Document:

Common Stock and Warrant Purchase Agreement

 Exhibit 10.3 
 COMMON STOCK AND WARRANT PURCHASE AGREEMENT 
 THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT
(the “Agreement”) is entered into as of August 15, 2008, by and among Progressive Gaming International Corporation, a Nevada corporation (the “Company”), with headquarters located at 920 Pilot Road Las
Vegas, NV 89119, Private Equity Management Group Inc., a Nevada corporation (“PEM Inc.”), and Private Equity Management Group LLC, a Nevada limited liability company (“PEM LLC”, and together with PEM Inc., the
“Purchasers”, or each individually a “Purchaser”), with regard to the following: 
 RECITALS 
 A. The Company and Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities
Act”). 
 B. PEM Inc. and PEM LLC desire to purchase, respectively and upon the terms and conditions stated in this Agreement,
(a) shares of the Company’s Common Stock, $0.10 par value per share (the “Common Stock”) and (b) a warrant (the “Warrant”) to purchase shares of Common Stock, in the form attached hereto as
Exhibit A. The shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrant are referred to herein as “Warrant Shares.” The shares of Common Stock (exclusive of the Warrant Shares) issued
to PEM Inc. hereunder at the Closing (as hereinafter defined) are referred to herein as the “Initial Shares.” Any shares of Common Stock issued to PEM Inc. hereunder subsequent to the Closing are referred to herein as the
“Additional Shares” (and, together with the Initial Shares, the “Common Shares”). The Common Shares, the Warrant and the Warrant Shares are collectively referred to herein as the “Securities”.

 C. The parties hereto have executed and delivered a Credit Agreement (the “Credit Agreement”) pursuant to which an
Affiliate of the Purchasers shall make available to the Company proceeds from a senior secured credit facility in consideration of which the parties hereto are entering into this Agreement. Capitalized terms not defined herein shall have the meaning
ascribed to them in the Credit Agreement. 
 D. Contemporaneously with the funding of the Loans pursuant to the Credit Agreement, the parties
hereto are executing and delivering this Agreement and a Registration Rights Agreement in the form attached hereto as Exhibit B (the “Registration Rights Agreement” and collectively with this Agreement, the
Warrant and any other documents or agreements executed in connection with the transactions contemplated hereunder, the “Transaction Documents”), pursuant to which the Company has agreed to provide certain registration rights under
the Securities Act, the rules and regulations promulgated thereunder and applicable state securities laws. 
  

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 AGREEMENTS 
 NOW, THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Purchasers hereby
agree as follows: 
 ARTICLE I 
 ISSUANCE AND SALE OF COMMON STOCK AND WARRANT 
 1.1 Issuance of Initial Shares and Warrant. In partial consideration of the
provision of credit to the Company pursuant to the Credit Agreement and subject to the terms and conditions of this Agreement, the issuance of One Million (1,000,000) Initial Shares and Warrant to the Purchasers shall be consummated in a
“Closing.” 
 1.2 Issuance of Additional Shares. In partial consideration of the provision of credit to the Company
pursuant to the Credit Agreement and if on November 15, 2008, the dollar volume weighted average price of the Common Stock as traded on the NASDAQ Global Market (“Nasdaq”) for the twenty (20) trading days prior to such
date (determined as of such date) (the “20-day VWAP”) does not equal or exceed $1.50, then the Company shall issue Additional Shares to PEM Inc. such that the sum of the Additional Shares plus the Initial Shares multiplied by the
20-day VWAP equals a total value of One Million Five Hundred Thousand Dollars ($1,500,000), provided, that, in no event may the aggregate number of Additional Shares issued exceed 900,000 shares of Common Stock. 
 1.3 Closing Date. Subject to the satisfaction (or waiver) of the conditions set forth in ARTICLES VI and VII
below, the date and time of the issuance, sale and purchase of the Initial Shares and Warrant pursuant to this Agreement shall be at 12:00 noon Eastern Time, on August 15, 2008. 
 ARTICLE II 
 PURCHASERS’ REPRESENTATIONS AND 
 WARRANTIES 
 The Purchasers represent and
warrant to the Company, as of the date hereof and as of the Closing that the following statements are true and correct: 
 2.1
Incorporation and Standing. PEM Inc. is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation. PEM LLC is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation. Each Purchaser’s corporate headquarters is in the State of California. 
 2.2 Authorization; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered on behalf of Purchasers and are valid and binding agreements of
Purchasers enforceable in accordance with their respective terms, except to the extent that such validity or enforceability may be subject to or affected by any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’ rights or remedies of creditors generally, or by other equitable principles of general application. 
  

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 2.3 Investment Purpose. Each Purchaser is purchasing the Securities for such Purchaser’s own
account for investment only and not with a view toward or in connection with the public sale or distribution thereof. Purchasers will not, directly or indirectly, offer, sell, pledge or otherwise transfer their Securities or any interest therein
except pursuant to transactions that are exempt from the registration requirements of the Securities Act and/or sales registered under the Securities Act. Purchasers understand that Purchasers must bear the economic risk of this investment
indefinitely, unless the Securities are registered pursuant to the Securities Act and any applicable state securities laws or an exemption from such registration is available, and that the Company has no present intention of registering any such
Securities other than as contemplated by the Registration Rights Agreement. 
 2.4 Accredited Investor Status. Each Purchaser is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D. 
 2.5 Reliance on Exemptions. Purchasers
understand that the Securities are being offered and sold to Purchasers in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and
accuracy of, and Purchasers’ compliance with, the representations, warranties, agreements, acknowledgments and understandings of Purchasers set forth herein in order to determine the availability of such exemptions and the eligibility of
Purchasers to acquire the Securities. 
 2.6 Governmental Review. Purchasers understand that no United States federal or state agency
or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the
merits of the offering of the Securities. 
 2.7 Rule 144. Each Purchaser acknowledges that it is familiar with Rule 144, as amended,
of the rules and regulations of the Securities and Exchange Commission, promulgated pursuant to the Securities Act (“Rule 144”). Each Purchaser understands that except as provided in the Registration Rights Agreement: (i) the
Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) Purchaser shall
have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or
(C) Purchaser provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144; (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities
under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. 
  

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 2.8 Legends. Purchasers understand that, subject to ARTICLE V hereof, the
certificates for the Warrant and, until such time as the Warrant Shares and Common Shares have been registered under the Securities Act as contemplated by the Registration Rights Agreement or otherwise may be sold by Purchaser pursuant to Rule 144
(subject to and in accordance with the procedures specified in ARTICLE V hereof), the certificates for the Common Shares and the Warrant Shares will bear a restrictive legend (the “Legend”), which will include
language in substantially the following form: 
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 The Company represents and warrants to each Purchaser as of the date hereof and as
of the Closing that the following statements are true and correct, except as set forth on the disclosure schedules attached hereto as Schedule 3 (the “Company Disclosure Schedules”) and except as disclosed in the SEC
Documents (as hereinafter defined). 
 3.1 Organization and Qualification. Each of the Company and its subsidiaries (i) is a
corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite power and authority to conduct its
business as now conducted and as currently contemplated and, in the case of the Company, to issue the Securities hereunder, and to execute and deliver each Transaction Document to which it is a party, and to contemplate the transactions contemplated
thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary
except where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect. “Material Adverse Effect” means any change or event that has had or could reasonably be expected to have a material
adverse effect on (i) the operations, business, assets, properties, or financial condition of (A) any Loan Party (other than the Inactive Subsidiaries), (B) any Subsidiary of any Loan Party that holds a Gaming License or otherwise has
assets, revenues, 

  

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operations or businesses that are material to any Loan Party, (C) the Loan Parties taken as a whole or (D) the Loan Parties and their Subsidiaries
taken as a whole, (ii) the ability of any Loan Party to perform any of its obligations under any Loan Document to which it is a party, (iii) the legality, validity or enforceability of this Agreement or any other Loan Document, or
(iv) the rights and remedies of Administrative Agent or any Lender under any Loan Document. 
 3.2 Authorization; Enforcement.
(a) The Company has the requisite corporate power and authority to enter into and perform under the Transaction Documents, and to issue, sell and perform its obligations with respect to the Securities in accordance with the terms hereof and
thereof and in accordance with the terms and conditions of the Transaction Documents; (b) the execution, delivery and performance of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Initial Shares and the Warrant, and the reservation for issuance of the Additional Shares and the Warrant Shares) have been duly authorized by all necessary corporate action and no further
consent or authorization of the Company, its board of directors, or its stockholders is required with respect to any of the transactions contemplated hereby or thereby (except for any action taken by the board of directors necessary in the future to
carry out the purposes of the Transaction Documents); (c) this Agreement, the Registration Rights Agreement, the Initial Shares, and the Warrant have been duly executed and delivered by the Company; and (d) this Agreement, the Registration
Rights Agreement and the Warrant constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except (i) to the extent that such validity or enforceability may be
subject to or affected by any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights or remedies of creditors generally, or by other equitable
principles of general application, and (ii) as rights to indemnity and contribution under the Registration Rights Agreement may be limited by federal or state securities laws. “Person” means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated association, corporation, entity or government (whether federal, state, county, city or otherwise, including, without limitation, any instrumentality, division, agency or
department thereof). 
 3.3 Capitalization. The authorized capital stock of the Company consists of (x) 100,000,000 shares of
Common Stock, of which the number of shares issued and outstanding, shares reserved for issuance pursuant to the Company’s stock option, restricted stock and stock purchase plans and shares issuable and reserved for issuance pursuant to
securities exercisable or exchangeable for, or convertible into, shares of Common Stock are set forth on Schedule 3.3 and (y) 5,000,000 shares of Preferred Stock, $0.10 par value of which 50,000 shares have been designated Series A
Junior Participating Preferred Stock, and none of which are issued and outstanding. All of such outstanding or issuable shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3.3, (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any Liens or encumbrances suffered or permitted by the Company; (ii) there is no outstanding
Indebtedness of the Company nor are there any outstanding leasing or similar arrangements that, in connection with GAAP, consistently applied for the periods covered thereby, are classified as a capital lease; (iii) except for the Securities
and the IGT Subordinated Debt and the warrants related thereto (and any registration rights related thereto), there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating

  

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to, or securities or rights convertible into or exercisable for, any shares of capital stock of the Company or any of its subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exercisable for, any shares of capital stock of the Company or any of its subsidiaries; (iv) except for the Registration Rights
Agreement, there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under the Securities Act; (v) except for the IGT Subordinated Debt, there are no
outstanding securities or instruments of the Company or any of its subsidiaries that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its
subsidiaries is or may become bound to redeem a security of the Company or any of its subsidiaries; (vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the
Securities or the IGT Subordinated Debt and the warrants related thereto (and any registration rights related thereto); and (vii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. The Company has furnished to the Purchaser true and correct copies of the Company’s Amended and Restated Articles of Incorporation, as amended and as in effect on the date hereof (the “Articles of
Incorporation”). The Company has furnished to the Purchasers true and correct copies of the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”). The Company has set forth on Schedule 3.3 hereof
all instruments, certificates, documents and agreements (other than the Articles of Incorporation and By-laws) governing securities convertible into or exercisable or exchangeable for Common Stock of the Company (and the Company shall provide to the
Purchasers copies thereof upon the request of the Purchasers). 
 3.4 Issuance of Securities. The Initial Shares to be issued and the
Warrant to be granted at the Closing have been duly authorized by all necessary corporate action and the Initial Shares, when issued in accordance with the terms hereof, will be validly issued and outstanding, fully paid and nonassessable and free
from all taxes, Liens and charges with respect to the issue thereof, with the holder being entitled to all rights accorded to a holder of Common Stock. The Additional Shares and the Warrant Shares have been duly authorized by all necessary corporate
action, and when the Additional Shares (if any) and the Warrant Shares are issued in accordance with the terms of this Agreement and the Warrant, respectively, such shares will be validly issued and outstanding, fully paid and nonassessable and free
from all taxes, Liens and charges with respect to the issue thereof, with the holder being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations and warranties set forth in ARTICLE
II of this Agreement, the issuance by the Company of the Securities is exempt from registration under the Securities Act. 
 3.5
No Conflicts or Violations. Except as disclosed in Section 3.5 of the Company Disclosure Schedules, the execution and delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the Securities) at the Closing will not (i) result in a violation of the Articles of Incorporation or By-laws;
(ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, 

  

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amendment, acceleration or cancellation of, any material agreement, indenture or instrument to which the Company or any of its subsidiaries is a party; or
(ii) assuming the accuracy of each of the representations and warranties set forth in ARTICLE II of this Agreement, result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the Principal Market) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected. Except as
disclosed in Section 3.5 of the Company Disclosure Schedules, neither the Company nor any of its subsidiaries is in violation of any term of or in default under any contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except where such violations or defaults would not result, either individually or in the aggregate, in a Material Adverse Effect. The
business of the Company and its subsidiaries is not being conducted, and will not be conducted, in violation of any law, ordinance or regulation of any Governmental Authority, except where such violations would not result, either individually or in
the aggregate, in a Material Adverse Effect. The Company and its subsidiaries are unaware of any facts or circumstances that might give rise to any of the foregoing. Neither the Company nor any of its officers or directors have violated
Section 9(a) of the Exchange Act or any rules promulgated thereunder or analogous provisions of any applicable state securities or Blue Sky laws. 
 3.6 Nasdaq Compliance; Repurchase. The Company is not in violation of the listing requirements of The NASDAQ Stock Market, including, without limitation, the requirements set forth in Marketplace Rule
4350(i)(1)(D) and except as set forth on Schedule 3.6, has no knowledge of any facts that would lead to delisting or suspension of the Common Stock by The NASDAQ Stock Market in the foreseeable future. The Company has not purchased any issued
and outstanding shares of Common Stock on the open market or in privately negotiated transactions or otherwise during the two month period prior to the Effective Date. The Company’s application for an exception to the shareholder approval
requirements contained in Section 4350(i)(1)(D)(ii) of The NASDAQ Stock Market Marketplace Rules is true, correct and complete and sets forth the material terms of the transactions contemplated hereby and by the Credit Agreement. 
 3.7 SEC Documents; Financial Statements. Since December 31, 2006, the Company has timely filed all materials required to be filed by it with
the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such documents collectively, the “SEC
Documents”). The Company has made available to each Purchaser true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company included in the SEC Documents have
been prepared in accordance with U.S. generally accepted accounting principles, consistently applied, and the rules and regulations of the SEC during the periods involved and fairly present in all material respects the consolidated financial
condition of the 

  

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Company and its subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended. Except as
set forth in a manner clearly evident to a sophisticated institutional investor in the consolidated financial statements or the notes thereto of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business consistent with past practice subsequent to the date of such financial statements and (ii) obligations under contracts and commitments incurred in the ordinary course
of business consistent with past practice and not required under generally accepted accounting principles to be reflected in such financial statements. To the extent required by the rules of the SEC applicable thereto, the SEC Documents contain a
complete and accurate list of each contract or agreement, with respect to the Company or any of its subsidiaries, filed with the SEC as an exhibit to the Company’s periodic reports under the Exchange Act or required to be so filed pursuant to
the rules and regulations promulgated under the Exchange Act or the Securities Act (each a “Material Contract”). None of the Company, its subsidiaries or, to the Company’s Knowledge, any of the other parties thereto, is in
breach or violation of any Material Contract, which breach or violation would have a Material Adverse Effect. No event, occurrence or condition exists which, with the lapse of time, the giving of notice, or both, could become a default on any
Material Contract by the Company or its subsidiaries thereunder which default could reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of
the executive officers (as defined in Rule 405 under the Securities Act) of the Company, after due inquiry. 
 3.8 No Undisclosed Events,
Liabilities, Developments or Circumstances. Except for the entering into the Loan Documents and the IGT Subordinated Debt Documents, no event, liability, development or circumstance has occurred or exists, or is contemplated to occur, with
respect to the Company or its subsidiaries or their respective business, properties, prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement on
Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and that has not been publicly disclosed at least ten days prior to the date hereof. Except as set forth in a manner clearly evident to a sophisticated
institutional investor in the consolidated financial statements or the notes thereto of the Company included in the SEC Documents, no Loan Party or any of its subsidiaries has liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business consistent with past practice subsequent to the date of such financial statements and (ii) obligations under contracts and commitments incurred in the ordinary course of business consistent with past
practice and not required under GAAP to be reflected in such financial statements. 
 3.9 Disclosure. No information relating to or
concerning the Company set forth in this Agreement contains an untrue statement of a material fact. None of the SEC Documents, at the time they were filed with the SEC (except as they have been subsequently amended or revised in the SEC Documents),
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 3.10 Acknowledgment Regarding Each Purchaser’s Purchase of the Securities. The Company acknowledges and agrees that no
Purchaser is acting as a financial advisor or 

  

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fiduciary of the Company (or in any similar capacity) with respect to this Agreement or the transactions contemplated hereby, that this Agreement and the
transaction contemplated hereby, and the relationship between each Purchaser and the Company, is “arms-length,” and that no statement made by any Purchaser (except as set forth in ARTICLE II), or any of such
Purchaser’s representatives or agents, in connection with this Agreement and the transactions contemplated hereby is advice or a recommendation, and that any such statement is merely incidental to such Purchaser’s purchase of the
Securities and has not been relied upon as such in any way by the Company, its officers or directors. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the transactions contemplated
hereby has been based solely on an independent evaluation by the Company and its representatives. 
 3.11 No General Solicitation.
Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the
offer or sale of the Securities. 
 3.12 No Integrated Offering. Neither the Company, nor any of its affiliates, nor any Person acting
on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would prevent the parties hereto from consummating the transactions contemplated hereby
pursuant to an exemption from the registration under the Securities Act pursuant to the provisions of Regulation D. The transactions contemplated hereby are exempt from the registration requirements of the Securities Act. Neither the Company
nor any of its subsidiaries have taken any action or steps that would (i) require registration of any of the Securities under the Securities Act or (ii) require approval of the Company’s shareholders under The NASDAQ Stock Market
Marketplace Rules. 
 3.13 No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage
commissions, finder’s fees or similar payments by Purchaser relating to this Agreement or the transactions contemplated hereby other than as set forth in that certain agreement between the Company and Roth Capital Partners, LLC dated
July 3, 2008. 
 3.14 Investment Company Acts. None of the Company, the Loan Parties or any of their respective subsidiaries is
an “investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as
amended. 
 3.15 Reservation of Common Stock. At least 3,190,000 shares of Common Stock have been duly authorized and reserved for
issuance of the Common Shares and the Warrant Shares, which number is no less than 110% of the number of shares of Common Stock needed to provide for the issuance of the Common Shares and Warrant Shares. 
 3.16 Schedules. All of the information which is required to be scheduled to this Agreement is set forth on the Company Disclosure Schedules
attached hereto, is correct and accurate and does not omit to state any information material thereto. 
  

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 3.17 Representations and Warranties in Documents; No Default. All representations and warranties
set forth in this Agreement and the other Transaction Documents are true and correct in all respects on the Effective Date and on the Closing Date (except to the extent that any such representations or warranties relate solely to an earlier date).
No Event of Default has occurred and is continuing and no condition exists which constitutes a Default or an Event of Default. 
 3.18
Reliance. The Company represents and warrants to each Purchaser and acknowledges and confirms that each Purchaser shall be entitled to rely upon the representations and warranties set forth in this Agreement in connection with the execution,
delivery and performance of this Agreement, notwithstanding any investigation, inquiry, or contrary knowledge or belief of or by or any of Purchaser or its officers, directors or Affiliates. 
 3.19 Incorporation by Reference. In addition to the foregoing Company representations and warranties, all of the representations and warranties
(including all schedules thereto) of the Company and the other Loan Parties pursuant to Article V of the Credit Agreement (the “Credit Agreement Reps”) are incorporated by reference into and made a part of this Agreement in their
entirety. The Company acknowledges and agrees that any breach of the Credit Agreement Reps by the Company while any provision of this Agreement remains in full force and effect, for so long as the Credit Agreement is then in full force and effect,
shall constitute a breach of the Company’s representations and warranties under this Agreement. 
 ARTICLE IV 
 COVENANTS 
 4.1 Securities Laws;
Disclosure; Press Release. The Company agrees to file a Form D with respect to the Securities with the SEC as required under Regulation D and to provide a copy thereof to each Purchaser promptly after such filing. The Company shall, on or
before the Closing, take such action as is necessary in order to obtain an exemption for or to qualify the Securities for sale to Purchasers under applicable securities or “Blue Sky” laws of the states of the United States and shall
provide evidence of any such action so taken to each Purchaser on or prior to the Closing. The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky”
laws of the states of the United States following the Closing. 
 4.2 Reporting Status. As to each Purchaser, until the earlier of
(a) the date that is one year after the date as of which such Purchaser may sell all of the Securities without restriction pursuant to Rule 144(b) promulgated under the Securities Act (or successor thereto), and (b) the date as of which
Purchaser has sold all of the Securities and the Warrant is no longer outstanding, the Company will file all reports required to be filed with the SEC pursuant to the Exchange Act, and the Company will not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would otherwise permit such termination. 
 4.3 Reservation of Common Stock. The Company will take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 110% of the number of shares of Common Stock needed to provide for
the issuance of the 

  

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maximum number of Additional Shares and 110% of the number of shares of Common Stock needed to provide for the issuance of the Warrant Shares upon exercise
of the Warrant (without regard to any limitations on exercises). 
 4.4 Listing of Common Stock. The Company will promptly secure the
listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official
notice of issuance) and will maintain, so long as any other shares of Common Stock will be so listed, such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents. The Company will use
commercially reasonable efforts to maintain the Common Stock’s authorization for quotation on Nasdaq or other listing or quotation on The NASDAQ Stock Market or listing on The New York Stock Exchange, Inc. or The American Stock Exchange, Inc.
(as applicable, the “Principal Market”). Neither the Company nor any of its Subsidiaries will take any action that would be reasonably expected to result in the delisting or suspension of the Common Stock from the Principal Market.
The Company will pay all fees and expenses in connection with satisfying its obligations under this Section 4.4. 
 4.5 Disclosure of
Transactions and Other Material Information. 
 4.5.1 From and after the filing of any required disclosure materials or other filings
with the SEC, no Purchaser will be in possession of any material nonpublic information received from the Company, any of its subsidiaries or any of its respective officers, directors, employees or agents that is not disclosed in such filing, the
omission to state which, in connection with a purchase or sale of securities, would result in any Purchaser’s violating the Securities Act, the Exchange Act, or applicable state securities or Blue Sky laws. From and after the filing of the
required materials with the SEC, without the express written consent of the Purchasers, the Company will not, and will cause each of its subsidiaries and each of their respective officers, directors, employees and agents not to, provide any
Purchaser with any nonpublic information the omission to state which, in connection with a purchase or sale of securities, would result in any Purchaser violating the Securities Act, the Exchange Act, or applicable state securities or Blue Sky laws.
In the event of a breach of the foregoing covenant by the Company, any of its subsidiaries, or any of its or their respective officers, directors, employees and agents, in addition to any other remedy provided herein or in the Loan Documents,
Purchasers will have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material nonpublic information without the prior approval by the Company, its subsidiaries, or any of its or their
respective officers, directors, employees or agents, provided that the Purchaser making such public disclosure shall have given the Company at least one Business Day prior notice of such public disclosure. No Purchaser will have any liability to the
Company, its subsidiaries, or any of its or their respective officers, directors, employees, shareholders or agents for any such disclosure. 
 4.5.2 Except as required by applicable law, no Loan Party nor any of their Affiliates will issue any press releases, shareholder notices or otherwise make any other public disclosures, filings or statements with respect to the transactions
contemplated hereby or by the Transaction Documents, the Loan Documents or the IGT Subordinated Debt Documents or disclose the name of any Purchaser without the prior consent of such Purchaser. 

  

 -11- 

 
Notwithstanding the foregoing, the Company may issue a press release or make a public announcement or disclosure with respect to the transactions
contemplated hereby to the extent that the Company has been advised by legal counsel that such disclosure is required by law, provided that in such case, Purchasers will be provided a prior draft of such release, announcement or filing and the
Company will review such draft and consult with the Purchasers in connection with any such press release or other public disclosure prior to its release or filing. 
 4.6 Supplemental Disclosure. As of or prior to the Closing, the Company will promptly supplement or amend in writing each of the Company Disclosure Schedules with respect to any matter of which the Company
becomes aware that arises or is discovered after the Effective Date that, if existing or known on the Effective Date, would have been required to be set forth or listed in the Company Disclosure Schedule; provided that, for purposes of determining
whether a breach exists with respect to any of the representations and warranties set forth in this Agreement, any such supplemental or amended disclosure will not be deemed to have been disclosed to a Purchaser, unless such Purchaser otherwise
consents in writing in its sole and absolute discretion. 
 4.7 Notification of Certain Matters. The Company will give prompt notice
to the Purchasers of (i) the occurrence, or failure to occur, of any event that any Loan Party believes could cause any of the Company’s representations or warranties contained in this Agreement to be untrue or inaccurate in any material
respect at any time during or prior to Closing, and (ii) any failure of any Loan Party to comply in any material respect with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder. 
 ARTICLE V 
 LEGEND REMOVAL, TRANSFER, CERTAIN
SALES 
 5.1 Removal of Legend. The Legend shall be removed and the Company shall issue a certificate without such Legend to the
holder of any Security upon which it is stamped, and a certificate for a security shall be originally issued without the Legend, if, (a) the sale of such Security is registered under the Securities Act, (b) such holder provides the Company
with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions and reasonably satisfactory to the Company and its counsel (the reasonable cost of which shall be borne by the Company if, after
one (1) year, neither an effective registration statement under the Securities Act or Rule 144 is available in connection with such sale) to the effect that a public sale or transfer of such Security may be made without registration under
the Securities Act pursuant to an exemption from such registration requirements or (c) such Security can be sold pursuant to Rule 144 and the holder provides the Company with reasonable assurances that the Security can be so sold without
restriction. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the Legend has been removed, or which were originally issued without the Legend, pursuant to an effective registration statement, in accordance with the manner of distribution described in such registration
statement and to deliver a prospectus in connection with such sale, or in compliance with an exemption from the registration requirements of the Securities Act. In the event the Legend is removed from any Security or any Security is issued without
the Legend and the 

  

 -12- 

 
Security is to be disposed of other than pursuant to the registration statement or pursuant to Rule 144, then prior to, and as a condition to, such
disposition, such Security shall be relegended as provided herein in connection with any disposition if the subsequent transfer thereof would be restricted under the Securities Act. Also, in the event the Legend is removed from any Security or any
Security is issued without the Legend and thereafter the effectiveness of a registration statement covering the resale of such Security is suspended or the Company determines that a supplement or amendment thereto is required by applicable
securities laws, then upon reasonable advance notice to Purchaser holding such Security, the Company may require that the Legend be placed on any such Security that cannot then be sold pursuant to an effective registration statement or Rule 144 or
with respect to which the opinion referred to in clause (b) next above has not been rendered, which Legend shall be removed in accordance with this Section 5.1. 
 5.2 Transfer Agent Instructions. The Company will issue irrevocable instructions to its transfer agent in the form attached hereto as Exhibit C (the “Irrevocable Transfer Agent
Instructions”), and any subsequent transfer agent, to issue certificates, registered in the name of each Purchaser or its respective nominee(s), as applicable, by the applicable Purchaser for the Additional Shares and the Warrant Shares in
such amounts as specified from time to time by the applicable Purchaser to the Company upon issuance of the Additional Shares or exercise of the Warrant. If the applicable Purchaser provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that a public sale, assignment or transfer of the Securities may be made without registration under the Securities Act or the applicable Purchaser provides the Company with reasonable assurances that the Securities can
be sold pursuant to Rule 144 without any restriction as to the number of securities acquired as of a particular date that can then be immediately sold, the Company will permit the transfer, and, in the case of the Additional Shares and the Warrant
Shares, promptly instruct its transfer agent to issue one or more certificates in such name and in such denominations as specified by the applicable Purchaser and without the Legend. 
 ARTICLE VI 
 CONDITIONS TO THE COMPANY’S OBLIGATION TO ISSUE 
 6.1 Conditions to the Company’s Obligation to Issue. The obligation of the Company hereunder to issue and sell the Initial Shares and Warrant
to the applicable Purchaser at the Closing is subject to the satisfaction, as of the date of the Closing and with respect to the Purchasers, of each of the following conditions thereto, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion: 
 (i) The representations and warranties of
Purchasers shall be true and correct as of the date when made and as of the Closing with the same force and effect as though such representations and warranties had been made on and as of the date of Closing (except for representations and
warranties that speak as of a specific date), and Purchasers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with
by the applicable Purchaser at or prior to the Closing. 
  

 -13- 

 ARTICLE VII 
 CONDITIONS TO PURCHASERS’ OBLIGATION TO PURCHASE 
 7.1 The obligation of each Purchaser hereunder to
purchase the Initial Shares and Warrant to be purchased by the applicable Purchaser on the date of the Closing is subject to the satisfaction of each of the following conditions, provided that these conditions are for each Purchaser’s sole
benefit and may be waived by such Purchaser at any time in such Purchaser’s sole discretion: 
 (i) Representations
and Warranties True; Compliance with Covenants and Conditions. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing with the same force and effect as
though such representations and warranties had been made on and as of the date of Closing, and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Company at or prior to the Closing; and 
 (ii) Officer’s
Certificate. The Company shall have delivered an officer’s certificate, in form and substance reasonably acceptable to the Purchasers, as to the accuracy of the Company’s representations and warranties pursuant to ARTICLE
III. 
 ARTICLE VIII 
 GOVERNING LAW; MISCELLANEOUS 
 8.1 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be drafted. The Company and the Purchasers agree that venue for any dispute arising under this Agreement will lie exclusively in the state or federal courts located in New
York County, New York, and the parties irrevocably waive any right to raise forum non conveniens or any other argument that New York is not the proper venue. The Company and the Purchasers irrevocably consent to personal jurisdiction in the
state and federal courts of the State of New York. The Company and the Purchasers consent to process being served in any such suit, action or proceeding by delivering a copy thereof 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 in this Section 8.1 shall affect or limit any right to serve process in any other manner permitted by law. The Company
and the Purchasers hereby agree that the prevailing party in any suit, action or proceeding arising out of or relating to this Agreement, shall be entitled to reimbursement for reasonable legal fees from the non-prevailing party. The parties hereby
waive all rights to a trial by jury. 
  

 -14- 

 8.2 Counterparts. This Agreement may be executed in two or more counterparts, including, without
limitation, by facsimile transmission, all of which counterparts shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event any signature
page is delivered by facsimile transmission, the party using such means of delivery shall cause additional original executed signature pages to be delivered to the other parties as soon as practicable thereafter. 
 8.3 Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement. 
 8.4 Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction. 
 8.5 Entire Agreement; Amendments. This Agreement, the Credit Agreement, the Transaction Documents and the instruments referenced herein and
therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Purchaser makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this Agreement may be waived other than by an instrument in writing signed by the party to be charged with enforcement and no provision of this Agreement may be amended other than
by an instrument in writing signed by the Company and each Purchaser. 
 8.6 Notice. Any notice herein required or permitted to be
given shall be in writing and may be personally served or delivered by nationally-recognized overnight courier or by facsimile machine with confirmed telecopy or email with electronic confirmation of receipt, and, if sent during normal business
hours of the recipient, shall be deemed delivered at the time and date of receipt and; if not, then shall be deemed delivered on the next business day (which shall include telephone line facsimile transmission). The addresses for such communications
shall be: 
  

			
	 If to the
 Company:
	  	 Progressive Gaming International Corporation
 920
Pilot Road
 Las Vegas, NV 89119
 Attention: Heather A.
Rollo
 Tel. No.: (702) 263-2583
 Facsimile No.: (702) 263-1681

 E-mail: heather.rollo@pgicorp.net

  

 -15- 

			
	with copies (which shall not constitute notice) to:	  	 Cooley Godward Kronish LLP
 4401 Eastgate
Mall
 San Diego, CA 92121
 Attention: Steven M. Przesmicki, Esq.

 Tel. No.: (858) 550-6070
 Facsimile No.: (858)
550-6420
 E-mail: przes@cooley.com

		
	If to a Purchaser:	  	 Private Equity Management Group Inc.
 Private Equity
Management Group LLC
 c/o Private Equity Management Group Financial Corporation
 1 Park Plaza
 Suite 550
 Irvine,
CA 92614
 Attention: Shiping Xu
 Tel. No.: (949)
757-0977
 Facsimile No.: (949) 757-0978
 E-mail: sxu@pemgroup.com

		
	 with copies
 (which shall not constitute notice) to:

	  	 Sheppard, Mullin, Richter & Hampton LLP
 333 S.
Hope Street, 48th Floor
 Los Angeles, CA 90071
 Attention:
William M. Scott IV, Esq.
 Tel No.: (213) 620-1780
 Fax No.:
(213) 443-4717
 E-mail: bscott@sheppardmullin.com

 Each party shall provide notice to the other parties of any change in address. 
 8.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The
Company and Purchasers shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party hereto; provided that any Purchaser may assign its rights and obligations hereunder to any of its
“affiliates,” as that term is defined under the Securities Act so long as such affiliate is an accredited investor (within the meaning of Regulation D under the Securities Act) and agrees in writing to be bound by this Agreement. Subject
to the preceding sentence, each Purchaser shall be permitted to assign its rights hereunder, in whole or in part. 
 8.8 Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 8.9 Survival; Indemnification. The representations and warranties of the Company and the agreements and covenants shall survive the Closing
notwithstanding any due 

  

 -16- 

 
diligence investigation conducted by or on behalf of any Purchaser. The Company agrees to indemnify and hold harmless each Purchaser and each of
Purchaser’s officers, directors, employees, partners, agents and affiliates from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees and disbursements and other
expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) arising as a result of or related to
any breach or alleged breach by the Company of any of its representations or covenants set forth herein, including advancement of expenses as they are incurred. The representations and warranties of each Purchaser shall survive the Closing and such
Purchaser shall indemnify and hold harmless the Company and each of its officers, directors, employees, partners, agents and affiliates from and against any and all Losses arising as a result of the breach of such Purchaser’s representations
and warranties. 
 8.10 Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby. 
 8.11 Remedies. No provision of this Agreement providing for any remedy to the
parties shall limit any remedy which would otherwise be available to the parties at law or in equity. Nothing in this Agreement shall limit any rights Purchaser may have with any applicable federal or state securities laws with respect to the
investment contemplated hereby. The parties acknowledge that a breach by one of them of this Agreement will cause irreparable harm to the other party. Accordingly, the parties acknowledge that the remedy at law for a material breach of their
obligations under this Agreement will be inadequate and agree, in the event of a breach or threatened breach by the other party of the provisions of this Agreement, that each party shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach and requiring immediate compliance, without the necessity of showing economic loss and without any bond or other security being required. 
 8.12 Final Agreement. This Agreement, when executed by the parties hereto, shall constitute the final agreement between the parties and upon such
execution Purchaser and the Company accept the terms hereof and have no cause of action against each other for prior negotiations preceding the execution of this Agreement. 
  

 -17- 

 IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this Agreement to be duly
executed as of the date first above written. 
  

			
	COMPANY:
	
	PROGRESSIVE GAMING INTERNATIONAL CORPORATION
		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	Russel H. McMeekin
	Title:	 	President and Chief Executive Officer
	
	PURCHASERS:
	
	PRIVATE EQUITY MANAGEMENT GROUP INC.
		
	By:	 	 /s/ PETER PAUL MENDEL

	Name:	 	Peter Paul Mendel
	Title:	 	Managing Director, Chief Compliance Officer
	
	PRIVATE EQUITY MANAGEMENT GROUP LLC
		
	By:	 	 /s/ PETER PAUL MENDEL

	Name:	 	Peter Paul Mendel
	Title:	 	Managing Director, Chief Compliance Officer

 Common Stock and Warrant Purchase Agreement 

 LIST OF EXHIBITS 
  

			
	EXHIBIT A    -	 	WARRANT
		
	EXHIBIT B    -	 	REGISTRATION RIGHTS AGREEMENT
		
	EXHIBIT C    -	 	IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

  

 -19- 

 Exhibit A 
 to 
 Common Stock and Warrant Purchase Agreement 
 FORM OF WARRANT 
  

 -20- 

 Exhibit B 
 to 
 Common Stock and Warrant Purchase Agreement 
 REGISTRATION RIGHTS AGREEMENT 
  

 -21- 

 Exhibit C 
 to 
 Common Stock and Warrant Purchase Agreement 
 FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS 
  

 -22- 

 List of Schedules 
 to 
 Common Stock and Warrant Purchase Agreement 

 

					
	Schedule 3	 	-	    	Company Disclosure Schedules
			
	Schedule 3.3	 	-	    	Capitalization

  

 -23-Amendment No. 1 to Note and Warrant Purchase Agreement

 Exhibit 10.5 
 AMENDMENT NO 1. TO NOTE AND WARRANT PURCHASE AGREEMENT 
 This Amendment No. 1 dated as of
August 14, 2008 is entered into with reference to the Note and Warrant Purchase Agreement (the “Purchase Agreement”) dated as of August 4, 2008, among PROGRESSIVE GAMING INTERNATIONAL CORPORATION, a Nevada corporation (the
“Issuer”), each subsidiary of the Issuer listed as a “Guarantor” on the signature pages thereto (the “Guarantors”), and INTERNATIONAL GAME TECHNOLOGY, a Nevada corporation, as Agent and sole initial
Purchaser. Capitalized terms used herein are used with the meanings set forth for those terms in the Purchase Agreement. 
 The parties
hereto hereby agree with reference to the following facts: 
 A. It is anticipated that the funding under the Purchase Agreement will be made
on August 15, 2008. 
 B. Certain of the conditions to such funding are not in a position to be satisfied. 
 C. The parties desire to provide for the orderly satisfaction of such matters on a post-closing basis. 
 D. The parties also desire to provide for certain other amendments to the Purchase Agreement. 
 NOW, THEREFORE, the parties hereby agree as follows: 
 1. Arrangements concerning the Australian Subsidiary. It is hereby agreed that the Issuer shall not pledge the stock of Progressive Gaming International (Australasia) Pty Ltd (the “Australian Subsidiary”) to the Agent or to
the Senior Credit Facility Agent to secure the Obligations or the obligations under the Senior Loan Documents, and that the Australian Subsidiary shall not be required to sign any instrument, document or agreement granting Liens on its property to
secure its guarantee of the obligations under the Purchase Agreement or the Senior Loan Documents on the Closing Date, provided that: 
 (a) The Senior Credit Facility Agent shall similarly also agree not to require such pledge or Lien; 
 (b) Within ten Business Days following the Closing Date, (i) the Issuer shall pledge all of the equity interests in the Australian Subsidiary to the Agent and to the Senior Credit Facility Agent pursuant to separate pledge agreements
to be governed by New York law (i.e., agreements which are distinct from the Issuer Security Agreement, the Guarantor Security Agreements and the similar security agreements executed in favor of the Senior Credit Facility Agent), and (ii) the
Australian Subsidiary shall grant a lien on all of its assets to secure the Obligations and the obligations under the Senior Loan Documents pursuant to separate guarantor security agreements to be governed by New York law (i.e., agreements which are
distinct from the Issuer Security Agreement, the Guarantor Security Agreements and the similar security agreements executed in favor of the Senior Credit Facility Agent); and 
  

 -1- 

 (c) The liens contemplated above shall be granted pursuant to agreements reasonably
acceptable to the Agent and the Senior Credit Facility Agent, but will limit the obligations secured under both the agreements in favor of the Agent and in favor of the Senior Credit Facility Agent to US$10,000,000 in the aggregate (without
allocation of such secured amount to the Obligations or the obligations under the Senior Loan Documents or the guarantees thereof). 
 2.
Other Foreign Collateral Arrangements. The Issuer hereby agrees that, in addition to the actions required by Section 1 hereof, it shall, prior to September 30, 2008 (but not later than the date any similar Liens are granted to the
Senior Credit Facility Agent), take the following actions in respect of each of its foreign Subsidiaries: 
 (a) The Issuer
shall, and shall cause each of its foreign Subsidiaries to, grant Liens on 100% of the equity securities of each foreign Subsidiary of the Issuer (including without limitation the Australian Subsidiary) to secure the Obligations which Liens shall be
enforceable and perfected under the laws of their respective jurisdictions of formation, provided that in respect of the equity securities of Progressive Gaming International (Netherlands) B.V. (the “Dutch Subsidiary”) only 65% of
such stock shall be pledged; 
 (b) Cause each of its foreign subsidiaries (other than the Dutch Subsidiary) to grant liens on
their respective assets to secure the Obligations; and 
 (c) Deliver to the Agent customary opinions of foreign counsel to
the Issuer regarding the perfection and enforceability of such pledges and liens. 
 3. Smith Barney. The Issuer represents that it
has caused Mikohn Holdings, Inc. to request that Smith Barney issue a certificate to evidence the 75,800 shares of the capital stock of the Issuer held by Mikohn Holdings, Inc. in a securities account with Smith Barney, and that the Issuer shall
cause Mikhohn Holdings, Inc. to promptly, and in any event within two Business Day following the receipt thereof, deliver that certificate to the Senior Credit Facility Agent (without non-standard or restrictive legends), evidencing such shares
together with a stock power executed in blank with respect thereto. 
 4. Landlord Waivers and Collateral Access Agreements. The Agent
waives, as of the Initial Funding Date, all requirements for the delivery of Landlord Waivers and Collateral Access Agreements by the Issuer and its Subsidiaries, provided that the Issuer shall diligently pursue the execution thereof in a
form acceptable to the Agent and shall in any event provide the same prior to September 15, 2008. 
 5. Revision to
Section 11.15. Section 11.15 of the Purchase Agreement is hereby amended to add the following language at the end of Section 11.15 as set forth below: 
 “FOR THE AVOIDANCE OF DOUBT, THE OBLIGATIONS OF EACH ISSUER PARTY UNDER THIS SECTION 11.15 SHALL APPLY NOTWITHSTANDING THE SOLE, CONTRIBUTORY, COMPARATIVE, OR OTHER TYPE OF NEGLIGENCE (OTHER THAN GROSS
NEGLIGENCE) OF THE INDEMNITEE OR ANY OTHER PERSON.” 
  

 -2- 

 6. Revision to Total Debt Service Coverage Ratio. Section 6.03(b) of the Purchase Agreement
is hereby amended so that the Total Debt Service Coverage Ratio as of the relevant Measurement Period is amended to be as set forth below (with out amending the required ratio for other Measurement Periods): 
  

			
	 Fiscal Quarter Ending:
	  	 Minimum Total Debt Service Coverage Ratio:

	September 30, 2008	  	0.72 to 1:00
	December 31, 2008	  	1.71 to 1:00
	March 31, 2009	  	0.99 to 1.00
	June 30, 2009	  	0.99 to 1:00

 7. Certain Tax Disclosures. The Issuer hereby supplements its representation made pursuant
to Section 5.01(j) of the Purchase Agreement with the information set forth on Schedule A hereto, but represents that the failure to file the tax returns described therein will not result in the assessment of aggregate penalties, and
that the aggregate taxes payable to the related tax authorities, do not exceed $100,000. 
 8. Revision to Definition of Inactive
Subsidiary. The following paragraph amends and restates in its entirety the definition of “Inactive Subsidiary” in the Purchase Agreement: 
 “ “Inactive Subsidiary” has the meaning specified therefor in Section 5.01(hh).” 
 9. Revision to Section 5.01(hh). The following paragraph amends and restates in its entirety Section 5.01(hh) of the Purchase Agreement: 
 “(hh) Inactive Subsidiaries. The Issuer represents and warrants to the Agent that Mikohn Holdings, Inc., End X and Games of Nevada, Inc., a Nevada corporation (each an “Inactive Subsidiary”) hold
no assets and have no obligations or liabilities, and do not engage in any business activity, except as set forth on Schedule 5.01(hh) to the Purchase Agreement, and agrees that it will not, and will not permit its Subsidiaries to, make any
investment in the Inactive Subsidiaries.” 
 10. Revision to Section 6.01(p). The following paragraph amends and restates in
its entirety Section 6.01(p) of the Purchase Agreement: 
 “(p) Licenses and Permits. The Issuer shall (i) ensure that
all licenses (including all necessary Gaming Licenses), permits, and consents and similar rights required from any federal, state, or local governmental body (including the Nevada Gaming Authorities and Mississippi Gaming Authorities) for the
ownership, use, or operation of the businesses or properties now owned or operated by the Issuer or its Subsidiaries are in full force and effect except for such licenses, permits, consents and similar rights the failure to maintain in full force

  

 -3- 

 
and effect could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (ii) maintain in force and effect
an approval of the Nevada Gaming Authorities and the Mississippi Gaming Authorities of continuous or delayed public offerings (the “Shelf Approvals”) substantially in the form of the Shelf Approvals of the Issuer in effective on the
Closing Date, (iii) comply, in all material respects, with all of the provisions thereof applicable to it, and (iv) comply with all provisions and requirements of all Gaming Licenses held by the Issuer or its Affiliates.” 

11. Revision to Section 6.02(r). The following paragraph amends and restates in its entirety Section 6.02(r) of the Purchase
Agreement: 
 “(r) Inactive Subsidiaries. Permit Mikohn Holdings to own any assets other than 175,800 shares of Common Stock,
incur any liabilities (other than de minimis liabilities) or engage in any business activity. Permit EndX to own any assets, incur any liabilities (other than certain tax liabilities not exceeding $10,000), or engage in any business activity. Permit
Games of Nevada, Inc. to own any assets, incur any liabilities (other than certain tax liabilities not exceeding $10,000), or engage in any business activity.” 
 12. Amendment to Rights Agreement. The Issuer and its Subsidiaries shall not agree to any amendment or other change to, supplement or modification or waiver of the Rights Agreement, dated as of June 14,
1999, between the Issuer and Computershare Limited, that could in any way adversely affect in any way International Game Technology or its Affiliates without the prior written consent of International Game Technology. 
 13. Events of Default. The failure of the Issuer or its Subsidiaries to timely comply with the covenants set forth herein shall constitute an
Event of Default under the Purchase Agreement. 
 14. Purchase Documents Confirmed. Except as expressly modified hereby, the terms of
the Purchase Documents are hereby confirmed. 
 15. Expenses. The Issuer confirms its obligation to pay the expenses of the Agent in
connection with the matters set forth herein. 
  

 -4- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written. 
  

			
	ISSUER:
	
	 PROGRESSIVE GAMING INTERNATIONAL CORPORATION,
 a Nevada corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	GUARANTORS:
	
	 PGIC NV,
 a Nevada
corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 MGC, INC.,
 a Nevada
corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 PROGRESSIVE GAMES, INC.,
 a Delaware
corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 GAMES OF NEVADA, INC.,
 a Nevada corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

 [Signature Page to Amendment No. 1 to Note and Warrant Purchase Agreement] 

			
	 VIKING MERGER SUBSIDIARY, LLC,
 a Delaware
limited liability company

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 PRIMELINE GAMING TECHNOLOGIES, INC.,
 a
California corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 MIKOHN INTERNATIONAL, INC.,
 a Nevada
corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 MIKOHN HOLDINGS, INC.,
 a Nevada corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

	
	 ENDX, INC. (USA),
 a Nevada
corporation

		
	By:	 	 /s/ RUSSEL H. MCMEEKIN

	Name:	 	 Russel H. McMeekin

	Title:	 	 President and Chief Executive Officer

 [Signature Page to Amendment No. 1 to Note and Warrant Purchase Agreement] 

			
	AGENT AND PURCHASER:
	
	INTERNATIONAL GAME TECHNOLOGY
		
	By:	 	 /s/ DANIEL R. SICILIANO

	Name:	 	 Daniel R. Siciliano

	Title:	 	 Chief Accounting Officer and Treasurer

 [Signature Page to Amendment No. 1 to Note and Warrant Purchase Agreement]

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