SB-2/A: Optional form for registration of securities to be sold to the public by small business issuers

Published on August 14, 1996




EXHIBIT 10.13


HALO


Confidential

EXCLUSIVE LICENSE AGREEMENT
Between
The University of Washington
and
MICRO VISION, INC.

This AGREEMENT is entered into as of the 3 day of March, 1994 (hereinafter the
"EFFECTIVE DATE" by and between the University of Washington, a public
institution of higher education with offices at Seattle, Washington 98195,
hereinafter referred to as "UW" and MICRO VISION, INC. having a place of
business at 6500 Columbia Center 701 Fifth Avenue Seattle, WA 98104-7003
(hereinafter "MICRO VISION").

Whereas, UW has sole ownership of UW PROPRIETARY MATTER (defined below) deriving
from development of a HALO Display ("HALO", and further referenced as "UW
INVENTION", below) and thus is the sole licensor of LICENSED SUBJECT MATTER
(defined below);

WHEREAS, UW desires that the HALO be used as soon as possible in the public
interest, and to this end desires to transfer the HALO to a company capable of
commercially exploiting the HALO.

WHEREAS, MICRO VISION desires, for the purpose of commercial exploitation, to
acquire a license to certain UW PATENT rights in and to the HALO and to receive
certain TECHNICAL INFORMATION relating to the HALO.

NOW, THEREFORE, in consideration of the above and the mutual covenants, terms,
and conditions set forth below, UW and MICRO VISION agree as follows:

1.0 DEFINITIONS

1.1 Terms defined in this Article, and parenthetically defined elsewhere in
this AGREEMENT, shall throughout this AGREEMENT have the meaning provided.
Defined terms may be used in the singular or in the plural, as sense shall
require. Terms defined in this Article and throughout this AGREEMENT will be
printed in capital letters for ease of reference.

1.2 "PARTIES" means UW (as the Licensor hereto) and MICRO VISION (as the
Licensee hereto), including AFFILIATES, successors or assigns as permitted by
this AGREEMENT, and "PARTY" means either one of them as the context where such
term is used indicates.

1.3 "AFFILIATE" means any corporation, company, new start-up company, or other
business entity (including any joint venture, partnership, form of association
or otherwise) and directly or indirectly controlling, controlled by, or under
common control with MICRO VISION; "control" of an entity for purposes of this
definition shall


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mean having the right to direct or to appoint or remove a majority or more of
the members of the board of directors (or their equivalent) or management
(including the president, chairman of the board, or general or managing partner
as applicable) of said entity, by contract, agreement, provisions in the
applicable articles or bylaws, ownership of or holding rights to vote sufficient
numbers of voting shares, securities or other rights entitled to vote for,
appoint, or remove the same, or having such right to so direct or appoint the
same by applicable law.

1.4 "This AGREEMENT" means this License Agreement as amended in writing by the
PARTIES from time to time.

1.5 "EFFECTIVE DATE" means the date referenced in the Preamble above. The
EFFECTIVE DATE takes effect upon signature of this AGREEMENT by the PARTIES
hereto.

1.6 "TECHNICAL INFORMATION" shall mean any technical facts, data, or advice,
written or oral (in the form of information contained in UW PATENTS and UW
PATENT applications, reports, letters, drawings, specifications, testing
procedures, training and operational manuals, bills of materials, photographs
and the like) relating to the HALO and owned or in the possession of UW.

1.7 "UW INVENTION" means the "HALO Display" as described and disclosed in UW's
Office of Technology Transfer (OTT) file #02-93-13.

1.8 "UW PATENTS" means all U.S. and foreign utility and design Patents and
Patent applications (including any divisionals, continuations, continuations
in part, reexaminations, extensions, renewals, or reissues thereof), design
registrations, utility models and similar rights and applications therefor as
part of the HALO Display.

1.9 "COPYRIGHTS" means all registered and unregistered statutory copyright
rights and applications for registration thereof and all common law COPYRIGHTS.

1.10 "UW PROPRIETARY MATTER" means any combination of COPYRIGHTABLE or
COPYRIGHTED work, UW INVENTIONS, UW PATENTS, and TECHNICAL INFORMATION.

1.11 "LICENSED SUBJECT MATTER" shall mean any subject matter, including but not
limited to products and processes, covered in whole or in part by the UW
PROPRIETARY MATTER for the FIELD OF USE specified below and in the TERRITORY in
which said subject matter is made, used, or sold; and any product incorporating
any TECHNICAL INFORMATION.

1.12 "FIELDS OF USE" shall mean all possible uses for the HALO technology.

1.13 "TERRITORY" shall mean world wide territory.

1.14 "CONFIDENTIAL INFORMATION" means confidential information or data
disclosed to a PARTY (the "RECEIVING PARTY") in connection with HALO by the
other PARTY (or, with respect to MICRO VISION, by its AFFILIATE) (the
"DISCLOSING PARTY"), including without limitation trade secrets, algorithms,
processes, formulae, programming,


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TECHNICAL INFORMATION, programming concepts and methods, source code and
accompanying comments and documentation which allow understanding thereof,
product specifications and procedures of operation, and all records, models,
prototypes, other media containing or disclosing such information or data,
EXCEPT any such information that (i) is already or becomes generally
available to the public free from any confidentiality obligations through no
breach of any confidentiality obligation under this AGREEMENT by the
RECEIVING PARTY (provided, however, that information shall not be deemed
generally available to the public merely because any part of that information
is embodied in general disclosures or because individual features or
components, or a combination thereof, are now or become generally available
to the public), (ii) is already known by the RECEIVING PARTY (or, with
respect to MICRO VISION, by its AFFILIATE), without any confidentiality
obligation to the DISCLOSING PARTY, prior to receipt from the DISCLOSING
PARTY, (iii) is independently developed by the RECEIVING PARTY (or, with
respect to MICRO VISION, by its AFFILIATE), without use of CONFIDENTIAL
INFORMATION of the DISCLOSING PARTY, (iv) is independently disclosed to the
RECEIVING PARTY (or, with respect to MICRO VISION, to its AFFILIATE) by a
source other than the DISCLOSING PARTY which source is under no obligation to
maintain the confidentiality thereof (provided that the RECEIVING PARTY shall
not disclose any such information regardless of the source if the RECEIVING
PARTY knows or has reason to know that such information should be kept
confidential), or (v) is required by a court or governmental agency to be
disclosed to it by the RECEIVING PARTY (or, with respect to MICRO VISION, by
its AFFILIATE) in connection with any proceeding over which such agency or
authority has jurisdiction, provided that the RECEIVING PARTY (or, with
respect to MICRO VISION, its AFFILIATE) shall use its best efforts to obtain
confidential treatment of such information by the court or agency and shall
accompany its disclosure to the court or agency with written notice of the
DISCLOSING PARTY's proprietary rights therein.

2.0 GRANT

2.1 UW hereby grants to MICRO VISION, and MICRO VISION accepts, an exclusive
license, with the right to sublicense during the term of exclusivity, to make,
use, and sell LICENSED SUBJECT MATTER in the TERRITORY and for the FIELD OF USE.

2.2 The license granted above is subject to a reserved non-exclusive license
in UW and the Washington Technology Center (a state institution headquartered on
the UW Campus) to make, have made, and use products, processes, or other subject
matter covered by UW PROPRIETARY MATTER for non-commercial research and
instructional purposes in all fields of use.

3.0 SUBLICENSING

3.1 During the term of exclusivity of the license granted in this AGREEMENT,
MICRO VISION shall have the right to grant sublicenses to UW PROPRIETARY MATTER
in the FIELD OF USE and for the TERRITORY without any additional compensation
due to UW beyond the compensation set forth in Article 7 for the license granted
under this AGREEMENT.


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3.2 Any and all sublicenses in and to UW PROPRIETARY MATTER granted by MICRO
VISION shall not be subject to prior approval of UW.

3.3 MICRO VISION agrees, at the request of UW, to forward to UW a list of any
and all sublicensees pertaining to UW PROPRIETARY MATTER.

4.0 TECHNICAL INFORMATION

4.1 UW agrees to disclose to MICRO VISION any other TECHNICAL INFORMATION,
whether confidential or non-confidential, not obtained by UW under conditions of
confidentiality to others, in UW's possession as of the EFFECTIVE DATE or during
the term of this AGREEMENT that in UW's judgment is necessary or valuable to the
commercial exploitation of LICENSED SUBJECT MATTER.

4.2 MICRO VISION agrees to keep any TECHNICAL INFORMATION received from UW and
identified by UW as confidential under conditions of strict secrecy and to use
the same degree of care MICRO VISION would for its own confidential TECHNICAL
INFORMATION, but no less than reasonable care, to protect UW's confidential
TECHNICAL INFORMATION from disclosure to unauthorized third parties.

5.0 DILIGENCE

5.1 MICRO VISION, during the term of this AGREEMENT, shall utilize its best
efforts in proceeding with the development, manufacture, sale, and other
commercial exploitation of UW PROPRIETARY MATTER, and in creating a supply and
demand for LICENSED SUBJECT MATTER.

6.0 INVENTIONS, PATENT PROSECUTION AND COST RECOVERY

6.1 MICRO VISION shall pay all reasonable costs associated with the filing and
prosecution of any UW PATENT application which it has properly requested UW to
make, MICRO VISION agrees to pay invoices for such fees and costs submitted by
UW within sixty (60) days of receipt of any such invoice from UW.

6.2 MICRO VISION hereby requests UW, pursuant to Paragraph 6.1 of this
Agreement, to proceed with drafting and filing a patent application for the HALO
Display. UW hereby agrees to take diligent efforts to file such a patent
application within Six (6) months from the EFFECTIVE DATE hereof.

6.3 UW, in consultation with MICRO VISION, shall have the overall control
of the selection of counsel, preparation, filing, prosecution and
maintenance, of any applications for UW PATENTS or COPYRIGHT registrations
for UW PROPRIETARY MATTERS, and examinations thereof, of any validity,
opposition or re-examination proceedings related thereto, and of the
settlement or disposition of all matters related thereto (including the
renewal, defense or assertion thereof); UW shall have no liability or
obligation to MICRO VISION with respect to its exercise of discretion or
handling of such matters, except to make such reports and respond to MICRO
VISIONS'S comments or requests, as may be appropriate. UW and Micro Vision
agree to meet and confer prior


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to the selection of any invention disclosure, filing of new patents or other
material patenting decisions.

6.4 UW shall keep MICRO VISION informed of the status of any and all UW
PATENTS and UW PATENT applications comprising UW'S PATENTS, and shall provide
MICRO VISION with the opportunity to advise UW on courses of action respecting
the filing of UW PATENT applications relating to the UW INVENTION, prosecution
of UW PATENT applications, and management of UW PATENTS.

6.5 In the event that MICRO VISION determines that it does not desire to
reimburse UW, or fails for any reason to reimburse UW for UW PATENT fees
incurred under Paragraph 6.1 above, it will promptly notify UW of its decision
and UW shall thereafter have the sole and exclusive right to file and/or
maintain any such UW PATENT and/or UW PATENT application, either foreign or
domestic, at its own expense; and, any UW PATENT issued or issuing therefrom
shall not be included among THE LICENSED SUBJECT MATTER. MICRO VISION and UW
agree to cooperate in filing UW PATENT applications in UW's name on any such UW
INVENTION and/or improvement where MICRO VISION declines to proceed in its own
name and at its own expense.

7.0 LICENSING FEES

7.1 In consideration for the grant of this License, MICRO VISION agrees to pay
to UW a non-refundable license issue fee of Twenty Five Thousand Dollars
($25,000) due and payable as of the EFFECTIVE DATE.

7.2 In further consideration for the grant of this License, MICRO VISION
agrees to pay the following non-refundable payments of cash and equity in MICRO
VISION, based upon patent milestone dates of the items recited below:

a. On filing a, or, if there is more than one, on filing the first HALO
Display patent application, MICRO VISION agrees to pay to UW Seventy Five
Thousand Dollars ($75,000) and grant equity to UW of One Hundred Thousand
(100,000) shares of stock in MICRO VISION. MICRO VISION'S obligation
under this Paragraph 7.2 (a) extends only to the first such HALO Display
patent application to be filed, even though multiple applications may be
filed. MICRO VISION agrees to issue the stock in the name of UW and in
the name of the inventor of HALO as follows:

UW Twenty Thousand Shares (20,000)
Thomas A. Furness III Eighty Thousand Shares (80,000)

b. On issuance of a, or, if there is more than, the first to issue HALO
Display patent application, MICRO VISION agrees to pay One Hundred
Thousand Dollars ($100,000) and grant equity of Two Hundred Thousand
shares of stock in MICRO VISION. MICRO VISION'S obligation under this
Paragraph 7.2(b) extends only to the first such HALO Display patent
application to be issued, even though multiple applications may be issued.
MICRO VISION agrees to issue the stock in the name of UW and in the name
of the inventor of HALO as follows:


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UW Forty Thousand Shares (40,000)
Thomas A. Furness III One Hundred Sixty Thousand Shares (160,000)

7.3 All payments required under this AGREEMENT shall be made in U.S. dollars
by check or money order payable to the University of Washington, and delivered
to UW as specified in this AGREEMENT; or, if so directed in writing by UW, in
such currency, form, and to such account as UW may designate.

8.0 TERM AND TERMINATION OF EXCLUSIVITY

8.1 The term for the exclusive license to UW PROPRIETARY MATTER shall extend
from the EFFECTIVE DATE of this AGREEMENT to thirty (30) days written notice by
UW for cause. Cause shall only exist if MICRO VISION fails to pay licensing
fees identified in Paragraph 7 above or fails to reimburse for patent
prosecution costs as identified in Paragraph 6 above. UW's option to terminate
exclusivity shall be in addition to any and all other legal remedies which UW
may have for the enforcement of any and all terms hereof, and does not in any
way limit any other legal remedy UW may have.

8.2 Upon expiration or termination of exclusivity:

a) the license granted herein shall become non-exclusive and shall remain
in effect for the duration of this AGREEMENT;

b) MICRO VISION shall have no further right to grant sublicenses;

c) MICRO VISION shall no longer have first right to bring suit for
infringement of UW PROPRIETARY MATTER; and

d) MICRO VISION shall have no further obligation to reimburse UW for any
fees or costs incurred by UW after expiration or termination of
exclusivity and related to UW PROPRIETARY MATTER.

9.0 TERM AND TERMINATION OF AGREEMENT

9.1 The term of this AGREEMENT shall commence on the EFFECTIVE DATE and shall
continue until the last of UW PROPRIETARY MATTER expires, unless sooner
terminated in accordance with the provisions set forth in this AGREEMENT.

9.2 Upon failure of UW or MICRO VISION to cure a material breach of this
AGREEMENT within thirty (30) days after a written demand for performance, the
notifying PARTY shall have the right at any time to terminate this AGREEMENT by
written notice to the other PARTY.

9.3 MICRO VISION shall have a right to terminate this AGREEMENT with or
without cause, upon ninety (90) days prior written notice to UW.


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9.4 In the event that no UW PATENTS covering LICENSED SUBJECT MATTER have been
filed within Five (5) years from the EFFECTIVE DATE, or, if filed, that no UW
PATENTS remain pending in or issued from any country's patent office, then
following Five Years from the EFFECTIVE DATE either PARTY may terminate this
AGREEMENT following ninety (90) days written notice of such intent to terminate
to the other PARTY.

9.5 The provisions under which this AGREEMENT may be terminated shall be in
addition to any and all other legal remedies which either PARTY may have for the
enforcement of any and all terms hereof, and do not in any way limit any other
legal remedy such PARTY may have.

9.6 Termination of this AGREEMENT shall terminate all rights and licenses
granted to MICRO VISION relating to UW PROPRIETARY MATTER.

9.7 Termination by UW or MICRO VISION under the options set forth in this
AGREEMENT shall not relieve MICRO VISION from any financial obligation to UW
accruing prior to or after termination or from performing according to any and
all other provisions of this AGREEMENT expressly agreed to survive termination.

9.8 In the event that there remain no valid, enforceable, and infringed UW
PROPRIETARY MATTER covering LICENSED SUBJECT MATTER, then following termination
MICRO VISION and any sublicensees shall have no further obligation to pay
royalties thereon or to account to UW therefor.

10.0 NOTICES

10.1 Any notice or other communication required or permitted to be given by
either PARTY hereto shall be deemed to have been properly given and be effective
upon the date of delivery if delivered in writing to the respective addresses
set forth below, or to such other address as either PARTY shall designate by
written notice given to the other PARTY. If notice or other communication is
given by facsimile transmission, said notice shall be confirmed by prompt
delivery of the hardcopy original.

Address and Telephone:


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FOR UW FOR MICRO VISION, INC.

FOR CONFIDENTIALITY, PATENTING OR MICRO VISION, Inc.
LICENSING MATTERS: 6500 Columbia Center
The University of Washington 701 Fifth Avenue
Office of Technology Transfer Seattle, WA 98104-7003
Mail Stop JD-50
Seattle, WA 98195 (206) 587-3780

PHYSICAL ADDRESS: Attn: Mr. David Hunter, Executive
1107 N.E. 45th Street N.E. Vice President
Suite 200
Seattle, WA 98105 w/copy Mr. James Biagi
Monahan & Robinson, P.S.
FOR TECHNICAL MATTERS: 6500 Columbia Center
The Human Interface Technology 701 Fifth Avenue
Laboratory Seattle, WA 98104-7003
Washington Technology Center
Mail Stop FJ-15
Seattle, WA 98195

11.0 PATENT MARKING

11.1 MICRO VISION shall mark, and shall require any sublicensee to mark, any
and all material forms of LICENSED SUBJECT MATTER or packaging pertaining
thereto made and sold by MICRO VISION (and/or by its sublicensees) with an
appropriate patent marking identifying the pendency of any U.S. patent
application and /or any issued U.S. or foreign patent forming any part of UW
PROPRIETARY MATTER.

12.0 PATENT INFRINGEMENT

12.1 Each PARTY shall promptly inform the other PARTY of any alleged
infringement of UW PROPRIETARY MATTER by a third party, and provide any
available evidence thereof.

12.2 Subject to Paragraph 12.6 below, during the term of exclusivity of the
license granted hereunder, MICRO VISION shall have the first right to settle
any alleged infringement of UW PROPRIETARY MATTER by securing cessation of
the infringement, instituting suit against the infringer, or entering into a
sublicensing agreement in and to relevant UW PATENTS in UW PROPRIETARY
MATTER. To enjoy said first right, MICRO VISION must initiate bona fide
action to settle any alleged infringement within ninety (90) days of learning
of said infringement. After MICRO VISION has recovered its reasonable
attorney's fees and other expenses directly related to any action, suit, or
settlement for infringement of UW PROPRIETARY MATTER, UW and MICRO VISION
shall divide any remaining damages, awards, or settlement proceeds in the
following manner:

UW Forty percent (40%)
MICRO VISION Sixty percent (60%)


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provided, however, any payment by an alleged infringer as consideration for the
grant of a sublicense shall be handled according to the royalty provisions for
sublicenses set forth in this AGREEMENT.

12.3 If MICRO VISION chooses to institute suit against an alleged infringer
during the term of exclusivity as provided in this AGREEMENT, MICRO VISION may
do so in UW's name (if required by law, otherwise, in MICRO VISION's name) but
at MICRO VISION'S sole expense, and UW shall, but at MICRO VISION's expense for
UW's direct associated expenses, fully and promptly cooperate and assist MICRO
VISION in connection with any such suit. Any and all damages, awards, or
settlement proceeds arising from such a MICRO VISION-initiated action shall be
MICRO VISION's.

12.4 If MICRO VISION fails, within ninety (90) days of learning of an alleged
infringement, to secure cessation of the infringement, institute suit against
the infringer, or provide to UW satisfactory evidence that MICRO VISION is
engaged in bona fide negotiation for the acceptance by infringer of a sublicense
in and to relevant UW PATENTS in UW PROPRIETARY MATTER, UW upon written notice
to MICRO VISION may assume full right and responsibility to secure cessation of
the infringement, institute suit against the infringer, or secure acceptance of
a sublicense from MICRO VISION in and to relevant UW PATENTS in UW PROPRIETARY
MATTER, approval for which sublicense MICRO VISION shall not unreasonably
withhold.

12.5 If UW in accordance with the terms and conditions of this AGREEMENT
chooses to institute suit against an alleged infringer, UW may bring such suit
in its own name (or, if required by law, in its and MICRO VISION'S name) and at
its own expense, and MICRO VISION shall, but at UW's expense for MICRO VISION"s
direct associated expenses, fully and promptly cooperate and assist UW in
connection with any such suit. Any and all damages, awards, or settlement
proceeds arising from such a UW-initiated action shall be UW's.

12.6 Neither MICRO VISION nor UW is obligated under this AGREEMENT to
institute a suit against an alleged infringer of UW PROPRIETARY MATTER.

12.7 Prior to making a claim of infringement or commencing any litigation
regarding infringement as provided for in this Article, MICRO VISION shall
obtain prior approval of UW, and such approval of UW shall not be unreasonably
withheld. Prior to settling a claim of infringement or settling any litigation
regarding infringement as provided for in this Article, MICRO VISION shall
obtain prior approval of UW, and such approval of UW shall not be unreasonably
withheld.

13.0 PATENT VALIDITY

13.1 If any claim challenging the validity or enforceability of any of LICENSED
SUBJECT MATTER shall be brought against MICRO VISION, MICRO VISION shall
promptly notify UW, UW, at its option, shall have the right, within thirty (30)
days after notification by MICRO VISION of such action, to intervene and take
over the sole defense of the claim at UW's expense.


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13.2 If MICRO VISION challenges the validity or enforceability of any of UW
PATENTS, MICRO VISION agrees not to suspend any payments due UW until such time
as that UW PATENT is determined to be invalid or unenforceable by final judgment
of a court of competent jurisdiction from which no appeal can be or is taken.

14.0 USE OF NAMES

14.1 UW and MICRO VISION each agree that they will not use the name, trademark,
or other identifier of the other for any advertising promotion, publicity or
commercially related purposes except:

a) with advance written approval of the other PARTY;

b) to the extent required by UW Boards, UW Committees, UW policies and
procedures or by law, UW may indicate that this AGREEMENT exists, may
disclose the terms of the AGREEMENT and may use the names The
University of Washington, or MICRO VISION solely to describe the
relationship between the UW and MICRO VISION established by this
AGREEMENT; or

c) to the extent required by law and in a form previously approved in
writing by the UW, MICRO VISION may indicate in any investment
offering (public or private), including but not limited to sub-
licensing, co-development, etc. circulated by MICRO VISION that this
AGREEMENT exists, may disclose the terms of this AGREEMENT, and may
use the names the University of Washington solely to describe the
relationship between the UW and MICRO VISION established by this
AGREEMENT.

14.2 UW and MICRO VISION each agree that they will not use the name, trademark,
or other identifier of the other for any advertising, promotion, or other
commercially related purpose except as provided for above or except upon advance
written notice and approval to the other PARTY.

15.0 REPRESENTATION AND WARRANTIES

15.1 UW represents and warrants that it has the right to grant the license in
and to UW PATENTS and disclose the TECHNICAL INFORMATION set forth in this
AGREEMENT.

15.2 UW represents that Ms. Margaret Wagner Dahl is authorized to sign this
AGREEMENT on behalf of UW.

15.3 MICRO VISION represents that Mr. David Hunter and Mr. Caisey Harlingten
are authorized to sign THIS AGREEMENT on behalf of MICRO VISION.

15.4 Nothing in this AGREEMENT shall be construed as:


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a) A representation or warranty by UW as to the patentability, validity,
scope, or usefulness of any of UW's PROPRIETARY MATTER; or

b) A representation or warranty by UW that anything made, used, sold, or
otherwise disposed of under any license granted in this AGREEMENT is
or will be free from infringement of patents or other proprietary
rights of third parties;

c) an obligation to bring or prosecute actions or suits against third
parties for infringement.

15.5 MICRO VISION represents that it is a company formed to further develop the
HALO Display into a commercially viable product, and that it is and will take
good faith efforts towards that end. MICRO VISION understands UW's concerns
regarding the competitive atmosphere for products having applications similar to
those of the HALO Display, and agrees with UW's concerns regarding the potential
for a licensee to "buy out" the rights of a licensor in order to keep a product
OFF the market to thereby benefit anothers' product. To this end, MICRO VISION
specifically represents and warrants that at no time will it take actions
intended to defeat, delay, suspend, or otherwise prevent the HALO Display from
attaining commercial viability as soon as reasonably possible.

15.6 Except as expressly set forth in this AGREEMENT, UW MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF ANY UW PROPRIETARY MATTER
OR ANY LICENSED SUBJECT MATTER WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK, OR OTHER RIGHTS. UW MAKES NO REPRESENTATIONS AS TO THE USEFULNESS OF
UW INVENTION(S): IF MICRO VISION CHOOSES TO EXPLOIT IT IN ANY MANNER
WHATSOEVER, MICRO VISION DOES SO AT ITS OWN RISK.

16.0 INDEMNIFICATION

16.1 The PARTIES mutually agree to indemnify, hold harmless and defend the
other's officers, inventors, employees, students, and agents, against any and
all claims, suits, losses, damages, costs, fees and expenses resulting from or
arising out of exercise of this AGREEMENT including, but not limited to, any
damages, losses or liabilities whatsoever with respect to death or injury to any
person and damage to any property arising from the possession, use, or operation
of LICENSED SUBJECT MATTER by MICRO VISION or its sub-licensees or any
customers, users, or others affected by LICENSED SUBJECT MATTER in any manner
whatsoever. This indemnification clause shall survive the termination of this
AGREEMENT.

17.0 APPLICABLE LAWS

17.1 MICRO VISION agrees to abide by all applicable federal, state, and local
laws and regulations pertaining to the management and commercial deployment of
LICENSED SUBJECT MATTER under this AGREEMENT.


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17.2 MICRO VISION understands that UW is subject to United States laws and
federal regulations, including the export of technical data, computer
software, laboratory prototypes and other commodities (including the Arms
Export Control Act, as amended, and the Export Administration Act of 1979),
and that UW's obligations hereunder are contingent upon compliance with
applicable United States laws and regulations, including those for export
control. The transfer of certain TECHNICAL INFORMATION and LICENSED SUBJECT
MATTER may require a license from a cognizant agency of the United States
Government and/or written assurances by MICRO VISION that MICRO VISION shall
not transfer data or commodities to certain foreign countries without prior
approval of an appropriate agency of the United States Government. UW neither
represents that an export license shall not be required, nor that, if
required, it shall be issued.

17.3 The rights and obligations of the PARTIES under this AGREEMENT shall be
governed by and construed in accordance with the laws of the State of
Washington, and, at the option of UW, venue of the legal or equitable action
shall lie in King County, the State of Washington. MICRO VISION hereby accepts
the venue and jurisdiction of the Federal District Court of Western Washington
or King County Superior Court located in Seattle, Washington, at UW's option.

18.0 RESOLUTION OF DISPUTES

18.1 MICRO VISION and UW agree that, in the event of a dispute between them
arising from, concerning, or in any way related to this AGREEMENT, the PARTIES
shall undertake good faith efforts to resolve the matter amicably between
themselves.

18.2 In the event an action is commenced to enforce a PARTY's rights under this
AGREEMENT, the prevailing PARTY in such action shall be entitled to recover its
reasonable costs and attorney's fees.

19.0 GENERAL

19.1 If any provision of this AGREEMENT shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be in any way affected or impaired thereby.

19.2 No provision of this AGREEMENT shall be deemed to have been waived by
any act of or acquiescence on the part of either PARTY. A waiver may only
occur in writing signed by an authorized representative of the PARTY waiving
the particular provision involved. No waiver of any provision of this
AGREEMENT shall constitute waiver of any other provision or of the same
provision on any other occasion.

19.3 No amendment or modification hereof shall be valid or binding upon the
parties unless it is made in writing, cites this AGREEMENT, and signed by duly
authorized representatives of UW and MICRO VISION.


Page 13


19.4 This AGREEMENT constitutes the entire agreement between the PARTIES and,
supersedes all previous representations, understandings, or agreements, oral or
written, between the PARTIES with respect to the subject matter hereof. The
headings in this AGREEMENT are intended solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
AGREEMENT.

19.5 The PARTIES agree that the relationship between the PARTIES established by
this AGREEMENT does not constitute a partnership, joint venture, agency, or a
contract of employment between them.

19.6 Neither PARTY transfer or assign its rights or obligation under this
AGREEMENT, except as provided herein or with the written consent of the other
PARTY. This AGREEMENT shall inure to the benefit of and be binding upon each of
the PARTIES hereto and their respective permitted successors and assigns.

IN WITNESS WHEREOF, UW and MICRO VISION have executed this AGREEMENT, in
duplicate originals but collectively evidencing only a single contract, by their
respective duly authorized officers, on the dates hereinafter written.

FOR MICRO VISION, INC. THE UNIVERSITY OF WASHINGTON

By: /s/ David Hunter By: /s/ Margaret Wagner Dahl
------------------------- --------------------------
Name: David Hunter Name: Margaret Wagner Dahl
Title: Executive Vice President Title: Acting Director, Office of
Technology Transfer

Date: Date: 3/3/94
------------------------- --------------------------

By: /s/ Caisey Harlingten
-------------------------
Name: Caisey Harlingten
Title: Executive Vice President
and Secretary, Treasurer
Date:
-------------------------