AMENDED AND RESTATED WARRANT AGREEMENT
Exhibit.
4.3
AMENDED
AND RESTATED WARRANT AGREEMENT
THIS
AMENDED AND RESTATED WARRANT AGREEMENT (this “Agreement”), dated as of January
31, 2005, is by and among FLORIDA GAMING CORPORATION, a Delaware corporation
(the “Company”), FIRST BANK (“First Bank”), a Missouri sate chartered bank and
the successor in interest to CIB Bank, an Illinois banking corporation (“CIB”),
and CITRUS BANK, NA, a national banking association (“Citrus”). First Bank and
Citrus Bank are also referred to hereunder individually as a “Lender” and
collectively as “Lenders”.
WHEREAS,
pursuant to that certain Warrant Agreement dated as of October 31, 2001 (as
amended to date, the “Original Warrant Agreement”), the Company issued to CIB
200,000 warrants (the “Warrants”), as evidenced by that certain Warrant
Certificate No. 1 of the Company (“Certificate No. 1”), to purchase up to
200,000 shares of Common Stock, par value $.10 per share, of the Company (the
“Common Shares”), subject to adjustment as set forth therein (the Common Shares
issuable on exercise of the Warrants as described and limited by the terms of
this Agreement shall be referred to herein as the “Warrant Shares”), pursuant to
a Loan Agreement dated as of October 31, 2001, by and among CIB, Florida Gaming
Centers, Inc., a Florida corporation and a wholly-owned subsidiary of the
Company (“FGCI”), and City National Bank, as Trustee, as amended by that certain
First Modification of Loan Documents, dated as of October 31, 2004 and as
further amended by that certain Second Amendment to Loan Agreement of even date
herewith (as further amended from time to time, the “Loan Agreement”).
Capitalized terms used herein but not otherwise defined herein shall have the
meanings given them in the Loan Agreement.
WHEREAS,
pursuant to that certain Loan Participation Certificate and Agreement
(Non-Negotiable), dated May 22, 2002, between CIB and Citrus, Citrus acquired a
32.61% participation interest in the loan made pursuant to the Loan Agreement
and First Bank now desires to transfer and assign to Citrus a corresponding
percentage of the Warrants.
WHEREAS,
on or about January 27, 2003, the Company effected a 1 for 2 reverse stock split
of the Common Shares (the “Reverse Split”), and accordingly the number of
Warrant Shares issuable upon exercise of the Warrants was correspondingly
reduced from 200,000 to 100,000 pursuant Section 9(C) of the Warrant
Agreement.
WHEREAS,
the parties now desire to enter into this Amended and Restated Warrant Agreement
to reflect the foregoing transfers and adjustments.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set
forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
SECTION
1. Warrant
Certificates.
The Company previously issued 200,000 Warrants to CIB, as evidenced by
Certificate No. 1. Upon execution of this Agreement, First Bank shall return
Certificate No. 1 to the Company, in exchange for which the Company shall
deliver in replacement thereof (a) a certificate to First Bank evidencing
Warrants to purchase 67,390 Common Shares and (b) a certificate to Citrus Bank
evidencing Warrants to purchase 32,610 Common Shares (together, the “Warrant
Certificates”), such amounts to reflect replacement of all of the Warrants
taking into account the adjustment resulting from the Reverse Split. Such
certificates shall be in registered form and shall be substantially in the form
set forth as Exhibit A attached hereto. The Warrant Certificates shall be
dated the date hereof.
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SECTION
2. Execution
of Warrant Certificates.
Warrant Certificates shall be signed on behalf of the Company by its President
and its Secretary.
SECTION
3. Registration.
The Company shall number and record the Warrant Certificates in a warrant
register as they are issued (the “Warrant Register”). The Company may deem and
treat the registered holder(s) of the Warrant Certificates (each such registered
holder being hereinafter referred to as a “Holder”), as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone) for all purposes and shall not be affected by any notice to the
contrary. The Warrants were initially registered in the name of CIB and the
register shall now reflect the transfer of 32,610 of the Warrants from First
Bank (as successor to CIB) to Citrus.
SECTION
4. Registration
of Transfers and Exchanges.
The Company shall from time to time register in the Warrant Register a transfer
of any outstanding Warrant Certificates upon surrender thereof accompanied by a
written instrument or instruments of transfer in form reasonably satisfactory to
the Company, duly executed by the registered Holder thereof or by the duly
appointed legal representative thereof. Upon any such registration of transfer,
the Company, at its own expense, will issue a new Warrant Certificate or, if
requested by the Holder, Warrant Certificates, of the same type and of a like
aggregate principal amount in exchange therefor to the transferee(s) designated
by the Holder and the surrendered Warrant Certificate shall be canceled and
disposed of by the Company. Except as may be limited by applicable law, any
Warrant and the Warrant Shares shall be freely transferable. Warrant
Certificates may be exchanged at the option of the Holder thereof when
surrendered to the Company at its office for another Warrant Certificate or
other Warrant Certificates of like tenor and representing in the aggregate a
like number of Warrants. All Warrant Certificates issued upon any exchange or
transfer, upon issuance, will be the legal and valid obligations of the Company,
entitled to the same benefits as the Warrant Certificate surrendered for
transfer or exchange. Warrant Certificates surrendered for exchange shall be
canceled and disposed of by the Company.
SECTION
5. Warrants;
Exercise of Warrants.
Subject to the terms of this Agreement, the Holder shall have the right at any
time, which may be exercised in the event that the Holder does not elect to take
the Deferred Fee in the form of cash pursuant to Section 3.6 of the Loan
Agreement, to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time be entitled to
receive on exercise of such Warrants and payment of the Exercise Price then in
effect for such Warrant. The price at which each Warrant shall be exercisable
(the “Exercise Price”) shall be $0.20 per Warrant Share issued upon such
exercise, subject to adjustment as described below. Notwithstanding the
foregoing, the maximum aggregate Exercise Price with respect to all Warrants
issued hereunder shall not exceed the greater of (1) the aggregate par value of
all of the Warrant Shares and (2) $20,000.00, such maximum aggregate Exercise
Price to be allocated pro rata among all outstanding Warrants. In the event of
an adjustment in the number of Warrant Shares as provided in Section 9, the
maximum aggregate Exercise Price (less the aggregate Exercise Price paid prior
to such adjustment upon the exercise of Warrants (the “Remaining Maximum
Exercise Price”)) shall not be adjusted, but shall be reallocated pro rata among
all outstanding Warrants, and the Exercise Price per Warrant shall be adjusted
to reflect such reallocation to the extent the product of the then current
Exercise Price and the maximum number of Warrant Shares remaining to be issued
under this Agreement would otherwise exceed the Remaining Maximum Exercise
Price.
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A Warrant
may be exercised by (i) surrender to the Company at its office designated for
such purpose (the address of which is set forth in Section 12 hereof) of the
Warrant Certificate or Certificates to be exercised, with the form of election
to purchase attached thereto duly filled in and signed and (ii) payment or
delivery to the Company of the Exercise Price for the number of Warrants being
exercised. Payment of the aggregate Exercise Price may at the Holder’s sole
option be paid (i) by delivery of immediately available funds, (ii) by the
Holder’s instruction to the Company to deduct from the number of Warrant Shares
issuable to the Holder on account of such exercise such Warrant Shares or
fractional Warrant Shares having an aggregate Current Market Value equal to the
aggregate Exercise Price for the number of Warrants being exercised, or (iii) by
the Holder’s delivery to the Company for redemption or cancellation of other
securities of the Company or fractional portions thereof accompanied by
appropriate assignments having an aggregate Current Market Value equal to the
Exercise Price for the number of Warrants being exercised.
Upon such
surrender of Warrants and payment of the Exercise Price as described above, the
Company shall issue and cause to be delivered with all reasonable dispatch to or
upon the written order of the Holder and in such name or names of the Holder as
such Holder may designate a certificate or certificates for the number of
Warrant Shares issuable upon the exercise of such Warrants. Such certificate or
certificates shall be deemed to have been issued and the person so named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price,
irrespective of the date of delivery of such certificate or certificates for
Warrant Shares.
Each
Warrant shall be exercisable, at the election of the Holder thereof, either in
full or from time to time in part and, in the event that a Warrant Certificate
is exercised in respect of fewer than all of the Warrants evidenced thereby, a
new Warrant Certificate evidencing the remaining Warrant or Warrants will be
issued and delivered pursuant to the provisions of this Section and of Section 2
hereof. All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled and disposed of by the Company. The Company shall keep copies of this
Agreement and any notices given or received hereunder available for inspection
by any Holder during normal business hours at its office.
Notwithstanding
the foregoing, however, each Lender acknowledges that Florida law prohibits any
Person from acquiring a five percent (5%) or greater equity interest in a
pari-mutuel operator and exercising control with respect to such interest until
such Person has received the approval of the Florida Department of Business and
Professional Regulation, Division of Pari-Mutuel Wagering. Therefore, each
Lender acknowledges that the acquisition of five percent (5%) or more of the
Company’s Common Shares upon the exercise of the Warrants requires such approval
before the Company is required to issue Common Shares in excess of such
percentage to such Lender pursuant hereto.
The
Warrants and all rights and options thereunder shall expire on October 31, 2007,
and shall be wholly null and void to the extent the Warrants are not exercised
before expiration.
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“Current
Market Value” means, as at any time, with respect to securities that are
publicly traded, the average of the daily closing prices of such security for
thirty (30) consecutive trading days ending three (3) trading days before such
date (as adjusted for any stock dividend, split, combination or reclassification
that took effect during such thirty (30) trading day period). The closing price
for each day shall be the last reported sale price regular way or, in case no
such reported sale takes place on such day, the average of the last closing bid
and asked prices regular way, in either case on the principal national
securities exchange on which such security is listed or admitted to trading, or
if not listed or admitted to trading on any national securities exchange, the
closing sale price for such day reported by NASDAQ, if such security is traded
over-the-counter and quoted in the National Market System, or if such security
is so traded, but not so quoted, the average of the closing reported bid and
asked prices of such security reported by NASDAQ, including the OTC Bulletin
Board or any comparable system, or, if such security is not listed on NASDAQ or
any comparable system, the average of the closing bid and asked prices as
furnished by two (2) members of the National Association of Securities Dealers,
Inc., selected from time to time by the Holders for that purpose. If such
security is not traded in such manner that the quotations referred to above are
available for the period required hereunder, Current Market Value shall be
deemed to be the fair market value of such security (without applying any
discounts for lack of liquidity or minority interests) or property, each as
reasonably determined in good faith by the Board of Directors of the Company
taking into account all information that should reasonably be taken into account
in valuing the Company as a going concern and dividing by the number of Common
Share Equivalents (as defined below) then outstanding. If Holders of a majority
of the then outstanding Warrants dispute the value determination by the Board of
Directors, the value determination shall be made by a regional or national
independent appraiser or investment bank mutually agreed upon by such Holders
and the Company. The fees of such appraiser shall be (i) paid by the Holders of
the Warrants in the event that the appraiser’s determination of Current Market
Value is less than ninety percent (90%) of the Current Market Value determined
by the Board of Directors, (ii) paid one-half by the Company and one-half by the
Holders of the Warrants in the event the appraiser’s determination of Current
Market Value is between ninety percent (90%) and one hundred ten percent (110%)
of the Current Market Value determined by the Board of Directors, and (iii) paid
by the Company in the event that the appraiser’s determination of Current Market
Value is in excess of one hundred ten percent (110%) of the Current Market Value
determined by the Board of Directors. The Company shall give each Holder written
notice of each determination of Current Market Value by the Board of Directors
(and the market basis for such determination) or by such appraisal process. For
purposes of this Agreement, “Common Share Equivalents” means, as at any time,
the number of Common Shares that are outstanding, plus the maximum number of
Common Shares issuable upon the exercise of the Warrants and the exercise or
conversion of all other outstanding options and convertible securities of the
Company from time to time, without regard to whether such exercise or conversion
is then available.
Notwithstanding
anything in this Agreement to the contrary, the ratio which the number of
Warrant Shares issuable upon the exercise of the Warrants bears to the total
number of Common Share Equivalents outstanding as of the time the Warrants are
exercised shall not exceed the ratio which 100,000 Warrant Shares bears to the
total number of Common Share Equivalents outstanding as of the date of this
Agreement.
SECTION
6. Payment
of Taxes.
The Company will pay all documentary stamp taxes and other governmental charges
in connection with the issuance, sale, delivery or transfer of the Warrants
hereunder, as well as all such taxes attributable to the issuance of Warrant
Shares upon the exercise of Warrants and payment of the Exercise
Price.
SECTION
7. Replacement
of Securities.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of any Warrant Certificate and, in the case of loss,
theft or destruction, provision of reasonable indemnification, the Company, at
its expense, will issue and deliver to the Holder a new Warrant Certificate of
like tenor, in lieu of such lost, stolen, destroyed or mutilated Warrant
Certificate. Any new Warrant Certificate issued upon the loss, theft,
destruction or mutilation of such Warrant Certificate shall be in substantially
the form of the Warrant Certificate so lost, stolen, destroyed or
mutilated.
SECTION
8. Reservation
of Warrant Shares.
The Company shall at all times reserve and keep available, free from preemptive
rights, for the purpose of enabling it to satisfy any obligation to issue Common
Shares upon exercise of Warrants, the maximum number of Common Shares which may
at such time be deliverable upon the exercise of all outstanding Warrants. The
Company or, if appointed, the transfer agent for the Common Shares and each
transfer agent for any of the Company’s capital stock issuable upon the exercise
of any of the Warrants (collectively, the “Transfer Agent”), will be irrevocably
authorized and directed at all times to reserve such number of authorized Common
Shares as shall be required for such purpose. The Company shall keep a copy of
this Agreement on file with the Transfer Agent. The Company will supply the
Transfer Agent with duly executed certificates for such purposes. The Company
will furnish such Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to Holders pursuant to Section 10
hereof.
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The
Company covenants that all Warrant Shares and other equity securities issued
upon exercise of Warrants pursuant to the terms of this Agreement will, upon
payment of the Exercise Price therefor and issuance thereof, be validly
authorized and issued, fully paid, nonassessable, free of preemptive rights and
free from all taxes, liens, charges and security interests with respect to the
issuance thereof. If Common Shares are listed on one or more principal
securities exchanges or markets within the United States of America, the Company
shall list on such exchanges or markets, Common Shares issued upon exercise of
the Warrants, immediately upon their issuance. Thereafter, the Company shall
register the Common Shares issued upon exercise of the Warrants (the
“Registrable Shares”) pursuant to Section 18 hereof.
SECTION
9. Adjustment
of Number of Warrant Shares Issuable.
The number of Warrant Shares issuable upon the exercise of each Warrant from
time to time is referred to as the “Warrant Number.” The Company hereby
represents and warrants that no adjustment to the Warrant Number had occurred
under the Warrant Agreement, other than the adjustment in connection with the
Reverse Split. The Warrant Number as of the date hereof is one (1). The Warrant
Number shall be subject to adjustment from time to time as hereinafter
provided.
A. Adjustments
to the Warrant Number. The Warrant Number will be subject to adjustment from
time to time as described in Subsections B, C and D below. If and whenever on or
after the date of this Agreement, the Company issues or sells, or in accordance
with Subsection B is deemed to have issued or sold, any Common Shares of
the Company (other than as described in Subsection C or Subsection D)
for a consideration per share less than the Current Market Value in effect
immediately prior to such issuance or sale, or deemed issuance or sale, then
forthwith upon such issuance or sale, or deemed issuance or sale, the Warrant
Number in effect will be adjusted by multiplying such Warrant Number by a
fraction, (x) the numerator of which shall be the total number of Common Share
Equivalents outstanding as determined immediately after such issuance or sale,
or deemed issuance or sale (including taking into account those deemed to have
been issued pursuant to Subsection B below in such transaction), and (y) the
denominator of which shall be an amount equal to the sum of (A) the number of
Common Share Equivalents outstanding immediately prior to such issuance or sale,
or deemed issuance or sale, plus (B) the number of Common Shares which the
aggregate consideration, if any, received by the Company for such shares would
buy at the Current Market Value thereof, as of the date immediately prior to
such issuance or sale, or deemed issuance or sale; provided, however, that
Common Shares issued or sold (or deemed issued or sold) without consideration
shall be deemed to have been issued or sold for $.001 per share.
B. Effect of
Certain Events on Warrant Number. For purposes of determining the adjusted
Warrant Number under Subsection A, the following will be
applicable:
1. Issuance
of Rights or Options. If the Company in any manner grants any right or option to
subscribe for or to purchase Common Shares or any other securities convertible
into or exchangeable for Common Shares (such right or option being herein called
an “Option” and such convertible or exchangeable securities being herein called
“Convertible Securities”) and the price per share for which Common Shares are
issuable upon the exercise of such Option or upon conversion or exchange of such
Convertible Securities is less than the Current Market Value per Common Share in
effect immediately prior to the time of the granting of such Option, then the
total maximum number of Common Shares issuable upon the exercise of such Option
or upon conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon exercise of such Option will be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For purposes of this paragraph, the “price per Share for which Common
Shares are issuable” will be determined by dividing (i) the total amount, if
any, received or receivable by the Company as consideration for the granting of
such Option, plus the minimum aggregate amount of additional consideration
payable to the Company upon exercise of such Option, plus in the case of an
Option which relates to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange thereof, by
(ii) the total maximum number of Common Shares issuable upon the exercise of the
Option or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Option. No further adjustment of the Warrant
Number will be made when Convertible Securities are actually issued upon the
exercise of such Option or when Common Shares are actually issued upon the
exercise of such Option or the conversion or exchange of such Convertible
Securities.
2. Issuance
of Convertible Securities. If the Company in any manner issues or sells any
Convertible Security and the price per share for which Common Shares are
issuable upon the conversion or exchange of such Convertible Securities is less
than the Current Market Value per Common Share in effect immediately prior to
the time of such issue or sale, then the maximum number of Common Shares
issuable upon conversion or exchange of such Convertible Security will be deemed
to be outstanding and to have been issued and sold by the Company for such price
per share. For purposes of this paragraph, the “price per share for which Common
Shares are issuable” will be determined by dividing (i) the total amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total maximum number of Common Shares issuable upon the
conversion or exchange of such Convertible Securities. No further adjustment of
the Warrant Number will be made when Common Shares are actually issued upon the
conversion or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustments of the Warrant Number had been or are to be made pursuant to
other provisions of this Agreement, no further adjustment of the Warrant Number
will be made by reason of such issue or sale.
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3. Change in
Option Price or Conversion Rate. If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities, or the rate at which any Options are
exercisable or Convertible Securities are convertible into or exchangeable for
Common Shares changes at any time, including, but not limited to, a change
resulting from any applicable anti-dilution provisions of such securities, the
Warrant Number in effect at the time of such change will be readjusted to the
Warrant Number which would have been at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or changed exercise or conversion rate, as the
case may be, at the time initially granted, issued or sold.
4. Treatment
of Expired Options and Unexercised Convertible Securities. Upon the expiration
of any Option without the exercise thereof or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
right, the Warrant Number then in effect hereunder will be adjusted to the
Warrant Number that would have been in effect at the time of such expiration or
termination had such Option or Convertible Security, to the extent outstanding
immediately prior to such expiration or termination, never been
issued.
5. Calculation
of Consideration Received. If any Common Shares, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor will be deemed to be the amount received by
the Company therefor. In case any Common Shares, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration as of the date of receipt determined as set forth below.
Any consideration received shall be net of discounts, commissions, taxes and
other expenses allowed, paid or incurred by the Company for underwriting or
otherwise in connection with the issuance and sale of such securities. If any
Common Shares, Options or Convertible Securities are issued in connection with
any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Shares, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash will be the Current Market Value
of such consideration; provided, however, that no value shall be credited as
consideration for services rendered.
6. Integrated
Transactions. In case any Option is issued in connection with the issuance or
sale of other securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such Option by
the parties thereto, the Option will be deemed to have been issued without
consideration.
7. Authorized
But Unissued Common Shares. The number of Common Shares outstanding at any given
time does not include Common Shares owned or held by or for the account of the
Company or any subsidiary, but the disposition of any Common Shares so owned or
held will be considered an issuance or sale of Common Shares.
8. Record
Date. If the Company takes a record of the holders of Common Shares for the
purpose of entitling them (i) to receive a distribution payable in Common
Shares, Options or Convertible Securities or (ii) to subscribe for or purchase
Common Shares, Options or Convertible Securities, then for purposes of this
Warrant such record date will be deemed to be the date of the issuance or sale
of the Common Shares deemed to have been issued or sold upon the declaration of
such dividend or upon the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.
9. Certain
Exceptions. Anything herein to the contrary notwithstanding, no adjustment will
be made to the Warrant Number by reason of (i) the issuance of capital stock or
Options or Convertible Securities issues to financial institutions or lessors in
connection with commercial credit arrangements, equipment financings or similar
transactions, which issuances are primarily for other than equity financing
purposes, and provided that the aggregate of such issuance and similar issuances
do not exceed one percent (1%) of the then outstanding Common Shares (assuming
full conversion and exercise of all outstanding convertible and exercisable
securities), or (ii) the issuance of Common Shares upon a subdivision of the
Common Shares for which an adjustment to the Warrant Number is made pursuant to
Subsection C below.
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C. Subdivision
or Combination of Common Shares. If the Company at any time subdivides (by any
split, dividend, recapitalization or otherwise) its outstanding Common Shares
into a greater number of shares, the Warrant Number in effect immediately prior
to such subdivision will be proportionately increased and the number of Common
Shares obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time combines (by reverse split or otherwise)
one or more classes of its outstanding Common Shares into a smaller number of
shares, the Warrant Number in effect immediately prior to such combination will
be proportionately reduced and the number of Common Shares obtainable upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Subsection C shall be effective at the close of business on the date
the subdivision or combination becomes effective.
D. Adjustments
and Payments for Other Distributions. In the event the Company, at any time or
from time to time, makes or issues, or fixes a record date for the determination
of holders of Common Shares entitled to receive, a dividend or other
distribution of assets, evidences of indebtedness or securities other than
Common Shares (a “Special Dividend”), unless there would otherwise have been an
adjustment in the Warrant Number pursuant to Subsections B or C above,
then and in each such event the Warrant Number then in effect shall be
increased, effective immediately after the record date at which the holders of
Common Shares are determined for purposes of such Special Dividend, to a number
determined by multiplying the Warrant Number in effect immediately before such
Special Dividend by a fraction, the numerator of which shall be the Current
Market Value per outstanding Common Share on such record date and the
denominator of which shall be the Current Market Value per outstanding Common
Share on such record date less the then Current Market Value of the assets,
evidences of indebtedness or securities other than Common Shares issued or
distributed in such Special Dividend with respect to one Common Share; provided,
however, if such record date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed
therefore, the Warrant Number shall be recomputed accordingly as of the close of
business on such record date and thereafter the Warrant Number shall be adjusted
pursuant to this Subsection D as of the time of actual payment of such dividend
or distribution.
E. Notice of
Adjustment; Roundings. Whenever the Warrant Number is adjusted, the Company
shall provide the notices required by Section 10 hereof. All calculations
under this Warrant Agreement shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
F. Reorganizations.
In case of any capital reorganization (other than in the cases referred to in
Sections 9(B), (C) or (D) hereof) or the consolidation or merger of the Company
with or into another entity (other than a merger or consolidation in which the
Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Shares into shares of other
securities or property), or the sale of the property of the Company as an
entirety or substantially as an entirety (collectively such actions being
hereinafter referred to as “Reorganizations”), there shall thereafter be
deliverable upon exercise of any Warrant (in lieu of the number of Common Shares
theretofore deliverable) the number of shares or other securities or property to
which a holder of the number of Common Shares that would otherwise have been
deliverable upon the exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full immediately prior to
such Reorganization. In case of any Reorganization, appropriate adjustment, as
reasonably determined in good faith by the Company and reasonably acceptable to
the Holders, shall be made in the application of the provisions herein set forth
with respect to the rights and interests of each Holder so that the provisions
set forth herein shall thereafter be applicable, as nearly as possible, in
relation to any shares or other property thereafter deliverable upon exercise of
Warrants. The Company shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof the successor entity (if other
than the Company) resulting from such reorganization or the entity purchasing or
leasing such assets or other appropriate corporation or entity shall assume, by
a supplemental Warrant Agreement in form reasonably acceptable to the Holders,
the obligation to deliver to the Holders such securities or assets as, in
accordance with the foregoing provisions, the Holders may be entitled to
receive, and all other obligations under this Agreement.
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G. Form of
Warrants. Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
H. Certain
Events. If any event occurs of the type contemplated by the provisions of this
Section 9 hereof but not expressly provided for by such provisions (including,
without limitation, the granting of equity appreciation rights, phantom equity
rights or other rights with equity features), then the Company’s Board of
Directors shall make an appropriate increase in the Warrant Number so as to
protect the rights of the Holders.
I. Miscellaneous.
For purposes of this Section 9, the term “Common Shares” shall mean shares
of (i) the class of equity designated as the Common Stock of the Company as of
the date of this Agreement, and (ii) any other class of equity resulting from
successive changes or reclassification of any such shares.
J. Protection
of Rights of Warrant Holders. The Company shall not amend its articles of
incorporation or bylaws or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities or
any other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company (including any amendment to the Company’s articles of
incorporation to increase the par value of its Common Shares), but will at all
times in good faith assist in the carrying out of all the provisions of this
Agreement and will take all actions that may be necessary or appropriate in
order to protect the rights of each Holder to exercise its Warrants without
impairment.
SECTION
10. Notices
to Warrant Holders.
A. Upon any
adjustment pursuant to Section 9 hereof, the Company shall promptly
thereafter cause to be given to each Holder at such Holder’s address appearing
on the Warrant register written notice of such adjustments by first class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 10.
B. In the
event (i) the Company shall authorize the issuance to all holders of Common
Shares of rights, options or warrants to subscribe for or purchase Common Shares
or of any other subscription rights or warrants; (ii) the Company shall
authorize the distribution to all holders of Common Shares of evidences of its
indebtedness or assets; (iii) of any consolidation or merger to which the
Company is a party and for which approval of the shareholders of the Company is
required, or of the conveyance or transfer of the properties and assets of the
Company substantially as an entirety, or of any reclassification or change of
Common Shares issuable upon exercise of the Warrants (other than as a result of
a subdivision or combination), or a tender offer or exchange offer for Common
Shares; (iv) of the voluntary dissolution, liquidation or winding up of the
Company; or (v) the Company proposes to take any action that would require an
adjustment to the Warrant Number pursuant to Section 9 hereof; then the Company
shall cause to be given to each Holder at such Holder’s address appearing on the
Warrant Register, at least 30 days prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of Common Shares to be entitled to
receive any such rights, options, warrants or distribution are to be determined,
or (ii) the initial expiration date set forth in any tender offer or exchange
offer for Common Shares, or (iii) the date on which any such consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of Common Shares shall be entitled to exchange such shares for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up. The Company shall give to each Holder written notice of any determination to
make a distribution to the holders of its Common Shares of any assets (including
cash), debt securities, preferred stock, or any rights or warrants to purchase
debt securities, assets or other securities (other than Common Shares, or
rights, options, or warrants to purchase Common Shares) of the Company, which
notice shall state the nature and amount of such planned distribution and the
record date therefor, and shall be given to each Holder at least 30 days prior
to such record date therefor. Nothing contained in this Agreement or in any of
the Warrant Certificates shall be construed as conferring upon any Holder the
right to vote or to consent or to receive notice as shareholders in respect of
the meetings of shareholders or any other matter, or any rights whatsoever as
shareholders of the Company.
8
SECTION
11. Legend.
The Warrants and the Warrant Shares or other securities issued upon exercise of
the Warrants have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and will be issued in reliance upon an exemption
from the registration requirements thereof. Pursuant to the foregoing, each
Holder acknowledges that the certificates representing the Warrants and the
Warrant Shares shall each bear a restrictive legend substantially as
follows:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION UNDER SUCH ACT.”
SECTION
12. Notices
to the Company and the Warrant Holders.
Any notices required or permitted to be given hereunder shall be delivered
personally or mailed, certified or registered mail, return receipt requested,
postage prepaid or delivered by commercial overnight courier service, charges
prepaid, to the following addresses, or such other address as any party hereto
designates by written notice to the Company, and shall be deemed to have been
given upon delivery, if delivered personally, three days after mailing, if
mailed, or one business day after delivery to the courier, if delivered by
overnight courier service:
If to the
Company:
Florida
Gaming Corporation
0000 X.X.
00xx
Xxxxxx
Xxxxx,
Xxxxxxx 00000
Attention: X.
Xxxxxxx Xxxxxxx
with a
copy to:
Xxxxxxx
X. Xxxxx
The
Market Place
Suite
130
00000
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
If to any
Holder, at the address appearing on the Warrant Register of the Company (until
the Company is otherwise notified in accordance with this Section by such
Holder). Any party may change, or any new Holder may provide, the address to
which notices to it are to be sent by giving written notice given pursuant to
this Section to the other parties hereto.
SECTION
13. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the
Company or any Holder shall bind and inure to the benefit of its respective
successors and assigns hereunder.
9
SECTION
14. Governing
Law.
This Agreement and each Warrant Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Illinois and for all purposes
shall be construed in accordance with the internal laws of said
State.
SECTION
15. Counterparts.
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
SECTION
16. Waiver.
No provision of this Agreement may be waived except by an instrument in writing
signed by the party be bound; provided that any waiver sought from the Holders
of any provision of this Agreement which affects Holders generally may be given
by Holders of a majority of (i) all of the Warrant Shares issuable upon exercise
of the Warrants and (ii) all the Common Shares issued upon exercise or in
respect of the Warrants then outstanding and any waiver so given shall be
binding on all Holders. No failure or delay by any party in exercising any right
or remedy hereunder shall operate as a waiver thereof, and a waiver of a
particular right or remedy on one occasion shall not be deemed a waiver of any
other right or remedy or a waiver of the same right or remedy on any subsequent
occasion.
SECTION
17. Survival.
Notwithstanding anything herein to the contrary, this Agreement and the rights
of the Holders of the Warrant Shares hereunder shall survive the exercise of all
of the Warrants.
SECTION
18. Registration.
A. At the
request of any Holder or Holders of a majority of the Registrable Shares, the
Company shall make one registration available for the sale of Registrable Shares
(a “Registration”), but only if and to the extent that the Registrable Shares
are not transferable freely without restriction under the Securities Act and any
applicable state securities laws. If a Registration is to be an underwritten
public offering, and if an underwriter for marketing reasons requests the
inclusion in the registration statement of information which is not required
under the Securities Act to be included in a registration statement on the
applicable form for the Registration, the Company will provide such information
for inclusion by the underwriter in the Registration. If a Registration is an
underwritten public offering and the managing underwriters advise the Company in
writing that in their reasonable opinion the number of Registrable Shares and
other securities requested to be included in the Registration (the “Other
Shares”) exceeds the number of shares which can be sold in such offering without
having an adverse effect on the price of such shares (such number of shares, the
“Maximum Number”), the Company will include in such registration first, the
Registrable Shares, up to the Maximum Number, and second, if the number of
Registrable Shares is less than the Maximum Number, the Other Shares, up to the
Maximum Number.
B. The
Company may postpone for up to ninety (90) days the filing or effectiveness of
any Registration if the Board of Directors of the Company determines in good
faith that such Registration is reasonably likely to materially interfere with,
or have a materially adverse effect on, any material corporate development
(including any material business combination or acquisition
transaction).
C. All
expenses incident to the Company’s performance of or compliance with this
Section 18 shall be borne by the Company.
D. The
Company agrees to indemnify, to the fullest extent permitted by law, each seller
of Registrable Shares, its officers and directors and each Person who controls
such seller (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses (including without limitation
attorneys’ fees) caused by any untrue or alleged untrue statement of a material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading. In connection with any
Registration in which a seller of Registrable Shares is participating, each such
seller severally, but not jointly, shall indemnify the Company, its Affiliates,
officers, directors and each Person who controls the Company (within the meaning
of the Securities Act), insofar as and to the extent that losses, claims,
damages, liabilities, and expenses (including without limitation attorneys’
fees) are caused by any untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such seller
expressly for use therein.
10
E. At any
time and from time to time after (i) the Company registers a class of securities
under Section 12 of the Securities Exchange Act of 1934, as amended (the
“Securities Exchange Act”), or (ii) the expiration of 90 days following the
close of business on the earlier of such date as the Company commences to file
reports under Section 13 or Section 15(d) of the Securities Exchange Act, then
upon receipt of a written request of a holder of Registrable Shares, stating
that such holder proposes to sell securities in compliance with Rule 144 of the
Securities and Exchange Commission (the “Commission”), the Company will (1)
forthwith furnish to such holder a written statement of compliance with the
filing requirements of the Commission as set forth in Rule 144, as such rule may
be amended from time to time and (2) make available to the public and such
holder such information as will enable the holder to make sales pursuant to Rule
144.
F. The
Company agrees to give each Holder prompt written notice of its intention to
register any of its securities under the Securities Act.
[Remainder
of page intentionally left blank. Signature page follows.]
11
IN
WITNESS WHEREOF, the parties hereto have executed this Warrant Agreement on the
date first set forth above.
| FLORIDA GAMING CORPORATION | |||
| Attest: | By: | ||
|
|
| ||
| , Secretary | Its: | ||
|
| |||
| FIRST BANK | |||
| By: | |||
|
| |||
| Its: | |||
|
| |||
| CITRUS BANK, NA | |||
| By: | |||
|
| |||
| Its: | |||
|
| |||
12
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION UNDER SUCH ACT.
| No. |
___________________Warrants |
Warrant
Certificate
FLORIDA
GAMING CORPORATION
This
Warrant Certificate certifies that ______________, or its successors, is the
registered holder of the number of Warrants (the “Warrants”) set forth above to
purchase shares of the Common Stock, $0.20 par value per share (the “Common
Shares”), of FLORIDA GAMING CORPORATION, a Delaware corporation (the “Company”).
Each Warrant entitles the holder upon exercise to receive from the Company one
fully paid and nonassessable Common Share of the Company (a “Warrant Share”) at
the initial aggregate exercise price (the “Exercise Price”) of $0.20 per Warrant
Share, upon surrender of this Warrant Certificate and payment of the Exercise
Price (payable as set forth in the Warrant Agreement), at the office of the
Company designated for such purpose, but only subject to the conditions set
forth herein and in the Warrant Agreement. Notwithstanding the foregoing, the
aggregate Exercise Price for all Warrants issued pursuant to the Warrant
Agreement shall not exceed $20,000.00. The Exercise Price and the number of
Warrant Shares issuable upon exercise of the Warrants are subject to adjustment
upon the occurrence of certain events as set forth in the Warrant
Agreement.
The
Warrants evidenced by this Warrant Certificate are part of a duly authorized
issue of Warrants issued pursuant to a Warrant Agreement dated as of October 31,
2001, as amended and restated on April __, 2005 (the “Warrant Agreement”), duly
executed and delivered by the Company, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
“holders” or “holder” meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.
The
holder of Warrants evidenced by this Warrant Certificate may exercise such
Warrants under and pursuant to the terms and conditions of the Warrant Agreement
by surrendering this Warrant Certificate, with the form of election to purchase
set forth hereon (and by this reference made a part hereof) properly completed
and executed, at the office of the Company designated for such purpose. In the
event that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued by the Company to the holder hereof or his or its
registered assignee a new Warrant Certificate evidencing the number of Warrants
not exercised.
13
The
Warrant Agreement provides that upon the occurrence of certain events the number
of Warrants Shares and the Exercise Price set forth on the face hereof may,
subject to certain conditions, be adjusted.
Warrant
Certificates, when surrendered at the office of the Company by the registered
holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged, in the manner and subject to the limitations
provided in the Warrant Agreement, but without payment of any service charge,
for another Warrant Certificate or Warrant Certificates of like tenor evidencing
in the aggregate a like number of Warrants.
Subject
to the terms and conditions of the Warrant Agreement, upon due presentation for
registration of transfer of this Warrant Certificate at the office of the
Company a new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
The
Company may deem and treat the registered holder(s) thereof as the absolute
owner(s) of this Warrant Certificate (notwithstanding any notation of ownership
or other writing hereon made by anyone), for the purpose of any exercise hereof,
of any distribution to the holder(s) hereof, and for all other purposes, and the
Company shall not be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a shareholder of the Company.
IN
WITNESS WHEREOF, this Warrant Certificate is duly executed on behalf of Florida
Gaming Corporation as of the _____ day of _______________, 200__.
| FLORIDA GAMING CORPORATION | |||
| Attest: | By: | ||
|
|
| ||
| , Secretary | Its: | , President | |
14
Form
of Election to Purchase
(To
Be Executed Upon Exercise of Warrant)
The
undersigned holder hereby represents that such holder is the registered holder
of this Warrant Certificate, and hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive _____ Common Shares
of Florida Gaming Corporation. The undersigned requests that a certificate for
such shares be registered in the name of the undersigned or nominee hereinafter
set forth, and further that such certificate be delivered to the undersigned at
the address hereinafter set forth or to such other person or entity as is
hereinafter set forth. If said number of Common Shares is less than all of the
Common Shares purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be registered in
the name of the undersigned or nominee hereinafter set forth, and further that
such certificate be delivered to the undersigned at the address hereinafter set
forth or to such other person or entity as is hereinafter set
forth.
Certificate
to be registered as follows:
| Name: | |||
|
|
|||
| Address: | |||
|
|
|||
|
|
|||
|
|
Certificate
to be delivered as follows:
| Name: | |||
|
|
|||
| Address: | |||
|
|
|||
|
|
|||
|
|
| Signature: | ||||
|
| ||||
| Date: | ||||
|
|
15
