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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000065770-09-000016.txt : 20090807
<SEC-HEADER>0000065770-09-000016.hdr.sgml : 20090807
<ACCEPTANCE-DATETIME>20090806182241
ACCESSION NUMBER:		0000065770-09-000016
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20090630
FILED AS OF DATE:		20090807
DATE AS OF CHANGE:		20090806

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MICROVISION INC
		CENTRAL INDEX KEY:			0000065770
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS, NEC [3679]
		IRS NUMBER:				911600822
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34170
		FILM NUMBER:		09993113

	BUSINESS ADDRESS:	
		STREET 1:		6222 185TH AVE NE
		CITY:			REDMOND
		STATE:			WA
		ZIP:			98052
		BUSINESS PHONE:		425-936-6847

	MAIL ADDRESS:	
		STREET 1:		6222 185TH AVE NE
		CITY:			REDMOND
		STATE:			WA
		ZIP:			98052
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q.htm
<DESCRIPTION>10Q
<TEXT>
<HTML>
<HEAD>
<TITLE>Q2 2009 DOC</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">
<font FACE="Times New Roman" SIZE="2">

<DIV align=left>
<HR size="4" noshade color="#000000" style="margin-top: -5px">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
</DIV>

<font size="3"><B><p align="center">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</P></font></B>

<BR>
<HR WIDTH="25%">
<BR>
<font size="5"><B><p align="center">FORM 10-Q</P></font></B>
<BR>
<HR WIDTH="25%">

<font size="3"><B><p align="center">
   [X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934
</P></font></B>
<font size="4" color="FF0000"><B><p align="center">
             For the quarterly period ended June 30, 2009
</P></font></B>

<font size="3"><B><p align="center"> OR </P></font></B>

<font size="3"><B><p align="center">
[&nbsp;&nbsp;]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
</P></font></B>

<font size="3"><B><p align="center">
 For the transition period from ________to _________
</P></font></B>

<font size="3"><B><p align="center">
                       Commission file number&nbsp;&nbsp;&nbsp; <u>0-21221</u>
</P></font></B>
<P ALIGN="CENTER"><IMG SRC="logo.gif"></P>
<font size="6" color="#0000FF"><B><U><p align="center">
                                   Microvision, Inc.
</U></B></font><BR>
<font size="2">
               (Exact name of Registrant as Specified in its Charter)
</font></P>

<P>&nbsp;
<TABLE COLS=2 WIDTH="100%">
<TR>
<TD>
<font size="3"><B>
<CENTER><u>Delaware</u></CENTER>
</font></B>
</TD>
<TD>
<font size="3"><B>
<CENTER><u> 91-1600822 </u></CENTER>
</font></B>
</TD>
</TR>
<TR>
<TD>
<font size="2">
<CENTER>&nbsp; (State or Other Jurisdiction of Incorporation or Organization)&nbsp;</CENTER>
</font>
</TD>
<TD>
<font size="2">
<CENTER>(I.R.S. Employer Identification Number)</CENTER>
</font>
</TD>
</TR>
</TABLE>
<BR>



<font size="3"><B><p align="center">
                                6222 185th Avenue NE
<BR><U>
                              Redmond, Washington  &nbsp;&nbsp;  98052
</U></B></font><BR>

<font size="2">
        (Address of Principal Executive Offices including Zip Code)
</font></P>

<font size="3"><B><U><p align="center">
                                 (425) 936-6847
</U></B></font><BR>

<font size="2">
                 (Registrant's Telephone Number, Including Area Code)
</font></P>



<P>
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.  YES &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#120; <FONT FACE="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;   NO &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman"> </P>

<P>
Indicate by check mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).  YES &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;   NO &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman"> </P>

<P>
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (Check one): </P>

<CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=0 WIDTH=100%>
<TR><TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>
Large accelerated filer  &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>
Accelerated filer &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#120; <FONT FACE="Times New Roman">
</FONT></TD>
<TD WIDTH="35%" VALIGN="TOP">
<FONT SIZE=2><P>
                                                                         Non-accelerated filer &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
<BR>(Do not check if a smaller reporting company)
</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>
Smaller reporting company &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman"></P>
</FONT></TD>
</TR>
</TABLE></CENTER>

<P>
Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934). YES &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;   NO &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#120; <FONT FACE="Times New Roman"> </P>

<P>
As of July 30, 2009, 76,163,000 shares of the Company's common stock, $0.001 par value, were outstanding.


<DIV align=left>
<HR size="1" noshade color="#000000" style="margin-top: -2px">
<HR size="4" noshade color="#000000" style="margin-top: -10px">
</DIV>
<P style="PAGE-BREAK-BEFORE: always" align=left>


<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=5 WIDTH=85%>
<TR><TD WIDTH="94%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Page</FONT></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Part I: Financial Information</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Item 1.  Financial Statements:</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>         Consolidated Balance Sheets as of  June 30, 2009 and
December 31, 2008 (unaudited)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=3><P ALIGN="CENTER"></FONT><A HREF="#bs"><FONT SIZE=2>3</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="BOTTOM">
<FONT SIZE=2><P>         Consolidated Statements of Operations for the three and six
months ended June 30, 2009 and 2008 (unaudited)
</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=4><P ALIGN="CENTER"></FONT><A HREF="#ops"><FONT SIZE=2>4</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="BOTTOM">
<FONT SIZE=2><P>         Consolidated Statements of Comprehensive Loss
for the three and six months ended June 30, 2009 and 2008 (unaudited)
</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=5><P ALIGN="CENTER"></FONT><A HREF="#compinc"><FONT SIZE=2>5</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>         Consolidated Statements of Cash Flows for the six
months ended June 30, 2009 and 2008 (unaudited)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=6><P ALIGN="CENTER"></FONT><A HREF="#flows"><FONT SIZE=2>6</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>         Notes to Consolidated Financial Statements
(unaudited)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#notes"><FONT SIZE=2>8</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#mda"><FONT SIZE=2>13</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Item 3.  Quantitative and Qualitative Disclosures About Market
Risk</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#market"><FONT SIZE=2>19</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Item 4.  Controls and Procedures</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#controls"><FONT SIZE=2>19</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Part II: Other Information</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Item 1A. Risk Factors</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#item1a"><FONT SIZE=2>20</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Item 6.  Exhibits</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#item6"><FONT SIZE=2>26</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Signatures</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#sign"><FONT SIZE=2>27</FONT></A></TD>
</TR>
<TR><TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Exhibit Index</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></FONT><A HREF="#index"><FONT SIZE=2>28</FONT></A></TD>
</TR>
</TABLE>




<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>
<P style="PAGE-BREAK-BEFORE: always" align=left>
<A NAME="bs"></A>
<B><p align="center">
                              Microvision, Inc.
<BR>
                    Consolidated Balance Sheets
<BR></B>
                  (In thousands, except per share data)
<BR>
                            (Unaudited)
<PRE>
<B>
                                                                                     June 30,      December 31,
                                                                                       2009           2008
                                                                                   -------------  -------------
Assets                                                                                                         </B>
Current assets
   Cash and cash equivalents                                                      $      23,616  $      25,533
   Investment securities, available-for-sale                                              2,709          2,705
   Accounts receivable, net of allowances of $57 and $57                                    342            537
   Costs and estimated earnings in excess of billings on uncompleted contracts              451            695
   Inventory                                                                              1,016          1,525
   Other current assets                                                                     596            889
                                                                                   -------------  -------------
   Total current assets                                                                  28,730         31,884

Property and equipment, net                                                               3,618          3,701
Restricted investments                                                                    1,332          1,332
Other assets                                                                                 53             47
                                                                                   -------------  -------------
   Total assets                                                                   $      33,733  $      36,964
                                                                                   =============  =============
                                                                                                               <B>
Liabilities and Shareholders' Equity                                                                           </B>
Current liabilities
   Accounts payable                                                               $       2,315  $       3,487
   Accrued liabilities                                                                    3,267          3,545
   Billings in excess of costs and estimated earnings on uncompleted contracts               55             62
   Liability associated with common stock warrants                                        1,133            331
   Current portion of capital lease obligations                                              66             41
   Current portion of long-term debt                                                         74             71
                                                                                   -------------  -------------
   Total current liabilities                                                              6,910          7,537
Capital lease obligations, net of current portion                                           187             45
Long-term debt, net of current portion                                                      284            322
Deferred rent, net of current portion                                                     1,243          1,409
                                                                                   -------------  -------------
   Total liabilities                                                                      8,624          9,313
                                                                                   -------------  -------------
Commitments and contingencies

Shareholders' equity
   Common stock, par value $.001; 125,000 shares authorized;
      76,163 and 68,080 shares issued and outstanding                                        76             68
   Additional paid-in capital                                                           336,367        319,662
   Accumulated other comprehensive loss                                                     (34)           (38)
   Accumulated deficit                                                                 (311,300)      (292,041)
                                                                                   -------------  -------------
   Total shareholders' equity                                                            25,109         27,651
                                                                                   -------------  -------------
   Total liabilities and shareholders' equity                                     $      33,733  $      36,964
                                                                                   =============  =============

</PRE>
<P ALIGN="CENTER">
The accompanying notes are an integral part of these financial statements.

<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>
<P style="PAGE-BREAK-BEFORE: always" align=left>
<A NAME="ops"></A>
<B><p align="center">
                              Microvision, Inc.
<BR>
                     Consolidated Statements of Operations
<BR></B>
                  (In thousands, except per share data)
<BR>
                            (Unaudited)
<BR></B>

<PRE>
<B>
                                                                               Three Months Ended       Six Months Ended
                                                                                   June 30,                June 30,
                                                                             ----------------------  ----------------------
                                                                                2009        2008        2009        2008
                                                                             ----------  ----------  ----------  ----------</B>
Contract revenue                                                            $      813  $    1,006  $    1,525  $    3,287
Product revenue                                                                    174         616         413         905
                                                                             ----------  ----------  ----------  ----------
    Total revenue                                                                  987       1,622       1,938       4,192
                                                                             ----------  ----------  ----------  ----------
Cost of contract revenue                                                           527         374         910       1,136
Cost of product revenue                                                            543         529         784         868
                                                                             ----------  ----------  ----------  ----------
    Total cost of revenue                                                        1,070         903       1,694       2,004
                                                                             ----------  ----------  ----------  ----------
Gross margin                                                                       (83)        719         244       2,188
                                                                             ----------  ----------  ----------  ----------


Research and development expense                                                 5,716       5,881      11,326      10,307
Sales, marketing, general and administrative expense                             3,667       4,103       7,481       8,238
                                                                             ----------  ----------  ----------  ----------
    Total operating expenses                                                     9,383       9,984      18,807      18,545
                                                                             ----------  ----------  ----------  ----------
Loss from operations                                                            (9,466)     (9,265)    (18,563)    (16,357)
Interest income                                                                     79         279         143         691
Interest expense                                                                   (20)        (12)        (31)        (25)
Gain (loss) on derivative instruments, net                                        (982)       (254)       (802)      1,419
Other expense                                                                       (5)        (14)         (6)        (32)
                                                                             ----------  ----------  ----------  ----------
Net loss                                                                    $  (10,394) $   (9,266) $  (19,259) $  (14,304)
                                                                             ==========  ==========  ==========  ==========

Net loss per share - basic and diluted                                      $    (0.15) $    (0.16) $    (0.28) $    (0.25)
                                                                             ==========  ==========  ==========  ==========

Weighted-average shares outstanding - basic and diluted                         68,881      56,782      68,482      56,756
                                                                             ==========  ==========  ==========  ==========

</PRE>
<P ALIGN="CENTER">
The accompanying notes are an integral part of these financial statements.


<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>
<P style="PAGE-BREAK-BEFORE: always" align=left>
<A NAME="ops"></A>
<B><p align="center">
                              Microvision, Inc.
<BR>
                     Consolidated Statements of Comprehensive Loss
<BR></B>
                             (In thousands)
<BR>
                            (Unaudited)
<BR></B>

<PRE>
<B>
                                                                               Three Months Ended       Six Months Ended
                                                                                   June 30,                June 30,
                                                                             ----------------------  ----------------------
                                                                                2009        2008        2009        2008
                                                                             ----------  ----------  ----------  ----------</B>
Net loss                                                                    $  (10,394) $   (9,266) $  (19,259) $  (14,304)

Other comprehensive gain (loss)
Unrealized gain (loss) on investment securities, available-for-sale                  3         (77)          4         (39)
                                                                             ----------  ----------  ----------  ----------
Comprehensive loss                                                          $  (10,391) $   (9,343) $  (19,255) $  (14,343)
                                                                             ==========  ==========  ==========  ==========

</PRE>
<P ALIGN="CENTER">
The accompanying notes are an integral part of these financial statements.


<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>
<P style="PAGE-BREAK-BEFORE: always" align=left>
<A NAME="flows"></A>
<B><p align="center">
                              Microvision, Inc.
<BR>
                    Consolidated Statements of Cash Flows
<BR></B>
                           (In thousands)
<BR>
                            (Unaudited)
<PRE>
<B>
                                                                                            Six Months Ended
                                                                                               June 30,
                                                                                        ----------------------
                                                                                           2009        2008
                                                                                        ----------  ----------
Cash flows from operating activities                                                                          </B>
    Net loss                                                                           $  (19,259) $  (14,304)
    Adjustments to reconcile net loss to net cash used in operations:
        Depreciation                                                                          556         481
        Non-cash stock-based compensation expense                                           1,924       1,604
        Loss (gain) on derivative instruments, net                                            802      (1,419)
        Inventory write-downs                                                                 340          --
        Net accretion of discount on short-term investments                                    --         (92)
        Non-cash deferred rent                                                               (138)       (137)
        Change in:
            Accounts receivable, net                                                          195       1,582
            Costs and estimated earnings in excess of billings on uncompleted contracts       244         277
            Inventory                                                                         169        (645)
            Other current assets                                                              270         (81)
            Other assets                                                                       (6)         (2)
            Accounts payable                                                               (1,006)       (276)
            Accrued liabilities                                                              (392)       (999)
            Billings in excess of costs and estimated earnings on uncompleted contracts        (7)       (879)
                                                                                        ----------  ----------
            Net cash used in operating activities                                         (16,308)    (14,890)
                                                                                        ----------  ----------<B>
Cash flows from investing activities                                                                          </B>
    Sales of investment securities                                                             --      12,800
    Purchases of investment securities                                                         --        (986)
    Purchases of restricted investment securities                                              --        (350)
    Purchases of property and equipment                                                      (544)       (215)
                                                                                        ----------  ----------
            Net cash provided by (used in) investing activities                              (544)     11,249
                                                                                        ----------  ----------<B>
Cash flows from financing activities                                                                          </B>
    Principal payments under capital leases                                                   (26)        (18)
    Principal payments under long-term debt                                                   (35)        (32)
    Net proceeds from issuance of common stock and warrants                                14,996         331
                                                                                        ----------  ----------
            Net cash provided by financing activities                                      14,935         281
                                                                                        ----------  ----------
Net decrease in cash and cash equivalents                                                  (1,917)     (3,360)
Cash and cash equivalents at beginning of period                                           25,533      13,399
                                                                                        ----------  ----------
Cash and cash equivalents at end of period                                             $   23,616  $   10,039
                                                                                        ==========  ==========<B>
Supplemental disclosure of cash flow information                                                              </B>
    Cash paid for interest                                                             $       31  $       25
                                                                                        ==========  ==========<B>
Supplemental schedule of non-cash investing and financing activities                                          </B>
    Property and equipment acquired under capital leases                               $       95  $       --
                                                                                        ==========  ==========
    Other non-cash additions to property and equipment                                 $       33  $       24
                                                                                        ==========  ==========

</PRE>
<P ALIGN="CENTER">
The accompanying notes are an integral part of these financial statements.



<B>
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="notes">MICROVISION, INC.</A><BR>
                           Notes to Consolidated Financial Statements<BR>
                           June 30, 2009<BR>
                  (Unaudited)</P>
</B>

<B><P>1.  MANAGEMENT'S STATEMENT AND PRINCIPLES OF CONSOLIDATION</P>
</B><U><P>Management's Statement</P>

</U><P>The Consolidated Balance Sheet as of June 30, 2009, the Consolidated
Statements of Operations and Comprehensive Loss for the three and six months
ended June 30, 2009 and 2008 and the Consolidated Statements of Cash Flows for
the six months ended June 30, 2009 and 2008 have been prepared by Microvision,
Inc. (the &quot;Company&quot; or &quot;Microvision&quot;) and have not been
audited.  In the opinion of management, all adjustments necessary to state
fairly the financial position at June 30, 2009 and the results of operations,
comprehensive loss and cash flows for all periods presented have been made and
consist of normal recurring adjustments.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules of the SEC.  You should read these condensed financial
statements in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2008.  The results of operations for the six months ended June 30,
2009 are not necessarily indicative of the operating results that may be
attained for the entire fiscal year.</P>

<P>At June 30, 2009, Microvision had $26.3 million in cash, cash equivalents and
investment securities, available-for-sale.  Microvision's operating plan for
2009 and 2010 includes the launch of its first accessory product, further
development of its PicoP display engine for embedded applications and further
development of automotive head-up display (HUD) and eyewear applications.  In
order to fully fund the Company's operating plan for 2009 and 2010, the Company
will require additional capital.  The Company plans to obtain additional cash
through the issuance of equity or debt securities.  There can be no assurance
that additional cash will be available or that, if available, it will be
available on terms acceptable to the Company on a timely basis.  If adequate
funds are not available by January 2010, the Company intends to consider
reducing the scope of its business to extend its operations as it pursues other
financing opportunities and business relationships.  This reduction in scope
could include delaying development projects resulting in reductions in staff,
operating costs, capital expenditures and investment in research and
development.  With these adjustments to its operating plan the Company believes
that it currently has sufficient cash, cash equivalents, and investment
securities to fund operations into June 2010.  </P>
<B>

<P>2.  NET LOSS PER SHARE</P>
</B>
<P>Basic net loss per share is calculated on the basis of the weighted-average
number of common shares outstanding during the reporting periods.  Diluted net
loss per share is calculated on the basis of the weighted-average number of
common shares outstanding and taking into account the dilutive effect of all
potential common stock equivalents outstanding.  Potentially dilutive common
stock equivalents primarily consist of warrants, employee stock options and
nonvested equity shares.  Diluted net loss per share for the three and six
months ended June 30, 2009 and 2008 is equal to basic net loss per share because
the effect of all potential common stock outstanding during the periods,
including options, warrants and nonvested equity shares is anti-dilutive.  The
components of basic and diluted net loss per share were as follows (in
thousands, except loss per share data): </P>

<PRE>
<B>
                                                                              Three Months Ended           Six Months Ended
                                                                                  June 30,                   June 30,
                                                                          --------------------------  --------------------------
                                                                              2009          2008          2009          2008
                                                                          ------------  ------------  ------------  ------------</B>
Numerator:
Net loss available for common shareholders - basic and diluted           $    (10,394) $     (9,266) $    (19,259) $    (14,304)
                                                                          ============  ============  ============  ============

Denominator:
Weighted-average common shares outstanding - basic and diluted                 68,881        56,782        68,482        56,756
                                                                          ============  ============  ============  ============

Net loss per share - basic and diluted                                   $      (0.15) $      (0.16) $      (0.28) $      (0.25)
                                                                          ============  ============  ============  ============

</PRE>


<P>On June 30, 2009 and 2008, the Company excluded the following convertible
securities from diluted net loss per share as the effect of including them would
have been anti-dilutive: options and warrants convertible into a total of
20,241,000 and 10,992,000 shares of common stock, respectively, and 409,000 and
125,000 shares of nonvested equity shares, respectively. </P>

<B>
<P>3.  CASH EQUIVALENTS, INVESTMENT SECURITIES AVAILABLE-FOR-SALE AND FAIR VALUE
MEASUREMENTS</P>

</B><P>The Company accounts for cash equivalents and investment securities in
accordance with the provisions of Statement of Financial Accounting Standards
(FAS) No. 115, <I>Accounting for Certain Investments in Debt and Equity
Securities</I> (FAS 115) and FAS Board Staff Position (FSP) No. FAS 115-2 and
FAS 124-2, <I>Recognition and Presentation of Other-Than-Temporary
Impairments</I>.  FAS 115 addresses the accounting and reporting for investments
in equity securities that have readily determinable fair values and debt
securities.  FSP FAS 115-2 and FAS 124-2 provides guidance on accounting and
presentation of investments with other-than-temporary impairments.  The Company
adopted FSP FAS 115-2 and FAS 124-2 effective April 1, 2009.  The Company
applies guidance in FAS No. 157, <I>Fair Value Measurements</I> (FAS 157) and
FSP FAS 157-4, <I>Determining Fair Value When the Volume and Level of Activity
for the Asset or</FONT> <FONT SIZE=2>Liability Have Significantly Decreased and
Identifying Transactions That Are Not</FONT> <FONT SIZE=2>Orderly</I></FONT>
<FONT SIZE=2>when estimating fair values of its cash equivalents, investment
securities and liability associated with common stock warrants.  FAS 157 and FSP
FAS 157-4 address estimating fair values and related disclosures.  The Company
adopted FAS 157 on January 1, 2008 for financial assets and liabilities and for
nonfinancial assets and liabilities measured at fair value on a recurring basis.
It elected to defer the adoption of FAS 157 for nonfinancial assets and
liabilities accounted for on a nonrecurring basis until January 1, 2009 as
permitted by FSP No. FAS 157-2, <I>Effective Date of FAS 157</I>.  Neither of
the two stages of adopting FAS 157 resulted in a material impact on the
Company's consolidated financial position, results of operations or cash flows.
</P>

<P>As of June 30, 2009, the Company held $3.0 million par value student loan
auction rate securities (SLARS), fair valued at $2.7 million.  The SLARS owned
by the Company are investment grade long-term bonds with variable interest rate
resets, purchases and sales to be determined via a Dutch Auction process every
28 days.  They were issued to fund U.S. government guaranteed student loans.
Beginning in February 2008 as global credit markets significantly deteriorated,
insufficient clearing bids have been submitted for the SLARS. In accordance with
the bond terms, the interest rates have been reset to &quot;maximum rates&quot;
instead of &quot;auction rates.&quot;  Since that time, the SLARS have been
illiquid through the auction process and secondary markets.</P>

<P>The valuation inputs hierarchy classification for assets and liabilities
measured at fair value on a recurring basis are summarized below as of June 30,
2009:</P>

<PRE><B>
                                                 Level 1       Level 2       Level 3        Total
                                               ------------  ------------  ------------  ------------</B>
Assets
Corporate debt and equity securities          $         --  $      9,000  $         --  $      9,000
Auction-rate securities                                 --            --     2,700,000     2,700,000
                                               ------------  ------------  ------------  ------------
                                              $         --  $      9,000  $  2,700,000  $  2,709,000
                                               ============  ============  ============  ============
Liabilities
    Liability associated with
        common stock warrants                               $  1,133,000                $  1,133,000
                                                             ============                ============

</PRE>

<P>The corporate debt securities and liability associated with common stock
warrants are classified within Level 2 of the fair value hierarchy because they
are valued using valuation inputs and common methods with sufficient levels of
transparency and observability.  The SLARS are classified in Level 3 of the fair
value hierarchy because of the significance of sufficiently unobservable
assumptions and inputs developed by the Company and used in the valuations.
</P>

<P>The following table summarizes the activity for those financial assets where
fair value measurements are estimated utilizing Level 3 inputs:</P>

<PRE>

Balance, December 31, 2008                $ 2,700,000
Transfer to (from) Level 3, June 30, 2009          --
Recognized loss included in earnings               --
                                           -----------
Balance, June 30, 2009                    $ 2,700,000
                                           ===========

</PRE>


<P>The Company's investments and liability associated with common stock warrants
are summarized below as of June 30, 2009 and December 31, 2008:</P>

<PRE><B>
                                                                                                      Classification on Balance Sheet
                                                                                            ----------------------------------------------
                                                                                                                                Liability
                                                                                                                               Associated
                                                                                                        Investment                With
                                              Cost/       Gross       Gross                             Securities,   Other      Common
                                            Amortized   Unrealized  Unrealized  Estimated      Cash     Available-   Current      Stock
                                              Cost        Gains       Losses    Fair Value  Equivalents  For-Sale    Assets     Warrants
                                           -----------  ----------  ----------  ----------  ----------  ----------  ---------  -----------</B>
As of June 30, 2009:
  Assets
    Corporate debt and equity securities  $    43,000  $       --  $  (34,000) $    9,000  $       --  $    9,000  $      --
    Auction rate securities                 2,700,000          --          --   2,700,000          --   2,700,000         --
                                           -----------  ----------  ----------  ----------  ----------  ----------  ---------
                                          $ 2,743,000  $       --  $  (34,000) $2,709,000  $       --  $2,709,000  $      --
                                           ===========  ==========  ==========  ==========  ==========  ==========  =========
  Liabilities
    Liability associated with
       common stock warrants                                                   $1,133,000                                     $ 1,133,000
                                                                                ==========                                     ===========

<B>
                                                                                                      Classification on Balance Sheet
                                                                                            ----------------------------------------------
                                                                                                                                Liability
                                                                                                                               Associated
                                                                                                        Investment                With
                                              Cost/       Gross       Gross                             Securities,   Other      Common
                                            Amortized   Unrealized  Unrealized  Estimated      Cash     Available-   Current      Stock
                                              Cost        Gains       Losses    Fair Value  Equivalents  For-Sale    Assets     Warrants
                                           -----------  ----------  ----------  ----------  ----------  ----------  ---------  -----------</B>
As of December 31, 2008:
  Assets
    Corporate debt and equity securities  $ 5,022,000  $       --  $  (38,000) $4,984,000  $4,979,000  $    5,000  $      --
    Auction rate securities                 2,700,000          --          --   2,700,000          --   2,700,000         --
                                           -----------  ----------  ----------  ----------  ----------  ----------  ---------
                                          $ 7,722,000  $       --  $  (38,000) $7,684,000  $4,979,000  $2,705,000  $      --
                                           ===========  ==========  ==========  ==========  ==========  ==========  =========
  Liabilities
    Liability associated with
        common stock warrants                                                  $  331,000                                     $   331,000
                                                                                ==========                                     ===========

</PRE>

<P>As of June 30, 2009, the unrealized losses on the Company's investments in
equity securities were due primarily to declines in the stock prices of the
equity securities.  The realized gains and losses resulting from the liability
associated with common stock warrants were primarily due to changes in the
Microvision stock price and decreasing terms to expiration.  The maturities
of the debt investment securities available-for-sale as of June 30, 2009
are greater than 5 years.</P>


<P>The guidance in FAS 115-2 requires that impairments determined to be other
than temporary be classified into one of two categories, &quot;credit&quot; or
&quot;other factors&quot;.  Upon adoption, one is to apply this guidance on an
as-if basis to investments currently held.  As of September 30, 2008,
based on continuing low market liquidity and auction failures with significant
uncertainty as to when such conditions would improve, the Company determined
that the estimated fair value of the SLARS no longer approximated par value, and
the impairments were other-than-temporary.  An "impairment of investment securities,
available-for-sale" of $300,000 was recorded on the consolidated statement of
operations.  The Company used a discounted cash flow model, with rates adjusted
for liquidity, to determine that the present value of estimated cash collections
was less than the adjusted cost.  Upon adopting FAS 115-2 effective April 1, 2009,
the other-than-temporary impairment that was recorded during the period ended
September 30, 2008 was categorized as credit type and no transition adjustments
were recorded. </P>


<P>The Company's significant nonfinancial assets and liabilities that are
subject to consideration for recognition and disclosure at fair value in the
financial statements on a nonrecurring basis primarily include property and
equipment, long-term debt and deferred rent.  If the Company concludes there has
been an event indicating the potential impairment of a nonfinancial asset or
liability, or periodically if no such indicating event is deemed to have
occurred, it utilizes guidance contained in FAS 157 to determine the fair value,
test for the existence of an impairment, and record significant impairments in
the period of determination.  </P>

<B><P>4.  INVENTORY</P>

</B><P>Inventory at June 30, 2009 and December 31, 2008 consisted of the
following:</P>

<PRE>
<B>
                                                                            June 30,     December 31,
                                                                              2009          2008
                                                                          ------------  ------------                            </B>
Raw materials                                                            $     28,000  $     45,000
Finished goods                                                                988,000     1,480,000
                                                                          ------------  ------------
                                                                         $  1,016,000  $  1,525,000
                                                                          ============  ============

</PRE>



<P>The inventory at June 30, 2009 and December 31, 2008 consisted of raw
materials and finished goods for ROV, the Company's hand-held bar code scanner.
Inventory is stated at the lower of cost or market, with cost determined on a
weighted-average basis.  Management periodically assesses the need to provide
for obsolescence of inventory and adjusts the carrying value of inventory to its
net realizable value when required.  In addition, Microvision reduces the value
of its inventory to its estimated scrap value when management determines that it
is not probable that the inventory will be consumed through normal production
during the next twelve months.  During the second quarter of 2009, the Company
recorded inventory write-downs of $318,000.  </P>
<B>

<P>5.  SHARE-BASED COMPENSATION </P>
</B>
<P>The Company accounts for stock-based employee compensation arrangements in
accordance with the provisions of Statement of FAS No. 123, as revised December
2004 (FAS 123(R)). The Company accounts for equity instruments issued to
non-employees in accordance with the provisions of Emerging Issues Task Force Issue
No. 96-18 and FAS No. 123. The following table shows the amount of stock-based
employee compensation expense included in the Consolidated Statements of
Operations:</P>

<PRE><B>
                                                                              Three Months Ended            Six Months Ended
                                                                                    June 30,                    June 30,
                                                                          --------------------------  --------------------------
                                                                              2009          2008          2009          2008
                                                                          ------------  ------------  ------------  ------------</B>
Cost of contract revenue                                                 $     58,000  $     14,000  $     72,000  $     64,000
Cost of product revenue                                                         7,000         1,000        14,000        12,000
Research and development expense                                              522,000       165,000       711,000       447,000
Sales, marketing, general and administrative expense                          779,000       356,000     1,145,000     1,081,000
                                                                          ------------  ------------  ------------  ------------
Share-based employee compensation cost charged against income            $  1,366,000  $    536,000  $  1,942,000  $  1,604,000
                                                                          ============  ============  ============  ============

</PRE>


<U><P>Options Activity and Positions</P>
</U>
<P>The following table summarizes shares, weighted average exercise price,
weighted average remaining contractual term and aggregate intrinsic value of
options outstanding and options exercisable as of June 30, 2009: </P>

<PRE>
<B>
                                                                  Weighted
                                                                  Average
                                                      Weighted   Remaining
                                                       Average  Contractual   Aggregate
                                                      Exercise      Term      Intrinsic
Options                                  Shares         Price     (years)       Value
- ---------------------------------------- -----------  --------- ------------  ----------</B>
Outstanding as of June 30, 2009           8,712,000  $    3.53          7.4  $4,606,000

Exercisable as of June 30, 2009           5,011,000  $    4.23          6.5  $1,921,000

</PRE>



<P>As of June 30, 2009, the Company's unamortized share-based compensation was
$4,698,000.  The Company plans to amortize this share-based compensation cost
over the next 2.7 years. </P>

<P>As of June 30, 2009, the Company's unamortized nonvested equity share-based
compensation was $504,000.  The Company plans to amortize this nonvested equity
share-based compensation cost over the next 2.4 years.</P>


<B><P>6.  LIABILITY ASSOCIATED WITH COMMON STOCK WARRANTS</P>
</B>
<P>In March and December 2005, the Company issued warrants to purchase 2,302,000
shares of common stock.  The warrants met the definition of derivative
instruments that must be accounted for as liabilities under the provisions of
Emerging Issues Task Force Issue No. 00-19, <I>Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock, </I>because the Company cannot engage in certain corporate transactions
affecting the common stock unless it makes a cash payment to the holders of the
warrants.  The Company records changes in the fair values of the warrants in the
statements of operations each period.  In July 2008, warrants to purchase
750,000 shares of common stock expired unexercised.  The Company valued the
remaining warrants to purchase 1,552,000 shares of common stock at June 30, 2009
using the Black-Scholes option-pricing model with the following assumptions:
expected volatilities of 78%; expected dividend yields of 0%; risk free interest
rates of from 0.4% to 0.8%; and contractual lives ranging from 0.7 year to 1.4
years.  The change in value of the warrants of $982,000 for the three and
$802,000 for the six months ended June 30, 2009 was recorded as a non-operating
loss and is included in "Gain (loss) on derivative instruments, net" in the
consolidated statements of operations.  The Company valued the warrants at June
30, 2008 using the Black-Scholes option-pricing model with the following
assumptions:  expected volatilities ranging from 65% to 68%; expected dividend
yields of 0%; risk free interest rates ranging from 1.3% to 2.8%; and
contractual lives ranging from 0.1 years to 2.4 years.  The change in value of
the warrants of $202,000 for the three months ended June 30, 2008 was recorded
as a non-operating loss and is included in &quot;Gain (loss) on derivative
instruments, net&quot; in the consolidated statements of operations.  The change
in value of the warrants of $1,535,000 for the six months ended June 30, 2008
was recorded as a non-operating gain and is included in "Gain (loss) on
derivative instruments, net" in the consolidated statements of operations.</P>
<B>

<P>7.  LONG-TERM NOTES</P>
</B>
<U><P>Tenant Improvement Loan Agreement</P>
</U>
<P>During 2006, the Company entered into a loan agreement with the lessor of the
Company's corporate headquarters in Redmond to finance $536,000 in tenant
improvements.  The loan carries a fixed interest rate of 9% per annum, is
repayable over the initial term of the lease, which expires in 2013, and is
secured by a letter of credit.  The balance of the loan was $358,000 at June 30,
2009.</P>


<B><P>8.  COMMON STOCK</P>
</B>
<P>In June 2009, the Company raised approximately $15,000,000, before issuance
costs of approximately $179,000, from the sale of 8,076,239 shares of common
stock and warrants to purchase 2,019,060 shares of its common stock to Max
Display Enterprises Limited, a subsidiary of Walsin Lihwa.  Walsin Lihwa is the
parent company of Touch Micro-system Technology Corp. (TMT).  Microvision has
worked for a number of years with both Walsin Lihwa and then TMT, as
manufacturers of Microvision's Micro-Electrical Mechanical systems (MEMS) chips.
The warrants have an exercise price of $2.1850 per share, a three year term, and
are exercisable on the date of issuance. The Company can call the warrants after
six months and once the shares are registered if the average closing bid price
of its stock is over $8.74 for any 20 consecutive trading days.  The warrants
were accounted for as permanent equity under the provisions of Emerging Issues
Task Force Issue No. 00-19, <I>Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock</I>.  As of
June 30, 2009, Max Display Enterprises Limited beneficially owned 12.9% of
Microvision's common stock, as determined in accordance with the rules of
the Securities Exchange Commission.</P>

<B>
<P>9.  RECEIVABLES FROM RELATED PARTIES</P>

</B><P>In 2000, 2001 and 2002, the Board of Directors authorized the Company to
provide unsecured lines of credit to each of the Company's three officers. The
lines of credit carry interest rates of 5.4% to 6.2% and were due within one
year of the officer's termination.</P>

<P>In January 2006, one officer left the Company and his outstanding loans
became due in January 2007.  In May 2007, the Company foreclosed on 50,000
shares of Lumera common stock pledged as collateral for the loans and sold the
shares for net proceeds of $227,000.  The Company has sued the officer and his
spouse to collect $1,733,000 in outstanding loans that remain unpaid.
Counterclaims were filed by the officer and his spouse, seeking to recover
damages in an amount in excess of $15,000,000. The Company believes these claims
are without merit and intends to defend them vigorously. However, an adverse
outcome could have a material adverse affect on the Company's financial
condition.   </P>

<P>Another officer with outstanding loans left the Company in August 2007 and
his loans became due in August 2008.  The Company is pursuing collection of the
remaining outstanding balance from the former officer.</P>
<P>As of June 30, 2009 and December 31, 2008, the total amount outstanding under
the lines of credit and the allowance for receivables from related parties was
$1,851,000.    </P>
<B>

<P>10.  COMMITMENTS AND CONTINGENCIES</P>

<P>Litigation</P>

</B><P>The Company is subject to various claims and pending or threatened
lawsuits in the normal course of business. Other than described above in Note 9,
the Company is not currently party to any such legal proceedings that management
believes would have a material adverse effect on the Company's financial
position, results of operations or cash flows.</P>
<B>

<P>11.  NEW ACCOUNTING PRONOUNCEMENTS</P>

</B><P>In May 2009, the Financial Accounting Standards Board (FASB) issued SFAS
No. 165, <I>Subsequent Events </I>(FAS 165).  This standard sets forth the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, the circumstances under
which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements, and the disclosures that an
entity should make about events or transactions that occurred after the balance
sheet date.  FAS 165 is effective for fiscal years and interim periods ended
after June 15, 2009.  The Company adopted this standard during the quarter ended
June 30, 2009 and has evaluated any subsequent events through the date of this
filing.  The Company does not believe there are any material subsequent events
which would require further disclosure.</P>

<P>In June 2009, the FASB issued SFAS No. 168, <I>The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles</I>
(FAS 168).  FAS 168 replaces FASB Statement No. 162, <I>The Hierarchy of
Generally Accepted Accounting Principles</I>, and establishes the FASB
Accounting Standards Codification TM (the Codification) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with generally accepted accounting principles (GAAP).  FAS 168 is
effective for interim and annual periods ending after September 15, 2009.  The
Company will begin to use the new guidelines and numbering system prescribed by
the Codification when referring to GAAP during the quarter ended September 30,
2009.  The Codification will not have an impact on the results of the Company.
</P>


<B><P><A NAME="mda">ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </A></P></B>

<U><P>Forward-Looking Statements</P>
</U>
<P>The information set forth in this report in Item 2, &quot;Management's
Discussion and Analysis of Financial Condition and Results of Operations,&quot;
and Item 3, &quot;Quantitative and Qualitative Disclosure about Market
Risk,&quot; includes &quot;forward-looking statements&quot; within the meaning
of Section 27A of the Securities Act of 1933, as amended (the &quot;Securities
Act&quot;), and Section 21E of the Securities Exchange Act of 1934, as amended
(the &quot;Exchange Act&quot;), and is subject to the safe harbor created by
that section.  Such statements may include, but are 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
Microvision, as well as assumptions relating to the foregoing.  The words
&quot;anticipate,&quot; &quot;believe,&quot; &quot;estimate,&quot;
&quot;expect,&quot; &quot;goal,&quot; &quot;may,&quot; &quot;plan,&quot;
&quot;project,&quot; &quot;will,&quot; and similar expressions identify
forward-looking statements, which speak only as of the date the statement was made.
Factors that could cause actual results to differ materially from those
projected in our forward-looking statements include the following: our ability
to obtain financing; market acceptance of our technologies and products; our
financial and technical resources relative to those of our competitors; our
ability to keep up with rapid technological change; government regulation of our
technologies; our ability to enforce our intellectual property rights and
protect our proprietary technologies; the ability to obtain additional contract
awards and to develop partnership opportunities; the timing of commercial
product launches; the ability to achieve key technical milestones in key
products; and other risk factors identified in this report under the caption
&quot;Item 1A - Risk Factors.&quot;  </P>


<B><P ALIGN="CENTER">Overview</P>
</B>
<P>We are developing high-resolution miniature display and imaging engines based
upon our technology platform.  Our technology platform utilizes our expertise in
two dimensional Micro-Electrical Mechanical systems (MEMS), lasers, optics and
electronics to create a high quality video or still image from a small form
factor device with lower power needs than conventional display technologies.
</P>

<P>Our strategy is to develop and supply a proprietary display engine called
PicoP to potential OEM customers who will embed them into a variety of consumer
and automotive products.  The primary objective for consumer applications is to
provide users of mobile devices with a large screen viewing experience produced
by a small embedded projector. Mobile devices may include cell phones, PDA's,
gaming consoles and other consumer electronics products.  These potential
products would allow users to watch movies, play videos, display images, and
other data onto a variety of flat or curved surfaces. </P>

<P>We are currently developing a small accessory projector that would be the
first commercial product based on the PicoP display engine.  The accessory
projector is expected to display images from a variety of video sources
including cell phones, portable media players, PDAs, gaming consoles, laptop
computers, digital cameras, and other consumer electronics products.  We expect
that the accessory product will be commercially available during 2009.</P>

<P>The PicoP with some modification could be embedded into a vehicle or
integrated into a portable standalone aftermarket device to create a
high-resolution head-up display (HUD) that could project point-by-point navigation,
critical operational, safety and other information important to the driver or
pilot. The PicoP could be further modified to be embedded into a pair of glasses
to provide the mobile user with a see-through or occluded personal display to
view movies, play games or access other content.</P>

<B>
<U><P>Results of Operations </P>
</B></U>
<I><P>Contract revenue. </I> </P>



<PRE><B>
                                                  % of                  % of
                                                contract              contract
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------
Three months ended June 30                                                                          </B>
Government revenue                  $     622       76.5  $     661       65.7  $     (39)     (5.9)
Commercial revenue                        191       23.5        345       34.3       (154)    (44.6)
                                     ---------             ---------             ---------
Total contract revenue              $     813             $   1,006             $    (193)    (19.2)
                                     =========             =========             =========

Six months ended June 30
Government revenue                  $   1,042       68.3  $   1,569       47.7  $    (527)    (33.6)
Commercial revenue                        483       31.7      1,718       52.3     (1,235)    (71.9)
                                     ---------             ---------             ---------
Total contract revenue              $   1,525             $   3,287             $  (1,762)    (53.6)
                                     =========             =========             =========

</PRE>
<P>We earn contract revenue from performance on development contracts with the
U.S. government and commercial customers and from the sale of prototype units
and evaluation kits based on our PicoP display engine. </P>

<P> Our contract revenue from development contracts in a particular period is
dependent upon when we enter into a contract, the value of the contracts we have
entered into, and the availability of technical resources to perform work on the
contracts.  </P>

<P>We recognize contract revenue as work progresses on long-term, cost plus
fixed fee and fixed price contracts using the percentage-of-completion method,
which relies on estimates of total expected contract revenue and costs.  Our
revenue contracts generally include a statement of the work we are to complete
and the total fee we will earn from the contract.  When we begin work on the
contract and at the end of each accounting period, we work with the members of
our technical team to estimate the labor and material and other cost required to
complete the statement of work compared to cost incurred to date.  We use
information provided by project mangers, vendors, outside consultants and others
as we deem necessary to develop our cost estimates.  Since our contracts
generally require some level of technology development to complete, the actual
cost required to complete a statement of work can vary from our estimated cost
to complete.   We have developed processes that allow us to make reasonable
estimates of the cost to complete a contract.  Historically, we have made only
immaterial revisions in the estimates to complete the contract at each reporting
period. Recognized revenues are subject to revisions as the contract progresses
to completion and actual revenue and cost becomes certain.  Revisions in revenue
estimates are reflected in the period in which the facts that give rise to the
revision become known.  In the future, revisions in these estimates could
significantly impact recognized revenue in any one reporting period.  If the
U.S. government cancels a contract, we would receive payment for work performed
and costs committed to prior to the cancellation.</P>

<P>We recognize contract revenue on the sales of prototype units and evaluation
kits upon acceptance of the deliverables by the customer or expiration of the
contractual acceptance period.  While we anticipate future sales of these units,
revenue may vary substantially due to the timing of orders from customers and
potential constraints on resources.</P>

<P>Contract revenue was substantially lower during the three and six months
ended June 30, 2009 than the same period in 2008, due to reduced contract
activity and lower beginning backlog in 2009 compared to the prior year.  We
expect that we will have fewer opportunities to enter into new development
contracts as we move closer to the commercialization of products based on our
PicoP display engine.</P>

<P>As long as most of our revenue is earned from performance on development
contracts, we believe there may be a high degree of variability in revenue from
quarter to quarter.</P>

<P>In July 2009, Microvision entered into a 9 month $1.0 million subcontract
with Lockheed Martin Corporation to supply two full-color, daylight readable,
see-through display systems as part of the U.S. government's Urban Leader
Tactical Response, Awareness &amp; Visualization program.  Lockheed Martin holds
a prime contract with the U.S. government for development of the soldier worn
display.</P>

<P>Our backlog of development contracts, including orders for prototype units,
at June 30, 2009 was $719,000 compared to $526,000 at June 30, 2008, all of
which is scheduled for completion during the next twelve months.    </P>

<I><P>Product revenue</I>. </P>



<PRE><B>
                                                  % of                  % of
                                                 product               product
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------
Bar code revenue                                                                                    </B>
Three months ended June 30          $     174      100.0  $     616      100.0  $    (442)    (71.8)
Six months ended June 30                  413      100.0        905      100.0       (492)    (54.4)
</PRE>
<P>Our bar code sales generally include acceptance provisions.  We recognize
revenue for bar code shipments upon acceptance of the product by the customer or
expiration of the contractual acceptance period.  Our quarterly bar code revenue
may vary substantially due to the timing of product orders from customers.</P>

<P>Bar code revenue was lower during the three and six months ended June 30,
2009 than the same period in 2008, due to decreased purchasing volume of small
and mid-sized businesses as a result of the global economic conditions.</P>

<P>The backlog of product orders at June 30, 2009 was approximately $135,000,
compared to $153,000 at June 30, 2008, all of which is scheduled for delivery
during the next twelve months. </P>

<I><P>Cost of contract revenue</I>. </P>

<PRE><B>
                                                  % of                  % of
                                                contract              contract
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------</B>
Three months ended June 30          $     527       64.8  $     374       37.2  $     153      40.9
Six months ended June 30                  910       59.7      1,136       34.6       (226)    (19.9)
</PRE>


<P>Cost of contract revenue includes both the direct and allocated indirect
costs of performing on development contracts.  Direct costs include labor,
materials and other costs incurred directly in performing on a contract.
Indirect costs include labor and other costs associated with operating our
research and development department and building our technical capabilities and
capacity.  Cost of contract revenue is determined both by the level of direct
costs incurred on development contracts and by the level of indirect costs
incurred in operating and building our technical capabilities and capacity.
Both the direct and indirect costs can fluctuate substantially from period to
period.</P>

<P>Cost of contract revenue was higher during the three months ended June 30,
2009 than the same period in 2008 as a result of the cost mix of the contracts
during those periods.  During the three months ended June 30, 2008, cost of
contract revenue included contracts with more favorable cost structures and
higher gross margins.  Cost of contract revenue was lower during six months
ended June 30, 2009 than June 30, 2008 as a result of the decreased activity on
development contracts.  The increase in cost of contract revenue as a percentage
of contract revenue during the three and six month periods ended June 30, 2009
compared to the same periods in 2008 was also the result of differences in the
cost mix of the contracts during those periods.</P>

<P>The cost of revenue as a percentage of revenue can fluctuate significantly
from period to period, depending on the contract cost mix and the levels of
direct and indirect costs incurred.  However, over longer periods of time we
expect modest fluctuations in the cost of contract revenue, as a percentage of
contract revenue.</P>

<I><P>Cost of product revenue</I>.  </P>

<PRE><B>
                                                  % of                  % of
                                                 product               product
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------</B>
Three months ended June 30          $     543      312.1  $     529       85.9  $      14       2.6
Six months ended June 30                  784      189.8        868       95.9        (84)     (9.7)
</PRE>

<P>Cost of product revenue includes both the direct and allocated indirect costs
of manufacturing products sold to customers.  Direct costs include labor,
materials and other costs incurred directly in the manufacture of these
products.  Indirect costs include labor and other costs associated with
operating our manufacturing capabilities and capacity. </P>

<P>Our overhead, which includes the costs of procuring, inspecting and storing
material, facility and depreciation costs, is allocated to inventory, cost of
product revenue, cost of contract revenue, and research and development expense
based on the proportion of direct material purchased for the respective
activity.  During the three months ending June 30, 2009 and 2008, we expensed
approximately $62,000 and $27,000, respectively, of manufacturing overhead
associated with production capacity in excess of production requirements.  For
the six months ending June 30, 2009 and 2008, we expensed approximately $134,000
and $72,000, respectively, of manufacturing overhead associated with production
capacity in excess of production requirements.</P>

<P>The Company has periodically entered into noncancelable purchase contracts in
order to ensure the availability of materials to support bar code scanner
production.  Management periodically assesses the need to provide for the
impairment on these purchase contracts and records a loss on purchase
commitments when required.  Cost of product revenue for the three and six month
periods ending June 30, 2009 includes approximately $318,000 and $340,000 of
inventory write-downs, respectively.  In addition, cost of product revenue for
the six months ended June 30, 2009 included $19,000 for noncancelable purchase
contracts that were in excess of estimated future proceeds from the sale of the
ROV scanners.</P>

<P>The cost of product revenue as a percentage of product revenue can fluctuate
significantly from period to period, depending on the product mix, the level of
overhead expense and the volume of direct materials purchased.  </P>

<I><P>Research and development expense.</I>  </P>

<PRE><B>

                                       2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     </B>
Three months ended June 30          $   5,716  $   5,881  $    (165)      (2.8)
Six months ended June 30               11,326     10,307      1,019        9.9
</PRE>

<DIR>


<P>Research and development expense consists of:</P>

</DIR>


<UL>


<LI>Compensation related costs of employees and contractors engaged in internal
research and product development activities,</LI>
<LI>Laboratory operations, outsourced development and processing work, and</LI>
<LI>Other operating expenses. </LI>
</UL>



<P>We have increased spending in research and development as part of our
strategy to accelerate the time to market for products based on the PicoP.   The
increase in cost during the six months ended June 30, 2009 as compared to the
six months ended June 30, 2008 is primarily attributable to increases in payroll
costs and contracted services. </P>

<P>As discussed above, the cost of contract revenue was higher during the three
months ended June 30, 2009 compared to the same period in 2008 as a result of
differences in the cost mix of the contracts during those periods.  As a result
there was an increase in overhead applied to cost of contract revenue during the
three months ended June 30, 2009 compared to the same period in 2008.  The
decrease in research and development expense for the three months ended June 30,
2009 as compared to the same period in 2008 is primarily attributable to an
increase in overhead allocated to cost of contract revenue as well as a decrease
in operating expenses for the period.</P>

<P>We believe that a substantial level of continuing research and development
expense will be required to develop additional commercial products using the
scanned beam display technology.  Accordingly, we anticipate our level of
research and development spending will continue to be substantial.  </P>

<I><P>Sales, marketing, general and administrative expense.</I>  </P>

<PRE><B>

                                       2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     </B>
Three months ended June 30          $   3,667  $   4,103  $    (436)     (10.6)
Six months ended June 30                7,481      8,238       (757)      (9.2)
</PRE>

<P>Sales, marketing, general and administrative expense includes compensation
and support costs for marketing, sales, management and administrative staff, and
for other general and administrative costs, including legal and accounting
services, consultants and other operating expenses.</P>

<P>The decrease in sales, marketing, general and administrative expense for the
three and six months ended June 30, 2009 compared to the same periods in 2008
was primarily the result of decreased payroll costs due to reductions in
staffing levels.</P>

<P>We continue to aggressively manage these costs as part of our strategy to
accelerate the development of PicoP-based products while controlling our cash
used in operations.</P>

<I><P>Interest income.  </P></I>

<PRE><B>

                                       2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     </B>
Three months ended June 30          $      79  $     279  $    (200)     (71.7)
Six months ended June 30                  143        691       (548)     (79.3)
</PRE>

<P>The decrease in interest income for the three and six months ended June 30,
2009 compared to the same period in 2008 resulted primarily from lower average
cash, investment securities balances, and interest rates.</P>

<I><P>Interest expense.  </P>
</I>

<PRE><B>

                                       2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     </B>
Three months ended June 30          $      20  $      12  $       8       66.7
Six months ended June 30                   31         25          6       24.0
</PRE>

<P>Gain (loss) on derivative instruments, net. </P>





<PRE><B>

                                       2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     </B>
Three months ended June 30          $    (982) $    (254) $    (728)     286.6
Six months ended June 30                 (802)     1,419     (2,221)    (156.5)
</PRE>

<P>In March and December 2005, we issued warrants to purchase 2,302,000
shares of common stock.  The warrants met the definition of derivative
instruments that must be accounted for as liabilities under the provisions of
Emerging Issues Task Force Issue No. 00-19, <I>Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock, </I>because we cannot engage in certain corporate transactions affecting
the common stock unless we make a cash payment to the holders of the warrants.
We record changes in the fair values of the warrants in the statements of
operations each period.  In July 2008, warrants to purchase 750,000 shares of
common stock expired unexercised.  We valued the remaining warrants to purchase
1,552,000 shares of common stock at June 30, 2009 using the Black-Scholes
option-pricing model with the following assumptions: expected volatilities of
78%; expected dividend yields of 0%; risk free interest rates of from 0.4% to
0.8%; and contractual lives ranging from 0.7 year to 1.4 years.  The change in
value of the warrants of $982,000 for the three and $802,000 for the six months
ended June 30, 2009 was recorded as a non-operating loss and is included in
"Gain (loss) on derivative instruments, net" in the consolidated statements of
operations.  We valued the warrants at June 30, 2008 using the Black-Scholes
option-pricing model with the following assumptions:  expected volatilities
ranging from 65% to 68%; expected dividend yields of 0%; risk free interest
rates ranging from 1.3% to 2.8%; and contractual lives ranging from 0.1 years to
2.4 years.  The change in value of the warrants of $202,000 for the three months
ended June 30, 2008 was recorded as a non-operating loss and is included in
&quot;Gain (loss) on derivative instruments, net&quot; in the consolidated
statements of operations.  The change in value of the warrants of $1,535,000 for
the six months ended June 30, 2008 was recorded as a non-operating gain and is
included in "Gain (loss) on derivative instruments, net" in the consolidated
statements of operations.</P>

<P>Prior to December 9, 2008, we held warrants to purchase 170,500 shares of
Lumera common stock.  On December 9, 2008, Lumera merged with GigOptix, LLC and
the combined company now conducts business as GigOptix, Inc.  Our Lumera
warrants were exchanged for warrants to purchase shares of the new company's
common stock, after applying a 0.125 exchange ratio and exercise price
escalation.  As of December 31, 2008, the fair value of the warrants was
determined to be zero.  As of June 30, 2008, the warrants were valued using the
Black-Scholes option-pricing model with the following assumptions:  expected
volatility of 107%; expected dividend yields of 0%; risk free interest rates of
2.83%; and contractual lives of 2.7 years.  The change in value of $52,000 for
the three months and $116,000 for the six months ended June 30, 2008 was
recorded as a non-operating loss and is included in &quot;Gain (loss) on
derivative instruments, net&quot; in the consolidated statements of
operations.</P>

<U><P>Liquidity and Capital Resources</P></U>


<P>We have funded our operations to date primarily through the sale of equity
and debt securities and, to a lesser extent, from development contract revenues
and product sales.  At June 30, 2009, we had $26.3 million in cash, cash
equivalents and investment securities, available-for-sale.  Our operating plan
for 2009 and 2010 includes the launch of the first accessory product, further
development of our PicoP display engine for embedded applications and further
development of automotive HUD and eyewear applications.  In order to fully fund
our operating plan for 2009 and 2010, we will require additional capital.  We
plan to obtain additional cash through the issuance of equity or debt
securities.  There can be no assurance that additional cash will be available or
that, if available, it will be available on terms acceptable to us on a timely
basis.  If adequate funds are not available by January 2010, we intend to
consider reducing the scope of our business to extend our operations as we
pursue other financing opportunities and business relationships.  This reduction
in scope could include delaying development projects resulting in reductions in
staff, operating costs, capital expenditures and investment in research and
development.  With these adjustments to our operating plan, we believe that we
currently have sufficient cash, cash equivalents, and investment securities to
fund operations into June 2010.    </P>

<P>Cash used in operating activities totaled $16.3 million during the six months
ended June 30, 2009, compared to $14.9 million during the same period in 2008.
During the six months ended June 30, 2009, the increase in cash used in
operating activities was primarily driven by lower contract activity and higher
research and development costs as we move closer to the commercialization of
PicoP based products.</P>
<P>We had the following material gains and charges, and changes in assets and
liabilities during the six months ended June 30, 2009:</P>

<UL>
<I><LI> &quot;Gain on derivative instruments, net&quot;   </I>In March and
December 2005 we issued warrants to purchase 2,302,000 shares of common stock,
of which 1,552,000 remain outstanding as of June 30, 2009.  Due to changes in
our stock price, we recognized a $982,000 non-operating loss during the six
months ended June 30, 2009.</LI>
<I><LI>&quot;Accounts payable&quot;</I>  During the six months ended June 30,
2009, accounts payable decreased by $1,006,000 due to payments made for
inventory, research and development expenses, and general operating expenses
that were billed to us in 2008.</LI></UL>


<P>Cash used in investing activities totaled $544,000 for the six months ended
June 30, 2009 compared to cash provided by investing activities of $11.2 million
during the six months ended June 30, 2008.  During the six months ended June 30,
2009, we used cash of $544,000 for capital expenditures, compared to $215,000
during the same period in 2008.  During the six months ended June 30,
2008,</FONT> <FONT SIZE=2>we had net sales of investment securities totaling
$11.8 million.</P>

<P>Cash provided by financing activities totaled $14.9 million for the six
months ended June 30, 2009 compared to $281,000 during the same period in 2008.
In June 2009, we raised approximately $15.0 million, before issuance costs of
approximately $179,000, from the sale of 8,076,239 shares of common stock and
warrants to purchase 2,019,060 shares of our common stock. The warrants have an
exercise price of $2.1850 per share, a three year term, and are exercisable on
the date of issuance. We can call the warrants after six months and once the
shares are registered if the average closing bid price of its stock is over
$8.74 for any 20 consecutive trading days.  </P>


<B><P><A NAME="market">ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</A></P></B>

<U><P>Interest Rate and Market Liquidity Risks</P>
</U><P>As of June 30, 2009, 90% of our total cash, cash equivalents and
investment securities, available-for-sale have variable interest rates or are
very short-term discount notes traded in active markets.  Therefore, we believe
our exposure to the market and interest rate risk is not material.  The
remaining 10% is composed of $3.0 million par student loan auction-rate
securities (SLARS).  The SLARS owned by the Company are investment grade
long-term bonds, structured with variable interest rate resets, purchases and sales
to be determined via a Dutch Auction process every 28 days.  They were issued to
fund U.S. government guaranteed student loans.  Beginning in February 2008 as
global credit markets significantly deteriorated, insufficient clearing bids
have been submitted for the SLARS.  The auctions have thus failed and the
interest rates have been reset to &quot;maximum rates&quot; instead of
&quot;auction rates&quot;.  The SLARS have been illiquid through the auction
process and through inactive secondary ARS markets.</P>

<P>Given the adverse credit market conditions, the fair value of the principal
of these bonds has become affected by changes in interest rates, the spread
between short and long rates, and credit market liquidity.  As a result, at
December 31, 2008, we estimated the fair value of our SLARS to be approximately
$2.7 million.  If market conditions worsen, we may have to further adjust the
estimated fair value of the SLARS, including additional charges to earnings, if
we believe the adjustment is other than temporary.  In the event we need access
to the funds invested in the SLARS, we could be required to sell these
securities at an amount below our original purchase value.  Any of these events
could affect our consolidated financial condition, results of operations and
cash flows.  However, based on our current operating plan and ability to access
our $23.6 million held in cash and cash equivalents and other investment
securities available for sale held as of June 30, 2009, we do not expect to be
required to sell these securities materially below their current estimated
values.  </P>

<P>Our investment policy generally directs that the investment managers should
select investments to achieve the following goals: principal preservation,
adequate liquidity and return.  As of June 30, 2009, our cash and cash
equivalents and investments available-for-sale securities portfolio are
comprised of short-term highly rated money market funds, corporate bonds and the
SLARS.  </P>


<PRE>
<B>
                                      Amount      Percent
                                     ---------  ---------</B>
Cash                                  $ 6,677      25.36%
Less than one year                   $ 16,948      64.38%
One to two years                           --          --
Greater than five years                 2,700      10.26%
                                     ---------  ---------
                                    $  26,325     100.00%
                                     =========  =========

</PRE>

<U><P>Foreign Exchange Rate Risk</P>
</U><P>All of our development contract payments are made in U.S. dollars.
However, in the future we may enter into additional development contracts in
foreign currencies that may subject us to foreign exchange rate risk.  We intend
to enter into foreign currency hedges to offset material exposure to currency
fluctuations when we can adequately determine the timing and amounts of the
foreign currency exposure.</P>

<B><P><A NAME="controls">ITEM 4.</B>&#9;<B>CONTROLS AND PROCEDURES</A></P></B>

<P>Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by
this report and, based on this evaluation, our principal executive officer and
principal financial officer have concluded that these disclosure controls and
procedures are effective.  There were no changes in our internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) that occurred
during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.</P>


<B><P>PART II</P>
</B>
<B><P ALIGN="CENTER">OTHER INFORMATION</P>
</B>
<B><P><A NAME="item1a">ITEM 1A </B>- <B>RISK FACTORS </A></P>
</B>

<B><P>Risk Factors Relating to the Microvision Business</P>
</B>
<B><P>We have a history of operating losses and expect to incur significant
losses in the future. </P>
</B>
<P>We have had substantial losses since our inception.  We cannot assure you
that we will ever become or remain profitable. </P>


<UL>


<LI>As of June 30, 2009, we had an accumulated deficit of $311.3 million. </LI>
<LI>We incurred consolidated net losses of $239.6 million from inception through
2006, $19.8 million in 2007, $32.6 million in 2008, and consolidated net loss of
$19.3 million in the six months ended June 30, 2009.</LI>
</UL>


<P>The likelihood of our success must be considered in light of the expenses,
difficulties and delays frequently encountered by companies formed to develop
and market new technologies.  In particular, our operations to date have focused
primarily on research and development of the scanned beam technology and
development of demonstration units.  We are unable to accurately estimate future
revenues and operating expenses based upon historical performance. </P>

<P>We cannot be certain that we will succeed in obtaining additional development
contracts or that we will be able to obtain substantial customer orders for our
products.  In light of these factors, we expect to continue to incur losses and
negative cash flow at least through at least 2010 and likely thereafter.  We
cannot be certain that we will achieve positive cash flow at any time in the
future. </P>

<B><P>We will require additional capital to fund our operations and to implement
our business plan.  If we do not obtain additional capital, we may be required
to curtail our operations substantially.  Raising additional capital may dilute
the value of current shareholders' shares. </P>
</B>
<P>Our operating plan for 2009 and 2010 includes the launch of our first
accessory product, further development of the PicoP display engine for embedded
applications and further development of automotive HUD and eyewear applications.
In order to fully fund our operating plan for 2009 and 2010, we will require
additional capital. We plan to obtain additional cash through the issuance of
equity or debt securities. We will require additional capital in the future to
fund our operations, including to:</P>


<UL>


<LI>Further develop the technology platform and PicoP display engine, </LI>
<LI>Develop and protect our intellectual property rights, and </LI>
<LI>Fund long-term marketing and business development opportunities.</LI>
</UL>



<P>Our capital requirements will depend on many factors, including, but not
limited to, the rate at which we can, directly or through arrangements with
original equipment manufacturers, introduce products incorporating the PicoP
display engine and image capture technologies, the market acceptance and
competitive position of such products, and the revenues, volumes and margins of
such products.  If the level of revenues or margin are less than anticipated
amounts or if expenses exceed the amounts budgeted, the Company may require
additional capital earlier than expected to further the development of our
technologies, for expenses associated with product development, and to respond
to competitive pressures or to meet unanticipated development difficulties.  In
addition, our operating plan provides for the development of strategic
relationships with systems and equipment manufacturers that may require
additional investments by us. </P>

<P>There can be no assurance that additional capital will be available to us, or
if available, on terms acceptable to us or on a timely basis. Raising additional
capital may involve issuing securities with rights and preferences that are
senior to our common stock and may dilute the value of current shareholders'
shares. If adequate funds are not available by January 2010, we intend to consider
reducing the scope of our business to extend our operations as we pursue other
financing opportunities and business relationships. This reduction in scope
could include reductions in staff and operating costs as well as reductions in
capital expenditures and investment in research and development.  With these
adjustments to our operating plan we believe that we currently have sufficient
cash, cash equivalents, and investment securities to fund operations into June
2010.  </P>

<B><P>If we cannot manufacture products at competitive prices, our financial
results will be adversely affected.</P>
</B>
<P>We are currently negotiating component pricing with suppliers for our future
products.  The cost per unit for PicoP based accessory projectors currently
exceeds the level at which we could expect to profitably sell these products.
If we cannot lower our cost of production, we may face increased demands on our
financial resources, possibly requiring additional equity and/or debt financing
to sustain our business operations.</P>

<B><P>We cannot be certain that our technology platform or products
incorporating our PicoP display engine will achieve market acceptance.  If
products incorporating the PicoP display engine do not achieve market
acceptance, our revenues may not grow.</P>
</B>
<P>Our success will depend in part on customer acceptance of the PicoP display
engine.  The PicoP display engine may not be accepted by manufacturers who use
display technologies in their products, by systems integrators who incorporate
our products into their products or by end users of these products.  To be
accepted, the PicoP display engine must meet the expectations of our potential
customers in the consumer, defense, industrial and medical markets.  If our
technology fails to achieve market acceptance, we may not be able to continue to
develop our technology platform.</P>

<B><P>Our planned future products are dependent on advances in technology by
other companies.</P>
</B>
<P>We rely on and will continue to rely on technologies, such as light sources,
MEMS and optical components that are developed and produced by other companies.
The commercial success of certain of our planned future products will depend in
part on advances in these and other technologies by other companies.  We may,
from time to time, contract with and support companies developing key
technologies in order to accelerate the development of them for our specific
uses.  There are no guarantees that such activities will result in useful
technologies or components for us.</P>
<B>
<P>It may become more difficult to sell our stock in the public market.</P>
</B>
<P>Our common stock is listed for quotation on The NASDAQ Global Market.  To
keep our listing on this market, we must meet NASDAQ's listing maintenance
standards.  If we are unable to continue to meet NASDAQ's listing maintenance
standards, our common stock could be delisted from The NASDAQ Global Market.  If
our common stock were delisted, we likely would seek to list the common stock on
the NASDAQ Capital Market, the American Stock Exchange or on a regional stock
exchange.  Listing on such other market or exchange could reduce the liquidity
for our common stock.  If our common stock were not listed on the Capital Market
or an exchange, trading of our common stock would be conducted in the over-the-
counter market on an electronic bulletin board established for unlisted
securities or directly through market makers in our common stock.  If our common
stock were to trade in the over-the-counter market, an investor would find it
more difficult to dispose of, or to obtain accurate quotations for the price of,
the common stock.  A delisting from The NASDAQ Global Market and failure to
obtain listing on such other market or exchange would subject our securities to
so-called penny stock rules that impose additional sales practice and market-
making requirements on broker-dealers who sell or make a market in such
securities.  Consequently, removal from The NASDAQ Global Market and failure to
obtain listing on another market or exchange could affect the ability or
willingness of broker-dealers to sell or make a market in our common stock and
the ability of purchasers of our common stock to sell their securities in the
secondary market.  In addition, when the market price of our common stock is
less than $5.00 per share, we become subject to penny stock rules even if our
common stock is still listed on The NASDAQ Global Market.  While the penny stock
rules should not affect the quotation of our common stock on The NASDAQ Global
Market, these rules may further limit the market liquidity of our common stock
and the ability of investors to sell our common stock in the secondary market.
The market price of our stock has mostly traded below $5.00 per share during
2008 and 2007.  On July 30, 2009, the closing price of our stock was $3.65.</P>

<B><P>Our lack of the financial and technical resources relative to our
competitors may limit our revenues, potential profits, overall market share or
value.</P>
</B>
<P>Our current products and potential future products will compete with
established manufacturers of existing products and companies developing new
technologies.  Many of our competitors have substantially greater financial,
technical and other resources than we have.  Because of their greater resources,
our competitors may develop products or technologies that are superior to our
own.  The introduction of superior competing products or technologies could
result in reduced revenues, lower margins or loss of market share, any of which
could reduce the value of our business.</P>

<B><P>We may not be able to keep up with rapid technological change and our
financial results may suffer.</P>
</B>
<P>The information display industry has been characterized by rapidly changing
technology, accelerated product obsolescence and continuously evolving industry
standards.  Our success will depend upon our ability to further develop our
technology platform and to cost effectively introduce new products and features
in a timely manner to meet evolving customer requirements and compete with
competitors' product advances.</P>

<P>We may not succeed in these efforts because of:</P>

<UL>


<LI>delays in product development,</LI>
<LI>lack of market acceptance for our products, or</LI>
<LI>lack of funds to invest in product development and marketing.</LI>
</UL>


<P>The occurrence of any of the above factors could result in decreased
revenues, market share and value.</P>

<B><P>We could face lawsuits related to our use of the PicoP display engine or
other technologies.  Defending these suits would be costly and time consuming.
An adverse outcome in any such matter could limit our ability to commercialize
our technology and products, reduce our revenues and increase our operating
expenses.</P>
</B>
<P>We are aware of several patents held by third parties that relate to certain
aspects of light scanning displays and image capture products.  These patents
could be used as a basis to challenge the validity, limit the scope or limit our
ability to obtain additional or broader patent rights of our patents or patents
we have licensed.  A successful challenge to the validity of our patents or
patents we have licensed could limit our ability to commercialize our technology
and the PicoP display engine and, consequently, materially reduce our revenues.
Moreover, we cannot be certain that patent holders or other third parties will
not claim infringement by us with respect to current and future technology.
Because U.S. patent applications are held and examined in secrecy, it is also
possible that presently pending U.S. applications will eventually be issued with
claims that will be infringed by our products or our technology.  The defense
and prosecution of a patent suit would be costly and time consuming, even if the
outcome were ultimately favorable to us.  An adverse outcome in the defense of a
patent suit could subject us to significant cost, to require others and us to
cease selling products that incorporate the PicoP display engine, to cease
licensing our technology or to require disputed rights to be licensed from third
parties.  Such licenses, if available, would increase our operating expenses.
Moreover, if claims of infringement are asserted against our future co-
development partners or customers, those partners or customers may seek
indemnification from us for damages or expenses they incur.</P>

<B><P>Our products may be subject to future health and safety regulations that
could increase our development and production costs.</P>
</B>
<P>Products incorporating the PicoP display engine could become subject to new
health and safety regulations that would reduce our ability to commercialize the
PicoP display engine.  Compliance with any such new regulations would likely
increase our cost to develop and produce products using the PicoP display engine
and adversely affect our financial results.</P>

<B><P>Our dependence on sales to distributors increases the risks of managing
our supply chain and may result in excess inventory or inventory shortages.</P>
</B>
<P>Currently, the majority of our distributor relationships for the ROV Scanner
and its accessories involve the distributor taking inventory positions and
reselling to multiple customers.  With these distributor relationships, we do
not recognize revenue until the distributors sell the product through to their
end user customers.  Our distributor relationships do reduce our ability to
forecast sales and increases risks to our business. Since our distributors act
as intermediaries between us and the end user customers, we must rely on our
distributors to accurately report inventory levels and production forecasts.
This requires us to manage a more complex supply chain and monitor the financial
condition and credit worthiness of our distributors and the end user customers.
Our failure to manage one or more of these risks could result in excess
inventory or shortages that could adversely impact our operating results and
financial condition.</P>

<B><P>We do not have long-term commitments from our ROV customers, and plan
purchases based upon our estimates of customer demand, which may require us to
contract for the manufacture of our products based on inaccurate estimates.</P>
</B>
<P>Our ROV sales are made on the basis of purchase orders rather than long-term
commitments.  Our customers may cancel or defer purchases at any time.  This
requires us to forecast demand based upon assumptions that may not be correct.
If our customers or we overestimate demand, we may create inventory that we may
not be able to sell or use, resulting in excess inventory, which could become
obsolete or negatively affect our operating results.  Conversely, if our
customers or we underestimate demand, or if sufficient manufacturing capacity is
not available, we may lose revenue opportunities, damage customer relationships,
and we may not achieve expected revenues.</P>
<B>
<P>Our future growth will suffer if we do not achieve sufficient market
acceptance of our products to compete effectively.</P>
</B>
<P>Our success depends, in part, on our ability to gain acceptance of our
current and future products by a large number of customers.  Achieving market
based acceptance for our products will require marketing efforts and the
expenditure of financial and other resources to create product awareness and
demand by potential customers.  We may be unable to offer products consistently
or at all that compete effectively with products of others on the basis of price
or performance.  Failure to achieve broad acceptance of our products by
potential customers and to effectively compete would have a material adverse
effect on our operating results.</P>
<B>
<P>Our operating results may be adversely impacted by worldwide political and
economic uncertainties and</FONT><FONT FACE="Times" SIZE=2> </FONT><FONT
SIZE=2>specific conditions in the markets we address. </P>

</B><P>In the recent past, general worldwide economic conditions have
experienced a downturn due to slower economic</FONT><FONT FACE="Times" SIZE=2>
activity, concerns about inflation, increased energy costs, decreased consumer
confidence, reduced corporate profits and capital spending, and adverse business
conditions. Any continuation or </FONT><FONT SIZE=2>worsening of the current
global economic and financial conditions could materially adversely affect our
ability to raise, or the cost of, needed capital and could materially adversely
affect our ability to commercialize products.  </FONT><FONT FACE="Times"
SIZE=2>We cannot predict the timing, strength, or duration of any economic
slowdown or subsequent economic recovery, worldwide, or in the display industry.
</P>
</FONT><B><FONT SIZE=2>
<P>Because we plan to continue using foreign contract manufacturers, our
operating results could be harmed by economic, political, regulatory and other
factors in foreign countries.</P>
</B>
<P>We currently use a contract manufacturer in Asia to manufacture our ROV
product, and we plan to use foreign manufacturers to manufacture future
products, where appropriate.  These international operations are subject to
inherent risks, which may adversely affect us, including:</P>

<UL>


<LI>political and economic instability;</LI>
<LI>high levels of inflation, historically the case in a number of countries in
Asia;</LI>
<LI>burdens and costs of compliance with a variety of foreign laws;</LI>
<LI>foreign taxes;</LI>
<LI>changes in tariff rates or other trade and monetary policies; and</LI>
<LI>changes or volatility in currency exchange rates.</LI>
</UL>


<B><P>If we have to qualify a new contract manufacturer or foundry for our
products, we may experience delays that result in lost revenues and damaged
customer relationships.</P>
</B>
<P>We rely on single suppliers to manufacture our ROV Scanner product and our
MEMS chips in wafer form.  The lead time required to establish a relationship
with a new contract manufacturer or foundry is long, and it takes time to adapt
a product's design to a particular manufacturer's processes.  Accordingly, there
is no readily available alternative source of supply for these products and
components in high volumes.  This could cause significant delays in shipping
products if we have to change our source of supply and manufacture quickly,
which may result in lost revenues and damaged customer relationships.</P>
<B>
<P>If we experience delays or failures in developing commercially viable
products, we may have lower revenues.</P>
</B>
<P>We have developed demonstration units incorporating the PicoP display engine.
However, we must undertake additional research, development and testing before
we are able to develop additional products for commercial sale.  Product
development delays by us or our potential product development partners, or the
inability to enter into relationships with these partners, may delay or prevent
us from introducing products for commercial sale.  We intend to rely on third
party developments or to contract with other companies to continue development
of green laser devices we will need for our products.  </P>

<B><P>Our success will depend, in part, on our ability to secure significant
third party manufacturing resources.</P>
</B>
<P>We are developing our capability to manufacture products in commercial
quantities.  Our success depends, in part, on our ability to provide our
components and future products in commercial quantities at competitive prices.
Accordingly, we will be required to obtain access, through business partners or
contract manufacturers, to manufacturing capacity and processes for the
commercial production of our expected future products.  We cannot be certain
that we will successfully obtain access to sufficient manufacturing resources.
Future manufacturing limitations of our suppliers could result in a limitation
on the number of products incorporating our technology that we are able to
produce.</P>

<B><P>If our licensors and we are unable to obtain effective intellectual
property protection for our products and technology, we may be unable to compete
with other companies.</P>
</B>
<P>Intellectual property protection for our products is important and uncertain.
If we do not obtain effective intellectual property protection for our products,
processes and technology, we may be subject to increased competition.  Our
commercial success will depend in part on our ability and the ability of the
University of Washington and our other licensors to maintain the proprietary
nature of the PicoP display and other key technologies by securing valid and
enforceable patents and effectively maintaining unpatented technology as trade
secrets.  We try to protect our proprietary technology by seeking to obtain
United States and foreign patents in our name, or licenses to third-party
patents, related to proprietary technology, inventions, and improvements that
may be important to the development of our business.  However, our patent
position and the patent position of the University of Washington and other
licensors involve complex legal and factual questions.  The standards that the
United States Patent and Trademark Office and its foreign counterparts use to
grant patents are not always applied predictably or uniformly and can change.
Additionally, the scope of patents are subject to interpretation by courts and
their validity can be subject to challenges and defenses, including challenges
and defenses based on the existence of prior art.  Consequently, we cannot be
certain as to the extent to which we will be able to obtain patents for our new
products and technology or the extent to which the patents that we already own
or license from others protect our products and technology.  Reduction in scope
of protection or invalidation of our licensed or owned patents, or our inability
to obtain new patents, may enable other companies to develop products that
compete with ours on the basis of the same or similar technology.</P>

<P>We also rely on the law of trade secrets to protect unpatented know-how and
technology to maintain our competitive position.  We try to protect this know-how
and technology by limiting access to the trade secrets to those of our
employees, contractors and partners with a need to know such information and by
entering into confidentiality agreements with parties that have access to it,
such as our employees, consultants and business partners.  Any of these parties
could breach the agreements and disclose our trade secrets or confidential
information, or our competitors might learn of the information in some other
way.  If any trade secret not protected by a patent were to be disclosed to or
independently developed by a competitor, our competitive position could be
materially harmed.</P>

<B><P>We could be exposed to significant product liability claims that could be
time-consuming and costly, divert management attention and adversely affect our
ability to obtain and maintain insurance coverage.</P>
</B>
<P>We may be subject to product liability claims if any of our product
applications are alleged to be defective or cause harmful effects.  For example,
because some of our PicoP displays are designed to scan a low power beam of
colored light into the user's eye, the testing, manufacture, marketing and sale
of these products involve an inherent risk that product liability claims will be
asserted against us.  Product liability claims or other claims related to our
products, regardless of their outcome, could require us to spend significant
time and money in litigation, divert management time and attention, require us
to pay significant damages, harm our reputation or hinder acceptance of our
products.  Any successful product liability claim may prevent us from obtaining
adequate product liability insurance in the future on commercially desirable or
reasonable terms.  An inability to obtain sufficient insurance coverage at an
acceptable cost or otherwise to protect against potential product liability
claims could prevent or inhibit the commercialization of our products.</P>

<B><P>We rely heavily on a limited number of development contracts with the U.S.
government, which are subject to immediate termination by the government for
convenience at any time, and the termination of one or more of these contracts
could have a material adverse impact on our operations.</P>
</B>
<P>During the first half of 2009 and the full year of 2008, 54% and 34%,
respectively, of our revenue was derived from performance on a limited number of
development contracts with the U.S. government.  Therefore, any significant
disruption or deterioration of our relationship with the U.S. government would
significantly reduce our revenues.  Our government programs must compete with
programs managed by other contractors for limited amounts and uncertain levels
of funding.  The total amount and levels of funding are susceptible to
significant fluctuations on a year-to-year basis.  Our competitors continuously
engage in efforts to expand their business relationships with the government and
are likely to continue these efforts in the future.  Our contracts with the
government are subject to immediate termination by the government for
convenience at any time.  The government may choose to use contractors with
competing display technologies or it may decide to discontinue any of our
programs altogether.  In addition, those development contracts that we do obtain
require ongoing compliance with applicable government regulations.  Termination
of our development contracts, a shift in government spending to other programs
in which we are not involved, a reduction in government spending generally, or
our failure to meet applicable government regulations could have severe
consequences for our results of operations.</P>

<B><P>Our development agreements have long sales cycles, which make it difficult
to plan our expenses and forecast our revenues.</P>
</B>
<P>Our development agreements have lengthy sales cycles that involve numerous
steps including determination of a product application, exploring the technical
feasibility of a proposed product, evaluating the costs of manufacturing a
product and manufacturing or contracting out the manufacturing of the product.
Our long sales cycle, which can last several years, makes it difficult to
predict the quarter in which contract signing and revenue recognition will
occur.  Delays in entering into development agreements could cause significant
variability in our revenues and operating results for any particular quarterly
period.</P>

<B><P>Our development contracts may not lead to products that will be
profitable.</P>
</B>
<P>Our development contracts, including without limitation those discussed in
this document are exploratory in nature and are intended to develop new types of
products for new applications.  These efforts may prove unsuccessful and these
relationships may not result in the development of products that will be
profitable.</P>

<B><P>Our revenues are highly sensitive to developments in the defense
industry.</P>
</B>
<P>Our revenues to date have been derived principally from product development
research relating to defense applications of our technology.  We believe that
development programs and sales of potential products in this market will
represent a significant portion of our future revenues.  Developments that
adversely affect the defense sector, including delays in government funding and
a general economic downturn, could cause our revenues to decline
substantially.</P>

<B><P>If we lose our rights under our third party technology licenses, our
operations will be adversely affected.</P>
</B>
<P>Our business depends in part on technology rights licensed from third
parties.  We could lose our exclusivity or other rights to use the technology
under our licenses if we fail to comply with the terms and performance
requirements of the licenses.    In addition, certain licensors may terminate a
license upon our breach and have the right to consent to sublicense
arrangements.  If we were to lose our rights under any of these licenses, or if
we were unable to obtain required consents to future sublicenses, we would lose
a competitive advantage in the market, and may even lose the ability to
commercialize our products completely.  Either of these results could
substantially decrease our revenues.</P>

<B><P>We are dependent on third parties in order to develop, manufacture, sell
and market our products.</P>
</B>
<P>Our strategy for commercializing our technology and products incorporating
the PicoP display engine includes entering into cooperative development,
manufacturing, sales and marketing arrangements with corporate partners,
original equipment manufacturers and other third parties.  We cannot be certain
that we will be able to negotiate arrangements on acceptable terms, if at all,
or that these arrangements will be successful in yielding commercially viable
products.  If we cannot establish these arrangements, we would require
additional capital to undertake such activities on our own and would require
extensive manufacturing, sales and marketing expertise that we do not currently
possess and that may be difficult to obtain.  In addition, we could encounter
significant delays in introducing the PicoP display engine or find that the
development, manufacture or sale of products incorporating the PicoP display
engine would not be feasible.  To the extent that we enter into cooperative
development, sales and marketing or other joint venture arrangements, our
revenues will depend upon the performance of third parties.  We cannot be
certain that any such arrangements will be successful.</P>

<B><P>Loss of any of our key personnel could have a negative effect on the
operation of our business.</P>
</B>
<P>Our success depends on our executive officers and other key personnel and on
the ability to attract and retain qualified new personnel.  Achievement of our
business objectives will require substantial additional expertise in the areas
of sales and marketing, research and product development and manufacturing.
Competition for qualified personnel in these fields is intense, and the
inability to attract and retain additional highly skilled personnel, or the loss
of key personnel, could reduce our revenues and adversely affect our
business.</P>

<B><P>We are dependent on a small number of customers for our revenue.  Our
quarterly performance may vary substantially and this variance, as well as
general market conditions, may cause our stock price to fluctuate greatly and
potentially expose us to litigation.</P>
</B>
<P>Our revenues to date have been generated primarily from a limited number of
development contracts with U.S. government entities and commercial partners.
Our quarterly operating results may vary significantly based on:</P>

<UL>


<LI>reductions or delays in funding of development programs involving new
information display technologies by the U.S. government or our current or
prospective commercial partners;</LI>
<LI>changes in evaluations and recommendations by any securities analysts
following our stock or our industry generally;</LI>
<LI>announcements by other companies in our industry;</LI>
<LI>changes in business or regulatory conditions;</LI>
<LI>announcements or implementation by our competitors of technological
innovations or new products;</LI>
<LI>the status of particular development programs and the timing of performance
under specific development agreements;</LI>
<LI>economic and stock market conditions; or</LI>
<LI>other factors unrelated to our company or industry.</LI>
</UL>


<P>In one or more future quarters, our results of operations may fall below the
expectations of securities analysts and investors and the trading price of our
common stock may decline as a consequence.  In addition, following periods of
volatility in the market price of a company's securities, shareholders often
have instituted securities class action litigation against that company.  If we
become involved in a class action suit, it could divert the attention of
management, and, if adversely determined, could require us to pay substantial
damages.</P>

<B><P>If we fail to manage expansion effectively, our revenue and expenses could
be adversely affected.</P>
</B>
<P>Our ability to successfully offer products and implement our business plan in
a rapidly evolving market requires an effective planning and management process.
The growth in business and relationships with customers and other third parties
has placed, and will continue to place, a significant strain on our management
systems and resources.  We will need to continue to improve our financial and
managerial controls, reporting systems and procedures and will need to continue
to train and manage our work force.</P>


<B><P><A NAME="item6">ITEM 6.</B>&#9;<B>Exhibits </A></P></B>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>10.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Securities Purchase Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>10.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Registration Rights Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>10.3</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Warrant No. 120 to Purchase Common Stock of Microvision, Inc.
                                                                                      issued June 22, 2009 to Max Display Enterprises Limited</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>31.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Executive Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>31.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Financial Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>32.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Executive Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>32.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Financial Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>

<P ALIGN="CENTER"><A NAME="sign">SIGNATURES</A></P>


<P>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, thereunto duly authorized.</P>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="53%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="47%" VALIGN="TOP">
<B><FONT SIZE=2><P>MICROVISION, INC.</B></FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=1 WIDTH=619>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>August 6, 2009</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P>BY: </FONT></TD>
<TD WIDTH="47%" VALIGN="TOP"><FONT SIZE=2><P> /s/ Alexander Y. Tokman</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Alexander Y. Tokman</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Executive Officer<BR>
   (Principal Executive Officer)</FONT></TD>
</TR>
</TABLE>


<P><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=1 WIDTH=619>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>August 6, 2009</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P>BY: </FONT></TD>
<TD WIDTH="47%" VALIGN="TOP"><FONT SIZE=2><P> /s/ Jeff Wilson</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Jeff Wilson</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Financial Officer<BR>
   (Principal Financial Officer) </FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>



<B>
<P ALIGN="CENTER"><A NAME="index"></A></P>

</B><P ALIGN="CENTER">EXHIBIT INDEX</P>

<P>The following documents are filed.</P>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="11%" VALIGN="BOTTOM">
<U><FONT SIZE=2><P>Exhibit Number</U></FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<U><FONT SIZE=2><P>Description</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>10.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Securities Purchase Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>10.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Registration Rights Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=31>
<FONT SIZE=2><P>10.3</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=31>
<FONT SIZE=2><P>Warrant No. 120 to Purchase Common Stock of Microvision, Inc.
issued June 22, 2009 to Max Display Enterprises Limited</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>31.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Executive Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>31.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Financial Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=27>
<FONT SIZE=2><P>32.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=27>
<FONT SIZE=2><P>Chief Executive Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P>32.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Financial Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>
</FONT>






</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>exh31-1.htm
<DESCRIPTION>EXHIBIT 31-1
<TEXT>

<TITLE>Q2 2009 Exhibit 31.1 </TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080" BGCOLOR="#ffffff">
<font FACE="Times New Roman" SIZE="2">


<FONT SIZE=2><B><P ALIGN="RIGHT">Exhibit 31.1 </P>
</B>

<B><P ALIGN="CENTER">
                    CERTIFICATION PURSUANT TO<BR>
       RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,<BR>
                  AS ADOPTED PURSUANT TO<BR>
       SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</P>
</B>


<P ALIGN="JUSTIFY">
I, Alexander Y. Tokman, certify that:

<DIR>

<P ALIGN="JUSTIFY">
1.   I have reviewed this quarterly report on Form 10-Q of Microvision, Inc;


<P ALIGN="JUSTIFY">
2.   Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;

<P ALIGN="JUSTIFY">
3.   Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;


<P ALIGN="JUSTIFY">
4.   The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:

<DIR>

<P ALIGN="JUSTIFY">
(a)   Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;

<P ALIGN="JUSTIFY">
(b)   Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles:

<P ALIGN="JUSTIFY">
(c)   Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

<P ALIGN="JUSTIFY">
(d)   Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and
</DIR>

<P ALIGN="JUSTIFY">
5.   The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

<DIR>

<P ALIGN="JUSTIFY">
(a)   All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and

<P ALIGN="JUSTIFY">
(b)   Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
</DIR>
</DIR>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=85%>
<TR><TD WIDTH="54%" VALIGN="TOP">
<FONT SIZE=2><P>Date:<U> August 6, 2009 </U></FONT></TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT SIZE=2><P>By: <U>/s/ Alexander Y. Tokman <BR>
</U>   Alexander Y. Tokman <BR>
 Chief Executive Officer
</FONT></TD>
</TR>
</TABLE>


<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>exh31-2.htm
<DESCRIPTION>EXHIBIT 31-2
<TEXT>
<HTML>
<HEAD>
<TITLE>Q2 2009 Exhibit 31.2 </TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080" BGCOLOR="#ffffff">
<font FACE="Times New Roman" SIZE="2">


<FONT SIZE=2><B><P ALIGN="RIGHT">Exhibit 31.2 </P>
</B>


<B><P ALIGN="CENTER">
                    CERTIFICATION PURSUANT TO<BR>
       RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,<BR>
                  AS ADOPTED PURSUANT TO<BR>
       SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</P>
</B>


<P ALIGN="JUSTIFY">
I, Jeff T. Wilson, certify that:

<DIR>

<P ALIGN="JUSTIFY">
1.   I have reviewed this quarterly report on Form 10-Q of Microvision, Inc.;


<P ALIGN="JUSTIFY">
2.   Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;

<P ALIGN="JUSTIFY">
3.   Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;


<P ALIGN="JUSTIFY">
4.   The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:


<DIR>

<P ALIGN="JUSTIFY">
(a)   Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;

<P ALIGN="JUSTIFY">
(b)   Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;

<P ALIGN="JUSTIFY">
(c)   Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

<P ALIGN="JUSTIFY">
d)   Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and
</DIR>

<P ALIGN="JUSTIFY">
5.   The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

<DIR>

<P ALIGN="JUSTIFY">
(a)   All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and

<P ALIGN="JUSTIFY">
(b)   Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
</DIR>
</DIR>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=85%>
<TR><TD WIDTH="54%" VALIGN="TOP">
<FONT SIZE=2><P>Date:<U> August 6, 2009 </U></FONT></TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT SIZE=2><P>By: <U>/s/ Jeff T. Wilson<BR>
</U>   Jeff T. Wilson<BR>
 Chief Financial Officer
</FONT></TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>exh32-1.htm
<DESCRIPTION>EXHIBIT 32-1
<TEXT>
<HTML>
<HEAD>
<TITLE>Q2 2009 Exhibit 32.1 </TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080" BGCOLOR="#ffffff">
<font FACE="Times New Roman" SIZE="2">

<FONT SIZE=2><B><P ALIGN="RIGHT">Exhibit 32.1 </P>
</B>

<B><P ALIGN="CENTER">
                           CERTIFICATION PURSUANT TO<BR>
                       SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,<BR>
                                 AS ADOPTED PURSUANT TO<BR>
                              SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>
</B>

<FONT SIZE=2><P ALIGN="JUSTIFY">
Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, the undersigned, as chief executive officer of
Microvision, Inc. (the "Company"), does hereby certify that to the undersigned's knowledge:

<DIR>

<FONT SIZE=2><P ALIGN="JUSTIFY">
 1) &nbsp;&nbsp;  the Company's Form 10-Q for the quarter ended June 30, 2009
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

<FONT SIZE=2><P ALIGN="JUSTIFY">
2) &nbsp;&nbsp; the information contained in the Company's Form 10-Q for the quarter ended June 30, 2009
fairly presents, in all material respects, the financial condition and results of operations of the Company.

</DIR>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=85%>
<TR><TD WIDTH="54%" VALIGN="TOP">
<FONT SIZE=2><P>Date:<U>August 6, 2009 </U></FONT></TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT SIZE=2><P>By: <U>/s/ Alexander Y. Tokman <BR>
</U>   Alexander Y. Tokman <BR>
 Chief Executive Officer
</FONT></TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>exh32-2.htm
<DESCRIPTION>EXHIBIT 32-2
<TEXT>
<HTML>
<HEAD>
<TITLE>Q2 2009 Exhibit 32.2 </TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080" BGCOLOR="#ffffff">
<font FACE="Times New Roman" SIZE="2">

<FONT SIZE=2><B><P ALIGN="RIGHT">Exhibit 32.2 </P>
</B>

<B><P ALIGN="CENTER">
                           CERTIFICATION PURSUANT TO<BR>
                       SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,<BR>
                                 AS ADOPTED PURSUANT TO<BR>
                              SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>
</B>

<FONT SIZE=2><P ALIGN="JUSTIFY">
Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, the undersigned, as chief financial officer of
Microvision, Inc. (the "Company"), does hereby certify that to the undersigned's knowledge:

<DIR>

<FONT SIZE=2><P ALIGN="JUSTIFY">
 1) &nbsp;&nbsp;  the Company's Form 10-Q for the quarter ended June 30, 2009
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

<FONT SIZE=2><P ALIGN="JUSTIFY">
2) &nbsp;&nbsp; the information contained in the Company's Form 10-Q for the quarter ended June 30, 2009
fairly presents, in all material respects, the financial condition and results of operations of the Company.

</DIR>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=85%>
<TR><TD WIDTH="54%" VALIGN="TOP">
<FONT SIZE=2><P>Date:<U> August 6, 2009 </U></FONT></TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT SIZE=2><P>By: <U>/s/ Jeff T. Wilson<BR>
</U>   Jeff T. Wilson<BR>
 Chief Financial Officer
</FONT></TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<HR WIDTH="85%">
<BR>
<BR>
<BR>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>7
<FILENAME>exh10-1.htm
<DESCRIPTION>WALSIN STOCK PURCHASE AGREEMENT
<TEXT>

<B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">SECURITIES PURCHASE AGREEMENT</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
</B><P ALIGN="JUSTIFY">&#9;SECURITIES PURCHASE AGREEMENT (this
&quot;<U>Agreement</U>&quot;), dated as of June 22, 2009, by and between
Microvision, Inc., a Delaware corporation (the &quot;<U>Company</U>&quot;), and
Max Display Enterprises Limited, a limited liability company formed under the
laws of the British Virgin Islands (the &quot;<U>Investor</U>&quot;).</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="A">

<OL TYPE="A">

<P ALIGN="JUSTIFY"><LI>The Company wishes to sell to the Investor, and the
Investor wishes to purchase, on the terms and subject to the conditions set
forth in this Agreement, (i) 8,076,239 shares (the &quot;<U>Shares</U>&quot;) of
the Company's common stock, $.001 par value per share (the &quot;<U>Common
Stock</U>&quot;), and (ii) a Warrant in the form attached hereto as <U>Exhibit
A</U> (the &quot;<U>Warrant</U>&quot;).  The shares of Common Stock into which
the Warrant is exercisable are referred to herein as the &quot;<U>Warrant
Shares</U>&quot;, and the Shares, the Warrant and the Warrant Shares are
collectively referred to herein as the &quot;<U>Securities</U>&quot;.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Warrant will entitle the Investor to purchase
2,019,060 number of Warrant Shares.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Company has agreed to effect the registration of the
Shares and the Warrant Shares for resale by the holders thereof<A
NAME="_DV_M15"></A> under the Securities Act (as defined below), pursuant to a
Registration Rights Agreement in the form attached hereto as <U>Exhibit B</U>
(the &quot;<U>Registration Rights Agreement</U>&quot;).</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The sale of the Shares and the Warrant by the Company to
the Investor will be effected in reliance upon the exemption from securities
registration afforded by the provisions of Regulation D (as defined below), as
promulgated by the Commission (as defined below) under the Securities
Act.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Company and Walsin Lihwa Corporation, a company
limited by shares organized under the laws of the Republic of China
(&quot;<U>Walsin Lihwa</U>&quot;), have agreed to enter into a Business
Collaboration Agreement dated on or about the date hereof (the &quot;<U>Business
Collaboration Agreement</U>&quot;).</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;In consideration of the mutual promises made herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Investor hereby agree as follows:</P>
<P ALIGN="JUSTIFY"></P>
<OL>

<LI><I><U>PURCHASE AND SALE OF SHARES AND WARRANT</U>.</LI>
<OL>

</I><U><LI>Closing of Purchase and Sale; Purchase Price</LI>
</U><P ALIGN="JUSTIFY">.  Upon the terms and subject to the satisfaction or
waiver of the conditions set forth herein, the Company agrees to sell and the
Investor agrees to purchase the Shares and the Warrant.  The date on which the
closing of such purchase and sale occurs (the &quot;<U>Closing</U>&quot;) is
hereinafter referred to as the &quot;<U>Closing Date</U>&quot;.  The Closing
will be deemed to occur at the offices of Ropes &amp; Gray, One International
Place, Boston, MA 02110, when (A) this Agreement and the other Transaction
Documents (as defined below) have been executed and delivered to the Investor by
the Company and, to the extent applicable, by the Investor, (B) each of the
conditions to the Closing described in <U>Section 5</U> hereof has been
satisfied or waived as specified therein and (C) full payment of the Investor's
Purchase Price (as defined below) has been made by the Investor to the Company
by wire transfer of immediately available funds against physical delivery by the
Company of duly executed certificates representing the Shares and the Warrant
being purchased by the Investor.</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Certain Definitions</LI></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  When used herein, the following terms shall have the
respective meanings indicated:&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Affiliate</U>&quot; means, as to any Person
(the &quot;<U>subject Person</U>&quot;), any other Person (a)&nbsp;that directly
or indirectly through one or more intermediaries controls or is controlled by,
or is under direct or indirect common control with, the subject Person,
(b)&nbsp;that directly or indirectly beneficially owns or holds ten percent
(10%) or more of any class of voting equity of the subject Person, or
(c)&nbsp;ten percent (10%) or more of the voting equity of which is directly or
indirectly beneficially owned or held by the subject Person.  For the purposes
of this definition, &quot;<U>control</U>&quot; when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
through representation on such Person's board of directors or other management
committee or group, by contract or otherwise. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Board of Directors</U>&quot; means the
Company's board of directors.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Business Collaboration Agreement</U>&quot;
has the meaning specified in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Business Day</U>&quot; means any day other
than a Saturday, a Sunday or a day on which the Nasdaq Global Market or the
Taiwan Stock Exchange is closed or on which banks in the City of New York or
Taiwan are required or authorized by law to be closed.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Closing</U>&quot; and &quot;<U>Closing
Date</U>&quot; have the respective meanings set forth in <U>Section 1.1</U>
hereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Commission</U>&quot; means the Securities
and Exchange Commission.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Common Stock</U>&quot; has the meaning specified
in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Company</U>&quot; has the meaning specified in
the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Debt</U>&quot; means, as to any Person at
any time: (a) all indebtedness, liabilities and obligations of such Person for
borrowed money; (b) all indebtedness, liabilities and obligations of such Person
to pay the deferred purchase price of Property or services (except trade
accounts payable<A NAME="_DV_C20">, accrued compensation, accrued expenses, and
unearned revenue and customer deposits</A> of such Person that, in any such
case, arise in the ordinary course of business and are not more than sixty (60)
days past due<A NAME="_DV_C22">)</A>; (c) all capital lease obligations of such
Person; (d) all indebtedness, liabilities and obligations of others guaranteed
by such Person; (e) all indebtedness, liabilities and obligations secured by a
Lien existing on Property owned by such Person, whether or not the indebtedness,
liabilities or obligations secured thereby have been assumed by such Person or
are non-recourse to such Person; (f) all reimbursement obligations of such
Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds and similar instruments; and (g) all
indebtedness, liabilities and obligations of such Person to redeem or retire
shares of capital stock of such Person. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Disclosure Documents</U>&quot; means all SEC
Documents filed by the Company at least two (2) Business Days prior to the date
of this Agreement via the Commission's Electronic Data Gathering, Analysis and
Retrieval system (EDGAR) in accordance with the requirements of Regulation S-T
under the Exchange Act.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Effective Date</U>&quot; has the meaning set
forth in the Registration Rights Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Environmental Law</U>&quot; means any
federal, state, provincial, local or foreign law, statute, code or ordinance,
principle of common law, rule or regulation, as well as any Permit, order,
decree, judgment or injunction issued, promulgated, approved or entered
thereunder, relating to pollution or the protection, cleanup or restoration of
the environment or natural resources, or to the public health or safety, or
otherwise governing the generation, use, handling, collection, treatment,
storage, transportation, recovery, recycling, discharge or disposal of hazardous
materials.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>ERISA</U>&quot; means the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Exchange Act</U>&quot; means the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Execution Date</U>&quot; means the date of
this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>FINRA</U>&quot; means the Financial Industry
Regulatory Authority.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>GAAP</U>&quot; means generally accepted
accounting principles, applied on a consistent basis, as set forth in (i)
opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (ii) statements of the Financial Accounting
Standards Board and (iii) interpretations of the Commission and the staff of the
Commission.  Accounting principles are applied on a &quot;consistent basis&quot;
when the accounting principles applied in a current period are comparable in all
material respects to those accounting principles applied in a preceding
period.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Governmental Authority</U>&quot; means any
nation or government, any state, provincial or political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including without
limitation any stock exchange, securities market or self-regulatory
organization.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Governmental Requirement</U>&quot; means any
law, statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, franchise, license or other directive or requirement of any federal,
state, county, municipal, parish, provincial or other Governmental Authority or
any department, commission, board, court, agency or any other instrumentality of
any of them.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Intellectual Property</U>&quot; means any
U.S. or foreign patents, patent rights, patent applications, trademarks, trade
names, service marks, brand names, logos and other trade designations (including
unregistered names and marks), trademark and service mark registrations and
applications, copyrights and copyright registrations and applications,
inventions, invention disclosures, protected formulae, formulations, processes,
methods, trade secrets, computer software, computer programs and source codes,
manufacturing research and similar technical information, engineering know-how,
customer and supplier information, assembly and test data drawings or royalty
rights.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Investment Company Act</U>&quot; means the
Investment Company Act of 1940, as amended.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Investor</U>&quot; has the meaning specified
in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Investor Party</U>&quot; has the meaning
specified in <U>Section 4.10</U> hereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Key Employee</U>&quot; has the meaning
specified in <U>Section 3.19</U> hereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Lien</U>&quot; means, with respect to
any Property, any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, tax lien, financing statement, pledge, charge,
or other lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such Property (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Market Price</U>&quot; means, as of a
particular date, the average closing price for the ten (10) consecutive Trading
Days occurring immediately prior to (but not including) such date.  For the
avoidance of doubt, the Market Price shall be determined by adding the daily
closing price for each of the ten (10) Trading Days immediately preceding the
relevant date, and dividing such sum by ten (10).</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Material Adverse Effect</U>&quot; means
an effect that is material and adverse to (i) the consolidated business,
properties, assets (including intangible assets), operations, results of
operations, condition (financial or otherwise), prospects or customer, supplier
or employee relations of the Company and its Subsidiaries taken as a whole, (ii)
the ability of the Company to perform its obligations under this Agreement or
the other Transaction Documents (as defined below) or (iii) the rights and
benefits to which the Investor is entitled under this Agreement and the other
Transaction Documents.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Material Contracts</U>&quot; means, as to
the Company, any <A NAME="_DV_C27">agreement required pursuant to Item 601 of
Regulation S-B or Item 601 of Regulation S-K, as applicable, promulgated under
the Securities Act to be filed as an exhibit to any report, schedule,
registration statement or definitive proxy statement filed or required to be
filed by the Company with the Commission </A>under the Exchange Act or any rule
or regulation promulgated thereunder, and any and all amendments, modifications,
supplements, renewals or restatements thereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Pension Plan</U>&quot; means an employee
benefit plan (as defined in ERISA) maintained by the Company for employees of
the Company or any of its Affiliates.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Permitted Liens</U>&quot; means the
following: </P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<OL TYPE="a">
<OL TYPE="a">
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>encumbrances consisting of easements, rights-of-way,
zoning restrictions or other restrictions on the use of real property or
imperfections to title that do not (individually or in the aggregate) materially
impair the ability of the Company to use such Property in its businesses, and
none of which is violated in any material respect by existing or proposed
structures or land use;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Liens for taxes, assessments or other governmental
charges (including, without limitation, in connection with workers' compensation
and unemployment insurance) that are not delinquent or which are being contested
in good faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject to such Liens, and for
which adequate reserves (as determined in accordance with GAAP) have been
established; and</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Liens of mechanics, materialmen, warehousemen, carriers,
landlords or other similar statutory Liens securing obligations that are not yet
due and are incurred in the ordinary course of business or which are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the Property subject to such
Liens, for which adequate reserves (as determined in accordance with GAAP) have
been established.</LI></P></OL>
</OL>
</OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Person</U>&quot; means any individual,
corporation, trust, association, company, partnership, joint venture, limited
liability company, joint stock company, Governmental Authority or other
entity.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Principal Market</U>&quot; means the
principal exchange or market on which the Common Stock is listed or traded.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Property</U>&quot; means property and/or
assets of all kinds, whether real, personal or mixed, tangible or intangible
(including, without limitation, all rights relating thereto).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Purchase Price</U>&quot; means, with respect
to the Investor, the number of Shares purchased by the Investor at the Closing
<U>times</U> 1.8573.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Registrable Securities</U>&quot; has the
meaning set forth in the Registration Rights Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Registration Rights Agreement</U>&quot; has
the meaning specified in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Regulation D</U>&quot; means Regulation D
under the Securities Act or any successor provision.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Reserved Amount</U>&quot; has the meaning
specified in <U>Section 4.3</U> hereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Rule 144</U>&quot; means Rule 144 under the
Securities Act or any successor provision.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>SEC Documents</U>&quot; has the meaning
specified in <U>Section 3.4</U> hereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Section 203</U>&quot; has the meaning
specified in <U>Section 3.31</U> hereof</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Securities</U>&quot; has the meaning
specified in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Securities Act</U>&quot; means the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Share</U>&quot; has the meaning specified in
the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&quot;<U>Subsidiary</U>&quot; means, with respect to
a Person, any corporation or other entity (other than an entity having no
material operations or business during the twelve month period immediately
preceding the Execution Date) of which at least a majority of the outstanding
shares of stock or other ownership interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors (or Persons
performing similar functions) of such corporation or entity (regardless of
whether or not at the time, in the case of a corporation, stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person.</P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;</B>&quot;<U>Tax</U>&quot; shall mean (i) any and all
federal, state, local and foreign taxes, including taxes based upon or measured
by gross receipts, income, profits, sales, use and occupation, and value added,
ad valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise, property and other similar taxes, together with all interest, penalties
and additions imposed with respect to such amounts whether disputed or not, (ii)
any liability for the payment of any amounts of the type described in clause (i)
as a result of being or ceasing to be a member of an affiliated, consolidated,
combined or unitary group for any period (including any liability under Treasury
Regulation Section 1.1502-6 or any comparable provision of foreign, state or
local law) and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied obligation
to indemnify any other Person or as a result of any obligations under any
agreements or arrangements with any other Person with respect to such amounts
and including any liability for taxes of a predecessor entity.</P>
<P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">&#9;&#9;</B>&quot;<U>Tax Returns</U>&quot; shall mean any
return, report, information return or other document (including any related or
supporting information) filed or required to be filed with any taxing authority
with respect to Taxes.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Termination Date</U>&quot; means the
first date on which there is no Warrant outstanding.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Trading Day</U>&quot; means any day on
which the Common Stock is purchased and sold on the Principal Market.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Transaction Documents</U>&quot; means,
collectively, this Agreement, the Registration Rights Agreement, the Warrant,
the Business Collaboration Agreement and all other agreements, documents and
other instruments executed and delivered by or on behalf of the Company or any
of its officers at the Closing.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Walsin Lihwa</U>&quot; has the meaning
specified in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Warrant</U>&quot; has the meaning
specified in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&quot;<U>Warrant Share</U>&quot; has the meaning
specified in the preamble to this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><LI>Other Definitional Provisions</LI></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined.  The
words &quot;hereof&quot;, &quot;herein&quot; and &quot;hereunder&quot; and words
of similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<OL>

<I><U><LI>REPRESENTATIONS AND WARRANTIES OF THE INVESTOR</I></U>.</LI>
<P ALIGN="JUSTIFY">&#9;&#9;The Investor hereby represents and warrants to the
Company and agrees with the Company that, as of the Execution Date and as of the
Closing Date:</P>
<P ALIGN="JUSTIFY"></P>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Authorization; Enforceability</LI></P>
</U><P ALIGN="JUSTIFY">.  The Investor is duly and validly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization with the requisite corporate power and authority
to purchase the Shares and the Warrant to be purchased by it hereunder and to
execute and deliver this Agreement and the other Transaction Documents to which
it is a party.  This Agreement and the Business Collaboration Agreement
constitute, and upon execution and delivery thereof, each other Transaction
Document to which the Investor is a party will constitute, the Investor's valid
and legally binding obligation, enforceable in accordance with its terms,
subject to (i) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws of general application relating
to or affecting the enforcement of creditors' rights generally and (ii) general
principles of equity.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Accredited Investor</LI></P>
</U><P ALIGN="JUSTIFY">.  The Investor (i) is an &quot;accredited investor&quot;
as that term is defined in Rule 501 of Regulation D and <A NAME="_DV_C58">(ii)
<A NAME="_DV_M123"></A></A>is acquiring the Securities in the ordinary course of
its business, solely for its own account, and not with a view to the public
resale or distribution of all or any part thereof, except pursuant to sales that
are registered under the Securities Act or are exempt from the registration
requirements of the Securities Act and does not have any agreement or
understanding with any person to distribute any of the Securities.</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Information</LI>
</U><P ALIGN="JUSTIFY">.  The Company has, prior to the Execution Date, provided
the Investor with<A NAME="_DV_C60"> </A>information regarding the business,
operations and financial condition of the Company<B> </B>and has, prior to the
Execution Date, granted to the Investor the opportunity to ask questions of and
receive satisfactory answers from representatives of the Company, its officers,
directors, employees and agents concerning the Company and materials relating to
the terms and conditions of the purchase and sale of the Securities hereunder,
as the Investor deems relevant in making an informed decision with respect to
its investment in the Securities. The Investor is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.  Neither such information nor any other
investigation conducted by the Investor or any of its representatives shall
modify, amend or otherwise affect the Investor's right to rely on the Company's
representations and warranties contained in this Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Limitations on Disposition</LI></P>
</U><P ALIGN="JUSTIFY">.  The Investor acknowledges that, except as provided in
the Registration Rights Agreement, the Securities have not been and are not
being registered under the Securities Act and may not be transferred or resold
without registration under the Securities Act or unless pursuant to an exemption
therefrom.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Legend</LI></P>
</U><P ALIGN="JUSTIFY">.  The Investor understands that the certificates
representing the Securities may bear at issuance a restrictive legend in
substantially the following form:</P>

<P ALIGN="JUSTIFY">&quot;The securities represented by this certificate have not
been registered under the Securities Act of 1933, as amended (the
&quot;Securities Act&quot;), or the securities laws of any state, and may not be
offered, transferred, pledged, hypothecated, sold or otherwise disposed of
unless a registration statement under the Securities Act and applicable state
securities laws shall have become effective with regard thereto, or an exemption
from registration under the Securities Act and applicable state securities laws
is available in connection with such offer or sale.&quot;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Notwithstanding the foregoing, it is agreed that, as long as
(A) the resale or transfer (including, without limitation, a pledge) of any of
the Securities is registered pursuant to an effective registration statement and
the holder of such Securities represents in writing to the Company that such
Securities have been or will be sold pursuant to such registration statement or
(B) such Securities have been sold pursuant to Rule 144, subject to receipt by
the Company of customary documentation in connection therewith, or (C) such
Securities are eligible for resale under Rule 144(k) or any successor provision
and the holder thereof represents in writing to the Company that it is eligible
to use such rule for public resales of such Securities, the certificates
representing such Securities shall be issued without any legend or other
restrictive language and, with respect to Securities upon which such legend is
stamped, the Company shall issue new certificates without such legend to the
holder upon request.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Reliance on Exemptions</LI></P>
</U><P ALIGN="JUSTIFY">.  The Investor understands that the Securities are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of U.S. federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of the Investor set forth in this <U>Section 2</U> in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Fees</LI></P></OL>

</U><P ALIGN="JUSTIFY">.  The Investor will indemnify and hold harmless the
Company from and against any claim against the Company by any person or entity
alleging that, as a result of any agreement or arrangement between such Person
and the Investor with respect to the purchase and sale of the Securities
contemplated hereby, the Company is obligated to pay any compensation, fee, cost
or related expenditure in connection with the purchase and sale of the
Securities contemplated hereby.</P>
<P ALIGN="JUSTIFY"></P>
<I><U><LI>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</I></U>.</LI>
<P ALIGN="JUSTIFY">&#9;&#9;The Company hereby represents and warrants to the
Investor that, except as (i)&nbsp;expressly set forth in the disclosure
schedules to this Agreement dated as of the Execution Date with specific
reference to the Section or subsection of this Agreement to which information
stated in such disclosure schedule relates or (ii)&nbsp;qualified by disclosure
in the SEC Documents if such qualification is expressly set forth in the
applicable Section and subsection of this Section 3 and to the extent the
qualifying nature of such disclosure is readily apparent on its face, but
excluding any disclosure in such SEC Documents to the extent that it is
predictive, cautionary or forward-looking in nature (it being understood and
agreed that facts underlying any such predictive, cautionary or forward-looking
statements shall not be excluded to the extent those facts are stated in such
SEC Documents and in existence on the date of such SEC Documents), as of the
Execution Date and as of the Closing Date:</P>
<OL>

<U><LI>Organization, Good Standing and Qualification</LI>
</U><P ALIGN="JUSTIFY">.  The Company is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite power and authority to carry on its business
as now conducted.  The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which it conducts business except where
the failure so to qualify has not had or would not reasonably be expected to
have a Material Adverse Effect.  The Company does not have any Subsidiaries.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Authorization; Consents</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company has the requisite corporate power and
authority to enter into and perform its obligations under the Transaction
Documents, including, without limitation, its obligations to issue and sell the
Securities to the Investor in accordance with the terms hereof and thereof, and
to issue the Warrant Shares upon exercise of the <A NAME="_DV_C59">Warrant.
All</A> corporate action on the part of the Company by its officers, directors
and stockholders necessary for the authorization, execution and delivery of, and
the performance by the Company of its obligations under, the Transaction
Documents has been taken, and no further consent or authorization of the
Company, its Board of Directors, stockholders, any Governmental Authority or
organization (other than such approval as may be required under the Securities
Act and applicable state securities laws in respect of the registration or
qualification of the Registrable Securities (as defined in the Registration
Rights Agreement) required under the Registration Rights Agreement), or any
other Person is required (pursuant to any rule of the FINRA or otherwise).</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Due Execution; Enforceability</LI>
</U><P ALIGN="JUSTIFY">.  This Agreement and the Business Collaboration
Agreement have been and, at or prior to the Closing, each other Transaction
Document to be delivered at the Closing will be, duly executed and delivered by
the Company.  This Agreement and the Business Collaboration Agreement constitute
and, upon the execution and delivery thereof by the Company, each other
Transaction Document will constitute the valid and legally binding obligation of
the Company, enforceable against it in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or other similar laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity. </P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Disclosure Documents; Agreements; Financial Statements; Other
Information</LI>
</U><P ALIGN="JUSTIFY">.  The Company is subject to the reporting requirements
of the Exchange Act and has filed with the Commission all reports, schedules,
registration statements and definitive proxy statements  that the Company was
required to file with the Commission on or after December 31, 2008
(collectively, the &quot;<U>SEC Documents</U>&quot;).  The Company is not aware
of any event occurring or expected to occur on or prior to the Closing Date
(other than the transactions effected hereby and quarterly releases of financial
results) that would require the filing of, or with respect to which the Company
intends to file, a Form 8-K after the Closing.  Each SEC Document, as of the
date of the filing thereof with the Commission (or if amended or superseded by a
filing prior to the Execution Date, then on the date of such amending or
superseding filing), complied in all material respects with the requirements of
the Securities Act or Exchange Act, as applicable, and the rules and regulations
promulgated thereunder and, as of the date of such filing (or if amended or
superseded by a filing prior to the Execution Date, then on the date of such
filing), such SEC Document (including all exhibits and schedules thereto and
documents incorporated by reference therein) did not contain an untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.  All documents required to be filed as
exhibits to the SEC Documents have been filed as required.  Except as set forth
in the Disclosure Documents, the Company has no liabilities, contingent or
otherwise, other than liabilities incurred in the ordinary course of business
which, under GAAP, are not required to be reflected in the financial statements
included in the Disclosure Documents and which, individually or in the
aggregate, are not material to the business or financial condition of the
Company.  As of their respective dates, the financial statements of the Company
included in the SEC Documents have been prepared in accordance with GAAP (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 exclude 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 year-end
adjustments).</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Due Authorization; Valid Issuance</LI>
</U><P ALIGN="JUSTIFY">.  The Shares and the Warrant are duly authorized and,
when issued, sold and delivered in accordance with the terms hereof, (i) the
Shares and the Warrant will be duly and validly issued, and the Shares will be
fully paid and nonassessable; in each case, free and clear of any Liens imposed
by or through the Company, and (ii) assuming the accuracy of the Investor's
representations in this Agreement, the Shares and the Warrant will be issued,
sold and delivered in compliance with all applicable federal and state
securities laws.  The Warrant Shares are duly authorized and reserved for
issuance and, when issued in accordance with the terms of the Warrant, will be
duly and validly issued, fully paid and nonassessable, free and clear of any
Liens imposed by or through the Company and, assuming the accuracy of the
Investor's representations in this Agreement at the time of exercise, will be
issued, sold and delivered in compliance with all applicable federal and state
securities laws.</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>No Conflict with Other Instruments</LI>
</U><P ALIGN="JUSTIFY">.  <A NAME="_DV_C71">The Company is not in violation of
any provisions of its charter, bylaws or any other governing document or in
default (and no event has occurred which, with notice or lapse of time or both,
would constitute a default) under any provision of any instrument or contract to
which it is a party or by which it or any of its Property is bound, or in
violation of any provision of any Governmental Requirement applicable to it,
except for any violation or default under any such instrument or contract or any
violation of any provision of a Governmental Requirement that, individually or
in the aggregate, has not had or would not reasonably be expected to have a
Material Adverse Effect.  The <A NAME="_DV_M182"></A></A>(i) execution, delivery
and performance of this Agreement and the other Transaction Documents, and (ii)
consummation of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Shares and the Warrant and the
reservation for issuance and issuance of the Warrant Shares) will not result in
any violation of any provisions of the Company's charter, bylaws or any other
governing document or in a default under any provision of any instrument or
contract to which it is a party or by which it or any of its Property is bound,
or in violation of any provision of any Governmental Requirement applicable to
the Company or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision, instrument
or contract or an event which results in the creation of any Lien upon any
assets of the Company.</P>
<P ALIGN="JUSTIFY"></P>
<LI><U>Form S-3</LI>
</U><P ALIGN="JUSTIFY">.  The Company is eligible to register the Registrable
Securities for resale by the Investor on a registration statement on Form S-3
under the Securities Act.  </P>

<U><LI>Fees</LI>
</U><P ALIGN="JUSTIFY">.  The Company is not obligated to pay any compensation
or other fee, cost or related expenditure to any underwriter, broker, agent or
other representative in connection with the transactions contemplated hereby.
The Company will indemnify and hold harmless the Investor from and against any
claim against the Investor by any Person alleging that, as a result of any
agreement or arrangement between such Person and the Company, the Investor is
obligated to pay any such compensation, fee, cost or related expenditure in
connection with the transactions contemplated hereby or the other Transaction
Documents.</P>

<U><LI>Solicitation; Other Issuances of Securities</LI>
</U><P ALIGN="JUSTIFY">.  Neither the Company nor any of its Subsidiaries or
Affiliates, nor any person acting on its or their behalf, (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities, or (ii)
has, directly or indirectly, made any offers or sales of any security or the
right to purchase any security, or solicited any offers to buy any security or
any such right, under circumstances that would require registration of the
Securities under the Securities Act.</P>

<U><LI>Exchange Act Registration; Listing</LI>
</U><P ALIGN="JUSTIFY">.  The Company files supplementary and periodic
information, documents, and reports pursuant to Section 15(d) of the Exchange
Act.  The Company's Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is listed on the Nasdaq Global Market.  The Company currently
meets the continuing eligibility requirements for listing on the Nasdaq Global
Market and has not received any notice from such market or the FINRA that it
does not currently satisfy such requirements or that such continued listing is
in any way threatened.  The Company has taken no action designed to, or which,
to the knowledge of the Company, would reasonably be expected to have the effect
of, terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the Nasdaq Global Market.</P>

<U><LI>Investment Company Status</LI>
</U><P ALIGN="JUSTIFY">. The Company is not, and immediately after receipt of
payment for the Shares and the Warrant issued under this Agreement will not be,
an &quot;investment company&quot; or an entity &quot;controlled&quot; by an
&quot;investment company&quot; within the meaning of the Investment Company Act,
and shall conduct its business in a manner so that it will not become subject to
the Investment Company Act.</P>

<U><LI>Capitalization</LI>
</U><P ALIGN="JUSTIFY">.  The authorized capital stock of the Company as of the
date hereof is as set forth in the SEC Documents.  The capitalization of the
Company as of March 31, 2009, including its 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 and agreements, the number
of shares issuable and reserved for issuance pursuant to securities (other than
the Warrant) exercisable for, or convertible into or exchangeable for any shares
of Common Stock and the number of shares initially to be reserved for issuance
upon exercise of the Warrant, is as set forth in the SEC Documents.  All issued
and outstanding shares of capital stock of the Company have been, or upon
issuance will be, validly issued, fully paid and non-assessable.  No shares of
capital stock of the Company were issued in violation of any preemptive rights
or any other similar rights of security holders of the Company.  Except as
disclosed in the SEC Documents, there are no outstanding preemptive rights,
rights of first refusal, shareholder rights, options, warrants, scrip, rights to
subscribe to, calls or commitments of any capital stock of the Company, or
arrangements by which the Company is or may become (as a result of the
transactions contemplated hereby or the other Transaction Documents or
otherwise) bound to issue additional shares or capital stock of the Company
(whether pursuant to anti-dilution, &quot;reset&quot; or other similar
provisions).</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Financial Condition</LI>
</U><P ALIGN="JUSTIFY">.  The Company's financial condition is, in all material
respects, as described in the SEC Documents, except for changes in the ordinary
course of business.  Except for changes in the ordinary course of business,
since March 31, 2009 there has been no (i) material adverse change to the
Company's business, operations, properties, financial condition, or results of
operations or (ii) change by the Company in its accounting principles, policies
and methods except as required by changes in the GAAP or applicable law.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>No Undisclosed Liabilities</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company does not have any liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which are
not properly reflected or reserved against in the financial statement described
in <U>Section 3.4</U> hereof to the extent required to be so reflected or
reserved against in accordance with GAAP, except for liabilities that have
arisen since March 31, 2009 in the ordinary course of business or that have not
had a Material Adverse Effect.</P>

<U><LI>Taxes</LI></OL>
</OL>

</U><P>.</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>The Company has filed all material Tax Returns required
to have been filed as of the date hereof (or extensions have been duly obtained)
and such Tax Returns are correct and complete in all material respects and have
paid all material Taxes required to have been timely paid by it in full through
the date hereof, except to the extent such Taxes are both (A) being challenged
in good faith and (B) adequately provided for on the Financial Statements in
accordance with GAAP.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Company does not have any material liability for
Taxes of any Person (other than the Company) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign law with respect
to income taxes), as a transferee or successor or by contract.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>No deficiencies for any material Taxes have been proposed
or assessed in writing against or with respect to the Company and there is no
outstanding material audit, assessment, dispute or claim concerning any Tax
liability of the Company pending or raised by an authority in writing.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Company has not participated in a &quot;listed
transaction&quot; within the meaning of Treasury Regulation Section 1.6011-
4(b)(2).</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><LI>Litigation</LI>
</U><P ALIGN="JUSTIFY">.  There is no material claim, litigation or
administrative proceeding pending or, to the Company's knowledge, threatened or
contemplated, against the Company or, to the Company's knowledge, against any
officer, director or employee of the Company in connection with such person's
employment therewith, except as described in the SEC Documents.  The Company is
not a party to or subject to the provisions of, any order, writ, injunction,
judgment or decree of any court or Governmental Authority which has had or would
reasonably be expected to have a Material Adverse Effect.</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Intellectual Property</LI></OL>
</OL>

</U><P ALIGN="CENTER">.</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>The Company owns, free and clear of claims or rights or
any other Person, with full right to use, sell, license, sublicense, dispose of,
and bring actions for infringement of, or, to the Company's knowledge, has
acquired licenses or other rights to use, all Intellectual Property necessary
for the conduct of its business as presently conducted (other than with respect
to software which is generally commercially available and not used or
incorporated into the Company's products and open source software which may be
subject to one or more &quot;general public&quot; licenses).  All works that are
used or incorporated into the Company's services, products or services or
products actively under development and which are proprietary to the Company
were developed by or for the Company by the current or former employees,
consultants or independent contractors of the Company or its predecessors in
interest or purchased or licensed by the Company or its predecessors in
interest.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The business of the Company as presently conducted and
the production, marketing, licensing, use and servicing of any products or
services of the Company do not, to the Company's knowledge, infringe or conflict
with any patent, trademark, copyright, or trade secret rights of any third
parties or any other Intellectual Property of any third parties in any material
respect.  The Company has not received written notice from any third party
asserting that any Intellectual Property owned or licensed by the Company, or
which the Company otherwise has the right to use, is invalid or unenforceable by
the Company and, to the Company's knowledge, there is no valid basis for any
such claim (whether or not pending or threatened).</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>No claim is pending or, to the Company's knowledge,
threatened against the Company nor has the Company received any written notice
or other written claim from any Person asserting that any of the Company's
present or contemplated activities infringe or may infringe in any material
respect any Intellectual Property of such Person and the Company is not aware of
any infringement by any other Person of any material rights of the Company under
any Intellectual Property Rights.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>All licenses or other agreements under which the Company
is granted Intellectual Property (excluding licenses to use software utilized in
the Company's internal operations and which is generally commercially available)
are in full force and effect and, to the Company's knowledge, there is no
material default by any party thereto.  The Company has no reason to believe
that the licensors under such licenses and other agreements do not have and did
not have all requisite power and authority to grant the rights to the
Intellectual Property purported to be granted thereby.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Company has taken all steps required in accordance
with commercially reasonable business practice to establish and preserve its
ownership in its owned Intellectual Property and to keep confidential all
material technical information developed by or belonging to the Company which
has not been patented or copyrighted.  To the Company's knowledge, the Company
is not making any material unlawful use of any Intellectual Property of any
other Person, including, without limitation, any former employer of any past or
present employees of the Company.  To the Company's knowledge, neither the
Company nor any of its employees has any agreements or arrangements with former
employers of such employees relating to any Intellectual Property of such
employers, which materially interfere or conflict with the performance of such
employee's duties for the Company or result in any former employers of such
employees having any rights in, or claims on, the Company's Intellectual
Property.  Each current and former employee of the Company who has had access to
material confidential Intellectual Property has executed agreements regarding
confidentiality, proprietary information and assignment of inventions and
copyrights to the Company, each independent contractor or consultant of the
Company who has or who had access to material confidential Intellectual Property
or who is or has been involved with the development of material confidential
Intellectual Property has executed agreements regarding confidentiality and
proprietary information, and the Company has not received written notice that
any employee, consultant or independent contractor is in violation of any
agreement or in breach of any agreement or arrangement with former or present
employers relating to proprietary information or assignment of inventions.
Without limiting the foregoing: (i) the Company has taken reasonable security
measures to guard against unauthorized disclosure or use of any of its
Intellectual Property; and (ii) the Company has no reason to believe that any
Person (including, without limitation, any former employee or consultant of the
Company) has unauthorized possession of any of its Intellectual Property, or any
part thereof, or that any Person has obtained unauthorized access to any of its
Intellectual Property.  The Company is in compliance in all material respects
with its obligations pursuant to all agreements relating to Intellectual
Property rights that are the subject of licenses granted by third parties,
except for any non-compliance that has not had or would not reasonably be
expected to have a Material Adverse Effect.</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><LI>Foreign Corrupt Practices</LI>
</U><P ALIGN="JUSTIFY">.  Neither the Company, nor to the Company's knowledge,
any director, officer, agent, employee or other person acting on behalf of the
Company, has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity, (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee (including, without limitation, any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment), or (ii)
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended,
except in each case as would not have a Material Adverse Effect.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Key Employees</LI></P>
</U><P ALIGN="JUSTIFY">.  Each of the Company's executive officers (as defined
in Rule 501(f) of the Securities Act) (each, a &quot;<U>Key Employee</U>&quot;)
is currently serving in the capacity described in the Disclosure Documents.  The
Company has no knowledge of any fact or circumstance (including, without
limitation, (i) the terms of any agreement to which such person is a party or
any litigation in which such person is or may become involved and (ii) any
illness or medical condition that could reasonably be expected to result in the
disability or incapacity of such person) that would limit or prevent any such
person from serving in such capacity on a full-time basis in the foreseeable
future, or of any intention on the part of any such person to limit or terminate
his or her employment with the Company.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Employee Matters</LI></P>
</U><P ALIGN="JUSTIFY">.  There is no strike, labor dispute or union
organization activity pending or, to the Company's knowledge, threatened between
it and its employees.  No employees of the Company belong to any union or
collective bargaining unit.  The Company has complied in all respects with all
applicable federal and state equal opportunity and other laws related to
employment, except as would not have a Material Adverse Effect.</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>ERISA</LI>
</U><P ALIGN="JUSTIFY">.  Except as described in the Company's SEC Documents,
the Company does not maintain or contribute to, or have any obligation under,
any Pension Plan.  The Company is in compliance in all material respects with
the presently applicable provisions of ERISA and the United States Internal
Revenue Code of 1986, as amended, with respect to each Pension Plan except in
any such case for any such matters that, individually or in the aggregate, have
not had, and would not reasonably be expected to have, a Material Adverse
Effect.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Environment</LI></P>
</U><P ALIGN="JUSTIFY">.  To the Company's knowledge, the Company does not have
any current liability under any Environmental Law, nor, to the Company's
knowledge, do any factors exist that are reasonably likely to give rise to any
such liability that, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect.  To the Company's
knowledge, the Company has not violated 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 would not reasonably be
expected to have a Material Adverse Effect.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Insurance</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company maintains insurance in such amounts and
covering such losses and risks as the Company believes to be reasonably prudent
in relation to the businesses in which the Company is engaged.  No notice of
cancellation has been received for any of such policies and the Company is in
compliance with all of the terms and conditions thereof.  The Company has no
reason to believe that it will not be able to renew any existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue doing business as currently
conducted without a significant increase in cost, other than normal increases in
the industry.  Without limiting the generality of the foregoing, the Company
maintains directors and officers insurance in an amount deemed to be reasonable
and appropriate by the Company's Board of Directors.</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Property</LI>
</U><P ALIGN="JUSTIFY">.  The Company does not own any real property.  The
Company owns all personal Property owned by it free and clear of all Liens
except for Permitted Liens and except for such Liens which, individually and
together with all other Liens (including without limitation Permitted Liens) do
not have, and cannot reasonably be expected to have, a Material Adverse Effect.
Any Property held under lease by the Company is held by it, to the Company's
knowledge, under valid, subsisting and enforceable leases with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such Property by the Company.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Regulatory Permits</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company possesses all material certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its businesses other than where the
failure to possess such certificates, authorizations or permits, individually or
in the aggregate, has not had and would not reasonably be expected to have a
Material Adverse Effect.  The Company has not received any notice or otherwise
become aware of any proceedings, inquiries or investigations relating to the
revocation or modification of any such certificate, authorization or permit.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Transfer Taxes</LI></P>
</U><P ALIGN="JUSTIFY">.  No stock transfer or other taxes (other than income
taxes) are required to be paid under United States federal, state or local laws
in connection with the issuance and sale of any of the Securities.</P>

<U><LI>Sarbanes-Oxley Act; Internal Controls and Procedures</LI>
</U><P ALIGN="JUSTIFY">.  The Company is in material compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 and any and all
applicable rules and regulations promulgated by the SEC thereunder that are
effective as of the date hereof.  The Company maintains internal accounting
controls, policies and procedures, and such books and records as are reasonably
designed to provide reasonable assurance that (i) all transactions to which the
Company is a party or by which its properties are bound are effected by a duly
authorized employee or agent of the Company, supervised by and acting within the
scope of the authority granted by the Company's senior management; (ii) the
recorded accounting of the Company's consolidated assets is compared with
existing assets at regular intervals; and (iii) all transactions to which the
Company is a party, or by which its properties are bound, are recorded (and such
records maintained) in accordance with all Governmental Requirements and as may
be necessary or appropriate to ensure that the financial statements of the
Company are prepared in accordance with GAAP.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Solvency</LI></P>
</U><P ALIGN="JUSTIFY">.  After giving effect to the transactions contemplated
by this Agreement, (i) the fair saleable value of the Company's assets exceeds
the amount that will be required to be paid on or in respect of the Company's
existing Debt as such Debt matures or is otherwise payable and (ii) the current
cash flow of the Company, together with the proceeds the Company would receive
upon liquidation of its assets, after taking into account all anticipated uses
of such amounts, would be sufficient to pay all Debt when such Debt is required
to be paid.  The Company has no knowledge of any facts or circumstances which
lead it to believe that it will be required to file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction, and
has no present intention to so file.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Transactions with Interested Persons</LI></P>
</U><P ALIGN="JUSTIFY">.  Except as set forth in the SEC Documents, to the
Company's knowledge, there are no business relationships or related-party
transactions involving the Company and its officers or directors that are of the
type required to be disclosed to the Commission.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Section 203; Rights Agreement</LI></P></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  The Board of Directors has heretofore taken all
necessary action to approve, and has approved, for purposes of Section 203 of
the Delaware General Corporation Law (including any successor statute thereto
&quot;<U>Section 203</U>&quot;) the Investor's becoming, together with its
Affiliates and associates, an &quot;interested stockholder&quot; within the
meaning of Section 203 solely as  result of the transaction contemplated by this
Agreement, such that, as of the Execution Date and from and after the Closing,
Section 203 will not be applicable to any &quot;business combination&quot;
within the meaning of Section 203 that may take place between the Investor
and/or its affiliates or associates, on the one hand, and the Company, on the
other, solely as a result of the transactions contemplated by this Agreement.
The Company does not have a rights agreement, poison pill or similar arrangement
in place.</P>
<P ALIGN="JUSTIFY"></P>
<OL>

<I><U><LI>COVENANTS OF THE COMPANY AND THE INVESTOR</I></U>.</LI>
<OL>

<U><LI>Participation Rights</LI>
</U><P ALIGN="JUSTIFY">.  If the Investor does not lead the next equity
financing round for the Company, whether (a) because the Investor was unable to
arrange a syndicate, (b) an offered financing was not accepted by the Company or
(c) any other reason, then, the Company will use commercially reasonable efforts
to permit the Investor to invest fifteen percent (15%) (or greater if mutually
agreed) of each subsequent equity financing over the two (2) years following the
Closing Date at the same time and on the same terms as other investors in such
financing, subject to Nasdaq and U.S. securities laws limitations, if any.  To
the extent practical under the circumstances, the Company will use commercially
reasonable efforts to provide the Investor with a written notice (the
&quot;<U>Participation Notice</U>&quot;), which the Company will use
commercially reasonable efforts to provide not less than ten (10) Business Days
prior to the expected date of the closing of such financing, which notice shall
set forth in reasonable details, to the extent then known, the material terms of
such financing, the expected date of the closing of such financing and, unless
the Company is restricted from doing so, identities of the other investors.  If
the Investor indicates a desire to participate in such financing in writing, the
Company will also use commercially reasonable efforts to keep the Investor
reasonably informed of material developments in such financing and will instruct
any placement agent, underwriter or broker hired by the Company to use
commercially reasonable efforts to permit the Investor to participate in such
financing as described above if so desired by the Investor.  The Investor will
keep strictly confidential, and not use for any purpose other than evaluating
its participation in such financing, any information provided to it by the
Company hereunder.  Without limiting the foregoing, in no event will Investor
contact any proposed investor identified to the Investor hereunder with respect
to a proposed investment in the Company.  The Investor's right under this
Section 4.1 will terminate if the Investor chooses not to participate in any
such financing.  </P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Director Seat</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company will promptly as practicable add a person
designated by the Investor in writing, who is reasonably acceptable to the
Company, to the Board of Directors and cause the Board of Directors to take all
necessary actions to effect such appointment, if each of the following
conditions has been satisfied: (a) either (i) the Company closes on an equity
financing syndicated by the Investor of at least $25 million within the twelve
(12) months following the Closing or (ii) the Investor participates in a
subsequent financing over the two (2) years following the Closing by purchasing
securities sold in such financings from the Company with an aggregate purchase
price of at least $10 million and (b) the Investor has not at that time sold
more than fifty percent (50%) of the Securities purchased pursuant to this
Agreement and, if all the other conditions set forth in this <U>Section 4.2</U>
are satisfied prior to the second (2nd) anniversary of the Closing Date, agrees
not to sell more than fifty percent (50%) of the Securities prior to the date
two (2) years following the Closing Date.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Reservation of Common Stock</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company shall, on the Closing Date, have
authorized and reserved for issuance to the Investor free from any preemptive
rights, and shall keep available at all times during which the Warrant is
outstanding, a number of shares of Common Stock (the &quot;<U>Reserved
Amount</U>&quot;) that, on the Closing Date, is not less than one hundred
percent (100%) of the number of Warrant Shares issuable upon exercise of the <A
NAME="_DV_M299"></A>Warrant issued at the Closing, without regard to any
limitation or restriction on such conversion or exercise that may be set forth
in the Warrant.  In the event that the Reserved Amount is insufficient at any
time to cover one hundred percent (100%) of the Registrable Securities issuable
upon the exercise of the Warrant (without regard to any restriction on such
conversion or exercise), the Company shall take such action (including, without
limitation, holding a meeting of its stockholders) to increase the Reserved
Amount to cover one hundred percent (100%) of the Registrable Securities
issuable upon such conversion and exercise, such increase to be effective not
later than the thirtieth (30th) day (or sixtieth (60th) day, in the event
stockholders approval is required for such increase) following the Company's
receipt of written notice of such deficiency.  While the Warrant is outstanding,
the Company shall not reduce the Reserved Amount without obtaining the prior
written consent of the Investor. </P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Limitations on Disposition</LI></P></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  The Investor shall not sell, transfer, assign or
dispose of any Securities, unless:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>there is then in effect an effective registration
statement under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Investor has notified the Company in writing of any
such disposition, and furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, that such disposition will not require
registration of such Securities under the Securities Act; provided, however,
that no such opinion of counsel will be required (A)&nbsp;if the sale, transfer
or assignment complies with federal and state securities laws and is made to a
fund or other institutional investor that is an Affiliate of the Investor and
which is also an &quot;accredited investor&quot; as that term is defined in Rule
501 of Regulation D; provided, that such Affiliate provides the Company with
customary accredited investor and investment representations (comparable with
those set forth in <U>Section 2.2</U> hereof), and agrees to be bound by the
terms and conditions of this Agreement or (B) if the sale, transfer or
assignment is made pursuant to Rule&nbsp;144 and the Investor provides the
Company with evidence reasonably satisfactory to the Company that the proposed
transaction satisfies the requirements of Rule 144.</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><LI>Press Release</LI>
</U><P ALIGN="JUSTIFY">.  The Company agrees with the Investor that the Company
will (i) on or prior to 5:00 p.m. (Eastern Time) on the second Business Day
following the Execution Date, issue a press release disclosing the material
terms of this Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby and (ii) on or prior to 5:00 p.m. (eastern time)
on the fourth Business Day following the Execution Date, file with the
Commission a Current Report on Form 8-K disclosing the material terms of this
Agreement and the other Transaction Documents and the transactions contemplated
hereby and thereby; provided, however, that the Investor shall have a reasonable
opportunity to review and comment on any such press release or Form 8-K prior to
the issuance or filing thereof.  </P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Standstill</LI></P></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  The Investor and Walsin Lihwa represent to the Company
that Walsin Lihwa is not a Subsidiary of any Person.  Until the second (2nd)
anniversary of the date of the Closing Date, none of the Investor, Walsin Lihwa
or any of their respective Subsidiaries, will, without the prior written consent
of the Company:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>acquire, offer to acquire, or agree to acquire, directly
or indirectly, by purchase or otherwise, any voting shares or direct or indirect
rights to acquire any voting shares of, or economic interest in (through
derivative securities or otherwise), the Company or any successor
thereto;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>make, or in any way participate, directly or indirectly,
in any &quot;solicitation&quot; of &quot;proxies&quot; to vote (as such terms
are used in the rules of the Commission), seek to advise or influence any person
or entity with respect to the voting of any voting shares of the Company or seek
or propose to have called, or cause to be called, any meeting of the
stockholders of the Company;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction involving the Company or any of its securities or assets;
or</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>form, join or in any way participate in a
&quot;group&quot; as defined in Section 13(d)(3) of the Exchange Act in
connection with any of the foregoing.</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;The provisions of this <U>Section 4.6</U> shall be
inoperative and of no force or effect if, from and after the date hereof: (a)
any Person or group shall have acquired or entered into a binding definitive
agreement that has been approved by the Board of Directors (or any duly
constituted committee thereof composed entirely of independent directors) to
acquire more than 50% of the outstanding voting securities of the Company or
assets of the Company or its Subsidiaries representing more than 50% of the
consolidated earnings power of the Company and its subsidiaries, taken as a
whole, (b) any Person commences a tender or exchange offer which, if
consummated, would result in such Person's acquisition of beneficial ownership
of more than 50% of the outstanding voting securities of the Company, and in
connection therewith, the Company files with the Securities and Exchange
Commission a Schedule 14D-9 with respect to such offer that does not recommend
that the Company's stockholders reject such offer; or (c) the Board of Directors
(or any duly constituted committee thereof composed entirely of independent
directors) shall have determined in good faith, after consultation with outside
legal counsel, that the failure to waive, limit, amend or otherwise modify the
standstill provisions, would be reasonably likely to be inconsistent with the
fiduciary duties of the Board of Directors under applicable law; provided,
however, that with respect to clauses (a), (b) and (c) of this sentence, the
Investor shall not have solicited, initiated or participated with any such other
Person or group in connection with any of the transactions contemplated by
clauses (a), (b) and (c) of this sentence.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;The provisions of this <U>Section 4.6</U> shall not limit
the Investor's rights under <U>Section 4.1</U> or limit the Investor from
presenting an investment to the Company of up to $40 million (reduced by any
funds raised by the Company after the Closing Date) in the aggregate over the
next twelve (12) months in which Investor is participating with the other
syndicate members provided that (i) each syndicate member agrees to keep the
offer to the Company and subsequent discussions confidential in a manner
reasonably acceptable to the Company and (ii) no syndicate member other than the
Investor would beneficially own (as defined in Rule 13d-3 under the Exchange
Act), if the offer is accepted, more than 15% of the Company's Common Stock and
the Investor would not beneficially own (as defined in Rule 13d-3 under the
Exchange Act), if the offer is accepted, more than 19.9% of the Company's Common
Stock.</P>
<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Undertakings of the Company</LI></P></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  The Company agrees that it will, during the period
beginning on the Execution Date and ending on the Termination Date:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>maintain its corporate existence in good standing;
and</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>comply with all Governmental Requirements applicable to
the operation of its business, except for instances of noncompliance that would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Use of Proceeds</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company shall use the proceeds from the sale of
the Shares and the Warrant for general corporate purposes; provided, that the
Company shall not use any of such proceeds (i) to pay any dividend or make any
distribution on any of its securities, or (ii) to repay any loan made to or
incurred by any Key Employee or any other officer or director or Affiliate of
the Company.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Listing</LI></P>
</U><P ALIGN="JUSTIFY">.  The Company has used, or promptly following the
Closing shall use, its commercially reasonable efforts to include all of the
Warrant Shares issuable upon exercise of the Warrant (without regard to any
limitation on such exercise) for listing on the Nasdaq Global Market.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Indemnification of Investor Parties</LI></P></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  The Company will indemnify and hold the Investor and
its directors, managers, officers, shareholders, members, partners, employees
and agents (each, an &quot;<U>Investor Party</U>&quot;) harmless from any and
all losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys' fees and costs of investigation that any such Investor
Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents or (b) any action
instituted against the Investor, or any of its Affiliates, by any stockholder of
the Company who is not an Affiliate of the Investor, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of the Investor's representation, warranties or covenants
under the Transaction Documents or any written agreements or understandings the
Investor may have with any such stockholder or any violations by the Investor of
state or federal securities laws or any conduct by the Investor which
constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any
action shall be brought against any Investor Party in respect of which indemnity
may be sought pursuant to this Agreement, such Investor Party shall promptly
notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing.  Any Investor Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Investor Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time following such Investor
Party's written request that it do so, to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of such
separate counsel, a material conflict on any material issue between the position
of the Company and the position of such Investor Party.  The Company will not be
liable to any Investor Party under this Agreement (i) for any settlement by an
Investor Party effected without the Company's prior written consent, which shall
not be unreasonably withheld or delayed; or (ii) to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to such Investor
Party's wrongful actions or omissions, or gross negligence or to such Investor
Party's breach of any of the representations, warranties, covenants or
agreements made by the Investor in this Agreement or in the other Transaction
Documents.</P>
<P ALIGN="JUSTIFY"></P>
<OL>

<I><U><LI>CONDITIONS TO CLOSING</I></U>.</LI>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Conditions to Investor's Obligations at the
Closing</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY">.</U>  The Investor's obligations to effect the Closing,
including, without limitation, its obligation to purchase Shares and Warrant at
the Closing, are conditioned upon the fulfillment (or waiver by the Investor in
its sole and absolute discretion) of each of the following events as of the
Closing Date, and the Company shall use its commercially reasonable efforts to
cause each of such conditions to be satisfied:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>the representations and warranties of the Company set
forth in this Agreement and in the other Transaction Documents shall be true and
correct as of such date as if made on such date (except to the extent that any
such representation or warranty relates to a particular date, such
representation or warranty shall be true and correct as of that particular
date); </LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have complied with or performed all of
the agreements, obligations and conditions set forth in this Agreement that are
required to be complied with or performed by the Company on or before the
Closing; </LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have delivered to the Investor a
certificate, signed by the Chief Executive Officer and Chief Financial Officer
of the Company, certifying that the conditions specified in <U>Sections
5.1(a)</U>, <U>(b)</U>, (<U>h)</U>, <U>(i)</U>, <U>(k)</U> and <U>(l)</U> have
been fulfilled as of the Closing, it being understood that the Investor may rely
on such certificate as though it were a representation and warranty of the
Company made herein;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have delivered to the Investor duly
executed certificates representing the Shares and the Warrant being purchased by
the Investor;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have executed and delivered to the
Investor the Registration Rights Agreement;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have executed and delivered to the
Investor the Business Collaboration Agreement and the Business Collaboration
Agreement shall be effective and shall not be terminated;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have delivered to the Investor a
certificate, signed by the Secretary or an Assistant Secretary of the Company,
attaching (i) the charter and bylaws of the Company, and (ii) resolutions passed
by its Board of Directors to authorize the transactions contemplated hereby and
by the other Transaction Documents, and certifying that such documents are true
and complete copies of the originals and that such resolutions have not been
amended or superseded, it being understood that the Investor may rely on such
certificate as a representation and warranty of the Company made
herein;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Company shall have authorized and reserved for
issuance the aggregate number of shares of Common Stock issuable upon exercise
of the Warrant to be issued at the Closing (such number to be determined without
regard to any restriction on such exercise);</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>there shall be no injunction, restraining order or decree
of any nature of any court or Governmental Authority of competent jurisdiction
that is in effect that restrains or prohibits the consummation of the
transactions contemplated hereby and by the other Transaction
Documents;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Closing Date shall occur on a date that is not later
than July 3, 2009;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>there shall have occurred no material adverse change in
the Company's consolidated business or financial condition since the date of the
Company's most recent financial statements contained in the Disclosure
Documents; and</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Common Stock shall be listed on the Nasdaq Global
Market.</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Conditions to Company's Obligations at the
Closing</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY">.</U>  The Company's obligations to effect the Closing with
the Investor are conditioned upon the fulfillment (or waiver by the Company in
its sole and absolute discretion) of each of the following events as of the
Closing Date:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="a">
<DIR>
<DIR>
<DIR>
<DIR>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>the representations and warranties of the Investor set
forth in this Agreement and in the other Transaction Documents to which it is a
party shall be true and correct as of such date as if made on such date (except
to the extent that any such representation or warranty relates to a particular
date, such representation or warranty shall be true and correct as of that
date);</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Investor shall have complied with or performed all of
the agreements, obligations and conditions set forth in this Agreement that are
required to be complied with or performed by the Investor on or before the
Closing; </LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>there shall be no injunction, restraining order or decree
of any nature of any court or Governmental Authority of competent jurisdiction
that is in effect that restrains or prohibits the consummation of the
transactions contemplated hereby and by the other Transaction Documents;
</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>the Investor shall have executed each Transaction
Document to which it is a party and shall have delivered the same to the
Company; and</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI><A NAME="_DV_C316">the Investor shall have tendered to
the Company the Purchase Price for the Shares and the Warrant being purchased by
it at the Closing by wire transfer of immediately available
funds.</A>&#9;</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>

<I><U><LI>MISCELLANEOUS.</LI>
<OL>

</I><LI>Severability</LI>
</U><P ALIGN="JUSTIFY">.  In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; <I>provided</I> that in such case the parties shall
negotiate in good faith to replace such provision with a new provision which is
not illegal, unenforceable or void, as long as such new provision does not
materially change the economic benefits of this Agreement to the parties.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Successors and Assigns</LI></P>
</U><P ALIGN="JUSTIFY">.  The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective successors and permitted
assigns of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.  The Investor may not assign its rights and obligations
hereunder without prior written consent of the Company; provided, however, that
the Investor may assign all or part of its rights and obligation hereunder to
its Subsidiaries, Walsin Lihwa or any of the Subsidiaries of Walsin Lihwa
without the Company's prior written consent.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>No Reliance</LI></P>
</U><P ALIGN="JUSTIFY">.  Each party acknowledges that (i) it has such knowledge
in business and financial matters as to be fully capable of evaluating this
Agreement, the other Transaction Documents, and the transactions contemplated
hereby and thereby, (ii) it is not relying on any advice or representation or
warranty of any other party in connection with entering into this Agreement, the
other Transaction Documents, or such transactions (other than the
representations and warranties made in this Agreement or the other Transaction
Documents), (iii) it has not received from any party any assurance or guarantee
as to the merits (whether legal, regulatory, tax, financial or otherwise) of
entering into this Agreement or the other Transaction Documents or the
performance of its obligations hereunder and thereunder, and (iv) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent that it has deemed necessary, and has
entered into this Agreement and the other Transaction Documents based on its own
independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by any
party.</P>

<U><LI>Injunctive Relief</LI>
</U><P ALIGN="JUSTIFY">.  The parties hereto acknowledge and agree that a breach
by either of their obligations hereunder will cause irreparable harm to the
other party and that the remedy or remedies at law for any such breach will be
inadequate and agrees that, in the event of any such breach, in addition to all
other available remedies, the non-breaching party shall be entitled to an
injunction restraining any breach and requiring immediate and specific
performance of such obligations.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Governing Law; Jurisdiction</LI></P>
</U><P ALIGN="JUSTIFY">.  This Agreement shall be governed by and construed
under the laws of the State of Washington applicable to contracts made and to be
performed entirely within the State of Washington.  Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in <A NAME="_DV_C109">the State of Washington </A>for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby and hereby irrevocably waives, and agrees not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.</P>

<U><LI>Counterparts</LI>
</U><P ALIGN="JUSTIFY">.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.  This Agreement may be
executed and delivered by facsimile transmission or electronic mail.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Headings</LI></P>
</U><P ALIGN="JUSTIFY">.  The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.  </P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Notices</LI></P>
</U><P ALIGN="JUSTIFY">.  Any notice, demand or request required or permitted to
be given by the Company or the Investor pursuant to the terms of this Agreement
shall be in writing and shall be deemed delivered (i) when delivered personally
or by verifiable facsimile transmission or electronic mail, unless such delivery
is made on a day that is not a Business Day, in which case such delivery will be
deemed to be made on the next succeeding Business Day and (ii) on the third
(3rd) Business Day after timely delivery to an international overnight courier,
addressed as follows:</P>
<P ALIGN="JUSTIFY"></P>
<I><P ALIGN="JUSTIFY">&#9;&#9;If to the Company</I>:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Microvision, Inc.</P>
<P ALIGN="JUSTIFY">6222 185th Avenue NE</P>
<P ALIGN="JUSTIFY">Redmond, WA&nbsp;98052</P>
<P ALIGN="JUSTIFY">Attn:&#9;General Counsel</P>
<P ALIGN="JUSTIFY">Tel:&#9;(425) 415-6847</P>
<P ALIGN="JUSTIFY">Fax:&#9;(425) 936-4411&#9;</P>
<P ALIGN="JUSTIFY"></P>
<I><P ALIGN="JUSTIFY">with a copy<A NAME="_DV_C205"> </A>to</I>:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Ropes &amp; Gray LLP</P>
<P ALIGN="JUSTIFY">One International Place</P>
<P ALIGN="JUSTIFY">Boston, MA  02110</P>
<P ALIGN="JUSTIFY">Attn:&#9;Joel F. Freedman</P>
<P ALIGN="JUSTIFY">Tel:&#9;(617) 951-7000</P>
<P ALIGN="JUSTIFY">Fax:&#9;(617) 951-7050</P>
<P ALIGN="JUSTIFY"></P>
<I><P ALIGN="JUSTIFY">If to the Investor</I>:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Max Display Enterprises Limited</P>
<P ALIGN="JUSTIFY">c/o Walsin Lihwa Corporation</P>
<P ALIGN="JUSTIFY">11F, No. 411</P>
<P ALIGN="JUSTIFY">Rueiguang Road, Neihu</P>
<P ALIGN="JUSTIFY">Taipei 114</P>
<P ALIGN="JUSTIFY">Taiwan, R.O.C.</P>
<P ALIGN="JUSTIFY">Attn:&#9;Jeff Chen and Sandy Yu</P>
<P ALIGN="JUSTIFY">Tel:&#9;886-2-2799-2211 x 6221 (Jeff Chen) / x 6136 (Sandy
Yu)</P>
<P ALIGN="JUSTIFY">Fax: &#9;886-2-2799-8980</P>
<P ALIGN="JUSTIFY"></P>
<I><P ALIGN="JUSTIFY">with a copy (which shall not constitute notice)
to</I>:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Simpson Thacher &amp; Bartlett LLP </P>
<P ALIGN="JUSTIFY">ICBC Tower - 35th Floor</P>
<P ALIGN="JUSTIFY">3 Garden Road, Central</P>
<P ALIGN="JUSTIFY">Hong Kong</P>
<P ALIGN="JUSTIFY">Attn:&#9;Chris K. H. Lin</P>
<P ALIGN="JUSTIFY">Tel:&#9;(852) 2514-7600</P>
<P ALIGN="JUSTIFY">Fax:&#9;(852) 2869-7694</P>
<P ALIGN="JUSTIFY"></P>
<U><LI>Expenses</LI>
</U><P ALIGN="JUSTIFY">.  The Company and the Investor shall pay all of its
respective costs and expenses that it incurs in connection with the negotiation,
execution, delivery and performance of this Agreement or the other Transaction
Documents.<A NAME="_DV_M503"><A NAME="_DV_M505"></A></A></P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Entire Agreement; Amendments</LI></P>
</U><P ALIGN="JUSTIFY">.  This Agreement and the other Transaction Documents
constitute the entire agreement between the parties with regard to the subject
matter hereof and thereof, superseding all prior agreements or understandings,
whether written or oral, between or among the parties.  Except as expressly
provided herein, neither this Agreement nor any term hereof may be amended
except pursuant to a written instrument executed by the Company and the Investor
and no provision hereof may be waived other than by a written instrument signed
by the party against whom enforcement of any such waiver is sought.  Any waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which it is given.</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Survival</LI></P></OL>
</OL>

</U><P ALIGN="JUSTIFY">.  The representations, warranties, covenants and
indemnity made by the Company herein and in the other Transaction Documents
shall survive the Closing notwithstanding any diligence investigation made by or
on behalf of the Investor.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">[Signature Pages to Follow]</P>
<P ALIGN="JUSTIFY">&#9;IN WITNESS WHEREOF, the undersigned have executed this
Purchase Agreement as of the date first-above written.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">MICROVISION, INC.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">By: &#9;__<U>/s/ Jeff T. Wilson</U>_________</P>
<P ALIGN="JUSTIFY">     &#9;Name:  Jeff T. Wilson</P>
<P ALIGN="JUSTIFY">     &#9;Title:  Chief Financial Officer</P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;</P>
<P>MAX DISPLAY ENTERPRISES LIMITED</P>

<P ALIGN="JUSTIFY">By:&#9;__<U>/s/ Chiao Yu Lon</U>___________</P>
<P ALIGN="JUSTIFY">&#9;Name: Chiao Yu Lon</P>
<P ALIGN="JUSTIFY">&#9;Title: Director</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">For the sole purpose of agreeing to the provisions of Section
4.6:</P>
<P ALIGN="JUSTIFY"></P>
<P>WALSIN LIHWA CORPORATION</P>

<P ALIGN="JUSTIFY">By:&#9;__<U>/s/ Chiao Yu Lon</U>___________</P>
<P ALIGN="JUSTIFY">&#9;Name: Chiao Yu Lon</P>
<P ALIGN="JUSTIFY">&#9;Title: Chairman</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">EXHIBIT A</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">WARRANT</P>
<P ALIGN="CENTER"></P>
<U><P ALIGN="CENTER">EXHIBIT B</P>
<P ALIGN="CENTER"></P>
</U><P ALIGN="CENTER">REGISTRATION RIGHTS AGREEMENT</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>8
<FILENAME>exh10-2.htm
<DESCRIPTION>WALSIN REGISTRATION RIGHTS AGREEMENT
<TEXT>

<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;REGISTRATION RIGHTS AGREEMENT</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;This REGISTRATION RIGHTS AGREEMENT (this
&quot;<U>Agreement</U>&quot;), dated as of June 22, 2009, is by and between
MICROVISION, INC., a Delaware corporation (the &quot;<U>Company</U>&quot;), and
MAX DISPLAY ENTERPRISEs LIMITED, a limited liability company formed under the
laws of the British Virgin Islands (the &quot;<U>Investor</U>&quot;).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;A.&#9;The Company has agreed, on the terms and subject to
the conditions set forth in the Securities Purchase Agreement, dated as of June
22, 2009 (the &quot;<U>Securities Purchase Agreement</U>&quot;), to issue and
sell to the Investor named therein (A) shares of the Company's common stock, par
value $0.001 per share (the &quot;<U>Common Stock</U>&quot;) and (B) the Warrant
in the form attached to the Securities Purchase Agreement (the
&quot;<U>Warrant</U>&quot;).</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;B.&#9;The Warrant is exercisable into shares of Common
Stock (the &quot;<U>Warrant Shares</U>&quot;) in accordance with their terms.
</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9; In consideration of the Investor entering into the
Securities Purchase Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">&#9;1.&#9;<U>DEFINITIONS</U>.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;For purposes of this Agreement, the following terms shall
have the meanings specified:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">&#9;&quot;<U>Business Day</U>&quot; means any day other than
a Saturday, a Sunday or a day on which the Nasdaq Global Market or the Taiwan
Stock Exchange is closed or on which banks in the City of New York or Taiwan are
required or authorized by law to be closed.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Commission</U>&quot; means the Securities and
Exchange Commission.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Effective Date</U>&quot; means the date on which
the Registration Statement is declared effective by the Commission.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Holder</U>&quot; means any person owning or
having the right to acquire, through exercise of the Warrant or otherwise,
Registrable Securities, including initially the Investor and thereafter any
permitted assignee thereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Registrable Securities</U>&quot; means (i) the
Shares and the Warrant Shares and any other shares of Common Stock issuable
pursuant to the terms of the Securities Purchase Agreement or the Warrant, and
(ii) any shares of capital stock issued or issuable from time to time (with any
adjustments) in replacement of, in exchange for or otherwise in respect of the
Shares or the Warrant Shares.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Registration Deadline</U>&quot; means the last
day of the 120-day period following the Closing Date.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Registration Period</U>&quot; has the meaning
set forth in Section 2(b).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Registration Statement</U>&quot; means a
registration statement or statements prepared in compliance with the Securities
Act pursuant to Section 2(a).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&quot;<U>Required Holders</U>&quot; means the Holders of
a majority of the Registrable Securities that are either then outstanding or are
issuable on exercise of the Warrant then outstanding (without regard to any
limitation on such exercise).</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;Capitalized terms used herein and not otherwise defined
shall have the respective meanings specified in the Securities Purchase
Agreement.</P>
<P ALIGN="JUSTIFY">&#9; </P>
<P ALIGN="JUSTIFY">&#9;2.&#9;<U>REGISTRATION</U>.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(a)&#9;<U>Filing of Registration Statement</U>.  As
soon as practicable but in no event later than 30 days after the Closing (the
&quot;Filing Deadline&quot;), the Company shall prepare and file with the
Commission a Registration Statement on Form S-3 pursuant to Rule 415 under the
Securities Act covering the resale of a number of shares of Registrable
Securities equal to the sum of (i) the aggregate number of Shares issued under
the Securities Purchase Agreement <U>plus</U> (ii) the aggregate number of
shares of Common Stock issuable on the Closing Date pursuant to the exercise of
the Warrant (such number to be determined using the Exercise Price in effect on
such date and without regard to any restriction on the ability to exercise the
Warrant as of such date).  Such Registration Statement shall state, to the
extent permitted by Rule 416 under the Securities Act, that it also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon the exercise of the Warrant as a result of adjustments pursuant to the
Warrant.  In the event that Form S-3 is not available for the registration of
the resale of Registrable Securities hereunder, the Company shall (x) register
the resale of the Registrable Securities on another appropriate form reasonably
acceptable to the Required Holders and (y) undertake to register the Registrable
Securities on Form S-3 as soon as such form is available, provided that the
Company shall maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the Commission or is no
longer required to be maintained effective hereunder.  </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)&#9;<U>Effectiveness</U>.  The Company shall use
its best efforts to cause the Registration Statement to become effective as soon
as practicable, but in no event later than the Registration Deadline.  The
Company shall maintain the effectiveness of each Registration Statement filed
pursuant to this Agreement until the earlier to occur of (i) the date on which
all of the Registrable Securities eligible for resale thereunder have been
publicly sold pursuant to either the Registration Statement or Rule 144, (ii)
the date on which all of the Registrable Securities remaining to be sold under
such Registration Statement (in the reasonable opinion of counsel to the
Company) may be immediately sold to the public under Rule 144 or any successor
provision, and (iii) the third (3<SUP>rd</SUP>) anniversary of the Closing Date
(the period beginning on the Closing Date and ending on the earlier to occur of
(i), (ii) and (iii) above being referred to herein as the &quot;<U>Registration
Period</U>&quot;).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(c) &#9;<U>Registration of Other Securities</U>.  In
no event shall the Company include any securities other than Registrable
Securities on any Registration Statement filed by the Company on behalf of the
Holders pursuant to the terms hereof.</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;3.&#9;<U>OBLIGATIONS OF THE COMPANY</U>.</P>
<P ALIGN="JUSTIFY">&#9;In addition to performing its obligations hereunder,
including without limitation those pursuant to Section 2 above, the Company
shall, with respect to each Registration Statement:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> &#9; &#9;(a)&#9;prepare and file with the Commission such
amendments and supplements to such Registration Statement and the prospectus
used in connection with such Registration Statement as may be necessary to
comply with the provisions of the Securities Act or to maintain the
effectiveness of such Registration Statement during the Registration Period, or
as may be reasonably requested by a Holder in order to incorporate information
concerning such Holder or such Holder's intended method of distribution; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)&#9;promptly following the Closing, use its best
efforts to secure the listing on the Nasdaq Global Market of all Registrable
Securities and provide each Holder with reasonable evidence thereof;</P>
<P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;(c)&#9;so long as a Registration Statement is
effective covering the resale of the applicable Registrable Securities owned by
a Holder, furnish to each Holder such number of copies of the prospectus
included in such Registration Statement, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
such Holder's Registrable Securities;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(d)&#9;use commercially reasonable efforts to
register or qualify the Registrable Securities under the securities or
&quot;blue sky&quot; laws of such jurisdictions within the United States as
shall be reasonably requested from time to time by a Holder, and do any and all
other acts or things which may reasonably be necessary or advisable to enable
such Holder to consummate the public sale or other disposition of the
Registrable Securities in such jurisdictions; <I>provided</I> that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such jurisdiction;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(e)&#9;notify each Holder promptly after becoming
aware of the occurrence of any event as a result of which the prospectus
included in such Registration Statement, as then in effect, contains an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and as promptly as practicable prepare
and file with the Commission and furnish to each Holder a reasonable number of
copies of a supplement or an amendment to such prospectus as may be necessary so
that such prospectus does not contain an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(f)&#9;use commercially reasonable efforts to prevent
the issuance of any stop order or other order suspending the effectiveness of
such Registration Statement and, if such an order is issued, to use commercially
reasonable efforts to obtain the withdrawal thereof at the earliest possible
time and to notify each Holder in writing of the issuance of such order and the
resolution thereof;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(g)&#9;furnish to each Holder, on the date that such
Registration Statement, or any successor registration statement, becomes
effective, a letter, dated such date, signed by an officer of the Company or of
outside counsel to the Company (and reasonably acceptable to such Holder)
addressed to such Holder, confirming such effectiveness and, to the knowledge of
such officer or counsel, the absence of any stop order;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(h)&#9;provide to each Holder and its representatives
the reasonable opportunity to conduct, subject to confidentiality agreements
reasonably acceptable to the Company, a reasonable inquiry of the Company's
financial and other records during normal business hours and make available
during normal business hours and with reasonable advance notice its officers,
directors and employees for questions regarding information which such Holder
may reasonably request in order to fulfill any due diligence obligation on its
part; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(i)&#9;permit counsel for each Holder to review such
Registration Statement and all amendments and supplements thereto, and any
comments made by the staff of the Commission concerning such Holder and/or the
transactions contemplated by the Securities Purchase Agreement and the Company's
responses thereto, within a reasonable period of time prior to the filing
thereof with the Commission (or, in the case of comments made by the staff of
the Commission, within a reasonable period of time following the receipt thereof
by the Company); and</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(j)&#9; in the event that, at any time, the number of
shares available under the Registration Statement is insufficient to cover the
sum of (i) the aggregate number of Shares plus (ii) the aggregate number of
Warrant Shares that are Registrable Securities then outstanding or issuable
under the Warrant (such number to be determined using the Exercise Price in
effect at such time and without regard to any restriction on the ability to
exercise the Warrant), the Company shall promptly amend such Registration
Statement or file a new registration statement, in any event as soon as
practicable, but not later than the tenth (10th) Business Day following notice
from a Holder of the occurrence of such event, so that such Registration
Statement or such new registration statement, or both, covers no less than the
sum of (i) the aggregate number of Shares plus (ii) the aggregate number of the
Warrant Shares that are Registrable Securities eligible for resale thereunder.
The Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof. Any Registration Statement filed pursuant to this Section 3(j)
shall state that, to the extent permitted by Rule 416 under the Securities Act,
such Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon exercise of the Warrant in
order to prevent dilution resulting from stock splits, stock dividends or
similar events. Unless and until such amendment or new Registration Statement
becomes effective, each Holder shall have the rights described in Section 2(c)
above.</P>
<P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY">&#9;4.&#9;<U>PERMITTED SUSPENSION</U>.</P>
<U><P ALIGN="JUSTIFY"></P>
</U><P ALIGN="JUSTIFY">&#9;&#9;(a)  <U>Black-Out Period</U>.  Notwithstanding
the Company's obligations under this Agreement, if in the good faith judgment of
the Company, following consultation with legal counsel, it would be detrimental
to the Company or its stockholders for resales of Registrable Securities to be
made pursuant to the Registration Statement due to the existence of a material
development involving the Company which the Company would be obligated to
disclose in the Registration Statement, which disclosure would be premature or
otherwise inadvisable at such time or would have a Material Adverse Effect upon
the Company and its stockholders, the Company shall have the right to suspend
the use of the Registration Statement for a period of not more than thirty (30)
days (the &quot;<U>Black-out Period</U>&quot;); <I>provided, however</I>, that
the Company may so defer or suspend the use of the Registration Statement for no
more than forty five (45) days in the aggregate in any twelve-month period.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)&#9;<U>Suspension</U>.  Notwithstanding anything
to the contrary contained herein or in the Securities Purchase Agreement, if the
use of the Registration Statement is suspended by the Company, the Company shall
promptly give written notice of the suspension to each Holder and shall promptly
notify each Holder in writing as soon as the use of the Registration Statement
may be resumed.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;5.&#9;<U>OBLIGATIONS OF EACH HOLDER</U>.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;In connection with the registration of Registrable
Securities pursuant to a Registration Statement, and as a condition to the
Company's obligations under Section 2 hereof, each Holder shall:  </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(a)  timely furnish to the Company in writing (i) a
completed shareholder questionnaire and (ii) such information in writing
regarding itself and the intended method of disposition of such Registrable
Securities, in each case, as the Company shall reasonably request in order to
effect the registration thereof; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)  upon receipt of any notice from the Company of
the happening of any event of the kind described in Sections 3(e) or 3(f) or of
the commencement of a Black-out Period, immediately discontinue any sale or
other disposition of such Registrable Securities pursuant to such Registration
Statement until the filing of an amendment or supplement as described in Section
3(e) or withdrawal of the stop order referred to in Section 3(f), or the
termination of the Black-out Period, as the case may be, and maintain the
confidentiality of such notice and its contents; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(c)  to the extent required by applicable law,
deliver a prospectus to the purchaser of such Registrable Securities; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(d)  notify the Company when it has sold all of the
Registrable Securities held by it; and</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">(e)  notify the Company in the event that any information
supplied by such Holder in writing for inclusion in such Registration Statement
or related prospectus is untrue or omits to state a material fact required to be
stated therein or necessary to make such information not misleading in light of
the circumstances then existing; immediately discontinue any sale or other
disposition of such Registrable Securities pursuant to such Registration
Statement until the filing of an amendment or supplement to such prospectus as
may be necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and use commercially reasonable efforts to assist
the Company as may be appropriate to make such amendment or supplement effective
for such purpose.</P>
<P ALIGN="JUSTIFY">&#9;6.&#9;<U>INDEMNIFICATION</U>.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;In the event that any Registrable Securities are included
in a Registration Statement under this Agreement:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(a)&#9;To the extent permitted by law, the Company
shall indemnify and hold harmless each Holder, the officers, directors,
employees, agents and representatives of such Holder, and each person, if any,
who controls such Holder within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended (the &quot;<U>Exchange
Act</U>&quot;), against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including
reasonable legal expenses or other expenses reasonably incurred in connection
with investigating or defending same, &quot;<U>Losses</U>&quot;), insofar as any
such Losses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement
under which such Registrable Securities were registered, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  Subject to the provisions of Section 6(c), the Company will
reimburse such Holder, and each such officer, director, employee, agent,
representative or controlling person, for any reasonable legal expenses or other
out-of-pocket expenses as reasonably incurred by any such entity or person in
connection with investigating or defending any Loss; <I>provided, however</I>,
that the foregoing indemnity shall not apply to amounts paid in settlement of
any Loss if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
obligated to indemnify any person for any Loss to the extent that such Loss is
(i) based upon and is in conformity with written information furnished by such
person expressly for use in such Registration Statement or (ii) based on a
failure of such person to deliver or cause to be delivered the final prospectus
contained in the Registration Statement and made available by the Company, if
such delivery is required by applicable law.  The Company shall not enter into
any settlement of a Loss that does not provide for the unconditional release of
such Holder from all liabilities and obligations relating to such Loss.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)&#9;To the extent permitted by law, each Holder
who is named in such Registration Statement as a selling stockholder, acting
severally and not jointly, shall indemnify and hold harmless the Company, the
officers, directors, employees, agents and representatives of the Company, and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any Losses to the extent (and only
to the extent) that any such Losses are based upon and in conformity with
written information furnished by such Holder expressly for use in such
Registration Statement. Subject to the provisions of Section 6(c), such Holder
will reimburse any legal or other expenses as reasonably incurred by the Company
and any such officer, director, employee, agent, representative, or controlling
person, in connection with investigating or defending any such Loss;
<I>provided, however</I>, that the foregoing indemnity shall not apply to
amounts paid in settlement of any such Loss if such settlement is effected
without the consent of such Holder (which consent shall not be unreasonably
withheld); and <I>provided, further</I>, that, in no event shall any indemnity
under this Section 6(b) exceed the gross proceeds resulting from the sale of the
Registrable Securities sold by such Holder under such Registration
Statement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(c)&#9;Promptly after receipt by an indemnified party
under this Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section&nbsp;6, promptly
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in and to assume
the defense thereof with counsel selected by the indemnifying party and
reasonably acceptable to the indemnified party; <I>provided, however</I>, that
an indemnified party shall have the right to retain its own counsel, with the
reasonably incurred fees and expenses of one such counsel for all indemnified
parties to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate under applicable standards of professional conduct due to actual
or potential conflicting interests between such indemnified party and any other
party represented by such counsel in such proceeding.  The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 6 with respect to such action, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 6 or with respect to any other action unless the indemnifying
party is materially prejudiced as a result of not receiving such notice.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(d)&#9;In the event that the indemnity provided in
Sections 6(a) or 6(b) is unavailable or insufficient to hold harmless an
indemnified party for any reason for the losses referred to therein, the Company
and each Holder agree, severally and not jointly, to contribute to the aggregate
Losses to which the Company or such Holder may be subject in such proportion as
is appropriate to reflect the relative fault of the Company and such Holder in
connection with the statements or omissions which resulted in such Losses;
<I>provided, however</I>, that in no case shall such Holder be responsible for
any amount in excess of the net proceeds resulting from the sale of the
Registrable Securities sold by it under the Registration Statement.  Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company or by such Holder.
The Company and each Holder agree that it would not be just and equitable if
contribution were determined by <I>pro rata</I> allocation or any other method
of allocation which does not take account of the equitable considerations
referred to above.  Notwithstanding the provisions of this Section 6(d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation.  For purposes of this
Section 6, each person who controls a Holder within the meaning of either the
Securities Act or the Exchange Act and each officer, director, employee, agent
or representative of such Holder shall have the same rights to contribution as
such Holder, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act and each officer, director,
employee, agent or representative of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this Section 6(d).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(e)&#9;The obligations of the Company and each Holder
under this Section&nbsp;6 shall survive the exercise of the Warrants in full,
the completion of any offering or sale of Registrable Securities pursuant to a
Registration Statement under this Agreement, or otherwise.  In addition,
obligations of the Company under this Section 6 are in addition to any liability
that the Company may have to any Holder.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;7.&#9;<U>REPORTS</U>.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;With a view to making available to each Holder the
benefits of Rule 144 and any other similar rule or regulation of the Commission
that may at any time permit such Holder to sell securities of the Company to the
public without registration, the Company agrees to use commercially reasonable
efforts (until all of the Registrable Securities have been sold under a
Registration Statement or pursuant to Rule 144) to:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(a)&#9;make and keep public information available, as
those terms are understood and defined in Rule 144; </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)&#9;file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act; and</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(c) &#9;furnish to such Holder, so long as such
Holder owns any Registrable Securities, promptly upon written request (i) a
written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) to the extent not publicly available through the Commission's EDGAR
database, a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company with the
Commission, and (iii) such other information as may be reasonably requested by
such Holder in connection with such Holder's compliance with any rule or
regulation of the Commission which permits the selling of any such securities
without registration.</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;8. &#9;<U>MISCELLANEOUS</U>.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(a)&#9;<U>Expenses of Registration</U>.  Except as
otherwise provided in the Securities Purchase Agreement, all reasonable
expenses, other than underwriting discounts and commissions and fees and
expenses of counsel and other advisors to each Holder, incurred in connection
with the registrations, filings or qualifications described herein, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, the fees and disbursements of counsel for the Company, and
the fees and disbursements incurred in connection with the letter described in
Section 3(g),  shall be borne by the Company.</P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">&#9;&#9;(b)&#9;<U>Amendment; Waiver</U>.  Except as expressly
provided herein, neither this Agreement nor any term hereof may be amended or
waived except pursuant to a written instrument executed by the Company and <A
NAME="_Hlk231403884">the Required Holders. </A>Any amendment or waiver effected
in accordance with this Section 8(b) shall be binding upon each Holder, each
future Holder and the Company.  Any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.  The failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or the delay by any party in exercising such right or remedy, shall not operate
as a waiver thereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(c)&#9;<U>Notices</U>.  Any notice, demand or request
required or permitted to be given by the Company or a Holder pursuant to the
terms of this Agreement shall be in writing and shall be deemed delivered (i)
when delivered personally or by verifiable facsimile transmission or electronic
mail, unless such delivery is made on a day that is not a Business Day, in which
case such delivery will be deemed to be made on the next succeeding Business Day
and (ii) on the third (3<SUP>rd</SUP>) Business Day after timely delivery to an
international overnight courier, addressed as follows:</P>
<I><P ALIGN="JUSTIFY"></P>
<P>&#9;&#9;If to the Company</I>:</P>

<P>&#9;&#9;Microvision, Inc.</P>
<P ALIGN="JUSTIFY">&#9;&#9;6222 185th Avenue NE</P>
<P ALIGN="JUSTIFY">&#9;&#9;Redmond, WA  98052</P>
<P ALIGN="JUSTIFY">&#9;&#9;Attn:&#9;General Counsel</P>
<P ALIGN="JUSTIFY">&#9;&#9;Tel:  &#9;(425) 415-6847</P>
<P ALIGN="JUSTIFY">&#9;&#9;Fax: &#9;(425) 936-4411</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<I><P>&#9;&#9;with a copy<A NAME="_DV_C205"> (which shall not constitute notice)
</A>to:</P>
</I><P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">Ropes &amp; Gray LLP</P>
<P ALIGN="JUSTIFY">One International Place</P>
<P ALIGN="JUSTIFY">Boston, MA  02110</P>
<P ALIGN="JUSTIFY">Attn:&#9;Joel F. Freedman</P>
<P ALIGN="JUSTIFY">Tel:&#9;(617) 951-7000</P>
<P ALIGN="JUSTIFY">Fax:&#9;(617) 951-7050</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>
</DIR>
</DIR>

<P><A NAME="_DV_M494"><A NAME="_DV_M495"><A NAME="_DV_M496"></A></A></A>and if
to a Holder, to such address as shall be designated by such Holder in writing to
the Company. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(d)&#9;<U>Assignment</U>.  Upon the transfer of any
Warrant or Registrable Securities by a Holder, the rights of such Holder
hereunder with respect to such securities so transferred shall be assigned
automatically to the transferee thereof, and such transferee shall thereupon be
deemed to be a &quot;Holder&quot; for purposes of this Agreement, as long as:
(i) the Company is, within a reasonable period of time following such transfer,
furnished with written notice of the name and address of such transferee, (ii)
the transferee agrees in writing with the Company to be bound by all of the
provisions hereof, and (iii) such transfer is made in accordance with the
applicable requirements of the Securities Purchase Agreement or the Warrant, as
applicable.</P>
<P ALIGN="JUSTIFY">&#9;&#9;(e)&#9;<U>Counterparts</U>.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.  This Agreement may be executed and delivered by facsimile
transmission.</P>
<P ALIGN="JUSTIFY">&#9;&#9;(f)&#9;<U>Governing Law</U>.  This Agreement shall be
governed by and construed under the laws of the State of Washington applicable
to contracts made and to be performed entirely within the State of Washington.
Each party hereby irrevocably submits to the non-exclusive jurisdiction of the
state and federal courts sitting in the State of Washington for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby and hereby irrevocably waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;(g)&#9;<U>Holder of Record</U>.  A person is deemed
to be a Holder whenever such person owns or is deemed to own of record
Registrable Securities.  If the Company receives conflicting instructions,
notices or elections from two or more persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the record owner of such Registrable
Securities.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="_DV_C109">(h)&#9;<U>Entire Agreement</U>. This
Agreement and the other Transaction Documents constitute the entire agreement
between the parties with regard to the subject matter hereof and thereof,
superseding all prior agreements or understandings, whether written or oral,
between or among the parties.  </A></P>
<P ALIGN="JUSTIFY"><A NAME="_DV_C110">(i)&#9;<U>Headings</U>.  The headings used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.</A></P>
<P ALIGN="JUSTIFY"><A NAME="_DV_C112">(j)&#9;<U>Third Party Beneficiaries</U>.
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.</A></P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">[Signature Pages to Follow]</P>
<P ALIGN="JUSTIFY">&#9;IN WITNESS WHEREOF, the undersigned have executed this
Registration Rights Agreement as of the date first-above written.</P>
<P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY">MICROVISION, INC.</P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;</P>
<P ALIGN="JUSTIFY">By: &#9;__<U>/s/ Jeff T. Wilson</U>_________</P>
<P>     &#9;Name:  Jeff T. Wilson</P>
<P>     &#9;Title:  Chief Financial Officer  <U><BR>
</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P>MAX DISPLAY ENTERPRISES LIMITED</P>
<B><P><BR>
</P></DIR>
</DIR>

</B><P>By:&#9;__<U>/s/ Chiao Yu Lon</U>___________</P>
<P>&#9;Name: Chiao Yu Lon</P>
<P>&#9;Title: Director<U><BR>
</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>9
<FILENAME>exh10-3.htm
<DESCRIPTION>WALSIN WARRANT
<TEXT>

<P ALIGN="JUSTIFY">THIS WARRANT (THIS &quot;<U>WARRANT</U>&quot;) AND THE
UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT have not been
registered under the Securities Act of 1933, as amended (the &quot;<U>SECURITIES
Act</U>&quot;), or the securities laws of any state, and may not be offered,
transferred, pledged, hypothecated, sold or otherwise disposed of unless a
registration statement under the Securities Act and applicable state securities
laws shall have become effective with regard thereto, or an exemption from
registration under the Securities Act and applicable state securities laws is
available in connection with such offer or sale.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Warrant No. 120&#9;Date of Issuance: June 22, 2009</P>
<P ALIGN="CENTER">________________________________________</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">MICROVISION, INC.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">COMMON STOCK PURCHASE WARRANT</P>
<P ALIGN="CENTER">_________________________________________</P>
<P ALIGN="CENTER"></P>
<P ALIGN="JUSTIFY">This certifies that, for good and valuable consideration,
Microvision, Inc., a Delaware corporation (the &quot;<U>Company</U>&quot;),
grants to the holder of this Warrant (the &quot;<U>Warrantholder</U>&quot;),
which on the date hereof shall be Max Display Enterprises Limited (the
&quot;<U>Initial Holder</U>&quot;), the right to subscribe for and purchase from
the Company 2,019,060 validly issued, fully paid and nonassessable shares (the
&quot;<U>Warrant Shares</U>&quot;) of the Company's Common Stock, par value
$0.001 per share (the &quot;<U>Common Stock</U>&quot;), at the purchase price
per share of $2.1850 (as adjusted pursuant to the provisions of this Warrant,
the &quot;<U>Exercise Price</U>&quot;), at any time and from time to time on or
after the date hereof to and including 11:59 P.M. Seattle Time on June 22, 2012
(the &quot;<U>Expiration Date</U>&quot;), all subject to the terms, conditions
and adjustments herein set forth.  The number of Warrant Shares and the Exercise
Price shall be subject to further adjustment in accordance with <U>Section
5</U>.</P>
<P ALIGN="JUSTIFY">This Warrant is issued pursuant to the Securities Purchase
Agreement (the &quot;<U>Securities Purchase Agreement</U>&quot;) by and between
the Initial Holder and the Company, dated as of the date hereof, and the Initial
Holder and the Company are each parties to the Registration Rights Agreement
(the &quot;<U>Registration Rights Agreement</U>&quot;), dated as of the date
hereof, a copy of each of which is on file at the principal office of the
Company.  Accordingly, the Warrantholder shall be entitled to all of the
benefits and bound by all of the applicable obligations set forth in the
Securities Purchase Agreement and the Registration Rights Agreement.  Any
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Securities Purchase Agreement.</P>
<OL>

<OL>

<U><P ALIGN="JUSTIFY"><LI>Exercise or Conversion of this Warrant</U>. </LI></P>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Exercise of Warrant</U>.  Subject to the terms and
conditions set forth herein, this Warrant may be exercised, in whole or in part,
by the Warrantholder by: (i) <A NAME="OLE_LINK1"><A NAME="OLE_LINK2">the
delivery of this Warrant to the Company, with a duly executed Exercise Form in
the form attached as <U>Exhibit A</U> hereto (the &quot;<U>Exercise
Form</U>&quot;) specifying the number of Warrant Shares to be purchased, prior
to the Expiration Date</A></A>; and (ii) the delivery of payment to the Company,
for the account of the Company, by cash, by wire transfer of immediately
available funds or by certified or bank cashier's check, of the Exercise Price
for the number of Warrant Shares specified in the Exercise Form in lawful money
of the United States of America.  The Company agrees that such Warrant Shares
shall be deemed to be issued to the Warrantholder as the record holder of such
Warrant Shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such Warrant Shares as
aforesaid.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>Conversion of Warrant</U>.</LI></P>
<P ALIGN="JUSTIFY">1.2.1.&#9;<U>Right to Convert</U>.  If and only if at the
time of exercise there is not then effective a registration statement filed
under the Securities Act registering the resale of the Warrant Shares issuable
on exercise hereof, then in addition to, and without limiting, the other rights
of the Warrantholder hereunder, the Warrantholder shall have the right (the
&quot;<U>Conversion Right</U>&quot;) to convert this Warrant or any part hereof
into Warrant Shares at any time and from time to time prior to the Expiration
Date.  Upon exercise of the Conversion Right, the Company shall deliver to the
Warrantholder, without payment by the Warrantholder of any Exercise Price or any
cash or other consideration, that number of Warrant Shares computed using the
following formula:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;X   =   <U>Y (A-B)</P>
</U><P ALIGN="JUSTIFY">                        &#9;&#9;     A          </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Where:     &#9;X  = &#9;The number of Warrant Shares to
be issued to the Warrantholder</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Y  = &#9;The number of Warrant Shares purchasable pursuant to
this Warrant at such time or such lesser number of Warrant Shares as may be
selected by the Warrantholder in the Notice of Conversion (as defined
herein)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">A  = &#9;The Market Price (as such term is defined in the
Securities Purchase Agreement) as of the Conversion Date </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">B  = &#9;The Exercise Price</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">1.2.2.&#9;<U>Method of Conversion</U>. The Conversion Right
may be exercised by the Warrantholder by the surrender of this Warrant to the
Company, together with a duly executed Notice of Conversion in the form attached
as <U>Exhibit B</U> hereto (the &quot;<U>Notice of Conversion</U>&quot;)
specifying that the Warrantholder intends to exercise the Conversion Right and
indicating the number of Warrant Shares to be acquired upon exercise of the
Conversion Right. Such conversion shall be effective upon the Company's receipt
of this Warrant, together with the Notice of Conversion, or on such later date
as is specified in the Notice of Conversion (the &quot;<U>Conversion
Date</U>&quot;). Certificates for the Warrant Shares so acquired shall be
promptly delivered to the Warrantholder, in any event not to exceed three (3)
Business Days after the Conversion Date in accordance with <U>Section 1.3</U>.
If applicable, the Company shall, upon surrender of this Warrant for
cancellation, deliver a new Warrant evidencing the rights of the Warrantholder
to purchase the remaining Warrant Shares which new Warrant shall in all other
respects be identical to this Warrant.  </P>
<FONT FACE="Courier New" SIZE=2>
</FONT><U><P ALIGN="JUSTIFY"><LI>Warrant Shares Certificate</U>.  A stock
certificate or certificates for the Warrant Shares specified in the Exercise
Form or Notice of Conversion, as the case may be, shall be promptly delivered to
the Warrantholder, in any event not to exceed three (3) Business Days after
receipt of such Exercise Form or the Conversion Date, as the case may be, and
receipt of payment of the purchase price, if any (&quot;<U>Delivery
Date</U>&quot;).  If this Warrant shall have been exercised or converted only in
part, the Company shall, at the time of delivery of the stock certificate or
certificates, deliver to the Warrantholder a new Warrant evidencing the rights
to purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical to this Warrant.  </LI></P>
<U><P ALIGN="JUSTIFY"><LI>Payment of Taxes</U>.  The issuance of certificates
for Warrant Shares shall be made without charge to the Warrantholder for any
stock transfer or other issuance tax or other incidental expense of issuance;
<U>provided</U>, <U>however</U>, that the Warrantholder shall be required to pay
any and all taxes which may be payable in respect of any transfer involved in
the issuance and delivery of any certificate in a name other than that of the
Warrantholder as reflected upon the books of the Company.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>Fractional Shares</U>.  No fractional shares of Common
Stock or scrip shall be issued to the Warrantholder in connection with the
exercise or conversion of this Warrant.  Instead of any fractional shares of
Common Stock that would otherwise be issuable to the Warrantholder, the Company
will pay to the Warrantholder a cash adjustment in respect of such fractional
interest in an amount equal to the product of such fractional interest and the
Market Price as of the date of receipt of such Exercise Form or the Conversion
Date, as the case may be.</LI></P></OL>

<U><P ALIGN="JUSTIFY"><LI>Duration</U>.</LI></P>
<P ALIGN="JUSTIFY">&#9;This Warrant shall expire and no longer be exercisable or
convertible into Warrant Shares, and its provisions shall have no further force
or effect, whether or not any portion thereof has been previously exercised or
converted, upon the earlier to occur of (i) the first date upon which this
Warrant has been exercised for or converted into the maximum amount of Warrant
Shares available for issuance upon an exercise or conversion of this Warrant at
such time, (ii) the last day of the Notice Period as provided in <U>Section
7</U> with respect to all Warrant Shares subject to redemption and (iii) the
Expiration Date.</P>
<U><P ALIGN="JUSTIFY"><LI>Loss or Destruction of this Warrant</U>.</LI></P>
<P ALIGN="JUSTIFY">Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of such indemnification as the
Company may reasonably require, and, in the case of such mutilation, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor.</P>
<U><P ALIGN="JUSTIFY"><LI>Ownership of this Warrant</U>.</LI></P>
<P ALIGN="JUSTIFY">The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing thereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary, other
than a transfer pursuant to <U>Section 6</U>.</P>
<P ALIGN="JUSTIFY"><LI><A NAME="_Ref49058377"><U>Certain
Adjustments</U>.</A></LI></P>
<OL>

<P ALIGN="JUSTIFY"><LI><A NAME="_Ref49058660">The number of Warrant Shares
purchasable upon the exercise of this Warrant and the Exercise Price shall be
subject to adjustment as follows:</A></LI></P>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Stock Dividends, etc</U>.  If at any time after the
date of the issuance of this Warrant and prior to the Expiration Date (i) the
Company shall fix a record date for the issuance of any stock dividend payable
in shares of Common Stock or (ii) the number of shares of Common Stock shall
have been increased by a subdivision or split-up of shares of Common Stock,
then, on the record date fixed for the determination of holders of Common Stock
entitled to receive such dividend or immediately after the effective date of
such subdivision or split up, as the case may be, the number of shares to be
delivered upon exercise or conversion of this Warrant will be increased so that
the Warrantholder will be entitled to receive the number of shares of Common
Stock that such Warrantholder would have owned immediately following such action
had this Warrant been exercised or converted in full immediately prior thereto.
The Exercise Price payable upon the exercise of this Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of this Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
purchasable immediately thereafter.  Notwithstanding the foregoing, in no
circumstance shall the Exercise Price be reduced to less than the par value of a
share of Common Stock.  </LI></P>
<U><P ALIGN="JUSTIFY"><LI>Combination of Stock</U>.  If the number of shares of
Common Stock outstanding at any time after the date of the issuance of this
Warrant shall have been decreased by a combination of the outstanding shares of
Common Stock, then, immediately after the effective date of such combination,
the number of shares of Common Stock to be delivered upon exercise or conversion
of this Warrant will be decreased so that the Warrantholder thereafter will be
entitled to receive the number of shares of Common Stock that such Warrantholder
would have owned immediately following such action had this Warrant been
exercised or converted in full immediately prior thereto<A NAME="OLE_LINK9">.
The Exercise Price payable upon the exercise of this Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of this Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
purchasable immediately thereafter.  Notwithstanding the foregoing, in no
circumstance shall the Exercise Price be reduced to less than the par value of a
share of Common Stock.  </A>  </LI></P>
<U><P ALIGN="JUSTIFY"><LI>Reorganization, Merger, etc</U>.&#9;In the event of a
merger, consolidation, business combination, tender offer, exchange of shares,
recapitalization, reorganization, redemption or other similar event, as a result
of which the class of shares of Common Stock shall be changed into the same or a
different number of shares of the same or another class or classes of stock or
securities or other assets of the Company or another entity or the Company shall
sell all or substantially all of its assets (each of the foregoing being a
&quot;Major Transaction&quot;), the Company will give the Warrantholder at least
fifteen (15) Business Days written notice prior to the earlier of (a) the
closing or effectiveness of such Major Transaction and (b) the record date for
the receipt of such shares of stock or securities or other assets, and: (i) the
Warrantholder shall be permitted to exercise this Warrant in whole or in part at
any time prior to the record date for the receipt of such consideration and
shall be entitled to receive, for each share of Common Stock issuable to the
Warrantholder upon such exercise, the same per share consideration payable to
the other holders of Common Stock in connection with such Major Transaction, and
(ii) if and to the extent that the Warrantholder retains any portion of this
Warrant following such record date, the Company will cause the surviving or, in
the event of a sale of assets, purchasing entity, as a condition precedent to
such Major Transaction, to assume the obligations of the Company under this
Warrant, with such adjustments to the Exercise Price and the securities covered
hereby as may be reasonably determined in good faith by the Board of Directors
to be necessary in order to preserve the economic benefits of this Warrant to
the Warrantholder.</LI></P></OL>

<U><P ALIGN="JUSTIFY"><LI>Notice of Adjustments</U>.  Whenever the number of
Warrant Shares or the Exercise Price of such Warrant Shares is adjusted, as
herein provided, the Company shall promptly mail by first class, postage
prepaid, to the Warrantholder, notice of such adjustment or adjustments setting
forth in reasonable detail the number of Warrant Shares and the Exercise Price
of such Warrant Shares after such adjustment, a brief statement of the facts
requiring such adjustment, and the computation by which such adjustment was
made.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>No Impairment</U>.  The Company shall not, by
amendment of its certificate of incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but shall at all times in good faith assist
in the carrying out of all the provisions of this <U>Section 5</U> and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Warrantholder against impairment.</LI></P></OL>

<U><P ALIGN="JUSTIFY"><LI>Transfers</U>.</LI></P>
<P ALIGN="JUSTIFY">&#9;This Warrant and the Warrant Shares issued upon the
exercise thereof may be transferred only in compliance with Section 4.4 of the
Securities Purchase Agreement and the other restrictions on transfer set forth
in the Registration Rights Agreement.  Subject to such restrictions, the Company
shall transfer this Warrant from time to time upon the books to be maintained by
the Company for that purpose, upon surrender hereof for transfer, properly
endorsed or accompanied by appropriate instructions for transfer and such other
documents as may be reasonably required by the Company, including, if required
by the Company, an opinion of its counsel reasonably satisfactory to the Company
to the effect that such transfer is exempt from the registration requirements of
the Act, to establish that such transfer is being made in accordance with the
terms hereof, and a new Warrant shall be issued to the transferee and the
surrendered Warrant shall be canceled by the Company.</P>
<P ALIGN="JUSTIFY">&#9;Upon such transfer or other disposition, the
Warrantholder shall deliver this Warrant to the Company together with a written
notice to the Company, substantially in the form of the Transfer Notice in the
form attached hereto as Exhibit C (the &quot;<U>Transfer Notice</U>&quot;),
indicating the person or persons to whom this Warrant shall be transferred and,
if less than all of this Warrant is transferred, the number of Warrant Shares to
be covered by the part of this Warrant to be transferred to each such person.
Within three (3) Business Days of receiving a Transfer Notice and the original
of this Warrant, the Company shall deliver to the each transferee designated by
the Warrantholder a Warrant or Warrants of like tenor and terms for the
appropriate number of Warrant Shares and, if less than all this Warrant is
transferred, shall deliver to the Warrantholder a Warrant for the remaining
number of Warrant Shares.</P>
<U><P ALIGN="JUSTIFY"><LI>Company Call Right</U>. </LI></P>
<P ALIGN="JUSTIFY">&#9;Notwithstanding any other provision contained in this
Warrant to the contrary, in the event that the average closing bid prices per
share of Common Stock, as quoted on the Nasdaq Global Market (or such other
exchange or stock market on which the Common Stock may then be listed or quoted)
over a period of 20 consecutive Trading Days, as defined in the Securities
Purchase Agreement, ending on or after the sixth (6<SUP>th</SUP>)-month
anniversary of the date hereof, exceeds 400% of the Exercise Price then in
effect, thereafter the Company, upon fifteen (15)&nbsp;Business Days prior
written notice (the &quot;<U>Notice Period</U>&quot;) ending at 11:59 P.M.
(Seattle time) on the fifteenth (15<SUP>th</SUP>) Business Day (not counting the
day such notice is given) given to the Warrantholder within ten (10) Business
Days of the end of such 20 consecutive Trading Day period, may call the Warrant,
in whole or in part, at a redemption price equal to $0.01 per share of Common
Stock then purchasable pursuant to the Warrant called for redemption provided
that (a)&nbsp;at all times during the Notice Period, there is an effective
registration statement filed under the Securities Act registering the resale of
the Warrant Shares issuable on exercise hereof; (b)&nbsp;the Warrantholder shall
have the right to exercise this Warrant prior to the end of the Notice Period
and (c) if the Warrantholder is Max Display Enterprises Limited or an Affiliate
of Walsin Lihwa at the time, the written notice shall be given by the Company to
the Warrantholder by both electronic mail and an international overnight courier
at the address set forth in <U>Section 8.5</U> hereof.</P>
<U><P ALIGN="JUSTIFY"><LI>Miscellaneous</U>.</LI></P>
<OL>

<U><P ALIGN="JUSTIFY"><LI>Entire Agreement</U>.  This Warrant constitutes the
entire agreement between the parties with regard to the subject matter hereof,
superseding all prior agreements or understandings, whether written or oral,
between or among the parties.  Except as expressly provided herein, neither this
Warrant nor any term hereof may be amended except pursuant to a written
instrument executed by the Company and holders of at least a majority of the
Warrant Shares and no provision hereof may be waived other than by a written
instrument signed by the party against whom enforcement of any such waiver is
sought.  Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it is given.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>Binding Effects; Benefits</U>.  This Warrant shall
inure to the benefit of and shall be binding upon the Company and the
Warrantholder and their respective heirs, legal representatives, successors and
assigns.  Nothing in this Warrant, expressed or implied, is intended to or shall
confer on any person other than the Company and the Warrantholder, or their
respective heirs, legal representatives, successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this
Warrant.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>Amendment; Waiver</U>.  Any term of this Warrant may
be amended or waived upon the written consent of the Company and the
Warrantholder.  If, at any time, any portion of this Warrant has been
transferred in accordance with <U>Section 6</U> above such that there are two or
more warrants outstanding, any term of this Warrant and any other warrants
issued pursuant to any such permitted transfers may be amended or waived upon
the written consent of the Company and the holders of such warrants (including
this Warrant) representing a majority of the aggregate Warrant Shares issuable
upon the exercise or conversion thereof at such time. </LI></P>
<U><P ALIGN="JUSTIFY"><LI>Section and Other Headings</U>.  The headings used in
this Warrant are used for convenience only and are not to be considered in
construing or interpreting this Warrant.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>Notices</U>.  Any notice, demand or request required
or permitted to be given by the Company or the Warrantholder pursuant to the
terms of this Warrant shall be in writing and shall be deemed delivered (i) when
delivered personally or by verifiable facsimile transmission or electronic mail,
unless such delivery is made on a day that is not a Business Day, in which case
such delivery will be deemed to be made on the next succeeding Business Day and
(ii) on the third (3<SUP>rd</SUP>) Business Day after timely delivery to an
international overnight courier, addressed as follows:</LI></P>
<P ALIGN="JUSTIFY">(a)&#9;if to the Company, addressed to:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Microvision, Inc.</P>
<P ALIGN="JUSTIFY">6222 185th Avenue NE</P>
<P ALIGN="JUSTIFY">Redmond, WA&nbsp;98052</P>
<P ALIGN="JUSTIFY">Attn:&#9;General Counsel</P>
<P ALIGN="JUSTIFY">Tel:&#9;(425) 415-6847</P>
<P ALIGN="JUSTIFY">Fax:&#9;(425) 936-4411</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">with a copy<A NAME="_DV_C205"> </A>to:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Ropes &amp; Gray LLP</P>
<P ALIGN="JUSTIFY">One International Place</P>
<P ALIGN="JUSTIFY">Boston, MA  02110</P>
<P ALIGN="JUSTIFY">Attn:&#9;Joel F. Freedman</P>
<P ALIGN="JUSTIFY">Tel:&#9;(617) 951-7000</P>
<P ALIGN="JUSTIFY">Fax:&#9;(617) 951-7050</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">(b)&#9;if to the Warrantholder, addressed to:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Max Display Enterprises Limited</P>
<P ALIGN="JUSTIFY">c/o Walsin Lihwa Corporation</P>
<P ALIGN="JUSTIFY">11F, No. 411</P>
<P ALIGN="JUSTIFY">Rueiguang Road, Neihu</P>
<P ALIGN="JUSTIFY">Taipei 114</P>
<P ALIGN="JUSTIFY">Taiwan, R.O.C.</P>
<P ALIGN="JUSTIFY">Attn:&#9;Jeff Chen and Sandy Yu</P>
<P ALIGN="JUSTIFY">Tel:&#9;886-2-2799-2211 x 6221 (Jeff Chen) / x 6136 (Sandy
Yu)</P>
<P ALIGN="JUSTIFY">Fax:&#9;886-2-2799-8980</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">with a copy (which shall not constitute notice) to:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Simpson Thacher &amp; Bartlett LLP</P>
<P ALIGN="JUSTIFY">ICBC Tower - 35th Floor</P>
<P ALIGN="JUSTIFY">3 Garden Road, Central</P>
<P ALIGN="JUSTIFY">Hong Kong</P>
<P ALIGN="JUSTIFY">Attn:  Chris K. H. Lin</P>
<P ALIGN="JUSTIFY">Tel:&#9;(852) 2514-7600</P>
<P ALIGN="JUSTIFY">Fax:&#9;(852) 2869-7694</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Severability</U>.  In the event that any provision of
this Warrant becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Warrant shall continue in full force and
effect without said provision; <I>provided</I> that in such case the parties
shall negotiate in good faith to replace such provision with a new provision
which is not illegal, unenforceable or void, as long as such new provision does
not materially change the economic benefits of this Warrant to the
parties.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>Governing Law</U>.  This Warrant shall be governed by
and construed under the laws of the State of Washington applicable to contracts
made and to be performed entirely within the State of Washington.  Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in <A NAME="_DV_C109">the State of Washington </A>for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby and hereby irrevocably waives, and agrees not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Warrant and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.</LI></P>
<U><P ALIGN="JUSTIFY"><LI>No Rights or Liabilities as Stockholder</U>.  Nothing
contained in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.</LI></P></OL>
</OL>
</OL>

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<P ALIGN="JUSTIFY">IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the date first above
written.</P><DIR>
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<P ALIGN="JUSTIFY">MICROVISION, INC.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">By:<U>  /s/ Jeff T. Wilson</U>______________</P>
<P ALIGN="JUSTIFY">Name:  Jeff T. Wilson</P>
<P ALIGN="JUSTIFY">Title:  Chief Financial Officer</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P>&nbsp;</P></DIR>
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<P>ACCEPTED AND AGREED:</P>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=635>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">MAX DISPLAY ENTERPRISES LIMITED</TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">By:__<U>/s/ Chiao Yu Lon</U>___________</TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">&#9;Name:  Chiao Yu Lon</TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">&#9;Title:  Director</TD>
</TR>
</TABLE>


<U><P ALIGN="RIGHT">EXHIBIT A</P>
</U><P ALIGN="CENTER">FORM OF NOTICE OF EXERCISE</P>
<P ALIGN="CENTER"></P>
<P ALIGN="JUSTIFY">&#9;To:&#9;Microvision, Inc. (&quot;<U>the
Company</U>&quot;)</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">1.&#9;The undersigned hereby elects to purchase __________
shares of the Common Stock of the Company (the &quot;<U>Common Stock</U>&quot;)
pursuant to the terms of the Warrant, dated as of June 22, 2009 (the
&quot;<U>Warrant</U>&quot;) and tenders herewith payment of the purchase price
of such shares in full.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">2.&#9;<A NAME="OLE_LINK7"><A NAME="OLE_LINK8">Please issue or
cause to be issued a certificate or certificates representing said shares in the
name of the undersigned.</A></A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">3.&#9;<A NAME="OLE_LINK3"><A NAME="OLE_LINK4">The undersigned
hereby represents and warrants to the Company that it is the registered and
beneficial owner of the portion of the Warrant which is the subject of this
Notice of Exercise.</A></A></P>
<P ALIGN="JUSTIFY">4.&#9;The undersigned acknowledges that each certificate for
Common Stock issued upon exercise of the Warrant may bear a legend in accordance
with Section 2.5 of the Securities Purchase Agreement, dated as of June 22, 2009
by and between the Company and Max Display Enterprises Limited.</P>
<P ALIGN="JUSTIFY">5.&#9;<FONT FACE="CG Times">Solely with respect to the shares
of Common Stock being received pursuant to this Notice of Exercise, the
representations and warranties of the Warrantholder, in its capacity as the
&quot;Purchaser&quot;, contained in the Securities Purchase Agreement are hereby
repeated at and as of the time of delivery hereof and are true and correct in
all respects at and as of the time of delivery hereof.</P>
</FONT><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">6.&#9;The undersigned hereby agrees that the restrictions on
transfer described in Section 6 of the Warrant shall survive any and all
exercises of the Warrant and shall be applicable to any and all of the shares of
Common Stock issued on exercise thereof.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;(Name of Registered
Owner)</P>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P>&#9;&#9;&#9;&#9;&#9;&#9;&#9;(Signature of Registered Owner)</P>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P>&#9;&#9;&#9;&#9;&#9;&#9;&#9;(Street Address)</P>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P>&#9;&#9;&#9;&#9;&#9;&#9;&#9;(City)              (State)              (Zip
Code)</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;Date:  _____________________</P>
<U><P ALIGN="RIGHT">EXHIBIT B</P>
</U><P ALIGN="CENTER">FORM OF NOTICE OF CONVERSION</P>
<P>&#9;To:&#9;Microvision, Inc. (&quot;<U>the Company</U>&quot;)</P>
<DIR>
<DIR>

<P>1.&#9;<FONT FACE="CG Times">The undersigned registered owner irrevocably
elects to surrender the Warrant, dated as of June 22, 2009 (the
&quot;<U>Warrant</U>&quot;), for the number of shares of Common Stock of the
Company (&quot;<U>Common Stock</U>&quot;) as shall be issuable pursuant to the
conversion right provisions of Section 1.2 of the Warrant, in respect of _____
shares of Common Stock underlying the Warrant.</P>

<P>2.&#9;</FONT>Please issue or cause to be issued a certificate or certificates
representing said shares in the name of the undersigned, and return cash to the
undersigned for any fractional shares<FONT FACE="CG Times">.</P>

<P>3.&#9;The undersigned hereby represents and warrants to the Company that it
is the registered and beneficial owner of the portion of the Warrant which is
the subject of this Notice of Conversion.</P>

<P>4.&#9;The undersigned acknowledges that each certificate for Common Stock
issued upon exercise of the Warrant may bear a legend in accordance with Section
2.5 of the Securities Purchase Agreement, dated as of June 22, 2009 by and
between the Company and Max Display Enterprises Limited.</P>

<P>5.&#9;The undersigned hereby agrees that the restrictions on transfer
described in Section 6 of the Warrant shall survive any and all exercises of the
Warrant and shall be applicable to any and all of the shares of Common Stock
issued on exercise thereof.</P>
</FONT><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;(Name of Registered
Owner)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P>&#9;&#9;&#9;&#9;&#9;&#9;(Signature of Registered Owner)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P>&#9;&#9;&#9;&#9;&#9;&#9;(Street Address)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;(City)
(State)              (Zip Code)</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;Date:_____________________</P>
<U><P ALIGN="RIGHT">EXHIBIT C</P>
</U><P ALIGN="CENTER">FORM OF TRANSFER NOTICE</P>
<P>To:&#9;Microvision, Inc. (&quot;<U>the Company</U>&quot;)</P>

<P ALIGN="JUSTIFY">FOR VALUE RECEIVED, the undersigned Warrantholder of the
attached Warrant hereby sells, assigns and transfers unto the person or persons
named below the right to purchase shares of the Common Stock of [
] evidenced by the attached Warrant. </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Date:                          </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">  </P>
<P ALIGN="JUSTIFY">Name of Registered Warrantholder</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY">By:&#9; &#9; </P>
<P ALIGN="JUSTIFY">Name:</P>
<P ALIGN="JUSTIFY">Title:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Transferee Name and Address:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">______________________________________________________</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">______________________________________________________</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">______________________________________________________</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
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