FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
 
THIS FIRST AMENDMENT (the “Amendment”), dated March 29th, 2007, is entered into
by and between WELLS GARDNER ELECTRONICS CORPORATION, an Illinois corporation
(“Wells Gardner”) and AMERICAN GAMING & ELECTRONICS, INC., a Nevada corporation
(“American”), Wells Gardner and American, each a Borrower are hereinafter,
unless referenced individually, collectively referred to as (the “Borrower”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its
Wells Fargo Business Credit operating division.

RECITALS

The Borrower and the Lender are parties to a Credit and Security Agreement dated
August 21, 2006 (as amended from time to time, the “Credit Agreement”).
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.

The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Terms used in this Amendment, which are defined in the Credit Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.
 
 

 
2.
The Credit Agreement is hereby amended and modified as follows:

 
(a) Section 1.1 Definitions shall be amended to read as follows:
 
Subsection (i) of the definition of “Eligible Accounts” shall be amended to read
as follows:
 
(i) (A) That portion of Accounts unpaid ninety (90) days or more after the
invoice date, or (B) with respect to Accounts due more than thirty (30) days,
but not more than one hundred twenty (120) days, after their invoice date, that
portion of such Accounts which is unpaid more than sixty (60) days past the
stated due date, but not to exceed 120 days from invoice date.
 

 
 

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Subsection (xi) of the definition of “Eligible Foreign Accounts” shall be
amended to read as follows:
 
(xi) Subject to Lender’s and the insurance underwriter’s approval, that portion
of Accounts owed by any one account debtor that would permit Revolving Advances
supported by such account debtor’s Accounts to exceed $500,000 at any one time
with respect to all, excluding Aristocrat Leisure Industries PTY.LTD (limitation
of $1,200,000 shall apply) and Recreativos Franco S.A. (limitation of $700,000
shall apply) and Globexpsa (limitation of $600,000) shall apply), except as
otherwise provided in (b)(ii) of the definition of “Borrowing Base”;
 
3. No Other Changes. Except as explicitly amended by this Amendment, all of the
terms and conditions of the Credit Agreement shall remain in full force and
effect and shall apply to any advance or letter of credit thereunder.

4. Conditions Precedent. This Amendment shall be effective when the Lender shall
have received an executed original hereof, together with each of the following,
each in substance and form acceptable to the Lender in its sole discretion:

(a) Such other matters as the Lender may require.

5. Representations and Warranties. The Borrower hereby represents and warrants
to the Lender as follows:

(a) The Borrower has all requisite power and authority to execute this
Amendment and any other agreements or instruments required hereunder and to
perform all of its obligations hereunder, and this Amendment and all such other
agreements and instruments has been duly executed and delivered by the Borrower
and constitute the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms.

(b) The execution, delivery and performance by the Borrower of this
Amendment and any other agreements or instruments required hereunder have been
duly authorized by all necessary corporate action and do not (i) require any
authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any
provision of any law, rule or regulation or of any order, writ, injunction or
decree presently in effect, having applicability to the Borrower, or the
articles of incorporation or by-laws of the Borrower, or (iii) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the Borrower is a
party or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in Article V of the
Credit Agreement are correct on and as of the date hereof as though made on and
as of such date, except to the extent that such representations and warranties
relate solely to an earlier date.

 
 

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6. References. All references in the Credit Agreement to “this Agreement” shall
be deemed to refer to the Credit Agreement as amended hereby; and any and all
references in the Security Documents to the Credit Agreement shall be deemed to
refer to the Credit Agreement as amended hereby.

7. No Waiver. The execution of this Amendment and the acceptance of all other
agreements and instruments related hereto shall not be deemed to be a waiver of
any Default or Event of Default under the Credit Agreement or a waiver of any
breach, default or event of default under any Security Document or other
document held by the Lender, whether or not known to the Lender and whether or
not existing on the date of this Amendment.

8. Release. The Borrower hereby absolutely and unconditionally releases and
forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.

9. Costs and Expenses. The Borrower hereby reaffirms its agreement under the
Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Loan Documents, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.

10. Miscellaneous. This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which counterparts, taken together, shall constitute one and the same
instrument.
 
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 
 

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WELLS FARGO BANK,
NATIONAL ASSOCIATION
 
By _/s/ Brian T. Sprink____________________
Brian T. Sprink
Its: Vice President
 
WELLS GARDNER ELECTRONICS CORPORATION
 
By _/s/ James F. Brace______________
James F. Brace
Its: VP, Secretary, Treasurer and CFO
 
 
AMERICAN GAMING & ELECTRONICS, INC.
 
By _/s/ James F. Brace______________
James F. Brace
Its: VP and CFO

 

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