Exhibit 10.26
MIKOHN GAMING CORPORATION
Registration Rights Agreement
-----------------------------
This Registration Rights Agreement (this "Agreement") is made and
entered into as of October 22, 2003, by and among Mikohn Gaming Corporation,
a Nevada corporation (the "Company"), and the investors signatory hereto
(each a "Purchaser" and collectively, the "Purchasers").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of September 25, 2003, among the Company and the
Purchasers (the "Purchase Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the respective meanings set forth in this Section
1:
"Effective Date" means the date that the Registration Statement
filed pursuant to Section 2(a) is first declared effective by the Commission.
"Effectiveness Date" means the earlier of (a) the 90th calendar
day following the Closing Date; provided, that, if the Commission reviews and
has comments to the filed Registration Statement, then the Effectiveness Date
under this clause (a) shall be the 120th day following the Closing Date, and
(b) the fifth Trading Day following the date on which the Company is notified
by the Commission that the Registration Statement will not be reviewed or is
no longer subject to further review and comments. "Effectiveness Date" shall
also have the meaning specified in Section 2(b).
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Date" means the 30th calendar day following the Closing
Date.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities who has awarded such
Registrable Securities from a Purchaser or a permitted successor or assignee
of such Purchaser pursuant to Section 5.6 of the Purchase Agreement.
"Indemnified Party" shall have the meaning set forth in Section
6(c).
"Indemnifying Party" shall have the meaning set forth in Section
6(c).
"Lead Purchaser" shall mean ▇▇▇▇▇▇▇▇▇ & Company Inc..
"Losses" shall have the meaning set forth in Section 6(a).
"Proceeding" means an Action, demand, claim, litigation, suit,
investigation, arbitration or proceeding (including, without limitation, a
partial proceeding, such as a deposition), whether pending or threatened.
"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"Registrable Securities" means (i) the Shares, (ii) the Warrants
and (iii) the shares of Common Stock issuable upon exercise of the Warrants.
"Registration Statement" means the initial registration statement
required to be filed in accordance with Section 2(a) and any additional
registration statement(s) required to be filed under Section 2(b), including
(in each case) the Prospectus, amendments and supplements to such
registration statements or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statements.
"Rule 144" means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued to the
Purchasers pursuant to the Purchase Agreement.
"Special Counsel" means Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
"Warrants" means the Warrants issued or issuable under the
Purchase Agreement.
2. Registration.
(a) On or prior to the Filing Date, the Company shall prepare
and file with the Commission a Registration Statement covering the resale of
all Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be
on another appropriate form for such purpose) and shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement) the "Plan of Distribution"
attached hereto as Annex A. The Company shall cause the Registration
Statement to be declared effective under the Securities Act as soon as
possible but, in any event, no later than the Effectiveness Date, and shall
use its best efforts to keep the Registration Statement continuously
effective under the Securities Act until the earlier of (i) the date that all
Registrable Securities covered by such Registration Statement have been sold,
(ii) the second anniversary of the later of (A) the Closing Date or (B) the
last date a warrant is exercised or (iii) such earlier date when all
Registrable Securities covered by the Registration Statement have been sold
or may be sold without volume restrictions pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter
to such effect, addressed and acceptable to the Company's transfer agent and
the affected Holders (the "Effectiveness Period").
(b) If for any reason the Commission does not permit all of the
Registrable Securities to be included in the Registration Statement filed
pursuant to Section 2(a), or for any other reason any Registrable Securities
are not permitted by the Commission to be included in a Registration
Statement filed under this Agreement, then the Company shall prepare and file
as soon as possible after the date on which the Commission shall indicate as
being the first date or time that such filing may be made, but in any event
by the 30th day following such date, an additional Registration Statement
covering the resale of all Registrable Securities not already covered by an
existing and effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415, on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on
Form S-3, in which case such registration shall be on another appropriate
form for such purpose). Each such Registration Statement shall contain
(except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) the "Plan of
Distribution" attached hereto as Annex A. The Company shall cause each such
Registration Statement to be declared effective under the Securities Act as
soon as possible but, in any event, no later than the 90th day following the
date on which the Company becomes aware that such Registration Statement is
required under this Agreement (each such 90th day, the "Effectiveness Date"
for such Registration Statement), and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act during
the entire Effectiveness Period.
(c) If: (i) a Registration Statement is not filed on or prior
to its Filing Date, or (ii) a Registration Statement is not declared
effective by the Commission on or prior to the required Effectiveness Date,
or (iii) after the Effective Date, such Registration Statement ceases to be
effective and available to the Holders as to all Registrable Securities to
which it is required to cover at any time prior to the expiration of its
Effectiveness Period, (any such failure or breach being referred to as an
"Event," and for purposes of clauses (i), (ii) or (iii) the date on which
such Event occurs, being referred to as "Event Date"), then, in addition to
any other rights available to the Holders: (x) on each such Event Date the
Company shall pay to each Holder an amount in cash, as liquidated damages and
not as a penalty, equal to 0.5% of the aggregate Investment Amount of such
Holder pursuant to the Purchase Agreement; and (y) on each monthly
anniversary of each such Event Date thereof (if the applicable Event shall
not have been cured by such date) until the applicable Event is cured, the
Company shall pay to each Holder an amount in cash, as liquidated damages and
not as a penalty, equal to 1% of the aggregate Investment Amount paid by such
Holder pursuant to the Purchase Agreement. If the Company fails to pay any
liquidated damages pursuant to this Section in full within seven days after
the date payable, the Company will pay interest thereon at a rate of 12% per
annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Holder, accruing daily from the date such liquidated
damages are due until such amounts, plus all such interest thereon, are paid
in full. The liquidated damages pursuant to the terms hereof shall apply on
a pro rata basis for any portion of a month prior to the cure of an Event.
(d) Notwithstanding anything in this Agreement to the contrary,
the Company may, by written notice to the Purchasers, suspend the
effectiveness of a Registration Statement after the Effective Date thereof
and/or require that the Purchasers immediately cease the sale of shares of
Common Stock pursuant thereto and/or defer the filing of any subsequent
Registration Statement for up to 45 consecutive days (the "Deferral Period")
in any 90-day period without paying liquidated damages, if the Company
determines in good faith, by appropriate resolutions or action by one or more
of its executive officers, that (A) it would be materially detrimental to the
Company (other than as relating solely to the price of the Common Stock) to
file a Registration Statement at such time and (B) it is in the best
interests of the Company to defer proceeding with such registration at such
time; provided, however, that in the event the disclosure relates to a
previously undisclosed proposed or pending material business transaction, the
disclosure of which the Company determines in good faith would be reasonably
likely to impede the Company's ability to consummate such transaction, the
Company may extend a Deferral Period from 45 days to 60 days without paying
liquidated damages pursuant to Section 2(c); provided further, however, that
Deferral Periods may not total more than 90 days in the aggregate in any
twelve-month period. Upon receipt of such notice, each Purchaser shall
immediately discontinue any sales of Registrable Securities pursuant to such
registration until such Purchaser has received copies of a supplemented or
amended Prospectus or until such Purchaser is advised in writing by the
Company that the then-current Prospectus may be used and has received copies
of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. In no event, however, shall
this right be exercised to suspend sales beyond the period during which (in
the good faith determination of the Company's Board of Directors) the failure
to require such suspension would be materially detrimental to the Company.
3. Gaming Consents.
Prior to filing the Registration Statement, the Company and its
Subsidiaries shall make or obtain all Permits necessary or desirable for the
consummation of the Transactions contemplated hereby, including without
limitation, the required approvals of the Mississippi Gaming Commission, the
Louisiana Gaming Commission, the Nevada Gaming Commission, the Nevada State
Gaming Control Board, or the ▇▇▇▇▇ County Liquor and Gaming Licensing Board,
or any other applicable gaming authorities, for the pledge of, or any
negative pledge on, the stock of Casino Excitement, Inc., Games of Nevada,
Inc., MGC, Inc., Mikohn International, Inc., Mikohn Nevada, or Progressive
Games, Inc.
4. Registration Procedures
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Not less than three Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or
supplement thereto, the Company shall furnish to the Holders and the Special
Counsel copies of all such documents proposed to be filed which documents
(other than those incorporated or deemed to be incorporated by reference)
will be subject to the review of the Lead Purchaser and the Special Counsel.
The Company shall not file a Registration Statement or any such Prospectus or
any amendments or supplements (other than periodic reports required under the
Exchange Act) thereto to which the Holders of a majority of the Registrable
Securities or the Special Counsel shall reasonably object in writing within
two Trading Days of receipt.
(b) (i) Subject to Section 2(d), prepare and file with the
Commission such amendments, including post-effective amendments, to each
Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously effective as to
the applicable Registrable Securities for its Effectiveness Period and
prepare and file with the Commission such additional Registration Statements
in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible, to any comments received from the Commission with
respect to each Registration Statement or any amendment thereto and, as
promptly as reasonably possible provide the Lead Purchaser true and complete
copies of all correspondence from and to the Commission relating to such
Registration Statement that would not result in the disclosure to the Holders
of material and non-public information concerning the Company; and (iv)
comply in all material respects with the provisions of the Securities Act and
the Exchange Act with respect to the Registration Statements and the
disposition of all Registrable Securities covered by each Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the Purchasers thereof set forth in the
Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders and the Special Counsel as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than three
Trading Days prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the
day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on
such Registration Statement (the Company shall provide true and complete
copies thereof and all written responses thereto to each of the Holders and
the Special Counsel that pertain to the Holders as a Selling Stockholder or
to the Plan of Distribution, but not information which the Company believes
would constitute material and non-public information); and (C) with respect
to each Registration Statement or any post-effective amendment, when the same
has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose; (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made
in such Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to such Registration Statement, Prospectus or
other documents so that, in the case of such Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) Use its reasonable best efforts to avoid the issuance of,
or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) Furnish to the Lead Purchaser, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto, and
all exhibits to the extent requested by such Person (other than those
previously furnished or incorporated by reference) promptly after the filing
of such documents with the Commission.
(f) Promptly deliver to each Holder, without charge, as many
copies of each Prospectus or Prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Persons may reasonably
request. The Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto to the extent permitted by
federal and state securities laws and regulations.
(g) Prior to any public offering of Registrable Securities, use
its reasonable best efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Purchaser requests in writing,
to keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by the Registration Statements;
provided, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer
in securities in any jurisdiction in which it is not so qualified or to
subject itself to material taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to be delivered to a transferee pursuant to the Registration Statements,
which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
such Holders may request.
(i) Upon the occurrence of any event described in Section
4(c)(v), as promptly as reasonably possible, prepare a supplement or
amendment, including a post-effective amendment, to the affected Registration
Statements or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, no Registration
Statement nor any Prospectus will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(j) The Company may require each selling Holder to furnish to
the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, the controlling person thereof.
5. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be
borne by the Company whether or not any Registrable Securities are sold
pursuant to a Registration Statement. The fees and expenses referred to in
the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and
expenses (A) with respect to filings required to be made with any Trading
Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company and up to $5,000 of the fees and disbursements of
Special Counsel in the aggregate, (v) Securities Act liability insurance, if
the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of
the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange as required hereunder.
6. Indemnification.
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents, investment advisors
and employees of each of them, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement
thereto, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for
use therein, or to the extent that such information relates to such Holder or
such Holder's proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder expressly for
use in the Registration Statement, such Prospectus or such form of Prospectus
or in any amendment or supplement thereto (it being understood that the
Holder has approved Annex A hereto for this purpose) or (2) in the case of an
occurrence of an event of the type specified in Section 4(c)(ii)-(v), the use
by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of an Advice or an amended or
supplemented Prospectus, but only if and to the extent that following the
receipt of the Advice or the amended or supplemented Prospectus the
misstatement or omission giving rise to such Loss would have been completely
corrected by such Advice or the amended or supplemented Prospectus and the
Holder fails to deliver such Advice or amended or supplemented Prospectus.
The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with
the transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and against all Losses, as incurred, arising solely out of or based solely
upon any untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon any
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent, but only to the
extent that, (1) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in the Registration Statement (it being
understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified
in Section 4(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder
of an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been completely corrected by such Advice or the amended or
supplemented Prospectus and the Holder fails to deliver such Advice or
amended or supplemented Prospectus. In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the
gross proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party shall promptly
notify the Person from whom indemnity is sought (the "Indemnifying Party") in
writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses; (2) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). It being
understood, however, that the Indemnifying Party shall not, in connection
with any one such Proceeding be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified Parties, which
firm shall be appointed by a majority of the Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) that are to be paid by the Indemnifying Party
pursuant to this Section shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the Indemnifying Party;
provided, that the Indemnifying Party may require such Indemnified Party to
undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section
6(a) or 6(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 6(c), any reasonable attorneys' or other reasonable fees
or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if
the indemnification provided for in this Section was available to such party
in accordance with its terms.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder
shall be required to contribute, in the aggregate, any amount in excess of
the total amount for which the Registrable Securities were sold by such
Purchaser. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may
have to the Indemnified Parties.
7. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees
that, in the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be adequate.
(b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 6(b) hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other
than the Registrable Securities, and the Company shall not after the date
hereof enter into any agreement providing any such right to any of its
security holders. Except as and to the extent specified in Schedule 7(b)
hereto, the Company has not previously entered into any agreement granting
any registration rights with respect to any of its securities to any Person
which have not been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant
to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in
Section 4(c) or (e), such Holder will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until such
Holder's receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the "Advice") by
the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement. The Company may provide appropriate
stop orders to enforce the provisions of this paragraph.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each
as promulgated under the Securities Act) or their then equivalents relating
to equity securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in connection with
stock option or other employee benefit plans, then the Company shall send to
each Holder written notice of such determination and, if within fifteen days
after receipt of such notice, any such Holder shall so request in writing,
the Company shall include in such registration statement all or any part of
such Registrable Securities such holder requests to be registered, subject to
customary underwriter cutbacks applicable to all holders of registration
rights.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively
to the rights of certain Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities to which such waiver or consent
relates, provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Agreement later than 6:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the Trading Day following the date of mailing,
if sent by nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as follows:
If to the Company: Mikohn Gaming Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Mayer, Brown, ▇▇▇▇ & Maw
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Purchaser: To the address set forth under such Purchaser's
name on the signature pages hereto.
If to Special Counsel: Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any other Person who is then the registered Holder:
To the address of such Holder as it appears in
the stock transfer books of the Company
or such other address as may be designated in
writing hereafter, in the same manner, by such
Person.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company
may not assign its rights or obligations hereunder without the prior written
consent of each Holder. Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted to a Purchaser under
the Purchase Agreement.
(i) Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one and
the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York, Borough of Manhattan (the
"New York Courts"). Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally
subject to the jurisdiction of any New York Court, or that such Proceeding
has been commenced in an improper or inconvenient forum. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any Proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding
shall be reimbursed by the other party for its attorney's fees and other
costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(n) Independent Nature of Purchasers' Obligations and Rights.
The obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert
with respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to protect and enforce its
rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any proceeding for such purpose.
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SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
MIKOHN GAMING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASER TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
By:_____________________________________
Name:
Title:
Address for Notice:
Facsimile No.:
Attn:
Annex A
Plan of Distribution
The Selling Stockholders and any of their pledgees, donees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be
at fixed or negotiated prices. The Selling Stockholders may use any one or
more of the following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
- an exchange distribution in accordance with the rules of the applicable
exchange;
- privately negotiated transactions;
- short sales
- broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser)
in amounts to be negotiated. The Selling Stockholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares or Warrant Shares owned by
them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell shares of Common Stock
from time to time under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act of 1933 amending the list of selling stockholders to include
the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.
Upon the Company being notified in writing by a Selling Stockholder
that any material arrangement has been entered into with a broker-dealer for
the sale of Common Stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of
shares involved, (iii) the price at which such the shares of Common Stock
were sold, (iv)the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did
not conduct any investigation to verify the information set out or
incorporated by reference in this prospectus, and (vi) other facts material
to the transaction. In addition, upon the Company being notified in writing
by a Selling Stockholder that a donee or pledge intends to sell more than 500
shares of Common Stock, a supplement to this prospectus will be filed if then
required in accordance with applicable securities law.
The Selling Stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event,
any commissions received by such broker-dealers or agents and any profit on
the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholders
has represented and warranted to the Company that it does not have any
agreement or understanding, directly or indirectly, with any person to
distribute the Common Stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
