Exhibit 10.1

 

LINE OF CREDIT

For $250,000 at 0% interest

 

May 17, 2010

 

American Wagering, Inc. and Subsidiaries

John Salerno

675 Grier Drive

Las Vegas, Nevada 89119

 

Re:  $250,000 Line of Credit

 

Dear John:

 

Please accept this letter as confirmation that I, Victor Salerno (“Salerno”),
have approved a line of credit (the “Line of Credit”) to American Wagering, Inc.
and its subsidiaries (the “Borrower”) on the following terms and conditions:

 

Borrower: American Wagering, Inc. and subsidiaries

 

Amount: $250,000

 

Purpose: Commercial investment needs of the Borrower

 

Type: A line of credit available May 17, 2010 through February 1, 2013, unless
earlier terminated by the Borrower.  Advances will be made available at the
request of the Borrower (“Advances”). The outstanding amount of all Advances
shall be payable on February 1, 2013.

 

Interest: At a rate per annum which at all times shall equal zero percent (0%)
simple interest per annum.

 

Interest will be calculated on the basis of a 360-day year for the actual number
of days elapsed. Interest on Advances will be payable in arrears on the last day
of each month.

 

Advances: Prior to any Advance, the Borrower shall submit to Salerno a written
description of the intended use of such Advance. In addition, for each Advance
equal to or greater than Five Thousand Dollars ($5,000), Salerno shall have the
additional right, in its sole discretion, to approve the use of such Advance.
Advances shall be in the minimum amount of Five Thousand Dollars ($5,000) and
integral multiples thereof.

 

Note: Advances under the Line of Credit shall be evidenced by a revolving line
of credit promissory note (the “Note “) payable to the order of Salerno. The
Borrower acknowledges that, in the absence of manifest error, the actual
crediting of the amount of any Advance hereunder to an account of the Borrower
shall constitute presumptive evidence that such Advance was made hereunder, and
Salerno’ records with respect to Advances under the Note shall constitute
presumptive evidence of principal amounts outstanding, advanced and repaid from
time to time and at any time under the Line of Credit.

 

Repayments: Repayments of Advances may be made to Salerno without premium,
penalty or other fees

 

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at any time in the minimum amount of One Dollar ($1) or integral multiples
thereof. Advances shall be repaid at any time and to the extent that they exceed
the maximum amount of the Line of Credit available hereunder.

 

Conditions Precedent: The obligation of Salerno to make the first Advance under
this Line of Credit will not arise until all of the following documents in form
and substance satisfactory to Salerno have been received by Salerno:

 

A) The Note; and

 

B) Such other documents as Salerno may reasonably request.

 

Conditions to Utilization: Advances shall be made at the request of the Borrower
so long as the Borrower’s representations and warranties continue to be true and
correct in all material respects and no Event of Default, or event, which alone
or with the giving of notice, or the passage of time, or both, would constitute
an Event of Default, has occurred hereunder. The Borrower’s request for any
Advance shall constitute a certification by the Borrower that the
representations and warranties contained herein shall be true and correct, and
no event shall have occurred and be continuing which alone or with the giving of
notice, or the passage of time, or both, would constitute an Event of Default
hereunder.

 

Representations and Warranties: The Borrower represents and warrants that:

 

A) The Borrower has full legal right to borrow in the manner and on the terms of
this Agreement and the Note.

 

B) The execution, delivery and performance of this Agreement, the Note, and any
other documents delivered or to be delivered by the Borrower to Salerno,

 

(i) do not require any approval or consent of, or filing with, any governmental
agency or entity;

 

(ii) do not and will not

 

(a) result in, or require, the creation or imposition of any mortgage, deed of
trust, pledge, lien, security interest or other charge or encumbrance of any
nature on any property now owned or hereafter acquired by the Borrower, except
as provided in this Agreement.

 

C) This Agreement and the Note are valid and are legally enforceable against the
Borrower in accordance with their terms.

 

D) Borrower agrees to repay any Advances taken against this Line of Credit or
against the April 21, 2010 Amendment to the April 21, 2008 Guaranty Agreement
and Line of Credit from the FIRST PROCEEDS of any funds or capital raised by the
Borrower in a completed investment transaction.

 

E) The financial statements of AWI as at year ending January 31 of each year
(previously delivered by the Borrower to Salerno) have been prepared in
accordance with generally accepted

 

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accounting principles consistently applied throughout the periods involved and
present fairly in accordance with generally accepted accounting principles the
financial condition of AWI and all such information so furnished is to the
Borrower’s best knowledge true, correct and complete.

 

Reporting Requirements: The Borrower shall furnish Salerno with the following
statements and reports:

 

A) Within one hundred twenty (120) days after the end of the fiscal year, a copy
of the audited annual financial statements of Piercy Bowler Taylor & Kern, Ltd.

 

B) Within forty-five (45) days after the end of each fiscal quarter, a copy of
the quarterly financial statements of AWI, certified by the Borrower to the best
of her knowledge to present fairly the financial condition of AWI.

 

C) From time to time at the request of Salerno, the Borrower will deliver a
certificate as to its representations and warranties and no Events of Default
hereunder.

 

Events of Default: If any of the events set forth below ( “Events of Default”)
shall occur and be continuing, Salerno may, but shall not be obligated to,
declare the Note immediately due and payable and withhold Advances and pursue
any other rights and remedies available to Salerno or both:

 

A) A payment of interest on the Note is not made within ten (10) business days
following the date on which it is due;

 

B) A representation or warranty contained herein proves to be incorrect in any
material respect;

 

C) The Borrower shall be involved in financial difficulties as evidenced by the
entry of an order by a court of competent jurisdiction finding him to be
bankrupt or insolvent and such order shall not be vacated or stayed on appeal or
otherwise stayed within sixty (60) days;

 

D) If at any time Salerno reasonably believes in good faith that the prospect of
payment of any Obligation or the performance of any agreement of the Borrower,
or that there is such a change in the assets, liabilities, financial condition
or business of AWI, which, in each case, impairs Salerno’s security or increases
its risk of non-collection.

 

Following any Event of Default which is continuing, Salerno may decline to make
any or all further Advances hereunder; Salerno may proceed to protect and
enforce its rights by suit in equity, action at law and/or other appropriate
proceeding either for specific performance of any covenant or condition
contained in the Line of Credit or any other outstanding agreement with Salerno
or in any instrument delivered to Salerno pursuant hereto or thereto, or in aid
of the exercise of any power granted in the Line of Credit, any outstanding
agreement with Salerno or any such instrument.

 

Notices: All communications herein provided shall be in writing and shall be
sufficient if sent by United States mail, registered or certified, postage
prepaid, delivered by messenger, or so-called overnight courier, addressed as
follows:

 

If to the Pledgor:

Victor Salerno

 

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675 Grier Drive

Las Vegas, Nevada 89119

 

If to the Pledgee:

American Wagering, Inc.

675 Grier Drive

Las Vegas, Nevada 89119

Attention:  Secretary

 

or to such other address as the party to receive any such communication or
notice may have designated by written notice to the other party.

 

Expenses: All reasonable legal expenses reasonably incurred by Salerno in
connection with the preparation, administration and enforcement of this
Agreement and the Note shall be payable by the Borrower to Salerno on demand.

 

WAIVER OF JURY TRIAL: TO THE EXTENT PERMITTED BY LAW, EACH OF THE Borrower AND
Salerno HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION,
CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT, THE
NOTE, THE STOCK PLEDGE AGREEMENT AND THE OTHER AGREEMENTS AND TRANSACTIONS
CONTEMPLATED HEREBY AND THE CONDUCT OF THE RELATIONSHIP BETWEEN THE Borrower AND
Salerno.

 

Laws: This Agreement shall be construed as an instrument under seal and in
accordance with and governed in all respects by the laws of the State of
Nevada.  The parties subject to personal jurisdiction to the State of Nevada and
venue shall be in Clark County, Nevada.

 

If the above terms and conditions are satisfactory, please so indicate on the
enclosed copy hereof whereupon this letter will then constitute an Agreement
between the Borrower and Salerno.

 

 

 

BORROWER

 

 

 

 

By:

/s/ John Salerno

 

 

John Salerno

 

Title: Secretary

 

Agreed and Accepted on May 17, 2010

 

 

 

 

 

 

SALERNO

 

 

 

 

By:

/s/ Victor Salerno

 

 

Victor Salerno

 

Agreed and Accepted on May 17, 2010

 

 

Copy to:

General Counsel

 

American Wagering, Inc.

 

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