REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
January 14, 1999, by and between MICROVISION, INC. a Washington corporation (the
"Company"), and XXXXXXXX XXXXXX (the "Investor").
RECITAL
WHEREAS, the Investor is purchasing 5,000 shares of the Company's Series B
Convertible Preferred Stock, Class 1, no par value (the "Series B-1 Stock") and
has been granted options to purchase 1,600 shares of the Company's Series B
Convertible Preferred Stock, Class 2, no par value ("Series B-2 Stock") and
1,920 shares of the Company's Series B Convertible Preferred Stock, Class 3, no
par value ("Series B-3 Stock" and, collectively with the Series B-1 Stock and
the Series B-2 Stock, the "Series B Stock"), pursuant to that certain Series B
Convertible Preferred 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
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means (i) the Common Stock issuable
or issued upon conversion of the Series B Stock and (ii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, the Series B Stock,
excluding in all cases, however, any Registrable Securities sold by a person in
a transaction in which its rights under this Agreement are not assigned;
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(c) The number of shares of "Registrable Securities then outstanding" shall
be determined by the number of shares of Common Stock outstanding which are, and
the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities which are, Registrable Securities;
(d) The term "Holder" means any person owning or having the right to
acquire 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 any assignee thereof in accordance with Section 3; and
(e) The term "Form S-3" means such form under the Act as in effect on the
date hereof or any registration form under the Act subsequently adopted by the
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) If, at any time after the expiration of 180 days after the closing of
the transactions contemplated by the Purchase Agreement, the Holder(s) of at
least 80% of the Registrable Securities then outstanding requests that the
Company file a registration statement of Form S-3 covering the resale of the
Registrable Securities, and the Company is a registrant entitled to use Form S-3
to register the Registrable Securities for such resale, the Company shall use
its reasonable best efforts to cause such Registrable Securities to be
registered for resale on such form. Upon receipt of such a request for
registration, the Company will:
i. promptly give written notice of the proposed registration and any
related qualification or compliance to all other Holders;
ii. file a registration statement covering the Registrable Securities
and other securities so requested to be registered as soon as practical after
receipt of the request or requests of the Holders, and effect such all such
other qualifications and compliances as may be so required to permit or
facilitate the sale and distribution of all or such portion of such Holders'
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holders joining in such
request as are specified in a written request given within 15 days after receipt
of written notice from the Company given in accordance with clause (a)(i).
(b) Notwithstanding the foregoing: (i) the Company shall not be obliged to
effect a registration pursuant to this Section 2 in the period starting 60 days
before the Company's good faith estimated date of filing of, and ending 90 days
after the effective date of, a registration statement pertaining to an
underwritten public offering of securities for the account of the Company (other
than a registration relating solely to the sale of securities to participants in
a Company stock option or stock purchase plan, or a registration on any form
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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
Shares, or a registration on Form S-4), if the Company is at all times during
such period diligently and in good faith pursuing such registration, provided,
however, that the Company shall promptly notify the Holders of any decision to
abandon or significantly delay such public offering; (ii) the Company shall not
be obliged to register for any Holder such number of Registrable Shares as such
Holder may sell freely in a broker's transaction pursuant to Rule 144 under the
Securities Act within three months of the date of the request for registration;
(iii) if the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public of less than one million dollars ($1.0); (iv) if the Company shall
furnish to the Holders a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such Form S-3 registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 90 days after receipt of the request of
the Holders under this Section 2; provided, however, that the Company shall not
exercise this right more than once in any 12-month period; (v) if the Company
has, within the six-month period preceding the date of such request, already
effected one such registration on Form S-3 for the Holders pursuant to this
Section 2; or (vi) in any particular 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 qualification or compliance.
(c) All reasonable expenses incurred in connection with the registrations
requested pursuant to this Section 2, including, without limitation, all
registration, filing, qualification, printing and accounting fees and the
reasonable fees and disbursements of one counsel for the selling Holders and
counsel for the Company, shall be borne by the Company.
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 Shares, the Company shall, as
promptly as reasonably possible:
(a) Prepare and file with the SEC a registration statement covering such
Registrable Shares and use its best efforts to cause such registration statement
to become effective, and, at the request of the Holders holding a majority of
the Registrable Shares registered thereunder, keep such registration statement
continuously effective for up to 180 days or such shorter period as will
terminate when all the Registrable Shares covered by the registration statement
have been sold.
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(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
Shares 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 Shares.
(d) Use its best efforts to register and qualify the Registrable Shares
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 Shares 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 Shares registered hereunder to be listed on each
securities exchange or market on which similar securities issued by The Company
are then listed.
4. Shareholders' Information.
The Company is obliged to take actions to register Registrable Shares under
this Agreement only if the Holders requesting registration provide the Company
on a timely basis all information regarding themselves, their Registrable
Shares, and their intended method of disposition of such securities as shall be
reasonably required to effect the registration of their Registrable Shares.
5. Assignment of Registration Rights
The rights to cause the Company to register Registrable Securities pursuant
to this Agreement may be assigned by a Holder to a transferee or assignee of
such securities who 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 Act; and
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(iii) the transferee or assignee executes an endorsement to this Agreement
agreeing to be bound by all the terms and conditions hereof as Holder.
6. "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 such Holder shall
not sell or otherwise transfer or dispose of any Registrable Shares held by such
Holder (other than those included in the registration and underwriting) without
the prior written consent of the Company or such underwriter for a period not to
exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act (the
"Lock-up Period"); provided, that all officers and directors of The Company and
all shareholders holding at least five percent (5%) of the shares of the Company
and other persons with registration rights also enter into similar agreements.
(b) Such agreement shall only apply to the first such registration
statement of the Company, including securities to be sold on its behalf to the
public in an underwritten offering.
(c) The obligations described in this Section 6 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 Shares, or a
registration on Form S-4. The Company may impose stop-transfer instructions with
respect to the Registrable Shares 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 Shares consent to
such waiver or termination.
7. 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.
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8. 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 shares of the Company that are
Registrable Securities themselves or upon which Registrable Securities are
based. 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.
9. 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.
10. 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.
11. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
12. 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: /s/ XXXXXXXX XXXXXXXX
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Its: Attorney-in-Fact/IP Counsel
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INVESTOR:
XXXXXXXX XXXXXX
/s/ XXXXXXXX XXXXXX
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