**Exhibit10.5**

 

CHANGEOF TERMS TO LINE OF CREDIT

 

April 21, 2010

 

AmericanWagering, Inc. and Subsidiaries

John Salerno

675Grier Drive

LasVegas, Nevada 89119

 

Re:  Extending the maturity date of the April 21,2008 Guaranty Agreement and Line of Credit

 

Dear****John:

 

We are pleased to confirmthat 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:**$1,000,000**

 

Purpose: Commercialinvestment needs of the Borrower

 

Type: A line of creditavailable November 7, 2007 through February 1, 2012, unless earlierterminated by the Borrower.  Advanceswill be made available at the request of the Borrower (“Advances”). Theoutstanding amount of all Advances shall be payable on February 1, 2012.

 

Interest: At a rate perannum which at all times shall equal ten percent (10%) simple interest perannum.

 

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

 

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

 

Note: Advances under theLine 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 anyAdvance hereunder to an account of the Borrower shall constitute presumptiveevidence that such Advance was made hereunder, and Salerno’ records withrespect to Advances under the Note shall constitute presumptive evidence ofprincipal amounts outstanding, advanced and repaid from time to time and at anytime under the Line of Credit.

 

Repayments: Repayments ofAdvances may be made to Salerno without premium, penalty or other fees at anytime in the minimum amount of OneDollar ($1) or integral multiples thereof. Advances shall be repaid atany time and to the extent that they exceed the maximum amount of the Line ofCredit available hereunder.

 

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Conditions Precedent: Theobligation of Salerno to make the first Advance under this Line of Credit willnot arise until all of the following documents in form and substancesatisfactory to Salerno have been received by Salerno:

 

A) The Note; and

 

B) Such other documents asSalerno may reasonably request.

 

Conditions to Utilization:Advances shall 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 fulllegal right to borrow in the manner and on the terms of this Agreement and theNote.

 

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

 

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

 

(ii) do not and willnot

 

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

 

C) This Agreement and theNote are valid and are legally enforceable against the Borrower in accordancewith their terms.

 

D) The financial statementsof****AWI as at year ending January 31of each year (previously delivered by the Borrower to Salerno) have beenprepared in accordance with generally accepted accounting principlesconsistently applied throughout the periods involved and present fairly inaccordance with generally accepted accounting principles the financialcondition of AWI and all such information so furnished is to the Borrower’sbest knowledge true, correct and complete.

 

Reporting Requirements: TheBorrower 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 annualfinancial statements of Piercy Bowler Taylor & Kern, Ltd.

 

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

 

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

 

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

 

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

 

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

 

C) The Borrower shall beinvolved in financial difficulties as evidenced by the entry of an order by acourt of competent jurisdiction finding him to be bankrupt or insolvent andsuch order shall not be vacated or stayed on appeal or otherwise stayed withinsixty (60) days;

 

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

 

Following any Event ofDefault which is continuing, Salerno may decline to make any or all furtherAdvances hereunder; Salerno may proceed to protect and enforce its rights bysuit in equity, action at law and/or other appropriate proceeding either for specificperformance of any covenant or condition contained in the Line of Credit or anyother outstanding agreement with Salerno or in any instrument delivered toSalerno pursuant hereto or thereto, or in aid of the exercise of any powergranted in the Line of Credit, any outstanding agreement with Salerno or anysuch 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:

 

If to the Pledgor:

VictorSalerno

675Grier Drive

LasVegas, Nevada 89119

 

If to the Pledgee:

American Wagering, Inc.

675 Grier Drive

Las Vegas, 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.

 

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

 

WAIVER OF JURY TRIAL:TO THEEXTENT PERMITTED BY LAW, EACH OF THE Borrower AND Salerno HEREBY WAIVES ITSRIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING INRESPECT OF OR ARISING OUT OF THIS AGREEMENT, THE NOTE, THE STOCK PLEDGEAGREEMENT AND THE OTHER AGREEMENTS AND TRANSACTIONS CONTEMPLATED HEREBY AND THECONDUCT OF THE RELATIONSHIP BETWEEN THE Borrower AND Salerno.

 

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 Salerno.

 
|   |                                        | BORROWER           |   |
|--------|---------------------------------------------|--------------------|--------|
|   |                                        |               |   |
|   | By:                                         | /s/ John Salerno   |   |
|   |                                        | John Salerno       |   |
|   | Title: Secretary                            |               |
|   | Agreed and Accepted on  April 21, 2010 |               |
|   |                                        |               |   |
|   |                                        |               |   |
|   |                                        | SALERNO            |   |
|   |                                        |               |   |
|   | By:                                         | /s/ Victor Salerno |   |
|   |                                        | Victor Salerno     |   |
|   | Agreed and Accepted on  April 21, 2010 |               |

 

 
| Copy to: | General Counsel               |   |
|----------|-------------------------------|--------|
|     | American  Wagering, Inc. |   |

 

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