Exhibit 4.3
PURCHASE AGREEMENT
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This PURCHASE AGREEMENT (this "Agreement"), dated as of August 2,
2001, by and among Mikohn Gaming Corporation, a Nevada corporation (the
"Company"), and each of the purchasers (individually, a "Purchaser" and,
collectively, the "Purchasers") listed on the Schedule of Purchasers attached as
Exhibit A hereto (the "Purchasers Schedule").
WHEREAS, the Company proposes to issue and sell to the Purchasers
up to an aggregate of 1,500,000 shares of its common stock, par value $.10 per
share (the "Common Stock" and, such shares, the "Common Shares"), subject to the
terms and conditions set forth in this Agreement;
WHEREAS, the Common Shares are being offered and sold to the
Purchasers in a private placement (the "Placement") without registration under
the Securities Act of 1933, as amended (the "Securities Act"), in reliance on an
exemption from the registration requirements under the Securities Act, solely to
(i) persons in the United States whom the Company reasonably believes to be
"qualified institutional buyers," as defined in Rule 144A under the Securities
Act, as such rule may be amended from time to time, and (ii) a limited number of
institutional "accredited investors," as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act, that make certain representations and agreements
to the Company;
WHEREAS, Xxxxxxxxx & Company, Inc. (the "Agent") has been engaged
by the Company to act as exclusive placement agent to the Company in connection
with the Placement; and
WHEREAS, the Company has prepared a preliminary private placement
memorandum, dated July 17, 2001 (the "Preliminary Private Placement Memorandum")
and a final private placement memorandum, dated August 2, 2001 (together with
all amendments and supplements thereto, the "Private Placement Memorandum"),
describing the Placement and setting forth information regarding the Company and
the Common Shares.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
SECTION 1. PURCHASE AND SALE OF THE COMMON SHARES
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1.1 Agreement to Purchase and Sell. Upon the basis of the
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representations, warranties and covenants, and subject to the terms and
conditions set forth in this Agreement and in the Private Placement Memorandum,
at the Closing (as defined hereinafter), the Company agrees to sell to each
Purchaser, and each such Purchaser agrees, severally and not jointly, to
purchase from the Company, the number of Common Shares set forth opposite such
Purchaser's name in the Purchasers Schedule for an aggregate amount in cash
equal to the product (such product, the "Purchase Price") determined by
multiplying (a) the number of Common Shares purchased by such Purchaser by (b)
$5.50.
1.2 Registration Rights Agreement. At the Closing, the Company
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and the Purchasers shall execute and deliver a registration rights agreement
with respect to the Common
Shares, in substantially the form of Exhibit B hereto (the "Registration Rights
Agreement" and, together with this Agreement, the "Operative Agreements").
1.3 Closing. The closing of the transactions contemplated hereby
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(the "Closing") shall take place at the offices of Xxxxxxxxx Traurig, LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on August 10, 2001, or at such other
place or time, or on such other date, as the Purchasers and the Company shall
mutually agree in writing. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
1.4 Delivery and Payment. At the Closing, (a) the Company shall
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deliver or cause to be delivered to each Purchaser (i) a stock certificate or
certificates evidencing the number of Common Shares to be purchased by such
Purchaser pursuant to this Agreement, such stock certificate(s) to be in the
denomination(s) and issued in the name(s) specified to the Company by such
Purchaser, (ii) a copy of the Registration Rights Agreement executed by the
Company and (iii) all other documents, instruments and writings required to be
delivered by the Company to such Purchaser pursuant to this Agreement or
otherwise required in connection herewith, and (b) each Purchaser shall deliver
or cause to be delivered to the Company (i) the Purchase Price, by wire transfer
of immediately available funds to the account designated by the Company, (ii) a
copy of the Registration Rights Agreement executed by such Purchaser and (iii)
all other documents, instruments and writings required to be delivered by such
Purchaser to the Company pursuant to this Agreement or otherwise required in
connection herewith.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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As of the date hereof, the Company hereby represents and warrants
to each Purchaser as follows:
2.1 Incorporation and Organization. The Company (a) is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada; (b) has full corporate power and authority to conduct,
operate and carry on its business and operations as described in the Private
Placement Memorandum, and to manage, use, control, own, lease and operate its
properties and assets; and (c) is duly qualified or licensed to do business as a
foreign corporation and is in good standing in every jurisdiction in which such
qualification or licensing is required, except where the failure to be so
qualified or licensed and in good standing, individually or in the aggregate,
would not have a material adverse effect on the business, prospects, condition
(financial or otherwise), net worth or earnings of the Company and its
subsidiaries, taking the Company and its subsidiaries as a whole (a "Material
Adverse Effect").
2.2 Issuance and Delivery of Shares. The Common Shares have been
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duly authorized and, when issued by the Company and paid for by the Purchasers,
in compliance with the provisions of this Agreement, (a) shall be free and clear
of any and all liens, charges, security interests, options, claims, equitable
interests, pledges, proxies, voting trusts or agreements, encumbrances,
restrictions or adverse interests of any kind and of any nature whatsoever
(collectively, "Liens"), except for such restrictions on transfer or ownership
as set forth in this Agreement or in the Private Placement Memorandum or
otherwise imposed by applicable federal or state securities laws or applicable
gaming laws, (b) shall have been duly authorized and validly issued, (c) shall
be fully paid and nonassessable and (d) shall have been issued in compliance
with all applicable federal and state securities laws and all applicable gaming
laws.
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The issuance and delivery of the Common Shares are not subject to any preemptive
or similar rights.
2.3 Capital Structure. The authorized and outstanding capital
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stock of the Company as of the date hereof is, and as of the Closing Date will
be, as set forth in the Private Placement Memorandum under the caption
"Capitalization." All of the outstanding shares of the Company's capital stock
have been duly authorized and validly issued, are fully paid and nonassessable,
were issued in compliance with all applicable federal and state securities laws
and all applicable gaming laws and are not subject to, and were not issued in
violation of, any preemptive or similar rights. Except as set forth in the
Private Placement Memorandum, there are no outstanding securities, options,
warrants, calls, rights, contracts, commitments, agreements, arrangements,
understandings or undertakings of any kind to which the Company or any of its
subsidiaries is a party, or by which any of them is bound, obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, shares of capital stock or other securities of the
Company or any of its subsidiaries, or any securities convertible into or
exercisable or exchangeable for any shares of capital stock or other securities
of the Company or any of its subsidiaries, or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, contract, commitment, agreement, arrangement,
understanding or undertaking. Except as set forth on Schedule 2.3 of the
Schedule of Exceptions attached as Schedule A hereto (the "Schedule of
Exceptions"), there are no contracts, commitments, agreements, arrangements,
understandings or undertakings of any kind to which the Company or any of its
subsidiaries is a party, or by which any of them is bound, granting to any
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or requiring
the Company to include such securities with Common Shares registered pursuant to
any registration statement.
2.4 Subsidiaries. Each of the subsidiaries of the Company (a) is
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duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (b) has full corporate power and authority to
conduct, operate and carry on its business and operations as described in the
Private Placement Memorandum, and to manage, use, control, own, lease and
operate its properties and assets; and (c) is duly qualified or licensed to do
business and is in good standing in every jurisdiction in which such
qualification or licensing is required, except where the failure to be so
qualified or licensed and in good standing, individually or in the aggregate,
would not have a Material Adverse Effect. All of the outstanding shares of
capital stock of, other securities of or other interests in each of the
Company's subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company, directly or indirectly
through one or more of the Company's subsidiaries, free and clear of any and all
Liens.
2.5 Authorization; Validity of Agreement; Company Action. The
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Company has full corporate power and authority to execute and deliver each of
the Operative Agreements, to perform its obligations under each of the Operative
Agreements and to consummate the Placement and the other transactions
contemplated by each of the Operative Agreements. The execution and delivery by
the Company of each of the Operative Agreements and the consummation by the
Company of the transactions contemplated by each of the Operative Agreements
have been duly authorized by, and each of the Operative Agreements, the
Placement
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and each of the other transactions contemplated by each of the Operative
Agreements have been validly approved by, the requisite vote of the Company's
Board of Directors. No other corporate action or proceeding on the part of the
Company is necessary for the execution and delivery by the Company of the
Operative Agreements, the performance by the Company of its obligations under
the Operative Agreements or the consummation by the Company of the Placement and
the other transactions contemplated by the Operative Agreements. This Agreement
has been duly and validly executed and delivered by the Company and, assuming
due and valid authorization, execution and delivery of this Agreement by each of
the Purchasers, is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
2.6 Consents and Approvals. Assuming the accuracy of the
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representation of each Purchaser set forth in Section 3.3 hereof, except as set
forth on Schedule 2.6 of the Schedule of Exceptions, no registration (including
any registration under the Securities Act) or filing with, or any notification
to, or any approval, permission, consent, ratification, waiver, authorization,
order, finding of suitability, permit, license, franchise, exemption,
certification or similar instrument or document (each, an "Authorization") of or
from, any court, arbitral tribunal, arbitrator, administrative or regulatory
agency or commission or other governmental or regulatory authority, agency or
governing body, domestic or foreign, including without limitation any Indian
tribe or gaming commission, authority or control board (each, a "Governmental
Entity"), or any other person, or under any statute, law, ordinance, rule,
regulation or agency requirement of any Governmental Entity, including without
limitation any gaming regulation or regulatory requirement (each, a "Law"), on
the part of the Company or any of its subsidiaries is required in connection
with the execution or delivery by the Company of the Operative Agreements, the
performance by the Company of its obligations under each of the Operative
Agreements or the consummation by the Company of the Placement and the other
transactions contemplated by the Operative Agreements.
2.7 No Violation
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(a) None of the Company or any of its subsidiaries is in
violation or breach of, or default under, nor has any event occurred that has
given or could give rise (either with or without due notice or the passage of
time or both or the happening or occurrence of any other event (including
through the action or inaction of any person)) to any right of termination,
amendment, cancellation or acceleration or any obligation to pay or repay with
respect to, or has resulted or could result in the loss of any benefit under,
any provision of the articles of incorporation, bylaws or similar organizational
documents or any of the Company or any of its subsidiaries, or (ii) any
indenture, loan agreement, mortgage, guarantee, other indebtedness, lease or
other agreement, contract, instrument, obligation, understanding, arrangement,
plan, proposal, restriction or other commitment to which the Company or any of
its subsidiaries is a party, or by which the Company or any of its subsidiaries
may be bound, or to which any of the respective properties or assets of the
Company or any of its subsidiaries may be subject, or to which any of the Common
Shares may be subject (each, a "Contract"), and which is material to the Company
and its subsidiaries, taking the Company and its subsidiaries as a whole (each
such Contract, a "Material Contract").
(b) None of the execution or delivery by the Company of the
Operative Agreements, the performance by the Company of its obligations under
the Operative
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Agreements, the consummation by the Company of the Placement or any of the other
transactions contemplated by each of the Operative Agreements or the compliance
by the Company with any of the terms of the Operative Agreements will (a)
conflict with, or result in or constitute any violation or breach of or default
under, or give rise (either with or without due notice or the passage of time or
both or the happening or occurrence of any other event (including through the
action or inaction of any person)) to any right of termination, amendment,
cancellation or acceleration or any obligation to pay or repay with respect to,
or result in the loss of any benefit under, any provision of the articles of
incorporation, bylaws or similar organizational documents of the Company or any
of its subsidiaries or any Material Contract; (b) conflict with, or result in or
constitute any violation of, any award, decision, judgment, decree, injunction,
writ, order, subpoena, ruling, verdict or arbitration award entered, issued,
made or rendered by any federal, state, local or foreign government or any other
Governmental Entity (each an "Order"), or any Law, applicable to the Company or
any of its subsidiaries, or to any of their respective properties or assets, or
to any Common Shares; (c) result in the creation or imposition of (or the
obligation to create or impose) any Lien on any of the properties or assets of
the Company or any of its subsidiaries, or on any Common Shares; or (d) conflict
with, or result in or constitute any violation of, or result in the termination,
suspension or revocation of, any Authorization applicable to the Company or any
of its subsidiaries, or to any of their respective properties or assets, or to
any Common Shares, or result in any other impairment of the rights of the holder
of any such Authorization.
2.8 SEC Documents; Financial Statements. The Company has filed
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in a timely manner all required reports, proxy statements, forms, and other
documents with the Securities and Exchange Commission (the "SEC") since January
1, 1996 (collectively, the "SEC Documents"). Each of the SEC Documents, as of
its respective date complied in all material respects with the requirements of
the Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and, except to the
extent that information contained in any SEC Document has been revised or
superseded by a later filed SEC Document filed and publicly available prior to
the date of this Agreement, none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company and its consolidated subsidiaries included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal recurring audit adjustments).
2.9 Intellectual Property. Except as set forth in the Private
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Placement Memorandum, the Company owns (and is the record owner of), or
possesses adequate licenses to use, sell and license, free and clear of all
Liens, the rights to any and all registered and unregistered service marks,
trademarks, trade names, corporate names, trade dress, Internet domain names,
identifying symbols, logos, emblems, signs or insignia, including all goodwill
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associated therewith, and all applications, registrations, and renewals in
connection therewith; all inventions (whether patentable or unpatentable and
whether or not reduced to practice), and all U.S. and foreign patents, patent
applications, and patent disclosures (and all rights related thereto, including
all reissues, divisions, continuations, continuations-in-part, substitutions,
extensions, or renewals of any of the foregoing); all copyrights, and all
applications, registrations, and renewals in connection therewith; and all
confidential information, technology, know-how, inventions, processes, formulae,
algorithms, models and methodologies; and any licenses to use any of the
foregoing (all of the foregoing, collectively, the "intellectual property"),
that are used in the business of the Company as presently conducted and as
described in the Private Placement Memorandum, except where the failure to own,
or be the record owner of, or possess such intellectual property, individually
or in the aggregate, would not have a Material Adverse Effect. Except as set
forth in the Private Placement Memorandum, neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with asserted
rights of others with respect to any of such intellectual property which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling, finding or other Order, would be likely to have a Material Adverse
Effect.
2.10 Litigation. Except as set forth in the Private Placement
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Memorandum, there are no investigations, claims, suits, actions, demands,
proceedings or arbitrations pending or, to the Company's knowledge, threatened
in any court or before or by any other Governmental Entity to which the Company
or any subsidiary of the Company is or could be a party or to which any of their
respective properties or assets are or could be subject, which, individually or
in the aggregate, could have a Material Adverse Effect, nor, to the knowledge of
the Company, is there any Law or Order outstanding against or affecting the
Company or any of its subsidiaries or any of their respective properties or
assets, which, individually or in the aggregate, could have a Material Adverse
Effect. To the knowledge of the Company, no action has been taken and no Law or
Order has been enacted, adopted or issued by any Governmental Entity which
prevents the execution, delivery or performance of this Agreement or the
Placement or the issuance of the Common Shares or suspends the Placement or the
offering, issuance or sale of the Common Shares in any jurisdiction in which the
Common Shares are proposed to be sold. No Order or relief of any nature by any
Governmental Entity has been issued with respect to the Company or any of its
subsidiaries which would suspend the Placement or the offering, issuance or sale
of the Common Shares in any jurisdiction in which the Common Shares are proposed
to be sold.
2.11 Compliance with Laws; Authorizations.
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(a) To the knowledge of the Company, none of the Company or
any of its subsidiaries has violated any foreign, federal, state or local Law or
Order relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), any provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any provisions of the Foreign
Corrupt Practices Act or the rules and regulations promulgated thereunder,
except for such violations which, individually or in the aggregate, would not
have a Material Adverse Effect. To the knowledge of the Company, there are no
costs or liabilities associated with Environmental Laws (including any capital
or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any Authorization, any related
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constraints on operating activities and any potential liabilities to third
parties) or ERISA which, individually or in the aggregate, would be likely to
have a Material Adverse Effect.
(b) Each of the Company and its subsidiaries has such
Authorizations of, and has made all registrations and filings with and notices
to, all Governmental Entities, including under applicable Environmental Laws, as
are necessary to manage, use, control, own, lease and operate its properties and
assets and to conduct, operate and carry on its business and operations, except
where the failure to have any such Authorization or to make any such
registration, filing or notice, individually or in the aggregate, would not have
a Material Adverse Effect. (i) Each such Authorization is in full force and
effect, and each of the Company and its subsidiaries is in full compliance with
all the terms and conditions thereof and with the Laws and Orders of the
Governmental Entities having jurisdiction with respect thereto, (ii) no event
has occurred (including the receipt of notice from any Governmental Entities)
which allows, or after due notice or the passage of time or both would allow,
revocation, suspension or termination of any such Authorization or results, or
after due notice or the passage of time or both would result, in any other
impairment of the rights of the holder of any such Authorization; and (iii) such
Authorizations contain no restrictions that are burdensome to the Company or any
of its subsidiaries, except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the presence
of any such restriction, individually or in the aggregate, would not have a
Material Adverse Effect. To the knowledge of the Company, each of the Company
and its subsidiaries is in full compliance with all Laws and Orders applicable
to the Company or any of its subsidiaries, or to any of their respective
properties or assets, or to any Common Shares, except where the failure to be in
compliance, individually or in the aggregate, would not have a Material Adverse
Effect.
2.12 Related Party Transactions. Except as disclosed in the
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Private Placement Memorandum, no relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers, stockholders, affiliates, customers or suppliers of the
Company or any of its subsidiaries, on the other hand, which would be required
by the Securities Act to be described in the Private Placement Memorandum if the
Private Placement Memorandum were a prospectus included in a registration
statement on Form S-1 filed with the SEC.
2.13 No Material Adverse Change. Except as disclosed in the
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Private Placement Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), subsequent to the date as of which
such information is given in such Private Placement Memorandum, (a) neither the
Company nor any of its subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, that is material to the
Company and its subsidiaries, taking the Company and its subsidiaries as a
whole, (b) there has not been any material change or any development involving
or which could reasonably be expected to involve a material change in the
capital stock of the Company or any of its subsidiaries, or material increase or
any development involving or which could reasonably be expected to involve a
material increase in the short-term or long-term debt of the Company or any of
its subsidiaries and (c) there has not been any material adverse change in the
business, prospects, condition (financial or otherwise), operations, net worth,
earnings, properties, assets, contracts, agreements or otherwise of the Company
and its subsidiaries, taking the Company and its subsidiaries as a whole (a
"Material Adverse Change"), or, to the knowledge of the Company,
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any development involving or which could reasonably be expected to involve a
Material Adverse Change.
2.14 Private Placement Memorandum.
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(a) The Private Placement Memorandum, as of the date
hereof, does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The historical financial statements, together with the
related notes, included in the Private Placement Memorandum have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved and fairly present the consolidated
financial position of the Company and its subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows and changes in
financial position for the periods then ended (subject, in the case of unaudited
statements, to normal recurring audit adjustments). The other financial and
statistical information and data with respect to the Company and its
subsidiaries set forth in the Private Placement Memorandum are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(b) The pro forma, or "as adjusted" (referred to herein as
"pro forma"), financial statements included in the Private Placement Memorandum
have been prepared on a basis consistent with the historical financial
statements of the Company and its subsidiaries, give effect to assumptions used
in the preparation thereof on a reasonable basis and in good faith and fairly
present the historical and proposed transactions contemplated by the Private
Placement Memorandum and comply as to form in all material respects with the
requirements applicable to pro forma financial statements included in
registration statements on Form S-1 under the Securities Act. The other pro
forma financial and statistical information and data with respect to the Company
and its subsidiaries set forth in the Private Placement Memorandum are, in all
material respects, accurately presented and prepared on a basis consistent with
the pro forma financial statements.
2.15 Distribution of Offering Materials; Facilitation of
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Placement. Except as permitted by the Securities Act, the Company has not
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distributed and, prior to the later to occur of the Closing Date and completion
of the distribution of the Common Shares, will not distribute any offering
material in connection with the Placement other than the Preliminary Private
Placement Memorandum and the Private Placement Memorandum. None of the Company
or any affiliate (as defined in Rule 501(b) of Regulation D ("Regulation D")
under the Securities Act) of the Company has directly, or through any agent
(provided that no representation is made as to the Agent or its affiliates or
any person acting on its behalf), (a) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of; any security (as defined in the
Securities Act) which is or will be integrated with the Placement in a manner
that would require the registration of the Common Shares under the Securities
Act or; (b) engaged in or used any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the
Placement, including articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
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2.16 Investment Company Act. The Company is not and, after giving
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effect to the Placement and the application of the net proceeds therefrom as
described in the Private Placement Memorandum, will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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As of the date hereof, each Purchaser severally represents and
warrants to the Company as follows:
3.1 Authority. Such Purchaser has all requisite power and authority
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to execute and deliver each of the Operative Agreements, to perform its
obligations under each of the Operative Agreements and to consummate the
transactions contemplated by each of the Operative Agreements. Such Purchaser
has taken all requisite action to, and no other action or proceeding on the part
of such Purchaser is necessary for, the execution and delivery by such Purchaser
of the Operative Agreements, the performance by such Purchaser of its
obligations under the Operative Agreements or the consummation by such Purchaser
of the transactions contemplated by the Operative Agreements. This Agreement has
been duly and validly executed and delivered by such Purchaser and, assuming due
and valid authorization, execution and delivery of this Agreement by the
Company, is a valid and binding obligation of such Purchaser and is enforceable
by the Company against such Purchaser in accordance with its terms.
3.2 Consents and Approvals. No registration or filing with, or any
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notification to, or any Authorization of or from, any Governmental Entity or any
other person, on the part of the Purchaser is required in connection with the
execution or delivery by such Purchaser of the Operative Agreements, the
performance by such Purchaser of its obligations under the Operative Agreements
or consummation by such Purchaser of the transactions contemplated by the
Operative Agreements.
3.3 Investment Experience and Intent. Such Purchaser has read the
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information set forth under the caption "Notice to Investors" in the Private
Placement Memorandum and hereby makes in this Agreement each of the
acknowledgements, representations, warranties and agreements forth under the
caption "Notice to Investors" in the Private Placement Memorandum. Such
Purchaser acknowledges that the Company and others will rely upon the truth and
accuracy of such acknowledgments, representations, warranties and agreements and
hereby consents to such reliance. In addition, any sale by any Purchaser of the
Common Shares will be based on an independent investment decision by such
Purchaser reached at the time of such sale.
3.4 No Legal, Tax or Investment Advice. Such Purchaser understands
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that nothing in the Preliminary Private Placement Memorandum, the Private
Placement Memorandum, the Operative Agreements or any other materials presented
to such Purchaser in connection with the Placement or the purchase and sale of
the Common Shares constitutes legal, tax or investment advice. Such Purchaser
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed to be necessary or appropriate in connection with its
purchase of the Common Shares.
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SECTION 4. CONDITIONS
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4.1 Conditions to Closing of the Purchasers. Each Purchaser's
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obligation to purchase the Common Shares at the Closing is subject to the
satisfaction, or waiver by such Purchaser, of the following conditions:
(a) Representations and Warranties. The representations and
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warranties of the Company set forth in this Agreement shall be true and correct
in all material respects (except for those qualified as to materiality or a
Material Adverse Effect, which shall be true and correct) as of the date of this
Agreement and as of the Closing Date (except to the extent that such
representation or warranty speaks of an earlier date, in which case such
representation or warranty shall be true and correct in all material respects
(or if qualified as to materiality or a Material Adverse Effect, true and
correct) as of such date) as though made on and as of the Closing Date. Such
Purchaser shall have received a certificate signed on behalf of the Company by
the Chief Executive Officer and the Chief Financial Officer of the Company to
such effect.
(b) Performance of Obligations of Company. The Company shall
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have performed in all material respects all agreements and covenants required to
be performed by it under this Agreement prior to the Closing Date. Such
Purchaser shall have received a certificate signed on behalf of the Company by
the Chief Executive Officer and the Chief Financial Officer of the Company to
such effect.
(c) Opinion of Company and the Company's Counsel. Each Purchaser
--------------------------------------------
shall have received (i) an opinion dated the Closing Date from Xxxxxxxxx
Xxxxxxx, LLP, counsel to the Company, in the form of Exhibit C hereto, and (ii)
an opinion dated the Closing Date from the General Counsel of the Company, in
the form of Exhibit D hereto.
(d) Registration Rights Agreement. The Company shall have
-----------------------------
executed and delivered to each of the Purchasers the Registration Rights
Agreement.
4.2 Conditions to Closing of the Company. The Company's obligation
------------------------------------
to issue and sell the Common Shares at the Closing is subject to the
satisfaction, or waiver by the Company, of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of each Purchaser set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date (except to the extent that such representation or warranty speaks
of an earlier date, in which case such representation or warranty shall be true
and correct in all material respects as of such date) as though made on and as
of the Closing Date.
(b) Performance of Obligations of the Purchasers. Each of the
--------------------------------------------
Purchasers shall have performed in all material respects all agreements and
covenants required to be performed by it under this Agreement prior to the
Closing Date.
(c) Registration Rights Agreement. Each of the Purchasers shall
-----------------------------
have executed and delivered to the Company the Registration Rights Agreement.
10
SECTION 5. RESTRICTIONS ON TRANSFER OF SHARES
----------------------------------
5.1 Restrictions on Transferability. The Common Shares may not be
-------------------------------
offered, sold or otherwise transferred except in compliance with the
registration requirements of the Securities Act and any other applicable
securities laws, or pursuant to an exemption therefrom, and in each case in
compliance with the terms of this Agreement and the restrictions set forth under
the caption "Notice to Investors" in the Private Placement Memorandum. The
Company shall be entitled to give stop transfer orders to its transfer agent
with respect to the Common Shares in order to enforce the foregoing
restrictions.
5.2 Restrictive Legend. Each certificate representing the Common
------------------
Shares will contain a legend substantially to the following effect (in addition
to any legends required under applicable securities laws).
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE EXPIRATION DATE
(THE "RESALE RESTRICTION TERMINATION DATE") OF THE PERIOD PROVIDED
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION
THERETO) AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION (SUCH PERIOD TO BE MEASURED FROM THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY)), EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, (D) PURSUANT TO OFFERS AND SALES TO FOREIGN
PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND WITHOUT DIRECTED
SELLING EFFORTS WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501 (a) (1), (2), (3)
OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
11
OR FOR OFFER OF SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRANSFER AGENT AND IN EACH CASE IN ACCORDANCE WITH
APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER APPLICABLE
JURISDICTION. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
SECTION 6. MISCELLANEOUS
-------------
6.1 Survival of Representations and Warranties. All
------------------------------------------
representations, warranties, covenants and agreements (except covenants and
agreements which are expressly required to be performed and are performed in
full on or before the Closing Date) contained in this Agreement shall survive
the Closing for three years, except that (i) Section 2.11 shall survive until
the end of the applicable statutes of limitations, and (ii) Sections 2.2 and 2.3
and this Section 6.1 shall survive indefinitely.
6.2 Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed sufficiently given and served for all purposes
(a) when personally delivered or given by telex or machine-confirmed facsimile,
(b) one business day after a writing is delivered to a national overnight
courier service or (c) three business days after a writing is deposited in the
United States mail, first class postage or other charges prepaid and registered,
return receipt requested, in each case, addressed as follows (or at such other
address for a party as shall be specified by like notice): (i) in the case of
the Company, to Mikohn Gaming Corporation , Attention: President, 000 Xxxxx
Xxxx, Xxx Xxxxx, XX 00000, (000) 000-0000 (Facsimile No.), and (ii) in the case
of any Purchaser, at the address for such Purchaser as set forth in the
Purchasers Schedule.
6.3 Amendments and Waivers. No modifications or amendments to, or
----------------------
waivers of, any provision of this Agreement may be made, except pursuant to a
document signed by the Company and the holders of a majority of the outstanding
Common Shares issued in the Placement.
6.4 Interpretation. When a reference is made in this Agreement to
--------------
Sections, paragraphs, clauses or Exhibits, such reference shall be to a Section,
paragraph, clause or Exhibit to this Agreement unless otherwise indicated. The
words "include," "includes," and "including"
12
when used herein shall be deemed in each case to be followed by the words
"without limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement has been negotiated
by the respective parties hereto and their attorneys and the language hereof
will not be construed for or against any party. The phrases "the date of this
Agreement," "the date hereof," and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to August 2, 2001. The words
"hereof," "herein," "herewith," "hereby" and "hereunder" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
6.5 Expenses. Each party shall pay all costs and expenses incurred
by it in connection with the execution and delivery of this Agreement and the
transactions contemplated hereby, including fees of legal counsel.
6.6 Further Assurances. Each party to this Agreement shall do and
------------------
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
6.7 No Third-Party Beneficiaries. No person or entity not a party
----------------------------
to this Agreement shall be deemed to be a third-party beneficiary hereunder or
entitled to any rights hereunder. All representations, warranties or agreements
of any Purchaser contained in this Agreement shall inure to the benefit of the
Company.
6.8 Successors and Assigns. The provisions of this Agreement shall
----------------------
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto. Notwithstanding the foregoing, neither any Purchaser nor
the Company shall assign or delegate any of its rights or obligations under this
Agreement.
6.9 Entire Agreement. This Agreement and all other documents
----------------
required to be delivered pursuant hereto constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
documents, agreements and understandings, both written and verbal, among the
parties with respect to the subject matter hereof and the transactions
contemplated hereby.
6.10 Severability. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable under present or future laws, then, if
possible, such illegal, invalid or unenforceable provision will be modified to
such extent as is necessary to comply with such present or future laws and such
modification shall not affect any other provision hereof; provided that if such
provision may not be so modified such illegality, invalidity or unenforceability
will not affect any other provision, but this Agreement will be reformed,
construed and enforced as if such invalid, illegal or unenforceable provision
had never been contained herein.
6.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF
NEW YORK.
13
6.12 Gaming Laws. Each of the provisions of this Agreement is
-----------
subject to and shall be enforced in compliance with applicable gaming laws.
6.13 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to each of the other parties, it being understood that
all parties need not sign the same counterpart.
(signature page follows)
14
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
MIKOHN GAMING CORPORATION
By:__________________________________
Name:
Title:
_____________________________________
as a PURCHASER
By:_________________________________
Name:
Title:
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
EXHIBIT A
---------
SCHEDULE OF PURCHASERS
----------------------
Name and Address Number of
of Purchaser Common Shares
--------------------------------------- ----------------------------
EXHIBIT B
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
B-A-1
