FLORIDA GAMING CORPORATION STOCK SUBSCRIPTION AGREEMENT
Exhibit
4.5
FLORIDA
GAMING CORPORATION
Florida
Gaming Corporation
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
▇▇.
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
1. Application.
Prides
Capital Fund I, L.P., a Delaware limited partnership (“Prides”) and Florida
Gaming Corporation, a Delaware corporation (the "Company"), intending to be
legally bound, hereby agree that on the date hereof, subject to the terms and
conditions hereof, Prides shall purchase from the Company and the Company shall
issue 5,000 shares (the "Preferred Shares") of Series AA 7% Cumulative
Convertible Preferred Stock (the "Series AA Preferred Stock") of the Company.
The purchase price of each Preferred Share is $1,000.00.
2. Closing.
(a) The
closing of the sale of the Preferred Shares (the “Closing”) shall take place on
the date hereof at the offices of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, LLC, or at such other time
or place as the Company and Prides may mutually agree.
(b) Prior
to
the Closing, the Company shall have filed with the Secretary of State of the
State of Delaware the Certificate of Designation to be effective in accordance
with applicable law at or prior to Closing.
(c) At
the
Closing, subject to the terms and conditions hereof, (i) the Company will
deliver to Prides stock certificates representing the Preferred Shares to be
purchased at such Closing, free and clear of any encumbrances, (ii) Prides
will
make payment to the Company of five million dollars ($5,000,000) by wire
transfer of immediately available funds to an account that the Company has
designated prior to the date hereof and (iii) the Company and Prides will
execute and deliver the Stockholders Agreement.
3. Representations
and Warranties of the Subscriber.
Prides
represents and warrants to the Company as follows:
(a) Prides,
in making the decision to purchase the Preferred Shares subscribed for, has
relied upon independent investigations made by it and its representatives,
if
any. The only agreements between the Company and Prides with respect to the
investment in the Preferred Shares are: (i) the form of Certificate of
Designations attached hereto as Exhibit
A;
(ii)
the form of Stockholders Agreement attached hereto as Exhibit
B
(the
“Stockholders Agreement”); (iii) the form of Warrant issued to Prides attached
hereto as Exhibit
C
and (iv)
this Subscription Agreement. No oral representations have been made or furnished
to Prides by the Company or any representative of the Company. Prides and/or
its
advisors have had a reasonable opportunity to ask questions of and receive
answers from the Company concerning the Preferred Shares.
(b) Prides
has sufficient access to all information, including all public filings with
the
Securities and Exchange Commission and all publicly available financial
statements and other financial information of the Company, and has been afforded
with an opportunity to ask questions of and receive answers from an officer
of
the Company concerning information to which a reasonable investor would attach
significance in making investment decisions, so that as a reasonable investor
Prides has been able to make Prides’ decision to purchase the Preferred Shares.
Prides has relied on, or consulted with, Prides’ advisors, including legal
counsel, with respect to Prides’ decision to purchase the Preferred
Shares.
(c) Prides
is
not subscribing for the Preferred Shares as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio,
or
presented at any seminar or meeting, or any solicitation of a subscription
by a
person not previously known to Prides in connection with investments in
securities generally.
(d) Prides
is
able to bear the substantial economic risks of an investment in the Preferred
Shares and the shares of Common Stock issuable upon conversion of the Preferred
Shares (the "Conversion Shares") for an indefinite period of time, has no need
for liquidity in such investment, has made commitments to investments that
are
not readily marketable which are reasonable in relation to Prides’ net worth
and, at the present time, could afford a complete loss of such
investment.
(e) Prides
has such knowledge and experience in financial, tax and business matters so
as
to enable it to utilize the information available to Prides in connection with
the offering of the Preferred Shares to evaluate the merits and risks of an
investment in such equity and to make an informed investment decision with
respect thereto.
(f) Prides
acknowledges that the purchase of the Preferred Shares involves a high degree
of
risk and further acknowledges that it can bear the economic risk of the purchase
of the Preferred Shares, including the total loss of its investment. Prides
is
not relying on the Company with respect to the tax and other economic
considerations of an investment in the Preferred Shares, and Prides has relied
on the advice of, or has consulted with, only Prides’ own advisor(s) with
respect thereto.
(g) Prides
has full right and power to perform pursuant to this Subscription Agreement
and
make an investment in the Company and is authorized and otherwise duly qualified
to purchase and hold the Preferred Shares and to enter into this Subscription
Agreement.
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(h) Prides
will not sell or otherwise transfer the Preferred Shares or the Conversion
Shares without registration under the Securities Act of 1933, as amended (the
"Securities Act") or an exemption therefrom and fully understands and agrees
that Prides may bear the economic risk of Prides’ purchase for an indefinite
period of time because, among other reasons, the Preferred Shares and the
Conversion Shares have not been registered under the Securities Act or under
the
securities laws of certain states and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless the securities are subsequently
registered under the Securities Act and under the applicable securities laws
of
such states or unless an exemption from such registration is available in the
opinion of counsel for the holder, which counsel and opinion are reasonably
satisfactory to counsel for the Company. Prides is purchasing the Preferred
Shares for Prides’ own account, for investment and not with a view to resale or
distribution except in compliance with the Securities Act. Prides is aware
that
an exemption from the registration requirements of the Securities Act pursuant
to Rule 144 promulgated thereunder is not presently available; that, except
as
contemplated by section 6 hereof, the Company has no obligation to make
available an exemption from the registration requirements pursuant to such
Rule
144 or any successor rule for resale of the Shares and the Conversion Shares,
and that even if an exemption under Rule 144 were available, Rule 144 permits
only routine sales of securities in limited amounts in accordance with the
terms
and conditions of such Rule 144.
(i) Prides
agrees to the placement of a legend on any certificate or other document
evidencing the Preferred Shares or the Conversion Shares stating that they
have
not been registered under the Securities Act (and a stop transfer order may
be
placed with respect thereto).
(j) Prides
understands and acknowledges that Florida law prohibits any person or entity
from acquiring a 5% or greater equity interest in a pari-mutuel -operator and
exercising control with respect to those shares until such person has received
the approval of the Florida Department of Business and Professional Regulation,
Division of Pari-Mutuel Wagering, and therefore that the acquisition of 5%
or
more of the Company's Common Stock upon the conversion of the Preferred Shares
could require such approval. In the event such approval is required upon Pride's
conversion of Preferred Shares, the Company will use its reasonable best efforts
to assist Prides in obtaining such consent.
(k) Prides
understands that the Preferred Shares are being offered and sold to him or
it in
reliance on specific exemptions from the registration requirements of federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of Prides set forth herein in order to determine the
applicability of such exemptions and the suitability of Prides to acquire the
Preferred Shares. The representations, warranties and agreements of Prides
contained herein are true and correct as of the date hereof and may be relied
upon by the Company. The representations, warranties and agreements of Prides
contained herein shall survive the execution and delivery of this Subscription
Agreement and the purchase of the Preferred Shares.
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(l) Prides
shall comply with all applicable securities laws with respect to the sale of
the
Preferred Shares and the Conversion Shares, including but not limited to the
filing of all reports required to be filed by Prides in connection therewith
with the U.S. Securities and Exchange Commission (the “SEC”) or any other
applicable regulatory authority.
4. Accredited
Investor Status.
Prides
further represents and warrants that it is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the SEC.
5. Representations
and Warranties of the Company.
The
Company represents and warrants to, and agrees with, Prides as
follows:
(a) Each
of
the Company and its subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the State
of
Delaware or its jurisdiction of incorporation or formation and has all
requisite, corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. The Company and each of its
subsidiaries is duly qualified to transact business and is in good standing
in
the State of Florida and in each other jurisdiction in which the failure to
so
qualify would be reasonably likely to have a Material Adverse Effect on the
Company. None of the Company nor any of its subsidiaries is the subject of
any
pending or, to the knowledge of the Company, threatened material investigation
or administrative or legal proceeding by the Internal Revenue Service, the
taxing authorities of any state or local jurisdiction or the SEC which have
not
been disclosed in the SEC Reports (as defined below).
(b) All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Subscription Agreement, the Certificate of Designations and the Stockholders
Agreement (the “Transaction Documents”), the performance of all obligations of
the Company hereunder and thereunder and the authorization, issuance (or
reservation for issuance) and delivery of the Preferred Shares and the
Conversion Shares have been taken, and this Subscription Agreement and each
of
the other Transaction Documents constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, except
to
the extent adjustments to the conversion price of the shares of Series AA
Preferred Stock and other shares of the Company's convertible preferred stock
would result in the issuance of a number of shares of Common Stock in excess
of
the Company's authorized number of shares of Common Stock.
(c) The
Preferred Shares, when issued, sold and delivered in accordance with the terms
hereof for the consideration expressed herein, will be validly issued, fully
paid and nonassessable and, subject to the accuracy of the representations
of
Prides in this Subscription Agreement, will be issued in compliance with all
applicable United States federal and state securities laws. The Conversion
Shares if issued in accordance with the terms of the Certificate of
Designations, Voting Powers, Preferences, Limitations, Restrictions, and
Relative Rights of Series AA 7% Cumulative Convertible Preferred Stock (the
"Certificate of Designation") shall be duly and validly issued and outstanding,
fully paid and nonassessable, and subject to the accuracy of the representations
and warranties of Prides and any transferee of the Preferred Shares, will be
in
compliance with all applicable United States federal and state securities laws.
The Preferred Shares and Conversion Shares, when and if issued, sold and
delivered pursuant to this Agreement or the Certificate of Designation (as
applicable), will be delivered free and clear of all encumbrances, excluding
encumbrances imposed by the Stockholders Agreement.
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(d) The
execution and delivery of this Subscription Agreement and the other Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby, including the issuance of the Preferred Shares and the Conversion
Shares, do not and will not (i) conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under,
the
Certificate of Incorporation or By-Laws of the Company, or any indenture,
mortgage, deed of trust or other material instrument to which the Company is
a
party or by which it or any of its properties or assets are bound, or any
applicable law, permit or decree, judgment or order of any court, federal or
state regulatory body, administrative, agency or other governmental body having
jurisdiction over the Company or any of its properties or assets or (ii) require
any declaration, filing or registration with, or notice to, or authorization,
consent, approval, order or permit of, any governmental or regulatory body
or
authority or any other Person, except to the extent that the failure to obtain
any such authorization, consent, approval or order or to make any such
registration, declaration, filing or notice, would not have a Material Adverse
Effect.
(e) As
of the
date hereof, the conduct of the business of the Company and its subsidiaries
complies in all material respects with all statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto. None of
the
Company nor any of its subsidiaries has received notice of any alleged violation
of any statute, law, regulation, ordinance, rule, judgment, order or decree
from
any governmental authority. The Company and its subsidiaries hold all licenses,
permits, orders, consents, approvals, registrations, authorizations,
qualifications and filings permits (collectively, “Permits”) necessary for the
lawful conduct of their respective businesses as they are presently being
conducted, all such Permits are in full force and effect, the Company and its
subsidiaries are in compliance with the terms of such Permits, there are no
pending or, to the knowledge of the Company, threatened, modifications,
amendments, cancellations, suspensions, limitations, nonrenewals or revocations
of any Permit and there has occurred no event which (whether with notice or
lapse of time or both) could reasonably be expected to result in or constitute
the basis for such a modification, amendment, cancellation, suspension,
limitation, nonrenewal or revocation thereof. The Company shall comply with
all
applicable securities laws with respect to the sale of the Preferred Shares
and
the Conversion Shares, including but not limited to the filing of all reports
required to be filed in connection therewith with the SEC or any other
applicable regulatory authority.
(f) Except
as
disclosed in reasonable detail in the Company's public securities filings filed
prior to the date hereof with the SEC (the “SEC Reports”), there is no action,
suit or proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened, against or affecting the Company or its subsidiaries, or any of
their properties, which, individually or in the aggregate could reasonably
be
expected to result in any material adverse change in the business, financial
condition or results of operations of the Company and its subsidiaries, taken
as
a whole, or which could reasonably be expected to materially and adversely
affect the properties or assets of the Company and its subsidiaries, taken
as a
whole (a “Material Adverse Effect”).
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(g) For
so
long as any shares of Preferred Shares or Conversion Shares held by Prides
remain outstanding, the Company will reserve from its authorized but unissued
shares of Common Stock a sufficient number of shares of common stock to permit
the issuance of all of the Conversion Shares;
(h) As
of
March 31, 2007, the authorized capital of the Company consisted of (i) 7,500,00
shares of Common Stock, par value $.20 per share, (ii) 1,200,000 Series A
Convertible Preferred Stock (“Series A Preferred Stock”), par value $.10 per
share, (iii) 50 shares of Series B Preferred Stock, par value $.10 per share
("Series B Preferred Stock"), (iv) 300 shares of Series E Preferred Stock,
par
value $.10 per share ("Series E Preferred Stock") and (v) 2,500 shares of
Series
F Preferred Stock, par value $.10 per share ("Series F Preferred Stock").
Of
such authorized capital stock, as of March 31, 2007, (i) 3,339,178 shares
of Common Stock were issued and outstanding, all of which were validly issued
and fully paid, nonassessable and free of preemptive rights, (ii) 28,235
shares of Series A Preferred Stock were issued and outstanding, (iii) 45
shares
of Series B Preferred Stock were issued and outstanding, (iv) 200 shares
of
Series E Preferred Stock were issued and outstanding, (v) 2,000 shares of
Series
F Preferred Stock were issued and outstanding, (vi) a total of 315,990 shares
of
Common Stock were reserved for issuance to pursuant to conversion of Series
A,
Series B, Series E, and Series F Preferred Stock and (vii) 1,488,625 shares
of
Common Stock were reserved for issuance pursuant to the exercise of outstanding
options to purchase Common Stock. The Company has not issued any capital
stock
or granted options to purchase capital stock since March 31, 2007 other than
pursuant to the grant of equity compensation under the Company’s Benefit Plans
and the exercise of outstanding stock options granted thereunder.
(i) Except
with respect to the Preferred Shares, warrants to purchase a total of 25,000
shares of Common Stock issued pursuant to the transactions the subject of this
Agreement, or as set forth in subsection 5(h) above, there are no outstanding
options, warrants, subscriptions, calls, convertible securities or other rights,
agreements, arrangements or commitments (contingent or otherwise) (including
any
right of conversion or exchange under any outstanding security, instrument
or
other agreement) obligating the Company or any of its direct or indirect
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, any shares or obligating them to grant, extend or enter into any such
agreement or commitment. There are no outstanding contractual obligations of
the
Company or any of its direct or indirect subsidiaries to repurchase, redeem
or
otherwise acquire any shares or make any investment (in the form of a loan,
capital contribution or otherwise) in any other person or entity other than
a
wholly-owned subsidiary of the Company.
(j) The
Company has filed with the SEC all forms, reports, schedules, proxy statements
(in each case including all exhibits and schedules thereto and documents
incorporated by reference therein and including all registration statements
and
prospectuses filed with the SEC) required to be filed by the Company with the
SEC since January 1, 2004. As of its date of filing, each SEC Report complied
in
all material respects with the requirements of the Securities Exchange Act
of
1934, as amended (the “Exchange Act”), or the Securities Act of 1933, as amended
(the “Securities Act”), and the rules and regulations promulgated thereunder and
none of such SEC Reports (including any and all financial statements included
therein) contained when filed (except to the extent revised or superseded by
a
subsequent filing with the SEC that is publicly available prior to the date
hereof) any untrue statement of a material fact or omitted or omits to state
a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
Each of
the consolidated financial statements (including the notes thereto) included
in
the SEC Reports complied (i) as to form required by published rules and
regulations of the SEC related thereto as of its date of filing with the SEC,
(ii) in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, (iii) has
been
prepared in accordance with U.S. generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or otherwise permitted by the SEC on Form 10-Q
or
any successor form under the Exchange Act) and (iv) presents fairly in all
material respects the consolidated financial position of Company and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended, subject (in
the
case of unaudited financial statements) to normal year-end adjustments and
any
other adjustments described therein or in the notes or schedules thereto or
the
absence of footnotes.
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(k) The
Company and its subsidiaries have designed and maintain (i) disclosure controls
and procedures that are effective for gathering, analyzing and disclosing in
a
timely manner the information which the Company is required to disclose in
the
reports filed under the Securities Exchange Act of 1934 and (ii) a system of
internal controls over financial reporting sufficient to provide reasonable
assurances regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP. The
Company has disclosed, based on its most recent evaluation of disclosure
controls and procedures prior to the date hereof, to the Company’s auditors and
the audit committee of the Company’s Board of Directors, (x) any significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting that are reasonably likely to adversely affect
in any material respect the Company’s ability to record, process, summarize and
report financial information and (y) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company’s internal controls over financial reporting.
(l) Except
for liabilities included or reserved for in the consolidated balance sheet
of
the Company as of March 31, 2007, as filed with the SEC, neither the Company
nor
any of its subsidiaries had, and since such date none of them has incurred,
liabilities, including contingent liabilities, or any other obligations
whatsoever that are or could be material (individually or in the aggregate)
to
the Company and its subsidiaries of a nature required to be disclosed on a
consolidated balance sheet or in the related notes thereto, taken as a whole,
except current liabilities incurred in the ordinary course of business
subsequent March 31, 2007 and except for such liabilities that would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
(m)
Except
as
disclosed in reasonable detail in the SEC Reports, neither the Company nor
any
of its subsidiaries is in material breach or violation of or in default in
the
performance or observance of any terms or provisions of, and no event has
occurred which, with notice, lapse of time or both, could result in a default
under any contract, agreement, lease or deed that is material to the business
or
operation of the Company and its subsidiaries taken as a whole, including any
“material contract” within the meaning of Item 601 of Regulation S-K of the SEC
(a "Material Contract"). To the knowledge of the Company, no other party to
any
Material Contract is in material breach thereof or default
thereunder.
7
(n) Except
as
disclosed in reasonable detail in the SEC Reports, no
transaction has occurred between or among the Company or any of its affiliates,
officers or directors or any affiliate of any such officer or director that
is
required to be disclosed pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(o) Except
as
disclosed in reasonable detail in the SEC Reports, during the period from March
31, 2007 to the date hereof, the business of the Company and its subsidiaries
has been conducted in the ordinary course consistent with past practice and
there has not been any event, occurrence or development that has had, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(p) Except
as
disclosed in reasonable detail in the SEC Reports, the Company and each of
its
subsidiaries have good and marketable title to their respective owned properties
and assets, and good title to their respective leasehold estates in leased
properties and assets, in each case subject to no encumbrance, other than
encumbrances that would not reasonably be expected to result in, individually
or
in the aggregate, a Material Adverse Effect. The properties and assets owned
and
leased by the Company and its subsidiaries are sufficient to carry on their
businesses as they are now being conducted, except as would not reasonably
be
expected to result, individually or in the aggregate, in a Material Adverse
Effect.
(q) Except
as
disclosed in reasonable detail in the SEC Reports, the Company and each of
its
subsidiaries own or have a valid license or other right to use each trademark,
service ▇▇▇▇, trade name, domain name or other source indicator, invention,
patent, design, trade secret, customer list, copyright, software, or work of
authorship in any media, know-how (including any registrations or applications
for registration of any of the foregoing) or any other similar type of
proprietary intellectual property right used in or necessary to carry on the
business of the Company and each of its subsidiaries, taken as a whole, as
currently conducted (collectively, the “Company Intellectual Property”), free
and clear of all encumbrances (other than other than encumbrances that would
not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect). The Company Intellectual Property is (i) valid and
enforceable, and (ii) to the knowledge of the Company, not being infringed,
misappropriated or otherwise violated by any third party. Neither the Company
nor any of its subsidiaries has received any written notice of infringement
of
or challenge to, and there are no claims or orders pending or threatened with
respect to the rights of others to the use of, any Company Intellectual
Property. The Company and each of its subsidiaries take all reasonable actions
to protect the Company Intellectual Property.
(r) Except
for matters which are not reasonably likely have a Material Adverse Effect,
each
of the Company and its subsidiaries has filed all necessary federal, state
and
foreign income and franchise tax returns and has paid or accrued all taxes
whether or not shown as due.
The
Company has no knowledge of any tax deficiency which has been asserted or
threatened against the Company or any of its subsidiaries. On the date hereof,
all stock transfer or other taxes (other than income taxes) which are required
to be paid in connection with the sale and transfer of the Shares hereunder
will
be, or have been, fully paid or provided for by the Company and the Company
has
complied and will comply with all laws imposing such taxes.
8
(s) With
respect to the Benefit Plans, to the knowledge of the Company and except as
disclosed in reasonable detail in the SEC Reports, no event has occurred and
no
condition or set of circumstances exist, in connection with which the Company
could be subject to any liability that would have a material adverse effect
on
it or its business under ERISA, the United States Internal Revenue Code of
1986,
as amended, or any other applicable law. The term “Benefit Plan” means each
“employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), including, without
limitation, multiemployer plans within the meaning of Section 3(37) of
ERISA), and all stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation, employee loan and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject
to
ERISA, under which (i) any current or former employee, director or
consultant of the Company or its subsidiaries has any present or future right
to
benefits and which are contributed to, sponsored by or maintained by the Company
or any of its respective subsidiaries or (ii) the Company or any of its
respective subsidiaries has had or has any present or future liability. The
transactions contemplated by this Agreement will not result in any severance,
change of control or termination pay or termination benefits or otherwise
require the Company to make any cash payments to any of its directors, officers,
employees or other affiliates. There are no pending or, to the knowledge of
the
Company, threatened, labor strikes, walkouts, work stoppages, slow-downs or
lockouts involving the Company or any of its subsidiaries that would reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(t) Except
for the Agreement with National Securities Corporation, which has been disclosed
to Prides, the Company is not a party to or bound by any contract, arrangement
or understanding with, or subject to any claim by, any person or firm which
may
result in an obligation of the Company to pay any finder's fees, brokerage
or
agent commissions or other like payments in connection with the transactions
contemplated hereby.
(u) No
shareholder vote under the organizational documents of the Company or any
listing requirements applicable to the Company is necessary for the issuance
of
the Preferred Shares or the conversion of the Preferred Shares into the
Conversion Shares.
(v) The
board
of directors of the Company has determined that the transactions contemplated
by
this Agreement and the Transaction Documents are in the best interests of the
Company. There are no anti-takeover laws of any state, federal or foreign
jurisdiction that would apply to the execution, delivery or performance of
this
Agreement or the consummation the transactions contemplated hereby. The Company
is not party to any contract or agreement with respect to, and does not maintain
any, stockholders rights plan, poison pill or similar agreement, plan or
arrangement with respect to its capital stock of the Company.
9
(w) The
Company undertakes and agrees to make all necessary filings in connection with
the sale of the Preferred Shares and the Conversion Shares as required by the
laws and regulations of all appropriate jurisdictions. The Company’s Common
Stock is registered pursuant to the Exchange Act, and is listed on the OTC
Bulletin Board, and the Company has taken no action intended to, or which to
its
knowledge could have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the OTC Bulletin
Board.
(x) The
Company shall consult with its legal counsel regarding its Exchange Act filing
requirements including, but not limited to, the obligation of the Company to
file Form 8-K in connection with the offering of the Preferred Shares, and
timely make any and all necessary filings.
(y) The
Company understands that Prides is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings
of
the Company set forth herein. The representations, warranties and agreements
of
the Company contained herein are true and correct as of the date hereof and
may
be relied upon by Prides. The representations, warranties and agreements of
the
Company contained herein shall survive the execution and delivery of this
Subscription Agreement and the purchase of the Preferred Shares.
6. Miscellaneous.
(a) This
Subscription Agreement has been duly and validly authorized, executed and
delivered by Prides and constitutes the valid, binding and enforceable agreement
of Prides. This Subscription Agreement has been completed and executed by an
authorized corporate officer, general partner or trustee of Prides.
(b) This
Subscription Agreement and the documents referred to herein constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and together supersede all prior discussions or agreements in respect
thereof.
(c) Subject
to the terms and conditions herein provided, each party hereto shall use its
reasonable best efforts to take, or cause to be taken, all actions and to do,
or
cause to be done, and to assist and cooperate with the other party in doing,
all
things necessary, proper or advisable consistent with applicable laws and
regulations to consummate and make effective the transactions contemplated
by
this Agreement; provided,
however,
that
nothing in this Section 6(c) shall require any party to agree to any
modification of this Agreement or any of the Transaction Documents or cause
Prides to make any payment or investment in the Company that is greater than
the
amount set forth herein.
(d) No
covenant or other provision hereof may be waived otherwise than by a written
instrument signed by the party so waiving such covenant or other provision.
The
waiver or failure to insist upon strict compliance with any condition or
provision hereof shall not operate as a waiver of, or estoppel with respect
to,
any subsequent or other waiver or failure. This Agreement may not be amended
or
modified except by an instrument in writing signed by the Company and each
of
the Investors.
10
(e) This
Agreement shall be deemed to be a contract made under, and shall be construed
in
accordance with, the laws of the State of Delaware (without giving effect to
principles of conflicts of law the effect of which would cause the application
of domestic substantive laws of any other jurisdiction).
(f) 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 Prides,
at
such address as Prides 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 Prides in
writing.
(g) Whenever
possible, each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement shall be deemed prohibited or invalid under such applicable law,
such
provision shall be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or the other provisions of this
Agreement.
(h) This
Agreement may be not assigned, pledged, hypothecated or otherwise transferred
by
the Company or Prides.
(i) Nothing
expressed or implied in this Agreement is intended or shall be construed to
confer upon or give any person other than the parties hereto any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby.
(d) This
Subscription Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute
a
single document.
11
IN
WITNESS WHEREOF, Prides has executed this Subscription Agreement this
15th
day of
June, 2007.
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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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Name:
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Title:
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12
Exhibit
A
Certificate
of Designations,
Voting
Powers, Preferences, Limitations,
Restrictions,
and Relative Rights of
Series
AA
7% Cumulative Convertible
Preferred
Stock, $0.10 Par Value
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
Florida
Gaming Corporation, a Delaware corporation (the "Corporation"), does
hereby
certify that the following resolution has been duly adopted by the Board
of
Directors of the Corporation (the "Board"):
RESOLVED,
that, pursuant to the authority expressly granted to and vested in the
Board by
the provisions of the Certificate of Incorporation (the "Certificate
of
Incorporation") of the Corporation, there hereby is created a new series
of
Preferred Stock, $0.10 par value, which series shall have the following
designations, powers, preferences, rights, qualifications, limitations
and
restrictions (in addition to the designations, powers, preferences, rights,
qualifications, limitations and restrictions set forth in the Certificate
of
Incorporation which are applicable to the Preferred Stock).
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1.
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Designation:
Number of Shares.
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The
designation of said series of Preferred Stock shall be Series AA 7% Cumulative
Convertible Preferred Stock (the "Series AA Preferred Stock"). The number
of
shares of Series AA Preferred Stock shall be 5,000. Each share of Series
AA
Preferred Stock shall have a stated value (the "Stated Value") equal
to $1,000
(as adjusted for any stock dividends, combinations or splits with respect
to
such shares). The Series AA Preferred Stock shall be equal in rank to
the Class
A Convertible Preferred Stock, the Series B Convertible Preferred Stock,
the
Series E 8% Cumulative convertible Preferred Stock ("Series E Preferred
Stock"),
and the Series F 8% Cumulative Convertible Preferred Stock ("Series F
Preferred
Stock") in all respects.
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2.
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Dividends.
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(a) The
holders of outstanding shares of Series AA Preferred Stock shall be entitled
to
receive preferential dividends in cash, out of any funds of the Corporation
legally available at the time of dividends, before any dividend or other
distribution will be paid or declared and set apart for payment on any
shares of
any Common Stock or other class of stock which does not expressly provide
that
it ranks senior in preference or priority to or on parity with the Series
AA
Preferred Stock (the Common Stock and such junior stock being hereinafter
collectively the "Junior Stock") at the greater of (i) the rate of 7%
per annum
on the Stated Value per share plus any accrued and unpaid dividends that
are
payable (“Regular Dividends”) and (ii) the amount of any dividend paid or
payable on any Junior Stock (on an as-converted basis), payable quarterly
on the
last day of a fiscal quarter, commencing June 30, 2007. Regular Dividends
will
accrue and accumulate whether or not the Corporation has earnings or
profits,
whether or not there are funds legally available for the payment of Regular
Dividends and whether or not Regular Dividends are declared.
(b) The
dividends on the Series AA Preferred Stock at the rate provided above
shall be
cumulative whether or not earned, so that if at any time full cumulative
dividends at the rate aforesaid on all shares of the Series AA Preferred
Stock
then outstanding from the date from and after which dividends thereon
are
cumulative to the end of the quarterly dividend period next preceding
such time
shall not have been paid or declared and set apart for payment, or if
the full
dividend on all such outstanding Series AA Preferred Stock for the then
current
dividend period shall not have been paid or declared and set apart for
payment,
the amount of the deficiency shall be paid or declared and set apart
for payment
before any sum shall be set apart for or applied by the Corporation or
a
subsidiary of the Corporation to the purchase, redemption or other acquisition
of the Series AA Preferred Stock or any shares of any other class of
stock
ranking on a parity with the Series AA Preferred Stock ("Parity Stock")
and
before any dividend or other distribution shall be paid or declared and
set
apart for payment on any Junior Stock and before any sum shall be set
aside for
or applied to the purchase, redemption or other acquisition of Junior
Stock.
(c) Dividends
on all shares of the Series AA Preferred Stock shall begin to accrue
and be
cumulative from and after the date of issuance thereof (the "Dividend
Commencement Date"). A dividend period shall be deemed to commence on
the day
following a quarterly dividend payment date herein specified and to end
on the
next succeeding quarterly dividend payment date herein specified.
(d) Unless
all accrued and unpaid dividends for all past Dividend Periods on outstanding
shares of Series AA Preferred Stock have been declared and paid or set
aside for
payment in full, the Corporation shall not redeem or purchase less than
all of
the outstanding shares of Series AA Preferred Stock, except through an
offer
made on the same terms to all holders of at least a majority of all shares
of
Series AA Preferred Stock at the time of standing voting in person or
by proxy
at an annual meeting of the Corporation's stockholders or at a special
meeting
called for such purpose, or by the execution of a written consent by
the record
holders of a majority of the outstanding shares of Series AA Preferred
Stock.
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3.
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Voting.
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Except
as
otherwise provided in Section 2(d) the holders of shares of Series AA
Preferred
Stock shall not be entitled to vote for the election of directors or
on any
other matters except as otherwise provided by law.
2
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4.
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Liquidation
Rights.
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(a) Upon
the
dissolution, liquidation or winding-up of the Corporation, whether voluntary
or
involuntary, the holders of the Series AA Preferred Stock shall be entitled
to
receive, before any payment or distribution shall be made on the Junior
Stock,
out of the assets of the Corporation available for distribution to stockholders,
an amount in cash per share equal to the greater of (i) the Stated Value
per
share of Series AA Preferred Stock and all accrued and unpaid dividends
to and
including the date of payment thereof and (ii) the amount the holders
of Series
AA Preferred Stock would have received upon dissolution, liquidation
or winding
up of the Corporation had such holders converted their shares of Series
AA
Preferred Stock into shares of Common Stock. After the payment to the
holders of
the shares of Series AA Preferred Stock of the full preferential amounts
provided for in this Section 4, the holders of the shares of Series AA
Preferred
Stock shall have no other right or claim to, and shall not be entitled
to
participate further in any distribution of the assets of the Corporation.
If the
assets of the Corporation available for distribution to the holders of
the
Series AA Preferred Stock shall be insufficient to permit payment in
full of the
amounts payable as aforesaid to the holders of Series AA Preferred Stock
upon
such liquidation, dissolution or winding-up, whether voluntary or involuntary,
then all such assets of the Corporation shall be distributed, to the
exclusion
of the holders of shares of Junior Stock, ratably among the holders of
the
Series AA Preferred Stock and any other stock of equal ranking.
(b) The
(i)
merger or consolidation of the Corporation with or into any other corporation
or
corporations and the sale or transfer by the Corporation of all or substantially
all of its assets (but only in each instance if ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ does
not
remain as the chief executive officer of the Corporation following such
transaction) and (ii) any Change of Control of the Corporation, shall
be deemed
to be a liquidation, dissolution or winding-up of the Corporation for
the
purposes of this Section 4. Holders of the Series AA Preferred Stock
shall be
entitled, upon the liquidation, dissolution or winding-up of the Corporation,
to
receive any amounts with respect to such stock as referred to in this
Section
4.
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5.
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Conversion
into Common Stock.
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Shares
of
Series AA Preferred Stock shall have the following conversion rights
and
obligations:
(a) Subject
to the further provisions of this Section 5, each holder of shares of
Series AA
Preferred Stock shall have the right during the period beginning on the
date of
issuance of the Series AA Preferred Stock (the "Conversion Period") to
convert
some or all such shares into fully paid and non-assessable shares of
Common
Stock of the Corporation (as defined in Section 5(h) below) determined
in
accordance with paragraph 5(b) below.
(b) Each
share of Series AA Preferred Stock shall be converted into a number of
shares of
Common Stock equal to 40.00, which is the Stated Value of each share
of Series
AA Preferred Stock divided by a designated rate of $25 per share of Common
Stock
(the "Conversion Stock"). The number of shares of Conversion Stock into
which
each share of Series AA Preferred Stock shall be converted shall be
proportionately adjusted for any increase or decrease in the number of
shares of
Common Stock or Series AA Preferred Stock, as the case may be, outstanding
arising from any division or consolidation of shares, stock dividend,
reverse
stock split, or other similar increase or decrease in the number of shares
of
Common Stock or Series AA Preferred Stock, as the case may be, outstanding
without receipt of consideration by the Corporation. Within five business
days
of the effective date of any conversion of a share of Series AA Preferred
Stock
into Common Stock, the Corporation shall pay the holder of such converted
share
of Series AA Preferred stock all accrued but unpaid dividends through
the
conversion date on such share.
3
(c) (i) The
holder of any certificate for shares of Series AA Preferred Stock desiring
to
convert any of such shares shall surrender such certificate, at the principal
office of any transfer agent for said stock (the "Transfer Agent"), with
a
written notice (the "Notice of Conversion") of such election to convert
such
shares into Common Stock duly filled out and executed, and if necessary
under
the circumstances of such conversion, with such certificate properly
endorsed
for, or accompanied by duly executed instruments of, transfer (and such
other
transfer papers as said Transfer Agent may reasonably require). The holder
of
the shares so surrendered for conversion shall be entitled to receive
within
three (3) business days of the Notice of Conversion (except as otherwise
provided herein) a certificate or certificates, which shall be expressed
to be
fully paid and non-assessable, for the number of shares of Common Stock
to which
such stockholder shall be entitled upon such conversion, registered in
the name
of such holder or in such other name or names as such stockholder in
writing may
specify (provided, that the Corporation shall not be required to issue
the
Common Stock in any name other than the holder of the Series AA Preferred
Stock
unless an exemption from registration for the transfer of such shares
is
available under the Securities Act of 1933 and any applicable state securities
laws). In the case of any Series AA Preferred Stock which is converted
in part
only, the holder of shares of Series AA Preferred Stock shall upon delivery
of
the certificate or certificates representing Common Stock also receive
a new
share certificate representing the unconverted portion of the shares
of Series
AA Preferred Stock. Nothing herein shall be construed to give any holder
of
shares of Series AA Preferred Stock surrendering the same for conversion
the
right to receive any additional shares of Common Stock or other property
which
results from an adjustment in conversion rights under the provisions
of
subparagraph (f) of this Section 5 until holders of Common Stock are
entitled to
receive the shares or other property giving rise to the adjustment.
(ii) In
the
case of the exercise of the conversion rights set forth in Section 5(a),
the
conversion privilege shall be deemed to have been exercised, and the
shares of
Common Stock issuable upon such conversion shall be deemed to have been
issued,
upon the date of receipt by such Transfer Agent for conversion of the
certificate for such shares of Series AA Preferred Stock. The person
or entity
entitled to receive Common Stock issuable upon such conversion shall
on the date
such conversion privilege is deemed to have been exercised and thereafter
be
treated for all purposes as the record holder of such Common Stock and
shall on
the same date cease to be treated for any purpose as the record holder
of such
shares of Series AA Preferred Stock so converted.
4
(iii) Notwithstanding
the foregoing, if the stock transfer books are closed on the date such
shares
are received by the Transfer Agent, the conversion privilege shall be
deemed to
have been exercised, and the person or entity shall be treated as a record
holder of shares of Common Stock, on the next succeeding date on which
the
transfer books are open. The Corporation shall not be required to deliver
certificates for shares of its Common Stock or new certificates for unconverted
shares of its Series AA Preferred Stock while the stock transfer books
for such
respective classes of stock are duly closed for any purpose, but the
right of
surrendering shares of Series AA Preferred Stock for conversion shall
not be
suspended during any period that the stock transfer books of either of
such
classes of stock are closed.
(iv) Upon
the
conversion of any shares of Series AA Preferred Stock, no adjustment
or payment
shall be made with respect to such converted shares on account of any
dividend
thereafter on shares of such stock or on account of any dividend on the
Common
Stock, except that the holder of such converted shares shall be entitled
to be
paid any dividends declared on shares of Common Stock after conversion
thereof.
(v) If
the
Corporation shall at any time be liquidated, dissolved or wound-up, the
conversion privilege shall terminate at the close of business on the
last
business day next preceding the effective date of such liquidation, dissolution
or winding up.
(vi) The
Corporation shall not be required, in connection with any conversion
of Series
AA Preferred Stock, to issue a fractional shares of its common Stock
nor to
deliver any stock certificate representing a fraction thereof, but in
lieu
thereof the Corporation may make a cash payment equal to such fraction
multiplied by $25.00.
(d) (i) In
case
of any consolidation or merger of the Corporation with or into any other
corporation (other than a merger or consolidation in which the Corporation
is
the surviving or continuing corporation and which does not result in
any
reclassification, conversion or change of the outstanding shares of Common
Stock), then lawful provision shall be made so that holders of Series
AA
Preferred Stock shall thereafter have the right to convert each share
of Series
AA Preferred Stock into the kind and amount of shares of stock and/or
other
securities or property receivable upon such consolidation or merger by
a holder
of the number of shares of Common Stock into which such shares of Series
AA
Preferred Stock might have been converted immediately before such consolidation
or merger. The foregoing provisions of this Section 5(d) shall similarly
apply
to successive consolidations and mergers.
(ii) In
case
of any sale or conveyance to another person or entity of the property
of the
Corporation as an entirety, or substantially as an entirety, in connection
with
which shares or other securities or cash or other property shall be issuable,
distributable, payable or deliverable for outstanding shares of Common
Stock,
then, unless the right to convert such shares shall have terminated,
lawful
provision shall be made so that the holders of Series AA Preferred Stock
shall
thereafter have the right to convert each share of the Series AA Preferred
Stock
into the kind and amount of shares of stock or other securities or cash
or
property that shall be issuable, distributable, payable or deliverable
upon such
sale or conveyance with respect to each share of Common Stock immediately
before
such conveyance.
5
(iii) In
case
of any issuance of Equity Securities of the Corporation after the date
hereof
(other than (a) issuances to employees of the Company or any of its subsidiaries
in connection with such person's employment arrangements, (b) registered
public
offerings, (c) issuances directly related to any business combination,
recapitalization or acquisition transaction involving the Company or any of
its subsidiaries and (d) issuances directly related to any joint venture,
strategic partnership or alliance, in each case to the extent approved
by the
Board) at a purchase price (including any implied purchase price based
upon
conversion into Common Stock) less than the applicable conversion price
of the
Series AA Preferred Stock, the number of shares of Conversion Stock into
which
each share of Series AA Preferred Stock may be converted shall be adjusted
downward to a conversion price calculated by multiplying the conversion
price
immediately prior to such issuance by a fraction, the numerator of which
equals
the sum of (i) the conversion price prior to such issuance multiplied
by the
number of shares of Common Stock of the Corporation that are outstanding
immediately prior to such issuance (on a fully diluted basis) plus (ii)
the
aggregate consideration received (or receivable upon conversion into
Common
Stock) by the Corporation with respect to such issuance and the denominator
of
which equals (x) the number of shares of Common Stock of the Corporation
that
are outstanding immediately after such issuance (on a fully diluted basis)
multiplied by the conversion price of the Series AA Preferred immediate
prior to
such issuance.
(e) Whenever
the number of shares to be issued upon conversion of the Series AA Preferred
Stock is required to be adjusted as provided in this Section 5, the Corporation
shall forthwith compute the adjusted number of shares to be so issued
and
prepare a certificate setting forth such adjusted conversion amount and
the
facts upon which such adjustment is based, and such certificate shall
be
forthwith be filed with the Transfer Agent for the Series AA Preferred
Stock and
the Common Stock; and the Corporation shall mail to each holder of record
of
Series AA Preferred Stock notice of such adjusted conversion price.
(f) In
case
at any time the Corporation shall propose:
(i) to
pay
any dividend or distribution payable in shares upon its Common Stock
or make any
distribution (other than cash dividends) to the holders of its Common
Stock,
Class A Convertible Preferred Stock, Series B Convertible Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, or Series E Preferred
Stock,
other than in accordance with the terms hereof; or
(ii) to
offer
for subscription to the holders of its Common Stock, Class A Convertible
Preferred Stock, Series B Convertible Preferred Stock, Series C Preferred
Stock,
Series D Preferred Stock, or Series E Preferred Stock, or other than
in
accordance with the terms thereof, any additional shares of any class
or any
other rights; or
(iii) any
capital reorganization or reclassification of its shares, or the consolidation
or merger of the Corporation with another corporation; or
(iv) the
voluntary dissolution, liquidation or winding-up of the Corporation;
6
then,
and
in any one or more of said cases, the Corporation shall cause at least
fifteen
(15) days prior notice of the date on which (A) the books of the Corporation
shall close, or a record be taken for such stock dividend, distribution
or
subscription rights, or (B) such capital reorganization, reclassification,
consolidation, merger, dissolution, liquidation or winding-up shall take
place,
as the case may be, to be mailed to the Transfer Agent for the Series
AA
Preferred Stock and for the Common Stock and to the holders of record
of the
Series AA Preferred Stock.
(g) So
long
as any shares of Series AA Preferred Stock shall remain outstanding and
the
holders thereof shall have the right to convert the same in accordance
with
provisions of this Section 5, the Corporation shall at all times reserve
from
the authorized and unissued shares of its Common Stock a sufficient number
of
shares to provide for such conversions.
(h) The
term
"Common Stock" as used in this Section 5 shall mean Common Stock of the
Corporation as such stock is constituted at the date of issuance thereof
or as
it may from time to time be changed, or shares of stock of any class,
other
securities and/or property into which the shares of Series AA Preferred
Stock
shall at any time become convertible pursuant to the provisions of this
Section
5.
(i) The
Corporation shall pay the amount of any and all issue taxes which may
be imposed
in respect of any issue or delivery of stock upon the conversion of any
shares
of Series AA Preferred Stock, but all transfer taxes that may be payable
in
respect of any change of ownership of Series AA Preferred Stock, or any
rights
represented thereby, or of stock receivable upon conversion thereof,
shall be
paid by the person or persons surrendering such stock for
conversion.
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6.
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Status
of Converted Stock.
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In
case
any shares of Series AA Preferred Stock shall be converted pursuant to
Section 5
hereof, or otherwise repurchased or reacquired, the shares so redeemed,
converted or reacquired shall resume the status of authorized but unissued
shares of Preferred Stock and shall no longer be designated as Series
AA
Preferred Stock.
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7.
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Defined
Terms.
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"Change
in Control" means a transaction involving the occurrence of (i) any merger,
consolidation, stock or asset purchase, recapitalization or other business
combination transaction as a result of which the stockholders of the
Corporation
immediately prior to such transaction in the aggregate cease to own more
than
50% of the total voting power of all shares of capital stock of the Corporation
that are entitled to vote generally in the election of directors of the
entity
surviving or resulting from such transaction (or ultimate parent thereof);
(ii)
any person or group, together with any affiliates thereof, has, directly
or
indirectly, become the beneficial owner of more than 50% of the total
voting
power of all shares of capital stock of the Corporation that are entitled
to
vote generally in the election of directors; (iii) during any period
of two
consecutive years, individuals who at the beginning of such period constitute
the board of directors of the Corporation (together with any new directors
whose
election by such board or whose nomination for election by the stockholders
of
the Corporation was approved by a vote of a majority of the directors
of the
Corporation then still in office who were either directors at the beginning
of
such period or whose election or nomination for election was previously
so
approved) cease for any reason (other than death) to constitute a majority
of
the board then in office; (iv) the sale, lease, encumbrance, transfer
or
disposition, including but not limited to any spin-off or in-kind distribution
(a “Divestiture”), by the Corporation or by one or more of its Subsidiaries of
all or substantially all of the assets, business or securities of the
Corporation (on a consolidated basis) to any person or group (other than
the
Corporation or its wholly-owned subsidiaries); provided
that a
Divestiture, the fair market value of the assets, business and securities
of
which is in excess of 50% of the Corporation’s market capitalization as of the
consummation of the Divestiture, shall be deemed a Divestiture of all
or
substantially all of the assets, business or securities of the Corporation
(on a
consolidated basis).
7
“Equity
Securities” means (x) any shares of capital stock of the Corporation, (y) any
rights, options, warrants or similar securities to subscribe for, purchase
or
otherwise acquire any shares of capital stock of the Corporation, and
(z)
capital stock or other equity securities directly or indirectly convertible
into
or exercisable or exchangeable for any shares of capital stock of the
Corporation.
“Senior
Stock” means each class or series of Equity Security of the Corporation the
that
rank senior in preference or priority to the Series AA Preferred Stock
with
respect to dividend rights or rights upon liquidation, dissolution or
winding up
of the Corporation.
8
IN
WITNESS WHEREOF, the Corporation has caused this Certificate to be duly
executed
on its behalf by its Chairman and Chief Executive Officer this 15th day
of June,
2007.
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FLORIDA
GAMING CORPORATION
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By:
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▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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9
EXHIBIT
B
Stockholders
Agreement
EXHIBIT
C
Warrant