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 


 

















 


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 


 

















 


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


 

















 


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.