Exhibit 1
---------
COMMON STOCK PURCHASE AGREEMENT
between
MICROFIELD GRAPHICS, INC.
and
STEELCASE INC.
March 25, 1999
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock................................ 1
1.1 Sale and Issuance of Common Stock.................... 1
1.2 Closing.............................................. 1
1.3 Further Covenants; Price Limitation on Future Sales.. 1
2. Other Agreements.......................................... 1
2.1 Amended Voting Agreement............................. 1
2.2 Amended Registration Rights Agreement................ 1
3. Representations and Warranties of the Company............. 1
3.1 Organization, Good Standing and Qualification........ 2
3.2 Authorization........................................ 2
3.3 Capitalization....................................... 2
3.4 Valid Issuance of Common Stock....................... 2
3.5 Absence of Conflicting Agreements; Consents.......... 2
3.6 Governmental Consents................................ 3
3.7 SEC and Other Reports................................ 3
3.8 Litigation........................................... 3
3.9 No Finders........................................... 3
3.10 Use of Proceeds ..................................... 3
4. Representations and Warranties of Investor................ 4
4.1 Organization, Good Standing and Qualification........ 4
4.2 Authorization........................................ 4
4.3 Absence of Conflicting Agreements; Consents.......... 4
4.4 Litigation........................................... 4
4.5 Purchase Entirely for Own Account.................... 4
4.6 Disclosure of Information............................ 5
4.7 Investment Experience................................ 5
4.8 Accredited Investor.................................. 5
4.9 Restricted Securities................................ 5
4.10 Legends.............................................. 5
4.11 No Finders........................................... 6
4.12 Affiliate Status..................................... 6
5. Conditions of Investor's Obligations at Closing........... 6
5.1 Representations and Warranties....................... 6
5.2 Qualifications....................................... 6
5.3 Proceedings and Documents............................ 6
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5.4 Amending Voting Agreement............................ 6
5.5 Amended Registration Rights Agreement................ 7
6. Conditions of the Company's Obligations at Closing........ 7
6.1 Representations and Warranties....................... 7
6.2 Qualifications....................................... 7
6.3 Proceedings and Documents............................ 7
6.4 Payment of Purchase Price............................ 7
6.5 Amended Voting Agreement............................. 7
6.6 Amended Registration Rights Agreement................ 7
7. Miscellaneous............................................. 8
7.1 Survival of Warranties............................... 8
7.2 Successors and Assigns............................... 8
7.3 Governing Law........................................ 8
7.4 Counterparts......................................... 8
7.5 Titles and Subtitles................................. 8
7.6 Notices.............................................. 8
7.7 Amendments and Waivers............................... 8
7.8 Severability......................................... 9
7.9 Entire Agreement..................................... 9
Schedule 2 Executive Officers and Directors
EXHIBIT A Amended and Restated Share Ownership, Voting and Right of First
Refusal Agreement
EXHIBIT B Amendment No. 1 to Registration Rights Agreement
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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of March 25, 1999, by and
among Microfield Graphics, Inc. d/b/a SoftBoard, an Oregon corporation (the
"Company"), and Steelcase Inc., a Michigan corporation ("Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, Investor agrees to purchase at the Closing, and
the Company agrees to sell and issue to Investor at the Closing, 444,445 shares
of the Company's Common Stock (the "Purchased Stock") for a purchase price of
$1,000,001.25.
1.2 Closing. The purchase and sale of the Purchased Stock shall
take place at the offices of Stoel Rives LLP, 000 XX Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx, at 10:00 A.M. on March 25, 1999, or at such other time and
place as the Company and Investor mutually agree upon orally or in writing
(which time and place are designated as the "Closing"). At the Closing, the
Company shall deliver to Investor a certificate representing the Purchased Stock
against payment of the purchase price therefor by wire transfer.
1.3 Further Covenants; Price Limitation on Future Sales. Subject to
the fiduciary duties of the officers and directors of the Company, for six
months following the Closing the Company shall not, without the prior approval
of Investor, sell any shares of the Company's Common Stock in a private sale to
a third party for a price per share less than 90% of the last trade price of the
Company's Common Stock on the Nasdaq SmallCap Market on the date the price per
share for such sale is determined.
2. Other Agreements.
2.1 Amended Voting Agreement. The Investor, the Company, and the
executive officers and directors named in Schedule 2 shall enter into the
Amended and Restated Share Ownership, Voting and Right of First Refusal
Agreement, in the form attached as Exhibit A (the "Amended Voting Agreement").
2.2 Amended Registration Rights Agreement. The Company agrees to
grant Investor registration rights as set forth in Amendment No.1 to the
Registration Rights Agreement attached as Exhibit B (the "Amended Registration
Rights Agreement").
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to Investor that:
3.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Oregon and has all requisite corporate 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 the
failure to so qualify would have a material adverse effect on its business or
properties.
3.2 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the Amended Voting
Agreement and the Amended Registration Rights Agreement, the performance of all
obligations of the Company hereunder and thereunder, and the authorization,
issuance, sale and delivery of the Purchased Stock has been taken or will be
taken prior to the Closing, and this Agreement, the Amended Voting Agreement and
the Amended Registration Rights Agreement constitute valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Amended Registration Rights Agreement may be limited by applicable federal
or state securities laws.
3.3 Capitalization. The authorized capital of the Company consists of:
(a) Common Stock. Twenty-five million (25,000,000) shares of
Common Stock, 3,686,900 of which were issued and outstanding as of February 28,
1999.
(b) Preferred Stock. Ten million (10,000,000) shares of
undesignated Preferred Stock, none of which are issued or outstanding.
3.4 Valid Issuance of Common Stock. The Purchased Stock, when
issued, sold and delivered in accordance with the terms of this Agreement for
the consideration expressed herein, will be duly and validly issued, fully paid,
and nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Amended Voting Agreement and
the Amended Registration Rights Agreement and under applicable state and federal
securities laws.
3.5 Absence of Conflicting Agreements; Consents. The execution and
delivery of this Agreement, the Amended Voting Agreement and the Amended
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby will not conflict in any material respect with
or result in a material breach of any terms or provisions of, or constitute a
material default under (a) the Articles of Incorporation or Bylaws of the
Company; (b) any note, bond, mortgage, indenture, license, lease, contract,
commitment, agreement or other instrument or obligation to which the Company is
a party or
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by which the Company or any of its properties may be bound; or (c)
any statute, order, writ, injunction, decree, rule or regulation applicable to
the Company or any of its properties. No consent, approval, authorization,
declaration or other order of, or registration or filing with, any court or
regulatory authority or any third person is required for the valid execution,
delivery and performance of this Agreement, the Amended Voting Agreement or the
Amended Registration Rights Agreement by the Company, or its consummation of the
transactions contemplated hereby or thereby, except such consents, approvals,
authorizations, declarations, registrations or filings that have already been
obtained or made, or those disclosed by Investor pursuant to this Agreement.
3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement except if required, qualifications or filings
under the Securities Act and applicable Blue Sky laws, which qualifications and
filings will be obtained or made and will be effective within the period
required by law.
3.7 SEC and Other Reports. The Company has heretofore made
available to Investor complete copies of all of registration statements, reports
and proxy statements, including amendments thereto, filed by the Company with
the Securities and Exchange Commission (the "SEC") since January 1, 1998 and
prior to the date of this Agreement (collectively the "SEC Documents"). None of
the SEC documents, as of the date filed, contain any untrue statement of any
material fact or omit to state a material fact necessary to make the statements
contained in them not misleading. The Company has also furnished Investor with
a copy of its year-end earnings release for 1998, including its income statement
and balance sheet, for the fiscal year ended January 2, 1999.
3.8 Litigation. There is no action, proceeding or suit pending,
or, to the Company's knowledge, threatened, that questions the validity of this
Agreement, the Amended Voting Agreement or the Amended Registration Rights
Agreement or that would prevent or materially hinder the consummation of the
transactions contemplated hereby or thereby.
3.9 No Finders. The Company has not employed any broker, finder,
agent or investment banker, dealt with anyone purporting to act in that capacity
or agreed to pay any brokerage fee, finder's fee or commission with respect to
the transactions contemplated by this Agreement.
3.10 Use of Proceeds. The net proceeds to be received by the Company
from the sale of the Purchased Stock pursuant to this Agreement shall be used by
the Company for working capital and other general corporate purposes and not for
dividends, stock buybacks (except for repurchases from employees at the original
purchase price), or bonuses inconsistent with prior practices for a period of
one year from the date of Closing.
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4. Representations and Warranties of Investor. Investor hereby
represents and warrants that:
4.1 Organization, Good Standing and Qualification. Investor is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Michigan and has all requisite corporate power and authority to
carry on its business as now conducted. Investor is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business or properties.
4.2 Authorization. Investor has full corporate power and authority
to enter into this Agreement, the Amended Voting Agreement and the Amended
Registration Rights Agreement, and each such Agreement constitutes its valid and
legally binding obligation, enforceable in accordance with their respective
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Amended Registration Rights Agreement may be limited by applicable federal
or state securities laws.
4.3 Absence of Conflicting Agreements; Consents. The execution and
delivery of this Agreement, the Amended Voting Agreement and the Amended
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby will not conflict in any material respect with
or result in a material breach of any terms or provisions of, or constitute a
material default under (a) the Articles of Incorporation or Bylaws of Investor;
(b) any note, bond, mortgage, indenture, license, lease, contract, commitment,
agreement or other instrument or obligation to which Investor is a party or by
which Investor or any of its properties may be bound; or (c) any statute, order,
writ, injunction, decree, rule or regulation applicable to Investor or any of
its properties. No consent, approval, authorization, declaration or other order
of, or registration or filing with, any court or regulatory authority or any
third person is required for the valid execution, delivery and performance of
this Agreement and the Amended Voting Agreement by Investor or its consummation
of the transactions contemplated hereby or thereby, except such consents,
approvals, authorizations, declarations, registrations or filings that have
already been obtained or made, or those disclosed by the Company pursuant to
this Agreement.
4.4 Litigation. There is no action, proceeding or suit pending,
or, to Investor's knowledge, threatened, that questions the validity of this
Agreement, the Amended Voting Agreement or the Amended Registration Rights
Agreement or that would prevent or materially hinder the consummation of the
transactions contemplated hereby or thereby.
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4.5 Purchase Entirely for Own Account. This Agreement is made with
Investor in reliance upon such Investor's representation to the Company, which
by Investor's execution of this Agreement Investor hereby confirms, that the
Purchased Stock will be acquired for investment for Investor's own account, not
as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same. By executing this
Agreement, Investor further represents Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Purchased Stock.
4.6 Disclosure of Information. Investor believes it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the Purchased Stock. Investor further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Purchased Stock and the business,
properties and financial condition of the Company. The foregoing, however, does
not limit or modify the representations and warranties of the Company in Section
3 of this Agreement or the right of Investor to rely thereon.
4.7 Investment Experience. Investor is an investor in securities
of companies in the development stage and acknowledges that it is able to fend
for itself, can bear the economic risk of its investment, and has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Purchased Stock. Investor also
represents it has not been organized for the purpose of acquiring the Purchased
Stock.
4.8 Accredited Investor. Investor is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
4.9 Restricted Securities. Investor understands that the Purchased
Stock it is purchasing is characterized as a "restricted security" under the
federal securities laws inasmuch as it is being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances. In this connection, Investor represents that it is familiar with
SEC Rule 144, as presently in effect, and understands the resale limitations
imposed thereby and by the Act.
4.10 Legends. It is understood that the certificates evidencing
the Purchased Stock may bear one or all of the following legends:
(a) "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
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AMENDED (THE "ACT"), OR ANY APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE
SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
(A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING THESE SECURITIES
OR (B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE
SECURITIES (CONCURRED IN BY LEGAL COUNSEL FOR THE COMPANY) STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION OR THE COMPANY OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION."
(b) A legend stating that the Purchased Stock is subject to the
Amended Voting Agreement.
4.11 No Finders. Investor has not employed any broker, finder,
agent or investment banker, dealt with anyone purporting to act in that capacity
or agreed to pay any brokerage fee, finder's fee or commission with respect to
the transactions contemplated by this Agreement.
4.12 Affiliate Status. Investor acknowledges that it is considered
an "affiliate" of the Company under the Federal Securities Laws and as such,
resales of shares of the Company's Common Stock owned by it are subject to
certain limitations, including the SEC's Rule 144.
5. Conditions of Investor's Obligations at Closing. The obligations of
Investor under subsection 1.1 of this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions, the waiver of
which shall not be effective against Investor if it does not consent thereto:
5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
5.2 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
5.3 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Investor, and it shall have received all
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such counterpart original and certified or other copies of such documents as it
may reasonably request.
5.4 Amended Voting Agreement. The Company, the Investor and the
Company's executive officers and directors named in Schedule 2 shall have
entered into the Amended Voting Agreement.
5.5 Amended Registration Rights Agreement. The Company and the
Investor shall have entered into the Amended Registration Rights Agreement.
6. Conditions of the Company's Obligations at Closing. The obligations
of the Company to Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by Investor:
6.1 Representations and Warranties. The representations and
warranties of Investor contained in Section 4 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
6.2 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
6.3 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Company, and it shall have received all such counterpart
original and certified or other copies of such documents as it may reasonably
request.
6.4 Payment of Purchase Price. Investor shall have delivered to
the Company at the Closing the purchase price for the Purchased Stock.
6.5 Amended Voting Agreement. The Company, the Investor and the
Company's executive officers and directors named in Schedule 2 shall have
entered into the Amended Voting Agreement.
6.6 Amended Registration Rights Agreement. The Company and the
Investor shall have entered into the Amended Registration Rights Agreement.
7. Miscellaneous.
7.1 Survival of Warranties.The warranties, representations and
covenants of the Company and Investor contained in or made pursuant to this
Agreement shall survive the
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execution and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of the Investor or the Company.
7.2 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Purchased Stock). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Oregon, exclusive of choice of law
rules.
7.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission or nationally recognized overnight
courier service or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
7.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by the written consent of the Company and Investor. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon the holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities are convertible),
any future holder of all such securities, and the Company.
7.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and
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the balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
7.9 Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE COMPANY:
MICROFIELD GRAPHICS, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Xxxx X. Xxxxxx
President and Chief Executive Officer
Address: 0000 XX Xxxxxx Xxxx
Xxxxxxxx, XX 00000
INVESTOR:
STEELCASE INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
Address: 000 - 00xx Xxxxxx, X.X.
Xxxxx Xxxxxx, XX 00000
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SCHEDULE 2
Executive Officers and Directors
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
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