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EXHIBIT 10.6
SECURITIES EXCHANGE AGREEMENT
This SECURITIES EXCHANGE AGREEMENT, dated as of December 1st, 2000, is
by and between Innovative Gaming Corporation of America, a Minnesota corporation
with principal executive offices located at 0000 Xxxxxxxxx Xxxxxx, Xxxx, Xxxxxx
00000 (the "COMPANY") and the investor set forth on Schedule A ("INVESTOR").
WHEREAS, Investor has previously entered into that certain Securities
Purchase Agreement pursuant to which Investor purchased shares of Series D 6%
Convertible Preferred Stock of the Company, par value $.01 per share (the
"SERIES D PREFERRED STOCK").
WHEREAS, Investor currently holds that number of shares of Series D
Preferred Stock set forth on Schedule A (the "SERIES D PREFERRED SHARES").
WHEREAS, Investor desires to purchase from the Company that number of
shares of the Company's Series G 6% Convertible Preferred Stock, par value $.01
per share (the "SERIES G PREFERRED STOCK") set forth on Schedule A (such shares
as the "SERIES G PREFERRED SHARES"), and the Company desires to issue and sell
the Series G Preferred Shares to Investor, on the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
I. PURCHASE AND SALE OF SERIES G PREFERRED SHARES
A. TRANSACTION. Investor hereby agrees to purchase from the Company, and
the Company has offered and hereby agrees to issue and sell to Investor in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), the Series G
Preferred Shares.
B. CONSIDERATION; SURRENDER AND REDEMPTION OF SERIES D PREFERRED SHARES.
In consideration for the Series G Preferred Shares to be purchased by Investor
hereunder, Investor shall surrender all of its interest in and to the Series D
Preferred Shares and the Company hereby agrees to redeem such Series D Preferred
Shares as provided below.
II. REGISTRATION RIGHTS
A. OBLIGATIONS OF THE COMPANY. The Company shall prepare and file with
the Securities and Exchange Commission (the "COMMISSION") no later than January
26, 2001 (the "LATEST FILING DATE"), a Registration Statement (as defined
below), and shall use its best efforts to cause the Commission to declare such
Registration Statement effective under the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder (the "SECURITIES
ACT"), as promptly as practicable but in no event later than 90 days after the
Latest Filing Date,
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assuming for purposes hereof a Conversion Price under the Certificate of
Designation of $.50 per share. At such time after the filing of the Registration
Statement as (i) the Commission indicates, either orally or in writing, that it
has no further comments with respect to such Registration Statement or that it
is willing to entertain appropriate requests for acceleration of effectiveness
of such Registration Statement and (ii) the Company shall have received all
necessary Nevada gaming regulatory approvals, the Company shall promptly, and in
no event later than two business days after receipt of such indication from the
Commission, request that the effectiveness of such Registration Statement be
accelerated within 48 hours of the Commission's receipt of such request. The
Company shall notify the Investor by written notice that such Registration
Statement has been declared effective by the Commission within 24 hours of such
declaration by the Commission.
B. DEFINITIONS.
1. "REGISTRABLE SECURITIES" means the Common Stock of the Company, par
value $.01 per share (the "COMMON STOCK"), issuable (i) in lieu of cash dividend
payments on the Series G Preferred Shares, and (ii) upon conversion or
redemption of the Series G Preferred Shares; provided, however, that a share of
Common Stock shall cease to be a Registrable Security for purposes of this
Agreement when it no longer is a Restricted Security (as defined below).
2. "REGISTRATION STATEMENT" means a registration statement on Form S-3
relating to the offer and sale of the Registrable Securities by the holders
thereof.
3. "RESTRICTED SECURITY" means any share of Common Stock issuable in
lieu of cash dividend payments on the Series G Preferred Shares or upon
conversion or redemption of the Series G Preferred Shares except any such share
that (i) has been registered pursuant to an effective registration statement
under the Securities Act and sold in a manner contemplated by the prospectus
included in such registration statement, (ii) has been transferred in compliance
with the resale provisions of Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
Rule 144 under the Securities Act (or any successor provision thereto), or (iii)
otherwise has been transferred and a new share of Common Stock not subject to
transfer restrictions under the Securities Act has been delivered by or on
behalf of the Company.
III. ACKNOWLEDGMENT OF RESTRICTIVE LEGENDS
Investor acknowledges and agrees that, upon issuance pursuant
to this Agreement, the Securities (including without limitation any Dividend
Shares or Conversion Shares) shall have endorsed thereon legends in
substantially the following form (and a stop-transfer order may be placed
against transfer of the Preferred Shares and the Conversion Shares until such
legend has been removed):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF
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1933 OR THE SECURITIES LAW OF ANY STATE. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO THEIR
DISTRIBUTION AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE SECURITIES ACT OF 1933 OR UNLESS, IN THE
OPINION OF COUNSEL SATISFACTORY TO THIS CORPORATION, AN
EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE SECURITIES
LAWS.
THE ARTICLES OF INCORPORATION OF THE CORPORATION IMPOSE
CERTAIN RESTRICTIONS ON THE OWNERSHIP OF FIVE PERCENT OR MORE
OF THE CAPITAL STOCK OF THE CORPORATION AND EMPOWER THE BOARD
OF DIRECTORS TO REDEEM CAPITAL STOCK UNDER CERTAIN
CIRCUMSTANCES. THE CORPORATION WILL FURNISH ANY SHAREHOLDER
UPON REQUEST AND WITHOUT CHARGE, A COPY OF THE ARTICLES OF
INCORPORATION AND A FULL STATEMENT OF THE DESIGNATIONS,
PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF THE SHARES OF
EACH CLASS OR SERIES AUTHORIZED TO BE ISSUED, SO FAR AS THEY
HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE BOARD TO
DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT
CLASSES OR SERIES.
THESE SECURITIES ARE SUBJECT TO THE MISSISSIPPI GAMING CONTROL
ACT AND THE REGULATIONS OF THE MISSISSIPPI GAMING COMMISSION.
THESE SECURITIES ARE SUBJECT TO THE NEVADA GAMING CONTROL ACT
AND THE REGULATIONS OF THE NEVADA GAMING COMMISSION.
IV. CLOSING DATE; DELIVERY OF SERIES D CERTIFICATES
The date and time (the "CLOSING DATE") of the issuance and
sale of the Series G Preferred Shares shall be the date hereof or such other
date and time as shall be mutually agreed upon in writing. The issuance and sale
of the Securities shall occur on the Closing Date at the offices of Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP. On the Closing Date, The Company shall deliver the
Series G Preferred Stock to Investor pursuant to Section I.B. hereof on a
"delivery-against-payment basis", and Investor shall deliver certificate(s)
representing the Series D Preferred Shares to the Company for cancellation
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V. GOVERNING LAW
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, without regard to the
conflicts of law principles of such state.
VI. COUNTERPARTS; EXECUTION
This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument. A facsimile transmission of
this signed Agreement shall be legal and binding on all parties hereto.
VII. SEVERABILITY
In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
VIII. ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS
This Agreement constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by all parties. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
IX. NOTICES
Except as may be otherwise provided herein, any notice or
other communication or delivery required or permitted hereunder shall be in
writing and shall be delivered personally or sent by certified mail, postage
prepaid, or by a nationally recognized overnight courier service, and shall be
deemed given when so delivered personally or by overnight courier service, or,
if mailed, three (3) days after the date of deposit in the United States mails,
as follows:
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A. to the Company, to:
Innovative Gaming Corporation of America
0000 Xxxxxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, CEO
(000) 000-0000
(000) 000-0000 (Fax)
B. if to Buyer, to:
The address of Investor as indicated on Schedule A.
The Company or Investor may change the foregoing address by notice given
pursuant to this Article X.
X. ASSIGNMENT
This Agreement shall not be assignable by either of the
parties hereto prior to the Closing without the prior written consent of the
other party, and any attempted assignment contrary to the provisions hereby
shall be null and void; provided, however, that Investor may assign its rights
and obligations hereunder, in whole or in part, to any Affiliate of Investor.
XI. FURTHER ASSURANCES
Each party to this Agreement will, on or any time after the
date hereof, execute such further documents or instruments and take such further
actions as may reasonably be requested by any other party to this Agreement to
effect the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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In Witness Whereof, the parties hereto have duly executed and
delivered this Agreement on the date first above written.
INNOVATIVE GAMING CORPORATION OF AMERICA
By:
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Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
INVESTOR:
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Name:
Signature Page - Securities Exchange Agreement
