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
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(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 Acces
