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EXHIBIT 10.20
EXTENDED SYSTEMS INCORPORATED
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT"), dated as of
February 18, 1998 is entered into by and among Extended Systems Incorporated, a
Delaware corporation (the "COMPANY"), and the individuals and entities listed on
Exhibit A attached hereto (collectively, the "STOCKHOLDERS").
R E C I T A L S
A. Those Stockholders designated on Exhibit A hereto as Note Holders
(the "NOTE HOLDERS") and the Company are parties to the Convertible Subordinated
Promissory Notes and Warrant Purchase Agreement dated September 30, 1992 (the
"NOTE AND WARRANT PURCHASE AGREEMENT").
B. Section 5 of the Note and Warrant Purchase Agreement grants certain
registration rights to the Note Holders with respect to Common Stock issuable to
the Note Holders pursuant to certain notes and warrants issued thereunder (the
"ORIGINAL NOTE AND WARRANT HOLDERS' REGISTRATION RIGHTS").
C. On December 7, 1993, the Board of Directors of the Company granted
Xxxx X. Xxxxxx Registration Rights with respect to 10% of his fully diluted
shares of Common Stock as of December 7, 1993.
D. The Note Holders and the Company desire that the Original Note and
Warrant Holders' Registration Rights be terminated and replaced with the
registration rights contained herein on a pari passu basis with Xx. Xxxxxx.
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
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SECTION 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. Hereafter, in this Agreement the following
terms shall have the following respective meanings:
"XXXXXX SHARES" shall mean 92,695 shares of Common Stock held by
Xxxx Xxxxxx.
"COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act or
Exchange Act.
"COMMON STOCK" shall mean the authorized Common Stock of the
Company.
"CONVERSION SECURITIES" means the Common Stock issued or issuable
pursuant to conversion of the notes issued pursuant to the Note and Warrant
Purchase Agreement (the "NOTES").
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"HOLDER" or "HOLDERS" shall mean any Person holding Registrable
Securities and any person holding Registrable Securities to whom the rights
under this Agreement have been transferred in accordance with Section 2.10
hereof.
"PERSON" shall mean any individual, firm, company, corporation,
unincorporated association, partnership, trust, joint venture or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"REGISTRABLE SECURITIES" means (i) the Conversion Securities, (ii)
the Xxxxxx Shares and (iii) any Common Stock of the Company issued or issuable
in respect of the Conversion Securities or the Xxxxxx Shares or other securities
issued or issuable pursuant to the conversion of the Conversion Securities or
the Xxxxxx Shares upon any stock split, stock dividend, recapitalization, or
similar event, or any Common Stock otherwise issued or issuable with respect to
the Conversion Securities or the Xxxxxx Shares; provided, however, that shares
of Common Stock or other securities shall only be treated as Registrable
Securities if and so long as they have not been (A) sold to or through a broker
or dealer or underwriter in a public distribution or a public securities
transaction, whether in a registered offering, Rule 144 transaction or
otherwise, or (B) sold or are available for sale in the opinion of counsel to
the Company in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act so that all transfer restrictions
and restrictive legends with respect thereto are removed upon the consummation
of such sale.
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The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Section 2.1
and 2.2 hereof, including, without limitation, all registration, qualification
and filing fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean (i) all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and (ii) all fees and disbursements of counsel for the
Holders.
"SHARES" held by any Person shall mean the shares issuable
pursuant to the Notes and Warrants (calculated on an as-converted basis) and the
shares of Common Stock held by such Person.
"VOTING SECURITIES" shall mean the Common Stock, any other
securities of the Company entitled to vote in the election of directors of the
Company, any securities convertible into, exchangeable for such securities, and
any options, warrants or other rights to purchase such securities.
SECTION 2
REGISTRATION RIGHTS
2.1 "PIGGY BACK" REGISTRATION.
(a) If at any time the Company shall determine to register under
the Securities Act (including pursuant to a demand of any stockholder of the
Company exercising registration rights) any of its Common Stock, other than a
registration relating solely to employee stock option or purchase plans, or a
registration statement on Form S-4 (or any similar form promulgated by the
Commission) relating solely to a Rule 145 transaction, the Company shall send to
each Holder written notice of such determination and, if within ten (10) days
after receipt of such notice, such Holder shall so request in writing, the
Company shall use its best efforts to include in such registration statement all
or any part of such Holder's Registrable Securities that such Holder requests to
be registered.
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(b) If the registration of which the Company gives notice
involves an underwriting, all Holders proposing to have registered their
Registrable Securities, shall enter into an underwriting agreement in customary
form with the underwriter selected for such underwriting. If the underwriter
determines that marketing factors require a limitation of the number of
securities to be underwritten, the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting pro
rata.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.1 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
2.2 REGISTRATION ON FORM S-3. In addition to the rights provided the
Holders in Section 2.1 above, if the registration of Registrable Securities
under the Securities Act can be effected on Form S-3 (or any similar form
promulgated by the Commission), the Company will promptly so notify each Holder,
including each Holder who has a right to acquire Registrable Securities, and
then will at any time, and from time to time, thereafter, as expeditiously as
possible, use its best efforts to effect qualification and registration under
the Securities Act on Form S-3 of all or such portion of the Registrable
Securities as the Holder shall specify.
2.3 EFFECTIVENESS. The Company will use its best efforts to maintain the
effectiveness for up to nine (9) months of any registration statement pursuant
to which any of the Registrable Securities are being offered.
2.4 INDEMNIFICATION. In the event that the Company registers any of the
Registrable Securities under the Securities Act, the Company will indemnify and
hold harmless each Holder and each underwriter of the Registrable Securities so
registered and each person, if any, who controls such Holder or any such
underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them become subject under the Securities Act or
under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse each such Holder, each such underwriter and
each such controlling person, if any, for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement, in any preliminary or amended preliminary prospectus
or in the prospectus, as amended, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
any violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with such registration; provided, however,
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based
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on an untrue statement or omission with respect to information furnished to the
Company by or regarding such Holder, underwriter or controlling person in
connection with such registration.
2.5 EXCHANGE ACT REGISTRATION. The Company will use its best efforts to
file on a timely basis with the Commission all information that the Commission
may require under either of Section 13 or Section 15(d) of the Exchange Act and,
so long as it is required to file such information, shall use its best efforts
to take all action that may be required as a condition to the availability of
Rule 144 under the Securities Act (or any successor exemptive rule hereinafter
in effect) with respect to the Company's Common Stock.
2.6 FURTHER OBLIGATIONS OF THE COMPANY. Whenever under the preceding
Sections of this Section 2 the Company is required hereunder to register
Registrable Securities, it agrees that it shall also do the following:
(a) Furnish to each selling Holder such copies of each preliminary
and final prospectus and any other documents that such Holder may reasonably
request to facilitate the public offering of its Registrable Securities.
(b) Use its best efforts to register or qualify the Registrable
Securities to be registered pursuant to this Section 2 under the applicable
securities or "blue sky" laws of such jurisdictions as any selling Holder may
reasonably request; provided, however, that the Company shall not be obligated
to qualify to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to the service of process in suits
other than those arising out of the offer or sale of the securities covered by
the registration statement in any jurisdiction where it is not then so subject;
(c) Furnish to each selling Holder a signed counterpart of:
(i) an opinion of counsel for the Company, dated the effective
date of the registration statement, and
(ii) "comfort" letters signed by the Company's independent
public accountants who have examined and reported on the Company's financial
statements included in the registration statement;
(d) Permit each selling Holder or his counsel or other
representatives to inspect and copy such corporate documents and records as may
reasonably be requested by them; and
(e) Furnish to each selling Holder, upon request, a copy of all
documents filed and all correspondence from or to the Commission in connection
with any such offering unless confidential treatment of such information has
been requested of the Commission.
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2.7 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with registrations pursuant to Sections 2.1 and 2.2, shall be borne
by the Company. Unless otherwise stated, all Selling Expenses relating to
securities registered on behalf of the Holders and all other Registration
Expenses shall be borne by the Holders of such securities pro rata on the basis
of the number of shares so registered.
2.8 TRANSFER OF REGISTRATION RIGHTS.
(a) The registration rights of the Note Holders under this
Section 2 may be transferred to any transferee of Registrable Securities.
(b) The registration rights of Xxxx Xxxxxx under this Section 2
may not be transferred.
2.9 NO SUPERIOR RIGHTS. The Company will not grant registration
rights to any Person that are superior to the rights granted hereunder.
2.10 TERMINATION OF PRIOR RIGHTS. The Note Holders and the Company
agree that the Original Note and Warrant Holders' Registration Rights are hereby
terminated. Each of the Stockholders and the Company agree that this Agreement
sets forth their complete agreement and understanding between the Stockholders
and the Company with respect to registration or similar rights.
SECTION 3
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed and construed in
all respects in accordance with the laws of the State of Idaho as applied to
agreements made and performed in Idaho by residents of the State of Idaho.
3.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subjects hereof. 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. Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought; provided, however, that
Holders of at least a majority of the Registrable Securities may, with the
Company's prior written consent, waive, modify or amend on behalf of all
holders, any provisions hereof.
3.3 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid or otherwise delivered by hand or by messenger,
addressed (a) if to a Holder at such Holder's address set forth Exhibit A, or at
such other address as such Holder shall have furnished to the Company in writing
or
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(b) if to any other holder of any shares of Company Stock, at such address as
such holder shall have furnished the Company in writing, or until any such
holder so furnishes an address to the Company, then to and at the address of the
last holder of such shares who has so furnished an address to the Company, or
(c) if to the Company, one copy should be sent to its address set forth in
Exhibit B and addressed to the attention of the Corporate Secretary or at such
other address as the Company shall have furnished to the Holders.
Each such notice or other communication shall, unless otherwise
expressly provided herein, be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or seventy-two (72) hours after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid.
3.4 SEVERABILITY. 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; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
3.5 WAIVER OF CONFLICT. Each party to this Agreement, and their
subsidiaries, if any, that have been or continue to be represented by Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel to the Company,
hereby acknowledges that Rule 3-310 of the Rules of Professional Conduct
promulgated by the State Bar of California requires an attorney to avoid
representations in which the attorney has a relationship with another party
interested in the representation without the informed written consent of all
parties affected. By executing this Agreement, each of the Holders and the
Company hereto gives their informed written consent to the representation of the
Company by Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation in
connection with this Agreement and the transactions contemplated hereby,
notwithstanding such prior and current representation of Holders and certain of
their subsidiaries.
3.6 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
3.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Holders,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
3.8 COSTS AND ATTORNEY'S FEES. In the event that any action, suit or
other proceeding is instituted concurring or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorney's fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
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3.9 ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this Agreement
there is a reference to a specific number of shares of Common Stock of the
Company of any class or series, then, upon the occurrence of any subdivision,
combination or stock dividend of such class or series of stock, the specified
number of shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the effect on the outstanding shares of such
class or series of stock by such subdivision, combination or stock dividend.
3.10 AGGREGATION OF STOCK. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
EXTENDED SYSTEMS INCORPORATED
A DELAWARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President & CEO
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Secretary
SUMMIT PARTNERS II, L.P.
By: Summit Partners II, L.P., General Partner
By: Stamps, Xxxxxxx & Co. II, General Partner
By: /s/ Xxxxxxx X. Xxxx
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General Partner
SUMMIT INVESTORS II, L.P.
By: /s/ Xxxxxxx X. Xxxx
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General Partner
XXXX X. XXXXXX
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
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EXHIBIT A
SCHEDULE OF STOCKHOLDERS
NAME AND ADDRESS
Xxxx X. Xxxxxx
X.X. Xxx 00
Xxxxxxxx, XX 00000
With a copy to:
Xxxxxx Xxxxxx
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
NOTE HOLDERS
Summit Partners II, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Summit Investors II, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
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EXHIBIT B
COMPANY ADDRESS
Extended Systems Incorporated
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
