EXHIBIT 10.11
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of April 6, 1998,
among RG Capital Fund LLC, a New York limited liability company ("RG Capital"),
Xxxxxxx & Green, Inc., a New York corporation ("R&G") and Linkon Corporation, a
Nevada corporation (the "Company").
W I T N E S S E T H:
-------------------
WHEREAS, RG Capital has agreed to subscribe to shares (the "Shares") of
common stock, par value $0.001 per share, of the Company (the "Common Stock")
pursuant to a Subscription and Stock Purchase Agreement (the "Subscription
Agreement") between the Company and RG Capital of even date herewith;
WHEREAS, pursuant to an Investment Banking and Financial Advisory Services
Agreement between R&G and the Company of even date herewith, R&G has been issued
warrants ("Warrants") to purchase additional shares of Common Stock (the
"Warrant Shares") pursuant to that certain Warrant Purchase Agreement dated of
even date herewith; and
WHEREAS, as additional consideration for the Shares and the Warrant Shares,
the Company desires to grant to RG Capital and R&G registration rights with
respect to the Shares and the Warrant Shares;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. (a) Demand Registration. Promptly upon the
-------------------
execution of this Agreement, and in any event prior to May 15, 1998 the Company
shall, at the Company's sole cost and expense (other than the fees and
disbursements of counsel for RG Capital) prepare and file with the Securities
and Exchange Commission (the "Commission") a registration statement sufficient
to permit the resale of all or part of the Shares and will use its good faith
best efforts through its officers, directors, auditors, and counsel to cause
such registration statement to become effective as promptly as practicable.
(b) Piggyback Registration. In addition to the Company's obligations
----------------------
under Section 1(a) of this Agreement and not in limitation thereof, the Company
shall give RG Capital and R&G at least 30 days' prior written notice of each
filing by the Company of a registration statement (other than a registration
statement on Form S-4 or Form S-8 or on any successor forms thereto) with the
Commission. If requested by RG Capital or R&G in writing within 20 days after
receipt of any such notice, the Company shall, at the Company's sole expense
(other than the fees and disbursements of counsel for RG Capital or R&G, and the
underwriting discounts, if any, payable in respect of the Shares or Warrant
1
Shares sold by RG Capital or R&G, respectively), register all or, at RG
Capital's or R&G's option, any portion of the Shares or the Warrant Shares
concurrently with the registration of such other securities, all to the extent
requisite to permit the public offering and sale of the Shares or the Warrant
Shares through the facilities of the Nasdaq National Market or any other
securities exchange, if any, on which the Common Stock is being sold or on the
over-the-counter market, and will use its reasonable best efforts through its
officers, directors, auditors, and counsel to cause such registration statement
to become effective as promptly as practicable. If the managing underwriter of
any such offering shall determine and advise the Company that, in its opinion,
the distribution of all or a portion of the Shares or the Warrant Shares
requested to be included in the registration concurrently with the securities
being registered by the Company would materially adversely affect the
distribution of such securities by the Company then the Company will include in
such registration first, the securities that the Company proposes to sell,
second, any shares of Common Stock required to be registered by the terms of a
registration rights agreement listed on Schedule 3.14 to the Subscription
Agreement and third, the Shares or Warrant Shares requested to be included in
such registration, to the extent permitted by the managing underwriter.
(c) In the event of a registration pursuant to the provisions of this
Agreement, the Company shall use its reasonable best efforts to cause the Shares
or Warrant Shares so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as RG Capital or R&G may
reasonably request; provided, however, that the Company shall not be required to
-------- -------
qualify to do business in any state by reason of this Section 1(c) in which it
is not otherwise required to qualify to do business.
(d) The Company shall keep effective any registration or qualification
contemplated by this Section 1 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document and communication for such period of time as
shall be required to permit RG Capital or R&G to complete the offer and sale of
the Shares or Warrant Shares covered thereby.
(e) In the event of a registration pursuant to the provisions of this
Agreement, the Company shall furnish to RG Capital and R&G such reasonable
number of copies of the registration statement and of each amendment and
supplement thereto (in each case, including all exhibits), of each prospectus
contained in such registration statement and each supplement or amendment
thereto (including each preliminary prospectus), all of which shall conform to
the requirements of the Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations thereunder, and such other documents, as RG
Capital or R&G may reasonably request to facilitate the disposition of the
Shares or Warrant Shares included in such registration.
(f) The Company shall notify RG Capital and R&G promptly when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.
2
(g) The Company shall advise RG Capital and R&G, promptly after it
shall receive notice or obtain knowledge of the issuance of any stop order by
the Commission suspending the effectiveness of such registration statement, or
the initiation or threatening of any proceeding for that purpose and promptly
use its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
(h) The Company shall promptly notify RG Capital and R&G at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, would include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing, and at the reasonable request
of RG Capital or R&G prepare and furnish to it such number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Shares, Warrant Shares or
securities, such prospectus shall not include an untrue statement of a material
fact or omit 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
under which they were made. RG Capital and R&G shall suspend all sales of the
Shares and the Warrant Shares, respectively, upon receipt of such notice from
the Company and shall not re-commence sales until they receive copies of any
necessary amendment or supplement to such prospectus, which shall be delivered
to RG Capital and R&G within 15 days of the date of such notice from the
Company.
(i) If requested by the underwriter for any underwritten offering of
Shares or Warrant Shares, the Company and RG Capital or R&G, as the case may be,
will enter into an underwriting agreement with such underwriter for such
offering, which shall be reasonably satisfactory in substance and form to the
Company, the Company's counsel, RG Capital and RG Capital's counsel or R&G and
R&G's counsel, as the case may be, and the underwriter, and such agreement shall
contain such representations and warranties by the Company and RG Capital or R&G
and such other terms and provisions as are customarily contained in an
underwriting agreement with respect to secondary distributions solely by selling
stockholders, including, without limitation, indemnities substantially to the
effect and to the extent provided in Section 2 of this Agreement.
(j) The Company agrees that until all the Shares or Warrant Shares
have been sold under a registration statement or pursuant to Rule 144
promulgated under the Securities Act, it shall use its reasonable best efforts
to keep current in filing all reports, statements and other materials required
to be filed with the Commission to permit the Company to maintain its
eligibility to use a Form S-2 registration statement and to permit RG Capital
and R&G to sell the Shares or Warrant Shares, respectively, under Rule 144.
(k) The Company shall furnish to RG Capital and R&G and to each
underwriter, if any, a signed counterpart, addressed to RG Capital and R&G or
each
3
underwriter, of (i) an opinion of counsel to the Company, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, an opinion dated the date of the closing under the
underwriting agreement), and (ii) a "cold comfort" letter dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing under the
underwriting agreement) signed by the independent public accountants who have
issued a report on the Company's financial statements included in such
registration statement, in each case covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities provided, however,
that the terms of this Section 1(k) shall not apply if the Shares or Warrant
Shares are registered in a "piggyback" registration in which the party seeking
registration does not receive an opinion of counsel or a "cold comfort letter."
2. Indemnification.
---------------
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless RG Capital and R&G, their officers, directors,
partners, employees, agents, and counsel, and each person, if any, who controls
any such person within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act") from and against any and all loss, liability, charge, claim,
damage, and expense whatsoever (which shall include, for all purposes of this
Section 2, but not be limited to, attorneys' fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation) as and when incurred,
arising out of, based upon, or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any registration
statement, preliminary prospectus, or final prospectus (as from time to time
amended and supplemented) or any amendment or supplement thereto, relating to
the sale of any of the Shares or Warrant Shares or (B) in any application or
other document or communication (in this Section 2 collectively called an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Shares or Warrant Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements made
therein not misleading, unless (x) such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to RG Capital or R&G by or on behalf of RG Capital or R&G
expressly for inclusion in any registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (y) such loss, liability, charge, claim,
damage or expense arises out of RG Capital's or R&G's failure to comply with the
terms and provisions of this Agreement, or (ii) any breach of any
representation, warranty,
4
covenant, or agreement of the Company contained in this Agreement. The
foregoing agreement to indemnify shall be in addition to any liability the
Company may otherwise have, including liabilities arising under this Agreement.
If any action is brought against RG Capital or R&G or any of their
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability other than pursuant to this Section 2(a)) and the
Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or
parties) provided that the indemnified party shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such indemnified party or
parties to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to the Company, in any of which
events such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties. Anything in this Section 2 to the contrary not
withstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of each indemnified party that is not released as described in this sentence,
settle or compromise any action, or permit a default or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action, in
respect of which indemnity may be sought hereunder (whether or not any
indemnified party is a party thereto) unless such settlement, compromise,
consent, or termination includes an unconditional release of each indemnified
party from all liability in respect of such action. The Company agrees promptly
to notify RG Capital and R&G of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the sale of any Shares or Warrant Shares or any preliminary
prospectus, prospectus, registration statement, or amendment or supplement
thereto, or any application relating to any sale of any Shares or Warrant
Shares.
(b) RG Capital and R&G agree to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Shares or Warrant Shares held by
RG Capital or R&G, respectively, each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, and its or their respective counsel, to the same extent as
the foregoing indemnity from the Company to RG Capital and R&G in Section 2(a)
but only with respect to statements or omissions, if any, made in any
registration statement, preliminary prospectus, or final pro-
5
spectus (as from time to time amended and supplemented) or any amendment or
supplement thereto, or in any application, in reliance upon and in conformity
with written information furnished to the Company with respect to RG Capital or
R&G by or on behalf of RG Capital or R&G, expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against RG Capital or R&G
pursuant to this Section 2(b), RG Capital or R&G shall have the rights and
duties given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of Section 2(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 2(a) or
2(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or other wise,
then the Company (including for this purpose any contribution made by or on
behalf of any director of the Company, any officer of the Company who signed any
such registration statement, any controlling person of the Company, and its or
their respective counsel) as one entity, and RG Capital or R&G (including for
this purpose any contribution by or on behalf of an indemnified party) as a
second entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
RG Capital or R&G in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission, or alleged omission
shall be determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information supplied by the
Company or by RG Capital or R&G, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement,
alleged statement, omission, or alleged omission. The Company, RG Capital and
R&G agree that it would be unjust and inequitable if the respective obligations
of the Company, RG Capital and R&G for contribution were determined by pro rata
or per capita allocation of the aggregate losses, liabilities, claims, damages,
and expenses (even if RG Capital or R&G and the other indemnified parties were
treated as one entity for such purpose) or by any other method of allocation
that does not reflect the equitable considerations referred to in this Section
2(c). No person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. For purposes of
this Section 2(c) each person, if any, who controls RG Capital or R&G within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
and each officer, director, partner, employee, agent, and counsel of RG Capital
or R&G or control person shall have the same rights to contribution as RG
Capital
6
or R&G or control person and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject to each case to the provisions of this Section 2(c). Anything in this
Section 2(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 2(c) is intended to supersede any
right to contribution under the Securities Act, the Exchange Act or otherwise.
3. Miscellaneous.
-------------
(a) Remedies. In the event of a breach by the Company of its
--------
obligations under this Agreement, RG Capital and R&G, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of their rights under this Agreement.
(b) Agreements and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the parties hereto.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, or telecopies, initially to the address set forth below, and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 3(c):
if to the Company:
Linkon Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx X. Xxxx, President
Copy to:
Xxxx Xxxxx & Xxxxxxx LLP
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
if to RG Capital:
RG Capital Fund LLC
Xxx Xxxxxx Xxxx, Xxxxx 000
0
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
if to R&G:
Xxxxxxx & Green, Inc.
Xxx Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, President
Copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; and when receipt is acknowledged, if telecopied.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
references only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York without reference to its
conflicts of law provisions.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application hereof in any circumstance is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any such
provisions in every other
8
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of this agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
concerning the registration rights granted by the Company pursuant to this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
9
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
RG CAPITAL FUND LLC
By: SG Capital Corp.,
its Managing Director
By:____________________________________
Name: Xxxxx Xxxxxxxx
Title: President
XXXXXXX & GREEN, INC.
By:____________________________________
Name: Xxxxx Xxxxxxxx
Title: President
LINKON CORPORATION
By:____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
10
