1
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 13, 1998 (this
"Agreement"), is made by and among Innovative Gaming Corporation of America, a
Minnesota corporation (the "Company"), and the person named on the signature
page hereto (the "Initial Investor").
WITNESSETH:
WHEREAS, in connection with the Subscription Agreement,
dated as of May 13, 1998, between the Initial Investor and the Company
(the "Subscription Agreement"), the Company has agreed, upon the terms
and subject to the conditions of the Subscription Agreement, to issue
and sell to the Initial Investor shares of Series B Convertible
Preferred Stock (such shares, including any additional shares of Series
B Convertible Preferred Stock issued as dividends on such shares, are
referred to as the "Shares"), convertible into shares of Common Stock,
$.01 par value (the "Common Stock"); and
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Securities Act"), with respect to
the Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall
have the following meanings:
(i) "Certificate of Designation" means the Certificate of
Designation of Series B Convertible Preferred Stock as filed with
the Minnesota Secretary of State and as amended from time to
time.
2
(ii) "Investor" means the Initial Investor and any
transferee or assignee who agrees to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(iii) "register," "registered," and "registration" refer
to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act on such
appropriate registration form promulgated by the Commission as shall be
selected by the Company and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and
Exchange Commission ("SEC").
(iv) "Registrable Securities" means the Common Stock
issuable upon conversion of the Shares.
(v) "Registration Statement" means a registration
statement under the Securities Act registering securities of the
Company.
(b) Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the
Subscription Agreement.
2. REGISTRATION.
(a) REGISTRATION. The Company shall prepare and file a
shelf-Registration Statement covering the sale by the Investor of
Registrable Securities (the "Registration Statement") with the SEC
pursuant to Rule 415 of the Securities Act within ten (10) business days
after the closing of the purchase of the Shares pursuant to the
Subscription Agreement (the "Closing"). As part of such Registration
Statement, with the approval of the Investor (with such approval being
given hereby for the registration of up to 10,000 shares issued upon
exercise of certain Warrants issued to Gaming Venture Corporation), the
Company may include additional shares of Common Stock registered on
behalf of the Company or the holders of such additional shares. In light
of the fact that the number of shares of Common Stock into which the
Shares are convertible is variable, the Company shall include in the
Registration Statement a number of Registrable Securities equal to not
less than 1,505,000 shares. If at any time the number of Registrable
Securities included in the Registration Statement is insufficient to
enable the Investor to sell all Registrable Securities, the Company
shall promptly file an additional registration statement to register for
resale such additional Registrable Securities as may be required.
(b) PAYMENTS BY THE COMPANY. The Company will use its best
efforts to have the Registration Statement become effective with the SEC
no later than 90 days from the closing of the purchase of the Preferred
Shares (the "Closing"). If
-2-
3
the Registration Statement covering the Registrable Securities is not
effective within 120 days after the closing, then the Company will make
payments to each holder of Registrable Securities (each, a "Holder") in
such amounts and at such times as shall be determined pursuant to this
Section 2(b). The amount to be paid by the Company to the Holders shall
be determined as of each Computation Date, and such amount shall be
equal to (1) in the case of the first Computation Date, one percent (1%)
and (2) in the case of each other Computation Date, two percent (2%), in
each case of the aggregate subscription price paid by the Investor for
the Shares pursuant to the Subscription Agreement (the "Periodic
Amount"); provided, however, that if any Computation Date is less than
30 days subsequent to another Computation Date, then the Periodic Amount
payable on the later Computation Date shall be prorated. The Periodic
Amount shall be divided among all the Holders in the same proportion as
each Holder's Registrable Securities bears to the total of the
outstanding Registrable Securities (assuming, for purposes of such
computation, that all Shares have been converted into Common Stock). The
Periodic Amount shall be paid by the Company within ten business days
after each Computation Date and shall be payable in cash; provided,
however, that the Company may elect in lieu of payment of any Periodic
Amount in cash to deliver to the Investor shares of Common Stock having
an Aggregate Market Value equal to the amount of the Periodic Amount if,
but only if, (1) such shares are freely tradable by the Investor without
any restriction under the Securities Act or any state securities or
"blue sky" law and (2) after the issuance of such shares to Holder, the
aggregate number of shares of Common Stock beneficially owned by the
Holder (determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) would not exceed
4.9% of the outstanding shares of Common Stock.
As used in this Section 2(b), the following terms shall
have the following meanings:
"Aggregate Market Value" of any shares of Common Stock as
of any Computation Date means the product obtained by multiplying (a)
such number of shares of Common Stock times (b) the Average Market Price
of the Common Stock for the Measurement Period for such Computation
Date.
"Average Market Price" of any security for any period
shall be computed as the average closing price of the shares over the
Measurement Period.
"Computation Date" means the date which is 120 days after
the Closing and each 30 days thereafter for the purposes of this Section
2(b).
-3-
4
"Measurement Period" means the period of ten consecutive
trading days for the Common Stock ending on (or on the last trading day
preceding) each Computation Date.
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall:
(a) prepare promptly and file with the SEC promptly (but
in no event later than 10 business days) after the Closing, a
Registration Statement or Statements with respect to all Registrable
Securities pursuant to Rule 415 under the Securities Act, and thereafter
use its best efforts to cause the Registration Statement to become
effective within 90 days after Closing. In the event the Registration
Statement is not effective within 180 days after the Closing, the
Investor shall have the right to require the Company to redeem all
Registrable Securities as provided in the Subscription Agreement. The
Company shall keep the Registration Statement effective pursuant to Rule
415 at all times until the earlier of (1) the Registrable Securities
have been disposed thereunder or (2) two years from the date of Closing
(or the aggregate period of two years of effectiveness in the event that
the effectiveness of such Registration Statement is temporarily
suspended (the "Registration Period"). In any case, the Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) filed by the Company shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements
therein, (in case of a prospect in light of the circumstances in which
they were made), not misleading; provided, however, that if at any time
the Investors shall be entitled to sell all Registrable Securities held
by them pursuant to Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit
the Investors to sell securities of the Company to the public without
registration, without volume or other restrictions, and without imposing
restrictions arising under the federal securities laws on the purchases
thereof in a period of three consecutive months, then the Company shall,
so long as it meets the current public information requirements of Rule
144, thereafter no longer be required to maintain the registration of
Registrable Securities pursuant to this Agreement;
(b) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration
Statement effective at all times through the Registration Period, and,
during such period, comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statement until such time as all of
such Registrable Securities have been disposed of in accordance with the
intended
-4-
5
methods of disposition by the seller or sellers thereof as set forth in
the Registration Statement or prospectus supplement;
(c) prepare promptly and file all necessary documents
relating to the Registration Securities with State gaming authorities
whose consent or approval of the Registration Statement is required.
(d) furnish to each Investor whose Registrable Securities
are included in the Registration Statement, such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;
(e) If necessary, use reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration
Statement under such other securities or blue sky laws of such
jurisdictions as the Investors who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare
and file in those jurisdictions such amendments (including
post-effective amendments) and supplements, (iii) take such other
actions as may be necessary to maintain such registrations and
qualifications in effect at all times through the Registration Period
and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (I) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this Section 3(e), (II) subject itself to general taxation in any such
jurisdiction, (III) file a general consent to service of process in any
such jurisdiction, (IV) provide any undertakings that cause more than
nominal expense or burden to the Company or (V) make any change in its
charter or bylaws;
(f) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities being
sold pursuant to such registration of the happening of any event of
which the Company has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue statement
or omission, and deliver a number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request;
-5-
6
(g) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities being
sold pursuant to such registration (or, in the event of an underwritten
offering, the managing underwriters) of the issuance by the SEC of any
stop order or other suspension of effectiveness of the Registration
Statement at the earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in interest
of the Registrable Securities being sold pursuant to such registration
to review the Registration Statement and all amendments and supplements
thereto a reasonable period of time prior to their filing with the SEC,
and shall not file any document in a form to which such counsel
reasonably objects;
(j) use its best efforts either to (i) cause all the
Registrable Securities covered by the Registration Statement to be
listed on a national securities exchange and on each additional national
securities exchange on which similar securities issued by the Company
are then listed, if any, if the listing of such Registrable Securities
is then permitted under the rules of such exchange or (ii) secure
designation of all the Registrable Securities covered by the
Registration Statement as a National Association of Securities Dealers
Automated Quotations System ("Nasdaq") "national market system security"
within the meaning of Rule 11Aa2-1 of the SEC under the Exchange Act and
the quotation of the Registrable Securities on the Nasdaq National
Market System or, if, despite the Company's best efforts to satisfy the
preceding clause (i) or (ii), the Company is unsuccessful in satisfying
the preceding clause (i) or (ii), to secure listing on a national
securities exchange or Nasdaq authorization and quotation for such
Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register with
the National Association of Securities Dealers, Inc. ("NASD") as such
with respect to such Registrable Securities;
(k) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(l) cooperate with the Investors who hold Registrable
Securities being sold to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legends) representing
Registrable Securities to be sold pursuant to the denominations or
amounts as the case may be, and registered in such names as the
Investors may reasonably request; and
(m) take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement;
-6-
7
4. OBLIGATIONS OF THE INVESTORS. In connection with the
registration of the Registrable Securities, the Investors shall have the
following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement with
respect to each Investor that such Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of
the Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
At least ten (10) business days prior to the first anticipated filing
date of the Registration Statement, the Company may notify each Investor
of the information the Company requires from each such Investor (the
"Requested Information"). If within five (5) business days prior to the
filing date the Company has requested and not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then the
Company may file the Registration Statement without including
Registrable Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation
and filing of the Registration Statement hereunder;
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Section 3(f) such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering
such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(f)
and, if so directed by the Company, such Investor shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Investor's
possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice; and
5. EXPENSES OF REGISTRATION. All expenses (other than fees
and expenses of investment bankers and other than brokerage commissions)
incurred in connection with registrations, filings or qualifications
pursuant to Section 3, including, without limitation, all registration,
listing and qualifications fees, printers and accounting fees and the
fees and disbursements of counsel for the Company, shall be borne by the
Company; provided, however, that the Investors shall bear the fees and
out-of-pocket expenses of its legal counsel and accountants and agents
selected by it.
-7-
8
6. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such Registrable
Securities, the directors, if any, of such Investor, the officers, if
any, of such Investor, each person, if any, who controls any Investor
within the meaning of the Securities Act or the Exchange Act, and each
broker, dealer or underwriter selling shares on behalf of the Investor,
and the controlling persons thereof (each, an "Indemnified Person"),
against any losses, claims, damages, expenses or liabilities (joint or
several) (collectively "Claims") to which any of them become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included
therein: (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to
state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements
therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or any
state securities law or any rule or regulation (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations").
Subject to the restrictions set forth in Section 6 (d) with respect to
the number of legal counsel, the Company shall reimburse the Investors
promptly as such expenses are incurred and are due and payable, for any
legal fees or other reasonable expenses incurred by them in connection
with investigating or defending any such Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) (I) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by any
Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d) hereof; (II) with respect to any
preliminary prospectus, shall not inure to the benefit of any such
person from whom the person asserting any such Claim purchased the
Registrable Securities that are the subject thereof (or to the benefit
of any person controlling
-8-
9
such person) if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected in the prospectus,
as then amended or supplemented, if such prospectus was timely made
available by the Company pursuant to Section 3(d) hereof; and (III)
shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by
or on behalf of the Indemnified Persons and shall survive the transfer
of the Registrable Securities by the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which
an Investor is participating, each such Investor agrees to indemnify and
hold harmless, to the same extent and in the same manner set forth in
Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange
Act, and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person
who controls such stockholder within the meaning of the Securities Act
or the Exchange Act (collectively and together with an Indemnified
Person, an "Indemnified Party"), against any Claim to which any of them
may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and such Investor will
promptly reimburse any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld; provided,
further, however, that the Investor shall be liable under this Section
6(b) for only that amount of a Claim as does not exceed the net proceeds
to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to
any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis
in the prospectus, as then amended or supplemented.
-9-
10
(c) The Company shall be entitled to receive indemnities
from selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as
provided above, with respect to information such persons so furnished in
writing by such persons expressly for inclusion in the Registration
Statement.
(d) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of
any action (including any governmental action), such Indemnified Person
or Indemnified Party shall, if a Claim in respect thereof is to made
against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof and this
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying parties;
provided, however, that an Indemnified Person or Indemnified Party shall
have the right to retain its own counsel, with the fees and expenses to
be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party
and other party represented by such counsel in such proceeding. The
Company shall pay for only one separate legal counsel for the Investors;
such legal counsel shall be selected by the Investors holding a majority
in interest of the Registrable Securities. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party
under this Section 6, except to the extent that the indemnifying party
is prejudiced in its ability to defend such action. The indemnification
required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as
such expense, loss, damage or liability is incurred and is due and
payable.
7. CONTRIBUTION. To the extent any indemnification
provided for herein is prohibited or limited by law, the indemnifying
party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that (a) no
contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth
in Section 6, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of such fraudulent
misrepresentation and (c) contribution by any seller of
-10-
11
Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making
available to the Investors the benefits of Rule 144 or any other similar
rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration,
until such time as the Investors have sold all the Registrable
Securities pursuant to a Registration Statement or Rule 144, the Company
agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC all reports and other documents
required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to
have the Company register Registrable Securities pursuant to this
Agreement shall be automatically assigned by the Investors to
transferees or assignees of all or any portion of such securities only
if: (a) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of
such transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (b)
immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities
laws, (c) at or before the time the Company received the written notice
contemplated by clause (a) of this sentence the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions
contained herein, and (d) such transfers of Registered Securities
complies with the Subscription Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of
this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and
Investors who hold a majority in
-11-
12
interest of the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record
such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities
with respect to the same Registrable Securities, the Company shall act
upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
(b) Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given when
personally delivered or when sent by registered mail, return receipt
requested, addressed (i) if to the Company, at Innovative Gaming
Corporation of America, 0000 Xxxxx Xxxxxx, Xxxx, Xxxxxx, 00000,
Attention: Chief Financial Officer (ii) if to the Initial Investor, at
the address set forth under its name in the Subscription Agreement and
(iii) if to any other Investor, at such address as such Investor shall
have provided in writing to the Company, or at such other address as
each such party furnishes by notice given in accordance with this
Section 11(b), and shall be effective, when personally delivered, upon
receipt, and when so sent by certified mail, four business days after
deposit with the United States Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of Minnesota
applicable to the agreements made and to be performed entirely within
such state, without giving effect to rules governing the conflict of
laws. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof. There are
no restrictions, promises, warranties or undertakings, other than those
set forth or referred to
-12-
13
herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject
matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may
require).
(h) The headings in the Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by
telephone line facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
-13-
14
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed by their respective officers thereunto duly
authorized as of day and year first above written.
INNOVATIVE GAMING CORPORATION
OF AMERICA
By:______________________________________
Xxxxxx X. Xxxxxxxxx, President and CEO
INVESTOR:
KA INVESTMENTS, LDC
By:______________________________________
Its:______________________________________
Address for Notices:
Bank of Xxxxxxxxxxx International (Cayman) Ltd.
Xxxxxxxxxxx House
Fort Strut, Xxxxxx Town
Grand Cayman, Cayman Island
With a copy to:
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Ivana Bozjak
Facsimile (000) 000-0000
-14-
