EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This Agreement, dated March 19, 1998, is between Microfield
Graphics, Inc. (the "Company") and Steelcase Inc. (the "Investor"). SECTION
8 contains an index of all defined terms.
RECITALS
A. The Company and the Investor are parties to a Common Stock Purchase
Agreement ("Purchase Agreement") dated March 16, 1998, pursuant to which the
Investor is purchasing shares of Common Stock from the Company.
B. The Investor has requested, and the Company is willing to grant to the
Investor, registration rights, all on the terms and conditions of this
Agreement.
AGREEMENT
The parties agree as follows:
1. REQUEST FOR REGISTRATION.
1.1 REQUEST AND NOTICE. If the Company shall receive, at any time after
March 19, 2000, a written request from the Investor (a "Notice") that the
Company file a registration statement under the Securities Act of 1933, as
amended (the "1933 Act"), then the Company shall, subject to the limitations of
this Agreement, use all reasonable efforts to effect as soon as practicable, and
in any event within 90 days of the receipt of such request, the registration
under the 1933 Act of all Registrable Securities which the Investor shall have
specified in the Notice. Any written request from the Investor pursuant to
this SECTION 1.1 shall state that the request is being made pursuant to this
SECTION 1.1. The Company is obligated to effect only two such registrations
pursuant to this SECTION 1.1.
1.2 SHARES INCLUDED. The Investor shall include in such registration at
least 200,000 shares of the Registerable Securities then held by it, or all of
the remaining Registrable Securities then held by the Investor if less.
1.3 UNDERWRITING. If the Investor intends to distribute the Registrable
Securities covered by its request by means of an underwriting, it shall so
advise the Company as a part of its request made pursuant to SECTION 1.1. In
such event, the Investor shall (together with the Company as provided in
SECTION 2.5) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Investor and
reasonably acceptable to the Company. Notwithstanding any other provision of
this SECTION 1, if the underwriter advises the Investor in writing that
marketing factors require a limitation
of the number of shares to be underwritten, then the Investor agrees to limit
the number of shares of Registrable Securities that may be included in the
underwriting.
1.4 DEFERRAL. Notwithstanding the foregoing, (a) the Company shall not be
obligated to effect a registration pursuant to SECTION 1.1 during the period
starting with the date 60 days prior to the Company's good faith estimated date
of filing of, and ending on the date 90 days following the effective date of, a
registration statement pertaining to an underwritten public offering of
securities for the account of the Company (the "Preclusion Period"), provided,
however, that the Company is at all times during such period diligently pursuing
such registration, and further provided that the Company notifies the Investor
at least 20 days before the beginning of the Preclusion Period and (b) if the
Company shall furnish to the Investor a certificate signed by the President or
Chief Financial Officer of the Company stating that, in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company for the Company to comply with such request and it is therefore
essential to defer the filing of the registration statement relating thereto,
the Company shall have the right to defer such filing for a period of not more
than 180 days after receipt of the Investor Notice; provided, however, that the
Company may not exercise this right more than once in any 12-month period.
1.5 REQUIRED REGISTRATION. The Company may, by giving written notice to
the Investor, require that all shares of Registrable Securities then held by the
Investor be registered on Form S-3 or a comparable form under the 1993 Act.
After giving such notice, the Company shall promptly undertake to prepare and
file with the SEC a Form S-3 or comparable registration statement with respect
to all the Investor's Registrable Securities and use its best efforts to cause
such registration to become effective and shall refrain from terminating such
registration statement until the Investor has sold all of its Registrable
Securities registered under such registration statement. The Investor shall
furnish to the Company such information regarding the Investor, the Registrable
Securities held by it, and the intended method of distribution (if any), as
shall be reasonably required to effect the registration pursuant to this
SECTION 1.5. If a registration pursuant to this SECTION 1.5 becomes effective,
all further obligations of the Company to make any registrations under this
Agreement shall automatically terminate.
1.6 COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes to register any of its stock or other securities under the Act
in connection with the public offering of such securities solely for cash (other
than a registration relating solely to the sale of securities to participants in
a Company stock plan or a registration on any form that does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), the
Company shall, at such time, promptly give the Investor written notice of such
registration. Upon the written request of the Investor given within ten (10)
days after mailing of such notice by the Company in accordance with Section 7.5,
the Company shall, subject to the provisions of Section 4.4, include in the
registration statement all of the Registrable Securities that the Investor has
requested to be registered.
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2. OBLIGATIONS OF THE COMPANY.
Whenever required under SECTIONS 1.1 or whenever it elects under
SECTION 1.5 of this Agreement to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
2.1 REGISTRATION STATEMENT. Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use commercially
reasonably efforts to cause such registration statement to become effective, and
keep such registration statement effective for up to nine months (or, if
earlier, until the Investor has sold the Registrable Securities held by it).
2.2 AMENDMENTS. Prepare and file with the SEC 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 1933 Act with respect to the disposition of all securities
covered by such registration statement.
2.3 PROSPECTUS. Furnish to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by it.
2.4 BLUE SKY. Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such states or jurisdictions as shall be reasonably requested by the
Investor, provided, however, 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 states or
jurisdictions.
2.5 UNDERWRITING. In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
2.6 NOTIFICATION. Notify the Investor, at any time when a prospectus
covered by such registration statement is required to be delivered under the
1933 Act, of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, either (a) includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing or (b) to the
Company's knowledge, fails to comply with the 1933 Act or any other applicable
federal or state securities laws.
2.7 LISTING. List the Registrable Securities being registered on any
national securities exchange on which a class of the Company's equity securities
are listed or qualify
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the Registrable Securities being registered for inclusion on the Nasdaq Stock
Market if the Company does not have a class of equity securities listed on a
national securities exchange.
3. EXPENSES.
3.1 REGISTRATION EXPENSES. All expenses (other than underwriting
expenses, discounts and commissions relating to Registrable Securities and fees
and disbursements of counsel for the Investor), including without limitation,
all registration, filing, and qualification fees, printing and accounting fees
and legal fees and expenses of the Company' counsel incurred in connection with
a registration pursuant to SECTION 1.1 or SECTION 1.5 shall be borne by the
Company.
3.2 UNDERWRITING EXPENSES. All underwriting expenses, discounts and
commissions relating to the Registrable Securities shall be borne by the
Investor.
3.3 DEEMED AMENDMENT. Notwithstanding any other provision of this
SECTION 3, the provisions of this SECTION 3 shall be deemed amended to
incorporate and comply with the provisions of any applicable state securities
laws, regulations, and administrative policies.
3.4 WITHDRAWN REGISTRATION. The Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to SECTION 1.1 if the
registration request is subsequently withdrawn at any time at the request of the
Investor (in which case the Investor shall bear such expenses), unless the
Investor agrees to forfeit its right to a demand registration pursuant to
SECTION 1.1. Notwithstanding the foregoing, however, if the Investor's request
for such withdrawal is preceded by and a consequence of a material adverse
disclosure made by the Company after the date of the Investor Notice but before
the effective date of the resulting registration statement, then the Investor
shall not be required to bear such expenses and shall not forfeit its right to
demand one registration pursuant to SECTION 1.1 as a consequence of such
withdrawal request.
4. CERTAIN REQUIREMENTS.
4.1 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be reasonably required under applicable federal and
state securities laws and regulations to effect the registration of its
Registrable Securities.
4.2 DELAY OF REGISTRATION. So long as the Company has given any notice
required by this Agreement, the Investor shall not have any right to take any
action to restrain or otherwise delay any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
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4.3 LIMITS ON REGISTRATIONS. The Company shall not be obligated to
register any Registrable Securities under this Agreement at any time after
March 19, 2005. This Agreement shall automatically expire on March 19, 2005.
Termination of this Agreement shall not affect any obligations to register
pursuant to a demand received prior to the termination of this Agreement.
4.4 UNDERWRITING REQUIREMENTS. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 1.6 to include any of the Investor's securities in
such underwriting unless it accepts the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it and then only in such
quantity as the underwriters determine in their sole discretion will not,
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of securities sold (other than by
the Company) that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling shareholders according to
the total amount of securities entitled to be included therein owned by each
selling shareholder or in such other proportions as shall mutually be agreed to
by such selling shareholders).
5. INDEMNIFICATION.
If any Registrable Securities are included in a registration statement
under this Agreement:
5.1 BY THE COMPANY. To the extent permitted by law, the Company will
indemnify and hold harmless the Investor, the officers and directors of the
Investor, any underwriter (as defined in the 0000 Xxx) for the Investor and each
person, if any, who controls the Investor or underwriter within the meaning of
the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the 1933 Act, the 1934 Act, or any other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions, or violations (collectively a "Violation"):
(a) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(b) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (c) any violation or alleged violation by the Company, or any of
the Company' officers, directors, employees or affiliates of the 1933 Act, the
1934 Act, or any rule or regulation promulgated under the 1933 Act, the 1934
Act, or any state or other federal securities law. The Company will reimburse
the Investor and each such officer or director, or underwriter
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or controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this SECTION 5.1 shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by any the Investor, underwriter or
controlling person.
5.2 BY THE INVESTOR. To the extent permitted by law, the Investor will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person, if any, who
controls the Company within the meaning of the 1933 Act and each agent and any
underwriter for the Company, against any losses, claims, damages, or liabilities
(joint or several) to which the Company or any such director, officer,
controlling person, agent, or underwriter or controlling person, may become
subject, under the 1933 Act, the 1934 Act, or any other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by the Investor expressly for
use in connection with such registration; and the Investor will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, agent, or underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this SECTION 5.2 shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected without
the consent of the Investor, which consent shall not be unreasonably withheld.
5.3 PROCEDURE. Promptly after receipt by an indemnified party under this
SECTION 5 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 5, 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 the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, reasonably satisfactory to the
indemnifying party, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
conflicts of 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 shall not relieve such indemnifying
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party of any liability to the indemnified party under this SECTION 5 except
to the extent the indemnifying party is prejudiced as a result thereof; and
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 5.
5.4 SURVIVAL. The obligations of each party under this SECTION 5 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement.
6. REPORTS, ASSIGNMENT AND STAND-OFF.
6.1 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Investor the benefits of Rule 144 promulgated under the 1933
Act and any other rule or regulation of the SEC that may at any time permit the
Investor to sell securities of the Company to the public without registration,
the Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act; and
(c) Furnish to the Investor, so long as the Investor owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 and the
1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing the Investor
of any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
6.2 ASSIGNMENT. The Investor's rights under this Agreement may not be
assigned by the Investor without the prior written consent of the Company,
except to any other person or entity, directly or indirectly, controlled by or
under direct or indirect common control with Investor (the "Investor
Affiliate"), provided that such Investor Affiliate acquires at least 50,000
shares of the Investor's Registrable Securities. Subject to the foregoing, 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. "Control"
means the power to direct the management and policies of such person or entity,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise. Investor Affiliate shall not mean employees of Investor
acting in their individual capacities.
6.3 "MARKET STAND-OFF" AGREEMENT. The Investor hereby agrees that it
shall not, to the extent requested by the Company and an underwriter of Common
Stock (or other securities) of the Company, sell or otherwise transfer or
dispose (other than to donees who
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agree to be similarly bound) any Registrable Securities during the period
requested by such underwriter (not to exceed 180 days following the
effective date of a registration statement of the Company filed under the
1933 Act); provided, however, that all officers and directors of the Company
also enter into similar agreements.
7. MISCELLANEOUS.
7.1 NO THIRD PARTY BENEFITS. Nothing in this Agreement, express or
implied, is intended to confer upon any third party any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
7.2 GOVERNING LAW. This Agreement and all transactions contemplated
hereby, shall be governed, construed and enforced in accordance with the laws of
the State of Oregon, without reference to its choice of law provisions.
7.3 COUNTERPARTS. This Agreement may be executed in several counterparts
each of which shall be deemed to be an original, and all of which when taken
together shall constitute one single agreement between the parties.
7.4 HEADINGS. The headings and subheadings used in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
this Agreement.
7.5 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given (a) upon personal delivery to the
party notified, (b) three days after 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 for such party, (c) one day after deposit with a
nationally recognized air courier service such as DHL or Federal Express for
next day delivery, or (d) on the date of facsimile transmission, with confirmed
transmission, provided that notice is also given under clauses (a), (b) or (c),
above. Addresses for notices are on the signature page hereof, or such other
address as such party may designate by ten days' advance written notice to the
other party in accordance with this SECTION 7.5.
7.6 AMENDMENT; WAIVERS. No amendment or modification of this Agreement
shall be effective unless it is set forth in a writing which refers to the
particular provision(s) so amended or modified and is executed by authorized
representatives of both parties. No failure or delay by either party in
exercising any right, power or remedy will operate as a waiver of any such
right, power or remedy and any waiver as to a breach of any particular provision
will not be deemed to be a waiver of any future breach of that same provision.
7.7 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
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and the balance of the Agreement shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms.
7.8 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties regarding the subject matter of this Agreement and supersedes any
other agreements among the parties regarding such subject matter, each of which
is hereby terminated and of no further force or effect.
8. DEFINITIONS.
The following terms are defined as follows or in the indicated
sections of this Agreement:
"1933 ACT" shall have the meaning set forth in SECTION 1.1;
"1934 ACT" shall have the meaning set forth in SECTION 5.1;
"PURCHASE AGREEMENT" shall have the meaning set forth in Recital A;
"COMMON STOCK" means the common stock of the Company;
"THE INVESTOR" means Steelcase Inc., a Michigan corporation;
"NOTICE" shall have the meaning set forth in SECTION 1.1;
"THE INVESTOR AFFILIATE" shall have the meaning set forth in SECTION
6.2;
"THE COMPANY" means Microfield Graphics, Inc., an Oregon corporation;
"REGISTER," "registration," and "registered" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act of 1933, as amended, and the declaration or
ordering of effectiveness of such registration statement or document;
"REGISTRABLE SECURITIES" means (a) the Common Stock issuable or issued
pursuant to the Purchase Agreement, (b) the Common Stock issuable or issued upon
exercise of the Warrant, and (c) any stock issued in connection with the Common
Stock described in (a) or (b) of this provision;
"SEC" means the Securities and Exchange Commission;
"VIOLATION" shall have the meaning set forth in SECTION 5.1; and
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"WARRANT" means Warrant No. 1998-W-1 issued to the Investor for the
purchase of 260,000 shares of the Company's Common Stock, of even date hereof.
The parties have executed this Agreement as of the date first written
above.
MICROFIELD GRAPHICS, INC.
By:
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Xxxx X. Xxxxxx, President and
Chief Executive Officer
Mailing Address: 0000 XX Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, President and
Chief Executive Officer
Fax: 503/000-0000
STEELCASE INC.
By:
-----------------------------------
Xxxxx X. Xxxxxxx, President and
Chief Executive Officer
Mailing Address: 000-00xx Xxxxxx X.X.
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, President and
Chief Executive Officer
Fax:
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