STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is dated
this 28th day of January, 1997 by and between IGT, a Nevada
corporation (the "Buyer"), and Acres Gaming, Inc., a Nevada
corporation (the "Seller").
WHEREAS, the Buyer desires to purchase and the Seller
desires to sell certain amounts of its Series A Convertible
Preferred Stock (the "Preferred Stock"), as hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the Buyer and the Seller agree as
follows:
1. PURCHASE AND SALE
Subject to the terms and conditions set forth in this
Agreement, at the closing referred to in Section 5 hereof, the
Seller will initially sell and transfer to the Buyer, and the
Buyer may purchase a maximum of 519,481 shares of the Preferred
Stock.
2. TERMS OF THE PREFERRED STOCK
The rights and preferences of the Preferred Stock (including
any Preferred Stock issued in connection with the payment of
dividends, as contemplated below) shall be as set forth in the
Seller's Certificate of Designation, a copy of which is attached
hereto as Exhibit "A".
3. PURCHASE PRICE
The Buyer shall pay to the Seller, as the purchase price for
the Preferred Stock (the "Stock Purchase Price") $9.62 per share.
The stock purchase price shall be paid in the manner provided in
Section 5 hereof.
4. BUYER'S PURCHASE OF ADDITIONAL SHARES
The Buyer may purchase from Seller on the same terms and
conditions set forth in Sections 2 and 3 above, up to 519,480
additional shares of the Preferred Stock, in increments not less
than 103,896 shares, as determined solely by the Buyer, if
purchased on or before August 8, 1997.
5. CLOSING
5.1 Time and Place
The Closing of the transfer and delivery of the documents
and instruments necessary to consummate the purchase and sale
contemplated by this Agreement (the "Closing") shall be held at
the offices of Seller's Counsel on January 28, 1997, or at such
other time or place as the Buyer and the Seller may agree. The
date on which the Closing is actually held hereunder is sometimes
referred to herein as the "Closing
Date". The date or dates, if any, on which the Closing with
respect to the additional shares of Preferred Stock shall occur
is referred to herein as the "Additional Shares Closing Date" and
shall occur five business days after Buyer gives Seller written
notice of its desire to purchase additional share of Preferred
Stock as permitted by Section 4 of this Agreement.
5.2 Conditions of Buyer's Obligations at Initial Closing
The obligations of Buyer under Section 1 of this Agreement
are subject to the fulfillment at or before the Closing Date of
each of the following conditions:
5.2A Representations and Warranties True at Series A Closing
Except for changes contemplated by this Agreement, the
representations and warranties of Seller contained in Section 6
hereof shall be true when made and shall be true on and as of the
Closing Date with the same effect as though such representations
had been made on and as of the Closing Date.
5.2B Performance
Seller shall have performed and complied with all
agreements and conditions contained herein required to be
performed and complied with by it on or before the Closing Date,
and, without limiting the generality of the foregoing, shall have
obtained all consents, approvals, authorizations, registrations
and qualifications required to complete the transactions
contemplated hereby.
5.2C Compliance Certificate
There shall have been delivered to Buyer a certificate,
dated the Closing Date, signed by Seller's President, certifying
that the conditions specified in Sections 5.2A and 5.2B have been
performed and complied with in all respects.
5.2D Proceedings and Documents
All corporate and other proceedings in connection with
the transactions contemplated at the closing and all documents
incident thereto shall be reasonably satisfactory in form and
substance to Buyer.
5.2E Registration Rights Agreement
Buyer and Seller shall enter into a Registration
Rights Agreement in the form of Exhibit "B" hereto.
5.2F Blue Sky
Seller shall have obtained all necessary Blue Sky law
permits and qualifications, or secured an exemption therefrom,
required by any state for the offer and sale of the Preferred
Stock, and the Common Stock issuable upon conversion of the
Preferred Stock.
5.2G Opinion of Counsel
There shall have been delivered to Buyer the opinion of
Seller's counsel dated the Closing Date in the form attached
hereto as Exhibit "C".
5.2H Employment Contract
The Employment Contract dated as of July 1, 1996
between Seller and Xxxx Xxxxx shall be in full force and effect
and shall not have been amended or modified.
5.2I Amendment of Articles of Incorporation
The Articles of Incorporation of Seller shall have been
amended to authorize the issuance of the Preferred Stock and such
amendment shall have received the required approval of the
shareholders of Seller. Seller shall have delivered to Buyer
stock certificate(s) representing 519,481 shares of Preferred
Stock.
5.2J No Prohibition
Neither the consummation nor the performance of this
Agreement will, directly or indirectly (with or without notice or
lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Seller or any person
or entity affiliated with Seller to suffer any material adverse
consequence under (a) any applicable legal requirement or order,
or (b) any legal requirement or order that has been published,
introduced, or otherwise formally proposed by or before any
governmental body, and no proceeding challenging the transaction
contemplated herein shall be pending or threatened.
5.2K Other Agreement(s)
The Seller and Buyer shall have entered into an appropriate
technology agreement(s), which shall be reasonably satisfactory
in form and substance to both parties.
5.3 Conditions of the Seller's Obligations at Initial Closing
The obligations of Seller under Section 1 of this Agreement
are subject to the fulfillment at or before the Closing Date of
each of the following conditions:
5.3A Representations and Warranties True at Series A Closing
The representations and warranties of the Buyer
contained in Section 7 hereof shall be true when made and shall
be true on and as of the Closing Date with the same effect as
though said representations and warranties had been made on and
as of the Closing Date.
5.3B Payment
Buyer shall have made payment to Seller by check or
wire transfer in the amount of $5,000,004.60.
5.3C Performance
Buyer shall have performed and complied with all
agreements and conditions contained herein required to be
performed and complied with by it on or before the Closing Date,
and, without limiting the generality of the foregoing, shall have
obtained all consents, approvals, authorizations, registrations
and qualifications required to complete the transactions
contemplated hereby.
5.3D Compliance Certificate
There shall have been delivered to Seller a
certificate, dated the Closing Date, signed by Buyer's President,
certifying that the conditions specified in Sections 5.3A and
5.3C have been performed and complied with in all respects.
5.3E Proceedings and Documents
All corporate and other proceedings to be conducted by
Buyer in connection with the transactions contemplated at the
closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to Seller.
5.3F No Prohibition
Neither consummation nor the performance of this
Agreement will, directly or indirectly (with or without notice or
lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Seller or any person
or entity affiliated with Seller to suffer any material adverse
consequence under (a) any applicable legal requirement or order,
or (b) any legal requirement or order that has been published,
introduced, or otherwise formally proposed by or before any
governmental body, and no proceeding challenging the transaction
contemplated herein shall be pending or threatened.
5.3G Other Agreement(s)
The Seller and Buyer shall have entered into an appropriate
technology agreement(s), which shall be reasonably satisfactory
in form and substance to both parties.
5.4 Conditions of Buyer's Obligations at Additional Shares
Closing Date(s)
The obligations of the Buyer to purchase additional shares
of Preferred Stock after giving notice of its intention to do so
is subject to the fulfillment at or before the Additional Shares
Closing Date of each of the following conditions each of which
may be waived at its sole discretion.
5.4A Representations and Warranties True at Additional
Shares Closing Date
The representations and warranties of Seller contained
in Section 6 hereof shall be true when made and shall be true on
and as of the Additional Shares Closing Date with the same effect
as though such representations and warranties had been made on
and as of the initial Closing Date, except for changes occurring
since the initial Closing Date, none of which changes shall have
had a material and adverse affect on the business, properties or
prospects of the Seller, and for changes in the capitalization of
Seller occurring as a result of the issuance of the Preferred
Stock.
5.4B Performance
Seller shall have performed and complied with all
agreements and conditions contained herein required to be
performed and complied with by it on or before the Additional
Shares Closing Date.
5.4C Blue Sky
Seller shall have obtained all necessary Blue Sky law
permits and qualifications, or secured an exemption therefrom
required by any state for the offer and sale of the additional
shares of Preferred Stock, and Common Stock issuable upon
conversion of such shares of Preferred Stock.
5.4D Opinion of Counsel
There shall have been delivered to Buyer the opinion of
counsel to Seller, dated the Additional Shares Closing Date,
substantially in the form attached hereto as Exhibit C with
appropriate changes to reflect the fact that additional shares of
Preferred Stock are being issued.
6. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Schedule of Exceptions, attached
hereto as Schedule 6.0, Seller represents and warrants to Buyer
as follows:
6.1 Organization of the Seller; Authority
The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada. The
Seller has all requisite power, authority, and capacity to
execute and deliver this Agreement and all other agreements,
documents, and instruments contemplated hereby and to carry out
all actions required of it pursuant to the terms of this
Agreement, and this Agreement has been duly executed and
delivered by the Seller and constitutes the legal, valid, and
binding obligation of the Seller, enforceable against the Seller
in accordance with its terms.
6.2 Title to Preferred Stock
All of the shares of the Preferred Stock, when duly
authorized and issued to Buyer, will be free and clear of any
security interest, liens, claims, charges, encumbrances of any
kind, or restrictions against the transfer or assignment thereof
imposed by Seller, except as imposed by applicable securities
laws, gaming laws and Section 7.7 and Section 9.2.
6.3 No Conflict
After giving effect to the proposed amendment to the
Articles of Incorporation, and after Seller authorizes the
issuance of the Preferred Stock, neither the execution and
delivery of this Agreement nor the consummation or performance of
it will, directly or indirectly (with or without notice or lapse
of time), contravene, conflict with or result in a violation of
(A) any provision of the organizational documents of the Seller,
or (B) any resolution adopted by the board of directors or the
stockholders of Seller, or (C) any mortgage, indenture, contract,
agreement, instrument, judgment, decree or order, to which Seller
is bound or any statute, rule or regulation applicable to Seller.
6.4 Conformity to Law
The Seller has materially complied with, and is in material
compliance with, (a) all material laws, statutes, governmental
regulations, and all material judicial or administrative tribunal
orders, judgments, writs, injunctions, decrees, or similar
commands applicable to its business (including, without
limitation, any labor, environmental, occupational health,
zoning, or other law, regulation or ordinance); (b) all material
unwaived terms and provisions of all material contracts,
agreements, and indentures to which the Seller is a party, or by
which the Seller is subject; and (c) its charter documents and
Bylaws, each as amended to date. The Seller has not committed,
been charged with, or been under investigation with respect to,
nor does there exist, any material violation of any material
provision of any federal, state, or local law or administrative
regulation in respect of its business.
6.5 Patents, Trademarks, etc.
Seller owns or has the right to use, free and clear of all
liens, charges, claims and restrictions, all trademarks, service
marks, trade names, copyrights, proprietary information, licenses
and rights necessary to its business as now conducted, and will
not, to Seller's knowledge, when so acting, infringe upon or
otherwise act adversely to the right or claimed right of any
person under or with respect to any of the foregoing. Seller has
not received any communications alleging that Seller has violated
or, by conducting its business as proposed, would violate, the
proprietary or intellectual property rights of any other person
or entity and Seller is not aware of any violation or
infringement by a third party of any of Seller's licenses,
trademarks, service marks, trade names, copyrights, trade secrets
or other proprietary rights.
6.6 Registration Rights
Except as set forth in Schedule 6.0 and contemplated by
Section 5.2E of this Agreement, Seller is not under any
obligation to "register" any of its outstanding securities or any
of its securities which may hereafter be issued. For purposes of
this Agreement, the term "register" refers to a registration
effected by filing a registration statement in compliance with
the Securities Act of 1933, as amended or the securities laws of
any state.
6.7 Capitalization
The authorized capital of Seller consists of (or will
consist of prior to the initial Closing Date):
(a) Preferred Stock: 20,000,000 shares of preferred stock, $.01
par value, 1,038,961 of which will have been designated Series A
Convertible Preferred Stock. The rights, privileges and
preferences of the Series A Convertible Preferred Stock will be
as stated in the Certificate of Designation.
(b) Common Stock: 50,000,000 shares of Common Stock, $.01 par
value. As of December 6, 1996, there are 8,071,856 issued and
outstanding shares of Seller's Common Stock.
Except (i) as set forth on Schedule 6.0 hereto and (ii)
with regard to the Preferred Stock to be sold hereunder, no
options, calls, warrants, conversion on privileges, preemptive
rights, rights of first refusal or other commitments or rights,
of any character whatsoever, are outstanding or in existence with
respect to the purchase or other acquisition of any of the
authorized but unissued capital stock of Seller.
6.8 Financial Statements
Seller has delivered to Buyer: (a) audited consolidated
balance sheets as at June 30 in each of the years 1993 through
1996, and the related audited consolidated statements of
operations, stockholders' equity, and cash flows for each of the
fiscal years then ended, together with the reports thereon of
Xxxxxx Xxxxxxxx, independent certified public accountants; and
(b) an unaudited consolidated balance sheet as of September 30,
1996 (the "Interim Balance Sheet") and the related unaudited
statements of operations, stockholders' equity and cash flow for
the nine months then ended, including in each case the notes
thereto. Such financial statements and notes fairly present the
financial condition and the results of operations, changes in
stockholders' equity, and cash flow as at the respective dates of
and for the period referred to in such financial statements, all
in accordance with GAAP, subject, in the case of interim
financial statements, to normal recurring year-end adjustments
(the effect of which will not, individually or in the aggregate,
be materially adverse) and the absence of notes.
6.9 Books and Records
The books of account, minute books, stock record books, and
other records of the Seller, all of which have been made
available to Buyer, are complete and correct and have been
maintained in accordance with sound business practices, including
the maintenance of an adequate system of internal controls. The
minute books contain accurate and complete records of all
meetings held of, and corporate action taken by, the
stockholders, the Board of Directors, and committees of the Board
of Directors, and no meeting of any such stockholders, Board of
Directors, or committee has been held for which minutes have not
been prepared and are not contained in such minute books.
6.10 No Undisclosed Liabilities
The Seller has no material liabilities or obligations of any
nature which are required to be disclosed in financial
statements, including footnotes thereto, prepared in accordance
with GAAP (whether known or unknown and whether absolute,
accrued, contingent, or otherwise ) except for liabilities or
obligations reflected or reserved against in the Balance Sheet as
of June 30, 1996 and current liabilities incurred in the ordinary
course of business since the date thereof.
6.11 Brokers
Except as set forth in the Schedule of Exceptions, the
Seller has not retained, utilized, or been represented by any
broker or finder in connection with the transaction contemplated
by this Agreement.
6.12 Disclosure
(a) The representations and warranties of Seller in this
Agreement, and the reports filed with the Securities and
Exchange Commission ("SEC") since January 1, 1995, taken as
a whole and in light of the circumstances in which they were
made, do not omit to state a material fact necessary to make
the statements herein or therein, not misleading.
(b) There is no fact known to Seller that has specific
application to Seller (other than general economic or
industry conditions) and that materially adversely affects
the business, financial condition, or results of operations
of the Seller (on a consolidated basis) that has not been
set forth in this Agreement or reflected in the SEC filings
of the Seller.
6.13 Consents of Third Parties
Except as set forth in the Schedule of Exceptions, the
Seller has no obligation to secure any consent from any third
party in order to permit the consummation of the transaction
contemplated by this Agreement.
7. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
7.1 Organization and Standing of Buyer
The Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada. The
Buyer has full power and authority under its Certificate of
Incorporation and Bylaws and applicable laws to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. Buyer has taken all corporate action
necessary for the authorization, execution, and delivery of this
Agreement and the other agreements and transactions contemplated
herein, the performance of all obligations of Buyer hereunder and
thereunder and the authorization and delivery of this Agreement
and the other agreements contemplated herein, and this Agreement
and the other agreements constitute valid and legally binding
obligations of Buyer, enforceable in accordance with its and
their terms.
7.2 No Conflict
Neither the execution and delivery of this Agreement nor the
consummation or performance of it will, directly or indirectly
(with or without notice or lapse of time), contravene, conflict
with or result in a violation of (A) any provision of the
organizational documents of Buyer, (B) any resolution adopted by
the board of directors or the stockholders of Buyer, or (C) any
mortgage, indenture, contract, agreement, instrument, judgment,
decree or order, to which Buyer is bound or any statute, rule or
regulations applicable to Buyer.
7.3 Purchase Entirely For Own Account
This Agreement is made with Buyer in reliance upon Buyer's
representation to the Seller, which, by Buyer's execution of this
Agreement, Buyer hereby confirms, that the Preferred Stock to be
received by the Buyer and the Common Stock issuable upon
conversion of the Preferred Stock will be acquired for investment
for Buyer's own account and not with a view to the distribution
of any part thereof, and that Buyer has no present intention of
selling, granting any participation in, or otherwise distributing
the same in a manner contrary to the Securities Act of 1933, as
amended (the "Act"), or applicable state securities laws.
7.4 Certain Proceedings
There is no pending proceeding that has been commenced
against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with this transaction. To Buyer's knowledge, no such proceeding
has been threatened.
7.5 Investment Experience
Buyer represents that it is an "accredited investor" as
defined in Regulation D promulgated under the Act.
7.6 Restricted Securities
Buyer understands that the Preferred Stock and the Common
Stock issuable upon conversion of the Preferred Stock are
characterized as "restricted securities" under the federal
securities laws inasmuch as it is being acquired from the Seller in a
transaction not involving a public offering and that under such laws
and applicable regulations such securities may be resold without
registration under the Act only in certain limited circumstances and
in accordance with the terms and conditions set forth in the legend
described in Section 7.7 below. In this connection, the Buyer
represents that it is familiar with SEC Rule 144, as in effect,
and understands the resale limitations imposed thereby and by the Act.
7.7 Legend
It is understood that the certificates evidencing the
Preferred (and the Common Stock issuable upon conversion of the
Preferred Stock) may bear the following legends:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE
SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS (IF
REQUIRED) COVERING ANY SUCH TRANSACTION INVOLVING SAID
SECURITIES; (ii) THIS CORPORATION RECEIVES AN OPINION OF LEGAL
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION; OR (iii) THIS CORPORATION OTHERWISE
SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO REDEMPTION BY THE COMPANY IN ACCORDANCE WITH ARTICLE
IX OF THE COMPANY'S ARTICLES OF INCORPORATION.
7.8 Residence
For purposes of the application of state securities laws,
the Buyer represents that it is a resident of Nevada.
7.9 No Seller Securities
Neither Buyer nor any affiliate owns any debt or equity
securities, including bank and trade debt, of the Seller.
8. COVENANTS OF SELLER PRIOR TO CLOSING DATE
8.1 Access and Investigation
Between the date of this Agreement and the Closing Date,
Seller will (a) afford Buyer and its affiliates and
representatives full and free access to Seller's personnel,
contracts, books and records, and other documents and data, (b)
furnish Buyer with copies of all such contracts, books and
records, and other existing documents and data as Buyer may
reasonably request, and (c) furnish Buyer with such additional
financial, operating, and other data and information as Buyer may
reasonably request.
8.2 Operation of Seller's Business
Between the date of this Agreement and the Closing Date,
Seller will conduct its business only in the ordinary course of
business.
8.3 Required Approvals
As promptly as practicable after the date of this Agreement,
Seller will make all filings required to be made by it in order
to consummate this Agreement. Between the date of this Agreement
and the Closing Date, Seller will, (a) cooperate with Buyer with
respect to all filings that Buyer elects to make or is required
to make in connection with the purchase, and (b) cooperate with
Buyer in obtaining all consents.
8.4 Notification
Between the date of this Agreement and the Closing Date,
Seller will promptly notify Buyer in writing if Seller becomes
aware of any fact or condition that causes or constitutes a
breach of any of Seller's representations and warranties as of
the date of this Agreement, or if Seller becomes aware of the
occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty
been made as of the time of occurrence or discovery of such fact
or condition.
9. COVENANTS OF BUYER
9.1 Approvals of Governmental Bodies
As promptly as practicable after the date of this Agreement,
Buyer will make all filings required to be made by it to
consummate this Agreement. Between the date of this Agreement and
the Closing Date, Buyer will cooperate with Seller with respect
to all filings that Seller is required to make in connection with
this Agreement, and cooperate with Seller in obtaining all
required consents; provided that this Agreement will not require
Buyer to dispose of or make any change in any portion of its
business or to incur any other burden to obtain a governmental
authorization.
9.2 Purchase of Additional Seller Securities
Except as set forth in Section 4. of this Agreement, after
the date hereof, the Buyer agrees that neither it nor any
affiliate will purchase, directly or indirectly, before the
earliest of (a) five years from the Closing Date or (b) the date
when the number of shares of the Common Stock owned by Xxxx F
Acres is less than 1,000,000 shares (adjusted for any stock
splits or stock dividends after the date hereof), any debt or
equity securities including bank and trade debt, of Seller
without the prior written consent of Seller, such consent not to
be unreasonably withheld. Notwithstanding this provision, the
Buyer may at any time purchase additional equity securities of
the Seller provided that Buyer shall not, without the consent of
the Seller, own more than 20% of the then outstanding Common
Stock of the Seller, including for calculation of the Buyer's
interest, the shares of Common Stock into which the Preferred
Stock owned by the Buyer is convertible at the time of such
purchase.
9.3 Sale of Seller Securities
Buyer shall not, without the prior written consent of
Seller, such consent not to be unreasonably withheld, directly or
indirectly sell, transfer, assign, exchange, convey, donate,
pledge, hypothecate or otherwise dispose of any debt or shares of
the Preferred Stock of Seller. Any such sale shall be of all
shares of the Preferred Stock of Seller then owned by Buyer, and
Seller shall have the right to purchase said securities on the
same terms and conditions Buyer proposes to sell such securities
to a third party. Seller shall have 30 days in which to approve
any sale after receipt of written notice from Buyer (which shall
contain the name of the buyer(s), price and terms) or in which to
exercise its right to purchase said securities.
10. COVENANTS OF SELLER AFTER THE INITIAL CLOSING DATE
Until Buyer owns less than Ten Percent (10%) of the
Preferred Stock or the shares of Common Stock into which such
Preferred is convertible, Seller hereby covenants and agrees as
follows:
10.1 Financial Information
Seller will furnish the following reports to Buyer:
(a) Within 90 days after the end of each fiscal year, a balance
sheet of Seller, as of the end of such fiscal year, and
statements of operations, stockholders' equity and cash flows for
such year, prepared in accordance with generally accepted
accounting principles and setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and certified by independent public accountants
of reputable and recognized national standing selected by Seller;
(b)
Within 45 days after the end of each fiscal quarter, financial statements
of Seller as at the end of such quarter (including a balance sheet,
statements of operations, shareholders' equity and cash flows, in form
prepared in accordance with generally accepted accounting principles
(except for the absence of accompanying notes and subject to normal year-end
adjustments).
(c) Copies of all filings made with the SEC, NASDAQ or any
exchange on which Seller's securities are traded.
10.2 Maintenance of Insurance and Licenses
Seller shall maintain insurance covering its operations that
is customary in scope and amount for entities engaged in similar
businesses. Seller shall maintain its trademarks, service marks,
trade names, copyrights, proprietary information, licenses and
rights necessary to its business as now conducted.
10.3 Compliance with Law
Seller will comply with all laws, statutes, governmental
regulations, and all judicial or administrative tribunal orders,
judgments, writs, injunctions, decrees, or similar commands
applicable to its business (including, without limitation, any
labor, environmental, occupational health, zoning or other law,
regulation or ordinance).
10.4 Indemnification
Seller will indemnify, defend and hold harmless each
representative of Buyer that serves as a director of Seller who
is a party to or is threatened to be made a party in any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, from
all liabilities arising therefrom, including attorneys' fees,
judgments, fines and amounts paid in settlement actually incurred
by the director in connection with any such action, suit or
proceeding; provided, however, that the action of such director
is not determined (by a final judicial determination) to have
been the result of bad faith or deliberately wrongful conduct.
The director shall have the right to select counsel to defend
such action, suits or proceedings, which counsel shall be
reasonably acceptable to Seller. Seller will cause the Bylaws and
Articles of Incorporation of Seller to contain provisions with
respect to limitation of liability and indemnification of
directors to the maximum extent permitted by law.
11. TERMINATION
11.1 Termination Events
This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) By either Buyer or Seller if a material breach of any
provision of this Agreement has been committed by the other
party and such breach has not been waived;
(b) (i) By Buyer if any of the conditions in Section 5.2
has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible
(other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived
such condition on or before the Closing Date; or (ii) by
Seller, if any of the conditions in Section 5.3 has not been
satisfied as of the scheduled Closing or if satisfaction of
such a condition is or becomes impossible (other than
through the failure of Seller to comply with its obligations
under this Agreement) and Seller has not waived such
condition on or before the scheduled Closing;
(c) By mutual consent of Buyer and Seller; or
(d) By either Buyer or Seller if the Closing has not
occurred (other than through the failure of any party
seeking to terminate this Agreement to comply fully with its
obligations under this Agreement) on or before January 31,
1997, or such later date as the parties may agree upon.
11.2 Effect of Termination
Each party's right of termination under Section 11.1 is in
addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant
to Section 11.1, all further obligations of the parties under
this Agreement will terminate, except that the obligations in
Sections 12.1 and 12.13 will survive; provided, however, that if
this Agreement is terminated by a party because of the breach of
the Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's
failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
12. GENERAL
12.1 Expenses
All expenses of the preparation, execution, and consummation
of this Agreement and of the transactions contemplated hereby,
including, without limitation, attorneys', accountants' and
outside advisors' fees and disbursements, shall be borne by the
party incurring such expenses.
12.2 Notices
All notices, demands, and other communications hereunder
shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally, or if
mailed by certified mail, return receipt requested, postage
prepaid, or sent by written telecommunication, as follows:
If to the Seller, to:
Acres Gaming, Inc.
000 X.X. 0xx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxx, Chairman
with a copy to:
XXXXXXX COIE
0000 X.X. 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
If to the Buyer, to:
IGT
0000 Xxxx Xxxx
Xxxx, Xxxxxx 00000
Attention: G. Xxxxxx Xxxxx, President/Chief Operating Officer
with a copy to:
IGT
0000 Xxxx Xxxx
Xxxx, Xxxxxx 00000
Attention: Xxxxx XxXxx, Vice President/General Counsel
12.3 Entire Agreement
This Agreement contains the entire understanding of the
parties, supersedes all prior agreements and understandings
relating to the subject matter hereof, and shall not be amended
except by a written instrument hereafter signed by all of the
parties hereto.
12.4 Governing Law
The validity and construction of this Agreement shall be
governed by the laws of the State of Nevada.
12.5 Sections and Section Headings
All enumerated subdivisions of this Agreement are herein
referred to as "section" or "subsection." The headings of
sections and subsections are for reference only and shall not
limit or control the meaning hereof.
12.6 Assigns
This Agreement shall be binding upon and inure to the
benefit of the heirs and successors of each of the parties.
Neither this Agreement nor the obligations of any party hereunder
shall be assignable or transferable by such party without the
prior written consent of the other party hereto.
12.7 Survival and Materiality of Representations and Warranties
The representations and warranties of the parties hereto
contained in this Agreement or otherwise made in writing in
connection with the transactions contemplated hereby (in each
case except as affected by the transactions contemplated by this
Agreement) shall be deemed to have been relied on by the other
parties hereto and shall survive the Closing and the consummation
of the transactions contemplated hereby for a period of one year.
12.8 Further Assurances
The Seller and the Buyer shall execute and deliver to the
appropriate other party such other instruments as may be
reasonably required in connection with the performance of this
Agreement, and each shall take all such further actions as may be
reasonably required to carry out the transactions contemplated by
this Agreement.
12.9 No Implied Rights or Remedies
Except as otherwise expressly provided herein, nothing
herein expressed or implied is intended or shall be construed to
confer upon or to give any person, firm, or corporation, other
than the Seller and the Buyer and their respective shareholders,
any rights or remedies under or by reason of this Agreement.
12.10 Counterparts
This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.11 Jurisdiction; Service of Process
Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may be
brought against any of the parties in the courts of the State of
Nevada, County of Washoe, or, if it has or can acquire
jurisdiction, in the United States District Court for the
District of Nevada, and each of the parties consents to the
jurisdiction of such, courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection
to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party
anywhere in the world.
12.12 Severability
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and
effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
12.13 Confidential Information
Any information concerning Buyer and its affiliates
furnished to the Seller, or by Seller to Buyer, or any of their
respective officers, attorneys, accountants, consultants,
representatives or agents (collectively, such party's
"Representatives"), in connection with the transactions
contemplated by this Agreement shall be treated as confidential
information. The party so furnished the information (the
"Recipient") shall not disclose such information and shall use
its best efforts to keep its Representatives from disclosing such
information, except that the Recipient may disclose the
confidential information or portions thereof (i) to Recipient's
Representatives who need to know such information for the purpose
of advising the Recipient in connection with the transactions
contemplated by this Agreement; (ii) if, at the time of the
disclosure, the confidential information is generally available
to and known by the public (other than as a result of disclosure
directly or indirectly in violation of any duty of
confidentiality); or (iii) if the information has been
independently acquired or developed by the Recipient without
violating a duty of confidentiality. To the extent that the
Recipient or one of its Representatives may become legally
compelled to disclose any confidential information not
encompassed by (i), (ii), or (iii) above, the Recipient or its
Representative may disclose such information if the Recipient has
used its commercially reasonable efforts, and has afforded the
delivering party the opportunity, to obtain an appropriate
protective order or other satisfactory assurance of confidential
treatment for the information required to be disclosed. In the
event that the transactions contemplated by this Agreement are
not consummated, the Recipient and its Representatives shall
return to the delivering party all written information furnished
by the delivering party.
12.14 No Publicity
Except as provided herein, neither Buyer nor Seller shall
make any public disclosure or publicity release pertaining to the
existence of this Agreement or of the subject matter contained
herein without the consent of the other parties hereto.
Notwithstanding the foregoing, each party shall be permitted to
make such specific disclosures to the public or to governmental
agencies as its counsel shall deem necessary to maintain
compliance with and to prevent violation of applicable federal or
state laws. In the event that either party proposes to issue,
make or distribute any press release, public announcement or
other written publicity or disclosure prior to the Closing Date
that refers to the transaction(s) contemplated herein, the party
proposing to make such disclosure shall provide a copy of such
disclosure to the other parties and shall afford the other
parties reasonable opportunity (subject to any legal obligation
of prompt disclosure) to comment on such disclosure or the
portion thereof which refers to the transactions contemplated
herein prior to making such disclosure.
IN WITNESS WHEREOF, and intending to be legally bound
hereby, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized
officers as an instrument under seal as of the date and year
first above written.
SELLER: ACRES GAMING INCORPORATED
By:/s/ Xxxxxx X. Xxxxxxxxx
Its:President
BUYER: IGT
By:/s/ G. Xxxxxx Xxxxx
Its:President
SCHEDULE 6.0
6.6 Registration Rights
Seller issued Ladenburg, Xxxxxxxx & Co. Inc. ("Ladenburg") a
warrant dated October 9, 1995 (the "Warrant") to purchase 125,000
shares of Seller's common stock at a purchase price of $9.00 per
share. Pursuant to Section 5 of the Warrant, Seller has granted
Ladenburg demand registration rights, and piggy-back registration
rights for the period from September 15, 1998 to September 15,
2000. Seller must pay all expenses incurred in connection with
any registration pursuant to Section 5 of the Warrant, including
attorneys' fees and expenses incurred in connection with such
registration other than underwriting discounts and applicable
transfer taxes.
