SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 14, 1999
MICROVISION, INC.
(Exact name of registrant as specified in its charter)
Washington 0-21221 91-1600822
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
2203 Airport Way South, Suite 100
Seattle, Washington 98134
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (206) 623-7055
Registrant's facsimile number, including area code: (206) 623-5961
<PAGE>
Item 5. Other Events
------------
On January 14, 1999, Microvision, Inc. (the "Company") raised $5,000,000
through the sale of 5,000 shares of its Series B Convertible Preferred Stock,
Class 1 (the "Series B-1 Stock") to Margaret Elardi, an accredited investor. The
Series B-1 Stock will be convertible from time to time into shares of common
stock at an initial conversion price of $12.50 per share, subject to adjustment
under certain conditions. The Company also granted Mrs. Elardi an option to
purchase 1,600 shares of Series B Convertible Preferred Stock, Class 2 (the
"Series B-2 Stock") at $1,000 per share at any time prior to July 14, 1999, and
an option to purchase 1,920 shares of Series B Convertible Preferred Stock,
Class 3 (the "Series B-3 Stock") at $1,000 per share at any time prior to
October 14, 1999. The initial conversion price for the Series B-2 Stock is
$16.00 per share and for the Series B-3 Stock is $19.20 per share. The Company
expects to file a registration statement covering the resale of the shares of
common stock underlying the Series B Convertible Preferred Stock after July 14,
1999.
Upon closing of the financing, the Board of Directors of the Company
elected Mrs. Elardi as a director. Mrs. Elardi will serve as a director of the
Company until the next annual meeting of the shareholders of the Company and
until her successor is duly qualified and elected.
Item 7. Financial Statements and Exhibits
---------------------------------
A. Financial Statements
--------------------
None.
B. Exhibits
--------
The following are filed as exhibits to this Current Report:
3.1 Amended and Restated Articles of Incorporation of
Microvision, Inc.(1)
3.1.1 Articles of Amendment of Articles of Incorporation Containing
the Statement of Rights and Preferences of the Series B
Convertible Preferred Stock of Microvision, Inc., dated
January 13, 1999
4.1 Form of specimen certificate for the Series B-1 Stock
4.2 Form of specimen certificate for the Series B-2 Stock
4.3 Form of specimen certificate for the Series B-3 Stock
4.4 Registration Rights Agreement, dated as of January 14, 1999,
between Microvision, Inc. and Margaret Elardi
10.1 Series B Convertible Preferred Stock Purchase Agreement,
dated as of January 14, 1999, between Microvision, Inc. and
Margaret Elardi
(1) Incorporated by reference to the Company's Form SB-2 Registration
Statement, Registration No. 333-5276-LA.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MICROVISION, INC.
By: /s/ RICHARD F. RUTKOWSKI
--------------------------------------
Richard F. Rutkowski
President and Chief Executive Officer
Date: January 28, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
3.1 Amended and Restated Articles of Incorporation of Microvision,
Inc.(1)
3.1.1 Articles of Amendment of Articles of Incorporation Containing the
Statement of Rights and Preferences of the Series B Convertible
Preferred Stock of Microvision, Inc., dated January 13, 1999
4.1 Form of specimen certificate for the Series B-1 Stock
4.2 Form of specimen certificate for the Series B-2 Stock
4.3 Form of specimen certificate for the Series B-3 Stock
4.4 Registration Rights Agreement, dated as of January 14, 1999,
between Microvision, Inc. and Margaret Elardi
10.1 Series B Convertible Preferred Stock Purchase Agreement, dated as
of January 14, 1999, between Microvision, Inc. and Margaret Elardi
(1) Incorporated by reference to the Company's Form SB-2 Registration
Statement, Registration No. 333-5276-LA.
ARTICLES OF AMENDMENT
OF ARTICLES OF INCORPORATION
CONTAINING THE
STATEMENT OF RIGHTS AND PREFERENCES OF THE
SERIES B CONVERTIBLE PREFERRED STOCK OF
MICROVISION, INC.
These Articles of Amendment containing the Statement of Rights and
Preferences of the Series B Convertible Preferred Stock of Microvision, Inc., a
Washington corporation (the "Corporation") are herein executed by the
Corporation, pursuant to the provisions of RCW 23B.06.020 and RCW 23B.10.060 as
follows:
1. The name of the Corporation is Microvision, Inc.
2. A copy of the resolution of the Board of Directors of the Corporation
amending the Articles of Incorporation of the Corporation to establish and
designate the rights and preferences of the Series B Convertible Preferred Stock
of the Corporation is attached hereto as Attachment A and is incorporated herein
by this reference.
3. The date of the adoption of the amendments by the Board of Directors of
the Corporation was January 13, 1999.
4. The amendments to the Articles of Incorporation were duly approved by
the Board of Directors of the Corporation.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment in an official and authorized capacity under penalty of perjury this
13th day of January, 1999.
MICROVISION, INC.
By: /s/ CASEY TEGREENE
-------------------------------------
Casey Tegreene, Attorney-in-fact
for Richard F. Rutkowski,
President and Chief Executive Officer
<PAGE>
ATTACHMENT A
RESOLVED, that, pursuant to Article II of the Corporation's Articles
of Incorporation, the Board of Directors hereby establishes a series
of the Corporation's preferred stock to be designated as the "Series B
Convertible Preferred Stock," no par value, consisting of 8,520
shares, of which 5,000 shares shall be Series B Convertible Preferred
Stock, Class 1, 1,600 shares shall be Series B Convertible Preferred
Stock, Class 2, and 1,920 shares shall be Series B Convertible
Preferred Stock, Class 3, and that the preferences, limitations and
relative rights of the shares of the Series B Stock shall be as set
forth in the Statement of Rights and Preferences of Series B Preferred
Stock, attached hereto as Exhibit A;
<PAGE>
Exhibit A
MICROVISION, INC.
8,520 Shares
Series B Convertible Preferred Stock, No Par Value
Stated Value $1,000.00 Per Share
Statement of Rights and Preferences
1. Designation and Amount. The rights, preferences, privileges, and limitations
granted to and imposed on the Series B Convertible Preferred Stock, no par value
("Series B Stock") of Microvision, Inc. (the "Corporation"), which series shall
consist of 8,520 shares of which 5,000 shares shall be designated Series B
Convertible Preferred Stock, Class 1 ("Series B-1 Stock"), 1,600 shares shall be
designated Series B Convertible Preferred Stock, Class 2 ("Series B-2 Stock"),
and 1,920 shares shall be designated Series B Convertible Preferred Stock, Class
3 ("Series B-3 Stock"), are as set forth below.
2. Dividends. The holders of the Series B Stock shall be entitled to receive,
when, as, and if declared by the Board of Directors, cumulative dividends at the
rate of $40.00 per share (as adjusted for any stock dividends, combinations or
splits) per annum payable out of funds legally available therefor or in duly
authorized shares of Common Stock.
3. Voting Rights. Except as otherwise required by law, the Series B Stock shall
not be entitled to vote on any matter submitted to a vote of the shareholders of
the Corporation.
4. Liquidation.
-----------
4.1 Liquidation Value. Upon any liquidation, dissolution or winding up of
the Corporation, the holders of the Series B Stock shall be entitled before any
distribution or payment is made upon any Common Stock, to be paid an amount
equal to $1000.00 per share, plus any accrued but unpaid dividends to the date
of such payment (the "Liquidation Value"). If upon such liquidation, dissolution
or winding up of the Corporation, the assets to be distributed among the holders
of Series B Stock shall be insufficient to permit payment to the holders of
Series B Stock of the amount distributable to them as provided herein, then
-1-
<PAGE>
the entire assets of the Corporation legally permitted to be distributed shall
be distributed ratably among the holders of Series B Stock. Upon any such
liquidation, dissolution or winding up of the Corporation, after the holders of
the Series B Stock shall have been paid in full the amounts to which they shall
be entitled, the remaining net assets of the Corporation may be distributed to
the holders of Common Stock.
4.2 Liquidation Events. The sale of all or substantially all of the assets
of the Corporation, or the acquisition of the Corporation by another entity by
means of merger, consolidation, share exchange, reorganization or otherwise
pursuant to which shares of capital stock of the Corporation are converted into
cash, securities or other property of the acquiring entity or any of its
affiliates (other than any merger, share exchange, or similar transaction
effected exclusively for the purpose of changing the domicile of the
Corporation) shall be regarded as a liquidation within the meaning of this
Section 4; provided, however, that each holder of Series B Stock shall have the
right to elect to convert such holder's Series B Stock pursuant to Section 6 in
lieu of receiving payment in liquidation, dissolution or winding up of the
Corporation; provided, further, that this provision shall not apply if the
holders of voting securities of the Corporation immediately prior to such
merger, consolidation, share exchange, reorganization or sale of assets
beneficially own, directly or indirectly, a majority of the combined voting
power of the surviving entity resulting from such merger, consolidation, share
exchange, reorganization or sale of assets.
4.3 Notice of Liquidation. The Corporation shall provide written notice of
such liquidation to each record holder of Series B Stock not less than 20 days
prior to the payment date stated therein.
5. Redemption.
----------
5.1 Mandatory Redemption.
--------------------
5.1.1 The Corporation shall redeem all shares of Series B Stock at any
time after January 14, 2004 (the "Redemption Date") into a number of shares of
Conversion Stock (as defined in Section 6.3 below) computed by (i) multiplying
the number of shares of Series B Stock to be redeemed by the Liquidation Value
thereof and (i) dividing the result by the applicable Conversion Price (as
defined in Section 6.4 below) then in effect (the "Redemption Shares").
-2-
<PAGE>
5.1.2 If the Market Price of the Common Stock (as defined in Section
5.3 below) has been not less than 150% of the Series B-1 Conversion Price (as
defined in Section 6.4.1 below) for a period of ten or more consecutive trading
days, then the Corporation may, at its option, redeem all or any portion of the
outstanding shares of Series B-1 Stock into the applicable number of Redemption
Shares.
5.1.3 If the Market Price of the Common Stock has been not less than
150% of the Series B-2 Conversion Price (as defined in Section 6.4.2 below) for
a period of ten or more consecutive trading days, then the Corporation may, at
its option, redeem all or any portion of the outstanding shares of Series B-2
Stock into the applicable number of Redemption Shares.
5.1.4 If the Market Price of the Common Stock has been not less than
150% of the Series B-3 Conversion Price (as defined in Section 6.4.3 below) for
a period of ten or more consecutive trading days, then the Corporation may, at
its option, redeem all or any portion of the outstanding shares of Series B-3
Stock into the applicable number of Redemption Shares.
5.2 Status of Series B Stock After Redemption Date. No share of Series B
Stock is entitled to any dividends accruing after the Redemption Date, and all
rights of the holder of such share shall cease, and such share shall not be
deemed to be outstanding, as of the Redemption Date. Any shares of Series B
Stock that are redeemed or otherwise acquired by the Corporation shall be
canceled and shall not be reissued, sold or transferred.
5.3 Market Price. "Market Price" means the closing price of the Common
Stock on the Nasdaq National Market or on any securities exchange on which the
Common Stock may at the time be listed, or, if there have been no sales on any
such market or exchange on any day, the average of the highest bid and lowest
asked prices on such market or exchange at the end of such day, or, if on any
day the Common Stock is not so listed, the average of the highest bid and lowest
asked prices on such day on the OTC Bulletin Board market.
-3-
<PAGE>
6. Conversion.
----------
6.1 Voluntary Conversion. At any time and from time to time, any holder of
Series B Stock may convert all or any portion thereof (including any fraction of
a share) held by such holder into a number of shares of Conversion Stock
computed by (i) multiplying (x) the number of shares to be converted by (y) the
sum of $1000.00 plus any accrued but unpaid dividends on such shares, and (ii)
dividing the result by the Conversion Price then in effect.
6.2 Conversion Procedure.
--------------------
6.2.1 Each conversion of Series B Stock shall be deemed to have been
effected as of the close of business on the date on which the certificate or
certificates representing the Series B Stock to be converted shall have been
surrendered at the principal office of the Corporation. At such time as such
conversion has been effected, the rights of the holder of such Series B Stock as
such holder shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Conversion Stock are to be issued upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Conversion Stock represented thereby.
(a) The conversion rights of the Series B Stock shall terminate
three days prior to the Redemption Date.
(b) As soon as possible after a conversion has been effected (but
in any event within ten business days in the case of subparagraph (i)
below), the Corporation shall deliver to the converting holder:
(i) a certificate or certificates representing the number of
shares of Conversion Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified;
(ii) a certificate representing any shares of Series B Stock that
were represented by the certificate or certificates delivered to the
Corporation in connection with such conversion but which were not
converted;
-4-
<PAGE>
(iii) The issuance of certificates for shares of Conversion Stock
upon conversion of Series B Stock shall be made without charge to the
holders of such Series B Stock for any issuance tax in respect thereof or
other cost incurred by the Corporation in connection with such conversion
and the related issuance of shares of Conversion Stock. Upon conversion of
each share of Series B Stock, the Corporation shall take all such actions
as are necessary in order to insure that the Conversion Stock issuable with
respect to such conversion shall be validly issued, fully paid, and
nonassessable.
(iv) The Corporation shall assist and cooperate with any holder
of shares required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of
shares hereunder (including, without limitation, making any filings
required to be made by the Corporation).
(v) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be deliverable upon
any conversion of the Series B Preferred, the Corporation, in lieu of
delivering the fractional share therefor, shall pay an amount to the holder
thereof equal to the Market Price of such fractional interest as of the
date of conversion.
(vi) If the shares of Conversion Stock issuable by reason of such
conversion of Series B Stock are convertible into or exchangeable for any
other stock or securities of the Corporation, the Corporation shall, at the
converting holder's option, upon surrender of the shares to be converted by
such holder as provided above together with any notice, statement or
payment required to effect such conversion or exchange of Conversion Stock,
deliver to such holder or as otherwise specified by such holder a
certificate or certificates representing the stock or securities into which
the shares of Conversion Stock issuable by reason of such conversion are so
convertible or exchangeable, registered in such name or names and in such
denomination or denominations as such holder has specified.
6.3 Conversion Stock. As used herein, the term "Conversion Stock" means the
Common Stock of the Corporation; provided that if there is a change such that
the securities issuable upon conversion of the Series B Stock are issued by an
entity other than the
-5-
<PAGE>
Corporation or there is a change in the class of securities so issuable, then
the term "Conversion Stock" shall mean the security issuable upon conversion of
such Series B Stock.
6.4 Conversion Price.
----------------
6.4.1 Subject to adjustment as set forth in Section 6.5, the initial
conversion price for the Series B-1 Stock (the "Series B-1 Conversion Price")
shall be $12.50.
6.4.2 Subject to adjustment as set forth in Section 6.5, the initial
conversion price for the Series B-2 Stock (the "Series B-2 Conversion Price")
shall be $16.00.
6.4.3 Subject to adjustment as set forth in Section 6.5, the initial
conversion price for the Series B-3 Stock (the "Series B-3 Conversion Price")
shall be $19.20.
6.5 Adjustments to Conversion Price. In order to prevent dilution of the
conversion rights granted hereunder, the applicable Conversion Price of the
Series B Stock shall be subject to adjustment from time to time as set forth
below:
6.5.1 In the event the Company at any time or from time to time
declares or pays any dividend on the Common Stock payable in shares of Common
Stock, or shall effect a subdivision or combination or consolidation of the
outstanding Common Stock (by stock split, reclassification or otherwise than by
payment of a share dividend) into a greater or lesser number of shares of Common
Stock, as the case may be, then the Conversion Price in effect immediately prior
to such event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate, based on the ratio of
(i) the number of shares of Common Stock outstanding immediately after such
event to (ii) the number of shares of Common Stock outstanding immediately prior
to such event.
6.5.2 If at any time or from time to time the shares of Common Stock
issuable upon conversion of the Series B Stock shall be changed into the same or
a different number of shares of any other class or classes of stock, whether by
recapitalization, reorganization, reclassification or otherwise (other than a
subdivision, combination or consolidation of shares, as provided above), the
Conversion Price then in effect shall, concurrently with the effectiveness of
such event, be proportionately adjusted such that the Series B Stock shall be
convertible into, in lieu of the number of shares of Common Stock to
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<PAGE>
which the holders otherwise would have been entitled to receive, a number of
shares of such other class or classes of shares equivalent to the number of
shares of Common Stock to which the holders would have been entitled to receive
upon conversion of the Series B Stock immediately before the event. In addition,
to the extent applicable in any recapitalization, reorganization or
reclassification, provision shall be made so that the holders of the Series B
Stock shall thereafter be entitled to receive upon conversion of the Series B
Stock the number of shares or property of the Company or otherwise, to which a
holder of Common Stock deliverable upon conversion would have been entitled on
such recapitalization, reorganization or reclassification.
6.5.3 Promptly after any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Series B Stock,
setting forth in reasonable detail and certifying the calculation of such
adjustment.
7. Amendment and Waiver. No amendment, modification or waiver shall be binding
or effective with respect to any provision of this Statement of Rights and
Preferences without the written consent of the holders of at least a majority of
the Series B Stock outstanding at the time such action is taken.
8. Amendment Upon Conversion or Redemption of Outstanding Shares.
-------------------------------------------------------------
When, as a result of the conversion or redemption of the Series B Stock no
shares thereof remain outstanding, the Board of Directors may, at its discretion
and without a vote of the shareholders of the Corporation, withdraw this
designation in its entirety by providing for the filing of an applicable
amendment or restatement of the Corporation's Restated Articles of
Incorporation, and the Series B Stock designated hereby shall thereby return to
the status of authorized but unissued and undesignated shares of Preferred Stock
of the Corporation.
-7-
Exhibit 4.1
SPECIMEN
Series B Convertible Preferred Stock, Class 1
See Restrictions on Other Side:
================================================================================
Number Shares
PB1-1 --
MICROVISION, INC.
Organized under the Laws of the State of Washington
Authorized Capital: 31,250,000 Common Stock, No Par Value
31,250,000 Preferred Stock, No Par Value
This Certifies that: SPECIMEN is the
registered holder of ____________________________________________________ Shares
of the Series B Convertible Preferred Stock, Class 1, No Par Value of
MICROVISION, INC.
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this _______________ day of _______________, A.D. ______
_______________________________ _______________________________
President Secretary
================================================================================
<PAGE>
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE WASHINGTON STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES
ACT (THE "ACTS"), AND NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING
MATERIALS HAVE BEEN REVIEWED BY ANY ADMINISTRATOR UNDER THE ACTS. THE SECURITIES
WERE ACQUIRED BY THE REGISTERED HOLDER PURSUANT TO A REPRESENTATION THAT THE
HOLDER WAS ACQUIRING THE SECURITIES FOR THE HOLDER'S OWN ACCOUNT, FOR
INVESTMENT. THESE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER THE ACTS OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT.
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER, UPON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND
RELATIVE RIGHTS OF THE SHARES OF EACH CLASS AUTHORIZED TO BE ISSUED BY THE
CORPORATION, AND OF THE VARIATIONS IN THE RELATIVE RIGHTS AND PREFERENCES
BETWEEN THE SHARES OF EACH SERIES OF EACH CLASS SO AUTHORIZED, SO FAR AS THE
SAME HAVE BEEN FIXED AND DETERMINED AND THE AUTHORITY OF THE BOARD OF DIRECTORS
OF THE CORPORATION TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF
SUBSEQUENT SERIES.
FOR VALUE RECEIVED, __________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
_____________________________ _____________ SHARES REPRESENTED BY THE WITHIN
CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT _________________
ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED
CORPORATION, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED: ___________________________
IN THE PRESENCE OF:
__________________________________
__________________________________
Exhibit 4.2
SPECIMEN
Series B Convertible Preferred Stock, Class 2
See Restrictions on Other Side:
================================================================================
Number Shares
PB2-1 --
MICROVISION, INC.
Organized under the Laws of the State of Washington
Authorized Capital: 31,250,000 Common Stock, No Par Value
31,250,000 Preferred Stock, No Par Value
This Certifies that: SPECIMEN is the
registered holder of ____________________________________________________ Shares
of the Series B Convertible Preferred Stock, Class 2, No Par Value of
MICROVISION, INC.
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this _______________ day of _______________, A.D. ______
_______________________________ _______________________________
President Secretary
================================================================================
<PAGE>
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE WASHINGTON STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES
ACT (THE "ACTS"), AND NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING
MATERIALS HAVE BEEN REVIEWED BY ANY ADMINISTRATOR UNDER THE ACTS. THE SECURITIES
WERE ACQUIRED BY THE REGISTERED HOLDER PURSUANT TO A REPRESENTATION THAT THE
HOLDER WAS ACQUIRING THE SECURITIES FOR THE HOLDER'S OWN ACCOUNT, FOR
INVESTMENT. THESE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER THE ACTS OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT.
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER, UPON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND
RELATIVE RIGHTS OF THE SHARES OF EACH CLASS AUTHORIZED TO BE ISSUED BY THE
CORPORATION, AND OF THE VARIATIONS IN THE RELATIVE RIGHTS AND PREFERENCES
BETWEEN THE SHARES OF EACH SERIES OF EACH CLASS SO AUTHORIZED, SO FAR AS THE
SAME HAVE BEEN FIXED AND DETERMINED AND THE AUTHORITY OF THE BOARD OF DIRECTORS
OF THE CORPORATION TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF
SUBSEQUENT SERIES.
FOR VALUE RECEIVED, __________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
_____________________________ _____________ SHARES REPRESENTED BY THE WITHIN
CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT _________________
ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED
CORPORATION, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED: ___________________________
IN THE PRESENCE OF:
__________________________________
__________________________________
Exhibit 4.3
SPECIMEN
Series B Convertible Preferred Stock, Class 3
See Restrictions on Other Side:
================================================================================
Number Shares
PB3-1 --
MICROVISION, INC.
Organized under the Laws of the State of Washington
Authorized Capital: 31,250,000 Common Stock, No Par Value
31,250,000 Preferred Stock, No Par Value
This Certifies that: SPECIMEN is the
registered holder of ____________________________________________________ Shares
of the Series B Convertible Preferred Stock, Class 3, No Par Value of
MICROVISION, INC.
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this _______________ day of _______________, A.D. ______
_______________________________ _______________________________
President Secretary
================================================================================
<PAGE>
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE WASHINGTON STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES
ACT (THE "ACTS"), AND NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING
MATERIALS HAVE BEEN REVIEWED BY ANY ADMINISTRATOR UNDER THE ACTS. THE SECURITIES
WERE ACQUIRED BY THE REGISTERED HOLDER PURSUANT TO A REPRESENTATION THAT THE
HOLDER WAS ACQUIRING THE SECURITIES FOR THE HOLDER'S OWN ACCOUNT, FOR
INVESTMENT. THESE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER THE ACTS OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT.
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER, UPON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND
RELATIVE RIGHTS OF THE SHARES OF EACH CLASS AUTHORIZED TO BE ISSUED BY THE
CORPORATION, AND OF THE VARIATIONS IN THE RELATIVE RIGHTS AND PREFERENCES
BETWEEN THE SHARES OF EACH SERIES OF EACH CLASS SO AUTHORIZED, SO FAR AS THE
SAME HAVE BEEN FIXED AND DETERMINED AND THE AUTHORITY OF THE BOARD OF DIRECTORS
OF THE CORPORATION TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF
SUBSEQUENT SERIES.
FOR VALUE RECEIVED, __________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
_____________________________ _____________ SHARES REPRESENTED BY THE WITHIN
CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT _________________
ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED
CORPORATION, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED: ___________________________
IN THE PRESENCE OF:
__________________________________
__________________________________
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 MARGARET ELARDI (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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<PAGE>
(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
2
<PAGE>
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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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first above written.
COMPANY:
MICROVISION, INC.
By: /s/ CLARENCE TEGREENE
------------------------------------
Its: Attorney-in-Fact/IP Counsel
------------------------------
INVESTOR:
MARGARET ELARDI
/s/ MARGARET ELARDI
----------------------------------------
7
SERIES B CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
January 14, 1999, by and among MICROVISION, INC., a Washington corporation (the
"Company"), and MARGARET ELARDI ("Purchaser").
W I T N E S S E T H
WHEREAS, the Company proposes to issue and sell, and Purchaser desires to
purchase from the Company, 5,000 shares of the Company's Series B Convertible
Preferred Stock, Class 1, no par value ("Series B-1 Stock"), and to grant
Purchaser an option to purchase 1,600 shares of the Company's Series B
Convertible Preferred Stock, Class 2, no par value ("Series B-2 Stock") and an
option to purchase 1,920 shares of the Company's Series B Convertible Preferred
Stock, Class 3, no par value ("Series B-3 Stock"), on the terms and subject to
the conditions set forth herein; and
WHEREAS, the Company and Purchaser desire to enter into an registration
rights agreement of even date herewith, pursuant to which Purchaser shall have
certain registration rights.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
SECTION 1.
Definitions
-----------
1.1 Defined Terms. Except as otherwise defined herein, capitalized terms
uses in this Agreement shall have the following meanings:
"Common Stock" means the Company's Common Stock, no par value.
"Director Plan" means the Microvision, Inc. 1996 Independent Director Stock
Plan, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Knowledge" or derivations thereof shall mean the knowledge of the officers
of the Company.
<PAGE>
"Lien" means any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer restriction under any shareholder or similar agreement, encumbrance or
any other restriction or limitation whatsoever.
"Material Adverse Effect" means any materially adverse effect on the
business, assets, liabilities, condition (financial or otherwise), results of
operations or prospects of the Company.
"1996 Stock Plan" means the Microvision, Inc. 1996 Stock Option Plan, as
amended.
"Permits" means any approvals, authorizations, consents, licenses, permits
or certificates.
"Person" means an individual, partnership, limited liability company,
corporation, joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Preferred Stock" means any of the Series A Stock, Series B-1 Stock, Series
B-2 Stock or Series B-3 Stock.
"Prior Plans" means the Company's 1993 Stock Option Plan, 1994 Combined
Incentive and Nonqualified Stock Option Plan and 1995 Combined Incentive and
Nonqualified Stock Option Plan.
"Registration Rights Agreement" means the Registration Rights Agreement of
even date herewith by and between the Company and the Purchaser in the form
attached hereto as Exhibit A.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Stock" means the Series A Convertible Preferred Stock of the
Company, no par value.
"Series B-1 Stock" means the Series B Convertible Preferred Stock, Class 1
of the Company, no par value.
"Series B-2 Stock" means the Series B Convertible Preferred Stock, Class 2
of the Company, no par value.
"Series B-3 Stock" means the Series B Convertible Preferred Stock, Class 3
of the Company, no par value.
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SECTION 2.
Sale and Purchase; Grant of Purchase Options
--------------------------------------------
2.1 Sale and Purchase of Series B-1 Stock. In reliance on the
representations and warranties of the Company and of Purchaser contained herein
and subject to the terms and conditions hereof, Purchaser agrees to purchase
from the Company, and the Company agrees to sell and issue to Purchaser, 5,000
shares of Series B-1 Stock at a purchase price of One Thousand Dollars
($1,000.00) per share (the "Initial Purchase"), for an aggregate purchase price
of Five Million Dollars ($5,000,000).
2.2 Option to Purchase Series B-2 Stock. At any time prior to July 14,
1999, Purchaser shall have the option to purchase up to 1,600 shares of Series
B-2 Stock on the same terms as the Initial Purchase.
2.3 Option to Purchase Series B-3 Stock. At any time prior to October 14,
1999, Purchaser shall have the option to purchase up to 1,920 shares of Series
B-3 Stock on the same terms as the Initial Purchase.
SECTION 3.
Closings; Delivery
------------------
3.1 Closing Dates. The first closing of the purchase and sale of the 5,000
shares of Series B Stock (the "First Closing") shall be held at the offices of
Stoel Rives LLP, 600 University Street, Suite 3600, Seattle, Washington 98101 on
January 14, 1999, or on such other date or at such other place as Purchaser and
the Company shall mutually agree. Any other closings that occur pursuant to the
terms hereof ("Additional Closings") shall be held at such dates and times as
the parties shall mutually agree. Any of the date of the First Closing and any
Additional Closing is referred to herein as the "Closing Date."
3.2 Delivery. At the closings the Company shall: (a) deliver to Purchaser a
certificate evidencing the Shares being purchased by her and (b) make such other
deliveries as may be required under the terms of this Agreement.
SECTION 4.
Representations and Warranties of the Company
---------------------------------------------
The Company hereby represents and warrants to, and agrees with, Purchaser
as follows:
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4.1 Organization, Good Standing and Qualification. The Company (i) is an
entity duly organized, validly existing and in good standing under the laws of
Washington, (ii) has all requisite power and authority to carry on its business,
(iii) is duly qualified to transact business and is in good standing in all
jurisdictions where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to do so
would not be material to the Company. The Company has the corporate power and
authority and is in possession of all material franchises, grants,
authorizations, licenses, permits, easements, consents, certificates, approvals
and orders (a) to own, lease and operate its properties and to carry on its
business as now being conducted and (b) to execute and deliver this Agreement
and the documents and instruments contemplated hereby and to consummate the
transactions contemplated hereby.
4.2 Capitalization.
--------------
4.2.1 The authorized capital stock of the Company is 62,500,000
shares, consisting of 31,250,000 shares of common stock, no par value ("Common
Stock") of which 6,063,626 shares were issued and outstanding as of December 31,
1998, and 31,250,000 shares of Preferred Stock. Of the authorized shares of
Preferred Stock, 1,875,000 shares have been designated as Series A Stock, of
which no shares are issued and outstanding; 5,000 shares have been designated
Series B-1 Stock, of which no shares are issued and outstanding; 1,600 shares
have been designated Series B-2 Stock, of which no shares are issued and
outstanding; and 1,920 shares have been designated Series B-3 Stock, of which no
shares are issued and outstanding. The Company has duly and validly reserved for
issuance 3,000,000 shares of Common Stock upon exercise of options currently
outstanding or issued under the 1996 Plan; 75,000 shares of Common Stock for
issuance under the Director Plan; 1,288,938 shares of Common Stock upon exercise
of options issued under the Prior Plans; and 2,273,926 shares of Common Stock
for issuance upon exercise of publicly traded common stock purchase warrants
outstanding as of December 31, 1998.. All outstanding options, rights and
warrants have been duly and validly issued and are in full force and effect. All
shares of capital stock subject to issuance upon exercise of any options, rights
or warrants or otherwise, upon issuance pursuant to the instruments under which
they are issuable, shall be duly authorized, validly issued, fully paid for and
non-assessable and free of all preemptive rights.
4.2.2 The issued and outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and non-assessable. The
shares of Series B Stock to be issued pursuant to this Agreement, upon delivery
to Purchaser of certificates therefor against payment in accordance with the
terms of this Agreement, (i) will be validly issued, fully paid and
non-assessable, (ii) will be free and clear of all Liens, and (iii) assuming
that the representations of Purchaser in Section 5 hereof are true and correct,
will be issued in compliance with all applicable federal and state securities
laws.
4.3 Authorization. The Company has all requisite corporate power and
authority to execute and deliver this Agreement and each agreement, document or
instrument adopted, entered into or delivered by it as contemplated herein (the
"Transaction Documents") and to
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perform its obligations hereunder and thereunder. The execution, delivery, and
performance of the Agreement and the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company.
Each Transaction Document to which it is a party has been duly and validly
executed and delivered by the Company and constitutes the legal, valid, and
binding obligation of the Company, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
4.4 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the valid execution and delivery by the Company of
the Transaction Documents to which it is a party, or the consummation by the
Company of the transactions contemplated by the Transaction Documents to which
it is a party, except for (i) filings pursuant to federal or state securities
laws and (ii) the filing of registration statements with the SEC and any
applicable state securities commission.
4.5 Company SEC Reports and Financial Statements.
--------------------------------------------
4.5.1 The Company has made available to Purchaser true and complete
copies of all periodic reports, statements and other documents that the Company
has filed with the SEC under the Exchange Act since August 30, 1996
(collectively, the "Company SEC Reports"), each in the form (including exhibits
and any amendments thereto) required to be filed with the SEC. As of their
respective dates, each of the Company's SEC Reports (i) complied in all respects
with all applicable requirements of the Exchange Act, and the rules and
regulations promulgated thereunder, respectively, (ii) were filed in a timely
manner, and (iii) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
4.5.2 Each of the audited financial statements of the Company
(including any related notes and schedules thereto) included (or incorporated by
reference) in its Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997, is accurate and complete and fairly presents, in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (except as may be noted therein), and in
conformity with the SEC's Regulation S-X, the financial position of the Company
as of its date and the results of operations and changes in financial position
for the period then ended. Each of the unaudited financial statements of the
Company (including any related notes and schedules thereto) included (or
incorporated by reference) in its Quarterly Report on Form 10-QSB for the
quarter and nine-month period ended September 30, 1998, is accurate and complete
and fairly presents, in conformity with GAAP applied on a consistent basis
throughout the periods involved
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<PAGE>
(except as may be noted therein), and in conformity with the SEC's Regulation
S-X, the financial position of the Company as of its date and the results of
operations and changes in financial position for the periods then ended.
4.5.3 Except as and to the extent set forth (or incorporated by
reference) in the Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1998 (the "Balance Sheet Date"), the Company has not
incurred any liability or obligation of any nature whatsoever (whether due or to
become due, accrued, fixed, contingent, liquidated, unliquidated or otherwise)
that would be required by GAAP to be accrued on, reflected on, or reserved
against it on, a balance sheet (the "Balance Sheet") (or in the applicable notes
thereto) of the Company prepared in accordance with GAAP consistently applied as
of the date and for the period required.
4.6 Changes. Since the Balance Sheet Date, there has not been:
4.6.1 any change in the assets, liabilities, financial condition or
operating results of the Company, except changes in the ordinary course of
business;
4.6.2 any damage, destruction or loss to real or personal property,
whether or not covered by insurance;
4.6.3 any waiver by the Company of a legal or contractual valuable
right or of a debt owed to it outside of the ordinary course of business;
4.6.4 any satisfaction or discharge of any Lien or payment of any
obligation by the Company;
4.6.5 any change or amendment to a contract or arrangement by which
the Company or any of its respective assets or properties is bound or subject;
4.6.6 other than in the ordinary course of business, any material
increase in excess of $5,000 annually in any compensation arrangement or
agreement with any employee of the Company receiving compensation;
4.6.7 any events or circumstances that otherwise could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
and
4.6.8 the Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock or equity interests, (ii) incurred any indebtedness for
money borrowed other than capital leases in the ordinary course of business,
(iii) made any loans or advances to any Person, other than ordinary advances for
travel expenses not exceeding $5,000, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights for consideration in excess of $35,000
in any one transaction or series of related transactions.
6
<PAGE>
SECTION 5.
Representations and Warranties of the Purchaser
-----------------------------------------------
Purchaser hereby represents and warrants to and agrees with the Company, as
follows:
5.1 Accredited Investor; Experience; Risk.
-------------------------------------
5.1.1 Purchaser is an accredited investor and has been advised and
understands that the Series B Stock has not been registered under the Securities
Act, on the basis that no distribution or public offering of the Series B Stock
is to be effected, except in compliance with the applicable securities laws and
regulations or pursuant to an exemption therefrom.
5.1.2 Purchaser is purchasing the Series B Stock for investment
purposes, for her own account and not with a view to, or for sale in connection
with, any distribution thereof in violation of federal or state securities laws.
5.1.3 Purchaser has such knowledge and experience in financial and
business matters that she is capable of evaluating the merits and risks of the
purchase of the Series B Stock pursuant to this Agreement.
5.1.4 The certificates representing the Series B Stock shall bear a
legend evidencing such restriction on transfer substantially in the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO REGISTRATION UNDER
THE ACT OR AN EXEMPTION THEREFROM."
5.2 Authorization. Purchaser has all requisite power and authority to
execute and deliver this Agreement and each of the Transaction Documents and to
perform her obligations hereunder and thereunder. Each Transaction Document to
which she is a party has been duly and validly executed and delivered by
Purchaser and constitutes the legal, valid, and binding obligation of Purchaser,
enforceable against her in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
7
<PAGE>
5.3 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of Purchaser is
required in connection with the valid execution and delivery by Purchaser of the
Transaction Documents to which she is a party, or the consummation by such
Purchaser of the transactions contemplated by the Transaction Documents to which
she is a party, except for such filings as have been made prior to the Closing.
SECTION 6.
Miscellaneous
-------------
6.1 Amendment; Waiver. Neither this Agreement nor any provision hereof may
be amended, modified, supplemented or waived, except by a written instrument
executed by the Company and the Purchaser.
6.2 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and delivered in Person,
transmitted by facsimile transmission (fax) or sent by registered or certified
mail (return receipt requested) or recognized overnight delivery service,
postage pre-paid, addressed as follows, or to such other address has such party
may notify to the other parties in writing:
6.2.1 if to the Company:
Microvision, Inc.
2203 Airport Way South, Suite 100
Seattle, WA 98134
Attn: Richard A. Raisig
Telephone No.: (206) 623-7055
Facsimile No.: (206) 623-5961
with a copy to:
Stoel Rives, LLP
600 University Street, Suite 3600
Seattle, Washington 98101
Attn: Christopher J. Voss
Telephone No.: 206-386-7505
Facsimile No.: 206-386-7500
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6.2.2 if to the Purchaser:
Margaret Elardi
3411 Las Vegas Blvd. S.
Las Vegas, NV 89109
Telephone No.: (702) 650-4734
Facsimile No.: (702) 650-4708
with a copy to:
Cohen, Johnson, Day & Clayson
4475 S. Pecos
Las Vegas, NV 89121
Attn: Steven Cohen
Telephone No.: (702) 454-2111
Facsimile No.: (702) 454-3333
A notice or communication will be effective (i) if delivered in Person or by
overnight courier, on the business day it is delivered, (ii) if transmitted by
telecopier or E-mail, on the business day of actual confirmed receipt by the
addressee thereof, and (iii) if sent by registered or certified mail, three (3)
business days after dispatch.
6.3 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
6.4 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors and permitted assigns of the parties hereto. No party hereto may
assign its rights or delegate its obligations under this Agreement without the
prior written consent of the other parties hereto.
6.5 Survival of Representations, Warranties and Covenants. All
representations and warranties made in, pursuant to or in connection with this
Agreement shall survive the execution and delivery of this Agreement, any
investigation at any time made by or on behalf of any Purchaser, and the sale
and purchase of the Series B Stock and payment therefor for a period of two (2)
years.
6.6 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof and thereof and
supersede and cancel all prior representations, alleged warranties, statements,
negotiations, undertakings, letters, acceptances, understandings,
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contracts and communications, whether verbal or written, among the parties
hereto and thereto or their respective agents with respect to or in connection
with the subject matter hereof.
6.7 Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Washington, without regard to
principles of conflict of laws.
6.8 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
6.9 Fees and Expenses. Each party shall bear its own fees and expenses in
connection with the negotiation and execution of this Agreement and the
Transaction Documents.
6.10 No Third-Party Beneficiaries. Nothing in this Agreement will confer
any third party beneficiary or other rights upon any Person or entity that is
not a party to this Agreement.
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STOCK PURCHASE AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the Company and Purchaser have caused this Agreement to
be executed effective as of the date first above written.
MICROVISION, INC.
By: /s/ CLARENCE TEGREENE
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Its: Attorney-in-Fact/IP Counsel
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MARGARET ELARDI
/s/ MARGARET ELARDI
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