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EXHIBIT 10.29
PLACEMENT AGENT AGREEMENT
This Placement Agent Agreement is made this ___ day of January, 1996, by and
between Multimedia Games, inc. (The "Company") and G-V capital corp. ("G.V.").
RECITALS
WHEREAS, the Company intends to offer and sell (the "Offering") up to
550,000 shares of its Common Stock, par value $.01 per share (the "Shares"), to
accredited investors (as (as such term is defined in Rule 501(a) of Regulation
D. Promulgation under the Securities Act of 1933, as amended (the "Securities
Act"), and has prepared certain offering materials in connection therewith (the
"Offering Materials").
WHEREAS, the Offering Materials consist of (i) the Company's Form 10-KSB
for the fiscal year ended September 30, 1995 as filed with the Securities and
Exchange Commission (the "SEC"), (ii) the Company's Executive Summary dated
January 26, 1996, (iii) the Company's Summary of Risk Factors dated January 26,
1996, and (iv) the Company's Summary of Offering dated January 26, 1996;
WHEREAS, the Company desires that G-V act as the exclusive placement
agent for the Offering and, in connection therewith, the Company has agreed to
pay G-V certain commissions and expenses and to issue G-V certain shares of
Common Stock;
WHEREAS, G-V desires to act as placement agent for the Offering, subject
to the terms and conditions set forth herein; and
WHEREAS, the parties desire to establish an escrow in connection with
the Offering;
AGREEMENTS
NOW, THEREFORE, for the mutual promises set forth herein and other good
and valuable consideration, the parties hereto agree as follows:
1. Placement Agent.
(a) G-V shall act as placement agent in connection with the Offering
and use its commercially reasonable efforts, subject to the Securities Act, the
Securities Exchange Act of 1934, as amended, and all applicable state
securities laws, to solicit prospective investors for the Offering.
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(b) As consideration for G-V's agreement to act as placement agent in
connection with the Offering, the Company agrees to pay to G-V (i) a seven and
one-half (7-1/2%) commission ($.15 per Share) for each Share (the "Commission")
and (ii) a two and one-half percent (2-1/2%) non-accountable expense allowance
($.05 per Share) for each Share (the "Expense Allowance"). The Commission and
the Expense Allowance will be payable on all Shares sold or otherwise issued in
the Offering.
(c) In addition to the consideration set forth in Section 1(b) above,
as closing, the Company shall issue to G-V a number of shares of Common Stock
equal to seven and one-half percent (7-1/2%) of the number of Shares sold or
otherwise issued in the Offering.
2. ESCROW.
(a) All subscription proceeds for Shares subscribed to be purchased in
the Offering (the "Funds") shall be held by G-V in a segregated interest-
bearing account at NorthFork Bank, Long Island, New York (or such other bank
selected by G-V). The Funds will not be released until all of the conditions
listed in Section 2)c) below have occurred or are otherwise waived in writing
by G-V.
(b) Provided that the conditions listed in Section 2(c) below have
occurred or are otherwise waived and provided further that G-V has received
(and the Company has accepted) subscription documents and Funds relating to the
sale of at least 150,000 Shares, the company and G-V will proceed with an
initial closing of the Offering. The date on which such initial closing occurs
shall be the "First Closing Date." On the First closing Date, G-V shall wire
transfer to the company's account, pursuant to wiring instruction provided in
writing by the Company to G-V, the Funds relating to the subscriptions accepted
by the Company as of the First Closing Date. The Company shall promptly
thereafter issue, or cause to be issued, to such subscribers certificates
representing the requisite Shares subscribed for. Subsequent closings of the
Offering shall occur on the same basis when and as the Company and G-V mutually
agree and provided that the conditions listed in Section 2(c) below have
occurred or are otherwise waived. Each date on which a closing occurs shall be
a "Closing Date."
(c) Listed below are the conditions to each closing, including, without
limitation, the initial closing to occur on the First Closing Date:
(ii) The Company shall have accepted the subscriptions held in escrow.
Such acceptance to be evidenced by the Company's execution of the
subscription documents.
(ii) There shall have been furnished to G-V a certificate, dated the
applicable Closing Date (as described below) and addressed to G-
V, signed by Xxxxxx X. Xxxxxx, Chairman of
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the Board and Chief Executive Officer of the company, and by
Xxxxxxxxx X. Roll, Vice President, Treasurer and Secretary of the
Company to the effect that: (i) The representations and
warranties of the Company contained in this Agreement are true
and correct, as if made at and as of such Closing Date, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be complied with or satisfied at or
prior to such Closing date; and (ii) the signer of said
certificate have carefully examined the Offering Materials and
any amendments or supplements thereto, and such documents do not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(iii) Since the date hereof, the Company shall not have sustained any
loss or interference with its business from fire, explosion,
accident, malfunction, flood or other calamity, or shall have
become a party to or the subject of any litigation, which in each
case is materially adverse to the Company, nor, except as
accurately described in the Offering Materials (exclusive of any
amendment or supplement thereto), shall there have been any
material adverse change, or any development involving a
prospective material adverse change in or affecting the condition
(financial or other), business prospects, net worth or results of
operations of the Company taken as a whole, whether or not
arising in the ordinary course of business.
(iv) On or prior to the First Closing Date (as defined below), G-V
shall receive from each person or entity referred to in Section
3(z) hereof the letters contemplated by Section 3(z) hereof.
(v) The Company shall have furnished G-V with such additional
documents and certificates as G-V or counsel to G-V may
reasonably request.
All such certificates, letters and documents shall be in compliance with the
provisions hereof only if they are satisfactory in form and substance to G-V
and its counsel. If any of the conditions specified in this Section 2(c) shall
not have been fulfilled when and as required by this agreement, G-V shall have
no obligation to transfer any Funds to the Company and may, in its sole
discretion, return such Funds to subscribers in the Offering. Any such return
of Funds to subscribers shall be without liability of G-V to the Company or to
any stockholder, officer, director, employee or creditor of the Company.
Notice of such return of Funds to subscribers shall be given to the Company in
writing, or by telephone and confirmed in writing.
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3. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to, and agrees with, G-V that:
(a) The Offering Materials do not contain an 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 not misleading.
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Texas with full
corporate power and authority to own or lease its properties and conduct its
business as described in the Offering Materials and is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the character of the business conducted by it or the properties owned
or leased by it make such qualification necessary, except where the failure to
be so qualified will not, individually or int he aggregate, have a material
adverse effect on the condition (financial or other), business prospects, net
worth or results or operations of the Company taken as a whole.
(c) All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. Excepts as described in
the Offering Materials (including the notes to the financial statements
included therein), there are (i) no outstanding warrants or options issued or
granted by the Company to purchase any shares of the capital stock of the
Company, (ii)no preemptive rights or other rights to subscribe for or to
purchase, or, any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the certificate of incorporation, by-laws or other
governing documents of the Company or any agreement or other instrument to
which the Company is a party or by which any of them may be bound, and (iii) no
person has any rights for or relating to the registration of any shares of
Common Stock or other securities of the Company. The capitalization of the
Company as of January 26, 1996, after giving effect to the offering of the
Shares, is as set forth in the Offering Materials and the Shares conform to the
description thereof contained in the Offering Materials. The Company has not
direct or indirect subsidiaries.
(d) The Shares have been duly authorized and, when issued and
delivered, the Shares will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights and no personal liability will
attach to the ownership thereof.
(e) The Shares which may be issuable pursuant to Section 3(cc) hereof
have been reserved for issuance and, when issued in accordance with the terms
of Section 3(cc) hereof, will be duly
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authorized, validly issued, fully paid and non-assessable and free of
preemptive rights and no personal liability will attach to the ownership
thereof.
(f) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder;
and such agreements have been duly authorized, executed and delivered by the
Company and constitute the valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally.
(g) Neither the execution, delivery or performance of this Agreement by
the Company nor the consummation by the Company of the transactions
contemplated hereby will conflict with, or constitute a breach or violation of,
or a default under, the certificate of incorporation, by-laws or other
governing documents of the Company, or any material agreement, indenture,
mortgage, deed of trust or other instrument to which the Company is a party o
by which it si bound, or to which any of its properties or assets is subject,
or any statute, law, governmental or administrative rule or regulation, order
or decree of any court or any governmental agency or body having jurisdiction
over the Company or any of its properties, or result in the creation or
imposition of any lien, charge, claim, encumbrance, security interest or
restriction whatsoever upon any right, property or asset of the Company.
Except for (i) permits and similar authorizations required to be obtained by
the Company under applicable state securities or "Blue Sky" laws and (ii) such
permits, consents and authorizations which have been obtained, no consent,
approval, authorizations or order of any court, governmental agency or body or
financial institution is required in connection with the consummation by the
Company of the transactions contemplated by this Agreement. The Offering
complies with an exemption from the registration requirements of the Securities
Act.
(h) The Company has not sustained, since the date of the latest audited
financial statements included int he Offering Materials, any loss, interruption
or interference with its business or its principal assets from fire, explosion,
flood, accident, malfunction or other calamity, whether or not covered by
insurance, or from any court or governmental action, order or decree (by its
terms applicable to the Company), which loss or interference would be material
with respect to the Company; and, since the respective dates as of which
information is given in the Offering Materials, (i) the Company has not
incurred any material liability or obligation, direct or contingent, or entered
into any material transaction not in the ordinary course of business, (ii) the
Company has not purchased any of its capital stock, or declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock,
or declared, paid or otherwise made any dividend or distribution of any kind on
its capital stock, and (iii) there has not been any change in the capital stock
of the Company or any material change in the short-
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term or long-term debt of the Company or any other material adverse change, or
any development involving a prospective material adverse change, in or
affecting the condition (financial or other), business prospects, net worth or
results or operations of the Company taken as a whole, except in each case as
described in the Offering Materials.
(i) The financial statements included as a part of the Offering
Materials present fairly, in all material respects, the financial conditions
and results of operations of the Company, at the dates and for the periods
indicated and, except as noted therein, have been prepared in the conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(j) The Company has good and marketable title to all real property
owned by it and owns or has valid rights to use all personal property (which is
material to its businesses), free and clear of all liens, encumbrances and
defects except as described in the Offering Materials and except such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company; and any property
or equipment, real, personal or mixed, and buildings held under lease by the
Company are held under valid, subsisting and enforceable leases with such
exceptions as are OT material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company.
(k) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which it is engaged; the Company has not
been refused any insurance coverage sought or applied for; and the Company has
no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition (financial or other),
business prospects, net worth or results of operations of the Company taken as
a whole.
(l) The Company owns or possesses adequate rights to use all patents,
trademarks, service marks, trade names, copyrightable works and licenses (and
any authorizations or permits) necessary, in each case, for the conduct of its
business. The Company has no reason to believe that the conduct of its
business will conflict with, nor has any knowledge of any claim that will
conflict with, the rights of others in respect thereof.
(m) Except as described in the Offering Materials, there are no legal
or governmental proceedings pending to which the Company is a party or of which
any property of the Company is the subject with may reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), business prospects, net worth or results of
operations of the
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Company taken as a whole; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by any other party, except in each case as described in the Offering
Materials.
(n) To the best of the Company's knowledge, no labor dispute with the
employees of the Company exists or is threatened or imminent that could result
in a material adverse change in the condition (financial or other), business
prospects, net worth or results of operations of the Company taken as a whole.
(o) No relationship, direct or indirect, exists between or among the
Company on the one hand and the directors, officers, shareholders, customers or
suppliers of the Company on the other hand, except as described in the Offering
Materials.
(p) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder, and no "reportable event" (as defined in ERISA and
the regulations and published interpretations thereunder) has occurred with
respect to any "employee benefit plan" (as defined in ERISA and the regulations
and published interpretations thereunder) of the Company, and the Company has
not incurred or expects to incur liability under Title IV of ERISA.
(q) The Company has filed, or has obtained currently effective
extensions with respect to, all federal, state and local tax returns required
to be filed through the date hereof and all such returns are true, correct and
complete in all material respects. The Company has paid, or has obtained
currently effective extensions with respect to, all taxes due with respect to
all such federal, state and local tax returns, and no tax deficiency has been,
nor does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company, is reasonably likely, individually or in
the aggregate, to have a material adverse effect on the condition (financial or
other), business prospects, net worth or results of operations of the Company
taken as a whole. To the best of the Company's knowledge, there is no pending
or threatened action, audit, investigation or other proceeding regarding the
assessment against, or collection from, the Company of any taxes.
(r) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with managements authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements in accordance with generally accepted accounting principles and to
maintain accountability for its assets, (C) access to its accounts and
financial assets is permitted only
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in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(s) The Company is not (i) in violation of its certificate of
incorporation, by-laws or other governing documents, (ii) in default in any
respect, and no event has occurred which, with notice or lapse of time or both,
would constitute such default, in the due performance or observance of any
term, covenant or condition contained in any agreement, indenture, mortgage,
deed of trust or other instrument to which it is a party or by which is bound,
or to which any of its property or assets is subject, or (iii) in violation in
any respect of any federal or state law or regulation, or any other statute,
law, governmental or administrative rule or regulation, order or decree of any
court or governmental agency or body to which it or its property is subject,
except for any such violation or default referred to in (ii) and (iii) above
which would not, individually or in the aggregate, have material adverse effect
on the condition (financial or other), business prospects, net worth or results
of operations of the Company taken as a whole.
(t) Except as described in the Offering Materials, the Company
possesses all material certificates, authorizations and permits issued by the
appropriate federal or state regulatory authorities necessary to conduct its
businesses, and the Company has not received any notice of proceedings relating
to the suspension, revocation or modification of any such certificate,
authorization or permit or the imposition of any fine or penalty with respect
to such certificate, authorization or permit, which individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the operations of the Company or its
condition (financial or other), business prospects, net worth or results of
operations taken as a whole.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of its securities to facilitate the sale or resale thereof.
(v) The Company shall furnish promptly to G-V and to G-V's counsel such
number of copies of the Offering Materials in such quantities as G-V may from
time to time reasonably request.
(w) If, prior to the final closing of the Offering, any event occurs as
a result of which the Offering Materials as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances then existing, not misleading, the Company shall promptly notify
G-V and shall
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prepare and furnish without charge to G-V as many copies as necessary of an
amended Offering Materials or a supplement to the Offering Materials which will
correct such statement or omission.
(x) The Company shall use its best efforts to take or cause to be taken
all necessary action and furnish to whomever G-V may reasonably direct such
information as may be required in qualifying the Shares for sale under the laws
of such jurisdictions within the United States as G-V shall designate, and
shall continue such qualifications in effect for as long as may be necessary
for completion of the distribution of the Shares in accordance with the terms
hereof; except that in no event shall the Company be obligated in connection
therewith to qualify to do business in any jurisdiction where it is not now so
qualified nor to take any action that will subject it to general service of
process in any jurisdiction where it is not now so subject.
(y) The Company shall not, during the twelve (12) month period
following the Effective Date (as defined below), except with respect to
issuance of a maximum of 817,682 shares of Common Stock relating to options
previously granted, offer for sale, sell, grant any option, right or warrant
with respect to, or otherwise dispose of, any Shares or shares of Common Stock
or any other securities convertible into, or exchangeable or exercisable for,
shares of Common Stock (or announce its intention to undertake any of the
foregoing), otherwise than in accordance with the Offering Materials, or in
connection with Section 3(cc) hereof) or with the prior written consent of G-V,
which consent shall not be unreasonably withheld; provided, however, that,
subject to the following sentence, the Company may offer for sale, sell, or
grant options, rights or warrants with respect to, shares of Common Stock at a
per share price in excess of $2.00, without the prior written consent of G-V.
Notwithstanding anything to the contrary contained in this Section 3(y), the
Company shall not file any registration statement on Form X-0, Xxx X-0 or Form
S-8 or make any sales of the Company's securities pursuant to Regulation S,
without the prior written consent of G-V, which consent shall not be
unreasonably withheld.
(z) The Company shall cause each director and officer of the Company,
and shall use its best efforts to cause each current shareholder known to the
Company who beneficially holds 5% or more of the Common Stock of the Company,
to furnish to G-V, on or prior to the First Closing Date, a letter or letters,
in form and substance satisfactory to counsel for G-V, pursuant to which each
such person or entity shall agree not to offer for sale, sell, grant any
option, right or warrant with respect to, or otherwise dispose of, any shares
of Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock (including, without limitation, Shares)
(or announce its intention to undertake any of the foregoing), from the date
hereof until the date eighteen (18) months after the Effective Date, except
with the prior written consent of G-V.
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(aa) There are no statutes, regulations, contracts, indentures,
mortgages, loan agreements, notes, leases, instruments or other documents which
are material to the business of the Company, other than those described or
referred to in the Offering Materials.
(bb) There are not contracts, agreements or arrangements (written or
oral) which are material to the business of the Company, other than those
described or referred to in the Offering Materials.
(cc) The Company shall prepare and file with the SEC a registration
statement ("Registration Statement") with respect to the Shares not later than
90 days from the First Closing Date (the "Filing Deadline"). The Company shall
prepare and file such amendments and supplements to the Registration Statement
as may be necessary to keep the Registration Statement effective until all the
Shares have been sold pursuant thereto or until the Shares are no longer, by
reason of Rule 144(k) under the Securities Act or any other rule of similar
effect, required to be registered for the resale thereof. The Company shall
use its best efforts to cause the Registration Statement to become effective
and shall diligently pursue such effectiveness. The date on which the
Registration Statement is declared effective by the SEC shall be referred to as
the "Effective Date." The Company shall provide, at the Company's sole cost
and expense, G-V and its counsel, with copies of all filings, correspondence,
and other non-privileged documents, relating to the Registration Statement and
its amendments. The Company shall not enter into any registration rights,
underwriting or private placement arrangement which will conflict with the
Company's obligations under this Section 3(cc). In the event that the Company
fails to file the Registration Statement with the SEC by the Filing Deadline,
the Company shall issue to each of the purchasers of Shares in the Offering
one-tenth of a share of Common Stock for each Share purchased in the Offering
for no additional consideration. In the event that the Company fails to file
the Registration Statement with the SEC within 90 days after the Filing
Deadline, the Company shall issue to the purchasers of Shares in the Offering
an additional one-tenth of a share of Common Stock for each Share purchased in
the Offering for no additional consideration. In the event that the Company
fails to file the Registration Statement with the SEC within 180 days after the
Filing Deadline, the Company shall issue to the purchasers of Shares in the
Offering an additional one-tenth of a share of Common Stock for each Share
purchased in the Offering for no additional consideration and the Company shall
be obligated to issue to the purchasers of Shares in the Offering an additional
one-tenth of a share of Common Stock for each subsequent 90-day period which
passes without the Registration Statement being filed with the SEC.
4. Expenses. The Company shall pay or cause to be paid (a) all expenses
(including stock transfer taxes) incurred in connection with the delivery to
investors in the Offering of the Shares; (b) all fees and expenses (including,
without limitation, fees and expenses of the Company's accountants and counsel,
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but excluding fees and expenses of counsel for G-V, except as provided below)
in connection with the preparation, printing, and delivery of the Offering
Materials and any amendments or supplements thereto and "blue Sky" clearance of
the foregoing: (c) any applicable "Blue Sky" listing or other fees; (d) the
cost of printing certificates representing the Shares; (e) the cost and charges
of any transfer agent or registrar; (f) the cost of the escrow contemplated by
Section 2 above; and (g) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section. It is understood, however, that, except as
expressly provided in this Agreement, G-V shall pay all of its own costs and
expenses, including the fees of its counsel, and any expenses incurred in
connection with G-V's performance hereunder. In the event that G-V's counsel
is required or requested to perform legal services on behalf of the Company or
legal services normally the responsibility of Company counsel, then the Company
will be responsible for the payment of G-V counsel's reasonable legal fees and
expenses relating to such legal services performed on the Company's behalf.
5. Indemnification.
(a) The Company shall indemnify and hold harmless G-V from and against
any loss, claim, damage or liability (or any action in respect thereof), joint
or several, to which G-V may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or ins based upon (i) failure to comply with the
registration requirements of the Securities Act, (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Offering
Materials, or any amendment or supplement thereto, or in any blue sky
application or other document executed by the Company or based upon written
information furnished by the Company filed in any state or other jurisdiction
in order to qualify any or all of the Shares under the securities laws thereof
(any such application, document or information being hereinafter referred to as
a "Blue Sky Application"), (iii) the omission or alleged omission to state in
the Offering Materials, or any amendment or supplement thereto, or in any Blue
Sky Application, a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (iv) any action or inaction by
the Company in connection with the transactions contemplated by this Agreement
which is in violation of, or non-compliance with, the Securities Act or the
securities acts of any state or jurisdiction (regardless of whether a Blue Sky
Application in such state or jurisdiction was filed), and shall reimburse G-V
promptly upon demand for any legal or other expenses as reasonably incurred by
G-V in connection with investigating, preparing to defend or defending against
or appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, notwithstanding the possibility that payments for
such expenses might later be held to be improper, in which case such payments
shall be promptly refunded.
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(b) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have, and shall
extend, upon the same terms and conditions, to each person, if any, who
controls G-V within the meaning of the Securities Act or any officer, director,
stockholder or partner or any authorized agent of G-V (including, without
limitation, G-V's legal counsel); and the obligations of G-V under this Section
5 shall be in addition to any liability that G-V may otherwise have, and shall
extend, upon the same terms and conditions, to each officer and director of the
Company.
(c) Promptly after receipt by any indemnified party under subsection
(a) or (b) above of notice of any claim or the commencement of any action, the
indemnified party shall notify the Company in writing of the claim or the
commencement of that action; provided, however, that the failure to so notify
the Company shall not relieve it from any liability which it may have under
this Section 5 except to the extent it has been prejudiced in any material
respect by such failure or from any liability which it may have to an
indemnified party otherwise than under this Section 5. If any such claim or
action shall be brought against any indemnified party, and such indemnified
party, and such indemnified party shall notify the Company thereof, the Company
shall be entitled to participate therein and, to the extent that it wishes to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the Company to the indemnified party of
its election to assume the defense of such claim or action, the Company shall
not be liable to the indemnified party under this Section 5 for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; except
that G-V shall have the right to employ counsel to represent it and other
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; except that G-V shall have the right to employ counsel
to represent it and other indemnified parties who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by them
against the Company under this Section 5 if, in G-V's reasonable judgment, it
is advisable for them to be represented by separate counsel, and in that event
the reasonable fees and expenses of such separate counsel shall be paid by the
Company.
6. Breaches and Remedies. In the event that the Company, its officers or
directors breach any of the covenants or agreements contained in this
Agreement, and G-V shall prevail in an action to enforce this Agreement,
whether by specific performance or for damages relating to such breach or
otherwise, then the Company hereby agrees that it shall be responsible for the
payment or reimbursement of all reasonable legal fees and disbursements of
counsel in connection with the investigation, prosecution and litigation
relating to the enforcement of any provisions of this Agreement, and all other
related expenses of G-V in connection therewith.
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7. Survival of Certain Provisions. The agreements contained in Sections 1,4,
5 and 6 hereof, and the representations, warranties and agreements of the
Company contained in Section 3 hereof, shall survive the sale of Shares to
investors in the Offering and the closing of escrow hereunder and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any indemnified party.
8. Notices. Except as otherwise provided in this Agreement, all statements,
requests, notices and agreements hereunder shall be in writing, and (a) if to
the Company, shall be delivered or sent by mail, telex or facsimile
transmission to 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, Attn: Xxxxxxxxx
X. Roll; and (b) if to G-V, shall be delivered or sent by mail, telex or
facsimile transmission to 000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxxx.
9. Parties. This Agreement shall inure to the benefit of and be binding upon
the Company and G-V and their respective successors and assigns. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except as set forth in Section 5(b). Nothing in this Agreement
shall be construed to give any person, other than the persons referred to in
Section 5(b), any legal or equitable right, remedy or claim under or in respect
of this Agreement, shall not include any purchaser of Shares in the Offering
merely by reason of such purchase; provided, however, that purchasers of Shares
in the Offering shall benefit from the terms of Section 3(cc) and shall have
the right to enforce such terms against the Company.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
11. Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of
the date first set forth above.
MULTIMEDIA GAMES, INC..
By:
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Its:
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G-V CAPITAL CORP.
By:
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Its:
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