Exhibit 10.3

September 26, 2007

Progressive Gaming International Corporation

920 Pilot Road

Las Vegas, NV 89119

Attn: Chief Financial Officer

 

Re: Amendment, Consent, and Waiver

Ladies and Gentlemen:

Reference is hereby made to that certain Amended and Restated Financing
Agreement dated as of August 4, 2006 among PROGRESSIVE GAMING INTERNATIONAL
CORPORATION, a Nevada corporation (“Borrower”), each Subsidiary of the Borrower
listed as a “Guarantor” on the signature pages thereto (each a “Guarantor” and
collectively, jointly and severally, the “Guarantors”), the Lenders from time to
time party thereto (“Lenders”), ABLECO FINANCE LLC, a Delaware limited liability
company (“Ableco”), as collateral agent for the Lenders (in such capacity,
together with any successor collateral agent, the “Collateral Agent”), and
Ableco, as administrative agent for the Lenders (in such capacity, together with
any successor administrative agent, the “Administrative Agent” and together with
the Collateral Agent, each an “Agent” and collectively, the “Agents”) (as
amended, restated, supplemented or otherwise modified from time to time, the
“Financing Agreement”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Financing Agreement.

The Borrower has requested that the Agents and Lenders:

(i) consent to the sale, license or other disposition by the Loan Parties of
substantially all of their assets related to their Table Games (as defined
below) business (including the business relating to the design, development,
manufacture, packaging, marketing, distributing and selling Table Games) to
Shuffle Master, Inc., a Minnesota corporation and its Affiliates and
Subsidiaries (collectively, the “Purchaser”), on the terms and conditions set
forth in a certain Purchase Agreement dated as of September 26, 2007 (the
“Shuffle Master APA”), which is attached hereto as Exhibit A, by and between, on
the one hand, the Borrower and Progressive Games, Inc., a Delaware corporation
and each of their respective Affiliates and Subsidiaries (individually and
collectively, the “Seller”) and, on the other hand, the Purchaser and the
related documents also attached hereto as Exhibit A (such documents, together
with the Shuffle Master APA, the “Acquisition Documents”) (the “Asset Sale”) (as
used herein, “Table Game” means any table game (live or otherwise and in any
format) and/or electronic methods of playing or simulating any game, as well as
pay tables and methods of play (whether proprietary or in the public domain) for
any game, including the Borrower’s Non-CJS progressive gaming systems
historically referred to as “Aquarius Controllers” and “Game Manager” and all
intellectual property related thereto, but excluding the Borrower’s CasinoLink
and/or CJS progressive systems for use with any gaming device);

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(ii) permit the Loan Parties to use a portion of the Net Cash Proceeds of the
Asset Sale to prepay a portion of the Indebtedness represented by the Senior
Secured Notes or for general working capital purposes in accordance with the
terms and conditions of this letter agreement; and

(iii) waive compliance by the Loan Parties with the financial covenants set
forth in Sections 7.03(a), (b), (c), and (e) of the Financing Agreement (the
“Specified Financial Covenants”) solely for the Borrower’s fiscal quarters
ending September 30, 2007 and December 31, 2007 (such fiscal quarters, the
“Specified Periods”).

The Borrower has further requested, and the Agents and Lenders have agreed, to
make certain amendments to the Financing Agreement in accordance with the terms
and conditions of this letter agreement.

1. Amendments to the Financing Agreement.

(a) Section 1.01 of the Financing Agreement is hereby amended by adding the
following definitions in proper alphabetical order:

““Progressive License” has the meaning set forth in the Shuffle Master APA.”

““Shuffle Master APA” means that certain Purchase Agreement dated as of
September 26, 2007 by and between, on the one hand, the Borrower and Progressive
Games, Inc., a Delaware corporation and each of their respective Affiliates and
Subsidiaries and, on the other hand, Shuffle Master, Inc., a Minnesota
corporation and its Affiliates and Subsidiaries.

““Technology License” has the meaning set forth in the Shuffle Master APA.”

(b) Section 7.02(m) of the Financing Agreement is hereby amended by (i) deleting
the “or” before clause (iv) thereof, and (ii) adding the following before the
period at the end thereof:

“, or (v) amend, modify or otherwise change the Shuffle Master APA, the
Progressive License or the Technology License, in each case other than any
amendment, modification or change that is not materially adverse to the Agents,
the Lenders or the Loan Parties.”

(c) Section 7.03 of the Financing Agreement is hereby amended by adding the
following new clause (f) at the end thereof:

“(f) Quarterly Adjusted Pro Forma EBITDA. Permit Adjusted Pro Forma EBITDA of
the Borrower and its Subsidiaries for the fiscal quarter ending on December 31,
2007 to be less than $1,000,000.”

 

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(d) Section 7.03(d) of the Financing Agreement is hereby amended and restated in
its entirety to read as follows:

“(d) Qualified Cash. Permit Availability plus Qualified Cash of the Borrower and
its Subsidiaries to be less than $6,000,000 as of any date of determination.”

2. Consents and Waivers.

(a) Upon the effectiveness of this letter agreement, and anything to the
contrary contained in the Financing Agreement notwithstanding (including in
Section 7.02(c) of the Financing Agreement), the Agents and Lenders hereby
consent to the consummation of the Asset Sale. The Borrower, each Agent, and
each Lender hereby agree that, anything to the contrary contained in the
Financing Agreement notwithstanding (including in Section 2.05(c)(v) of the
Financing Agreement), (i) the Net Cash Proceeds of the Cash Purchase Price (as
defined in the Shuffle Master APA) shall be used to immediately prepay the
outstanding principal amount of the Revolving Loans (without a commensurate
permanent reduction of the Total Revolving Credit Commitment in an equivalent
amount) to the extent that the outstanding principal amount of the Revolving
Loans exceeds $10,000,000, and (ii) with respect to the remaining Net Cash
Proceeds of the Cash Purchase Price (after giving effect to the prepayment in
the foregoing clause (i)) (the “Remaining Net Cash Proceeds”), each Agent and
each Lender hereby waive the requirement that the Remaining Net Cash Proceeds be
used by the Borrower to prepay the Revolving Loans. The Borrower, each Agent,
and each Lender hereby further agree that, anything to the contrary contained in
the Financing Agreement notwithstanding (including in Section 2.05(c)(v) or
2.05(c)(vii) of the Financing Agreement) (A) 100% of the Net Cash Proceeds of
any Contingent Purchase Price Payments (as defined in the Shuffle Master APA)
shall be used to prepay the outstanding principal amount of the Revolving Loans
(without a commensurate permanent reduction of the Total Revolving Credit
Commitment in an equivalent amount), and (B) 100% of any indemnity payments made
to the Loan Parties in connection with the Asset Sale, any purchase price
adjustment received by the Loan Parties in connection with the Asset Sale, or
any amounts received from escrow arrangements in connection with the Asset Sale
(in each case, net of any reasonable expenses (including reasonable attorneys
fees and costs and other litigation expenses) incurred in collecting such
amounts) shall be used to prepay the outstanding principal amount of the
Revolving Loans (without a commensurate permanent reduction of the Total
Revolving Credit Commitment in an equivalent amount).

(b) Anything to the contrary contained in the Financing Agreement
notwithstanding (including in Section 2.05(e) of the Financing Agreement), any
prepayment of the Revolving Loans without a commensurate permanent reduction of
the Total Revolving Credit Agreement pursuant to clause (a) of this letter
agreement shall be without premium or penalty (including the Applicable
Prepayment Premium).

(c) Upon the effectiveness of this letter agreement, and anything to the
contrary contained in the Financing Agreement notwithstanding (including in
Sections 2.05(c)(v) and 7.02(m) of the Financing Agreement), each Agent and each
Lender consent to the prepayment (whether by redemption or otherwise) of some or
all of the Indebtedness represented by the

 

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Senior Secured Notes on or before December 31, 2007 so long as (i) Qualified
Cash of the Borrower and its Subsidiaries is greater than $10,000,000 both
immediately before and after giving effect to such prepayment and after giving
effect to any amount required to be paid (or to be required to be paid) by the
Borrower to Purchaser pursuant to Sections 2.3(b)(iii) and 2.3(b)(iv) of the
Shuffle Master APA, and (ii) no Default or Event of Default shall have occurred
and be continuing or would result from such prepayment.

(d) Upon the effectiveness of this letter agreement, each Agent and each Lender
hereby waive the Loan Parties’ compliance with the Specified Financial Covenants
for the Specified Periods.

(e) Upon the effectiveness of this letter agreement, the Borrower’s license of
(i) the Licensed Patents (as defined in the Shuffle Master APA as of the date
hereof) pursuant to the Progressive License, and (ii) certain intellectual
property pursuant to the Technology License, shall constitute a “Permitted Lien”
under the Financing Agreement.

3. Conditions Precedent to Letter Agreement. The satisfaction of each of the
following shall constitute conditions precedent to the effectiveness of this
letter agreement and each and every provision hereof:

(a) the Agents shall have received counterparts of this letter agreement duly
executed by the Loan Parties and each Lender;

(b) the representations and warranties in this letter agreement, the Financing
Agreement as amended by this letter agreement, and the other Loan Documents
shall be true and correct in all material respects on and as of the date hereof,
as though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date);

(c) the Agents shall have received copies of each of the Acquisition Documents,
in form and substance reasonably satisfactory to the Agents, together with a
certificate of the Secretary of the Borrower certifying each such document as
being a true, correct, and complete copy thereof;

(d) the Agents shall have received evidence reasonably satisfactory to them
(including a certificate of the Secretary of the Borrower) that all
(i) conditions precedent to the consummation of the Asset Sale have been
satisfied, and (ii) all material consents, approvals, authorizations, licenses,
permits, entitlements and accreditations required in connection with the Asset
Sale have been obtained;

(e) after giving effect to this letter agreement, no Event of Default or event
that, with the giving of notice or passage of time, would constitute an Event of
Default shall have occurred and be continuing on the date hereof, nor shall
result from the consummation of the transactions contemplated herein; and

(f) no injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against the Loan Parties or any Agent or Lender.

 

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4. Miscellaneous.

(a) Each Loan Party hereby represents and warrants that (i) the execution,
delivery, and performance of this letter agreement are within its corporate
powers, have been duly authorized by all necessary corporate action, and are not
in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter, bylaws or other organizational
documents, or of any material contract or undertaking to which it is a party or
by which any of its properties may be bound or affected, (ii) the
representations and warranties in the Financing Agreement and the other Loan
Documents are true and correct in all respects on and as of the date hereof, as
though made on such date, (iii) after giving effect to this letter agreement, no
Default or Event of Default has occurred and is continuing on the date hereof or
as of the date of the effectiveness of this letter agreement, (iv) after giving
effect to the Asset Sale (including, without limitation, the licenses described
in Section 2(e) hereof), such Loan Party will own or license or otherwise have
the right to use all licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, tradenames, copyrights,
copyright applications, franchises, authorizations, non-governmental licenses
and permits and other intellectual property rights that are necessary for the
operation of its business, without infringement upon or conflict with the rights
of any other Person with respect thereto, and (v) other than certain
intellectual property rights retained by the Borrower to facilitate the
operation of the Table Games business being sold by the Borrower to the
Purchaser, the Licensed Patents (as defined in the Shuffle Master APA) and the
intellectual property licensed pursuant to the Technology License are used
solely in the Borrower’s Table Games business.

(b) The amendments, consents and waivers herein are limited to the specifics
hereof, shall not apply with respect to any facts or occurrences other than
those on which the same are based, shall not excuse future non-compliance with
the Loan Documents and, except as expressly set forth herein, shall not operate
as an amendment, consent or waiver of any right, power or remedy of Agents and
the Lenders, nor as a consent to or waiver of any further or other matter, under
the Loan Documents.

(c) This letter agreement is a “Loan Document” under the Financing Agreement
and, after the date hereof, any reference to “the Agreement” or “the Financing
Agreement” in the Financing Agreement or any other Loan Document shall mean the
Financing Agreement as modified hereby. This letter agreement reflects the
entire understanding of the parties with respect to the matters contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.

(d) This letter agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall be deemed to constitute but one and the same agreement. Delivery
of an executed counterpart of this letter agreement by facsimile or electronic
mail shall be equally as effective as delivery of an original executed

 

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counterpart of this letter agreement. Any party delivering an executed
counterpart of this letter agreement by facsimile or electronic mail also shall
deliver an original executed counterpart of this letter agreement, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this letter agreement.

(e) This letter agreement shall be determined under, governed by and construed
in accordance with the laws of the State of New York.

[remainder of page intentionally left blank]

 

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    Very truly yours, AGENTS AND LENDERS:    

ABLECO FINANCE LLC, as Administrative

Agent, Collateral Agent and on behalf of itself

and its affiliate assigns as Lenders

    By:  

/s/ Alexander J. Ornstein

    Name:   Alexander J. Ornstein     Title:   Senior Vice President

[SIGNATURE PAGE TO AMENDMENT, CONSENT AND WAIVER]

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BORROWER:     PROGRESSIVE GAMING INTERNATIONAL CORPORATION     By:  

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:   GUARANTORS:     MIKOHN NEVADA     By:
 

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:       MGC, INC.     By:  

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:       MIKOHN INTERNATIONAL, INC.     By:
 

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:       PROGRESSIVE GAMES, INC.     By:  

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:       VIKING MERGER SUBSIDIARY, LLC    
By:  

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:  

[SIGNATURE PAGE TO AMENDMENT, CONSENT AND WAIVER]

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    PRIMELINE GAMING TECHNOLOGIES, INC.     By:  

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:       GAMES OF NEVADA, INC.     By:  

/s/ Heather A. Rollo

    Name:   Heather A. Rollo     Title:  

[SIGNATURE PAGE TO AMENDMENT, CONSENT AND WAIVER]

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Exhibit A

Acquisition Documents