Share Purchase Agreement

Exhibit 2.3  

CONTENTS

CLAUSE  

PAGE  

1.  

INTERPRETATION  

1  

2.  

AGREEMENT TO SELL AND PURCHASE  

3  

3.  

PURCHASE PRICE  

3  

4.  

COMPLETION  

3  

5.  

WARRANTIES AND REPRESENTATIONS  

4  

6.  

FURTHER ACTION  

5  

7.  

GRANT OF POWERS OF ATTORNEY  

5  

8.  

RELEASE OF SELLER’S SECURITY  

6  

9.  

NO DISCHARGE OF IGT ENCUMBRANCES  

6  

10.  

ASSIGNMENT  

6  

11.  

COSTS  

7  

12.  

ENTIRE AGREEMENT  

7  

13.  

VARIATIONS  

7  

14.  

WAIVER  

7  

15.  

INVALIDITY  

7  

16.  

NOTICES  

7  

17.  

COUNTERPARTS  

9  

18.  

GOVERNING LAW AND JURISDICTION  

9  

19.  

THIRD PARTY RIGHTS  

9  

THIS AGREEMENT is dated 16 January 2009

PARTIES

(1)      

PRIVATE EQUITY MANAGEMENT GROUP FINANCIAL CORPORATION, a corporation incorporated in California, as administrative agent for the Lenders (“ Seller” ).

(2)      

IGT-UK GAMING LIMITED, a company incorporated and registered in England and Wales (“ Buyer” ).

(3)      

PROGRESSIVE GAMING INTERNATIONAL CORPORATION, a corporation incorporated in Nevada ( “ Borrower”) ,

RECITALS

(A)      

The Borrower and certain of its subsidiaries entered into a Credit Agreement, dated as of 4 August 2008 (as amended, restated, supplemented, or otherwise modified from time to time, including all exhibits and schedules thereto, the “ Credit Agreement ”), with, among others, the Lenders party thereto, and the Seller, as administrative agent for the Lenders.

(B)      

In connection with the entry into by the Borrower of the Credit Agreement, the Borrower executed and delivered to the Seller an equitable mortgage of shares and securities (the “ Share Mortgage ”) under which the Borrower granted an equitable mortgage in favour of the Seller over the share capital (and the rights related thereto) held by the Borrower in PGIC

Holdings Limited (the “ UK Subsidiary ”). The Share Mortgage secures, among other things, payment and discharge of the Obligations arising under the Credit Agreement.

(C)      

The Borrower has defaulted under its Obligations pursuant to the Credit Agreement and an Event of Default has occurred under the Credit Agreement and is continuing.

(D)      

Seller has exercised the rights granted to it under the Share Mortgage, and, in enforcing the security created by the Share Mortgage, wishes to sell, pursuant to its power of sale under the Share Mortgage, and its rights under any other applicable law (including without limitation the Law of Property Act 1925 (the “ LPA ”)), the share capital held by the Borrower in the UK

Subsidiary (and the rights related thereto), and the Buyer wishes to purchase those assets, on the terms and conditions of this agreement.

(E)      

It is intended that this agreement take effect as a deed notwithstanding that a party may only execute this agreement under hand.

AGREED TERMS

1.      

INTERPRETATION

1.1      

Capitalised terms used but not defined herein have the meanings ascribed to them in the Credit Agreement. In this agreement, the following words and expressions and abbreviations have the following meanings, unless the context otherwise requires;.

“Bill of Sale” means the Secured Party Assignment and Bill of Sale dated on or about the date of this agreement and executed by the Seller and IGT; “Bill of Sale Purchase Price” means the consideration for the Purchased Assets (as that term is defined under the Bill of Sale) as specified in Section 3 of the Bill of Sale; “Completion” means the completion of the sale and purchase of the Shares and Securities and the Related Rights in accordance with this agreement; “Debentures” has the meaning given to that term in clause 4.4;

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1.2      

Clause, schedule and paragraph headings do not affect the interpretation of this agreement.

1.3      

A reference to a clause or a schedule is a reference to a clause of, or schedule to, this agreement. A reference to a paragraph is to a paragraph of the relevant schedule, and a reference to an appendix is to the relevant appendix to this agreement.

1.4      

A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality) and that person's personal representatives, successors or permitted assigns.

1.5      

A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated.

1.6      

Words in the singular include the plural and in the plural include the singular.

1.7      

A reference to one gender includes a reference to the other gender.

1.8      

A reference to a particular statute, statutory provision or subordinate legislation is a reference to it as it is in force from time to time taking account of any amendment or re-enactment and includes any statute, statutory provision or subordinate legislation which it amends or re- enacts and subordinate legislation for the time being in force made under it.

1.9      

A reference to writing or written includes faxes but not e-mail.

1.10      

Documents in agreed form are documents in the form agreed by the parties to this agreement and initialled by them or on their behalf for identification.

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1.11      

Where the words include(s) , including or in particular are used in this agreement, they are deemed to have the words "without limitation" following them.

1.12      

Any obligation in this agreement on a person not to do something includes an obligation not to agree or allow that thing to be done.

1.13      

Where the context permits, other and otherwise are illustrative and shall not limit the sense of the words preceding them.

2.      

AGREEMENT TO SELL AND PURCHASE

2.1      

Upon the terms and subject to the conditions of this agreement, the Seller shall sell, and the Buyer shall purchase, the Shares and Securities with effect from Completion, together with all of the Related Rights.

2.2      

The Buyer shall not be obliged to complete the purchase of any of the Shares and Securities unless the Seller completes the sale of all of the Shares and Securities simultaneously.

2.3      

Pursuant to clause 2.1, the Seller hereby transfers and assigns the Related Rights to the Buyer, with effect from Completion.

2.4      

The Borrower hereby:

(a)      

acknowledges that an Event of Default has occurred under the Credit Agreement, and is continuing; and

(b)      

agrees to waive the requirements under clauses 2.3, 2.5, 4.1(a)(i) and 4.2(b) of the Share Mortgage that the Seller give the Borrower 5 Business Days’ notice prior to taking any action permitted under such clauses, including the sale of the Shares and Securities and the Related Rights at Completion, as contemplated under this agreement.

2.5      

Seller hereby suspends Borrower’s rights under clause 2.5 of the Share Mortgage, and, by execution hereof, the Borrower hereby acknowledges receipt of such notice of suspension.

3.      

PURCHASE PRICE

3.1      

The consideration payable by the Buyer for the Shares and Securities and the Related Rights shall be the Purchase Price, which shall be paid in immediately available funds on Completion.

4.      

COMPLETION

4.1      

Completion shall take place at the time and date of execution of the Bill of Sale or as soon thereafter as is possible, or at such other time and date as may be agreed in writing between the Buyer and the Seller

4.2      

At Completion:

(a)      

The Seller shall deliver to the Buyer of or make available to the Buyer or its designee:

(i)      

stock transfer forms relating to all of the Shares and Securities duly executed, dated and completed in favour of the Buyer (or as it may direct);

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(ii)      

all stock and share certificates relating to the Shares and Securities;

(iii)      

any executed and undated resignation letters and letters of authority for any directors of the UK Subsidiary which have been delivered by the Borrower to the Seller pursuant to clause 2.3(iv) of the Share Mortgage;

(iv)      

any letters of authority and irrevocable proxy delivered by the Borrower to the Seller pursuant to clause 2.3(a)(ii) and (iii) of the Share Mortgage, and any other documents provided by the Borrower to the Seller under clause 2.3(a)(v) of the Share Mortgage;

(v)      

share certificates relating to all of the issued shares in the capital of each of Progressive Gaming International (Group) Ltd and Progressive Gaming International (UK) Ltd, and any undated stock transfer forms in relation to any of the issued shares in the capital of either of these companies which are in the possession of the Seller;

(vi)      

to the extent in the Seller’s possession at Completion, the common seals, certificates of incorporation and statutory books and share certificate books of each UK Subsidiary; and

(vii)      

an executed copy of a deed of release entered into by the Seller, in the agreed form, which unconditionally and irrevocably releases: (1) the Shares and Securities and the Related Rights from the security created by (or purported to be created by) the Share Mortgage and (2) the security created by (or purported to be created by) the debentures executed and delivered by the Borrower and the UK Subsidiaries in favour of the Seller (the “Debentures” ) as security and collateral for the Obligations under the Credit Agreement.

(b)      

The transfer and assignment of the Related Rights provided for in clause 2.3 shall take effect.

4.3      

The Buyer’s