FLORIDA GAMING CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
entered into as of November 19, 1997, by and among FLORIDA GAMING
CORPORATION, a Delaware corporation (the "Company"), and PACIFIC
CONTINENTAL SECURITIES CORP. ("Pacific").
RECITALS
WHEREAS, the Company expects to issue to Pacific warrants
(the "Warrants") to purchase up to 150,000 shares of the Common
Stock of the Company in connection with the offering (the
"Offering") by the Company of up to 3,000 shares of Series G 5%
Convertible Preferred Stock of the Company (the "Shares")
convertible into shares of the Company's Common Stock; and
WHEREAS, the Company has agreed to register the Registrable
Shares (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties, covenants and conditions set forth
in this Agreement, the Company and Pacific agree as follows:
AGREEMENT:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering
the Securities Act.
"Common Stock" shall mean the Company's Common Stock, $.10
par value.
"Other Registrable Securities" shall mean those shares of
Common Stock heretofore or hereafter issued pursuant to one or
more agreements granting the purchasers of such securities the
right to have the Company register such securities or include
such securities in any other registration of the Company's equity
securities.
"Registrable Shares" shall mean (i) the shares of Common
Stock issuable upon exercise of the Warrants, and (ii) any shares
of Common Stock of the Company issued or issuable in respect of
the Warrants upon any stock split, stock dividend,
recapitalization or similar event; provided, however, that
Registrable Shares or other securities shall no longer be treated
as Registrable Shares if (A) they have been sold to or through a
broker or dealer or underwriter in a public distribution or a
public securities transaction, (B) they have been sold in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act so that all transfer
restrictions and restrictive legends with respect thereto are
removed upon consummation of such sale, or (C) the shares are
available for sale under the Securities Act (including Rule 144
thereunder), in the opinion of counsel to the Company, without
compliance with the registration and prospectus delivery
requirements of the Securities Act so that all transfer
restrictions and restrictive legends with respect thereto may be
removed upon the consummation of such sale.
The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration
or ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by
the Company in compliance with Section 2 hereof, including,
without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue
sky fees and expenses, reasonable fees and disbursements (not to
exceed $5,000) of one counsel for all the selling holders of
Registrable Shares, and the reasonable expenses of any special
audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company,
which shall be paid in any event by the Company, and excluding
all underwriting discounts and selling commissions applicable to
the sale of the Registrable Shares).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall
be in effect from time to time.
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Shares
and all fees and disbursements of counsel for the selling holders
of Registrable Shares (other than the fees and disbursements of
such counsel included in Registration Expenses).
2. Registration.
(a) Agreement to Register. At any time four months
from the date of this Agreement until the third anniversary of
the date hereof, at the request (the "Registration Request") of
the holders of a majority of the Registrable Shares, the Company
shall prepare and file with the Commission within 60 days of the
Registration Request a registration statement covering the resale
of the Registrable Shares, shall use its best efforts to cause
such registration statement to become effective within 60 days
thereafter and to do all other things necessary to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky and other state
securities laws in such jurisdictions as the holders of
Registrable Shares may reasonably request, and appropriate
compliance with applicable regulations issued under the
Securities Act) and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Shares.
The registration statement filed pursuant to this
Section 2 may, subject to the provision of Section 2(c) below,
include Other Registrable Securities and may include securities
of the Company being sold for the account of the Company.
(b) Penalty for Failure to Register.
(i) If a registration statement is not declared
effective within 180 days from the Registration Request (the "180
Day Period"), then the Company shall pay to holders of
Registrable Shares who have complied with the obligations
hereunder an aggregate amount equal to $5,000 for each 30 day
period after the expiration of the 180 Day Period and through the
270th day from the Registration Request ("270 Day Period") until
the registration statement is declared effective.
(ii) If a registration statement is not declared
effective within the 270 Day Period, then the Company shall pay
to holders of Registrable Shares who have complied with the
obligations hereunder an aggregate amount equal to $10,000 for
each 30 day period after the expiration of the 270 Day Period
until the registration statement is declared effective.
(iii) Any penalty payable to holders of
Registrable Shares under Sections 2(b)(i) or (ii) shall be
allocated pro rata among all the holders of Registrable Shares to
be included in the registration statement.
(c) Notwithstanding anything to the contrary contained
herein, if (x) the Board determines in good faith that the
registration and distribution of Registrable Shares 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 of the Registrable
Shares included in the registration statement 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 registration statement or (B) allow such
registration statement to fail to be effective and usable or
elect that such 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 4(a) of this Agreement; and
provided, further, that the period referred to in Section 4(a)
during which the registration statement is required to be
effective and usable shall be extended by the aggregate number of
days during which the registration statement was not effective or
usable pursuant to the foregoing provisions.
(d) Underwriting. If Pacific intends to distribute the
Registrable Shares by means of an underwriting, it shall so
advise the Company and shall select an underwriter reasonably
acceptable to the Company.
(i) If the Company shall request inclusion in any
registration pursuant to Section 2 of shares of Common Stock
being sold for its own account, or if officers or directors of
the Company or holders of Other Registrable Securities, shall
request inclusion in any registration pursuant to Section 2,
Pacific shall offer to include Other Registrable Securities and
the shares of Common Stock of the Company in the underwriting and
may condition such offer on their acceptance of the further
applicable provisions of this Agreement.
(ii) Notwithstanding any other provision of this
Section 2, if the representative of the underwriters advises the
Company in writing that marketing factors require a limitation on
the number of shares to be underwritten, the Company shall so
advise all holders of Registrable Shares and other shareholders
whose securities would otherwise be underwritten pursuant hereto,
and, subject to any agreement between the Company and the holders
of Other Registrable Shares, the number of Registrable Shares and
other securities that may be included in the registration and
underwriting shall be allocated in the following manner: the
securities of the holders of Other Registrable Securities shall
be excluded pro rata, unless another method of determining such
exclusion is specified in the agreements governing the Other
Registrable Securities, according to the relative number of Other
Registrable Securities requested to be included in such
registration and underwriting, from such registration and
underwriting to the extent required by such limitation and, if a
limitation on the number of shares is still required, the number
of shares of Common Stock proposed to be registered by the
Company shall be excluded to the extent required, and, if a
further limitation on the number of shares is still required, the
number of Registrable Shares that may be included in the
registration and underwriting shall be allocated among all
holders of Registrable Shares in proportion, as nearly as
practicable, to the respective amounts of Registrable Shares
which they had requested to be included in such registration at
the time of filing the registration statement. No Registrable
Shares or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall also be
included in such registration.
(iii) If the Company or any holder of Other
Registrable Securities who has requested inclusion in such
registration and underwriting as provided above disapproves of
the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and
Pacific. The securities so withdrawn shall also be withdrawn
from registration.
3. Expenses of Registration. The Company shall bear all
Registration Expenses incurred in connection with any
registration, qualification or compliance of the Registrable
Shares pursuant to this Agreement. All Selling Expenses shall be
borne by the holders of the securities so registered pro rata on
the basis of the number of their shares so registered.
4. Registration Procedures. Pursuant to this Agreement,
the Company will keep each holder of Registrable Shares advised
in writing as to the initiation of a registration under this
Agreement and as to the completion thereof. At its expense, the
Company will:
(a) Use best efforts to keep such registration
effective for a period ending on May 19, 2001 or until the holder
or holders of Registrable Shares have completed the distribution
described in the registration statement relating thereto or until
the securities registered cease to be Registrable Shares,
whichever first occurs;
(b) Prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as
may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of securities covered by such
registration statement; and
(c) Furnish such number of prospectuses and other
documents incidental thereto, including any amendment of or
supplement to the prospectus, as a holder of Registrable Shares
from time to time may reasonably request.
5. Indemnification.
(a) The Company will indemnify each holder of
Registrable Shares, each of its officers, directors and partners,
and each person controlling such holder of Registrable Shares,
with respect to which registration has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who
controls any underwriter, and their respective counsel against
all claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, or other document
incident to any such registration, or based on 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 any violation by the Company of the Securities Act
or any rule or regulation thereunder applicable to the Company in
connection with any such registration and will reimburse each
such holder of Registrable Shares, each of its officers,
directors and partners, and each person controlling such holder
of Registrable Shares, each such underwriter and each person who
controls any such underwriter, for any legal and any other
expenses as they are reasonably incurred in connection with
investigating and defending any such claim, loss, damage,
liability or action; provided, however, that the indemnity
contained in this Section 5(a) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or expense
that arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company
by such holder of Registrable Shares or underwriter and stated to
be specifically for use therein. The foregoing indemnity
agreement is further subject to the condition that insofar as it
relates to any untrue statement, alleged untrue statement,
omission or alleged omission made in a prospectus, such indemnity
agreement shall not inure to the benefit of the foregoing
indemnified parties if copies of a supplemental prospectus
correcting the misstatement, or alleged misstatement, omission or
alleged omission upon which such loss, liability, claim or damage
is based is timely delivered to such indemnified party and a copy
thereof was not furnished to the person asserting the loss,
liability, claim or damage.
(b) Pacific or any transferee of the Registrable
Shares, severally and not jointly, will indemnify the Company,
each of its directors and officers, each other holder of
Registrable Shares and each person who controls the Company or
holder of Registrable Shares within the meaning of the Securities
Act and the rules and regulations thereunder, and each
underwriter, if any, and each person who controls any
underwriter, and their respective counsel against all claims,
losses, damages and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus or other document incident to any
such registration or based upon 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 any violation of the Securities Act or any rule or
regulation thereunder applicable to the Company and will
reimburse the Company, any other holder of Registrable Shares and
their respective directors, officers, partners, persons,
underwriters or control persons for any legal or any other
expense reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in
each case to the extent, and only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) relating to such holder is made in such registration
statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information
furnished to the Company by Pacific and stated to be specifically
for use therein; provided, however, that the obligations of
Pacific shall be limited to an amount equal to the proceeds to
Pacific and provided further that such indemnification
obligations shall not apply if the Company modifies or changes to
a material extent the written information furnished by Pacific.
(c) Each party entitled to indemnification under this
Section 5 (an "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be
withheld or delayed), and the Indemnified Party may participate
in such defense at such Indemnified Party's expense; and provided
further that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself
or the claim in question as an Indemnifying Party may reasonably
request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting
therefrom.
(d) If for any reason the indemnification provided for
in this section is unavailable to an Indemnified Party or is
insufficient to hold it harmless as contemplated by this
Agreement, then the Indemnifying Party shall contribute to the
amount paid or payable by the Indemnified Party as a result of
such loss, claim, damage, liability or action in such proportion
as is appropriate to reflect not only the relative benefits
received by the Indemnified Party and the Indemnifying Party, but
also the relative fault of the Indemnified Party and the
Indemnifying Party, as well as any other relevant equitable
considerations.
6. Information by Holder of Registrable Shares.
Pacific shall furnish to the Company such information
regarding Pacific and the distribution proposed by such Pacific
as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration referred
to in this Agreement.
7. Transfers or Assignments of Registration Rights.
Pacific's rights under this Agreement to cause the Company
to register the Registrable Shares may be transferred or assigned
by Pacific.
8. Miscellaneous.
8.1 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware without giving effect to conflict of laws principles.
8.2 Successors and Assigns. Except as otherwise
provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
8.3 Entire Agreement. This Agreement constitutes the
full and entire understanding and agreement among the parties
with regard to the subject matter hereof.
8.4 Notices, etc. All notices and other
communications required or permitted hereunder shall be in
writing and shall be mailed by first-class mail, postage prepaid,
or delivered by hand or by messenger or courier delivery
service, addressed (a) if to Pacific, at such address as Pacific
shall have furnished to the Company in writing, or (b) if to the
Company, at 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000-0000, or
at such other address as the Company shall have furnished to
Pacific in writing.
8.5 Delays or Omissions. No delay or omission to
exercise any right, power or remedy accruing to any holder of any
Registrable Shares, upon any breach or default of the Company
under this Agreement, shall impair any such right, power, or
remedy of such holder nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or
in any similar breach or default thereunder occurring; nor shall
any waiver of any single breach or default be deemed a waiver of
any other breach or default thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part
of any holder of any breach or default under this Agreement, or
any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or
otherwise afforded to any holder, shall be cumulative and not
alternative.
8.6 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all
of which together shall constitute one instrument.
8.7 Severability. In the case any provision of this
Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
8.8 Amendments. The provisions of this Agreement may
be amended at any time and from time to time, and particular
provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and by the
owners of all of the Registrable Shares as of the date of such
amendment or waiver.
8.9 Termination of Registration Rights. This
Agreement shall terminate at the earlier of May 19, 2001, and at
such time as there ceases to be any outstanding Registrable
Shares as defined herein, except that the provisions of Section 5
shall survive the termination of this Agreement.
The foregoing Registration Rights Agreement is hereby
executed as of the date first above written.
FLORIDA GAMING CORPORATION
By: _________________________
X. Xxxxxxx Xxxxxxx
Chairman and Chief
Executive Officer
PACIFIC CONTINENTAL SECURITIES
CORP.
By: __________________________
Name: ________________________
Title: _______________________
