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EXHIBIT 10.11
MULTIMEDIA GAMES, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated to be
effective as of the final closing under the Offering (as defined below), by and
among MULTIMEDIA GAMES, INC., a Texas corporation (the "Company"), each Holder
(as defined below) and XXXXX, XXXXXXX SECURITIES, INC., as a Holder and as
Agent for the Holders,
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Holders are purchasing from the Company (the "Offering") not
less than 50 Units, nor more than 70 Units, each Unit consisting of (i) 16,667
shares of the Company's Common Stock, $.10 par value (the "Offering Stock"),
and (ii) 16,667 Redeemable Common Stock Purchase Warrants (collectively the
"Offering Warrants"), each entitling the holder thereof to purchase one share
of Common Stock (collectively the "Offering Warrant Shares")
WHEREAS, prior to the effective date of this Agreement, the Company
offered and sold (the "Bridge Offering") 16 Units, each Unit consisting of (i)
a promissory note of the Company in the principal amount of $50,000, and (ii)
22,500 Redeemable Common Stock Purchase Warrants (collectively the "Bridge
Warrants"), each entitling the holder thereof to purchase one share of Common
Stock (collectively the "Bridge Warrant Shares");
WHEREAS, in connection with the Bridge Offering, the Company issued to
designees of the Agent 173,310 Redeemable Common Stock Purchase Warrants
(collectively the "Bridge Placement Warrants") each entitling the holder
thereof to purchase one share of Common Stock (collectively the "Bridge
Placement Warrant Shares");
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WHEREAS, in connection with the Offering, the Company contemplates
issuing to the Agent or its designees 350,000 Redeemable Common Stock Purchase
Warrants (collectively the "Offering Placement Warrants") each entitling the
holder thereof to purchase one share of Common Stock (collectively the
"Offering Placement Warrant Shares");
WHEREAS, the Company is willing to register the Registerable Securities
(as defined below) under the 1933 Act upon the terms and conditions contained
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Certain Definitions
For the purposes of this Agreement, the following terms have the
following meanings:
"Affiliate", with respect to any Person, means any other Person
directly or indirectly controlling, controlled by or under common
control with, such Person. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling",
"controlled by" or "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise.
"Beneficial owner" or "beneficially own" has the meaning given
such term in Rule 13d-3 under the 1934 Act.
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"Business Day" means any day, excluding Saturday, Sunday and any
other day on which commercial banks in Boston, Massachusetts or New
York, New York are authorized or required by law to close.
"Commission" means the Securities and Exchange Commission, and
any successor commission or agency having similar powers.
"Common Stock" means the shares of Common Stock, $.01 par value,
of the Company.
"Holder" means the Holder, any Permitted Transferee of a Holder
(and any subsequent Permitted Transferee) that, in each case, holds
Registrable Securities.
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Permitted Transferee" means any Person that (i) shall be the
registered owner of Registerable Securities in accordance with the terms
thereof, and (ii) shall have executed and delivered to the Company an
executed counterpart of this Agreement and shall have agreed to be bound
hereunder in the same manner and to the same extent as the Holder is
bound hereunder.
"Person" means an individual, a partnership, a joint venture, a
corporation, an association, a trust, an individual retirement account
or any other entity or organization, including a government or any
department or agency thereof.
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"Registrable Securities" means the Bridge Warrants, the Bridge
Warrant Shares, the Bridge Placement Warrants, the Bridge Placement
Warrant Shares, the Offering Stock, the Offering Warrants, the Offering
Warrant Shares, the Offering Placement Warrants and the Offering
Placement Warrant Shares, in each case as adjusted pursuant to the
provisions of the applicable instrument evidencing such securities.
Registrable Securities shall cease to be Registrable Securities when (i)
a registration statement (other than a registration statement on Form
S-8) with respect to the sale of such securities shall have become
effective under the 1933 Act and such securities shall have been
disposed of under such registration statement, (ii) they shall have been
distributed to the public pursuant to Rule 144, (iii) they shall have
been otherwise transferred or disposed of other than to a Permitted
Transferee, or (iv) any transfer or disposition of them to the public
shall not require their registration or qualification under the 1933 Act
or any similar state law then in force, or (v) they shall have ceased to
be outstanding.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Article II of this
Agreement, including, without limitation, all registration and filing
fees (including filing fees with respect to the National Association of
Securities Dealers, Inc.), all fees and expenses of complying with state
securities or "blue sky" laws (including reasonable fees and
disbursements of underwriters' counsel in connection with any "blue sky"
memorandum or survey), all printing expenses, all listing fees, all
registrars' and transfer agents' fees, the fees and disbursements of
counsel for the Company and of its independent public accountants,
including the expenses of any special audits and/or "cold comfort"
letters required by or incident to such performance and compliance;
provided that, "Registration Expenses" shall not include underwriting
discounts and commissions and applicable transfer taxes, if
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any, and any fees and disbursements of counsel retained by the Holders
of Registrable Securities being registered, which shall be borne by the
sellers of the Registrable Securities being registered in all cases.
"Rule 144" means Rule 144 (or any successor provision) under the
1933 Act.
"Rule 144 Transaction" means any Sale of Shares made in reliance
upon Rule 144 (as in effect on the date hereof) that complies with
paragraphs (e), (f) and (g) thereof (as in effect on the date hereof),
regardless of whether at the time of such Sale the seller is entitled to
rely upon paragraph (k) of Rule 144 in connection with the Sale of such
Shares.
"Share" means any share of Common Stock and, unless the context
otherwise requires, any Bridge Warrant Shares and Warrant Shares. Share
shall also mean any equity securities received in exchange for or with
respect to the Common Stock by way of merger, consolidation, exchange,
stock dividend or reorganization or recapitalization involving the
Company in which the Company is the surviving or resulting entity.
"Warrants" means, collectively, the Bridge Warrants, the Bridge
Placement Warrants, the Offering Warrants and the Offering Placement
Warrants.
ARTICLE II
Registration Rights
SECTION 2.1 Registration Upon Demand.
(a) At any time after the earlier of (i) six months from the date of
this Agreement, or (ii) nine months from the date of closing of the Bridge
Offering, the Agent on behalf of the Holders
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or the Holders of a majority in interest of the Registerable Securities, may
make a written demand of the Company for registration with the Commission under
and in accordance with the provisions of the 1933 Act of all or part of their
Registrable Securities (a "Demand Registration"); provided, however, that the
Company need only effect one Demand Registration. Such request shall specify
the aggregate number of the Registrable Securities proposed to be sold and
shall also specify the intended method of disposition thereof. Within ten (10)
days after receipt of such request, the Company shall give written notice (the
"Notice") of such registration request to all other Holders stating that the
Company will include in such registration all Registrable Securities as to
which the Company has received written requests for inclusion therein within
twenty (20) Business Days after the giving of the Notice. Each Notice shall
also specify the number of Registrable Securities requested to be registered
and the intended method of disposition thereof. Within five (5) Business Days
after the expiration of such twenty (20) Business Days, the Company will notify
all the Holders to be included in such registration of the other Holders and
the number of Registrable Securities requested to be included therein.
(b) Participation by Other Parties. No Person other than a Holder
shall be permitted to offer any securities under any Demand Registration unless
(x) such Person is entitled to exercise "piggyback" or incidental registration
rights pursuant to an existing contractual commitments with the Company and (y)
if such contractual commitments permit, the Holders participating in such
Demand Registration and their underwriters, if any, in their sole discretion,
determine that such Demand Registration can accommodate such additional
participation.
(c) Effective Registration and Expenses. The Company shall use its
best efforts to cause any registration made pursuant to this Section 2.1 to be
declared effective as soon as possible; provided that, the Agent or the Holders
of a majority in interest
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of the Registerable Securities to be included in such registration may, by
written notice to the Company prior to such registration being declared
effective, withdraw such demand without prejudice to any future demand made by
the Agent or such Holders pursuant to this Section 2.1. A registration will not
count as a Demand Registration until it has become effective and has remained
effective for the longer of (i) such time as the Warrants are no longer
outstanding, or (ii) a Holder has disposed of its Registerable Securities
pursuant to such registration, or (iii) nine (9) months from the effective date
of such registration. The Company shall pay all Registration Expenses in
connection with a registration made pursuant to this Section 2.1, whether or
not such registration becomes effective or Registrable Securities are sold
thereunder.
(d) Selection of Underwriters. If any Demand Registration is an
underwritten offering, the Agent or the Holders holding a majority of the
Registrable Securities to be registered by the Holders may, at their option,
select and obtain the investment banker or bankers and managing underwriter or
underwriters that will administer the offering, such investment banker or
bankers and managing underwriter or underwriters to be reasonably satisfactory
to the Company.
SECTION 2.2. Incidental Registration.
(a) If the Company at any time proposes to register for its own
account or for the account of a selling shareholder, securities under the 1933
Act on a form and in a manner that would permit registration of Registrable
Securities for sale to the public under the 1933 Act, it will each such time
give prompt written notice to all Holders of Registrable Securities of its
intention to do so, describing such securities and specifying the form and
manner and the other relevant facts involved in such proposed registration
(including, without limitation, whether or not such registration will be in
connection with an underwritten offering of its Common
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Stock and, if so, the identity of the managing underwriter and whether such
offering will be pursuant to a "best efforts" or "firm commitment"
underwriting). Upon the written request of any such Holder of Registrable
Securities delivered to the Company within 20 days after such notice shall have
been given to such Holder (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration under the 1933 Act, as expeditiously as is reasonable, of all
Registrable Securities that the Company has been so requested to register by
the Holders of Registrable Securities, to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered; provided, however, that:
(i) if, at any time after giving such written notice of its
intention to register any of such securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to
each Holder of Registrable Securities that has requested to register
Registrable Securities and thereupon the Company shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith to the extent provided in Section 2.2(b));
(ii) if the registration so proposed by the Company involves an
underwritten offering of the securities to be registered and the managing
underwriter thereof advises the Company that, in its opinion, the number of
securities proposed to be included in such offering by the Company and the
number of shares of Registrable Securities proposed to be included in such
offering by the Holder or Holders thereof should be limited due to market
conditions, the Company may require, by written notice to each such
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Holder that, to the extent necessary to meet such limitation on the number of
shares of Registrable Securities that the Holders are permitted to sell, all
Holders of Registrable Securities proposing to sell shares of Registrable
Securities in such offering shall share pro rata in the number of shares of
Registrable Securities to be excluded from such offering, such sharing to be
based on the respective numbers of shares of Registrable Securities as to which
registration has been requested by such Holders. To the extent any
Registerable Securities are required to be excluded from such underwritten
offering (the "Excluded Securities"), such Excluded Securities shall
nevertheless be included in such registration for sale to the public (but shall
not be a part of the securities sold to the underwriter of such offering) and
the Holders shall agree not to offer or sell the Excluded Securities for a
period of 90 days following the effective date of any such registration;
provided further, that such 90 day period shall be reduced to such shorter
period as shall be necessary to enable the Holder to exercise the Warrant and
sell the underlying warrant shares prior to any redemption of the Warrant
pursuant to the terms thereof.
(iii) the Company shall not be obligated to effect any
registration of Registrable Securities under this Section 2.2 that is
incidental to the registration of any of its securities in connection with any
merger, acquisition, exchange offer, dividend reinvestment plan or stock option
or other employee benefit plan.
(iv) the company shall maintain the effectiveness of any
registration of Registerable Securities effected pursuant to this Section 2.2
until the later of (i) such time as the Warrants are no longer outstanding, or
(ii) a Holder has disposed of its Registerable Securities pursuant to such
registration, or (iii) nine (9) months from the effective date of such
registration.
(b) The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities effected by it pursuant to this
Section 2.2.
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SECTION 2.3 Registration Procedures.
(a) If and whenever the Company is required to use its best efforts
to effect the registration of any Registrable Securities under the 1933 Act as
provided in Section 2.1 and 2.2, the Company will as expeditiously as is
reasonable:
(i) subject to the terms and conditions of this
Agreement, use its best efforts to cause such registration statement to become
effective;
(ii) prepare and file with the Commission such
amendments (including post-effective amendments) and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to comply with
the provisions of the 1933 Act with respect to the disposition of all
Registrable Securities and other securities covered by such registration
statement until the earlier of (A) such time as all such Registrable Securities
and other securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement and (B) the expiration of 270 days from the date such
registration statement first becomes effective;
(iii) furnish to each seller of such Registrable
Securities such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the 1933 Act, such
documents incorporated by reference in such registration statement or
prospectus, and such other documents, as such seller may reasonably request in
order to facilitate the sale or disposition of such Registrable Securities;
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(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or "blue sky" laws of such jurisdictions
as each seller shall reasonably request, and do any and all other acts and
things that may be necessary to enable such seller to consummate the
disposition in such jurisdictions of its Registrable Securities covered by such
registration statement, except that the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to subject itself to taxation
in respect of doing business in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(v) immediately notify each seller of Registrable
Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing or if it is necessary to amend or supplement such
prospectus to comply with law, and at the request of any such seller prepare
and furnish to such seller a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities or securities, such
prospectus shall not include 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 in the light of the circumstances then
existing and shall otherwise comply in all material respects with law and so
that such prospectus, as amended or supplemented, will comply with law;
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(vi) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security Holders, as soon as reasonably practicable, an earnings or financial
statement which shall satisfy the provisions of Section 11(a) of the 1933 Act;
(vii) use its best efforts to list such securities
(including the Warrants) on NASDAQ and each securities exchange on which shares
of Common Stock are then listed, if such securities are not already so listed
and if such listing is then permitted under the rules of such exchange, and
provide a transfer agent and registrar for such Registrable Securities not
later than the effective date of such registration statement; and
(viii) issue to any underwriter to which any Holder of
Registrable Securities may sell such Registrable Securities in connection with
any such registration (and to any direct or indirect transferee of any such
underwriter) certificates evidencing shares of Common Stock or Warrants
without any restrictive legends. The Company may require each seller of
Registrable Securities as to which any registration is being effected to
furnish the Company with such information regarding such seller and the
distribution of such securities as the Company may from time to time reasonably
request in writing and as shall be required by law or by the Commission in
connection therewith.
(b) If requested by the underwriters for any underwritten offering of
Registrable Securities on behalf of a Holder or Holders of Registrable
Securities, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and conditions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities to the effect and to
the extent provided in Section 2.5.
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(c) If any registration shall be in connection with an underwritten
public offering, each Holder of Registrable Securities agrees (whether or not
such Holder has registered Shares in such offering), if so required by the
managing underwriters, not to effect any public sale or distribution (including
any sale pursuant to Rule 144) of Registrable Securities (other than as part of
such underwritten public offering) within 7 days prior to the effective date of
the registration statement with respect to such underwritten public offering or
120 days after the effective date of such registration statement (which 120-day
period shall be extended to 180 days at the request of the managing underwriter
selected by the Company).
(d) The Company agrees, if so required by the managing underwriters
in connection with an underwritten offering of Registrable Securities, not to
effect any public sale or distribution of any of its equity securities or
securities convertible into or exchangeable or exercisable for any of such
equity securities during the 7 days prior to and the 120 days after the
effective date of any registration statement with respect to such underwritten
public offering, except as part of such underwritten offering or except in
connection with a stock option plan, stock purchase plan, savings or similar
plan, or an acquisition, merger or exchange offer.
(e) It is understood that in any underwritten offering of Registrable
Securities in addition to the shares (the "initial shares") the underwriters
have committed to purchase, the underwriting agreement may grant the
underwriters an option to purchase a number of additional shares (the "option
shares") equal to up to 15% of the initial shares (or such other maximum amount
as the National Association of Securities Dealers, Inc. may then permit),
solely to cover over-allotments. Shares proposed to be sold by the Company and
the Holders shall be allocated between initial shares and option shares as
agreed or, in the absence of
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agreement, pro rata in relation to the number of initial shares sold by each.
SECTION 2.4. Preparation; Reasonable Investigation.
In connection with the preparation and filing of each registration
statement registering Registrable Securities under the 1933 Act, the Company
will give the Holders of Registrable Securities on whose behalf such
Registrable Securities are to be so registered and their underwriters, if any,
and their respective counsel and accountants, the opportunity to participate in
the preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have issued a report on its financial
statements as shall be necessary, in the opinion of such Holders and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the 1933 Act. Without limiting the foregoing, each
registration statement, prospectus, amendment, supplement or any other document
filed with respect to a registration under this Agreement shall be subject to
review and reasonable approval by the holders registering Registrable
Securities in such registration and by their counsel.
SECTION 2.5. Indemnification.
(a) In the event of any registration of any Registerable Securities
under the 1933 Act, the Company will, and hereby does, indemnify and hold
harmless, the seller of any Registrable Securities covered by such registration
statement, its directors and officers, each other Person who participates as
an underwriter in the offering or sale of such securities, each officer and
director of each such underwriter, and each other Person, if any, who controls
such seller or any such underwriter within the meaning
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of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
losses, claims, damages, liabilities and expenses, including legal and other
expenses incurred in investigating and defending any such claim, joint or
several, to which such seller or any such director or officer or participating
or controlling Person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
1933 Act, any preliminary prospectus, final prospectus or summary prospectus
included therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Company will reimburse such
seller, and each such director, officer, underwriter and controlling Person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding or (iii) any violation of any rule or regulation promulgated under
the 1933 Act or any other applicable federal or state securities law and
relating to any action or inaction of the Company in connection with such
registration; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company for use in the
preparation thereof by such seller or underwriter, as the case may be. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such seller
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or any such director, officer, underwriter or controlling Person and shall
survive the transfer of such securities by such seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to this
Agreement, that the Company shall have received an undertaking satisfactory to
it from (i) the prospective seller of such securities, to indemnify and hold
harmless the Company in the same manner and to the same extent as set forth in
Section 2.5(a) to the extent that the Company incurs any loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arising out
of or based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company for use in the preparation thereof by such prospective seller, except
that any such prospective seller shall not in any event be liable to the
Company pursuant thereto for an amount in excess of the net proceeds of sale of
such prospective seller's Registrable Securities so to be sold) the Company,
each such underwriter of such securities, each officer and director of each
such underwriter and each other Person, if any, who controls the Company or
any such underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and (ii) each such underwriter of such securities,
to indemnify and hold harmless (in the same manner and to the same extent as
set forth in Section 2.5(a)) the Company, each officer and director of the
Company, each prospective seller, each officer and director of each prospective
seller (and, if such prospective seller is a portfolio or investment fund, its
investment advisors and the directors and officers thereof) and each other
Person, if any, who controls the Company or any such prospective seller within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, with
respect to any statement in or omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus included
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therein, or any amendment or supplement thereto, if such statement or omission
was made in reliance upon and in conformity with written information furnished
by such prospective seller or such underwriter, as the case may be, to the
Company for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such director, officer
or controlling Person and shall survive the transfer of such securities by such
seller.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding (including any governmental
investigation) involving a claim referred to in Section 2.5(a) or (b), such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding provisions of this Section 2.5, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim (in which case, the indemnifying party shall not be liable for the fees
and expenses of more than one counsel for all sellers of Registrable
Securities, or more than one counsel for the underwriters in connection with
any one action or separate but similar or related actions), the indemnifying
party will be entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified, to the extent
that it may wish with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such
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indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof. The indemnifying party shall
not, without the consent of the indemnified party, settle or compromise any
claim or consent to the entry of any judgment which settlement, compromise or
judgment would materially and adversely affect the indemnified party other than
as a result of money damages or other money payments; provided, that, if the
indemnified party shall fail or refuse to consent to such settlement,
compromise or judgment proposed by the indemnifying party and approved by the
person asserting such claim, and a judgment thereafter shall be entered or a
settlement or compromise thereafter shall be effected on terms less favorable
in the aggregate to the indemnified party than the settlement, compromise or
judgment so proposed, the indemnifying party shall have no liability with
respect to money or other damages in excess of those provided for in the
settlement, compromise or judgment so proposed or any costs or expenses related
to such claim arising after the date such settlement, compromise or judgment
was so proposed.
SECTION 2.6. Contribution.
If the indemnification provided for in Section 2.5 is unavailable to the
indemnified party or parties in respect of any losses, claims, damages or
liabilities referred to therein, then each such indemnified party and the
Company shall contribute to the amount of such losses, claims, damages or
liabilities (a) as between the Company and the Holders of Registrable
Securities covered by a registration statement, on the one hand, and the
underwriters, on the other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and such Holders, on the one hand,
and the underwriters, on the other, from the offering of the Registrable
Securities, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and such Holders, on the one hand,
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and of the underwriters, on the other, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations, and (b) as between the Company,
on the one hand, and each Holder of Registrable Securities covered by a
registration statement, on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of each such Holder in connection
with such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by the Company and such
Holders, on the one hand, and the underwriters, on the other, shall be deemed
to be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and such Holders bear to the total underwriting discounts and
commissions received by the underwriters. The relative fault of the Company
and such Holders, on the one hand, and of the underwriters, on the other, shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company and
such Holders or by the underwriters. The relative fault of the Company, on the
one hand, and of each such Holder, on the other, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact relates to information supplied by such party, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 2.6
were determined by pro rata allocation (even if the underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the next
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities referred to
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in the next preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 2.6, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that such underwriter has otherwise paid by reason of such untrue
or alleged untrue statement or omission or alleged omission, and no Holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of such
Holder were offered to the public exceeds the amount of any damages that such
Holder has otherwise paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each Holder's obligation to contribute pursuant
to this Section 2.5 is several in the proportion that the proceeds of the
offering received by such Holder bears to the total proceeds of the offering
received by all Holders and not joint.
SECTION 2.7 Nominees of Beneficial Owners.
In the event that any Registrable Securities are held by a nominee for
the beneficial owner thereof, the beneficial owner thereof may, at its
election, be treated as the Holder of such Registrable Securities for purposes
of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement or any determination of any number or
percentage of shares of Registrable Securities held by any Holder or Holders of
Registrable Securities contemplated by this Agreement. If the beneficial owner
of any Registrable Securities so elects, the
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Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
ARTICLE III
Miscellaneous
SECTION 3.1. Termination. This right of the Agent and the Holders to
request a Demand Registration pursuant to Section 2.1 and the right of the
Holders to request to be included in a registration pursuant to Section 2.2
shall terminate on the fifth anniversary of the effective date of this
Agreement.
SECTION 3.2. Representations. Each of the parties hereto represents
that this Agreement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3.3. Certain Remedies. Without intending to limit the remedies
available to any of the parties hereto, each of the parties hereto agrees that
damages at law will be an insufficient remedy in the event such party violates
the terms hereof and each of the parties hereto further agrees that each of the
other parties hereto may apply for and have injunctive or other equitable
relief in any court of competent jurisdiction to restrain the breach or
threatened breach of, or otherwise specifically to enforce, any of such party's
agreements set forth herein.
SECTION 3.4. Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any such term may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the Company and a majority in interest of the holders of
the Registrable Securities. Each Holder shall be bound by any amendment or
waiver authorized by this Section 3.4, whether or not such Holder shall have
consented thereto.
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SECTION 3.5. Notices. All notices and other communications provided
for herein shall be in writing and shall be delivered by telecopy, by hand or
sent by certified or registered mail, return receipt requested, postage
prepaid, addressed, if to any Holder, to such Holder at such address as such
Holder shall have specified in writing to the party giving any such notice or
sending any such communication), and, if to the Company, to Multimedia Games,
Inc., 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, Attention: Vice
President-Finance, (or to such other address as the Company shall have
specified in writing to the party giving any such notice or sending any such
communication). All such notices shall be conclusively deemed to be received
and shall be effective, (i) if sent by hand delivery, upon receipt, (ii) if
sent by telecopy, upon dispatch thereof, or (iii) if sent by registered or
certified mail, on the third day after the day on which such notice is mailed.
SECTION 3.6. Benefit; Successors and Assigns. Except as otherwise
provided herein, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; provided, however, that this Agreement shall not inure to the benefit
of any Permitted Transferee unless such Permitted Transferee shall have
executed and delivered to the Company an executed counterpart of this Agreement
and shall have agreed to be bound hereunder in the same manner and to the same
extent as Holder is bound hereunder. Holder may not assign any of its rights
hereunder to any Person other than a Permitted Transferee that has complied
with the requirements of the preceding sentence in all respects. Nothing in
this Agreement either express or implied is intended to confer on any person
other than the parties hereto and their respective successors and permitted
assigns, any rights, remedies or obligations under or by reason of this
Agreement.
SECTION 3.7 Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof is
validly asserted as a defense, the successful
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party shall be entitled to recover reasonable attorneys' fees and expenses in
addition to any other available remedy.
SECTION 3.8. Miscellaneous. This Agreement sets forth the entire
agreement and understanding among the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter hereof. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement, regardless of any investigation made by any party
hereto or on such party's behalf. This Agreement shall be construed and
enforced in accordance with and governed by the law of the State of Oklahoma
without regard to the conflict of laws provisions thereof. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized signatories thereunto duly
authorized as of the day and year first above written.
MULTIMEDIA GAMES, INC.
By:
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HOLDER
By:
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Address:
XXXXX, XXXXXXX SECURITIES, INC.
By:
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Address:
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