REGISTRATION RIGHTS AGREEMENT
dated as of
November 12, 1997
among
FLORIDA GAMING CORPORATION
and
THE PURCHASERS LISTED ON EXHIBIT A HERETO
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . .1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 2 REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . .3
2.1 Securities Subject to this Agreement . . . . . . . . .3
2.2 Shelf Registration . . . . . . . . . . . . . . . . . .3
2.3 Piggyback Registration . . . . . . . . . . . . . . . .5
2.4 Registration Procedures. . . . . . . . . . . . . . . .6
2.5 Preparation: Reasonable Investigation. . . . . . . . 11
2.6 Certain Rights of Holders. . . . . . . . . . . . . . 11
2.7 Registration Expenses. . . . . . . . . . . . . . . . 11
2.8 Indemnification; Contribution. . . . . . . . . . . . 12
2.9 Participation in Underwritten Registrations. . . . . 15
2.10 Selection of Underwriters. . . . . . . . . . . . . . 15
ARTICLE 3 LIQUIDATED DAMAGES . . . . . . . . . . . . . . . . . 15
ARTICLE 4 RULE 144A. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 5 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 16
5.1 Entire Agreement . . . . . . . . . . . . . . . . . . 16
5.2 Successors and Assigns . . . . . . . . . . . . . . . 16
5.3 Notices. . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Headings . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Counterparts . . . . . . . . . . . . . . . . . . . . 17
5.6 Applicable Law . . . . . . . . . . . . . . . . . . . 17
5.7 Specific Enforcement . . . . . . . . . . . . . . . . 17
5.8 Amendment and Waivers. . . . . . . . . . . . . . . . 17
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
dated as of November 12, 1997 between Florida Gaming Corporation,
a Delaware corporation (the "Company") and each of the Purchasers
of shares of Series G 5% Convertible Preferred Stock (the "Series
G Convertible Preferred Stock") pursuant to the Stock Purchase
Agreement of even date herewith (the "Stock Purchase Agreement"),
whose names are set forth on Exhibit A hereto (individually, a
"Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, it is a condition precedent to the obligations of
each Purchaser under the Stock Purchase Agreement that the Company
grant registration rights for the Company's Series G Convertible
Preferred Stock, and
WHEREAS, in connection with resales by the Purchasers of the
Company's Common Stock upon or after conversion of the Series G
Convertible Preferred Stock, the Company and the Purchasers now
desire to enter into this Agreement in order to facilitate such
resales.
AGREEMENT
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have
the following meanings.
"Board" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday
or other day on which banks in Miami, Florida are authorized by
law to close.
"Certificate of Designation" means the certificate of
powers, designations, preferences and relative, participating,
optional or other rights of the Company's Series G Convertible
Preferred Stock and the qualifications, limitations and
restrictions thereof, as amended from time to time.
"Closing Date" shall mean the Closing Date of the Stock
Purchase Agreement.
"Commission" means the Securities and Exchange
Commission.
"Common Stock" means the common stock, par value $.10
per share, of the Company.
"Company" means Florida Gaming Corporation, a Delaware
corporation.
"Company Registration Statement" means the Registration
Statement of the Company relating to the registration for sale of
shares of the Company's Common Stock contemplated by Section 2.3,
including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
"Effective Time" means the date of effectiveness of any
Registration Statement.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Holders" has the meaning given to it in Section 2.1(b)
hereof.
"NASD" means the National Association of Securities
Dealers, Inc.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a
government or political subdivision or an agency or
instrumentality thereof.
"Preferred Stock" means the Series G Convertible
Preferred Stock, par value $.10 per share, of the Company, issued
for any purpose including, but not limited to, in consideration
as the payment of dividends on the Company's Preferred Stock,
Common Stock, or other securities.
"Prospectus" means the prospectus included in any
Registration Statement, as amended or supplemented by any
prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"Registration Statements" means the Company
Registration Statement and the Shelf Registration Statement.
"Restricted Securities" means any Securities until (i)
a registration statement covering such Securities has been
declared effective by the Commission and such Securities have
been disposed of pursuant to such effective registration
statement, (ii) such Securities are sold under circumstances in
which all the applicable conditions of Rule 144 (or any similar
provisions then in force) under the Securities Act are met, or
such Securities may be sold pursuant to Rule 144(k) (or any
similar provision then in force) under the Securities Act, and
are freely tradable after such sale by the transferee, (iii) such
Securities are otherwise transferred, the Company has delivered a
new certificate or other evidence of ownership for such
Securities not bearing a legend restricting further transfer and
such Securities may be resold without registration under the
Securities Act, or (iv) such Securities shall have ceased to be
outstanding.
"Securities" means the Company's Common Stock issuable
upon conversion of the Preferred Stock, and, if the Registration
Statement on Form S-3 is available for such registration, upon
the exercise of the warrants to purchase the Company's Common
Stock issued to the Holders in connection with the issuance of
the Preferred Stock.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shelf Registration Statement" means the registration
statement of the Company relating to the shelf registration for
resale of Restricted Securities contemplated by Section 2.2
herein, including the Prospectus included therein, all amendments
and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
"Stock Purchase Agreement" has the meaning given to it
in the recitals to this Agreement.
As used in this Agreement, words in the singular
include the plural, and in the plural include the singular.
ARTICLE 2
REGISTRATION RIGHTS
2.1 Securities Subject to this Agreement.
(a) The Securities entitled to the benefits of this
Agreement are the Restricted Securities, but only for so long as
they remain Restricted Securities.
(b) A Person is deemed to be a holder of Restricted
Securities (each, a "Holder") whenever such Person is the
registered holder of such Restricted Securities on the Company's
books and records.
2.2 Shelf Registration.
(a) The Company shall:
(i) as expeditiously as practicable, but no later
than 60 days from the Closing Date, cause to be filed a Shelf
Registration Statement on Form S-3, as available, or such other
available Form, pursuant to Rule 415 under the Securities Act,
which Shelf Registration Statement shall provide for resales of
all Restricted Securities of the Holders who shall have provided
to the Company the information required pursuant to Section
2.2(c) herein; and
(ii) use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective by the
Commission within 180 days from the Closing Date.
(b) In connection with the Shelf Registration
Statement, the Company shall comply with all the provisions of
Section 2.4 below and shall use its reasonable efforts to effect
such registration to permit the sale of the Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished
to the Company pursuant to Section 2.2.(c)). Subject to Section
2.2(d), the Company shall use its reasonable best efforts to
keep such Shelf Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section
2.2(d) to the extent necessary to ensure that it is available for
resales of Restricted Securities by the Holders of Restricted
Securities, and to ensure that it conforms with the requirements
of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for
a period of five (5) years from the Effective Time or such longer
period as required by Section 2.2(d) or such shorter period that
will terminate when all the Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement or otherwise cease to be Restricted
Securities. Upon the occurrence of any event that would cause any
Shelf Registration Statement or the Prospectus contained therein
(i) to contain a material misstatement or omission or (ii) not to
be effective and usable for sale or resale of Restricted
Securities during the period required by this Agreement, the
Company shall file promptly an appropriate amendment to such
Shelf Registration Statement or the related Prospectus or any
document incorporated therein by reference, in the case of clause
(i), correcting any such misstatement or omission, and, in the
case of either clause (i) or (ii), use its reasonable efforts to
cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become
usable for its intended purpose(s) as soon as practicable
thereafter.
(c) No Holder of Restricted Securities may include any
of its Restricted Securities in the Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes
to the Company in writing, within 10 Business Days after receipt
of a written request therefor, such information specified in Item
507 of Regulation S-K under the Securities Act or such other
information as the Company may reasonably request for use in
connection with the Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein and in any application to
the NASD. Each Holder as to which the Shelf Registration
Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make
the information previously furnished to the Company by such
Holder not materially misleading.
(d) Notwithstanding anything to the contrary contained
herein, if (x) the Board determines in good faith that the
registration and distribution of Restricted Securities (or the
use of such Shelf Registration Statement or the Prospectus
contained therein) would interfere with any proposed or pending
material corporate transaction involving the Company or any of
its subsidiaries or would require premature disclosure thereof
or would require the Company to disclose information that the
Company has not otherwise made public and that the Company
reasonably determines is in the best interests of the Company not
to disclose at such time, and (y) the Company notifies the
Holders in writing not later than three (3) days following such
determination (such notice a "Blackout Notice"), the Company may
(A) postpone the filing of such Shelf Registration Statement or
(B) allow such Shelf Registration Statement to fail to be
effective and usable or elect that such Shelf Registration
Statement not be usable for a reasonable period of time, but not
in excess of 90 days (a "Blackout Period"); provided, however,
that the aggregate number of days included in all Blackout
Periods shall not exceed 45 during any consecutive 12 months and
shall not exceed 90 during the period specified in Section 2.2(b)
of this Agreement; and provided, further, that the period
referred to in Section 2.2(b) during which the Shelf Registration
Statement is required to be effective and usable shall be
extended by the aggregate number of days during which the Shelf
Registration Statement was not effective or usable pursuant to
the foregoing provisions; and provided further, that the right of
the Company to impose a Blackout Period shall only arise after
the Company has first had the Shelf Registration Statement
declared effective by the Securities and Exchange Commission and
paid any liquidated damages pursuant to Article 3 herein, if
required. In no event shall any Blackout Period affect the
conversion rights set forth in Section 5(m) of the Certificate of
Designation.
2.3 Piggyback Registration.
(a) At any time that the Company proposes to file a
Company Registration Statement, either for its own account or for
the account of a stockholder or stockholders, the Company shall
give the Holders written notice of its intention to do so and of
the intended method of sale (the "Registration Notice") within a
reasonable time prior to the anticipated filing date of the
Company Registration Statement effecting such Company
Registration. Each Holder may request inclusion of any Restricted
Securities in such Company Registration by delivering to the
Company, within twenty (20) days after receipt of the
Registration Notice, a written notice (the "Piggyback Notice")
stating the number of Restricted Securities proposed to be
included and that such shares are to be included in any
underwriting only on the same terms and conditions as the shares
of Common Stock otherwise being sold through underwriters under
such Company Registration Statement. The Company shall use its
best efforts to cause all Restricted Securities specified in the
Piggyback Notice to be included in the Company Registration
Statement and any related offering, all to the extent requisite
to permit the sale by the Holders of such Restricted Securities
in accordance with the method of sale applicable to the other
shares of Common Stock included in such Company Registration
Statement; provided, however, that if, at any time after giving
written notice of its intention to register any securities and
prior to the effective date of the Company Registration Statement
filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration
of such securities, the Company may, at its election, give
written notice of such determination to each Holder of Restricted
Securities and, thereupon:
(i) in the case of a determination not to
register in a piggyback registration, shall be relieved of its
obligation to register any Restricted Securities in connection
with such registration (but not from its obligation to pay the
expenses of registration in connection therewith), and
(ii) in the case of a delay in registering in a
piggyback registration, shall be permitted to delay registering
any Restricted Securities for the same period as the delay in
registering such other securities.
(b) The Company's obligation to include Restricted
Securities in a Company Registration Statement pursuant to
Section 2.3(a) shall be subject to the following limitations:
(i) The Company shall not be obligated to
include any Restricted Securities in a registration statement
filed on Form X-0, Xxxx X-0 or such other similar successor forms
then in effect under the Securities Act.
(ii) If a Company Registration Statement involves
an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of securities
requested to be included in such Company Registration Statement
exceeds the number which can be sold in such offering without
adversely affecting the offering, the Company will include in
such Company Registration Statement the number of such Securities
which the Company is so advised can be sold in such offering
without adversely affecting the offering, determined as follows:
(A) first, the securities proposed by the
Company to be sold for it own account, and
(B) second, any Restricted Securities
requested to be included in such registration and any other
securities of the Company in accordance with the priorities, if
any, then existing among the holders of such securities pro rata
among the holders thereof requesting such registration on the
basis of the number of shares of such securities requested to be
included by such holders.
(iii) The Company shall not be obligated to
include Restricted Securities in more than three Company
Registration Statement(s).
(c) No Holder of Restricted Securities may include any
of its Restricted Securities in the Company Registration
Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 10 Business Days
after receipt of a written request therefor, such information
specified in Item 507 of Regulation S-K under the Securities Act
or such other information as the Company may reasonably request
for use in connection with the Company Registration Statement or
Prospectus or preliminary Prospectus included therein and in any
application to the NASD. Each Holder as to which the Company
Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed
in order to make all information previously furnished to the
Company by such Holder not materially misleading.
2.4 Registration Procedures. In connection with any
Registration Statement and any Prospectus required by this
Agreement to permit the sale or resale of Restricted Securities,
the Company shall:
(a) prepare and file with the Commission such
amendments and post-effective amendments to such Registration
Statement as may be necessary to keep such Registration Statement
effective (i) if such Registration Statement is a Company
Registration Statement, until the earlier of such time as all of
such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof
set forth in such Company Registration Statement or (ii) if such
Registration Statement is a Shelf Registration Statement, for the
applicable period set forth in Section 2.2(b) herein; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule
424 under the Securities Act, and to comply fully with the
applicable provisions of Rules 424 and 430A, as applicable, under
the Securities Act in a timely manner; and comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement or the Prospectus;
(b) advise the Holders covered by such Registration
Statement and, if requested by such Persons, to confirm such
advice in writing, (i) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and when
the same has become effective, (ii) of any request by the
Commission for post-effective amendments to such Registration
Statement or post-effective amendments or supplements to the
Prospectus or for additional information relating thereto, (iii)
of the issuance by the Commission of any stop order suspending
the effectiveness of any such Registration Statement under the
Securities Act or of the suspension by any state securities
commission of the qualification of the Restricted Securities for
offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, and (iv) of the
existence of any fact or the happening of any event that makes
any statement of a material fact made in any such Registration
Statement, the related Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein
untrue, or that requires the making of any additions to or
changes in any such Registration Statement or the related
Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of such Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Restricted Securities under
state securities or Blue Sky laws, the Company shall use its
reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(c) promptly furnish to each Holder of Restricted
Securities covered by any Registration Statement, and each
underwriter, if any, without charge, at least one conformed copy
of any Registration Statement, as first filed with the Commission
and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference) and such other
documents as such Holder may reasonably request;
(d) deliver to each Holder covered by any Registration
Statement, and each underwriter, if any, without charge, as many
copies of the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such person reasonably
may request.
(e) enter into such customary agreements and take all
such other reasonable action in connection therewith (including
those reasonably requested by the selling Holders or the
underwriter(s), if any) required in order to expedite or
facilitate the disposition of such Restricted Securities pursuant
to such Registration Statement, including, but not limited to,
dispositions pursuant to an underwritten registration, and in
such connection:
(i) make such representations and warranties to
the selling Holders and underwriter(s), if any, in form,
substance and scope as are customarily made by issuers to
underwriters in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be to
an underwriter(s)) and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company
(which counsel and opinions, in form and substance, shall be
reasonably satisfactory to the selling Holders and the
underwriter(s), if any, and their respective counsel) addressed
to each selling Holder and underwriter, if any, covering the
matters customarily covered in opinions requested in underwritten
offerings (whether or not sales of securities pursuant to such
Registration Statement are to be made to an underwriter(s)) and
dated the date of effectiveness of any Registration Statement
(and, in the case of any underwritten sale of securities pursuant
to such Registration Statement, each closing date of sales to the
underwriter(s) pursuant thereto);
(iii) use reasonable efforts to obtain comfort
letters dated the date of effectiveness of any Registration
Statement (and, in the case of any underwritten sale of
securities pursuant to such Registration Statement, each closing
date of sales to the underwriter(s) pursuant thereto) from the
independent certified public accountants of the Company addressed
to each selling Holder and underwriter, if any, such letters to
be in customary form and covering matters of the type customarily
covered in comfort letters in connection with underwritten
offerings (whether or not sales of securities pursuant to such
Registration Statement are to be made to an underwriter(s));
(iv) provide for the indemnification provisions
and procedures of Section 2.6 hereof with respect to selling
Holders and the underwriter(s), if any, and;
(v) deliver such documents and certificates as
may be reasonably requested by the selling Holders or the
underwriter(s), if any, and which are customarily delivered in
underwritten offerings (whether or not sales of securities
pursuant to such Registration Statement are to be made to an
underwriter(s)), with such documents and certificates to be dated
the date of effectiveness of any Registration Statement.
The actions required by clauses (i) through (v) above shall
be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at
any time the representations and warranties of the Company
contemplated in clause (i) above cease to be true and correct,
the Company shall so advise the underwriter(s), if any, and each
selling Holder promptly, and, if requested by such Person, shall
confirm such advice in writing;
(f) prior to any public offering of Restricted
Securities, cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the
Restricted Securities under the securities or Blue Sky laws of
such U.S. jurisdictions as the selling Holders or underwriter(s),
if any, may reasonably request in writing by the time any
Registration Statement is declared effective by the Commission,
and do any and all other acts or filings necessary or advisable
to enable disposition in such U.S. jurisdictions of the
Restricted Securities covered by any Registration Statement and
to file such consents to service of process or other documents as
may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation in any
jurisdiction where it is not then so qualified or as a dealer in
securities in any jurisdiction where it would not otherwise be
required to register or qualify but for this Section 2.4, or to
take any action that would subject it to the service of process
in suits or to taxation, in any jurisdiction where it is not then
so subject;
(g) in connection with any sale of Restricted
Securities that will result in such securities no longer being
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Restricted Securities to be
sold and not bearing any restrictive legends; and enable such
Restricted Securities to be in such denominations and registered
in such names as the Holders or the underwriter(s), if any, may
request at least two (2) Business Days prior to any sale of
Restricted Securities made by such underwriters;
(h) use its reasonable efforts to cause the
disposition of the Restricted Securities covered by any
Registration Statement to be registered with or approved by such
other U.S. governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of such
Restricted Securities, subject to the proviso contained in
Section 2.2(f);
(i) if any fact or event contemplated by Section
2.4(b) shall exist or have occurred, prepare a supplement or
post-effective amendment to any Registration Statement or related
Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered
to the purchasers of Restricted Securities, the Prospectus will
not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statement therein
not misleading;
(j) cooperate and assist in the performance of any due
diligence investigation by any underwriter (including any
"qualified independent underwriter") that is required to be
retained in accordance with the rules and regulations of the
NASD, and use its reasonable efforts to cause any Registration
Statement to become effective and approved by such U.S.
governmental agencies or authorities as may be necessary to
enable the Holders selling Restricted Securities to consummate
the disposition of such Restricted Securities;
(k) otherwise use its reasonable efforts to comply
with all applicable rules and regulations of the Commission, and
make generally available to its security holders with regard to
such Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule
158 (which need not be audited) for the twelve-month period (i)
commencing at the end of any fiscal quarter in which Restricted
Securities are sold to the underwriter in a firm or best efforts
underwritten offering or (ii) if not sold to an underwriter in
such an offering, beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of any
Registration Statement;
(l) request that the Company's transfer agent provide
a CUSIP number for all Restricted Securities not later than the
effective date of any Registration Statement;
(m) use its best efforts to list, not later than the
effective date of such Registration Statement, all Restricted
Securities covered by such Registration Statement on the NASDAQ
Small Capital Market or any other trading market on which any
Common Stock of the Company are then admitted for trading, and
(n) provide promptly to each Holder covered by any
Registration Statement upon request each document filed with the
Commission pursuant to the requirements of Section 12 and Section
14 of the Exchange Act.
Each Holder agrees by acquisition of a Restricted Security
that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 2.4(b)(iv)
or the commencement of a Black-Out Period, such Holder will
forthwith discontinue disposition of Restricted Securities
pursuant to any Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 2.4(i), or until it is advised in
writing, in accordance with the notice provisions of Section 5.3
herein (the "Advice"), by the Company that the use of the
Prospectus may be resumed, and has received copies of any
additional or supplemental fillings that are incorporated by
reference in the Prospectus. If so directed by the Company, each
Holder will deliver to the Company all copies, other than
permanent file copies, then in such Holder's possession, of the
Prospectus covering such Restricted Securities that was current
at the time of receipt of such notice. In the event the Company
shall give any such notice, the time period regarding the
effectiveness of the Shelf Registration Statement set forth in
Section 2.2(b) shall be extended by the number of days during
the period from and including the date of the giving of such
notice pursuant to Section 2.4(b)(iv) or the commencement of a
Black-Out Period to and including the date when each selling
Holder covered by such Registration Statement shall have received
the copies of the supplemented or amended Prospectus contemplated
by Section 2.4(i) or shall have received (in accordance with the
notice provisions of Section 5.3) the Advice.
2.5 Preparation; Reasonable Investigation. In connection
with preparation and filing of each Registration Statement under
the Securities Act, the Company will give the Holders of
Restricted Securities registered under such Registration
Statement, their underwriter, if any, and their respective
counsel and accountants, the opportunity to participate in the
preparation of such Registration Statement, each prospectus
included therein or filed with the Commission, and each amendment
thereof or supplement thereto, and will give each of them the
financial statements, contracts and other corporate records as
requested, and such opportunities to discuss the business,
finances and accounts of the Company and its subsidiaries with
its officers, directors and the independent public accountants
who have certified its financial statements as shall be
necessary, in the opinion of such Holders and such underwriters '
respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act. If any such information is
reasonably deemed to be confidential, then the Holders and their
underwriters, if any, shall execute a confidentiality agreement
with the Company in a form reasonably acceptable to the Company.
2.6 Certain Rights of Holders. Unless required by
applicable law, the Company will not file any registration
statement under the Securities Act which refers to any Holder of
Restricted Securities by name or otherwise without the prior
written approval of such Holder, which may not be unreasonably
withheld.
2.7 Registration Expenses.
(a) All expenses incident to the Company's performance
of or compliance with this Agreement will be borne by the
Company, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and
filing fees and expenses (including filings made with the NASD
and reasonable counsel fees of the Company in connection
therewith); (ii) all reasonable fees and expenses of compliance
with federal securities and state Blue Sky or securities laws in
connection with compliance with state Blue Sky or securities laws
for up to 15 states; (iii) all expenses of printing, messenger
and delivery services and telephone calls; (iv) all fees and
disbursements of counsel for the Company; and (v) all fees and
disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort
letters required by or incident to such performance).
(b) In addition, in connection with the filing of the
Shelf Registration Statement required to be filed by this
Agreement, the Company will reimburse the Holders of the
Restricted Securities being registered pursuant to any Shelf
Registration Statement for the reasonable fees and disbursements
(not to exceed $5,000) of not more than one counsel to review
such Registration Statement.
(c) Notwithstanding the foregoing, the Company will
not be responsible for any underwriting discounts, commissions or
fees attributable to the sale of Restricted Securities or any
legal fees or disbursements (other than any such fees or
disbursements relating to Blue Sky compliance or otherwise as set
for the under Section 2.7(a)) incurred by any underwriter(s) in
any underwritten offering if the underwriter(s) participates in
such underwritten offering at the request of the Holders of
Restricted Securities, or any transfer taxes that may be imposed
in connection with a sale or transfer of Restricted Securities.
(d) The Company shall, in any event, bear its internal
expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees
and expenses of any Person, including special experts, retained
by the Company.
2.8 Indemnification; Contribution.
(a) The Company agrees to indemnify and hold harmless
(i) each Holder covered by any Registration Statement, (ii) each
other Person who participates as an underwriter in the offering
or sale of such securities, (iii) each person, if any, who
controls (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) any such Holder or underwriter
(any of the persons referred to in this clause (iii) being
hereinafter referred to as a "controlling person") and (iv) the
respective officers, directors, partners, employees,
representatives and agents of any such Holder or underwriter or
any controlling person (any person referred to in clause (i),
(ii), (iii) or (iv) may hereinafter be referred to as an
"indemnified Person"), to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities,
judgments or expenses, joint or several (or actions or
proceedings, whether commenced or threatened, in respect thereof)
(collectively, "Claims"), to which such indemnified Person may
become subject under either Section 15 of the Securities Act or
Section 20 of the Exchange Act or otherwise, insofar as such
Claims arise out of or are based upon, or are caused by any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (or any
amendment or supplement thereto), or any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or a violation by the Company of the Securities Act
or any state securities law, or any rule or regulation
promulgated under the Securities Act or any state securities law,
or any other law applicable to the Company relating to any such
registration or qualification, except insofar as such losses,
claims, damages, liabilities, judgments or expenses of any such
indemnified Person: (x) are caused by any such untrue statement
or omission or alleged untrue statement or omission that is based
upon information relating to such indemnified Person furnished in
writing to the Company by or on behalf of any of such indemnified
Person expressly for use therein; or (y) with respect to the
preliminary Prospectus, result from the fact that such Holder
sold Securities to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of
the Prospectus, as amended or supplemented, if the Company shall
have previously furnished copies thereof to such Holder in
accordance with this Agreement and said Prospectus, as amended
or supplemented, would have corrected such untrue statement or
omission. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any
indemnified Person and shall survive the transfer of such
securities by such Holder.
In case any action shall be brought or asserted against
any of the indemnified Persons with respect to which indemnity
may be sought against the Company, such indemnified Person shall
promptly notify the Company and the Company shall assume the
defense thereof. Such indemnified Person shall have the right to
employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified Person unless (i) the
employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have
failed to assume the defense and employ counsel or (iii) the
named parties to any such action (including any implied parties)
include both the indemnified Person and the Company and the
indemnified Person shall have been advised in writing by its
counsel that there may be one or more legal defenses available to
it which are different from or additional to those available to
the Company (in which case the Company shall not have the right
to assume the defense of such action on behalf of the indemnified
Person), it being understood, however, that the Company shall
not, in connection with such action or similar or related actions
or proceedings arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any
local counsel) at any time for all the indemnified Persons, which
firm shall be (x) designated by such indemnified Persons and (y)
reasonably satisfactory to the Company. The Company shall not be
liable for any settlement of any such action or proceeding
effected without the Company's prior written consent, which
consent shall not be withheld unreasonably, and the Company
agrees to indemnify and hold harmless any indemnified Person from
and against any loss, claim, damage, liability, judgment or
expense by reason of any settlement of any action effected with
the written consent of the Company. The Company shall not,
without the prior written consent of each indemnified Person,
settle or compromise or consent to the entry of judgment on or
otherwise seek to terminate any pending or threatened action,
claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether
or not any indemnified Person is a party thereto), unless such
settlement, compromise, consent or termination includes an
unconditional release of each indemnified Person from all
liability arising out of such action, claim litigation or
proceeding.
(b) Each Holder of Restricted Securities covered by
any Registration Statement agrees, severally and jointly, to
indemnify and hold harmless the Company and its directors,
officers and any person controlling (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act) the Company, and the respective officers, directors,
partners, employees, representatives and agents of each person,
to the same extent as the foregoing indemnity from the Company to
each of the indemnified Persons, but only with respect to actions
based on information relating to such Holder furnished in writing
by or on behalf of such Holder expressly for use in any
Registration Statement or Prospectus. In case any action or
proceeding shall be brought against the Company or its directors
or officers or any such controlling person in respect of which
indemnity may be sought against a Holder of Restricted Securities
covered by any Registration Statement, such Holder shall have the
rights and duties given the Company in Section 2.8(a) (except
that the Holder may but shall not be required to assume the
defense thereof), and the Company or its directors or officers
or such controlling person shall have the rights and duties given
to each Holder by Section 2.8(a).
(c) If the indemnification provided for in this
Section 2.8 is unavailable to an indemnified party under Section
2.7(a) or (b) (other than by reason of exceptions provided in
those Sections) in respect of any losses, claims, damages,
liabilities, judgments or expenses referred to therein, then each
applicable indemnifying party (in the case of the Holders
severally and not jointly), in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims
damages, liabilities, judgments or expenses (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Holder on the
other hand from sale of Restricted Securities or (ii) if such
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and such Holder in
connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities, judgments or expenses,
as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of such Holder
on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or
by such Holder and the parties relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission. The amount paid to a party as a result of
the losses, claims, damages, liabilities judgments and expenses
referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 2.8(a),
any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or
claim.
The Company and each Holder of Restricted Securities
covered by any Registration Statement agree that it would not be
just and equitable if contribution pursuant to this Section
2.8(c) were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.8(c)
no Holder (and none of its related indemnified Persons) shall be
required to contribute, in the aggregate, any amount in excess of
the amount by which the dollar amount of proceeds received by
such Holder upon the sale of the Restricted Securities exceeds
the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity, and contribution provisions contained in
this Section 2.8 are in addition to any liability which the
indemnifying person may otherwise have to the indemnified persons
referred to above.
2.9 Participation in Underwritten Registrations. No Holder
may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Restricted
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under
the terms of such underwriting arrangements.
2.10 Selection of Underwriters. The Holders of Restricted
Securities covered by any Registration Statement who desire to do
so may sell such Restricted Securities in an underwritten
offering. In any such underwritten offering, the investment
banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a
majority of the Restricted Securities included in such offering
if such registration is pursuant to the Shelf Registration
Statement, and by the Company if such registration is pursuant
to a Company Registration Statement; provided, however, that such
investment bankers and managers must be reasonably satisfactory
to the Company or the Holders, respectively. Such investment
bankers and managers are referred to herein as the
"underwriters".
ARTICLE 3
LIQUIDATED DAMAGES
Each of the Company and the Purchasers (on behalf of
themselves and each subsequent Holder of Restricted Securities)
agrees that each Holder of Restricted Securities will suffer
damages if the Shelf Registration Statement covering all
Registrable Securities is not filed with and declared effective
by the Commission and maintained in the manner and within the
time period contemplated by Article 2 hereof, and it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Shelf Registration Statement is not filed
and declared effective by the Commission on or prior to the date
that is 180 days after the Closing Date, (ii) the Company shall
cause a Blackout Period to occur within the first 30 days
following the 180th day after the Closing Date, or (iii) the
Shelf Registration Statement is filed and declared effective but
shall thereafter cease to be effective (without being succeeded
immediately by an additional Shelf Registration Statement filed
and declared effective) for a period of time which shall exceed
45 days in the aggregate per year (defined as a period of 365
days commencing on the date the Shelf Registration Statement is
declared effective) (each such event referred to in clauses (i)
and (ii) is referred to herein as a "Registration Default"),
then the Company shall pay as Liquidated Damages to each Holder
of Restricted Securities who has complied with such Holder's
obligations hereunder an amount equal to 1% of the liquidation
preference of the Preferred Stock for the first 30 day period
after the expiration of said 180 day period after the Closing
Date (or pro rata portion thereof) and 2% of the liquidation
preference of the Preferred Stock for each 30 day period
thereafter (or pro rata portion thereof) that there continues to
be a Registration Default, in cash ratably according to the
number of Preferred Stock held by each Holder, immediately
payable following the occurrence of such Registration Default.
ARTICLE 4
RULE 144A
The Company hereby agrees with each Holder of Restricted
Securities, for so long as any of the Restricted Securities
remain outstanding and continue to be "restricted securities"
within the meaning of Rule 144 under the Act, and during any
period in which the Company is not subject to Section 13 or 15(d)
of the Exchange Act, to make available to the Holders of
Restricted Securities in connection with any sale thereof, and
to any prospective purchaser of Preferred Stock or Common Stock
from such Holders of Restricted Securities or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in
order to permit resales of such Restricted Securities pursuant to
Rule 144A.
ARTICLE 5
MISCELLANEOUS
5.1 Entire Agreement. This Agreement, together with the
Stock Purchase Agreement and the Certificate of Designation,
constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreement
and understandings, both oral and written, between the parties
with respect to the subject matter hereof.
5.2 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of
each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Restricted
Securities; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign
of a Holder unless and to the extent such successor or assign
acquired Restricted Securities from such Holder at a time when
such Holder could not transfer such Restricted Securities
pursuant to any Registration Statement or pursuant to Rule 144
under the Securities Act as contemplated by clause (ii) of the
definition of Restricted Securities.
5.3. Notices. All notices and other communications given or
made pursuant hereto or pursuant to any other agreement among the
parties, unless otherwise specified, shall be in writing and
shall be deemed to have been duly given or made if sent by
telecopy (with confirmation in writing), delivered personally or
by overnight courier or sent by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the
telecopy number, if any, or address set forth below or at such
other addresses as shall be furnished by the parties by like
notice. Notices sent by telecopier shall be effective when
receipt is acknowledged, notices delivered personally or by
overnight courier shall be effective upon receipt and notices
sent by registered or certified mail shall be effective three
days after mailing:
if to a Holder: to such Holder at the address set
forth beneath the signature of the
Holder to this Agreement, or if not
so stated, as it appears on the
records of the Preferred Stock
register. In addition, copies of
all such notices or other
communications shall be
concurrently delivered by the
Person giving the same to each
person who has been identified to
the Company by such Holder as a
Person who is to receive copies of
such notice.
if to the Company: Florida Gaming Corporation
0000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Telephone Number: (000) 000-0000
Attention: X. Xxxxxxx Xxxxxxx,
Chief Executive Officer
5.4 Headings The headings contained in this Agreement are
for convenience only and shall not affect the meaning or
interpretation of this Agreement.
5.5 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and
the same instrument.
5.6 Applicable Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of New York, without giving effect to the choice law provisions.
5.7 Specific Enforcement. Each party hereto acknowledges
that the remedies at law of the other parties for a breach or
threatened breach of this Agreement would be inadequate, and, in
recognition of this fact, any party to this Agreement, without
posting any bond, and in addition to all other remedies which may
be available, shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a
temporary to permanent injunction or any other equitable remedy
which may then be available.
5.8 Amendment and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof
may not be given unless the Company has obtained the written
consent of Holders of a majority of the Restricted Securities.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
Florida Gaming Corporation
By:
Name: X. Xxxxxxx Xxxxxxx
Its: Chief Executive Officer
THE PURCHASERS
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