Exhibit 10.6
TERM SHEET FOR $1,000,000.00 LINE OF CREDIT

     
Lender:
  [REDACTED]
Borrower:
  Diamondhead Casino Corporation (“DHCC”)
Description of Loan:
  Type: Draw Down Line of Credit (LOC)
Maturity:
  November 1, 2012
Interest:
  9% per annum calculated on the number of days advances are outstanding using a
365 day year.
Repayment:
  Interest only on outstanding principal amount of the Loan shall be due and
payable quarterly. All outstanding principal, interest, fees, charges and other
amounts are due at Maturity.
Advances:
  In increments of not less than $50,000.00 with 5 business days notice given
either by email, U.S. mail, or by fax.
Collateral:
  None-LOC will be unsecured.
Up Front Inducement:
  Upon execution of this Agreement, Lender will be entitled to 50,000 options to
purchase common stock of DHCC at $1.75 per share.
Stock Option:
  In addition to the Up Front Inducement, Lender shall have the right to
purchase a maximum of 250,000 shares of common, stock of DHCC at a purchase
price of $1.75 per share based upon the amount drawn down by Borrower. For
example, if the Borrower borrows only $500,000.00 of the $1,000,000.00 LOC, then
the Lender would have the right to purchase shares of DHCC common stock based on
the proportional amount borrowed ($500,000 divided by $1,000,000 x 250,000
shares equals 125,000 shares.) The Stock Purchase Option shall contain piggyback
registration rights and anti-dilution provisions. All 300,000 options herein
shall be exercisable prior to repayment in full by Borrower of the amount
borrowed.
 
   
Governing Law:
  Loan document shall be governed by Maryland law.

     
BORROWER:
  LENDER:
 
   
/s/ Deborah A. Vitale
 
Diamondhead Casino Corporation
  [REDACTED]
By: Deborah A. Vitale, President
   
Date: 10/22/08
  Date:10/21/08