**Exhibit 10.21**

 

**Line of Credit Confirmation Letter**

 

April 21, 2008

 

AmericanWagering, Inc. and Subsidiaries

John Salerno

675Grier Drive

LasVegas, Nevada 89119

 

Re: Second Amendment toGuaranty dated June 8, 2006 and Restatement of Such Agreement as a “Lineof Credit”

 

Dear****John:

 

We are pleased to confirmthat Victor and Terina Salerno(the “Salernos”) have approved a line of credit (the “Line of Credit”) to you(the “Borrower”) on the following terms and conditions:

 

THIS SECOND AMENDMENT TO THEGUARANTY DATED JUNE 8, 2006 AND RESTATEMENT OF SUCH AGREEMENT AS A “LINE OFCREDIT” COMPLETELY AMENDS AND RESTATES THE GUARANTY AGREEMENT IN ITS ENTIRETY;THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL CONTROL.

 

Borrower: **American Wagering, Inc. and subsidiaries**

 

Amount:**$500,000**

 

Purpose: Commercialinvestment needs of the Borrower

 

Type: A line of creditavailable from the date hereof through February 16,2011 unless earlier terminated by the Borrower.  Advances will be made available at the requestof the Borrower (“Advances”). The outstanding amount of all Advances shall bepayable on February 16, 2011**.**

 

Interest: At a rate perannum of 10.0% .

 

Interestwill be calculated on the basis of a 360-day year for the actual number of dayselapsed. Interest on Advances will be payable in arrears on the last day ofeach month.

 

The loan repayment scheduleshould be agreed upon by the Borrower and the Salernos and is attached as Exhibit A.Advances: Prior to any Advance, the Borrower shall submit to the Salernos awritten description of the intended use of such Advance. In addition, for eachAdvance the Salernos shall have the additional right, in its sole discretion,to approve the use of such Advance. In any event, the Salernos shall not makeany Advance if such Advance, when aggregated with all amounts due andoutstanding under the Note (as defined below), is greater than 50% of thethen-current market value (as quoted on any applicable national exchange, theNasdaq stock market or other interdealer quotation system, or applicableover-the-counter market) of the Stock (as defined below), which is pledged bythe Borrower as security for the Line of Credit pursuant to the terms of theStock Pledge Agreement (as defined below).

 

Note: Advances under theLine of Credit shall be evidenced by a revolving line of credit promissory note

 

----

 

(the “Note “) payable to theorder of the Salernos. The Borrower acknowledges that, in the absence ofmanifest error, the actual crediting of the amount of any Advance hereunder toan account of the Borrower shall constitute presumptive evidence that suchAdvance was made hereunder, and the Salernos’ records with respect to Advancesunder the Note shall constitute presumptive evidence of principal amountsoutstanding, advanced and repaid from time to time and at any time under theLine of Credit.

 

Repayments: Repayments ofAdvances may be made to the Salernos without premium, penalty or other fees atany time in the minimum amount of interestdue. Advances shall be repaid at any time and to the extent that theyexceed the maximum amount of the Line of Credit available hereunder.

 

Conditions Precedent: Theobligation of the Salernos to make the first Advance under this Line of Creditwill not arise until all of the following documents in form and substancesatisfactory to the Salernos have been received by the Salernos:

 

A)The Note, including an approved repayment schedule; and

 

B)Such other documents as the Salernos may reasonably request.

 

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

 

Representations andWarranties: The Borrower represents and warrants that:

 

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

 

B)The execution, delivery and performance of this Agreement, the Note and theStock Pledge Agreement, and any other documents delivered or to be delivered bythe Borrower to the Salernos,

 

(i) donot require any approval or consent of, or filing with, any governmental agencyor entity;

 

(ii) donot and will not

 

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

 

C)This Agreement, the Note and the repayment schedule are valid and are legallyenforceable against the Borrower in accordance with their terms.

 

----

 

D)The financial statements of****AWI as at the most recent quarter (previously delivered by the Borrower tothe Salernos) have been prepared in accordance with generally acceptedaccounting principles consistently applied throughout the periods involved andpresent fairly in accordance with generally accepted accounting principles thefinancial condition of AWI and all such information so furnished is to theBorrower’s best knowledge true, correct and complete.

 

Reporting Requirements: TheBorrower shall furnish the Salernos with the following statements and reports:

 

A)Within one hundred twenty (120) days after the end of the fiscal year, a copyof 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 thequarterly financial statements of AWI,certified by the Borrower to the best of her knowledge to present fairly thefinancial condition of AWI.

 

C)From time to time at the request of the Salernos, the Borrower will deliver acertificate as to its representations and warranties and no Events of Defaulthereunder.

 

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

 

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

 

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

 

C)The Borrower is in default of any other material provision hereof;

 

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

 

F)If at any time the Salernos reasonably believes in good faith that the prospectof payment of any Obligation or the performance of any agreement of theBorrower, or that there is such a change in the assets, liabilities, financialcondition or business of AWI,which, in each case, impairs the Salernos’ security or increases its risk ofnon-collection.

 

Followingany Event of Default which is continuing, the Salernos may decline to make anyor all further Advances hereunder; the Salernos may proceed to protect andenforce its rights by suit in equity, action at law and/or other appropriateproceeding either for specific performance of any covenant or conditioncontained in the Line of Credit or any other outstanding agreement with theSalernos or in any instrument delivered to the Salernos pursuant hereto orthereto, or in aid of the exercise of any power granted in the Line of Credit,any outstanding agreement with the Salernos or any such instrument.

 

----

 

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

 

Ifto the Pledgor:

Victor Salerno

675 Grier Drive

Las Vegas, Nevada 89119

 

Ifto the Pledgee:

AmericanWagering, Inc.

675Grier Drive

LasVegas, Nevada 89119

Attention: Secretary

 

or to such other address asthe party to receive any such communication or notice may have designated bywritten notice to the other party.

 

Expenses: All reasonablelegal expenses reasonably incurred by the Salernos in connection with thepreparation, administration and enforcement of this Agreement and the Noteshall be payable by the Borrower to the Salernos on demand.

 

WAIVER OF JURY TRIAL:TO THEEXTENT PERMITTED BY LAW, EACH OF THE Borrower AND THE Salernos HEREBY WAIVESITS RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT ORPROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT AND THE NOTE, AND THEOTHER AGREEMENTS AND TRANSACTIONS CONTEMPLATED HEREBY AND THE CONDUCT OF THERELATIONSHIP BETWEEN THE Borrower AND THE Salernos.

 

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

 

If the above terms andconditions are satisfactory, please so indicate on the enclosed copy hereofwhereupon this letter will then constitute an Agreement between the Borrowerand the Salernos.

 

 
|     |                          | By:                                          |   /s/ John  Salerno |   |
|----------|-------------------------------|----------------------------------------------|-------------------------------|--------|
|     |                          |                                         |   John Salerno      |   |
|     |                          | Title: Secretary                             |                          |
|     |                          | Agreed and Accepted on  April 22, 2008: |                          |
|     |                          |                                         |
|     |                          |                                         |
| Copy to: | Melody Sullivan               |                                         |
|     | Chief Financial Officer       |                                         |
|     | American  Wagering, Inc. |                                         |

 

Encl.Exhibit A.  Line of Credit RepaymentAmortization Schedule

 

----

 
| **Loan Amortization Schedule** | **AWI LOAN FROM  SALERNO** |
|--------------------------------|----------------------------|

 

**NOTE: At  2/13/08 balance of  $480,000 out of $500,000 credit line.**

 
| ** **                  | ** ** | **Enter values** | ** ** |
|-----------------------------|------------|-----------------------|------------|
| Loan amount                 |       | $                     | 480,000.00 |   |
| Annual interest rate        |       | 10.00                 | %          |
| Loan period in years        |       | 3                     |       |
| Number of payments per year |       | 12                    |       |
| Start date of loan          |       | 11/8/2007             |       |
| Optional extra payments     |       | $                     | —     |   |

 
| ** **                   | ** ** | **Loan summary**       | ** ** |
|------------------------------|------------|-----------------------------|------------|
| Scheduled payment            |       | Interest only for 12 months |       |
| Scheduled number of payments |       | 36                          |       |
| Actual number of payments    |       |                        |       |
| Total early payments         |       | Additional $80K 2/13/08     |       |
| Total interest               |       | $                           | 120,364.88 |   |
|                              |            |                             |            |  |

 

**Lender name:  **VicSalerno

 
| **Pmt  No.** | ** ** | **Payment Date** | ** ** | **Beginning  Balance** | ** ** | **Scheduled  Payment** | ** ** | **Extra  Payment** | ** ** | **Total Payment** | ** ** | **Principal** | ** ** | **Interest** | ** ** | **Ending  Balance** | ** ** | **Cumulative  Interest** | ** ** |
|--------------|------------|-----------------------|------------|------------------------|------------|------------------------|------------|--------------------|------------|-------------------|------------|---------------|------------|--------------|------------|---------------------|------------|--------------------------|------------|
| ** **   | ** ** | ** **            | ** ** | ** **             | ** ** | ** **             | ** ** | ** **         | ** ** | ** **        | ** ** | ** **    | ** ** | ** **   | ** ** | ** **          | ** ** | ** **               | ** ** |
| 1            |       | 12/8/2007             |       | $                      | 400,000.00 |                   | $          | 12,906.87          |       | $                 | —     |          | $          | 12,906.87    |       | $                   | 9,573.54   |                     | $          | 3,333.33 |   | $ | 390,426.46 |   | $ | 3,333.33 |   |
| 2            |       | 1/8/2008              |       | 390,426.46             |       | 12,906.87              |       | —             |       | 12,906.87         |       | $             | 9,653.32   |         | $          | 3,253.55            |       | $                        | 380,773.14 |   | $ | 6,586.89 |   |
| 3            |       | **2/1/2008**          |       | 380,773.14             |       | 2,282.86               |       | —             |       | 2,282.86          |       | $             | —     |         | $          | 2,282.86            |       | $                        | 380,773.14 |   | $ | 8,869.75 |   |
| 3            |       | 2/13/2008             |       | 380,773.14             |       | —                 |       | (80,000.00         | )          | (80,000.00        | )          | $             | —     |         | $          | —              |       | $                        | 460,773.14 |   | $ | 8,869.75 |   |
| 3            |       | **2/18/2008**         |       | 460,773.14             |       | 999.55                 |       | —             |       | **999.55**        |       | $             | —     |         | $          | 999.55              |       | $                        | 460,773.14 |   | $ | 9,869.30 |   |
|         |       | **2/18/2008**         |       | 460,773.14             |       | 520.15                 |       | —             |       | **520.15**        |       | $             | —     |         | $          | 520.15              |       | $                        | 460,773.14 |   | $ | 10,389.45 |   |
| 4            |       | 3/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 13,709.08 |   |
| 5            |       | 4/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 17,548.85 |   |
| 6            |       | 5/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 21,388.63 |   |
| 7            |       | 6/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 25,228.41 |   |
| 8            |       | 7/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 29,068.18 |   |
| 9            |       | 8/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 32,907.96 |   |
| 10           |       | 9/13/2008             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 36,747.73 |   |
| 11           |       | 10/13/2008            |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 40,587.51 |   |
| 12           |       | 11/13/2008            |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 44,427.29 |   |
| 13           |       | 12/13/2008            |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 48,267.06 |   |
| 14           |       | 1/13/2009             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 52,106.84 |   |
| 15           |       | 2/13/2009             |       | 460,773.14             |       | 3,839.78               |       | —             |       | 3,839.78          |       | $             | —     |         | $          | 3,839.78            |       | $                        | 460,773.14 |   | $ | 55,946.61 |   |
| 16           |       | 3/13/2009             |       | 460,773.14             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,067.10      |       | 3,839.78     |       | 451,706.04          |       | $                        | 59,786.39  |   |
| 17           |       | 4/13/2009             |       | 451,706.04             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,142.66      |       | 3,764.22     |       | 442,563.38          |       | $                        | 63,550.61  |   |
| 18           |       | 5/13/2009             |       | 442,563.38             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,218.85      |       | 3,688.03     |       | 433,344.54          |       | $                        | 67,238.64  |   |
| 19           |       | 6/13/2009             |       | 433,344.54             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,295.67      |       | 3,611.20     |       | 424,048.87          |       | $                        | 70,849.84  |   |
| 20           |       | 7/13/2009             |       | 424,048.87             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,373.13      |       | 3,533.74     |       | 414,675.73          |       | $                        | 74,383.58  |   |
| 21           |       | 8/13/2009             |       | 414,675.73             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,451.24      |       | 3,455.63     |       | 405,224.49          |       | $                        | 77,839.21  |   |
| 22           |       | 9/13/2009             |       | 405,224.49             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,530.00      |       | 3,376.87     |       | 395,694.48          |       | $                        | 81,216.08  |   |
| 23           |       | 10/13/2009            |       | 395,694.48             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,609.42      |       | 3,297.45     |       | 386,085.06          |       | $                        | 84,513.54  |   |
| 24           |       | 11/13/2009            |       | 386,085.06             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,689.50      |       | 3,217.38     |       | 376,395.56          |       | $                        | 87,730.91  |   |
| 25           |       | 12/13/2009            |       | 376,395.56             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,770.25      |       | 3,136.63     |       | 366,625.32          |       | $                        | 90,867.54  |   |
| 26           |       | 1/13/2010             |       | 366,625.32             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,851.66      |       | 3,055.21     |       | 356,773.65          |       | $                        | 93,922.75  |   |
| 27           |       | 2/13/2010             |       | 356,773.65             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 9,933.76      |       | 2,973.11     |       | 346,839.89          |       | $                        | 96,895.87  |   |
| 28           |       | 3/13/2010             |       | 346,839.89             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,016.54     |       | 2,890.33     |       | 336,823.35          |       | $                        | 99,786.20  |   |
| 29           |       | 4/13/2010             |       | 336,823.35             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,100.01     |       | 2,806.86     |       | 326,723.34          |       | $                        | 102,593.06 |   |
| 30           |       | 5/13/2010             |       | 326,723.34             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,184.18     |       | 2,722.69     |       | 316,539.16          |       | $                        | 105,315.76 |   |
| 31           |       | 6/13/2010             |       | 316,539.16             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,269.05     |       | 2,637.83     |       | 306,270.11          |       | $                        | 107,953.58 |   |
| 32           |       | 7/13/2010             |       | 306,270.11             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,354.62     |       | 2,552.25     |       | 295,915.48          |       | $                        | 110,505.83 |   |
| 33           |       | 8/13/2010             |       | 295,915.48             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,440.91     |       | 2,465.96     |       | 285,474.57          |       | $                        | 112,971.80 |   |
| 34           |       | 9/13/2010             |       | 285,474.57             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,527.92     |       | 2,378.95     |       | 274,946.65          |       | $                        | 115,350.75 |   |
| 35           |       | 10/13/2010            |       | 274,946.65             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,615.65     |       | 2,291.22     |       | 264,331.00          |       | $                        | 117,641.97 |   |
| 36           |       | 11/13/2010            |       | 264,331.00             |       | 12,906.87              |       | —             |       | 12,906.87         |       | 10,704.12     |       | 2,202.76     |       | 253,626.88          |       | $                        | 119,844.73 |   |
|              |            |                       |            |                        |            |                        |            |                    |            |                   |            |               |            |              |            |                     |            |                          |            |  |  |  |  |  |  |  |  |  |  |

 

----