer, without the necessity
of showing economic loss and without any bond or other security being required.
o. Single Purchaser. Notwithstanding any references in this Agreement to
multiple Purchasers, the parties hereto acknowledge and agree that Capital
Ventures International is the sole Purchase hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
COMPANY:
MICROVISION, INC.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------
Title: CFO / VP Operations
-------------------------
PURCHASER:
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management, Inc.,
its authorized agent
By: /s/ XXXXXXX XXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxx
--------------------------
Title: Secretary and General
Counsel
-------------------------
Residence: Cayman Islands
Address: c/o Heights Capital Management,
Inc.
000 Xxxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
with copies of all notices to:
Klehr, Harrison, Xxxxxx, Branzburg &
Xxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Investment Amount $ 6,000,000
-----------
21
