**EXHIBIT 10.2**

** **

| For Bank use Only     |   | Reviewed by |
|-----------------------|--------|-------------|
| Due MAY 1, 2003       |   |        |
| Customer # 6608780924 |   | Loan #: 18  |

 

**AMENDMENT TO LOAN AGREEMENT AND NOTE**

 

This amendment (the“Amendment”), dated as of the date specified below, is by and between theborrower (the “Borrower”) and the bank (the “Bank”) identified below.

 

**RECITALS**

 

A.  The Borrower and the Bank have executed a Loan Agreement (the “**Agreement**”) dated MAY 14, 2001 and theBorrower has executed a Note (the “**Note**”)dated May 14, 2001, either or both which may have been amended from time totime, and the Borrower (and if applicable certain third parties) have executedthe collateral documents which may or may not be identified in the Agreementand certain other related documents (collectively the “**Loan Documents**”), setting forth the termsand conditions upon which the Borrower may obtain loans from the Bank from timeto time in the original amount of $3, 500,000.00 as may be amended from time totime.

 

B.  The Borrower has requested that the Bank permit certain modificationsto the Agreement and Note as described below.

 

C.  The Bank has agreed to such modifications, but only upon theterms and conditions outlined in this Amendment.

 

**TERMS OF AGREEMENT**

 

In consideration of themutual covenants contained herein, and for other good and valuableconsideration, the Borrower and the Bank agree as follows:

 

ý  **Extension of Maturity Date.**  If checked here, any references in theAgreement or Note to the maturity date or date of final payments are herebydeleted and replaced with “MAY 1, 2003.”

 

o  **Change in Maximum Loan Amount.**  If checked here, all references to “$N/A” inthe Agreement and in the Note (whether or not numerically) as the maximum loanamount which may be borrowed from time to time are hereby deleted and replaced with“$ N/A”.

 

o  **Change in Multiple AdvanceTermination Date.**  If checkedhere, all references to “N/A” as the termination date for multiple advances arehereby deleted and replaced with “N/A”.

 

**Change in Financial Covenant(s).**

 

                                                (i)     o If checkedhere, all references to “$                                      ”in the Agreement as the minimum Net Working Capital amount are hereby deletedand replaced with “$                                      ”for the period beginning                                      and thereafter.

 

                                                (ii)    o If checked here, allreferences to “$                                      ”in the Agreement as the minimum Tangible Net Worth amount are hereby deletedand replaced with “$                                      ”for the period beginning                                      and thereafter.

 

                                                (iii)   o If checked here, allreferences to“                                      ”in the Agreement as the maximum Debt to Worth Ratio are hereby deleted andreplaced with “                                      ”for the period beginning                                      and thereafter.

 

                                                (iv)   o If checked here, allreferences to“                                      ”in the Agreement as the minimum Current Ratio are hereby deleted and replaced with“                                      ”for the period beginning                                      and thereafter.

 

                                                (v)    o If checked here, allreferences to“$                                      ”in the Agreement as the minimum Capital Expenditures amount are hereby deletedand replaced with “$                                      ”for the period beginning                                      and thereafter.

 

                                                (vi)   o If checked here, allreferences to “                                      ”in the Agreement as the minimum Cash Flow Coverage Ratio  are hereby deleted and replaced with“                                      ”for the period beginning                                      and thereafter.

 

                                                (vii)  o If checked here, allreferences to “$                                      ”in the Agreement as the maximum Officers, Directors, Partners, and ManagementSalaries and Other Compensation amount are hereby deleted and replaced with “$                                      ”for the period beginning“                                      and thereafter.

 

                                                o   **Change inPayment Schedule.**  If checkedhere, effective upon the date of this Amendment, any payment terms are amendedas follows.

 

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o  **Change in Late Payment Fee.**  If checked here, subject to applicable law,if any payment is not made on or before its due date, the Bank may collect adelinquency charge of                                      %of the unpaid amount.  Collection of thelate payment fee shall not be deemed to be a waiver of the Bank’s right todeclare a default hereunder.

 

**Default Interest Rate.**  Notwithstanding any provision of this Note to the contrary, uponany default or at any time during the continuation thereof (including failureto pay upon maturity), the Bank may, at its option and subject to applicablelaw, increase the interest rate on this Note to a rate of 5% per annum plus theinterest rate otherwise payable hereunder. Notwithstanding the foregoing and subject to applicable law, upon theoccurrence of a default by the Borrower or any guarantor involving bankruptcy,insolvency, receivership proceedings or an assignment for the benefit ofcreditors, the interest rate on this Note shall automatically increase to a rateof 5% per annum plus the rate otherwise payable hereunder.

 

**Effectiveness of Prior Documents.**  Except as specifically amended hereby, theAgreement, the Note and the other Loan Documents shall remain in full force andeffect in accordance with their respective terms.  All warranties and representations contained in the Agreement andthe other Loan Documents are hereby reconfirmed as of the date hereof.  As collateral previously provided to securethe Agreement and/or Note continues as security, and all guarantiesguaranteeing obligations under the Loan Documents remain in full force andeffect.  This is an amendment, not anovation.

 

**Preconditions to Effectiveness.**  This Amendment shall only become effectiveupon execution by the Borrower and the Bank, and approval by any other thirdparty required by the bank.

 

**No Waiver of Defaults: Warranties.**  This Amendment shall not be construed as orbe deemed to be a waiver by the Bank of existing defaults by the Borrower,whether known or undiscovered.  Allagreements, representations and warranties made herein shall survive theexecution of this Amendment.

 

**Counterparts.**  This Amendment may be signed in any number of counterparts, eachof which shall be considered an original, but when taken together shall constituteone document.

 

**Authorization.**  The Borrower represents and warrants that the execution, deliveryand performance of this Amendment and the documents referenced herein arewithin the authority of the Borrower and have been duly authorized by allnecessary action.

 

**Attachments.  Alldocuments attached hereto, including any appendices, scheduled, riders andexhibits to this Amendment, are hereby expressly incorporated herein byreference.**

 

Dated as of : MAY 3, 2002

 
|                  |           |                          | PDS GAMING CORPORATION |
|-----------------------|----------------|-------------------------------|------------------------|
| (Individual Borrower) |           | Borrower Name  (Organization) |
|                  |           |                          |                   |   |
|                  |           | a                             | MINNESOTA Corporation  |
| Borrower Name         | N/A            |                          | By :                   |  /s/ Martie Vlcek |
|                  |           |                          | Name and Title :       |  MARTIE VLCEK, CFO |
|                  |           |                          |                   |
|                  |           | By :                          |                   |
|                  |           |                          |                   |   |
| Borrower Name         | N/A            |                          | Name and Title :       |   |
|                  |           |                          |                   |   |
|                  |           |                          |                   | SEE ATTACHED SIGNATURE  ADDENDUM FOR  CO-BORROWER SIGNATURE(S) |
|                  |           |                          |                   |   |
| Agreed to :           |           |                          |                   |   |
|                  |           |                          |                   |   |
| U.S. BANK N.A.,       |           |                          |                   |
| (Bank)                |           |                          |                   |   |
|                  |           |                          |                   |   |
| By :                  |           | /s/ Susan Lydon               |                   |   |
|                  |           | SUSAN LYDON                   |                   |   |
| Name and Title :      | VICE PRESIDENT |                          |                   |   |
|                       |                |                               |                        |  |  |  |  |  |  |  |  |

 

FORADDITIONAL TERMS.  SEE ATTACHED ADDENDUM

 

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