Document:

exhibit10_1.htm

Exhibit 10.1

 

MEMORANDUM  OF UNDERSTANDING

This Memorandum of Understanding ("MOU") is entered into as of July 13, 2014 between the parties (collectively, the "Parties"), by and through their undersigned counsel, to the consolidated class and derivative action, captioned: In re PokerTek Merger Litigation, No. 14 CVS 10579 (N.C.B.C.) (the "Consolidated Action" or the "Action").

WHEREAS, on April 30, 2014, PokerTek, Inc. ("PokerTek" or the "Company") and Multimedia Games, Inc. announced that they had entered into an Agreement and Plan of Merger dated as of April 29, 2014 (the "Merger Agreement"), pursuant to which PokerTek shareholders will receive $1.35 in cash for each share of PokerTek common stock they own (the "Proposed Transaction");

 

WHEREAS, between May 9, 2014 and June 9, 2014, five (5) similar shareholder derivative and/or class actions were filed in the General Court of Justice, Superior Court Division, of Mecklenburg County, North Carolina and were assigned to the Hon. Calvin Murphy and subsequently the Hon. Louis A. Bledsoe, III of the North Carolina Business Court (the "Court"), alleging breaches of fiduciary duties and/or aiding and abetting thereof against all of some of the following defendants, Mark D. Roberson; James T. Crawford, III; Joseph J. Lahti; Lyle A. Berman; Gehrig H. White; Arthur L. Lomax; PokerTek, Inc.; Multimedia Games, Inc.; Multimedia Games Holding Company, Inc.; and 23 Acquisition Co. (collectively, "Defendants") relating to the Proposed Transaction. The actions were entitled: Simmer v. PokerTek, Inc., et al., Civil Action No. 14 CVS 8300(N.C.B.C.), filed May 9, 2014; Weber v. PokerTek, Inc., et al., Civil Action No. 14CVS 8911 (N.C.B.C.), filed May 15, 2014; Stephens v. Roberson, et al., Civil Action No. 14 CVS 9215(N.C.B.C.), filed on May 16, 2014; Lobo v. PokerTek, Inc., Civil Action No. 14 CVS 9271 filed May 19, 2014 and Sandler v. Lahti, Civil Action No. 15 CVS 10579 filed June 9, 2014 (collectively the "Related Actions"), the plaintiffs in which are referred to herein as “Plaintiffs”;

 

WHEREAS, on July 10, 2014, a substantially similar shareholder action was filed in the United States District Court for the Western District of North Carolina, captioned Clark v. PokerTek, Inc., Case No. 3:14 cv 00380 (W.D.N.C.) (the "Federal Action" and, together with the Consolidated Action, the "Actions"), alleging 

 

  

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breaches of fiduciary duty and aiding and abetting thereof and related violations of federal securities law, against Defendants relating to the Proposed Transaction;

 

WHEREAS, on June 9, 2014, Plaintiffs filed a Motion for Consolidate the Related Actions;

 

WHEREAS, on June 16, 2014, the Company filed a Proxy Statement on Schedule 14A (the "Proxy") pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, announcing, among other things, that the shareholder vote in connection with the Proposed Transaction would take place on July 24, 2014;

 

WHEREAS, on July 8, 2014, the Court, with the consent of all parties, issued an Order consolidating the Related Actions under the caption In re PokerTek Merger Litigation, No. 14 CVS 10579;

 

WHEREAS, Defendants have voluntarily produced  roughly 3,100 pages of documents to Plaintiffs' counsel in the Consolidated Action on a confidential basis and Plaintiffs have conducted a detailed review and analysis, in conjunction with their financial expert, of the non-public documents produced by Defendants, as well as publicly available documents, including the Proxy;

 

WHEREAS, Plaintiffs demanded that Defendants, among other things, make supplemental disclosures to the Proxy filed on June 16, 2014;

 

    WHEREAS, the Parties have engaged in discussions with respect to Plaintiffs' demands concerning a potential resolution of Plaintiffs' claims;

 

WHEREAS, counsel to the Parties have engaged in  arm's-length negotiations concerning disclosure of further information to PokerTek shareholders and the terms and conditions of a potential resolution of the Consolidated Action;

 

    WHEREAS, in connection with settlement discussions and negotiations, counsel for the Parties did not discuss the amount or appropriateness of any potential application by Plaintiffs' counsel for attorneys' fees;

 

WHEREAS, Plaintiffs and Defendants each recognize the time and expense that would be incurred by further litigation;

 

WHEREAS, on July 11, 2014, Plaintiffs filed a Motion for Preliminary Injunction, seeking to enjoin the Proposed Transaction until and unless supplemental and corrective disclosures were made to correct certain alleged misstatements and omissions in the Proxy filed on June 16, 2014;

  

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WHEREAS, on July 13, 2014, the Parties reached an agreement-in-principle on the structure of a settlement of the Consolidated Action;

 

WHEREAS, Defendants each have denied, and continue to deny, that they have committed or aided and abetted in the commission of any violation of law or breaches of duty or engaged in any of the wrongful acts alleged in the Action, and expressly maintain that they diligently and scrupulously complied with their fiduciary, disclosure, and other legal duties, that they did not fail to accurately include any material information in the Proxy, and that they are entering into this MOU solely to eliminate the risk, burden, and expense of further litigation;

 

WHEREAS, Plaintiffs and Plaintiffs' counsel believe that the claims asserted by the Plaintiffs have merit, and the entry by Plaintiffs into this MOU is not an admission as to the lack of merit of any claims asserted in the Actions, and Plaintiffs are entering into the settlement set forth in this MOU only to secure substantial, disclosure-based therapeutic relief for PokerTek and the Class (defined herein) and to eliminate the risk, burden, and expense of further litigation, and because they believe that the Supplemental Disclosures will provide shareholders with substantial benefits and allow them to cast a more fully informed vote on the Proposed Transaction; and

 

WHEREAS, Plaintiffs and Plaintiffs' counsel believe, subject to the completion of Confirmatory Discovery, as defined below, that the terms contained in this MOU are fair and adequate to both the Company and its shareholders and that it is reasonable to pursue a settlement of the Consolidated Action based upon the substantial benefits and protections offered herein.

 

NOW THEREFORE, the Parties have reached the following agreement-in-principle intended to be a full and final resolution of the Released Claims (defined below) (the "Settlement"):

 

                1. PokerTek will provide the supplemental disclosures identified in the document attached hereto as Exhibit A in a filing with the SEC on Form 8-K, to be filed promptly following execution of this MOU (the "Supplemental Disclosures"). Without admitting any wrongdoing, Defendants acknowledge that the Supplemental Disclosures were caused by Plaintiffs' initiation and prosecution of their claims in the Consolidated Action.

 

2. Plaintiffs will withdraw any pending motion for preliminary injunctive relief in the Consolidated Action related to the Shareholder Vote, the closing of the Proposed Transaction, or any action taken to further enjoin the Shareholder Vote or the closing of the Proposed Transaction, and will not seek injunctive 

 

  

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relief of any kind relating to the Proposed Transaction, either in this Court or any other court.  The parties shall jointly seek to adjourn and stay all pending motions or deadlines until Confirmatory Discovery, defined below, is completed and the Settlement has either been granted final approval or been terminated.

 

3. Pending negotiation, execution, and final approval of the Stipulation and Settlement by the Court, Plaintiffs agree to cease the proceedings and to stay and not initiate any other proceedings.  The Plaintiffs also agree to cooperate with Defendants to prevent, stay, or seek dismissal of or oppose the entry of any interim or final order in favor of any member of the Class in the Federal Action or any other litigation against any of the parties to this MOU that challenges the  Settlement, the Proposed Transaction, the Merger Agreement, disclosures about any of these, or otherwise involves a Released Claim (as defined below).

 

4. PokerTek has previously provided to Plaintiffs' counsel certain document discovery.  The Parties shall agree to such reasonable discovery as is necessary to confirm the fairness and reasonableness of the Settlement (the "Confirmatory Discovery") to include, but not necessarily be limited to, depositions of Defendant Lahti and a designee of Burrill, the Board’s financial advisors.  The Parties will use their best efforts, in good faith, to complete the deposition of Defendant Lahti on July 15, 2014 and to conclude all confirmatory discovery within 45 days of the date of this MOU.

 

5. The consummation of the Settlement is subject to the following conditions, and shall become effective on the date that all such conditions are satisfied (the "Effective Date"): (a) satisfactory completion of the Confirmatory Discovery, and Plaintiffs' continuing good faith belief following the completion of the Confirmatory Discovery, that the Settlement is fair, reasonable and adequate; (b) the drafting and execution of the Stipulation (as defined in  paragraph 7); (c) closing of the Proposed Transaction, subject to the unilateral right of Defendants to waive this condition upon written notice to Plaintiffs; (d) conditional certification of the Class (as defined below) for settlement purposes; (e) final approval of the Settlement by the Court and the affirmance of such approval on appeal or the expiration of the time to take any further appeal; (f) approval of a complete release of all Released Persons (as defined below), and of Plaintiffs and their agents and attorneys, by the Court, in a form customarily approved by the Court in connection with settlements of this type; (g) the inclusion in the preliminary order of approval and the final judgment of a provision  enjoining all members of the Class from asserting any of the Released Claims; and (h) dismissal with prejudice of the Consolidated Action.  In the event 

 

  

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any of these conditions are not met or otherwise waived, this MOU shall be null and void and of no force and effect and this MOU shall not be deemed to prejudice in any way the respective positions of the Parties with respect to the Consolidated Action. In such event, Plaintiffs reserve all rights with respect to any potential attorneys' fee application related to any mooted claims, and Defendants reserve all applicable rights and defenses with respect thereto. This paragraph shall be immediately binding on the Parties.

 

6. Plaintiffs acknowledge and agree that the parties to the Proposed Transaction may negotiate amendments or modifications to the Merger Agreement, and agree that they will not challenge, object to, or seek any further disclosures other than those set forth in Exhibit A concerning any such amendments or modifications so long as they are not inconsistent with the fairness of the Settlement as referenced in this MOU, and such modifications or amendments do not reduce the consideration to be paid to shareholders under the Merger Agreement.

 

7. The Parties will attempt in good faith to agree promptly, after satisfactory completion of the Confirmatory Discovery, upon an appropriate stipulation of settlement (the "Stipulation") and such other documentation as may be required in order to obtain final approval by the Court of the Settlement and the dismissal of the Consolidated Action with prejudice and such Stipulation shall be executed and submitted to the Court for approval at the earliest practicable time after the closing of the Proposed Transaction. The Stipulation shall expressly provide that, among other things:

 

a. Defendants each have denied, and continue to deny, that they have committed or aided and abetted in the commission of any violation of law or breaches of duty or engaged in any of the alleged wrongful acts, and expressly maintain that they diligently and scrupulously complied with their fiduciary, disclosure, and other legal duties, and that they did not fail to accurately include material information in the Proxy, and that they are entering into this MOU solely to eliminate the risk, burden, and expense of further litigation;

 

b. Plaintiffs' counsel acknowledge that Defendants would continue to assert legal and factual defenses to claims made in the Actions, and that the terms of the Settlement are fair, reasonable, adequate, and in the best interest of all members of the Class; and

 

c. Plaintiffs' counsel believe that their claims have merit based on proceedings to date but, having concluded that the proposed Settlement is fair and adequate and recognizing the risk of further litigation, believe that it is reasonable to pursue the settlement of the Consolidated Action based upon the procedures outlined herein and the benefits provided to the proposed  Class.

 

  

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                            8.  Contingent on satisfactory completion of Confirmatory Discovery, the Stipulation will further provide for, among other things:

 

a. The conditional certification, for settlement purposes only, of a  mandatory, non-opt-out class that includes any and all record and beneficial holders of PokerTek common stock, their respective successors in interest, successors, predecessors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under any of them, and each of them, together with their predecessors and successors and assigns, who held PokerTek common stock as of June 10, 2014 or between that date and the date of consummation of the Proposed Transaction, but excluding: (i) the Defendants; (ii) the immediate families of the PokerTek Board; (iii) any parent, subsidiary, affiliate, officer, or director of PokerTek; (iv) any entity in which any excluded person has a controlling interest; and (v) the legal representatives, heirs, successors and assigns of any excluded person (the "Class").;

 

b. A provision that conditions the Settlement on Final Approval of the Settlement by the Court and passage of the Effective Date;

 

c. The requirement that the Parties to the Consolidated Action present, as soon as practicable, the Settlement to the Court and setting of a final hearing on whether the Settlement should be approved, following appropriate notice to members of the Class;

 

d. The requirement that the Parties use their best efforts, and take all such other such steps as may be necessary and required to effect the implementation and Final Approval of the Settlement on the terms set forth herein, including the dismissal (with prejudice and without costs) of the Consolidated Action and the Federal Action;

 

e. That Defendants: (i) deny and continue to deny that they have committed, or aided or abetted in the commission of, any unlawful or wrongful act or violation of any duty owed to Plaintiffs, the Class or anyone else in connection with the Released Claims and the subject matter thereof, including the Proposed Transaction and the Merger Agreement; (ii) maintain that they diligently and scrupulously complied with all of 

  

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their legal duties and obligations in connection therewith; and (iii) are entering into the Stipulation solely because the proposed Settlement will eliminate the distraction, burden, risk, and expense of continued litigation;

 

f. That Plaintiffs' counsel, without any admission as to the lack of merit of any of the claims asserted in the Action, believe that the Settlement has provided PokerTek and its shareholders with substantial therapeutic benefits by allowing for a materially fully informed vote on the Proposed Transaction; that the terms of the Settlement are fair, reasonable, adequate and in the best interest of all members of the proposed Class; that Plaintiffs have held and continue to hold shares of PokerTek common stock at all times material thereto; and that Plaintiffs' counsel further represent that none of the Plaintiffs' claims or causes referred to in the Stipulation have been assigned, encumbered or otherwise transferred;

 

g. Defendants' acknowledgment that the Supplemental Disclosures were caused by Plaintiffs' initiation and prosecution of their claims as set forth in the Consolidated Action;

 

h. The full and complete discharge, dismissal with prejudice, settlement, and release of any Released Claim belonging to any Releasing Plaintiff against the Released Persons and a permanent injunction barring the assertion by any Releasing Plaintiff of any Released Claims against the Released Persons:

 

(i) The definition of Released Claims in the Stipulation shall include, without limitation, any and all claims, debts, demands, rights, actions or causes of action, liabilities, damages, interest, losses, obligations, judgments,  suits, fees, expenses, costs, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, accrued or un­  accrued, liquidated or un-liquidated, at law or in equity, matured or un­ matured, whether direct, derivative, individual, class, representative, legal, equitable or of any other type, or in any other capacity (including, but not limited to, any claims arising under state, local, federal, foreign, statutory, or common law or any other law, rule or regulation, including but not limited to any federal securities laws and any state disclosure laws), that have been, could have been, or in the future can or might be asserted in the Action or in any court, tribunal, forum or proceeding by Plaintiffs or any of the other member of the Class arising out of the allegations, facts, events, acquisitions, matters, acts, occurrences, statements, 

 

  

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representations, misrepresentations, omissions, or any other matter, thing or cause whatsoever, or any series thereof, embraced, involved or set forth in, or referred to or otherwise related in any way to: (i) the Proposed Transaction; (ii) the Merger Agreement or any amendments thereto; (iii) any actions, deliberations or negotiations in connection with the Proposed Transaction, the Merger Agreement or any amendment thereto, including the process of deliberation or negotiation by each of PokerTek, Multimedia Games, Inc., Multimedia Games Holding Company, Inc. and 23 Acquisition Co. and any of their respective officers, directors, employees, representatives or advisors; (iv) the consideration offered, paid or received by any Released Person or Class members in connection with the Proposed Transaction; (v) the disclosures (including the preliminary and final Proxy Statement, as well as any amendments thereto, or any other disclosures, public filings, periodic reports, press releases, proxy statements or other statements issued, made available or filed) or disclosure obligations or any Defendant or Released Person relating to or discussing, directly or indirectly, the Proposed Transaction, the Merger Agreement or any amendments thereto; and/or (vi) any fiduciary obligations of any of the Released Persons in connection with the Proposed Transaction, the Merger Agreement or any amendment thereto, including the negotiation and consideration of the Proposed Transaction, the Merger Agreement or any amendment thereto, or any disclosures related thereto, and (vii) any Shareholder vote on the Proposed Transaction; provided, however, that the Released Claims shall not include any claims to enforce the Settlement;

 

(ii) The definition of Releasing Plaintiffs in the Stipulation shall include, without limitation, Plaintiffs, PokerTek (in its capacity as derivative plaintiff), and each member of the Class, on behalf of themselves and each of their agents, representatives, heirs, executors, administrators, predecessors, successors and assigns, and any other person or entity who has the right, ability, standing or capacity to assert, prosecute or maintain on behalf of any Class member any of the Released Claims or to obtain the proceeds of any recovery in whole or in part (whether individual, derivative, representative, legal, equitable or any other type or in any other capacity); and

 

  

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(iii) The definition of Released Persons in the Stipulation shall include, without limitation, each of the Defendants and their respective past and/or present family members, heirs, estates, executors, administrators, predecessors, successors, assigns, parent entities, subsidiaries, associates, affiliates, employees, officers, directors, Shareholders, agents, representatives, attorneys, financial or investment advisors, advisors, consultants, accountants, investment bankers, commercial bankers, trustees, engineers, insurers, co-insurers and re-insurers, general or

limited partners or partnerships, limited liability companies, members, and any person, firm, trust, corporation, officer, director or other individual or entity in which any Defendant has a controlling interest or which is related to or affiliated with any of the Defendants, whether or not such Released Party were named, served with process or appeared in the Action.

 

9. The Stipulation will include a provision that upon final approval of the Settlement by the Court, Defendants, their counsel, and the Released Persons shall be deemed to have, and by operation of the judgment shall have, fully, finally, and forever released, relinquished, and discharged each and all of the Releasing Persons, and Plaintiffs' counsel from all claims, complaints, allegations or sanctions (including Unknown Claims) arising out of, relating to, or in connection with, the institution, prosecution, assertion, settlement or resolution of the Actions or the Released Claims (the "Defendants'  Released  Claims").

 

10. The Settlement is intended to extinguish all Released Claims and Defendants' Released Claims and, consistent with such intentions, the Releasing Persons and Released  Persons shall waive their rights to the extent permitted by state law, federal law, foreign law, or principle of common law, which may have the effect of limiting the releases set forth above. This shall include Unknown Claims. "Unknown Claims" means any claim that a Releasing Party does not know or suspect exists in his, her, or its favor at the time of the release of the Released

 

Claims as against the Released Persons, including without limitation those which, if known, might have affected the decision to enter into the Settlement and any claim that a Released Party does not know or suspect exists in his, her, or its favor at the time of the release of the Defendants' Released Claims as against the Releasing Persons, including without limitation those which, if known, might have affected the decision to enter into the Settlement. This shall include a waiver of any rights pursuant to § 1542 of the California Civil Code (or any similar, comparable or equivalent provision) which provides:

 

  

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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR  HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The Releasing Persons acknowledge that members of the Class and/or other Company shareholders may discover facts in addition to or different from those that they now know or believe to be true with respect to the subject matter of this release, but that it is their intention, as Plaintiffs and on behalf of the Class, to fully, finally, and forever settle and release any and all claims released hereby known or unknown, suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery or existence of such additional or different facts. Plaintiffs and the other undersigned parties acknowledge, and the members of the Class by operation of law shall be deemed to have acknowledged, that the inclusion of Unknown Claims in the definition of Released Claims was separately bargained for, constitutes separate consideration for, and was a key element of the Settlement and is being relied upon by each and all of the Defendants in entering into the Stipulation.

 

11. The Settlement described herein shall be subject to the approval of the Court and any appeals that may be taken. Should there be a failure of any condition set out in paragraph 5 hereof, the Settlement shall be null and void and of no force and effect, and shall not be deemed to prejudice in any way the position of any party with respect to this litigation (except with respect to the provisions of paragraph 5, above). In such event, neither the existence of this MOU nor its contents shall be admissible in evidence or shall be referred to for any purpose in the Consolidated Action or in any other litigation or proceeding except to enforce its terms.

 

                    12. Plaintiffs intend to file a petition for an award of attorneys' fees and expenses with the Court. It is Plaintiffs' Counsel's position that they are entitled to reasonable attorneys' fees and expenses for the therapeutic benefits obtained by virtue of the Consolidated Action and the Settlement for PokerTek and its shareholders.  Defendants acknowledge that the Supplemental Disclosures were caused by Plaintiffs' initiation and prosecution of their claims as set forth in the Consolidated Action, and that such Supplemental Disclosures constitute valid

 

  

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consideration to the Company and its shareholders.  After agreeing upon all other terms attendant to the Stipulation, the Parties will negotiate in good faith regarding the amount of the attorneys' fees, costs, and expenses to be paid to Plaintiffs' counsel in the Actions, subject to approval of the Court (the "Agreed-to Fee"). Defendants shall not object to or oppose any application for fees made by Plaintiffs' counsel in the Consolidated Action, provided that such application is for an award no greater than the amount of the "Agreed-To Fee." In no event shall Defendants be obligated to pay attorneys' fees and expenses in excess of the Agreed-to-Fee in connection with the Settlement.  If the Parties are unable to reach agreement with respect to the amount of such attorneys' fees, costs, and  expenses, Plaintiffs reserve the right to submit an application for an award of attorneys' fees, costs, and expenses to be paid to Plaintiffs' counsel, consistent with the facts set forth herein, and Defendants reserve the right to object to the amount of such application, consistent with the facts set forth herein.   PokerTek, its successor and/or assigns, and/or their insurer(s), and/or the insurer(s) of the Individual Defendants, shall pay the fees and expenses award to Plaintiffs' counsel in the Actions, on behalf of all Defendants, within 15 business days after the entry of an order by the Court awarding such fees and expenses. The Parties agree that no other Defendant shall be required to make any such payment. Such payment shall be subject to the joint and several obligation of Plaintiffs' counsel to refund, within 15 business days, the amounts received and any interest accrued or accumulated thereon, if and when, as a result of any appeal, or successful collateral proceeding, the fee or expense award is reduced or reversed or if the award order does not become final, if the Settlement itself is voided by any party as provided herein or in the Stipulation, or if the approval of the Settlement is later reversed by any court. Any failure by the Court to approve the amount of such fees shall not affect the validity of the terms of the Settlement. The Parties agree that PokerTek, its successors and/or assigns, and/or their insurers, and/or the insurer(s) of the Individual Defendants, shall be solely responsible for the payment of fees and expenses awarded to Plaintiffs' counsel, on behalf of all Defendants, and that no other Defendant shall be required to make any such payment. Defendants shall have no responsibility for allocation or distribution of the fees and expenses award among Plaintiffs' counsel. Except as provided herein, the Released Persons shall bear no other expenses, costs, damages, or fees alleged or incurred by Plaintiffs in the Actions or by any of their attorneys, experts, advisors, agents or representatives.  Further, Plaintiffs may petition the Court for incentive payments, not to exceed $1,000 per plaintiff, for their participation in the Consolidated Action.  Such incentive payments, which shall be subject to Court approval, shall be paid exclusively from the amount of attorneys' fees and costs awarded to Plaintiffs' Counsel by the Court.

 

  

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13. The provisions contained in this MOU shall not be deemed a presumption, concession or an admission by any Defendant in the Action of any fault, liability or wrongdoing as to any facts or claims alleged or asserted in the Action, or any other actions or proceedings, or that any of the Supplemental Disclosures are material. Nor shall the provisions contained in this MOU be deemed a presumption, concession or an admission by any Plaintiffs concerning the merits, or lack thereof, of any facts or claims alleged or asserted in the Action, or any other actions or proceedings, or that any of the Supplemental Disclosures are not material. The provisions contained in this MOU shall not be interpreted, construed, deemed, invoked, offered, or received in evidence or otherwise used by any person in the Action, or in any other action or proceeding, whether civil, criminal, or administrative, except in connection with any proceeding to enforce the terms of the Settlement.

 

14. PokerTek or its successor in interest shall cause notice of the Settlement to be provided to the Class in a cost-effective form and manner to be approved by the Court, and shall pay for any reasonable and necessary costs and expenses related to the notice and administration of the Settlement and the Proposed Transaction.

 

15. This MOU sets forth all of the material terms of the Settlement. The Parties intend to memorialize the Settlement as soon as practicable in a Stipulation and such other documentation as may be required in order to obtain final approval by the Court of the

 

Settlement and the dismissal of the Consolidated Action with prejudice. In the event of the Parties' failure to agree in good faith on the form of such Stipulation and documentation, any party may seek the assistance of the Court in facilitating the consummation of the Settlement as provided in this MOU. This MOU and the Settlement shall be governed by, and construed in accordance with, the laws of North Carolina, without regard to conflict of laws principles.

 

16. This MOU may be modified or amended only by a writing, signed by all of the signatories hereto, that refers specifically to this MOU.

 

17. Each signatory to this MOU represents and warrants that he or she has authority from his or her clients to enter into this MOU.

 

18. This MOU may be executed in counterparts by facsimile, electronic, or original signature by any of the signatories hereto and as so executed shall constitute one agreement.

 

  

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19. This MOU shall be binding upon and shall inure to the benefit of the Parties and their respective agents, successors, executors, heirs and assigns.

 

DATED: July 13, 2014

s/John Hughes__________________________

Mona Lisa Wallace

N.C. Bar No. 09021

John Hughes

N.C. Bar No. 22126

WALLACE & GRAHAM, P.A.

525 N. Main St.

Salisbury, NC 28144

Tel: 704-633-5244

Fax: 704-633-9434

mwallace@wallacegraham.com

jhughes@wallacegraham.com

s/Donald J. Enright                                                     

Donald J. Enright

Elizabeth K. Tripodi

LEVI & KORSINSKY, LLP

1101 30th Street, N.W., Suite 115

Washington, DC 20007

Tel: 202-524-4290

denright@zlk.com

etripodi@zlk.com

s/Evan J. Smith                                                             

Evan J. Smith

Marc Ackerman

BRODSKY & SMITH, LLC

Two Bala Plaza, Suite 510

Bala Cynwyd, PA 19004

Tel: 610-667-6200

esmith@brodsky-smith.com

mackerman@brodsky-smith.com

s/Seth Rigrodsky__________________________

Seth Rigrodsky

Brian D. Long

RIGRODSKY & LONG, P.A.

2 Righter Parkway, Suite 120

Wilmington, DE 19803

Tel: 302-295-5310

sdr@rigrodskylong.com

bdl@rigroskylong.com

  

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s/ Laurence Rosen_________________________

Laurence Rosen

Phillip Kim

THE ROSEN LAW FIRM, P.A.

275 Madison Avenue, 34th Floor

New York, NY 10016

Tel: 212-686-1060

lrosen@rosenlegal.com

pkim@rosenlegal.com

s/ Willie C. Briscoe________________________

Willie C. Briscoe

THE BRISCOE LAW FIRM

8150 North Central Expressway, Suite 1575

Dallas, Texas 75206

Tel: 214-239-4568

wbriscoe@thebriscoelawfirm.com

s/ Gary W. Jackson_________________________

Gary W. Jackson

N.C. State Bar No. 13976

Rabon Law Firm, PLLC

225 E. Worthington Avenue

Suite 200

Charlotte, NC 28203

Tel: 704-377-6680

gjackson@ncadvocates.com

Counsel for Plaintiffs

s/Irving M. Brenner_________________________

Irving M. Brenner, Esq

McGuireWoods LLP

201 North Tryon Street

Suite 3000

Charlotte, NC 28202-2146

ibrenner@mcguirewoods.com

s/Lee M. Whitman__________________________

Charles George

Lee M. Whitman

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, NC 27607

cgeorge@wyrick.com

lwhitman@wyrick.com

s/Gregory A. Markel_________________________

Gregory A. Markel, Esq

Cadwalader, Wickersham & Taft LLP

One World Financial Center

Ney York, NY 10281

Greg.Markel@cwt.com

Counsel for Defendants

  

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Exhibit A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported):    July 13, 2014

 

POKERTEK, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

	
North Carolina

	  	
000-51572

	  	
61-1455265

	
(State or Other Jurisdiction of

Incorporation)

	  	
(Commission File Number)

	  	
(IRS Employer

Identification No.)

 

	
1150 Crews Road, Suite F

Matthews, North Carolina

	  	
28105

	
(Address of Principal Executive Offices)

	  	
(Zip Code)

 

(704) 849-0860

(Registrant’s telephone number, including area code) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

	
o

	
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	  
	
x

	
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	  
	
o

	
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	
o

	
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	  

 

  

A-1

  

This Current Report on Form 8-K is filed by PokerTek, Inc., a North Carolina corporation (the “Registrant”), in connection with the items set forth below.

Item 8.01:       Other Events

 

Settlement of Certain Litigation

 

As previously disclosed, PokerTek, Inc., a North Carolina corporation (“PokerTek”), Multimedia Games, Inc, a Delaware corporation (“Parent”), and 23 Acquisition Co., a North Carolina corporation and a wholly owned subsidiary of Parent (“23 Acquisition”), entered into that certain Agreement and Plan of Merger, dated as of April 29, 2014, (the “Merger Agreement”), pursuant to which Parent agreed to acquire all of the outstanding shares of PokerTek’s common stock in an all cash merger (the “Proposed Merger”).

 

    As described in the Definitive Proxy Statement, dated June 16, 2014, under the heading “Proposal I: The Merger - Litigation Related to the Merger,” a purported class action complaint on behalf of PokerTek’s shareholders was filed on May 9, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No. 14-CVS-8300, captioned Robert Simmer, on behalf of himself and all others similarly situated, Plaintiff, v. PokerTek, Inc., Multimedia Games Holding Company, Inc., Multimedia Games, Inc., 23 Acquisition Co., James Crawford, Joe Lahti, Lyle Berman, Lou White and Arthur L. Lomax,  Defendants, and an purported amended class action complaint was filed on June 6, 2014 (“Action #1”).

 

    A second purported class action complaint on behalf of PokerTek’s shareholders was filed on May 15, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No 14-CVS-8911, captioned Jeffrey Weber and James Dabord, individually and on behalf of all others similarly situated, Plaintiff, v. PokerTek, Inc., Multimedia Games Holding Company, Inc., Multimedia Games, Inc., 23 Acquisition Co., James Crawford, Joe Lahti, Lyle Berman, Lou White and Arthur L. Lomax,  Defendants, and an purported amended class action complaint was filed on June 6, 2014 (“Action #2”).

 

A third purported class action complaint on behalf of PokerTek’s shareholders was filed on May 16, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No. 14-CVS-9215, captioned Herald J. Stephens, individually and on behalf of all others similarly situated, as Plaintiff, v. Mark D. Roberson, James T. Crawford III, Joseph J. Lahti, Lyle A. Berman, Gehrig H. White, Arthur L. Lomax, PokerTek, Inc., Multimedia Games, Inc., Multimedia Games Holding Company, Inc. and 23 Acquisition Co., Defendants (“Action #3”).

 

A fourth purported class action complaint on behalf of PokerTek’s shareholders was filed on May 19, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No 14-CVS-9271, captioned Luis Lobo, individually and on behalf of all others similarly situated, as Plaintiff, v. PokerTek, Inc., James Crawford, Joe Lahti, Lyle Berman, Gehrig White, Lee Lomax, Mark Roberson, Multimedia Games, Inc. and 23 Acquisition Co., Defendants, and an purported amended class action complaint was filed on June 6, 2014 (the “Action #4”).

 

    A firth purported class action and shareholder derivative complaint on behalf of PokerTek’s shareholders was filed on June 9, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No 14-CVS-10579, captioned Arkady Sandler, individually and on behalf of all others similarly situated, as Plaintiff, v. Joseph J. Lahti, Lyle A. Berman, Gehrig H. White, Arthur L. Lomax, James T. Crawford III,  Multimedia Games, Inc. and 23 Acquisition Co., Defendants and PokerTek, Inc., Nominal Defendant (“Action #5”).

 

    Actions #1, #2, #3, #4 and #5 are collectively referred to herein as the Actions.  On July 8, 2014, the Actions were consolidated into a single action under the caption of Action #5.

 

    On July 10, 2014, a substantially similar shareholder action was filed in the United States District Court for the Western District of North Carolina, captioned Clark v. PokerTek, Inc., Case No. 3:14 cv 00380 (W.D.N.C.) (the "Federal Action" and, together with the Consolidated Action, the "Actions"), alleging breaches of fiduciary duty and aiding and abetting thereof and related violations of federal securities law, against Defendants relating to the Proposed Transaction.  This action has not yet been served on the defendants.

  

A-2

  

 

PokerTek believes that these lawsuits are without merit and that no further disclosure is required to supplement the Definitive Proxy Statement under any applicable rule, statute, regulation or law.  However, to eliminate the burden, expense and uncertainties inherent in such litigation, on July 13, 2014, the defendants entered into a memorandum of understanding (the "Memorandum of Understanding") regarding settlement of the Consolidated Action.  The Memorandum of Understanding outlines the terms of the parties' agreement in principle to settle and release all claims which were or could have been asserted in the Consolidated Action and the Federal Action.  In consideration for such settlement and release, the parties to the Consolidated Action have agreed that PokerTek will make certain supplemental disclosures to the Definitive Proxy Statement, all of which are set forth below.  The Memorandum of Understanding contemplates that the parties will attempt in good faith to agree promptly upon a stipulation of settlement to be submitted to the assigned Judge of the North Carolina Business Court of the General Court of Justice, Superior Court Division, Mecklenburg County, North Carolina for approval at the earliest practicable time.  The Stipulation will be subject to customary conditions, including confirmatory discovery and approval by the Court, which will consider the fairness, reasonableness and adequacy of such settlement.  Under the terms of the proposed settlement, following final approval by the Court, the Consolidated Action will be dismissed with prejudice.  There can be no assurance that the parties will ultimately enter into the Stipulation or that the Court will approve the settlement even if the parties were to enter into the Stipulation.  In such event, or if the Merger is not consummated for any reason, the proposed settlement will be null and void and of no force and effect.

 

The settlement will not affect the timing of the Special Meeting or the amount of merger consideration to be paid to shareholders of PokerTek in connection with the proposed Merger.

 

Defined terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings ascribed to those terms in the Definitive Proxy Statement.

 

SUPPLEMENTAL DISCLOSURES

 

In the Memorandum of Understanding with respect to the settlement of the lawsuits described above, PokerTek has agreed to make these supplemental disclosures to the Definitive Proxy Statement.  These supplemental disclosures should be read in conjunction with the Definitive Proxy Statement, which should be read in its entirety.  Without admitting in any way that the disclosures below are material or otherwise required by law, PokerTek makes the following amended and supplemental disclosures:

	
  

	
1.

	
PokerTek hereby supplements the disclosures in the Proxy related to the financial projections of the Company relied upon by Burrill in performing its valuation analyses to provide the following additional information:

 

	  	 	
2014

	 	 	
2015

	 	 	
2016

	 	 	
2017

	 	 	
2018

	 	 	
2019

	 
	
EBITDAS

	 	$	503	 	 	$	1,662	 	 	$	2,626	 	 	$	3,731	 	 	$	4,982	 	 	$	6,098	 
	
Depreciation and Amortization

	 	$	873	 	 	$	1,379	 	 	$	1,415	 	 	$	1,905	 	 	$	2,618	 	 	$	3,304	 
	
Share-based Compensation

	 	$	360	 	 	$	336	 	 	$	338	 	 	$	372	 	 	$	412	 	 	$	454	 
	
Change in Working Capital

	 	$	(488	)	 	$	(2,512	)	 	$	(2,960	)	 	$	(3,366	)	 	$	(3,818	)	 	$	(3,662	)
	
Capital Expenditures

	 	$	-	 	 	$	(21	)	 	$	(27	)	 	$	(32	)	 	$	(37	)	 	$	(41	)
	
Effective Tax Rate

	 	 	-3	%	 	 	-25	%	 	 	10	%	 	 	10	%	 	 	10	%	 	 	10	%
	
Unlevered Free Cash Flow

	 	$	(11	)	 	$	(892	)	 	$	(455	)	 	$	180	 	 	$	923	 	 	$	2,151	 

 

	
  

	
2.

	
None of the confidentiality agreements entered into between PokerTek and the companies identified in the Proxy contain standstill provisions that are currently barring those interested parties from making competing and/or superior offers for the Company.

  

A-3

  

 

	
  

	
3.

	
PokerTek retained Northeast Securities, an investment bank, on July 12, 2012 to assist PokerTek to explore potential sell side opportunities for PokerTek.

	
  

	
4.

	
PokerTek again retained Northeast Securities, an investment bank, on May 7, 2013 to assist PokerTek with respect to exploring a transaction with several identified potential suitors.

	
  

	
5.

	
Historically, Burrill has never performed, or received compensation for performing, any services for PokerTek or MGAM.

 

	
  

	
6.

	
With respect to Burrill's Comparable Companies Analysis , the enterprise value/EBITDA and enterprise value/revenue multiples observed for each of the companies for the last twelve months and estimated FY2014, as well as the price to book value for each of the selected companies are as follows:

	
($ in millions, except per share data)

	  	  	  	  	  	
Enterprise Value

	
Price

	  	
Price

	
% of 52

	
Equity

	
Enterprise

	  	
Revenue

	  	
EBITDA

	
Book

	
Company

	
04/25/14

	
Wk High

	
Value

	
Value

	  	
LTM

	
2014E

	  	
LTM

	
2014E

	  	
Value

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
International Game Technology

	
$12.46

	
58.8%

	
$3,073.9

	
$4,906.6

	  	
2.2x

	
2.3x

	  	
6.9x

	
6.8x

	  	
2.8x

	
Bally Technologies, Inc.

	
$62.88

	
76.1%

	
$2,458.4

	
$4,250.1

	  	
3.7x

	
3.2x

	  	
11.0x

	
8.9x

	  	
10.8x

	
Scientific Games Corporation

	
$11.68

	
60.0%

	
$980.3

	
$4,015.5

	  	
3.2x

	
2.4x

	  	
14.4x

	
7.5x

	  	
3.4x

	
Aristocrat Leisure Ltd.

	
$4.55

	
88.6%

	
$2,510.5

	
$2,721.5

	  	
3.5x

	
N.A.

	  	
16.4x

	
N.A.

	  	
6.9x

	
Ainsworth Game Technology Ltd.

	
$3.85

	
86.8%

	
$1,239.8

	
$1,186.1

	  	
5.9x

	
N.A.

	  	
17.5x

	
N.A.

	  	
6.2x

	
Universal Entertainment Corporation

	
$18.20

	
69.2%

	
$1,335.6

	
$1,059.9

	  	
1.3x

	
N.A.

	  	
4.1x

	
N.A.

	  	
0.7x

	
Multimedia Games Holding Company, Inc.

	
$27.22

	
67.8%

	
$805.7

	
$710.0

	  	
3.3x

	
3.1x

	  	
6.8x

	
6.2x

	  	
3.5x

	
Amaya Gaming Group Inc.

	
$6.17

	
73.4%

	
$580.7

	
$657.0

	  	
4.6x

	
3.6x

	  	
25.7x

	
8.7x

	  	
2.7x

	
IBASE GAMING Inc

	
$3.24

	
93.1%

	
$58.4

	
$45.1

	  	
1.4x

	
N.A.

	  	
18.8x

	
N.A.

	  	
5.3x

	
Gaming Partners International Corporation

	
$8.19

	
80.3%

	
$64.8

	
$45.2

	  	
0.9x

	
N.A.

	  	
24.1x

	
N.A.

	  	
1.4x

	
Galaxy Gaming, Inc.

	
$0.45

	
88.2%

	
$17.2

	
$34.9

	  	
4.1x

	
3.6x

	  	
9.8x

	
8.1x

	  	
12.0x

	
DEQ Systems Corporation

	
$0.29

	
75.1%

	
$21.1

	
$19.9

	  	
2.9x

	
N.A.

	  	
22.2x

	
N.A.

	  	
2.8x

	
Source: S&P Capital IQ

	  	  	  	  	  	  	  	  	  	  	  	  

 

The multiples selected and applied by Burrill as part of this analysis (representing the   40th and 60th percentiles of the observed data sets) were thus:

	
  

	
a.

	
3.2x – 3.6x LTM Revenue

	
  

	
b.

	
2.6x – 3.2x 2014 Revenue

	
  

	
c.

	
13.1x – 16.4x  LTM EBITDA

	
  

	
d.

	
6.5x – 7.8x 2014 EBITDA

	
  

	
e.

	
3.0x – 4.1x Price/Book

  

A-4

  

 

	
  

	
7.

	
With respect to Burrill's Comparable Transactions Analysis, the enterprise value/LTM Revenue and enterprise value/LTM EBITDA for each of the selected transactions, as well as the price to book value for each of the transactions observed are as follows:

 

	  	 	
Implied

	 	 	 	 	 	 	 	
Implied

	 
	  	 	
Enterprise

	 	 	
Ent. Value / LTM

	
Equity /

	 
	
Target/Issuer

	 	
Value

	 	 	
Revenue

	 	 	
EBITDA

	 	
Book Value

	 
	  	 	 	 	 	 	 	 	 	 	 	 
	
SHFL entertainment, Inc.

	 	$	1,343.5	 	 	 	4.9	x	 	 	16.1	x	 	4.4	x
	
WMS Industries Inc.

	 	 	1,486.8	 	 	 	2.2	x	 	 	7.6	x	 	1.6	x
	
Cadillac Jack, Inc.

	 	 	177.0	 	 	 	2.3	x	 	 	5.0	x	 	-	 
	
GameTech International Inc.

	 	 	19.6	 	 	 	0.6	x	 	 	7.5	x	 	0.7	x
	
Elo Touch Solutions, Inc.

	 	 	380.0	 	 	 	0.9	x	 	 	-	 	 	-	 
	
Odyssey Gaming Limited

	 	 	3.5	 	 	 	0.3	x	 	 	5.4	x	 	0.7	x
	
Abilit Corporation

	 	 	72.5	 	 	 	1.4	x	 	 	-	 	 	0.9	x
	
Inspired Gaming Group Limited

	 	 	270.6	 	 	 	2.1	x	 	 	5.3	x	 	2.4	x
	
Cyberview Technology, Inc.

	 	 	54.6	 	 	 	1.1	x	 	
N.M.

	 	 	2.2	x
	
Octavian Global Technologies, Inc.

	 	 	30.1	 	 	 	0.5	x	 	 	4.9	x	 	-	 
	
Inspired Gaming Group Limited

	 	 	695.1	 	 	 	2.5	x	 	 	6.8	x	 	2.5	x
	
Summit Amusement & Distributing, Ltd.

	 	 	44.0	 	 	 	1.7	x	 	 	9.0	x	 	41.7	x
	
Radica Games Ltd.

	 	 	185.8	 	 	 	1.3	x	 	 	15.6	x	 	2.3	x
	
GTECH Holdings Corporation

	 	 	4,717.3	 	 	 	3.7	x	 	 	9.4	x	 	4.8	x
	
Stargames

	 	 	112.2	 	 	 	2.2	x	 	 	13.2	x	 	3.7	x
	
Taito Corporation

	 	 	545.0	 	 	 	0.7	x	 	 	5.5	x	 	1.2	x
	
Atronic International

	 	 	148.3	 	 	 	1.0	x	 	 	5.4	x	 	-	 
	
Acres Gaming Incorporated

	 	 	107.5	 	 	 	3.0	x	 	 	9.9	x	 	5.6	x
	
Anchor Coin, Inc.

	 	 	57.0	 	 	 	1.3	x	 	 	6.1	x	 	1.3	x
	
Casino Data Systems

	 	 	170.4	 	 	 	2.2	x	 	 	9.3	x	 	2.0	x

 

The multiples selected and applied by Burrill as part of this analysis (representing the   40th and 60th percentiles of the observed data sets) were thus:

	
  

	
a.

	
1.3x – 2.1x LTM Revenue

	
  

	
b.

	
6.4x – 8.4x LTM EBITDA

	
  

	
c.

	
2.0x – 2.4x Price/Book

	
  

	
8.

	
With respect to Burrill's Premiums Paid Analysis, the one-day, seven-day, and thirty-day premiums for each of the transactions observed in the Comparable Transactions Analysis are as follows:

 

  

A-5

  

 

	  	  	 	
Premium Paid

	 
	  	  	 	
1 Day

	 	 	
1 Week

	 	 	
1 Month

	 
	
Target/Issuer

	
Acquirer

	 	
Prior

	 	 	
Prior

	 	 	
Prior

	 
	  	  	 	 	 	 	 	 	 	 	 
	
SHFL entertainment, Inc.

	
Bally Technologies, Inc.

	 	 	24.3	%	 	 	30.6	%	 	 	29.5	%
	
WMS Industries Inc.

	
Scientific Games Corporation

	 	 	58.8	%	 	 	51.3	%	 	 	48.6	%
	
Cadillac Jack, Inc.

	
Amaya Gaming Group Inc.

	 	 	-	 	 	 	-	 	 	 	-	 
	
GameTech International Inc.

	
Yuri Itkis Gaming Trust of 1993

	 	 	-	 	 	 	-	 	 	 	-	 
	
Elo Touch Solutions, Inc.

	
The Gores Group LLC

	 	 	-	 	 	 	-	 	 	 	-	 
	
Odyssey Gaming Limited

	
eBet Limited

	 	 	152.5	%	 	 	152.5	%	 	 	152.5	%
	
Abilit Corporation

	
Konami Corp.

	 	 	14.4	%	 	 	14.4	%	 	 	9.6	%
	
Inspired Gaming Group Limited

	
Vitruvian Partners LLP

	 	 	21.2	%	 	 	25.7	%	 	 	16.5	%
	
Cyberview Technology, Inc.

	
International Game Technology

	 	 	97.7	%	 	 	93.9	%	 	 	71.3	%
	
Octavian Global Technologies, Inc.

	
PacificNet, Inc.

	 	 	-	 	 	 	-	 	 	 	-	 
	
Inspired Gaming Group Limited

	
FL GROUP hf.

	 	 	13.0	%	 	 	13.6	%	 	 	10.0	%
	
Summit Amusement & Distributing, Ltd.

	
GameTech International Inc.

	 	 	-	 	 	 	-	 	 	 	-	 
	
Radica Games Ltd.

	
Mattel, Inc.

	 	 	11.5	%	 	 	13.8	%	 	 	9.0	%
	
GTECH Holdings Corporation

	
Lottomattica S.p.A.

	 	 	4.5	%	 	 	9.2	%	 	 	11.5	%
	
Stargames

	
Shuffle Master Australasia Pty Limited

	 	 	19.2	%	 	 	19.2	%	 	 	15.7	%
	
Taito Corporation

	
Square Enix Holdings Co., Ltd.

	 	 	14.6	%	 	 	16.1	%	 	 	15.4	%
	
Atronic International

	
GTECH Corporation

	 	 	-	 	 	 	-	 	 	 	-	 
	
Acres Gaming Incorporated

	
International Game Technology

	 	 	2.7	%	 	 	13.9	%	 	 	31.4	%
	
Anchor Coin, Inc.

	
Affinity Gaming

	 	 	-	 	 	 	-	 	 	 	-	 
	
Casino Data Systems

	
Aristocrat Leisure Ltd.

	 	 	7.2	%	 	 	33.3	%	 	 	54.2	%

 

	
  

	
9.

	
With respect to Burrill's Discounted Cash Flow and Sensitivity Analysis, the following additional information is provided:

	
  

	
a.

	
Burrill utilized the end of period convention for the PokerTek DCF because it was most appropriate for the projected growth rate of the Company.

	
  

	
b.

	
To demonstrate the sensitivity in the DCF, Burrill held the discount rate constant for the purpose of calculating the terminal value because the terminal value was already being varied to the terminal growth rate.

	
  

	
c.

	
The implied valuation range derived by Burrill is amended to $1.01 to $1.50 per share (from $.98 to $1.47 per share).

This filing may be deemed to be solicitation material in respect of the proposed acquisition of PokerTek by Multimedia Games.  In connection with the proposed merger transaction, PokerTek filed with the Securities and Exchange Commission (the "SEC") the Definitive Proxy Statement on June 19, 2014. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE TN THE DEFINITIVE PROXY STATEMENT BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.

 

The Definitive Proxy Statement was mailed to PokerTek's shareholders on or about June 24, 2014.  Free copies of the Definitive Proxy Statement and other filings that PokerTek has made with the SEC may be obtained at the SEC's website at http://www.sec.gov.  In addition, investors may obtain a free copy of the Definitive Proxy Statement and other filings that PokerTek has made with the SEC from PokerTek's website at http://www.pokertek.com or by directing a request to: PokerTek, Inc., 1150 Crews Road, Suite F Matthews, North Carolina 28105, Attn: Secretary of the Corporation.

 

  

A-6

  

Participants in the Solicitation

PokerTek and its directors, executive officers and certain other members of management and employees of PokerTek may be deemed "participants" in the solicitation of proxies from shareholders of PokerTek in favor of the proposed merger.  Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the shareholders of PokerTek in connection with the proposed merger are set forth in the Definitive Proxy Statement and other relevant documents that may be filed with the SEC.  You can find information about PokerTek's executive officers and directors in its Annual Report on Form 10-K/A for the fiscal year ended December 31, 2013 filed with the SEC on April 29, 2014.

Forward-Looking Statements

This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "project," "could," "should," "would," "continue," "seek," "target," "guidance," "outlook," "forecast" and other similar words.  These forward-looking statements are based on PokerTek's current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and timing of certain events to differ materially from the information i n the forward-looking statements.  The following factors, among others, could cause actual results to differ from such statements: the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed merger agreement; the failure to receive, on a timely basis or otherwise, the required approvals by PokerTek's shareholders and government or regulatory agencies; the risk that a closing condition to the proposed merger may not be satisfied; risks related to the disruption of management's attention from PokerTek's ongoing business operations due to the transaction; the effect of the announcement of the proposed merger on PokerTek's relationships with its customers, suppliers and service providers; and other economic, business, competitive, and regulatory factors affecting the businesses of PokerTek generally, including those set forth in the filings of PokerTek with the SEC, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of its annual reports on Form 10-K and quarterly reports on Form 10- Q, current reports on Form 8-K and other SEC filings. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. PokerTek assumes no obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements except as required by law.

 

  

A-7

  

	
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	  	
PokerTek, Inc.

	  	  
	
Dated:  July 14, 2014

	
By: /s/ Mark D. Roberson

	  	
    Mark D. Roberson

	  	
    Chief Executive Officer

  

A-8EX-10.2

 Exhibit 10.2 
 INDEMNIFICATION AGREEMENT 
 This Indemnification Agreement (this
“Agreement”) is entered into as of                                 ,
2014 by and between MOL Global, Inc., a Cayman Islands company (the “Company”) and the undersigned, a director and/or officer of the Company (the “Indemnitee”). 

RECITALS 

1. The Company recognizes that highly competent persons are becoming more reluctant to serve corporations as directors or in other
capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their services to the corporation. 

2. The Board of Directors of the Company (the “Board”) has determined that the inability to attract and retain highly competent
persons to serve the Company is detrimental to the best interests of the Company and its shareholders and that it is reasonable and necessary for the Company to provide adequate protection to such persons against risks of claims and actions against
them arising out of their services to the corporation. 
 3. The Company is willing to indemnify the Indemnitee to the fullest
extent permitted by applicable law, and the Indemnitee is willing to serve and continue to serve the Company on the condition that he be so indemnified. 
 AGREEMENT 
 In consideration of the premises and the covenants contained
herein, the Company and the Indemnitee do hereby covenant and agree as follows: 
 A. DEFINITIONS 

The following terms shall have the meanings defined below: 
 Expenses shall include damages, judgments, fines, penalties, settlements and costs, attorneys’ fees and disbursements and costs of attachment or similar bond, investigations, and any expenses
paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding. 

Indemnifiable Event means any event or occurrence that takes place either before or after the execution of this Agreement, related
to the fact that the Indemnitee is or was a director or an officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture or other entity, or was a director or
officer of an entity that was a predecessor of the Company or another entity at the request of such predecessor entity, or related to anything done or not done by the Indemnitee in any such capacity. 

Participant means a person who is a party to, or witness or participant (including on appeal) in, a Proceeding. 

 Proceeding means any threatened, pending, or completed action, suit or proceeding, or
any inquiry, hearing or investigation, whether civil, criminal, administrative, investigative or other, in which the Indemnitee may be or may have been involved as a party or otherwise by reason of an Indemnifiable Event, including, without
limitation, any threatened, pending, or completed action, suit or proceeding by or in the right of the Company. 
 B. AGREEMENT TO
INDEMNIFY 
 1. General Agreement. In the event the Indemnitee was, is, or becomes a Participant in, or is threatened to
be made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee from and against any and all Expenses which the Indemnitee incurs or becomes obligated to incur in connection with such Proceeding, to the fullest extent permitted by
applicable law. 
 2. Indemnification of Expenses of Successful Party. Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on the merits in defense of any Proceeding or in defense of any claim, issue or matter in such Proceeding, the Indemnitee shall be indemnified against all Expenses incurred in
connection with such Proceeding or such claim, issue or matter, as the case may be. 
 3. Partial Indemnification. If the
Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify the Indemnitee for the portion of such Expenses to which
the Indemnitee is entitled. 
 4. Exclusions. Notwithstanding anything in this Agreement to the contrary, the Indemnitee
shall not be entitled to indemnification under this Agreement: 
 (a) to the extent that payment is actually made to the
Indemnitee under a valid, enforceable and collectible insurance policy; 
 (b) in connection with a judicial action by or in the
right of the Company, in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudicated by final judgment in a court of law to be liable for gross negligence or willful misconduct in the performance of his duty to the
Company, unless and only to the extent that the court in which such action was brought determines upon application, that notwithstanding the adjudication of such liability, in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses as such court shall deem proper; 
 (c) in connection with any Proceeding
initiated by the Indemnitee against the Company or any director or officer of the Company, and not by way of defense, unless (i) the Company has joined in, or the Board has consented to, the initiation of such Proceeding; or (ii) the
Proceeding is one to enforce indemnification rights under this Agreement or any applicable law; 
 (d) for a disgorgement of
profits made from the purchase and sale by the Indemnitee of securities pursuant to Section 16(b) of the Exchange Act or similar provisions of any applicable U.S. state statutory law or common law; 

 (e) brought about by the dishonesty or fraud of the Indemnitee seeking payment hereunder;
provided, however, that the Indemnitee shall be protected under this Agreement as to any claims upon which a suit may be brought against him by reason of any alleged dishonesty on his part, unless a judgment or other final adjudication thereof
adverse to the Indemnitee establishes that he committed acts of active and deliberate dishonesty with actual dishonest purpose and intent and such acts were material to the cause of action so adjudicated; 

(f) for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnity; or 

(g) arising out of the Indemnitee’s breach of an employment agreement with the Company (if any) or any other agreement with the
Company or any of its subsidiaries. 
 5. No Employment Rights. Nothing in this Agreement is intended to create in the
Indemnitee any right to continued employment with the Company. 
 6. Contribution. If the indemnification provided in this
Agreement is unavailable and may not be paid to the Indemnitee for any reason other than those set forth in Section 4, then the Company shall contribute to the amount of Expenses paid in settlement actually and reasonably incurred and paid or
payable by the Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by the Indemnitee on the other hand from the transaction from which such Proceeding arose, and
(ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events which resulted in such Expenses, as well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances
resulting in such Expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or any other method of allocation
which does not take account of the foregoing equitable considerations. 
 C. INDEMNIFICATION PROCESS 

1. Notice and Cooperation By the Indemnitee. the Indemnitee shall, as a condition precedent to his right to be indemnified under
this Agreement, give the Company notice in writing as soon as practicable of any claim made against the Indemnitee for which indemnification will or could be sought under this Agreement, provided that the delay of the Indemnitee to give notice
hereunder shall not prejudice any of the Indemnitee’s rights hereunder, unless such delay results in the Company’s forfeiture of substantive rights or defenses. Notice to the Company shall be given in accordance with Section F.7 below. In
addition, the Indemnitee shall give the Company such information and cooperation as the Company may reasonably request. 

 2. Indemnification Payment. 

(a) Advancement of Expenses. The Indemnitee may submit a written request to the Company requesting that the Company advance
to the Indemnitee all Expenses that may be reasonably incurred by the Indemnitee in connection with a Proceeding as such Expenses are incurred. The Company shall, within ten business days of receiving such a written request by the Indemnitee,
advance all requested, documented Expenses to the Indemnitee. 
 (b) Reimbursement of Expenses. To the extent the
Indemnitee has not requested any advanced payment of Expenses from the Company, the Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company immediately after the Indemnitee
makes a written request to the Company for reimbursement. 
 (c) Determination by the Reviewing Party. For the purposes of
this Agreement, the “Reviewing Party” with respect to each indemnification request of the Indemnitee shall be (A) the Board by a majority vote of a quorum consisting of Disinterested Directors (as defined below), or (B) if
a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, an Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered
to the Indemnitee. For the purposes of this Agreement, “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. Notwithstanding any other
provision of this Agreement, in the event the Reviewing Party informs the Company that the Indemnitee is not entitled to indemnification in connection with a Proceeding under this Agreement or applicable law, the Company shall be entitled to be
reimbursed by the Indemnitee for all the Expenses previously advanced or otherwise paid to or on behalf of the Indemnitee in connection with such Proceeding; provided, however, that the Indemnitee may bring a suit to enforce his
indemnification right in accordance with Section C.3 below. 
 3. Suit to Enforce Rights. Regardless of any action by the
Reviewing Party, if the Indemnitee has not received full indemnification within 30 days after making a written demand in accordance with Section C.2 above, the Indemnitee shall have the right to enforce its indemnification rights under this
Agreement by commencing litigation in any court of competent jurisdiction seeking a determination by the court or challenging any determination by the Reviewing Party with respect to any aspect of this Agreement. Any determination by the Reviewing
Party not challenged by the Indemnitee and any judgment entered by the court shall be binding on the Company and the Indemnitee. 

 4. Assumption of Defense. In the event the Company is obligated under this Agreement
to advance any Expenses for any Proceeding against the Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by the Indemnitee, upon delivery to the Indemnitee of written notice of its election to
do so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by
the Indemnitee with respect to the same Proceeding, unless (i) the employment of counsel by the Indemnitee has been previously authorized by the Company, (ii) the Indemnitee has reasonably concluded, based on written advice of counsel,
that there may be a conflict of interest of such counsel retained by the Company between the Company and the Indemnitee in the conduct of any such defense, or (iii) the Company ceases or terminates the employment of such counsel with respect to
the defense of such Proceeding, in any of which events the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company. At all times, the Indemnitee shall have the right to employ counsel in any Proceeding at the
Indemnitee’s expense. 
 5. Defense to Indemnification, Burden of Proof and Presumptions. It shall be a defense to
any action brought by the Indemnitee against the Company to enforce this Agreement that it is not permissible under this Agreement or applicable law for the Company to indemnify the Indemnitee for the amount claimed. In connection with any such
action or any determination by the Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified under this Agreement, the burden of proving such a defense or determination shall be on the Company. Neither the failure of
the Reviewing Party or the Company to have made a determination prior to the commencement of such action by the Indemnitee that indemnification is proper under the circumstances because the Indemnitee has met the standard of conduct set forth in
applicable law, nor an actual determination by the Reviewing Party or the Company that the Indemnitee had not met such applicable standard of conduct shall be a defense to the action or create a presumption that the Indemnitee has not met the
applicable standard of conduct. 
 6. No Settlement Without Consent. The Company shall not settle any Proceeding in any
manner that would impose any damage, loss, penalty or limitation on the Indemnitee without the Indemnitee’s prior written consent. Neither the Company nor the Indemnitee shall unreasonably withhold its consent to any proposed settlement,
provided that the Indemnitee may withhold his consent if any proposed settlement imposes any damage, loss, penalty or limitation on the Indemnitee. 
 7. Company Participation. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial action if the Company was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such action, unless such lack of opportunity does not result in the Company’s forfeiture of substantive rights or defenses. 

 8. Reviewing Party. 

(a) If the Reviewing Party determines that the Indemnitee is entitled to indemnification under this Agreement, the Company shall make
payment to the Indemnitee within ten days after such determination, provided that notwithstanding any other provision of this Agreement, the Indemnitee shall not be entitled to be reimbursed more than once for the same expense. The Indemnitee shall
cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary for such determination. Any Independent Counsel or member of the Board shall act reasonably and
in good faith in making a determination under this Agreement with respect to the Indemnitee’s entitlement to indemnification. Any costs or expenses (including attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold the
Indemnitee harmless therefrom. “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee. 

(b) If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected
in accordance with this Section 8(b). The Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee requests that such selection be made by the Board), and the Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected, provided that if such selection is made by the Board at the request of the Indemnitee, the Board shall provide written notice to the Indemnitee of the identity of the Independent Counsel so
selected. Within 10 days after such written notice of selection has been given, the non-selecting party may deliver a written objection to such selection; provided, however, that such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 8(d) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.
Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by the Indemnitee of a written request for indemnification, no Independent Counsel shall have been selected and not objected to, either the
Company or the Indemnitee may petition the a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or the Indemnitee to the other’s selection of Independent Counsel and/or for the appointment
as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel. The
Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting under this Agreement, and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 8(b), regardless of the manner in which such Independent Counsel was selected or appointed. 

 (c) In making a determination with respect to entitlement to indemnification hereunder, the
Reviewing Party shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with this Agreement, and the Company shall have the burden of proof to
overcome such presumption in connection with the making by any person or entity of any determination contrary to that presumption. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or
without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create
a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable
cause to believe that his conduct was unlawful. For purposes of any determination of good faith, the Indemnitee shall be deemed to have acted in good faith if the Indemnitee’s action is based on (i) the records or books of account of the
Company and any other corporation, partnership, joint venture or other entity of which the Indemnitee is or was serving at the written request of the Company as a director, officer, employee, agent or fiduciary, including financial statements,
(ii) on information supplied to the Indemnitee by the officers and directors of the Company or such other corporation, partnership, joint venture or other entity in the course of their duties, (iii) on the advice of legal counsel for the
Company or such other corporation, partnership, joint venture or other entity or (iv) on information or records given or reports made to the Company or such other corporation, partnership, joint venture or other entity by an independent
certified public accountant or an appraiser or other expert selected with reasonable care by the Company or such other corporation, partnership, joint venture or other entity. In addition, the knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Company or such other corporation, partnership, joint venture or other entity shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement. The
provisions of this Section 8(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. 

D. DIRECTOR AND OFFICER LIABILITY INSURANCE 
 1. Good Faith Determination. The Company shall from time to time make a good faith determination as to whether it is practicable for the Company to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses incurred in connection with their services to the Company or to ensure the Company’s performance of its indemnification
obligations under this Agreement. 
 2. Coverage of the Indemnitee. To the extent the Company maintains an insurance
policy or policies providing directors’ and officers’ liability insurance, the Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage obtained for any of the
Company’s directors or officers. 
 3. No Obligation. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain any director and officer insurance policy if the Company determines in good faith that such insurance is not reasonably available in the case that (i) premium costs for such insurance are disproportionate to the
amount of coverage provided, or (ii) the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit. 

 E. NON-EXCLUSIVITY; FEDERAL PREEMPTION; TERM 

1. Non-Exclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which the
Indemnitee may be entitled under the Company’s current memorandum and articles of association, applicable law or any written agreement between the Indemnitee and the Company (including its subsidiaries and affiliates). The indemnification
provided under this Agreement shall continue to be available to the Indemnitee for any action or omission while serving in an indemnified capacity even though he may have ceased to serve in any such capacity at the time of any Proceeding.

 2. Federal Preemption. Notwithstanding the foregoing, both the Company and the Indemnitee acknowledge that in certain
instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the U.S. Securities and
Exchange Commission’s prohibition on indemnification for liabilities arising under certain U.S. federal securities laws. The Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake
with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify the Indemnitee. 

3. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period the
Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as the Indemnitee shall be subject to any Proceeding by reason of his former or current capacity at the Company, whether or not he is acting or serving in any such capacity at the time any expense is incurred for which
indemnification can be provided under this Agreement. This Agreement shall continue in effect regardless of whether the Indemnitee continues to serve as an officer and/or a director of the Company or any other enterprise at the Company’s
request. 
 F.` MISCELLANEOUS 
 1. Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of
this Agreement shall operate as a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided in this Agreement, no failure to exercise or any delay in exercising any
right or remedy shall constitute a waiver. 
 2. Subrogation. In the event of payment to or on behalf of the Indemnitee by
the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the Company to bring suit to enforce such rights. 

 3. Assignment; Binding Effect. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by either party hereto without the prior written consent of the other party; except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to an entity
which assumes all obligations of the Company under this Agreement. Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company’s successors
(including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as the Indemnitee’s spouses, heirs, and personal and
legal representatives. As a condition to any purchase, merger, consolidation or other business combination transaction involving the Company, the Company’s successor shall expressly assume the obligations under this Agreement. 

4. Severability and Construction. Nothing in this Agreement is intended to require or shall be construed as requiring the Company
to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to a court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. In addition, if any portion of this
Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law. The parties hereto acknowledge that
they each have had opportunities to have their respective counsels review this Agreement. Accordingly, this Agreement shall be deemed to be the product of both of the parties hereto, and no ambiguity shall be construed in favor of or against either
of the parties hereto. 
 5. Counterparts. This Agreement may be executed in two counterparts, both of which taken
together shall constitute one instrument. 
 6. Governing Law. This agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, U.S.A. 
 7. Notices. All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be deemed to have been duly given if delivered by hand,
against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at: 
 MOL Global, Inc. 
 Lots 07-03 & 08-03, Levels 7 and 8

 Berjaya Times Square, No. 1, Jalan Imbi 

55100 Kuala Lumpur, Malaysia 
 Attention:
                                  

and to the Indemnitee at its last address notified to the Company. 

 8. Entire Agreement. This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. 

(Signature page follows) 

 IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first written above.

 COMPANY 
  

	
	MOL Global, Inc.
	
	  
	Name:
	Title:

  

	
	INDEMNITEE
	
	  
	Name:

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