REGISTRATION RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of April 26, 2007, by and among PokerTek, Inc., a North Carolina corporation
with headquarters located at 0000 Xxxxx Xxxx, Xxxxx X, Xxxxxxxx, Xxxxx Xxxxxxxx
00000 (the ”Company”),
and
the undersigned buyers (each, a “Buyer”,
and
collectively, the “Buyers”).
RECITALS
A. In
connection with the Securities Purchase Agreement by and among the parties
hereto, dated as of April 23, 2007 (the “Securities
Purchase Agreement”),
the
Company has agreed, upon the terms and subject to the conditions set forth
in
the Securities Purchase Agreement, to issue and sell to each Buyer (i) shares
(the “Common
Shares”)
of the
Company’s common stock, no par value (the “Common
Stock”),
and
(ii) the Warrants (as defined in the Securities Purchase Agreement) which will
be exercisable to purchase Warrant Shares (as defined in the Securities Purchase
Agreement) in accordance with the terms of the Warrants.
B. To
induce
the Buyers to execute and deliver the Securities Purchase Agreement, the Company
has agreed to provide certain registration rights under the Securities Act
of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933
Act”),
and
applicable state securities laws.
AGREEMENT
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and each of the Buyers hereby agree as
follows:
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1.
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Definitions.
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Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
(a) “Business
Day”
means
any day other than Saturday, Sunday or any other day on which commercial banks
in The City of New York are authorized or required by law to remain
closed.
(b) “Closing
Date”
shall
have the meaning set forth in the Securities Purchase Agreement.
(c) “Effective
Date”
means
the date that the applicable Registration Statement has been declared effective
by the SEC.
(d) “Effectiveness
Deadline”
means
(i) with respect to the initial Registration Statement required to be filed
to
cover the resale by the Investors of the Registrable Securities
the
105th
calendar
day after the Closing Date (or the 135th
calendar
day after the Closing Date in the event that such Registration Statement is
subject to review by the SEC) and (b) with respect to any additional
Registration Statements that may be required to be filed by the Company pursuant
to this Agreement, the 105th
calendar
day following the date on which the Company was required to file such additional
Registration Statement (or the 135th
calendar
day after such date in the event that such Registration Statement is subject
to
review by the SEC).
(e) “Filing
Deadline”
means
the date which is 45 Business Days after the Closing Date.
(f) “Investor”
means
a
Buyer or any transferee or assignee
of
any Registrable Securities or Warrants, as applicable, to whom a Buyer assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 0
and any
transferee or assignee thereof to whom a transferee or assignee of any
Registrable Securities or Warrants, as applicable, assigns its rights under
this
Agreement and who agrees to become bound by the provisions of this Agreement
in
accordance with Section 0.
(g) “Person”
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(h) “register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant
to
Rule 415 and the declaration of effectiveness of such Registration Statement(s)
by the SEC.
(i) “Registrable
Securities”
means
(i) the Common Shares, (ii) the Warrant Shares issued or issuable upon
exercise of the Warrants and (iii) any capital stock of the Company issued
or
issuable with respect to the Common Shares, the Warrant Shares or the Warrants,
including, without limitation, as a result of any share split, share dividend,
recapitalization, exchange or similar event or otherwise, without regard to
any
limitations on exercise of the Warrants, until,
in each
case, the earliest to occur of (i) the date on which such Common Share, Warrant
Share or such share capital of the Company has been registered under the 1933
Act and sold or transferred pursuant to an effective Registration Statement,
(ii) the date on which such Common Share or Warrant Share has been sold pursuant
to Rule 144 under the 1933 Act or are eligible for sale (without volume
restrictions) pursuant to Rule 144(k) under the 1933 Act or (iii) the date
on
which such Common Share,
Warrant Share or such share capital ceases to be outstanding.
(j) “Registration
Statement”
means
a
registration statement or registration statements of the Company filed under
the
1933 Act covering the Registrable Securities.
(k) “Required
Holders”
means
the holders of at least a majority of the Registrable Securities.
(l) “Required
Registration Amount”
means
the sum of (i) the number of Common Shares issued and (ii) the number of Warrant
Shares issued and issuable pursuant to the Warrants as of the Trading Day
immediately preceding the applicable date of determination
(without
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taking
into account any limitations on the exercise of the Warrants set forth therein),
all subject to adjustment as provided in Section 2(d).
(m) “Rule
415”
means
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.
(n) “SEC”
means
the United States Securities and Exchange Commission.
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2.
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Registration.
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(a) Mandatory
Registration.
The
Company shall prepare, and, as soon as reasonably practicable, but in no event
later than the Filing Deadline, file with the SEC the Registration Statement
on
Form S-1 covering the resale of all of the Registrable Securities. In the event
that Form S-1 is unavailable for such a registration, the Company shall use
such
other form as is available for such a registration on another appropriate form
reasonably acceptable to the Required Holders, subject to the provisions of
Section 0(c).
The
Registration Statement prepared pursuant hereto shall register for resale at
least the number of shares of Common Stock equal to the Required Registration
Amount as of the date the Registration Statement is initially filed with the
SEC. The Registration Statement shall contain (except if otherwise directed
by
the Required Holders) the “Selling
Stockholders”
and
“Plan
of Distribution”
sections in substantially the form attached hereto as Exhibit
B,
unless
otherwise required by the SEC. The Company shall use its best efforts to have
the Registration Statement declared effective by the SEC as soon as practicable,
but in no event later than the Effectiveness Deadline. The Company shall use
its
best efforts to file with the SEC in accordance with Rule 424 under the 1933
Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement by 9:30 a.m. on the Business Day following the Effective
Date.
In no
event shall the Company include any securities other than Registrable Securities
on any Registration Statement without the prior written consent of the Required
Holders. The Company shall not after the date hereof until the Effective Date
of
the Registration Statement required to be filed pursuant to this Section
00
enter
into any agreement providing any such right to any of its security
holders.
(b) Legal
Counsel.
Subject
to Section 0
hereof,
Magnetar Capital Master Fund, Ltd. shall have the right to select one (1) legal
counsel to review and oversee, solely on its behalf, any registration pursuant
to this Section 0
(“Legal
Counsel”),
which
shall be Xxxxxxxxx Xxxxxxx, LLP or such other counsel as thereafter designated
by Magnetar Capital Master Fund, Ltd.
(c) Ineligibility
for Form S-1.
In the
event that Form S-1 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall register the resale of
the
Registrable Securities on another appropriate form reasonably acceptable to
the
Required Holders.
(d) Sufficient
Number of Shares Registered.
In the
event the number of shares available under a Registration Statement filed
pursuant to Section 00
is
insufficient to cover all of the Registrable Securities required to be covered
by such Registration Statement, the Company shall amend the applicable
Registration Statement, or file a new Registration Statement (on the short
form
available therefor, if applicable), or both, so as to cover at least the
Required Registration Amount as of the Trading Day immediately preceding the
date of the
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filing
of
such amendment or new Registration Statement, in each case, as soon as
practicable, but in any event not later than fifteen (15) days after the
necessity therefor arises. The Company shall use its best efforts to cause
such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock registered under such Registration
Statement is less than the product determined by multiplying (i) the Required
Registration Amount as of such time by (ii) 0.90. The calculation set forth
in
the foregoing sentence shall be made without regard to any limitations on the
exercise of the Warrants and that the Warrants are then fully exercisable for
shares of Common Stock at the then prevailing applicable Exercise
Price.
(e) Effect
of Failure to File and Obtain and Maintain Effectiveness of Registration
Statement.
If (i)
a Registration Statement covering all of the Registrable Securities required
to
be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Deadline (a
“Filing
Failure”)
or (B)
not declared effective by the SEC on or before the Effectiveness Deadline (an
“Effectiveness
Failure”)
or
(ii) on any day after the Effective Date of such Registration Statement sales
of
all of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowable Grace Period (as
defined in Section 0)
pursuant to such Registration Statement (including, without limitation, because
of a failure to keep such Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to such Registration
Statement, a suspension or delisting of (or a failure to timely list) the Common
Stock on its principal trading market or exchange, or to register a sufficient
number of shares of Common Stock) (a “Maintenance
Failure”)
then,
as relief for the damages to any holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall be exclusive of any other monetary remedies available, excluding
remedies of specific performance), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement, as liquidated
damages, an amount in cash equal to two percent (2%) of the aggregate Purchase
Price (as such term is defined in the Securities Purchase Agreement) of such
Investor’s Registrable Securities included in such Registration Statement that
continue to be owned by such Investor and which are not registered (or the
prospectus contained in the applicable Registration Statement is not available
for use) as a result of the Filing Failure, Effectiveness Failure or Maintenance
Failure, on every thirty (30) day anniversary (pro rated for periods totaling
less than thirty days) of (1) a Filing Failure until such Filing Failure is
cured; (2) an Effectiveness Failure until such Effectiveness Failure is cured;
and (3) a Maintenance Failure until such Maintenance Failure is cured. The
payments to which a holder shall be entitled pursuant to this Section
00
are
referred to herein as “Registration
Delay Payments.”
Notwithstanding the foregoing, in no event shall (I) the aggregate of all
Registration Delay Payments exceed $1,000,000 or (II) the Company be required
to
pay any Registration Delay Payments to an Investor with respect to an
Effectiveness Failure or a Maintenance Failure if all the Registrable Securities
included in the Registration Statement that is the subject to such Effectiveness
Failure or Maintenance Failure (as the case may be) and then held by such
Investor are eligible to be sold pursuant to Rule 144(k) promulgated under
the
1933 Act on the Principal Market. Registration Delay Payments shall be paid
on
the earlier of (A) the last day of each thirty (30) day period following the
event or failure giving rise to the Registration Delay Payments and (B) the
third (3rd)
Business Day after such event or failure is
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cured.
In
the event the Company fails to make Registration Delay Payments in a timely
manner, such Registration Delay Payments shall bear interest at the rate of
one
percent (1.0%) per month (pro rated for partial months) until paid in
full.
(f) Offering.
Notwithstanding anything to the contrary contained in this Agreement, in the
event the staff of the SEC (the “Staff”)
or the
SEC seeks to characterize any offering pursuant to a Registration Statement
filed pursuant to this Agreement as constituting an offering of securities
by or on behalf of the Company, or in any other manner, such that the Staff
or the SEC do not permit such Registration Statement to become
effective and used for resales in a manner that does not constitute such an
offering and that permits the continuous resale at the market by the Investors
participating therein (or as otherwise may be acceptable to each
Investor) without being named therein as an “underwriter,” then the Company
shall reduce the number of shares to be included in such Registration Statement
by all Investors until such time as the Staff and the SEC shall so permit
such Registration Statement to become effective as aforesaid. In making
such reduction, the Company shall reduce the number of shares to be included
by
all Investors on a pro rata basis (based upon the number of Registrable
Securities otherwise required to be included for each Investor) unless the
inclusion of shares by a particular Investor or a particular set of Investors
are resulting in the Staff or the SEC’s “by or on behalf of the Company”
offering position, in which event the shares held by such Investor or set of
Investors shall be the only shares subject to reduction (and if by a set of
Investors on a pro rata basis by such Investors or on such other basis as would
result in the exclusion of the least number of shares by all such
Investors). In addition, in the event that the Staff or the SEC requires
any Investor seeking to sell securities under a Registration Statement
filed pursuant to this Agreement to be specifically identified as
an “underwriter” in order to permit such Registration Statement to
become effective, and such Investor does not consent to being so named as an
underwriter in such Registration Statement, then, in each such case, the
Company shall reduce the total number of Registrable Securities to be
registered on behalf of such Investor, until such time as the
Staff or the SEC does not require such identification or until such Investor
accepts such identification and the manner thereof. Any reduction pursuant
to this paragraph will first reduce all Registrable Securities other than
those issued pursuant to the Securities Purchase Agreement. In the event of
any reduction in Registrable Securities pursuant to this paragraph, an
affected Investor shall have the right to require, upon delivery of a written
request to the Company signed by such Investor, the Company to file a
registration statement within 30 days of such request (subject to any
restrictions imposed by Rule 415 or required by the Staff or the SEC)
for resale by such Investor in a manner acceptable to such Investor, and the
Company shall following such request cause to be and keep effective such
registration statement in the same manner as otherwise contemplated in this
Agreement for registration statements hereunder, in each case until such
time as: (i) all Registrable Securities held by such Investor have been
registered pursuant to an effective Registration Statement in a manner
acceptable to such Investor or (ii) the Registrable Securities may be
resold by such Investor without restriction (including volume limitations)
pursuant to Rule 144(k) of the 1933 Act (taking account of any Staff position
with respect to “affiliate” status) or (iii) such Investor agrees to be named as
an underwriter in any such Registration Statement in a manner acceptable to
such
Investor as to all Registrable Securities held by such Investor and that have
not theretofore been included in a Registration Statement under this Agreement
(it being understood that the special demand right under this sentence may
be
exercised by an Investor multiple times and with respect to
limited
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amounts
of Registrable Securities in order to permit the resale thereof by such Investor
as contemplated above).
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3.
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Related
Obligations.
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The
Company will use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:
(a) The
Company shall promptly prepare and file with the SEC a Registration Statement
with respect to the Registrable Securities (but in no event later than the
Filing Deadline) and use its best efforts to cause such Registration Statement
relating to the Registrable Securities to become effective as soon as
practicable after such filing (but in no event later than the Effectiveness
Deadline). Subject to allowable Grace Periods (as defined below), the Company
shall use best efforts to keep each Registration Statement effective pursuant
to
Rule 415 at all times until the earlier of (i) the date as of which all of
the
Investors may sell all of the Registrable Securities required to be covered
by
such Registration Statement without restriction pursuant to Rule 144(k) (or
any
successor thereto) promulgated under the 1933 Act or (ii) the date on which
the
Investors shall have sold all of the Registrable Securities covered by such
Registration Statement or (iii) the date that is two years after the Effective
Date (the “Registration
Period”).
The
Company shall ensure that each Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain
any
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 (in the case
of
prospectuses, in the light of the circumstances in which they were made) not
misleading. The Company shall submit to the SEC, within three (3) Business
Days
after the later of the date that (i) the Company learns that no review of a
particular Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on a particular Registration Statement (as
the
case may be) and (ii) the approval of Legal Counsel pursuant to Section
00
(which
approval is immediately sought), a request for acceleration of effectiveness
of
such Registration Statement to a time and date not later than 48 hours after
the
submission of such request.
(b) Subject
to Section 00
of this
Agreement, the Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition
of
all Registrable Securities of the Company required to be covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant
to
this Section 00)
by
reason of the Company filing a report on Form 10-Q (or Form 10Q-SB) or Form
10-K
(or Form 10-KSB) or any analogous report under the Securities Exchange Act
of
1934, as amended (the “1934
Act”),
the
Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments
-6-
or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement such
Registration Statement.
(c) The
Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least three (3) Business Days prior to its filing
with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for documents filed pursuant to the 1934 Act incorporated by references,
Annual Reports on Form 10-K (or Form 10-KSB), Quarterly Reports on Form 10-Q
(or
Form 10-QSB), Current Reports on Form 8-K, and any similar or successor reports)
within a reasonable number of days prior to their filing with the SEC, and
(B)
not file any Registration Statement or amendment or supplement thereto in a
form
to which Legal Counsel or any legal counsel for any other Investor reasonably
objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or supplement thereto
without the prior approval of Legal Counsel, which consent shall not be
unreasonably withheld. The Company shall furnish to Legal Counsel, without
charge, (i) copies of any correspondence from the SEC or the staff of the SEC
to
the Company or its representatives relating to any Registration Statement,
provided that such correspondence shall not contain any material, non-public
information regarding the Company or any of its subsidiaries, (ii) upon
request, promptly after the same is prepared and filed with the SEC, one (1)
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits and (iii) upon
request, upon the effectiveness of any Registration Statement, one (1) copy
of
the prospectus included in such Registration Statement and all amendments and
supplements thereto. The Company shall reasonably cooperate with Legal Counsel
and legal counsel for each other Investor in performing the Company’s
obligations pursuant to this Section 0.
(d) The
Company shall furnish to each Investor whose Registrable Securities are included
in any Registration Statement, without charge, (i) promptly after the same
is
prepared and filed with the SEC, at least one (1) copy of any Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by
an
Investor, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request
from time to time) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
(e) The
Company shall use its best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors
of the Registrable Securities covered by a Registration Statement under such
other securities or “blue sky” laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations
and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to
maintain such registrations and qualifications in effect at all times during
the
Registration Period, and (iv) take all other actions
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reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided,
however,
that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 00,
(y)
subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company
shall promptly notify Legal Counsel and each Investor who holds Registrable
Securities of the receipt by the Company of any notification with respect to
the
suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.
(f) The
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event,
as
a result of which the prospectus included in a Registration Statement, as then
in effect, includes an untrue statement of a material fact or omission to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided
that in
no event shall such notice contain any material, non-public information
regarding the Company or any of its subsidiaries), and, subject to Section
00,
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission and deliver ten (10) copies of such
supplement or amendment to Legal Counsel, legal counsel for each other Investor
and each Investor (or such other number of copies as Legal Counsel, legal
counsel for each other Investor or such Investor may reasonably request). The
Company shall also promptly notify Legal Counsel and each Investor in writing
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, when a Registration Statement or any post-effective amendment
has become effective (notification of such effectiveness shall be delivered
to
Legal Counsel and each Investor by facsimile or e-mail on the same day of such
effectiveness and by overnight mail), and when the Company receives written
notice from the SEC that a Registration Statement or any post-effective
amendment will be reviewed by the SEC, (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus
or
related information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be
appropriate.
(g) The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to use best efforts
promptly to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Legal Counsel and each Investor who holds
Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.
(h) If
any
Investor may be required under applicable securities law to be described in
the
Registration Statement as an underwriter and such Investor consents to so being
named an underwriter, at the request of any Investor, the Company shall furnish
to such Investor, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as an Investor may reasonably
request (i) a letter, dated such date, from the Company’s independent certified
public accountants in form and substance as is customarily given
by
-8-
independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Investors, and (ii) an opinion, dated as of such date, of
counsel representing the Company for purposes of such Registration Statement,
in
form, scope and substance as is customarily given to selling securityholders
in
such transactions, addressed to the Investors.
(i) If
any
Investor may be required under applicable securities law to be described in
the
Registration Statement as an underwriter and such Investor consents to so being
named an underwriter, upon the written request of such Investor, the Company
shall make available for inspection by (i) such Investor, (ii) legal counsel
for
such an Investor and (iii) one (1) firm of accountants or other agents retained
by such Investor (collectively, the “Inspectors”),
all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the “Records”),
as
shall be reasonably deemed necessary by each Inspector, and cause the Company’s
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree
in
writing to hold in strict confidence and not to make any disclosure (except
to
such Investor) or use of any Record or other information which the Company’s
Board of Directors determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of
such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c)
the
information in such Records has been made generally available to the public
other than by disclosure in violation of this Agreement or any other Transaction
Document. Such Investor agrees that it shall, upon learning that disclosure
of
such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and
allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and such Investor, if any) shall be deemed to limit any Investor’s
ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.
(j) The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
to be disclosed in the Registration Statement pursuant to the 1933 Act, (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the
public other than by disclosure in violation of this Agreement or any other
Transaction Document. The Company agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a
court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.
(k) Without
limiting any obligation of the Company under the Securities
Purchase
-9-
Agreement,
the Company shall use its best efforts either to (i) cause all of the
Registrable Securities covered by a Registration Statement to be listed on
each
securities exchange on which securities of the same class or series issued
by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all of the Registrable Securities covered by a
Registration Statement on The
Nasdaq Global Select Market,
or
(iii) if, despite the Company’s best efforts to satisfy the preceding clauses
(i) or (ii) the Company is unsuccessful in satisfying the preceding clauses
(i)
or (ii), to secure the inclusion for quotation on The Nasdaq Global Select
Market for such Registrable Securities and, without limiting the generality
of
the foregoing, to use its best efforts to arrange for at least two market makers
to register with the National Association of Securities Dealers, Inc.
(“NASD”)
as
such with respect to such Registrable Securities. The Company shall pay all
fees
and expenses in connection with satisfying its obligation under this Section
00.
(l) The
Company shall cooperate with the Investors who hold Registrable Securities
being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing
the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts (as the case
may
be) as the Investors may reasonably request and registered in such names as
the
Investors may request.
(m) If
reasonably requested by an Investor in writing, the Company shall within ten
(10) days of receipt of notice from such Investor and subject to Section
00
hereof
(but (x) not more often than once in any 30-day period and (y) not during any
15-day period prior to the time the Company is required to file its Quarterly
Report on Form 10-Q or any 15-day period prior to the time the Company is
required to file its Annual Report on Form 10-K) (i) incorporate in a prospectus
supplement or post-effective amendment such information as an Investor
reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any
Registration Statement if reasonably requested by an Investor holding any
Registrable Securities.
(n) The
Company shall use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may reasonably be necessary to
consummate the disposition of such Registrable Securities.
(o) The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 0000 Xxx) covering
a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of the Registration
Statement.
-10-
(p) The
Company shall otherwise use its best efforts to comply in all material respects
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
(q) Within
two (2) Business Days after a Registration Statement which covers Registrable
Securities is declared effective by the SEC, the Company shall deliver, and
shall cause legal counsel for the Company to deliver, to the transfer agent
for
such Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit
A.
(r) Notwithstanding
anything to the contrary herein, at any time after the Effective Date of the
applicable Registration Statement, the Company may delay the disclosure of
material, non-public information concerning the Company or any of its
subsidiaries, the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company, in the best interest of the
Company and, in the opinion of counsel to the Company, otherwise required (a
“Grace
Period”);
provided,
that
the Company shall promptly (i) notify the Investors in writing of the invocation
of a Grace Period (provided
that in
each notice the Company will not disclose any material, non-public information
to the Investors) and the date on which the Grace Period will begin, and
(ii) notify the Investors in writing of the date on which the Grace Period
ends; and, provided
further,
that no
Grace Period shall exceed fifteen (15) consecutive days and during any three
hundred sixty five (365) day period such Grace Periods shall not exceed an
aggregate of forty-five (45) days and the first day of any Grace Period must
be
at least five (5) Trading Days after the last day of any prior Grace Period
(each, an “Allowable
Grace Period”);
provided,
that no
Allowable Grace Period may exist during the first thirty (30) Business Days
after the Effective Date of the applicable Registration Statement. For purposes
of determining the length of a Grace Period above, the Grace Period shall begin
on and include the date the Investors receive the notice referred to in clause
(i) and shall end on and include the later of the date the Investors receive
the
notice referred to in clause (ii) and the date referred to in such notice.
The
provisions of Section 00
hereof
shall not be applicable during the period of any Allowable Grace Period. Upon
expiration of the Grace Period, the Company shall again be bound by the first
sentence of Section 00
with
respect to the information giving rise thereto unless such material, nonpublic
information is no longer applicable.
|
4.
|
Obligations
of the Investors.
|
(a) At
least
five (5) Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor in writing of
the
information the Company requires from each such Investor. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held
by it
and the intended method of disposition of the Registrable Securities held by
it,
as shall be reasonably required to effect and maintain the effectiveness of
the
registration of such Registrable Securities and shall execute such documents
in
connection with such registration as the Company may reasonably request.
(b) Each
Investor, by such Investor’s acceptance of the Registrable Securities,
agrees
-11-
to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from such Registration
Statement.
(c) Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 0
or the
first sentence of 3(f)
or the
Investor receives a notice from the Company that a Grace Period is in effect,
such Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 0
or the
first sentence of Section 3(f) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary in this Section
00,
the
Company shall cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which such Investor has entered into a contract
for
sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 0
or the
first sentence of Section 3(f) and for which such Investor has not yet
settled.
(d) Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of
Registrable
Securities pursuant to the Registration Statement.
(e) Each
Investor covenants and agrees to deliver a Registration Statement Questionnaire
in the form attached hereto as Exhibit
C
no later
than five (5) Business Days prior to the Filing Deadline.
|
5.
|
Expenses
of Registration.
|
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
0
and
0,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company shall be paid by the Company. The Company shall also reimburse
Magnetar Capital Master Fund, Ltd. for the fees and disbursements of Legal
Counsel in connection with registration, filing or qualification pursuant to
Sections 0
and
0
of this
Agreement which amount shall be limited to $10,000.
|
6.
|
Indemnification.
|
In
the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
(a) To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Investor within the meaning of the 1933 Act or the 1934 Act (each,
an “Indemnified
Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys’ fees, or expenses (collectively,
“Claims”)
incurred in investigating, preparing or
-12-
defending
any action, claim, suit, inquiry, proceeding, investigation or appeal taken
from
the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether
or
not an indemnified party is or may be a party thereto (“Indemnified
Damages”),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue
Sky Filing”),
or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,
if
the Company files any amendment thereof or supplement thereto with the SEC)
or
the omission or alleged omission to state therein any material fact necessary
to
make the statements made therein, in light of the circumstances under which
the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”).
Subject to Section 00,
the
Company shall reimburse the Indemnified Persons, promptly as such expenses
are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any
such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 00:
(i)
shall not apply to a Claim by an Indemnified Person arising out of or based
upon
a Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person for such
Indemnified Person expressly for use in connection with the preparation of
such
Registration Statement or any such amendment thereof or supplement thereto
and
(ii) shall not be available to the extent such Claim is based on a failure
of
the Investor to deliver or to cause to be delivered the prospectus made
available by the Company (to the extent applicable), including a corrected
prospectus, if such prospectus or corrected prospectus was timely made available
by the Company pursuant to Section 0
and then
only if, and to the extent that, following the receipt of the corrected
prospectus no grounds for such Claim would have existed; and (iii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force
and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of any of the Registrable Securities
by
any of the Investors pursuant to Section 0.
(b) In
connection with any Registration Statement in which an Investor is
participating, such Investor agrees to severally and not jointly indemnify,
hold
harmless and defend, to the same extent and in the same manner as is set forth
in Section 00,
the
Company, each of its directors, each of its officers who signs the Registration
Statement and each Person, if any, who controls the Company within the meaning
of the 1933 Act or the 1934 Act (each, an “Indemnified
Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
or
-13-
Indemnified
Damages 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 to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject
to Section 00,
such
Investor will reimburse any legal or other expenses reasonably incurred by
an
Indemnified Party in connection with investigating or defending any such Claim;
provided,
however,
that
the indemnity agreement contained in this Section 00
and the
agreement with respect to contribution contained in Section 0
shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent
shall
not be unreasonably withheld or delayed; provided,
further,
however,
that
such Investor shall be liable under this Section 00
for only
that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of any of the Registrable
Securities by any of the Investors pursuant to Section 0.
(c) Promptly
after receipt by an Indemnified Person or Indemnified Party (as the case may
be)
under this Section 0
of
notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party (as the case may be) shall, if a Claim in respect thereof
is
to be made against any indemnifying party under this Section 0,
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 control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person
or
the Indemnified Party (as the case may be); provided,
however,
that an
Indemnified Person or Indemnified Party (as the case may be) shall have the
right to retain its own counsel with the fees and expenses of such counsel
to be
paid by the indemnifying party if: (i) the indemnifying party has agreed in
writing to pay such fees and expenses; (ii) the indemnifying party shall have
failed promptly to assume the defense of such Claim and to employ counsel
reasonably satisfactory to such Indemnified Person or Indemnified Party (as
the
case may be) in any such Claim; or (iii) the named parties to any such Claim
(including any impleaded parties) include both such Indemnified Person or
Indemnified Party (as the case may be) and the indemnifying party, and such
Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Person or such Indemnified
Party
and the indemnifying party (in which case, if such Indemnified Person or such
Indemnified Party (as the case may be) notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party, provided
further,
that in
the case of clause (iii) above the indemnifying party shall not be responsible
for the reasonable fees and expenses of more than one (1) separate legal counsel
for such Indemnified Person or Indemnified Party (as the case may be). The
Indemnified Party or Indemnified Person (as the case may be) shall reasonably
cooperate with the indemnifying party in connection with any negotiation or
defense of any such action or Claim by the indemnifying party and shall furnish
to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person (as the case may be) which relates
to
such action or Claim. The indemnifying party shall
-14-
keep
the
Indemnified Party or Indemnified Person (as the case may be) reasonably apprised
at all times as to the status of the defense or any settlement negotiations
with
respect thereto. No indemnifying party shall be liable for any settlement of
any
action, claim or proceeding effected without its prior written consent,
provided,
however,
that
the indemnifying party shall not unreasonably withhold, delay or condition
its
consent. No indemnifying party shall, without the prior written consent of
the
Indemnified Party or Indemnified Person (as the case may be), consent to entry
of any judgment or enter into any settlement or other compromise which does
not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person (as the case may be) of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party
or
Indemnified Person (as the case may be) with respect to all third parties,
firms
or corporations relating to the matter for which indemnification has been made.
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 party of any liability to the Indemnified Person or Indemnified
Party (as the case may be) under this Section 0,
except
to the extent that the indemnifying party is materially and adversely prejudiced
in its ability to defend such action.
(d) No
Person
involved in the sale of Registrable Securities who is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
in
connection with such sale shall be entitled to indemnification from any Person
involved in such sale of Registrable Securities who is not guilty of fraudulent
misrepresentation.
(e) The
indemnification required by this Section 0
shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
(f) The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
|
7.
|
Contribution.
|
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 0
to the
fullest extent permitted by law; provided,
however,
that:
(i) no contribution shall be made under circumstances where the maker would
not
have been liable for indemnification under the fault standards set forth in
Section 0
of this
Agreement, (ii) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities
who
was not guilty of fraudulent misrepresentation; and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount
of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement (taking account of any amounts paid
or
payable
under Section 0).
-15-
|
8.
|
Reports
Under the 1934 Act.
|
With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investors to sell securities of the Company to the public
without registration (“Rule
144”),
the
Company agrees to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
(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 so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 4(c) of the Securities Purchase
Agreement) and the filing of such reports and other documents is required for
the applicable provisions of Rule 144; and
(c) furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, 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 with the SEC if such reports
are
not publicly available via XXXXX, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant
to
Rule 144 without registration.
|
9.
|
Assignment
of Registration Rights.
|
The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of such Investor’s Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
the
Company within five (5) Business Days after such assignment; (ii) the Company
is, within five (5) Business Days after such transfer or assignment, furnished
with written notice of (a) the name and address of such transferee or assignee,
and (b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws if so
required; (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein; (v) such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement; and (vi) such transfer shall
have been conducted in accordance with all applicable federal and state
securities laws.
|
10.
|
Amendment
of Registration Rights.
|
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only
-16-
with
the
written consent of the Company and the Required Holders, provided
that any
Investor may give a waiver in writing as to itself. Any amendment or waiver
effected in accordance with this Section 0
shall be
binding upon each Investor and the Company. No such amendment or waiver (unless
given pursuant to the foregoing proviso) shall be effective to the extent that
it applies to less than all of the holders of the Registrable Securities. No
consideration shall be offered or paid to any Person to amend or consent to
a
waiver or modification of any provision of any of this Agreement unless the
same
consideration also is offered to all of the parties to this
Agreement.
|
11.
|
Miscellaneous.
|
(a) Solely
for purposes of this Agreement, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns or is deemed to own of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from such record owner of such Registrable
Securities.
(b) Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service with next day delivery specified, in each case,
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If
to the
Company:
PokerTek,
Inc.
0000
Xxxxx Xxxx, Xxxxx X
Xxxxxxxx,
Xxxxx Xxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Chief Executive Officer
With
a
copy (for informational purposes only) to:
Xxxxxx
Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
000
Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxx, Esq.
If
to the
Transfer Agent:
American
Stock Transfer & Trust
0000
00xx
Xxxxxx
Xxxxxxxx,
Xxx Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Operations Center
-17-
If
to
Legal Counsel:
Xxxxxxxxx
Xxxxxxx, LLP
00
X.
Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxx
X.
Xxxxx, Esq.
If
to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers
attached hereto, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or
to
the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change provided,
that
Xxxxxxxxx Xxxxxxx, LLP shall only be provided notices sent to Magnetar Capital
Master Fund, Ltd. Written confirmation of receipt (A) given by the recipient
of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall
be
rebuttable evidence of personal service, receipt by facsimile or receipt from
a
nationally recognized overnight delivery service in accordance with clause
(i),
(ii) or (iii) above, respectively.
(c) Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as
a
waiver thereof.
(d) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
-18-
(e) This
Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement), the schedules and exhibits attached hereto and thereto
and
the instruments referenced herein and therein constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, the other
Transaction Documents, the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof and thereof.
(f) Subject
to the requirements of Section 0,
this
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
(g) The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof. Unless the context clearly
indicates otherwise, each pronoun herein shall be deemed to include the
masculine, feminine, neuter, singular and plural forms thereof. The terms
“including,”
“includes,”
“include”
and
words of like import shall be construed broadly as if followed by the words
“without limitation.” The terms “herein,”
“hereunder,”
“hereof”
and
words of like import refer to this entire Agreement instead of just the
provision in which they are found.
(h) This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
In
the event that any signature is delivered by facsimile transmission or by an
e-mail which contains an electronic file of an executed signature page, such
signature page shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or electronic file signature page (as the case
may be) were an original thereof.
(i) Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
(j) All
consents and other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this Agreement,
by the Required Holders.
-19-
(k) The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
(l) This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, other than the Persons
referred to in Section 0
and
0
hereof.
(m) The
obligations of each Investor under this Agreement and the other Transaction
Documents are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under this Agreement or any other Transaction
Document. Nothing contained herein or in any other Transaction Document, and
no
action taken by any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture
or
any other kind of group or entity, or create a presumption that the Investors
are in any way acting in concert or as a group or entity with respect to such
obligations or the transactions contemplated by the Transaction Documents or
any
matters, and the Company acknowledges that the Investors are not acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any of the other the Transaction Documents.
Each Investor shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or
out
of any other Transaction Documents, and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such purpose.
The use of a single agreement with respect to the obligations of the Company
contained was solely in the control of the Company, not the action or decision
of any Investor, and was done solely for the convenience of the Company and
not
because it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement and in
each other Transaction Document is between the Company and an Investor, solely,
and not between the Company and the Investors collectively and not between
and
among Investors.
[signature
pages follow]
-20-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
COMPANY:
|
|
|
POKERTEK,
INC.
By:
/s/ Gehrig
White
Name: X.
Xxxxx
Title:
C. E.
O.
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
|
|
MAGNETAR
CAPITAL MASTER FUND, LTD.
By: Magnetar
Financial LLC
Its: Investment
Manager
|
|
|
/s/
Xxxx
Xxxxxxxx
By: Xxxx
Xxxxxxxx
Its: Counsel
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
SRB
Greenway Capital, L.P.
|
|
|
By:
SRB Management, L.P., General Partner
|
|
|
By:
BC Advisors, L.L.C., General Partner
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx, Member
|
|
|
SRB
Greenway Capital (QP), L.P.
|
|
|
By:
SRB Management, L.P., General Partner
|
|
|
By:
BC Advisors, L.L.C., General Partner
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx, Member
|
|
|
SRB
Greenway Offshore Operating Fund, L.P.
|
|
|
By:
SRB Management, L.P., General Partner
|
|
|
By:
BC Advisors, LLC, General Partner
|
|
|
By:
/s/ Xxxxx
Xxxxxx
|
|
|
Xxxxx
Xxxxxx, Member
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
JANUS
CAPITAL MANAGEMENT LLC
|
|
|
(“Janus”)
on behalf of each of the following
|
|
|
funds
and portfolio advised by Janus:
|
|
|
JANUS
VENTURE FUND (a series of Janus
|
|
|
Investment
Fund), and
|
|
|
JANUS
US VENTURE FUND (a series of Janus
|
|
|
Capital
Funds Plc), and
|
|
|
SMALL
CAP GROWTH PORTFOLIO (a series
|
|
|
of
Ohio National Fund Inc.),
|
|
|
By:
/s/ Xxxxxxx
Xxxxx
|
|
|
Name:
Xxxxxxx Xxxxx
|
|
|
Title:
Portfolio Manager and authorized
|
|
|
signatory
as investment adviser to each of the
|
|
|
aforementioned
funds and portfolios
|
Address
for Notice:
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and Associate Counsel
Tel:
000
000 0000
Fax:
000
000 0000
SCHEDULE
OF BUYERS
|
Buyer
|
Buyer
Address
and
Facsimile Number
|
Buyer’s
Representative’s Address
and
Facsimile Number
|
|
Magnetar
Capital Master Fund, Ltd.
|
0000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxxxx Xxxxxx and Xxxx Xxxxxxx
Facsimile:
(000)
000-0000
|
Xxxxxxxxx
Traurig, LLP
00
X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxxxxx
Xxxx
X. Xxxxx
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
|
|
Janus
Venture Fund (a series of Janus Investment Fund)
|
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and
Associate
Counsel
Facsimile:
(303) 394-7714
|
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and
Associate
Counsel
Facsimile:
(000) 000-0000
|
|
Janus
US Venture Fund (a series of Janus Capital Funds
Plc)
|
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and
Associate
Counsel
Facsimile:
(303) 394-7714
|
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and
Associate
Counsel
Facsimile:
(000) 000-0000
|
|
Small
Cap Growth Portfolio (a series of Ohio National Fund
Inc.)
|
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and
Associate
Counsel
Facsimile:
(303) 394-7714
|
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx Xxxx, AVP and
Associate
Counsel
Facsimile:
(000) 000-0000
|
|
SRB
Greenway Capital (QP), L.P.
|
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attn:
Xxxxxx Xxx
Facsimile:
(000) 000-0000
|
N/A
|
|
SRB
Greenway Capital, L.P.
|
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attn:
Xxxxxx Xxx
Facsimile:
(000) 000-0000
|
N/A
|
|
SRB
Greenway Offshore Operating Fund, L.P.
|
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attn:
Xxxxxx Xxx
Facsimile:
(000) 000-0000
|
N/A
|
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
______________________
______________________
______________________
Attention:
_____________
Re: PokerTek,
Inc.
Ladies
and Gentlemen:
[We
are][I am] [an officer/counsel] to PokerTek, Inc., a North Carolina corporation
(the “Company”),
and
have represented the Company in connection with that certain Securities Purchase
Agreement (the “Securities
Purchase Agreement”)
entered into by and among the Company and the buyers named therein
(collectively, the “Holders”)
pursuant to which the Company issued to the Holders its shares of the Company’s
common stock, no par value (the “Common
Stock”),
and
warrants exercisable for shares of Common Stock (the “Warrants”).
Pursuant to the Securities Purchase Agreement, the Company also has entered
into
a Registration Rights Agreement with the Holders (the “Registration
Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon exercise of the Warrants,
under the Securities Act of 1933, as amended (the “1933
Act”).
In
connection with the Company’s obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration Statement
on Form S-1 (File No. 333-_____________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
relating to the Registrable Securities which names each of the Holders as a
selling stockholder thereunder.
In
connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at
[ENTER
TIME OF EFFECTIVENESS]
on
[ENTER
DATE OF EFFECTIVENESS]
and
[we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s
staff, that any stop order suspending its effectiveness has been issued or
that
any proceedings for that purpose are pending before, or threatened by, the
SEC
and the Registrable Securities are available for resale under the 1933 Act
pursuant to the Registration Statement.
This
letter shall serve as our standing instruction to you that, provided that a
Rule
424(b) prospectus has been filed with the SEC, the shares of Common Stock are
freely transferable by the Holders pursuant to the Registration Statement.
You
need not require further letters from us to effect any future legend-free
issuance or reissuance of shares of Common Stock to the Holders as contemplated
by the Company’s Irrevocable Transfer Agent Instructions dated _________ __,
200_.
Very
truly yours,
By:_____________________
CC: [LIST
NAMES OF HOLDERS]
EXHIBIT
B
SELLING
SHAREHOLDERS
The
shares of common stock being offered by the selling shareholders are those
previously issued to the selling shareholders and those issuable to the selling
shareholders upon exercise of the warrants. For additional information regarding
the issuance of those shares of common stock and warrants, see “Private
Placement of Common Shares and Warrants” above. We are registering the shares of
common stock in order to permit the selling shareholders to offer the shares
for
resale from time to time. Except for the ownership of the shares of common
stock
and the warrants issued pursuant to the Securities Purchase Agreement, the
selling shareholders have not had any material relationship with us within
the
past three years.
The
table
below lists the selling shareholders and other information regarding the
beneficial ownership of the shares of common stock by each of the selling
shareholders. The second column lists the number of shares of common stock
beneficially owned by each selling shareholder, based on its ownership of the
shares of common stock and the warrants, as of ________, 2007, assuming exercise
of all the warrants held by the selling shareholders on that date, without
regard to any limitations on exercise.
The
third
column lists the shares of Common Stock being offered by this prospectus by
the
selling shareholders.
In
accordance with the terms of a registration rights agreement with the holders
of
the shares of common stock and the warrants, this prospectus generally covers
the resale of the sum of (i) the number of shares of common stock equal to
the
number of shares of common stock issued and (ii) the number of shares of common
stock issuable upon exercise of the related warrants, determined as if the
outstanding warrants were exercised, as applicable, in full (without regard
to
any limitations on exercise contained therein), in each case, as of the trading
day immediately preceding the date this registration statement was initially
filed with the SEC. Because the exercise price of the warrants may be adjusted,
the number of shares that will actually be issued may be more or less than
the
number of shares being offered by this prospectus. The fourth column assumes
the
sale of all of the shares offered by the selling shareholders pursuant to this
prospectus.
Under
the
terms of the warrants, a selling shareholder may not exercise the warrants,
to
the extent such exercise would cause such selling shareholder, together with
its
affiliates, to beneficially own a number of shares of common stock which would
exceed 4.90% of our then outstanding shares of common stock following such
exercise, excluding for purposes of such determination shares of common stock
issuable upon exercise of the warrants which have not been exercised. The number
of shares in the second column does not reflect this limitation. The selling
shareholders may sell all, some or none of their shares in this offering. See
“Plan of Distribution.”
|
Name
of Selling Stockholder
|
Number
of Shares of Common Stock Owned Prior to Offering
|
Maximum
Number of Shares of Common Stock to be Sold Pursuant to this
Prospectus
|
Number
of Shares of Common Stock Owned After Offering
|
|
Magnetar
Capital Master Fund, Ltd. (1)
|
0
|
||
|
Janus
Venture Fund (a series of Janus Investment Fund)
|
|||
|
Janus
US Venture Fund (a series of Janus Capital Funds
Plc)
|
|||
|
Small
Cap Growth Portfolio (a series of Ohio National Fund
Inc.)
|
|||
|
SRB
Greenway Capital (QP), L.P.
|
|||
|
SRB
Greenway Capital, L.P.
|
|||
|
SRB
Greenway Offshore Operating Fund, L.P.
|
(1)
Magnetar Financial LLC is the investment advisor of Magnetar Capital Master
Fund, Ltd. (“Magnetar Master Fund”) and consequently has voting control and
investment discretion over securities held by Magnetar Master Fund. Xxxx
Xxxxxxxx has voting control over Supernova Management LLC, the general partner
of Magnetar Capital Partners LP, the sole managing member of Magnetar Financial
LLC. As a result, Xx. Xxxxxxxx may be deemed to have beneficial ownership (as
determined under Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any shares deemed to be beneficially owned by Magnetar Financial
LLC.
PLAN
OF DISTRIBUTION
We
are
registering the shares of common stock previously issued to the selling
shareholders and the shares of common stock issuable upon exercise of the
warrants to permit the resale of these shares of common stock by the holders
of
the common stock and warrants from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
shareholders of the shares of common stock. We will bear all fees and expenses
incident to our obligation to register the shares of common stock.
The
selling shareholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
shareholders will be responsible for underwriting discounts or commissions
or
agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,
| · |
on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale;
|
| · |
in
the over-the-counter market;
|
| · |
in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
|
| · |
through
the writing of options, whether such options are listed on an options
exchange or otherwise;
|
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| · |
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
short
sales made after the date the Registration Statement is declared
effective
by the SEC, subject to any applicable limitations on short sales
contained
in any agreement between a selling shareholder and the
Company;
|
| · |
sales
pursuant to Rule 144;
|
| · |
broker-dealers
may agree with the selling securityholders to sell a specified number
of
such shares at a stipulated price per
share;
|
| · |
a
combination of any such methods of sale;
and
|
| · |
any
other method permitted pursuant to applicable
law.
|
If
the
selling shareholders effect such transactions by selling shares of common stock
to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or
to
whom they may sell as principal (which discounts, concessions or commissions
as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales
of
the shares of common stock or otherwise, the selling shareholders may enter
into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling shareholders may also sell shares of common stock short
and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales.
The
selling shareholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all
of
the warrants or shares of common stock owned by them and, if they default in
the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling shareholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling shareholders also may transfer and donate the shares of common
stock
in other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The
selling shareholders and any broker-dealer participating in the distribution
of
the shares of common stock may be deemed to be “underwriters” within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of
the
shares of common stock is made, a prospectus supplement, if required, will
be
distributed which will set forth the aggregate amount of shares of common stock
being offered and the terms of the offering, including the name or names of
any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.
Under
the
securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in
some states the shares of common stock may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There
can
be no assurance that any selling shareholder will sell any or all of the shares
of common stock registered pursuant to the shelf registration statement, of
which this prospectus forms a part.
The
selling shareholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of
1934,
as amended, and the rules and regulations thereunder, including, without
limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of common
stock
by the selling shareholders and any other participating person. To the extent
applicable, Regulation M may also restrict the ability of any person engaged
in
the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing
may
affect the marketability of the shares of common stock and the ability of any
person or entity to engage in market-making activities with respect to the
shares of common stock.
We
will
pay all expenses of the registration of the shares of common stock pursuant
to
the registration rights agreement, estimated to be
$[ ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided,
however,
that a
selling shareholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling shareholders against liabilities,
including some liabilities under the Securities Act, in accordance with the
registration rights agreements, or the selling shareholders will be entitled
to
contribution. We may be indemnified by the selling shareholders against civil
liabilities, including liabilities under the Securities Act, that may arise
from
any written information furnished to us by the selling shareholder specifically
for use in this prospectus, in accordance with the related registration rights
agreements, or we may be entitled to contribution.
Once
sold
under the shelf registration statement, of which this prospectus forms a part,
the shares of common stock will be freely tradable in the hands of persons
other
than our affiliates.
