EXECUTION COPY
EXHIBIT 4.1
SILICON GAMING, INC.
_________________________
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 30, 1997
FOR
UNITS CONSISTING OF
SENIOR DISCOUNT NOTES
DUE SEPTEMBER 30, 2002
AND
WARRANTS TO PURCHASE COMMON STOCK,
PAR VALUE $.001 PER SHARE,
OF
SILICON GAMING, INC.
_________________________
JULY 8, 1998
SILICON GAMING, INC.
AMENDMENT NO. 1 (the "Amendment") dated July 8, 1998, to the Agreement (the
"Agreement") dated as of September 30, 1997 by and between Silicon Gaming, Inc.,
a California corporation (the "Company"), and the purchaser named therein (the
"Purchaser"). Unless otherwise defined, capitalized terms used in this Amendment
have the same meanings as those ascribed to them in the Agreement.
WHEREAS, the Company and the Purchaser entered into the Agreement as of
September 30, 1997 providing for the issuance by the Company and the purchase by
the Purchaser of $30,000,000 aggregate principal amount of Senior Discount Notes
and 375,000 Warrants to Purchase Common Stock; and
WHEREAS, the Company and the Purchaser wish to amend the Agreement to
provide for the issuance by the Company and the purchase by the Purchaser of
$17,250,000 aggregate principal amount of new Senior Discount Notes (Series B)
and 250,000 additional Warrants to Purchase Common Stock; and
WHEREAS, in connection with such new issuance and purchase, the Company and
the Purchaser have agreed to amend the terms of the original Warrants to
Purchase Common Stock and to amend the terms of certain other documents.
NOW THEREFORE, the Company, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, agrees with the
Purchaser as follows:
ARTICLE I
AMENDMENTS
1.1 AMENDMENTS TO ARTICLE I.
-----------------------
(a) Section 1.1 of the Agreement is hereby amended by adding the following
definitions:
"Additional Closing" has the meaning ascribed thereto in Section 2.6
hereof.
"Additional Closing Date" has the meaning ascribed thereto in Section
2.6 hereof.
"Additional Common Stock Purchase Warrants" means the warrants of the
Company issued at the Additional Closing pursuant to the Warrant
Agreement representing the right to purchase shares of Common Stock at
the exercise price set forth therein.
"Additional Units" has the meaning set forth in Section 2.4(c) hereof."
(b) Section 1.1 of the Agreement is hereby further amended by revising the
definition of "Common Stock Purchase Warrants" to include the Additional Common
Stock Purchase Warrants.
(c) Section 1.1 is hereby further amended by restating each of the
following definitions in its entirety:
"Accreted Value" means, with respect to any Senior Discount Note and
as of any date before September 30, 2002, the sum of (a) the issue
price of such Senior Discount Note (which shall be equal to $730.58
per $1,000 principal amount at maturity of the Senior Discount Notes
(Series A) and $810.43 per $1,000 principal amount at maturity of the
Senior Discount Notes (Series B)) and (b) the amount which has
accreted at such time calculated by applying an accretion rate per
annum to such issue price of 16.64% with respect to the Senior
Discount Notes (Series A) and 18.3% with respect to the Senior
Discount Notes (Series B), in each case compounding semi-annually on
each accretion date as set forth below, from the date of issuance of
the Senior Discount Notes to the date as of which the Accreted Value
is being determined, in proportion to the number of days elapsed (if
calculated on any date other than any semi-annual accretion date) and
based on an annual period of twelve 30-day months. As of the dates
set forth below, each Senior Discount Note will have the Accreted
Value per $1,000 principal amount at maturity appearing opposite such
dates:
SENIOR DISCOUNT NOTES (SERIES A)
Semi-annual Accretion Date Accreted Value
-------------------------- --------------
Issue Date $ 730.58
March 31, 1998 $ 791.37
September 30, 1998 $ 857.21
March 31, 1999 $ 897.29
September 30, 1999 $ 909.45
March 31, 2000 $ 922.62
September 30, 2000 $ 936.89
March 31, 2001 $ 952.34
September 30, 2001 $ 962.90
March 31, 2002 $ 980.52
September 30, 2002 $1,000.00
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SENIOR DISCOUNT NOTES (SERIES B)
Semi-annual Accretion Date Accreted Value
-------------------------- --------------
Issue Date $ 810.43
September 30, 1998 $ 847.23
March 31, 1999 $ 862.02
September 30, 1999 $ 878.20
March 31, 2000 $ 895.89
September 30, 2000 $ 915.25
March 31, 2001 $ 936.41
September 30, 2001 $ 959.57
March 31, 2002 $ 974.45
September 30, 2002 $1,000.00
"Issue Date" means the date of original issuance of the Senior
Discount Notes (Series A) or (Series B), as the case may be.
"Senior Discount Notes" means the Company's Senior Discount Notes
(Series A) and Senior Discount Notes (Series B), due September 30,
2002, as amended or supplemented from time to time in accordance with
the terms hereof, that are issued pursuant to this Agreement and each
note delivered in substitution or exchange for any such note.
1.2 AMENDMENTS TO ARTICLE II.
------------------------
(a) Sections 2.1, 2.2 and 2.3 of the Agreement are hereby amended to
replace the phrase "Senior Discount Note(s)" by the phrase "Senior Discount
Note(s)(Series A)."
(b) Article II of the Agreement is hereby further amended to add the
following Sections 2.4, 2.5 and 2.6:
2.4 Issuance of Additional Units.
----------------------------
(a) The Company has authorized the issuance and sale of up to
$17,250,000 aggregate principal amount of its Senior Discount
Notes (Series B), to be issued pursuant to and in accordance with
the terms of this Agreement. Each Senior Discount Note (Series B)
will be issued in the principal amount of $100,000, substantially
in the form set forth in Exhibit E hereto, with such changes
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thereto, if any, as may be approved by the Purchaser and the
Company.
(b) The Company has authorized the issuance and sale of up to
250,000 Additional Common Stock Purchase Warrants, each
exercisable to purchase one share of the Common Stock of the
Company, to be
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acquired by the Purchaser in accordance with the terms of this
Agreement. The Additional Common Stock Purchase Warrants will be
substantially in the form of the Warrant Certificate as set forth
in Exhibit A of the Warrant Agreement, with such changes thereto,
if any, as may be approved by the Purchaser and the Company.
(c) The Senior Discount Notes (Series B) and the Additional
Common Stock Purchase Warrants will be issued in attached units
("Additional Units") each consisting of $100,000 principal amount
of Senior Discount Notes (Series B) and 1,450 Additional Common
Stock Purchase Warrants, subject to detachment of the Additional
Common Stock Purchase Warrants from the Senior Discount Notes
(Series B) upon the terms and subject to the conditions set forth
herein.
(d) The Company and the Purchaser hereby agree that for Federal
income tax purposes, including for purposes of determining
original issue discount and the issue price of the Senior
Discount Notes (Series B) under sections 1271-1275 of the Code
and the regulations issued thereunder, the $86,956.52 issue price
of each Additional Unit shall be allocated $810.43 to each $1,000
of principal amount of the Senior Discount Notes (Series B) and
$4.08 to each Additional Common Stock Purchase Warrant. The
Company and the Purchaser hereby further agree that the
allocation of the issue price pursuant to the preceding sentence
shall be binding on the Company for purposes of any determination
by the Company of the issue price of the Senior Discount Notes
(Series B) pursuant to the first sentence of Treasury Regulations
section 1.1273-2(f)(2).
2.5 Sale and Purchase of Units. At the Additional Closing
--------------------------
provided for in Section 2.6, the Company will issue and sell to
the Purchaser and, subject to the terms and conditions of this
Agreement, the Purchaser will purchase from the Company, the
Additional Units at the purchase price of $86,956.52 per
Additional Unit payable in cash by wire transfer of immediately
available funds.
2.6 Closing of Sale of Additional Units. The purchase and
-----------------------------------
delivery of the Additional Units to be purchased by the Purchaser
shall take place at the offices of Xxxxxxx, Procter & Xxxx XXX,
Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, at a closing (the
"Additional Closing") on July 8, 1998, or at such other place or
on such other date as the Purchaser and the Company may agree
upon (such date on which the Additional Closing shall have
actually occurred, the "Additional Closing Date"). At the
Additional Closing, the Company will deliver or cause to be
delivered to the Purchaser the Additional Units to be purchased
by it
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against payment of the purchase price therefor. Unless the
Purchaser otherwise notifies the Company at least two Business
Days prior to the Additional Closing Date, the Additional Units
to be purchased hereunder shall be in the form of a single Senior
Discount Note (Series B) and a single Additional Common Stock
Purchase Warrant certificate, in each case dated the date of the
Additional Closing and registered in the Purchaser's name or that
of its nominee as set forth on the signature page hereto. If at
the Additional Closing the Company shall fail to tender to the
Purchaser any of the Additional Units to be purchased by it as
provided in this Article II, or any of the conditions specified
in Article III for the benefit of the Purchaser or the Company,
as the case may be, shall not have been satisfied or waived in
writing by the Purchaser or the Company, as applicable, the
Purchaser or the Company, as the case may be, shall, at its
election, be relieved of all further obligations under this
Agreement, without thereby waiving any other rights it may have
by reason of such failure or such non-fulfillment.
1.3 AMENDMENTS TO ARTICLE III.
-------------------------
Article III of the Agreement is hereby amended to add the following
Sections 3.3 and 3.4:
3.3 Conditions Precedent to Obligations of the Purchaser on the
-----------------------------------------------------------
Additional Closing Date. The Purchaser's obligation to purchase
-----------------------
and pay for the Additional Units to be sold to it at the
Additional Closing is subject (i) to the fulfillment to its
satisfaction, prior to or at the Additional Closing, of the
conditions set forth in Section 3.1 above, with respect to and
after giving effect to, as applicable, the issuance of the
Additional Units, in each case substituting the Additional
Closing for the Closing and, with respect to the certificate
provided for in Section 3.1 (c), referring to the conditions set
forth in this Section 3.3, and also providing for a fee pursuant
to Section 3.1(m)(ii) of $50,000 (and not $625,000), (ii) to the
amendment of the Senior Discount Notes and Warrants issued at the
Closing as provided in Exhibits A and D, as amended, and (iii) to
the execution by the Company of a Registration Rights Agreement
with respect to the Additional Warrants in the form of Exhibit C-
2; provided that any or all of such conditions may be waived, in
whole or in part, by the Purchaser with respect to this Agreement
in its sole and absolute discretion.
3.4 Conditions Precedent to Obligations of the Company on the
---------------------------------------------------------
Additional Closing Date. The Company's obligation to issue the
-----------------------
Additional Units at the Additional Closing is subject to (i) the
fulfillment
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to its satisfaction, prior to or at the Additional Closing, of
the conditions set forth in Section 3.2 above, with respect to
and after giving effect to, as applicable, the issuance of the
Additional Units, and in each case substituting the Additional
Closing for the Closing, and (ii) to the amendment of the Senior
Discount Notes and Warrants issued at the Closing as provided in
Exhibits A and D, as amended; provided that any or all of such
conditions may be waived, in whole or in part, by the Company
with respect to this Agreement in its sole and absolute
discretion.
1.4 AMENDMENTS TO ARTICLE IV.
------------------------
The introductory language to Article IV is hereby amended to provide
as follows:
In order to induce the Purchaser to purchase the Units and the
Additional Units, the Company represents and warrants that the
statements contained in this Article IV are correct and complete
as of the date of this Agreement and will be correct and complete
as of the Closing Date or the Additional Closing Date as the case
may be (as though made and as though the Closing Date or
Additional Closing Date were substituted for the date of this
Agreement throughout Article IV):
1.5 AMENDMENTS TO ARTICLE VI.
------------------------
Sections 6.6 and 6.7 of the Agreement are amended and restated in
their entirety as follows:
6.6 Optional and Mandatory Redemption.
---------------------------------
(a) The Senior Discount Notes (Series A) and (Series B) will
be subject to redemption, in whole or from time to time in
part (in multiples of $1,000 of principal amount) at the
option of the Company at the price per $1,000 principal
amount at maturity with respect to any Redemption Date
appearing opposite the period in which such Redemption Date
occurs, plus any accrued and unpaid interest to the
Redemption Date:
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SENIOR DISCOUNT NOTES (SERIES A)
Price per $1,000
Period Principal Amount
------ ----------------
October 1997 $833.33
November 1997 $837.19
December 1997 $848.49
January 1998 $859.78
February 1998 $871.08
March 1998 $882.38
April 1998 $894.61
May 1998 $906.85
June 1998 $919.09
July 1998 $931.32
August 1998 $943.56
September 1998 $955.79
October 1998 $969.05
November 1998 $982.30
December 1998 $995.56
January 1999 $997.20
February 1999 $998.84
After February 28, 1999 $1,000.00
SENIOR DISCOUNT NOTES (SERIES B)
Price per $1,000
Period Principal Amount
------ ----------------
July 1998 $931.32
August 1998 $943.56
September 1998 $955.79
October 1998 $969.05
November 1998 $982.30
December 1998 $995.56
January 1999 $997.20
February 1999 $998.84
After February 28, 1999 $1,000.00
(b) Notwithstanding any other provision hereof, if any
Gaming Authority requires that the Purchaser or any Holder
or beneficial owner of the Securities must be licensed,
qualified or found suitable under any Gaming Laws in order
to maintain any material gaming license, registration or
approval of the Company, or its Gaming Subsidiaries under
such Gaming Laws, and the Purchaser, Holder or beneficial
owner of the Securities
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fails to apply for a license, qualification or finding of
suitability within 30 days after being requested to do so by
any Gaming Authority (or such lesser period that may be
required by such Gaming Authority), or if such Purchaser,
Holder or beneficial owner is not so licensed, qualified or
found suitable, the Purchaser, Holder or beneficial owner of
the Securities shall comply with any order by such Gaming
Authorities that such Person dispose of any Securities held
by it; provided, however, that in the event the Purchaser,
Holder or beneficial owner of the Securities does not comply
with such order within the required period, the Company
shall have the option as its sole remedy with respect to the
Senior Discount Notes to call for redemption of the Senior
Discount Notes of such Purchaser, Holder or beneficial owner
at a price in cash equal to the Accreted Value thereof on
the Redemption Date, plus accrued and unpaid interest to the
Redemption Date, and except as may be required by any Gaming
Authority, the Company shall comply with the procedures
contained in the Senior Discount Notes for redemption of the
Senior Discount Notes. The Company shall pay or reimburse
any Purchaser, Holder or beneficial owner of the Securities
who is required to apply for a license, qualification or
finding of suitability, for the costs or expenses incurred
therewith except with respect to any Purchaser, Holder or
beneficial owner of the Securities whose affirmative actions
have directly caused such Purchaser, Holder or beneficial
owner to so apply.
(c) On September 30, 2001, the Company shall redeem $5.0
million in principal amount of the Senior Discount Notes
(Series A) and $3.0 million in principal amount of the
Senior Discount Notes (Series B) (without prepayment penalty
or premium) at 100% of the principal amount so redeemed,
plus any accrued and unpaid interest thereon to the
Redemption Date.
(d) Upon any partial prepayment or redemption of the Senior
Discount Notes, the principal amount so prepaid or redeemed
shall be allocated to all Senior Discount Notes (Series A)
or (Series B), as the case may be, at the time outstanding
in proportion to the respective outstanding principal
amounts thereof, and a corresponding pro rata adjustment
shall be made in the minimum denomination of a Senior
Discount Note pursuant to Section 11.1.
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6.7 Mandatory Offers.
----------------
(a) Within 10 Business Days after any Change of Control
Trigger Date, any Repayment Trigger Date or any Excess
Proceeds Date, the Company shall mail a notice to each
Holder containing all instructions and materials necessary
to enable such Holders to tender Senior Discount Notes
pursuant to the Offer and stating: (i) that an Offer is
being made pursuant to Section 7.12, 7.13 or 7.18, as the
case may be, the length of time the Offer shall remain open,
and the maximum aggregate principal amount of Senior
Discount Notes that the Company is required to purchase
pursuant to such Offer; (ii) the purchase price for the
Senior Discount Notes (as set forth in Section 7.12, 7.13 or
7.18, as the case may be), the amount of accrued and unpaid
interest on such Senior Discount Notes as of the purchase
date, and the purchase date (which shall be no earlier than
30 days nor later than 40 days from the date such notice is
mailed (the "Purchase Date")); (iii) that any Senior
Discount Note not tendered will continue to accrue interest
if interest is then accruing; (iv) that, unless the Company
defaults in the payment of the purchase price on the
Purchase Date, interest shall cease to accrue on such Senior
Discount Notes on the Purchase Date; (v) that Holders
electing to tender any Senior Discount Note or portion
thereof will be required to surrender their Senior Discount
Note, with a form entitled "Option of Holder to Elect
Purchase" completed, to the Company at the address specified
in Section 13.2 hereof prior to the close of business on the
Business Day preceding the Purchase Date, provided that
--------
Holders electing to tender only a portion of any Senior
Discount Note must tender a principal amount of $1,000 or
integral multiples thereof; (vi) that Holders will be
entitled to withdraw their election to tender Senior
Discount Notes if the Company receives, not later than the
close of business on the second Business Day preceding the
Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of Senior Discount Notes delivered for purchase, and
a statement that such Holder is withdrawing his election to
have such Senior Discount Notes purchased; (vii) that
Holders whose Senior Discount Notes are accepted for payment
in part will be issued new Senior Discount Notes equal in
principal amount to the unpurchased portion of Senior
Discount Notes surrendered, provided that only Senior
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Discount Notes in a principal amount of $1,000 or integral
multiples thereof will be accepted for payment in part and
(viii) if the Offer is made with respect to a Change of
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Control, the circumstances and relevant facts regarding such
Change of Control.
(b) On the Purchase Date for any Offer, the Company shall
(i) in the case of an Offer resulting from a Change of
Control, accept for payment all Senior Discount Notes or
portions thereof tendered pursuant to such Offer, (ii) in
the case of an Offer resulting from one or more Securities
Sales or Mezzanine Debt Financings the aggregate Net Cash
Proceeds of which exceed $40,000,000, accept for payment all
Senior Discount Notes or portions thereof tendered pursuant
to such Offer that can be purchased out of such Net Cash
Proceeds, and (iii) in the case of an Offer resulting from
an Asset Disposition pursuant to which the Company or any
Subsidiary has Excess Proceeds, accept for payment the
maximum principal amount of Senior Discount Notes that can
be purchased out of such Excess Proceeds; provided, however,
-------- -------
that the Company will accept pursuant to Offers described in
clauses (ii) and (iii) Senior Discount Notes (Series A) and
(Series B) in proportion to the aggregate principal amount
of such Senior Discount Notes (Series A) and (Series B),
respectively, tendered pursuant to such Offer.
(c) With respect to any Offer, (i) if less than all of the
Senior Discount Notes tendered pursuant to an Offer are to
be accepted for payment by the Company for any reason, the
Company shall select on or prior to the Purchase Date the
Senior Discount Notes or portions thereof to be accepted for
payment pursuant to Section 6.2; and (ii) unless the Company
defaults in the payment of the purchase price for such
Senior Discount Notes on the Purchase Date, interest shall
cease to accrue on such Senior Discount Notes on the
Purchase Date; provided, however, that if the Company fails
-------- -------
to purchase all Senior Discount Notes accepted for payment,
the Company shall purchase on a pro rata basis all Senior
Discount Notes (Series A) and (Series B), respectively,
accepted for payment and interest shall continue to accrue
on all Senior Discount Notes not purchased.
(d) Promptly after the Purchase Date with respect to an
Offer, (i) the Company shall mail to each Holder of Senior
Discount Notes or portions thereof accepted for payment an
amount equal to the purchase price for, plus any accrued and
unpaid interest on, such Senior Discount Notes, (ii) with
respect to any tendered Senior Discount Note not accepted
for payment in whole or in part, the Company shall return
such Senior Discount Note to the
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Holder thereof, and (iii) with respect to any Senior
Discount Note accepted for payment in part, the Company
shall authenticate and mail to each such Holder a new Senior
Discount Note equal in principal amount to the unpurchased
portion of the tendered Senior Discount Note.
(e) The Company will (i) publicly announce the results of
the Offer on or as soon as practicable after the Purchase
Date, and (ii) comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations to the extent
such laws and regulations are applicable to any Offer.
(f) Notwithstanding Section 7.12 and Section 6.7, upon the
occurrence of a Change in Control Trigger Date, in lieu of
repurchasing Senior Discount Notes as required by Section
7.12, the Company may elect, instead, to call for redemption
all Senior Discount Notes pursuant to Section 6.1 provided
that the related Notice of Redemption is mailed to all
holders not later than the last date that it would be
required to commence a Mandatory Offer pursuant to Section
6.7 in respect of such Change in Control.
1.6 AMENDMENTS TO ARTICLE VII.
Article VII of the Agreement is hereby amended to add the following
Sections 7.19, 7.20 and 7.21:
7.19 Information Requests. The Company acknowledges that the
--------------------
Purchaser may wish, from time to time, to request from the
Company certain information, to review such information, and to
provide the Company with its views with respect to such
information. Accordingly the Company hereby confirms that the
Purchaser may:
(a) discuss the business operations, properties and
financial and other condition of the Company with the
Company's management;
(b) submit proposals or suggestions to the Company's
management from time-to-time and the Company's management
will discuss such proposals or suggestions with the
Purchaser within a reasonable period after such submission
but shall have no obligation to accept such proposals or
suggestions (the management, policies and operations of the
Company being within the sole and absolute discretion of the
Company); and
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(c) inspect the Company's books and records, to inspect its
business premises and other properties, to receive financial
statements, operating reports, budgets or other financial
reports of the Company, and to reasonably request
information at reasonable times and intervals concerning the
general status of the Company's financial condition and
operations.
7.20 Confidentiality. The Purchaser agrees that except as may be
---------------
required by law, rule, regulation, legal process or regulatory
authority, any non-public information received from the Company
pursuant hereto (the "Information") will be treated as
confidential and will not be disclosed by the Purchaser or made
available to any third party (other than any of the Purchaser's
partners, employees, advisers, attorneys, accountants or agents
which the Purchaser reasonably believes have a need to know such
information and which agree to be bound by the confidentiality
provisions set forth herein) without the Company's prior written
approval and without safeguards for protecting such information.
The Purchaser agrees that it shall use its reasonable efforts to
maintain the confidence of all Information disclosed to it
pursuant to this letter agreement, except that (i) the Purchaser
may disclose any Information to any Person with whom the Purchaser
is discussing a potential sale of any Securities, provided that
such Person executes a confidentiality agreement substantially
similar to this paragraph in favor of the Company and (ii) to the
extent that the Purchaser is requested or required (by deposition,
interrogatories, subpoena or otherwise) as part of an action,
suit, proceeding or investigation by or before any court or
governmental authority. Notwithstanding the foregoing,
"Information" excludes any of the foregoing that has entered the
public domain through no fault of the Purchaser, that an
authorized executive officer of the Company has authorized for
public dissemination, that was known to or possessed by the
Purchaser prior to its discussion with the Company of the
transactions contemplated in the first paragraph of this letter
agreement and other than through disclosure or delivery by the
Company, or that was learned or obtained by the Purchaser from
sources having no duty of confidentiality to the Company. The
Purchaser may decline to receive Information by providing written
notice to the Company.
7.21 Certification Not a Waiver. The Company acknowledges that
--------------------------
the Purchaser may be required from time to time to give
certifications or make representations to Gaming Authorities with
respect to the Purchaser's intention to influence the Company's
management or operations. The Company hereby agrees that the
submission of such a certification or representation does not
constitute a waiver by the
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Purchaser of the provisions of Section 7.19, nor shall any failure
to exercise such provisions of constitute such a waiver.
Notwithstanding the foregoing, however, the Purchaser acknowledges
that it may be subject to Gaming Laws with respect to its ownership
of the Securities or its exercise of the provisions of Section 7.19
or otherwise and the Purchaser shall be responsible for any costs or
expenses it may incur in complying with any Gaming Laws.
1.7 AMENDMENTS TO ARTICLE XI.
------------------------
(a) Section 11.1 of the Agreement is hereby amended and restated in
its entirety as follows:
11.1 Form and Dating. The Senior Discount Notes shall be
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substantially in the form of Exhibits A-1 and A-2 hereto, which
--------------------
exhibits are part of this Agreement. The Senior Discount Notes may
have notations, legends or endorsements required by law, stock
exchange rule or usage. The Company shall approve the form of the
Senior Discount Notes and any notation, legend or endorsement on
them. Subject to adjustment as provided in Section 6.6(c) hereof,
the Senior Discount Notes shall be issued, and may be transferred
only, in denominations of $100,000 and integral multiples thereof.
The terms and provisions contained in the Senior Discount Notes
shall constitute, and are hereby expressly made, a part of this
Agreement and to the extent applicable, the Company, by its
execution and delivery of this Agreement, expressly agrees to such
terms and provisions and to be bound thereby.
(b) The second paragraph of Section 11.2 of the Agreement is hereby
amended and restated in its entirety as follows:
With respect to the sale and issuance of the Senior Discount Notes,
the Company shall authorize for issuance, upon the execution and
delivery of this Agreement, Senior Discount Notes in an aggregate
principal amount up to $47,250,000. In no case shall the aggregate
principal amount of outstanding Senior Discount Notes exceed
$47,250,000 at any time, except as provided in Section 11.5.
(c) Section 11.10 of the Agreement is hereby amended and restated in
its entirety as follows:
11.10 Record Date. If a record date for purposes of determining the
-----------
identity of Holders of Senior Discount Notes entitled to vote or
consent to any action by vote or consent authorized or permitted
under this
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Agreement is fixed by the Company, such record date shall be 10 days
prior to the first solicitation of such vote or consent.
(c) Section 11.12 of the Agreement is hereby amended and restated in
its entirety as follows:
11.12 Restrictive Legends. Except as otherwise permitted by
-------------------
this Section 11.12, each Unit, and each constituent Senior Discount
Note and Common Stock Purchase Warrant certificate (or Common Stock
certificate issued on exercise thereof), issued pursuant to this
Agreement shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
PURSUANT TO THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO (i) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT,
OR (iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT
RELATING TO SUCH ACT, PROVIDED THAT, IF REQUESTED BY THE COMPANY, AN
OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM AND SUBSTANCE IS
FURNISHED TO THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE.
IN ADDITION, ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER
DISPOSITION OF THIS SECURITY IS RESTRICTED BY, AND THE RIGHTS OF THE
HOLDER OF SUCH SECURITY ARE SUBJECT TO THE TERMS AND CONDITIONS
CONTAINED IN, A SECURITIES PURCHASE AGREEMENT DATED AS
OF_______________, A COMPLETE AND CORRECT COPY OF THE FORM OF WHICH
WILL BE FURNISHED BY THE ISSUER
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TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
PURSUANT TO PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986 RELATING
TO ORIGINAL ISSUE DISCOUNT AND TREASURY REGULATIONS PUBLISHED
THEREUNDER, THE FOLLOWING INFORMATION IS PROVIDED: (1) THIS SECURITY
IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT IN THE AMOUNT OF
$___________ PER $1,000 OF FACE AMOUNT; (2) THE ISSUE PRICE OF THIS
SECURITY IS $_______ PER $1,000 FACE AMOUNT; (3) THE ISSUE DATE OF
THIS SECURITY IS _____________; AND (4) THE YIELD TO MATURITY OF
THIS SECURITY IS _____%.
The Company shall maintain a copy of this Agreement and any
amendments thereto on file in its principal office, and will make
such copy available during normal business hours for inspection to
any party thereto or will provide such copy to the Purchaser upon
its request.
Whenever the legend requirement imposed by this Section 11.12 shall
terminate, as hereinabove provided, the respective holders of
Securities for which such legend requirements have terminated shall
be entitled to receive from the Company, at the Company's expense,
Senior Discount Notes or new Common Stock Purchase Warrant
certificates, as applicable, without such legend.
1.8 AMENDMENTS TO ARTICLE XIII
--------------------------
Section 13.12 of the Agreement is hereby amended and restated in its
entirety as follows:
13.12 Merger. This Agreement, as amended from time to time, and
------
the Senior Discount Notes constitute the entire agreement of the
Company and the Holders and express the entire understanding of the
Company and the Holders with respect to the Senior Discount Notes.
1.9 AMENDMENTS TO EXHIBITS.
----------------------
(a) Exhibit A to the Agreement is hereby amended to be designated A-1
and to add a new Exhibit A-2 in the form set forth in Exhibit 1 hereto.
15
(b) Exhibit C to the Agreement is hereby amended to be designated C-1
and to add a new Exhibit C-2 in the form set forth in Exhibit 2 hereto.
(c) Exhibit D to the Agreement is hereby amended as set forth in
Exhibit 3 hereto.
ARTICLE II
MISCELLANEOUS
2.1. Severability. Any provision of this Agreement that is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
2.2. Successors and Assigns. All covenants, promises and agreements by
----------------------
or on behalf of the respective parties which are contained in this Amendment
shall bind and inure to the benefit of the successors and assigns of all other
parties. The terms and provisions of this Amendment shall inure to the benefit
of and shall be binding upon any assignee or transferee of the Purchaser, and in
the event of such transfer or assignment, the rights and privileges herein
conferred upon the Purchaser shall automatically extend to and be vested in, and
become an obligation of, such transferee or assignee, all subject to the terms
and conditions hereof. In connection therewith, such transferee or assignee may
disclose all documents and information which such transferee or assignee now or
hereafter may have relating to this Amendment, subject to full compliance with
Section 13.9 of the Agreement.
2.3. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAW.
2.4. Service of Process. The Company (a) hereby irrevocably submits
------------------
itself to the jurisdiction of the state courts of the State of New York and to
the jurisdiction of the United States District Court for the Southern District
of New York for the purpose of any suit, action or other proceeding arising out
of or based upon this Amendment or the subject matter hereof or thereof brought
by the Purchaser or its successors or assigns and (b) hereby waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Amendment or the subject matter hereof may not be enforced
in or by such court, and (c) hereby waives any offsets or counterclaims in any
such action, suit or proceeding (other than compulsory counterclaims). The
Company hereby consents to service of process by registered mail at the address
to which notices are to be given. The Company agrees that its submission to
jurisdiction and its consent to service of process by mail is made for the
express benefit of the
16
Purchaser. Final judgment against the Company in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions (a) by
suit, action or proceeding on the judgment, a certified or true copy of which
shall be conclusive evidence of the fact and of the amount of any indebtedness
or liability of the Company therein described or (b) in any other manner
provided by or pursuant to the laws of such other jurisdiction; provided,
--------
however, that the Purchaser may at its option bring suit or institute other
-------
judicial proceedings against the Company or any of the Company's assets in any
state or federal court of the United States or in any country or place where the
Company or such assets may be found.
2.5. Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
--------------------
IN ANY LITIGATION, SUIT OR PROCEEDING, IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AMENDMENT, OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, PROVIDED, HOWEVER, THAT WITH
-------- -------
RESPECT TO ANY COMPULSORY COUNTERCLAIM (I.E., A CLAIM BY ONE PARTY AGAINST
ANOTHER PARTY WHICH IF NOT BROUGHT IN SUCH ACTION WOULD RESULT IN THE PARTY
BRINGING SUCH CLAIM BEING FOREVER BARRED FROM BRINGING SUCH CLAIM), THE PARTY
BRING SUCH CLAIM SHALL HAVE THE RIGHT TO RAISE SUCH COMPULSORY COUNTERCLAIM IN
ANY SUCH LITIGATION.
2.6. Counterparts. This Amendment may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
17
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AGREEMENT
UNITS OF SENIOR DISCOUNT NOTES
AND COMMON STOCK PURCHASE WARRANTS
COMPANY SIGNATURE PAGE
If this Amendment is satisfactory, please so indicate by signing the
applicable attached signature page of this Amendment and delivering such
counterpart to the Company whereupon this Amendment will become binding among
the parties hereto in accordance with its terms.
SILICON GAMING, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Chief Financial Officer
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AGREEMENT
UNITS OF SENIOR DISCOUNT NOTES
AND COMMON STOCK PURCHASE WARRANTS
PURCHASER SIGNATURE PAGE
Accepted and agreed as of the Aggregate Number and
date first written above: Purchase Price of Additional Units
to be Purchased:
B III CAPITAL PARTNERS, L.P., Number of Units: 172.5
a Delaware limited partnership
Comprised of:
By: DDJ Capital III, LLC, Aggregate principal
its General Partner amount of Senior Discount Notes
By: DDJ Capital Management, LLC, to be Purchased: $17,250,000
its Manager
Aggregate Number of
Shares of Common Stock
Purchase Warrants to
By: /s/ Xxxx X. Xxxxxxx be Purchased: 250,000
-------------------------------
Name:
Title: Member Purchase Price: $15,000,000
Address: c/o DDJ Capital Management, LLC
Attn: Xxxxx Xxxxxxxxx Xxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Nominee (name in which the Units are to be registered,
if different than name of Purchaser):
Xxxxxxx Xxxxx & Company FFC: BIII Capital Partners, L.P.
--------------------------------------------------------
(Nominee's Name)
