Purchase Agreement (2006)Full Document 

Start of Preview
                                                               EXECUTION VERSION

                          INTERNATIONAL GAME TECHNOLOGY

                      2.60% CONVERTIBLE DEBENTURES DUE 2036

                                   ----------

                               PURCHASE AGREEMENT

                                                               December 14, 2006

Banc of America Securities LLC
   As Representative of the several Purchasers
   named in Schedule I hereto (the "Representative")
c/o Banc of America Securities LLC
9 West 57th Street, 21st Floor
New York, NY 10019

Ladies and Gentlemen:

     International Game Technology, a Nevada corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$825,000,000 principal amount of the 2.60% Convertible Debentures, convertible
into common stock par value $0.00015625 ("Stock") of the Company, specified
above (the "Firm Securities") and, at the election of the Purchasers, up to an
aggregate of $75,000,000 additional principal amount of such Debentures (the
"Optional Securities") (the Firm Securities and the Optional Securities which
the Purchasers elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Securities"). The Securities will have the benefit of a
registration rights agreement (the "Registration Rights Agreement"), to be dated
as of December 20, 2006, between the Company and the Purchasers. Banc of America
Securities LLC will act as the global coordinator for the offering and together
with Bear, Stearns & Co. Inc, Deutsche Bank Securities Inc., Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC and
Wachovia Capital Markets, LLC, will act as joint-book-running managers for the
offering.

     1. The Company represents and warrants as of the Applicable Time and each
Time of Delivery (each as defined below), and agrees with, each of the
Purchasers that:

          (a) A preliminary Offering Circular, dated December 13, 2006 (the
     "Preliminary Offering Circular") and an Offering Circular, dated December
     14, 2006 (the "Offering Circular"), have been prepared in connection with
     the offering of the Securities and the shares of the Stock issuable upon
     conversion thereof. The Preliminary Offering Circular, as amended or
     supplemented at the Applicable Time (as defined herein), together with the
     Final Term Sheet (as defined herein) and any other oral information and/or
     writings that the parties expressly agree in writing (as set forth on
     Schedule II hereto) to treat as part of the Disclosure Package ("Issuer
     Written Information"), is hereinafter referred to as the "Disclosure
     Package". Any reference to the Preliminary Offering Circular, the
     Disclosure Package or the Offering Circular shall be deemed to refer to and
     include the Company's most recent Annual Report on Form 10-K (the "Form



     10-K"), the definitive Proxy Statement on Schedule 14A, filed with the
     Commission on January 17, 2006, and the Current Reports on Form 8-K filed
     on March 13, 2006, June 21, 2006, July 7, 2006, September 29, 2006 and
     October 4, 2006, and all documents filed subsequent to the 10-K with the
     United States Securities and Exchange Commission (the "Commission")
     pursuant to Section 13(a), 13(c), 14 or 15(d) of the United States
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or
     prior to the date of the Preliminary Offering Circular, the Disclosure
     Package or the Offering Circular, as the case may be, and any reference to
     the Preliminary Offering Circular, the Disclosure Package or the Offering
     Circular, as amended or supplemented, as of any specified date, shall be
     deemed to include (i) any documents filed with the Commission pursuant to
     Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the
     Preliminary Offering Circular, the Disclosure Package or the Offering
     Circular, as the case may be, and prior to such specified date and (ii) any
     Additional Issuer Information (as defined in Section 5(f)) furnished by the
     Company prior to the completion of the distribution of the Securities; and
     all documents filed under the Exchange Act and so deemed to be included in
     the Preliminary Offering Circular, the Disclosure Package or the Offering
     Circular, as the case may be, or any amendment or supplement thereto are
     hereinafter called the "Exchange Act Reports". The Exchange Act Reports,
     when they were or are filed with the Commission, conformed or will conform
     in all material respects to the applicable requirements of the Exchange Act
     and the applicable rules and regulations of the Commission thereunder. The
     Preliminary Offering Circular and the Offering Circular and any amendments
     or supplements thereto and the Exchange Act Reports did not and will not,
     as of their respective dates, contain an untrue statement of a material
     fact or omit to state a material fact necessary in order to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading; provided, however, that this representation and
     warranty shall not apply to any statements or omissions made in reliance
     upon and in conformity with information furnished in writing to the Company
     by any Purchaser through the Representative expressly for use therein;

          (b) The Disclosure Package as of 5:00 pm (Eastern time) on the date
     hereof (the "Applicable Time") will not contain any untrue statement of a
     material fact or omit to state any material fact necessary in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading; provided, however, that this representation and
     warranty shall not apply to any statements or omissions made in reliance
     upon and in conformity with information furnished in writing to the Company
     by any Purchaser through the Representative expressly for use therein;

          (c) Any Issuer Written Information does not conflict with the
     information contained in the Preliminary Offering Circular, as amended or
     supplemented at the Applicable Time, or the Offering Circular and any such
     Issuer Written Information, as supplemented by and taken together with the
     Disclosure Package as of the Applicable Time, did not include any untrue
     statement of a material fact or omit to state any material fact necessary
     in order to make the statements therein, in the light of the circumstances
     under which they were made, not misleading; provided, however, that this
     representation and warranty shall not apply to any statements or omissions
     made in reliance upon and in conformity with information furnished in
     writing to the Company by any Purchaser through the Representative
     expressly for use therein;


                                       2



          (d) Neither the Company nor any of its subsidiaries has sustained
     since the date of the latest audited financial statements included in the
     Disclosure Package and the Offering Circular any material loss or
     interference with its business from fire, explosion, flood or other
     calamity, whether or not covered by insurance, or from any labor dispute or
     court or governmental action, order or decree, otherwise than as set forth
     or contemplated in the Disclosure Package and the Offering Circular; and,
     since the respective dates as of which information is given in the
     Disclosure Package and the Offering Circular, there has not been any change
     in the capital stock (other than issuances of Common Stock pursuant to
     existing employment agreements, stock option and other employee benefit
     plans and repurchases of Common Stock pursuant to the Company's stock
     repurchase program) or long-term debt of the Company or any of its
     subsidiaries or any material adverse change, or any development involving a
     prospective material adverse change, in or affecting the general affairs,
     management, financial position, stockholders' equity or results of
     operations of the Company and its subsidiaries, taken as whole, otherwise
     than as set forth or contemplated in the Disclosure Package and the
     Offering Circular;

          (e) The Company and its subsidiaries have good and marketable title in
     fee simple to all real property and good and marketable title to all
     personal property owned by them, in each case free and clear of all liens,
     encumbrances and defects except such as are described in the Disclosure
     Package and the Offering Circular or such as do not materially affect the
     value of such property and do not interfere with the use made and proposed
     to be made of such property by the Company and its subsidiaries; and any
     real property, equipment and buildings held under lease by the Company and
     its subsidiaries are held by them under valid, subsisting and enforceable
     leases with such exceptions as are not material and do not interfere with
     the use made and proposed to be made of such real property, equipment and
     buildings by the Company and its subsidiaries;

          (f) The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the state of Nevada, with
     power and authority (corporate and other) to own its properties and conduct
     its business as described in the Disclosure Package and the Offering
     Circular, and has been duly qualified as a foreign corporation for the
     transaction of business and is in good standing under the laws of each
     other jurisdiction in which it owns or leases properties or conducts any
     business so as to require such qualification, except where the failure to
     be so qualified would not reasonably be expected to have a material adverse
     effect on the business, financial condition, prospects or results of
     operations of the Company and its subsidiaries, taken as a whole (a
     "Material Adverse Effect"); and each subsidiary of the Company has been
     duly incorporated and is validly existing as a corporation in good standing
     under the laws of its jurisdiction of incorporation;

          (g) The Company has an authorized capitalization as set forth in the
     Disclosure Package and the Offering Circular, and all of the issued shares
     of capital stock of the Company have been duly and validly authorized and
     issued and are fully paid and non-assessable; the shares of Stock initially
     issuable upon conversion of the Securities have been duly and validly
     authorized and reserved for issuance and, when issued and delivered in
     accordance with the provisions of the Securities and the Indenture referred
     to below, will be duly and validly issued, fully paid and non-assessable,
     will conform to the description of the Stock contained in the Disclosure
     Package and the Offering Circular; the issuance of the Stock issuable upon
     conversion of the Securities will not be subject to any preemptive or
     similar rights; and all of the issued shares of capital stock of each
     subsidiary of the Company have been duly and


                                       3



     validly authorized and issued, are fully paid and non-assessable (except
     that with respect to foreign subsidiaries, this representation is limited
     to the extent the concepts of fully paid and non-assessable are not
     recognized under the laws of their respective jurisdiction of
     incorporation) and (except for directors' qualifying shares and that with
     respect to the Company's subsidiaries in Argentina and Iceland, a nominal
     number of shares are held by citizens of such jurisdictions as required by
     the laws of such jurisdictions) are owned directly or indirectly by the
     Company, free and clear of all liens, encumbrances, equities or claims;

          (h) The Securities have been duly authorized and, when issued and
     delivered pursuant to this Agreement, will have been duly executed,
     authenticated, issued and delivered and will constitute valid and legally
     binding obligations of the Company entitled to the benefits provided by the
     indenture to be dated as of December 20, 2006 (the "Indenture") between the
     Company and Wells Fargo Bank, National Association, as Trustee (the
     "Trustee"), under which they are to be issued; the Indenture has been duly
     authorized and, when executed and delivered by the Company and the Trustee,
     the Indenture will constitute a valid and legally binding instrument,
     enforceable in accordance with its terms, subject, as to enforcement, to
     bankruptcy, insolvency, reorganization and other laws of general
     applicability relating to or affecting creditors' rights and to general
     equity principles; the Securities and the Indenture will conform in all
     material respects to the descriptions thereof in the Disclosure Package and
     the Offering Circular;

          (i) This Agreement has been duly authorized, executed and delivered by
     the Company; and the Registration Rights Agreement has been duly authorized
     and, assuming due authorization, execution and delivery by the Purchasers,
     when executed and delivered by the Company, will constitute a legal, valid,
     binding and enforceable instrument of the Company, subject, as to the
     enforcement, to bankruptcy, insolvency reorganization of general
     applicability relating to or affecting creditors' rights and to general
     equity principles;

          (j) Except as described in the Disclosure Package and the Offering
     Circular, each of the Company and its subsidiaries possesses such licenses,
     certificates, authorizations, approvals, franchises, permits or other
     rights and all authorizations from all Federal, state or other governmental
     entities or agencies (including, without limitation, any agency established
     by a federally recognized Indian tribe to regulate gaming on such tribe's
     reservation) which have, or may at any time have, jurisdiction over the
     activities of the Company or any of its subsidiaries or any successor to
     such authority, including without limitation any such governmental entities
     or agencies, which has, or may at any time have, jurisdiction over the
     gaming activities of the Company or any of its subsidiaries (the "Gaming
     Authorities"), as are currently necessary (i) to own its property and
     conduct in all material respects the business now operated by it, (ii) for
     the Company to execute, deliver and perform this Agreement, the
     Registration Rights Agreement and the Indenture and (iii) to consummate the
     transactions contemplated hereby and thereby; except as described in the
     Disclosure Package and the Offering Circular, neither the Company nor any
     of its subsidiaries has received any notice of proceedings or has knowledge
     that any proceedings are pending or threatened, relating to the revocation
     or modification of any such license, certificate, authorization, approval,
     franchise, permit or other right which, individually or in the aggregate,
     would be reasonably expected to have a Material Adverse Effect; except as

End of Preview