STOCKHOLDERS AGREEMENT June 15, 2007
Exhibit
4.6
FLORIDA
GAMING CORPORATION
STOCKHOLDERS
AGREEMENT
June
15, 2007
TABLE
OF CONTENTS
|
SECTION
1
|
DEFINITIONS
|
1
|
|
|
SECTION
2
|
REGISTRATION
RIGHTS
|
2
|
|
|
2.1
|
Company
Registration.
|
2
|
|
|
2.2
|
Expenses
of Registration.
|
3
|
|
|
2.3
|
Registration
Procedures
|
5
|
|
|
2.4
|
Indemnification.
|
6
|
|
|
2.5
|
Information
by Holder
|
8
|
|
|
2.6
|
Rule
144 Reporting
|
8
|
|
|
2.7
|
Transfer
of Registration Rights
|
9
|
|
|
2.8
|
Termination
|
9
|
|
|
SECTION
3
|
MISCELLANEOUS
|
11
|
|
|
3.1
|
Governing
Law
|
11
|
|
|
3.2
|
Entire
Agreement; Amendment
|
11
|
|
|
3.3
|
Notices,
Etc
|
11
|
|
|
3.4
|
Severability
|
11
|
|
|
3.5
|
Counterparts
|
11
|
|
FLORIDA
GAMING CORPORATION
STOCKHOLDERS
AGREEMENT
This
Stockholders Agreement (the "Agreement")
is
made as of June 15, 2007, by and among Florida Gaming Corporation, a Delaware
corporation (the "Company"),
and
Prides Capital Fund I, L.P. (the "Investor")
RECITALS
A. The
Company and the Investor are parties to a certain Subscription Agreement dated
as of June 15, 2007 pursuant to which the Investor is acquiring 5,000 shares
(the "Preferred Shares") of the Company's Series AA Cumulative Convertible
Preferred Stock $0.10 par value (the "Preferred Stock").
B. The
Investor's acquisition of the Preferred Shares is conditioned upon the Company
entering into this Agreement with the Investor.
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
SECTION
1
DEFINITIONS
As
used
in this Agreement, the following terms shall have the following respective
meanings:
1.1 "Commission"
shall
mean the Securities and Exchange Commission or any other U. S. federal agency
at
the time administering the Securities Act.
1.2 "Common
Stock"
shall
mean shares of the Company's single class of Common Stock.
1.3 "Exchange
Act"
shall
mean the Securities Exchange Act of 1934, as amended.
1.4 "Holder
"
shall
mean the Investor (and its transferees as permitted by Section 2.10) holding
Registrable Securities.
1.5 "Registrable
Securities"
shall
mean shares of Common Stock issued upon the conversion of any of the Preferred
Shares, as permitted by the Certificate, excluding in all cases, however, any
Registrable Securities that have been sold to or through a broker or dealer
or
underwriter in a public distribution or a public securities transaction or
which
have been sold in a private transaction in which the transferor's rights under
this Agreement are not assigned.
1.6 The
terms
"register,"
"registered"
and
"registration"
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement. "Registration
Expenses"
shall
mean all expenses, except as otherwise stated below, incurred by the Company
in
complying with Sections 2.1 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company (and fees and disbursements
of
one special counsel for Holder, if any), accounting fees, blue sky fees and
the
expense 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).
1.7 "Securities
Act"
shall
mean the Securities Act of 1933, as amended, or any similar United States
federal statute and the rules and regulations of the Commission thereunder,
all
as the same shall be in effect at the time.
1.8 "Selling
Expenses"
shall
mean all underwriting discounts, selling commissions and stock transfer taxes
applicable to the securities registered by the Holder.
SECTION
2
REGISTRATION
RIGHTS
2.1 Company
Registration.
(a) Notice
of Registration.
If at
any time or from time to time the Company shall determine to register any of
its
securities, either for its own account or the account of a security holder
or
holders, other than (i) a registration relating solely to employee benefit
plans
or (ii) a registration relating solely to a Commission Rule 145 transaction,
the
Company will:
(i) promptly
give to Holder written notice thereof; and
(ii) if
requested by Holder, include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests made, within ten (10) days after receipt of such written notice from
the Company or such later date as agreed to by the Company, by Holder.
(b) Underwriting.
If the
registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Holder
as a
part of the written notice given pursuant to Section 2.1(a). In such event
the
right of the Holder to registration pursuant to Section 2.1 shall be conditioned
upon the Holder's participation in such underwriting and the inclusion of
Registrable Securities in the underwriting to the extent provided herein. The
Holder shall, together with the Company, enter into an underwriting agreement
in
customary form with the managing underwriter selected for such underwriting
by
the Company. Notwithstanding any other provision of this Section 2.1, if the
managing underwriter determines that marketing factors require a limitation
of
the number of shares to be underwritten, the managing underwriter may limit
the
number of shares of Registrable Securities to be included in such registration
without requiring any limitation in the number of shares to be registered on
behalf of the Company, provided that the number of shares of Registrable
Securities to be included in such registration shall not be limited to less
than
twenty-five percent (25%) of the total number of shares to be included in such
registration. The Company shall so advise the Holder of the number of shares
that may be included in the registration and underwriting. If the Holder
disapproves of the terms of any such underwriting, the Holder may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration.
2
(c) Right
to Terminate Registration.
The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 2.1 prior to the effectiveness of such registration
whether or not the Holder has elected to include Registrable Securities in
such
registration.
2.2 Shelf
Registration.
(a) At
any
time after September 1, 2009 (the “Applicable Date”), if requested by a majority
of the Holders, the Company agrees that it shall file with the SEC within
fifteen (15) days following such request (the “Required Filing Date”), a
registration statement on Form S-3 under the Securities Act if the Company
is
then eligible to use such form (any such registration statement, a “Shelf
Registration Statement”) for an offering to be made on a delayed and continuous
basis pursuant to Rule 415 thereunder, and or/any similar rule that may be
adopted by the SEC, to register the resale of any Registrable Securities
outstanding as of such date by the Investor from time to time in accordance
with
the methods of distribution elected by the Investor and set forth in such Shelf
Registration Statement and, thereafter, shall use its reasonable best efforts
to
cause such Shelf Registration Statement to be declared effective under the
Securities Act on or before 5:00 pm eastern time on the date that is ninety
(90)
days after the Closing Date (the “Effective Date”).
(b) Notwithstanding
the foregoing, the Company may postpone filing or having the Shelf Registration
Statement declared effective for a reasonable period not to exceed forty-five
(45) consecutive trading days if the Board of Directors of the Company shall
have determined in good faith because of valid business reasons (not including
avoidance of the Company’s obligations hereunder), including without limitation
the acquisition or divestiture of assets, capital raising activities, pending
corporate developments and similar events, that postponing effectiveness is
in
the best interests of the Company, and prior to postponing the effectiveness
the
Company provides the Investor with written notice of such postponement, which
notice need not specify the nature of the event giving rise to the
postponement.
(c) The
Company shall use its reasonable best efforts to: (i) to keep the Shelf
Registration Statement continuously effective under the Securities Act in order
to permit the prospectus forming a part thereof to be usable by the Investor
until the earliest of (1) the sale of all Registrable Securities registered
under the Shelf Registration Statement; (2) the expiration of the period
referred to in Rule 144(k) of the Securities Act with respect to all Registrable
Securities held by Persons who are not Affiliates of the Company; and (3) two
years from the date upon which the Shelf Registration Statement is declared
effective under the Securities Act (such period being referred to herein as
the
“Effectiveness Period”).
3
(d) The
Company may suspend the use of the prospectus included in the Shelf Registration
Statement for a period not to exceed sixty (60) consecutive trading days if
the
Board of Directors of the Company shall have determined in good faith because
of
valid business reasons (not including avoidance of the Company’s obligations
hereunder), including without limitation the acquisition or divestiture of
assets, capital raising activities, pending corporate developments and similar
events, that it is in the best interests of the Company to suspend such use,
and
prior to suspending such use the Company provides the Investor with written
notice of such suspension (“Material Adverse Event Notice”), which notice need
not specify the nature of the event giving rise to the suspension (any period
during which such a suspension is in effect, a “Blackout Period”).
Notwithstanding the foregoing, the Company may not send more than two Material
Adverse Event Notices to the Investor in any 365-day period.
(e) In
the
event that the Investor is prevented from selling Registrable Securities through
the Shelf Registration Statement as a result of a Blackout Period declared
by
the Company, the Effectiveness Period shall be extended by the number of days
that the Investor is prevented from making sales under the Shelf Registration
Statement as a result of such Blackout Period.
(f) If
at any
time following the filing of any Shelf Registration Statement, the Investor
desires to sell all or any portion of the Registrable Securities under such
Shelf Registration Statement in an underwritten offering, the Investor shall
notify the Company of such intent at least 15 days prior to any such sale (any
such proposed sale, an “Underwritten Take-Down Transaction”), and the Company
shall prepare and file a prospectus supplement, post-effective amendment to
the
Shelf Registration Statement and/or Exchange Act reports incorporated by
reference into the Shelf Registration Statement and take such other actions
as
necessary to permit the consummation of any such Underwritten Take-Down
Transaction.
2.3 Demand
Registration.
(a) If,
at
any time after the Applicable Date, the Shelf Registration Statement is not
effective or otherwise available, the Investor may request in a written notice
to the Company (the “Request”) that the Company effect the registration under
the Securities Act of some or all of the Registrable Securities then owned
by
the Investor; provided, however, that the Company will not be required to effect
more than one registration pursuant to this Section. Following the receipt
of a
Request, the Company shall, subject to the limitations of this Section 2, use
its commercially reasonable efforts to effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Investor requests to be registered.
(b) If
the
Investor intends to distribute the Registrable Securities covered by its request
by means of an underwritten offering, it shall so advise the Company as a part
of its request made pursuant to this Section 2.3. In such event, the right
of
the Investor to include its Registrable Securities in such registration shall
be
conditioned upon the Investor’s participation in such underwriting and the
inclusion of Registrable Securities in the underwriting to the extent provided
herein. The Investor shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by
the
Investor (which underwriter or underwriters shall be reasonably acceptable
to
the Company). Notwithstanding any other provision of this Section 2.3, if the
underwriter advises the Company that marketing factors require a limitation
of
the number of securities to be underwritten (including Registrable Securities),
then the Company shall so advise the Investor; provided,
however,
that
the number of shares of Registrable Securities to be included in such
underwriting and registration will not be reduced unless all other securities
of
the Company (including those that are entitled by contract or otherwise to
be
included therein) are first entirely excluded from such underwriting and
registration. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
4
(c) Notwithstanding
the foregoing, the Company may postpone having a registration statement pursuant
to this Section 2.3 declared effective for a reasonable period not to exceed
forty-five (45) consecutive trading days if the Board of Directors of the
Company shall have determined in good faith because of valid business reasons
(not including avoidance of the Company’s obligations hereunder), including
without limitation the acquisition or divestiture of assets, capital raising
activities, pending corporate developments and similar events, that postponing
effectiveness is in the best interests of the Company, and prior to postponing
the effectiveness the Company provides the Investor with written notice of
such
postponement, which notice need not specify the nature of the event giving
rise
to the postponement.
2.4 Expenses
of Registration.
(a) Registration
Expenses.
The
Company shall bear all Registration Expenses incurred in connection with all
registrations pursuant to Section 2.1, 2.2 or 2.3.
(b) Selling
Expenses.
Unless
otherwise stated in Section 4.2(a), all Selling Expenses and Registration
Expenses relating to securities registered on behalf of the Holder shall be
borne by the Holder.
2.5 Registration
Procedures.
In the
case of each registration, qualification or compliance effected by the Company
pursuant to this Agreement, the Company will:
(a) keep
the
Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof;
(b) as
soon
as practicable, prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective until the earlier of
one
hundred twenty (120) days or (ii) the distribution described in the Registration
Statement has been completed; provided, however, that (i) such 120-day period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request of
the
managing underwriter;
(c) furnish
to the Holder and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters
may
reasonably request in order to facilitate the public offering of such
securities;
(d) 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 all securities covered by
such
registration statement;
5
(e) in
the
event of an underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing
underwriter of such offering. The Holder participating shall also enter into
and
perform its obligations under such an agreement;
(f) use
its
best efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions
as
shall be reasonably requested by the Holder, provided that the Company shall
not
be required in connection therewith or as a condition thereto to qualify to
do
business or to file a general consent to service of process in any such states
or jurisdictions;
(g) cause
all
such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;
(h) use
its
best efforts to furnish, at the request of the Holder requesting registration
of
Registrable Securities pursuant to this Section 2, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 2, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holder requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants
to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holder requesting registration of Registrable Securities;
(i) notify
the Holder of Registrable Securities covered by such registration statement
at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements made therein not
misleading in the light of the circumstances then existing; and
(j) provide
a
transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration.
6
2.6 Indemnification.
(a) By
Company.
The
Company will indemnify the Holder and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against
all
expenses, claims, losses, damages or liabilities, joint or several, (or actions
in respect thereof), including any of the foregoing incurred in settlement
of
any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or
any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, 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, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act, the
Exchange Act or any state or federal securities law, or any rule or regulation
promulgated under such Acts or law applicable to the Company in connection
with
any such registration, qualification or compliance, and the Company will
reimburse the Holder and each person controlling the Holder, each such
underwriter and each person who controls any such underwriter, for any legal
and
any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent
that
any such claim, loss, damage, liability or expense arises out of or is based
on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information regarding the Holder
furnished to the Company by an instrument duly executed by the Holder,
underwriter or controlling person and stated to be specifically for use therein.
If the Holder is represented by counsel other than counsel for the Company,
the
Company will not be obligated under this Section 2.6(a) to reimburse legal
fees
and expenses of more than one separate counsel.
(b) By
Holder.
The
Holder will, if Registrable Securities held by the Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors, each of its officers,
each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out
of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, 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, and will reimburse the Company, such directors,
officers, persons, underwriters or controlling persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information regarding the Holder furnished to the
Company by an instrument duly executed by the Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability
of
the Holder under this subsection (b) shall be limited in an amount equal to
the
public offering price of the shares sold by the Holder, unless such liability
arises out of or is based on willful misconduct by the Holder.
7
(c) Procedures.
Each
party entitled to indemnification under this Section 2.6 (the "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 litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may participate
in such defense at such 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 unless the failure
to
give such notice is materially prejudicial to an Indemnifying Party's ability
to
defend such action and provided further, that the Indemnifying Party shall
not
assume the defense for matters as to which there is a conflict of interest
or
separate and different defenses. 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.
(d) Contribution.
If the
indemnification provided for in this Section 2.6 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
loss,
liability, claim, damage, or expense referred to therein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one
hand and of the Indemnified Party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense
as
well as any other relevant equitable considerations, provided that in no event
shall any contribution by the Holder under this Section 2.6(d) exceed the public
offering price of shares sold by the Holder, except in the case of willful
misconduct by the Holder. The relative fault of the Indemnifying Party and
of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Controlling
Agreement.
Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions of this Section 2.6, the provisions in the underwriting
agreement shall control.
2.7 Information
by Holder.
The
Holder of Registrable Securities included in any registration shall furnish
to
the Company such information regarding the Holder, the Registrable Securities
held by it and the distribution proposed by it as the Company may request in
writing and only as shall be necessary to enable the Company to comply with
the
provisions hereof in connection with any registration, qualification or
compliance referred to in this Agreement.
2.8 Rule
144 Reporting.
With a
view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the Registrable Securities
to the public without registration, after such time as a public market exists
for the Common Stock of the Company, the Company agrees to use its best efforts
to:
8
(a) Make
and
keep public information available, as those terms are understood and defined
in
Rule 144 under the Securities Act, at all times after the effective date that
the Company becomes subject to the reporting requirements of the Securities
Act
or the Securities Exchange Act of 1934, as amended and for so long as the
Company remains subject to the periodic reporting requirements under Section
13
or 15(d) of the Exchange Act.
(b) Use
its
best efforts to file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements).
(c) Furnish
to the Holder forthwith upon request a written statement by the Company as
to
its compliance with the reporting requirements of Rule 144 (at any time after
90
days after the effective date of the first registration statement filed by
the
Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject
to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company
and
other information in as the Holder may reasonably request in availing itself
of
any rule or regulation of the Commission allowing the Holder to sell any such
securities without registration.
2.9 Transfer
of Registration Rights.
The
rights to cause the Company to register securities granted Holder under Section
2.1, 2.2 or 2.3 may be transferred in connection with any transfer by the Holder
of Registrable Securities provided that: (i) such transfer may otherwise be
effected in accordance with applicable securities laws, (ii) such transfer
is
effected in compliance with the restrictions on transfer contained in this
Agreement and in any other agreement between the Company and the Holder, and
(iii) such transferee is an affiliate of a Stockholder or acquires (I) at least
50,000 shares of Registrable Securities (as equitably adjusted for stock
dividends, stock splits or other recapitalizations) or (II) all shares of
Registrable Securities held by a Stockholder if transferred to a single
transferee. No transfer will divest the Holder or any subsequent owner of such
rights and powers unless all Registrable Securities are transferred or
assigned.
2.10 Termination.
The
rights granted pursuant to this Section 2 shall terminate as to the Holder
at
such time as the Holder may sell under Rule 144, or a successor rule, in a
three
month period all Registrable Securities then held by the Holder.
SECTION
3
TAG-ALONG
RIGHT
▇.▇.
▇▇▇▇▇▇▇ (“WBC”), individually, hereby covenants and agrees as
follows:
9
3.1
If at
any time WBC proposes to transfer shares of Common Stock of the Company held
to
any person or entity (each, a “Proposed Transferee”), then WBC shall send
written notice to the Investor which shall state (i) that WBC desires to
make such a transfer, (ii) the identity of the proposed transferee and the
number of Shares proposed to be sold or otherwise transferred, (iii) the
proposed purchase price per share to be paid and the other terms and conditions
of such transfer and (iv) the projected closing date of such transfer,
which in no event shall be prior to 20 days after the giving of such written
notice to the Investor.
3.2
For a
period of 20 days after the giving of the notice pursuant to Section 3.1 above,
the Investor shall have the right to sell to the Proposed Transferees in such
transfer at the same price and upon the same terms and conditions as WBC (which
terms and conditions may include making representations or providing
indemnities; provided,
however,
that in
no event shall the Investor be required to make any representations or provide
any indemnities other than (i) on a proportionate basis and (ii) with
respect to matters relating solely to the Investor, such as representations
as
to title to shares to be transferred by the Investor a percentage of the total
number of shares proposed to be transferred to such Proposed Transferee equal
to
the percentage obtained by dividing (x) the number of shares of Common Stock
then held by the Investor (on a fully diluted basis) by (y) the total number
of
shares of Common Stock then outstanding (on a fully diluted basis), and the
number of Shares that may be transferred by WBC in such proposed transfer shall
be commensurately reduced.
3.3
The
rights of the Investor under Section 3 shall be exercisable by delivering
written notice thereof, prior to the expiration of the 20-day period referred
to
in 3.2 above, to WBC with a copy to the Company. The failure of the Investor
to
respond within such period to WBC shall be deemed to be a waiver of the
Investor’s rights under this Section 3 with respect to that transfer, so long as
such transfer takes place within a period of 120 days following the expiration
of such 20-day period.
3.4
In the
event that the Investor exercises rights under Section 3.2 and following such
exercise there is a change in the price or terms of the proposed transaction
between WBC and the Proposed Transferee, then WBC shall promptly notify the
Investor of the revised price or terms and, if the price has changed at all
or
the other terms have changed materially, the Investor shall have the right
to
rescind the exercise of its rights under Section 3.2 by notice to WBC within
five business days of receipt of the notice from WBC.
SECTION
4
ACTIONS
REQUIRING INVESTOR CONSENT
Without
the prior written consent of the Investor, the Corporation shall not (i)
increase or decrease (including by way of merger, consolidation or otherwise)
the authorized amount of the Preferred Stock, (ii) issue any shares of the
Preferred Stock, or (iii) permit any amendment, repeal, alteration, addition,
or
deletion or other change to the powers, designations, preferences, rights,
qualifications, limitations or restrictions of the Preferred Stock in any manner
adverse to the Investor, including but not limited to by way of merger,
consolidation, or otherwise and whether by board resolution, amendment to the
Certificate of Incorporation or Bylaws, or otherwise, or (iv) enter into any
contract, understanding or other arrangement to do any of the foregoing, except
if such contract, understanding, or other arrangement is subject to the prior
approval of the Investor.
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SECTION
5
MISCELLANEOUS
5.1 Governing
Law.
This
Agreement shall be governed in all respects by the laws of the State of Delaware
as applied to contracts made and to be fully performed entirely within that
state between residents of that state.
5.2 Entire
Agreement; Amendment.
This
Agreement constitutes the full and entire understanding and agreement between
the parties with regard to the subject matter hereof and thereof. This Agreement
or any term hereof may be amended, waived, discharged or terminated by a written
instrument signed by the Company and the Holder Any amendment or waiver effected
in accordance with this paragraph shall be binding upon each party to the
Agreement, whether or not such party has signed such amendment or waiver, each
future Holder, and the Company.
5.3 Notices,
Etc.
All
notices and other communications required or permitted hereunder shall be deemed
given if in writing and mailed by registered or certified mail, postage prepaid,
or otherwise delivered by hand or by messenger, addressed (a) if to the
Investor, at such address as such Investor shall have furnished to the Company
in writing, or (b) if to the Company, at the address of its principal offices
and addressed to the attention of the Corporate Secretary and with a copy to
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: R. ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., or at such
other address as the Company shall have furnished to the Holder in
writing.
5.4 Severability.
In the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided that
no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
5.5 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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
11
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set
forth above.
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FLORIDA
GAMING CORPORATION, a
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||
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Delaware
corporation
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By:
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Title:
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PRIDES
CAPITAL FUND I, L.P.
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By:
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Prides
Capital Partners, LLC,
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| its sole general partner | ||
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By:
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||
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Title:
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▇.▇.
▇▇▇▇▇▇▇
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By:
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Name:
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▇.▇.
▇▇▇▇▇▇▇, individually
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12