Document:

Exhibit 10.19

 

CHANGE IN TERMS AGREEMENT

 

	
  Principal

  	
   

  	
  Loan Date 

  	
   

  	
  Maturity 

  	
   

  	
  Loan No 

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer 

  	
   

  	
  Initials

  	
   

  
	
  $1,425,000.00

  	
   

  	
  02-04-2008

  	
   

  	
  02-04-2013

  	
   

  	
  7015103

  	
   

  	
  1E / 45

  	
   

  	
   

  	
   

  	
  CH

  	
   

  	
   

  	
   

  
	
   

  
	
  References
  in the boxes above are for Lender’s use only and do not limit the
  applicability of this document to any particular loan or item. Any item above
  containing “***” has been omitted due to text length limitations.

  

 

	
  Borrower: 

  	
   

  	
  AWI GAMING, INC.

  	
  Lender:

  	
   

  	
  GREAT BASIN BANK OF NEVADA

  
	
   

  	
   

  	
  P O BOX 56

  	
   

  	
   

  	
  FALLON OFFICE

  
	
   

  	
   

  	
  LOVELOCK , NV 89419

  	
   

  	
   

  	
  498 W WILLIAMS AVENUE

  
	
   

  	
   

  	
   

  	
   

  	
  FALLON, NV 89406

  

 

	
  Principal Amount: $1,425,000.00

  	
   

  	
  Interest Rate: 8.000%

  	
   

  	
  Date of Agreement: February 4, 2008

  

 

DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory Note
dated February 21, 2006 between Borrower and Lender in the principal
amount of $1,500,000.00 and all subsequent modifications together with other
previously signed documents that remain in effect.

 

DESCRIPTION OF COLLATERAL. Borrower
acknowledges this Note is secured by the following collateral described in the
security instrument listed herein, all the terms and conditions of which are
hereby incorporated and made a part of this Agreement:

 

(A)  A Deed of Trust dated February 21,
2006, Recorded February 28, 2006, Document Number 247484, to a trustee in
favor of lender for all real property located at 1420 Cornell Avenue, Lovelock,
Pershing County, Nevada

 

(B)   A Commercial Security
Agreement dated February 21, 2006 between Borrower and Lender, for all
Furniture, Fixtures, Equipment and all Gaming Equipment.

 

DESCRIPTION OF CHANGE IN TERMS. Extend maturity
date, reduce the interest rate and change to a fixed rate amortized loan. A
prepayment penalty has been added.

 

PROMISE TO PAY. AWI GAMING, INC. (“Borrower”) promises
to pay to GREAT BASIN BANK OF NEVADA (“Lender”), or order, in lawful money of
the United States of America, the principal amount of One Million Four Hundred
Twenty-five Thousand & 00/100 Dollars ($1,425,000.00), together with
interest at the rate of 8.000% per annum on the unpaid principal balance from February 4,
2008, until paid in full. The interest rate may change under the terms and
conditions of the “INTEREST AFTER DEFAULT” section.

 

PAYMENT. Borrower will pay this loan in 59 regular
payments of $12,020.61 each and one irregular last payment estimated at
$1,261,506.46. Borrower’s first payment is due March 4, 2008, and all
subsequent payments are due on the same day of each month after that. Borrower’s
final payment will be due on February 4, 2013, and will be for all
principal and all accrued interest not yet paid. Payments include principal and
interest. Unless otherwise agreed or required by applicable law, payments will
be applied first to any late charges; then to any accrued unpaid interest; and
then to principal. Interest on this loan is computed on a 365/360 simple
interest basis; that is, by applying the ratio of the annual interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lender’s address shown above or at such other place as
Lender may designate in writing.

 

PREPAYMENT PENALTY; MINIMUM INTEREST CHARGE. Borrower agrees
that all loan fees and other prepaid finance charges are earned fully as of the
date of the loan and will not be subject to refund upon early payment (whether
voluntary or as a result of default), except as otherwise required by law. In
any event, even upon full prepayment of this Agreement, Borrower understands that
Lender is entitled to a minimum interest
charge of $15.00. Upon prepayment of this Agreement, Lender is entitled to the
following prepayment penalty: The Borrower may prepay up to 20% of the
principal balance in any year without penalty. Principal prepayments in excess
of that amount shall be subject to a prepayment penalty equal to 2% of the
excess amount paid the first year, 1% of the excess the second year. Other
than Borrower’s obligation to pay any minimum interest charge and prepayment
penalty, Borrower may pay all or a portion of the amount owed earlier than it
is due. Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower’s obligation to continue to make payments under the
payment schedule. Rather, early payments will reduce the principal balance due
and may result in Borrower’s making fewer payments. Borrower agrees not to send
Lender payments marked “paid in full”, “without recourse”, or similar language.
If Borrower sends such a payment, Lender may accept it without losing any of
Lender’s rights under this Agreement, and Borrower will remain obligated to pay
any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that
indicates that the payment constitutes “payment in full” of the amount owed or
that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: GREAT BASIN BANK OF
NEVADA, P.O. BOX 2808 ELKO, NV 89803.

 

LATE CHARGE. If a payment is 15
days or more late, Borrower will be charged 5.000%
of the unpaid portion of the regularly scheduled payment or $15.00, whichever
is greater.

 

INTEREST AFTER DEFAULT. Upon default, including
failure to pay upon final maturity, the interest rate on this loan shall be
increased by 2.000 percentage points. However, in no event will the interest
rate exceed the maximum interest rate limitations under applicable law.

 

DEFAULT. Each of the
following shall constitute an Event of Default under this Agreement: 

 

Payment Default. Borrower fails to make any
payment when due under the Indebtedness.

 

Other Defaults. Borrower fails to comply with
or to perform any other term, obligation, covenant or condition contained in
this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or
condition contained in any other agreement between Lender and Borrower.

 

False Statements. Any warranty, representation
or statement made or furnished to Lender by Borrower or on Borrower’s behalf
under this Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.

 

Insolvency. The dissolution or
termination of Borrower’s existence as a going business, the insolvency of
Borrower, the appointment of a receiver for any part of Borrower’s property,
any assignment for the benefit of creditors, any type of creditor workout, or
the commencement of any proceeding under any bankruptcy or insolvency laws by
or against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of
foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the Indebtedness. This
includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there
is a good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor. Any of the preceding events
occurs with respect to any Guarantor of any of the Indebtedness or any
Guarantor dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness evidenced by this Note.

 

Change In Ownership. Any change in ownership of
twenty-five percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material adverse change
occurs in Borrower’s financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.

 

LENDER’S RIGHTS. Upon default, Lender may
declare the entire unpaid principal balance under this Agreement and all
accrued unpaid interest immediately due, and then Borrower will pay that
amount.

 

ATTORNEYS’ FEES; EXPENSES. Lender may hire
or pay someone else to help collect this Agreement if Borrower does not pay.
Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses,
whether or not there is a lawsuit, including attorneys’ fees, expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), and appeals. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law.

 

GOVERNING LAW. This Agreement will be governed by
federal law applicable to Lender and, to the extent not preempted by federal
law, the laws of the State of Nevada without regard to its conflicts
of law provisions. This Agreement has been accepted by Lender in the State of
Nevada.

 

 

RIGHT OF SETOFF. To the extent permitted by
applicable law, Lender reserves a right of setoff in all Borrower’s accounts
with Lender (whether checking, savings, or some other account). This includes
all accounts Borrower holds jointly with someone else and all accounts Borrower
may open in the future. However, this does not include any IRA or Keogh
accounts, any trust accounts for which setoff would be prohibited by law, or
monies in any accounts that were received pursuant to the federal Social
Security Act, including, without limitation, retirement and survivors’
benefits, supplemental security income benefits and disability insurance
benefits. Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the indebtedness against any and all
such accounts.

 

COLLATERAL. Borrower acknowledges this
Agreement is secured by the following collateral described in the security
instrument listed herein, all the terms and conditions of which are hereby
incorporated and made a part of this Agreement:

 

(A) A Deed of Trust dated February 21, 2006, Recorded February 28,
2006, Document Number 247484, to a trustee in favor of lender for all real
property located at 1420 Cornell Avenue, Lovelock, Pershing County, Nevada

 

(B) A Commercial Security Agreement dated February 21, 2006
between Borrower and Lender, for all Furniture, Fixtures, Equipment and all
Gaming Equipment.

 

CONTINUING VALIDITY. Except as expressly changed
by this Agreement, the terms of the original obligation or obligations,
including all agreements evidenced or securing the obligation(s), remain
unchanged and in full force and effect. Consent by Lender to this Agreement
does not waive Lender’s right to strict performance of the obligation(s) as
changed, nor obligate Lender to make any future change in terms. Nothing in
this Agreement will constitute a satisfaction of the obligation(s). It is the
intention of Lender to retain as liable parties all makers and endorsers of the
original obligation(s), including accommodation parties, unless a party is
expressly released by Lender in writing. Any maker or endorser, including
accommodation makers, will not be released by virtue of this Agreement. If any
person who signed the original obligation does not sign this Agreement below,
then all persons signing below acknowledge that this Agreement is given
conditionally, based on the representation to Lender that the non-signing party
consents to the changes and provisions of this Agreement or otherwise will not
be released by it. This waiver applies not only to any initial extension,
modification or release, but also to all such subsequent actions.

 

ANNUAL SUBMISSION OF FINANCIAL INFORMATION. Borrower to
furnish Lender, as soon as available, but in no event later than sixty (60)
days after the end of each fiscal year, Borrower’s Balance Sheet and Income
Statement for the year ended satisfactory to the Lender. All Financial Reports
required to be provided under this agreement shall be prepared in accordance
with generally accepted accounting principles, applied on a consistent basis,
and certified by Borrower as being true and correct. Within thirty (30) days of
completion, Borrower to furnish Lender with copies of Borrower’s and Guarantor’s
Tax Returns. Within thirty (30) days of Borrower’s fiscal year-end, each
Guarantor shall furnish Lender with a current Personal Financial Statement in a
form satisfactory to the Lender.

 

CHOICE OF VENUE. If there is a lawsuit, you
agree upon our request to submit to the jurisdiction of the courts of ELKO
COUNTY, State of Nevada.

 

SUCCESSORS AND ASSIGNS. Subject to any limitations
stated in this Agreement on transfer of Borrower’s interest, this Agreement
shall be binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Collateral becomes vested in a person other
than Borrower, Lender, without notice to Borrower, may deal with Borrower’s
successors with reference to this Agreement and the Indebtedness by way of
forbearance or extension without releasing Borrower from the obligations of
this Agreement or liability under the Indebtedness.

 

MISCELLANEOUS PROVISIONS. If any part of this
Agreement cannot be enforced, this fact will not affect the rest of the
Agreement. Lender may delay or forgo enforcing any of its rights or remedies
under this Agreement without losing them. Borrower and any other person who
signs, guarantees or endorses this Agreement, to the extent allowed by law,
waive presentment, demand for payment, and notice of dishonor. Upon any change
in the terms of this Agreement, and unless otherwise expressly stated in
writing, no party who signs this Agreement, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender’s security interest in the collateral;
and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify
this loan without the consent of or notice to anyone other than the party with
whom the modification is made. The obligations under this Agreement are joint
and several.

 

PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD
ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE
AGREEMENT.

 

CHANGE IN TERMS SIGNERS:

 

 

	
  AWI GAMING, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
      /s/
  Bruce E. Dewing

  	
   

  	
  By:

  	
      /s/
  John M. Salerno

  
	
   

  	
   BRUCE E DEWING, President of AWI GAMING, Inc.

  	
   

  	
   

  	
   JOHN M SALERNO, Secretary/Treasurer of AWI  GAMING,
  INC.

  

 

LASER PRO Lending, Ver 5.30.00.008 Copr.
Harland Financial Solutions, Inc. 1997, 2008. All Rights Reserved. - NV C1\HARLAND\CFI\LPL\D20C.
FC TR-10566 PR-43

 

 

	
  State of Nevada

  	
  }

  	
   

  
	
   

  	
   

  	
   

  
	
  County of Churchill

  	
  }

  	
   

  

 

This instrument
was acknowledged before me on 2-8-08 by Bruce E. Dewing, who acknowledged
to me, that he is the President of AWI Gaming, Inc.

 

	
   

  	
  /s/ Authorized Notary

  	
   

  
	
   

  	
  Notary Public for the
  State of Nevada

  	
   

  
	
   

  	
   

  	
  [Seal]

  
	
   

  	
  My Commission Expires
  07/29/09

  	
   

  

 

 

	
  State of Nevada

  	
  }

  	
   

  
	
   

  	
   

  	
   

  
	
  County of Clark

  	
  }

  	
   

  

 

This instrument
was acknowledged before me on 2-5-08 by John M. Salerno, who acknowledged
to me, that he is the Secretary/Treasurer of AWI Gaming, Inc.

 

	
   

  	
  /s/ David Lichterman

  	
   

  
	
   

  	
  Notary Public for the
  State of Nevada

  	
  [Seal]

  
	
   

  	
   

  	
   

  
	
   

  	
  My Commission Expires
  06-08-08

  	
   

  

 

 

COMMERCIAL GUARANTY

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1E / 45

  	
   

  	
   

  	
   

  	
  CH

  	
   

  	
   

  	
   

  

 

References in the shaded
area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item. Any item above containing “***” has
been omitted due to text length limitations.

 

	
  Borrower:

  	
  AWl GAMING, INC. 

  P O BOX 56

  LOVELOCK, NV 89419

  	
  Lender:

  	
  GREAT BASIN BANK OF NEVADA 

  FALLON OFFICE 

  498 W WILLIAMS AVENUE

  FALLON, NV 89406 

  
	
   

  	
   

  	
   

  	
   

  
	
  Guarantor:

  	
  STURGEONS, LLC 

  675 GRIER DRIVE 

  LAS VEGAS, NV 89119

  	
   

  	
   

  

 

CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable
consideration, Guarantor absolutely and unconditionally guarantees full and
punctual payment and satisfaction of the Indebtedness of Borrower to Lender,
and the performance and discharge of all Borrower’s obligations under the Note
and the Related Documents. This is a guaranty of payment and performance and
not of collection, so Lender can enforce this Guaranty against Guarantor even
when Lender has not exhausted Lender’s remedies against anyone else obligated
to pay the Indebtedness or against any collateral securing the Indebtedness,
this Guaranty or any other guaranty of the Indebtedness. Guarantor will make
any payments to Lender or its order, on demand, in legal tender of the United
States of America, in same-day funds, without set-off or deduction or
counterclaim, and will otherwise perform Borrower’s obligations under the Note
and Related Documents. Under this Guaranty, Guarantor’s liability is unlimited
and Guarantor’s obligations are continuing.

 

INDEBTEDNESS.
The word “Indebtedness” as used in this Guaranty means all of
the principal amount outstanding from time to time and at any one or more
times, accrued unpaid interest thereon and all collection costs and legal
expenses related thereto permitted by law, attorneys’ fees, arising from any
and all debts, liabilities and obligations of every nature or form, now
existing or hereafter arising or acquired, that Borrower individually or
collectively or interchangeably with others, owes or will owe Lender. “Indebtedness”
includes, without limitation, loans, advances, debts, overdraft indebtedness,
credit card indebtedness, lease obligations, other obligations, and liabilities
of Borrower, and any present or future judgments against Borrower, future
advances, loans or transactions that renew, extend, modify, refinance,
consolidate or substitute these debts, liabilities and obligations whether:
voluntarily or involuntarily incurred; due or to become due by their terms or
acceleration; absolute or contingent; liquidated or unliquidated; determined or
undetermined; direct or indirect; primary or secondary in nature or arising
from a guaranty or surety; secured or unsecured; joint or several or joint and
several; evidenced by a negotiable or non-negotiable instrument or writing;
originated by Lender or another or others; barred or unenforceable against
Borrower for any reason whatsoever; for any transactions that may be voidable
for any reason (such as infancy, insanity, ultra vires or otherwise); and
originated then reduced or extinguished and then afterwards increased or
reinstated.

 

If Lender presently holds
one or more guaranties, or hereafter receives additional guaranties from
Guarantor, Lender’s rights under all guaranties shall be cumulative. This
Guaranty shall not (unless specifically provided below to the contrary) affect
or invalidate any such other guaranties. Guarantor’s liability will be Guarantor’s
aggregate liability under the terms of this Guaranty and any such other
unterminated guaranties.

 

CONTINUING
GUARANTY. THIS IS A “CONTINUING GUARANTY” UNDER WHICH
GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND
SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR
HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY,
ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH  GUARANTOR’S OBLIGATIONS AND LIABILITY
UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL
OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM
TIME TO TIME.

 

DURATION
OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of any acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all the
Indebtedness incurred or contracted before receipt by Lender of any notice of
revocation shall have been fully and finally paid and satisfied and all of
Guarantor’s other obligations under this Guaranty shall have been performed in
full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in
writing. Guarantor’s written notice of revocation must be mailed to Lender, by
certified mail, at Lender’s address listed above or such other place as Lender
may designate in writing. Written revocation of this Guaranty will apply only
to advances or new Indebtedness created after actual receipt by Lender of
Guarantor’s written revocation. For this purpose and without limitation, the
term “new Indebtedness” does not include the Indebtedness which at the time of
notice of revocation is contingent, unliquidated, undetermined or not due and
which later becomes absolute, liquidated, determined or due. This Guaranty will
continue to bind Guarantor for all the Indebtedness incurred by Borrower or
committed by Lender prior to receipt of Guarantor’s written notice of
revocation, including any extensions, renewals, substitutions or modifications
of the Indebtedness. All renewals, extensions, substitutions, and modifications
of the Indebtedness granted after Guarantor’s revocation, are contemplated
under this Guaranty and, specifically will not be considered to be new
Indebtedness. This Guaranty shall bind Guarantor’s estate as to the
Indebtedness created both before and after Guarantor’s death or incapacity,
regardless of Lender’s actual notice of Guarantor’s death. Subject to the
foregoing, Guarantor’s executor or administrator or other legal representative
may terminate this Guaranty in the same manner in which Guarantor might have
terminated it and with the same effect. Release of any other guarantor or
termination of any other guaranty of the Indebtedness shall not affect the
liability of Guarantor under this Guaranty. A revocation Lender receives from
any one or more Guarantors shall not affect the liability of any remaining
Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of the
Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges
and agrees that reductions in the amount of the Indebtedness, even to zero
dollars ($0.00), prior to Guarantor’s written revocation of this Guaranty shall
not constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor’s heirs, successors and assigns so long as any of the
Indebtedness remains unpaid and even though the Indebtedness may from time to
time be zero dollars ($0.00).

 

GUARANTOR’S
AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without
notice or demand and without lessening Guarantor’s liability under this
Guaranty, from time to time: (A) prior to revocation as set
forth above, to make one or more additional secured or unsecured loans to
Borrower, to lease equipment or other goods to Borrower, or otherwise to extend
additional credit to Borrower; (B) to alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms of the Indebtedness or any part of the Indebtedness, including increases
and decreases of the rate of interest on the Indebtedness; extensions may be
repeated and may be for longer than the original loan term; (C) to take
and hold security for the payment of this Guaranty or the Indebtedness, and
exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any such security, with or without the substitution of new collateral; (D) to
release, substitute, agree not to sue, or deal with any one or more of Borrower’s
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (E) to determine how, when and what application of payments
and credits shall be made on the Indebtedness; (F) to apply such security
and direct the order or manner of sale thereof, including without limitation,
any nonjudicial sale permitted by the terms of the controlling security
agreement or deed of trust, as Lender in its discretion may determine; (G) to
sell, transfer, assign or grant participations in all or any part of the
Indebtedness; and (H) to assign or transfer this Guaranty in whole or in
part.

 

GUARANTOR’S
REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the terms
of this Guaranty; (B) this Guaranty is executed at Borrower’s request and
not at the request of Lender; (C) Guarantor has full power, right and
authority to enter into this Guaranty; (D) the provisions of this Guaranty
do not conflict with or result in a default under any agreement or other
instrument binding upon Guarantor and do not result in a violation of any law,
regulation, court decree or order applicable to Guarantor; (E) Guarantor
has not and will not, without the prior written consent of Lender, sell, lease,
assign, encumber, hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor’s assets, or any interest therein; (F) upon
Lender’s request, Guarantor will provide to Lender financial and credit
information in form acceptable to Lender, and all such financial information
which currently has been, and all future financial information which will be
provided to Lender is and will be true and correct in all material respects and
fairly present Guarantor’s financial condition as of the dates the financial
information is provided; (G) no material adverse change has occurred in
Guarantor’s financial condition since the date of the most recent financial
statements provided to Lender and no event has occurred which may materially
adversely affect Guarantor’s financial condition; (H) no litigation,
claim, investigation, administrative proceeding or similar action (including
those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender
has made no representation to Guarantor as to the creditworthiness of Borrower;
and (J) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower’s financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor’s risks
under this

 

 

Guaranty, and Guarantor
further agrees that, absent a request for information, Lender shall have no
obligation to disclose to Guarantor any information or documents acquired by
Lender in the course of its relationship with Borrower.

 

GUARANTOR’S
FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with
the following:

 

Annual
Statements. As soon as available, but in no event later than
sixty (60) days after the end of each fiscal year, Guarantor’s balance sheet
and income statement for the year ended, prepared by Guarantor.

 

Tax
Returns. As soon as available, but in no event later than
thirty (30) days after the applicable filing date for the tax reporting period
ended, Federal and other governmental tax returns, prepared by a tax
professional satisfactory to Lender.

 

All financial reports
required to be provided under this Guaranty shall be prepared in accordance
with GAAP, applied on a consistent basis, and certified by Guarantor as being
true and correct.

 

GUARANTOR’S
WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (A) to continue lending money or to
extend other credit to Borrower; (B) to make any presentment, protest,
demand, or notice of any kind, including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice of any
action or nonaction on the part of Borrower, Lender, any surety, endorser, or
other guarantor in connection with the Indebtedness or in connection with the
creation of new or additional loans or obligations; (C) to resort for
payment or to proceed directly or at once against any person, including
Borrower or any other guarantor; (D) to proceed directly against or
exhaust any collateral held by Lender from Borrower, any other guarantor, or
any other person; (E) to give notice of the terms, time, and place of any
public or private sale of personal property security held by Lender from
Borrower or to comply with any other applicable provisions of the Uniform
Commercial Code; (F) to pursue any other remedy within Lender’s power; or (G) to
commit any act or omission of any kind, or at any time, with respect to any
matter whatsoever.

 

Guarantor also waives any
and all rights or defenses based on suretyship or impairment of collateral
including, but not limited to, any rights or defenses arising by reason of (A) any
“one action” or “anti-deficiency” law or any other law which may prevent Lender
from bringing any action, including a claim for deficiency, against Guarantor,
before or after Lender’s commencement or completion of any foreclosure action,
either judicially or by exercise of a power of sale; (B) any election of
remedies by Lender which destroys or otherwise adversely affects Guarantor’s
subrogation rights or Guarantor’s rights to proceed against Borrower for
reimbursement, including without limitation, any loss of rights Guarantor may
suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (C) any disability or other defense of Borrower, of any
other guarantor, or of any other person, or by reason of the cessation of Borrower’s
liability from any cause whatsoever, other than payment in full in legal
tender, of the Indebtedness; (D) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any collateral for the
Indebtedness; (E) any statute of limitations, if at any time any action or
suit brought by Lender against Guarantor is commenced, there is outstanding
Indebtedness which is not barred by any applicable statute of limitations; or (F) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the Indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower’s
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of the enforcement of this Guaranty.

 

Guarantor further waives
and agrees not to assert or claim at any time any deductions to the amount
guaranteed under this Guaranty for any claim of setoff, counterclaim, counter
demand, recoupment or similar right, whether such claim, demand or right may be
asserted by the Borrower, the Guarantor, or both.

 

GUARANTOR’S
UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor’s full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.

 

SUBORDINATION
OF BORROWER’S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness, whether now existing or hereafter created, shall be superior to
any claim that Guarantor may now have or hereafter acquire against Borrower,
whether or not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon any account
whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness. Guarantor does hereby
assign to Lender all claims which it may have or acquire against Borrower or
against any assignee or trustee in bankruptcy of Borrower; provided however,
that such assignment shall be effective only for the purpose of assuring to
Lender full payment in legal tender of the Indebtedness. If Lender so requests,
any notes or credit agreements now or hereafter evidencing any debts or
obligations of Borrower to Guarantor shall be marked with a legend that the
same are subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor, from time to
time to file financing statements and continuation statements and to execute
documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.

 

MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part
of this Guaranty:

 

Amendments.
This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Guaranty. No alteration of or amendment to this
Guaranty shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.

 

Attorneys’
Fees; Expenses. Guarantor agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this Guaranty.
Lender may hire or pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender’s attorneys’ fees and legal expenses whether or not
there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Guarantor also shall pay all court costs and such additional fees as may be
directed by the court.

 

Caption
Headings. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Guaranty.

 

Governing
Law. This Guaranty will be governed by federal law applicable to Lender and, to
the extent not preempted by federal law, the laws of the State of Nevada
without regard to its conflicts of law provisions. 

 

Integration.
Guarantor further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the opportunity to be
advised by Guarantor’s attorney with respect to this Guaranty; the Guaranty
fully reflects Guarantor’s intentions and parol evidence is not required to
interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds
Lender harmless from all losses, claims, damages, and costs (including Lender’s
attorneys’ fees) suffered or incurred by Lender as a result of any breach by
Guarantor of the warranties, representations and agreements of this paragraph.

 

Interpretation.
In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be deemed
to have been used in the plural  where
the context and construction so require; and where there is more than one
Borrower named in this Guaranty or when this Guaranty is executed by more than
one Guarantor, the words “Borrower” and “Guarantor” respectively shall mean all
and any one or more of them. The words “Guarantor,” “Borrower,” and “Lender”
include the heirs, successors, assigns, and transferees of each of them. If a
court finds that any provision of this Guaranty is not valid or should not be
enforced, that fact by itself will not mean that the rest of this Guaranty will
not be valid or enforced. Therefore, a court will enforce the rest of the
provisions of  this Guaranty even
if a provision of this Guaranty may be found to be invalid or unenforceable. If
any one or more of Borrower or Guarantor are corporations, partnerships,
limited liability companies, or similar entities, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, managers, or other agents acting or purporting to act on
their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.

 

Notices.
Any notice required to be given under this Guaranty shall be
given in writing, and, except for revocation notices by Guarantor, shall be
effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Guaranty. All revocation notices by
Guarantor shall be in writing and shall be effective upon delivery to Lender as
provided in the section of this Guaranty entitled “DURATION OF GUARANTY.” Any
party may change its address for notices under this Guaranty by giving formal
written notice to the other parties, specifying that the purpose of the notice
is to change the party’s address. For notice purposes, Guarantor agrees to keep
Lender informed at all times of Guarantor’s current address. Unless otherwise
provided or required by law, if there is more than one Guarantor, any notice
given by Lender

 

2

 

to any Guarantor is
deemed to be notice given to all Guarantors.

 

No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part
of Lender in exercising any right shall operate as a waiver of such right or
any other right. A waiver by Lender of a provision of this Guaranty shall not
prejudice or constitute a waiver of Lender’s right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty. No
prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of
any of Lender’s rights or of any of Guarantor’s obligations as to any future
transactions. Whenever the consent of Lender is required under this Guaranty,
the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.

 

Successors and Assigns. Subject to any limitations stated in this Guaranty
on transfer of Guarantor’s interest, this Guaranty shall be binding upon
and inure to the benefit of the parties, their successors and assigns.

 

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Guaranty. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money
of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall
include the singular, as the context may require. Words and terms not otherwise
defined in this Guaranty shall have the meanings attributed to such
terms in the Uniform Commercial Code:

 

Borrower. The
word “Borrower” means AWI GAMING, INC. and includes all co-signers and
co-makers signing the Note and all their successors and assigns.

 

GAAP. The
word “GAAP” means generally accepted accounting principles.

 

Guarantor. The word “Guarantor” means everyone signing this Guaranty, including
without limitation STURGEONS, LLC, and in each case, any signer’s successors and assigns.

 

Guaranty. The
word “Guaranty” means this guaranty from Guarantor to Lender.

 

Indebtedness.  The word “Indebtedness”
means Borrower’s indebtedness to Lender as more particularly described in this
Guaranty.

 

Lender. The
word “Lender” means GREAT BASIN BANK OF NEVADA, its successors and assigns.

 

Note. The
word “Note” means and includes without limitation all of Borrower’s promissory
notes and/or credit agreements evidencing Borrower’s loan obligations in favor
of Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for promissory
notes or credit agreements.

 

Related
Documents. The words “Related Documents” mean all promissory
notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other
instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the
Indebtedness.

 

EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN
ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON
GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT
THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”.
NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.  THIS GUARANTY IS DATED FEBRUARY 4, 2008.

 

	
  GUARANTOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STURGEONS, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AWI GAMING, INC., Member of
  STURGEONS, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Bruce E. Dewing 

  	
   

  	
  By:

  	
    /s/ John M. Salerno

  
	
   

  	
    BRUCE E. DEWING, President of AWI 

    GAMING, INC.

  	
   

  	
   

  	
    John M. Salerno, Secretary
  

    of AWI Gaming, INC.

  

 

LIMITED
LIABILITY COMPANY ACKNOWLEDGMENT

 

 

	
  State of Nevada

  	
  }

  	
   

  
	
   

  	
   

  	
   

  
	
  County of Churchill

  	
  }

  	
   

  

 

This instrument was acknowledged before me on 2-8-08 by Bruce E.
Dewing, who acknowledged to me, that he is the President of AWI Gaming, Inc.

 

	
   

  	
  /s/ Authorized Notary

  	
   

  
	
   

  	
  Notary Public for the State of Nevada

  	
   

  
	
   

  	
   

  	
                 [Seal]

  
	
   

  	
  My Commission Expires 07/29/09

  	
   

  

 

 

	
  State of Nevada

  	
  }

  	
   

  
	
   

  	
   

  	
   

  
	
  County of Clark 

  	
  }

  	
   

  

 

This instrument was acknowledged before me on 2-5-08 by John M.
Salerno, who acknowledged to me, that he is the Secretary/Treasurer of AWI
Gaming, Inc.

 

	
   

  	
  /s/ David Lichterman

  	
   

  
	
   

  	
  Notary Public for the State of Nevada

  	
   

  
	
   

  	
   

  	
                 [Seal]

  
	
   

  	
  My Commission Expires 6-8-08

  	
   

  

 

 

COMMERCIAL GUARANTY

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1E / 45

  	
   

  	
   

  	
   

  	
  CH

  	
   

  	
   

  

 

References in the shaded area are for Lender’s use only and do not
limit the applicability of this document to any particular loan or item. Any
item above containing “***” has been omitted due to text length limitations.

 

	
  Borrower:

  	
  AWl GAMING, INC. 

  P O BOX 56

  LOVELOCK, NV 89419

  	
  Lender:

  	
  GREAT BASIN BANK OF NEVADA 

  FALLON OFFICE 

  498 W WILLIAMS AVENUE

  FALLON, NV 89406

  
	
   

  	
   

  	
   

  	
   

  
	
  Guarantor:

  	
  AMERICAN WAGERING, INC. 

  675 GRIER DRIVE 

  LAS VEGAS, NV 89119-3738

  	
   

  	
   

  

 

CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable
consideration, Guarantor absolutely and unconditionally guarantees full and
punctual payment and satisfaction of the Indebtedness of Borrower to Lender,
and the performance and discharge of all Borrower’s obligations under the Note
and the Related Documents. This is a guaranty of payment and performance and
not of collection, so Lender can enforce this Guaranty against Guarantor even
when Lender has not exhausted Lender’s remedies against anyone else obligated
to pay the Indebtedness or against any collateral securing the Indebtedness,
this Guaranty or any other guaranty of the Indebtedness. Guarantor will make
any payments to Lender or its order, on demand, in legal tender of the United
States of America, in same-day funds, without set-off or deduction or
counterclaim, and will otherwise perform Borrower’s obligations under the Note
and Related Documents. Under this Guaranty, Guarantor’s liability is unlimited
and Guarantor’s obligations are continuing.

 

INDEBTEDNESS.
The word “Indebtedness” as used in this Guaranty means all of
the principal amount outstanding from time to time and at any one or more
times, accrued unpaid interest thereon and all collection costs and legal
expenses related thereto permitted by law, attorneys’ fees, arising from any
and all debts, liabilities and obligations of every nature or form, now
existing or hereafter arising or acquired, that Borrower individually or
collectively or interchangeably with others, owes or will owe Lender. “Indebtedness”
includes, without limitation, loans, advances, debts, overdraft indebtedness,
credit card indebtedness, lease obligations, other obligations, and liabilities
of Borrower, and any present or future judgments against Borrower, future
advances, loans or transactions that renew, extend, modify, refinance,
consolidate or substitute these debts, liabilities and obligations whether:
voluntarily or involuntarily incurred; due or to become due by their terms or
acceleration; absolute or contingent; liquidated or unliquidated; determined or
undetermined; direct or indirect; primary or secondary in nature or arising
from a guaranty or surety; secured or unsecured; joint or several or joint and
several; evidenced by a negotiable or non-negotiable instrument or writing;
originated by Lender or another or others; barred or unenforceable against
Borrower for any reason whatsoever; for any transactions that may be voidable
for any reason (such as infancy, insanity, ultra vires or otherwise); and
originated then reduced or extinguished and then afterwards increased or
reinstated.

 

If Lender presently holds
one or more guaranties, or hereafter receives additional guaranties from
Guarantor, Lender’s rights under all guaranties shall be cumulative. This
Guaranty shall not (unless specifically provided below to the contrary) affect
or invalidate any such other guaranties. Guarantor’s liability will be
Guarantor’s aggregate liability under the terms of this Guaranty and any such
other unterminated guaranties.

 

CONTINUING
GUARANTY. THIS IS A “CONTINUING GUARANTY” UNDER WHICH
GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND
SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR
HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY,
ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH  GUARANTOR’S OBLIGATIONS AND LIABILITY
UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL
OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM
TIME TO TIME.

 

DURATION
OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of any acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all the
Indebtedness incurred or contracted before receipt by Lender of any notice of
revocation shall have been fully and finally paid and satisfied and all of
Guarantor’s other obligations under this Guaranty shall have been performed in
full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in
writing. Guarantor’s written notice of revocation must be mailed to Lender, by
certified mail, at Lender’s address listed above or such other place as Lender
may designate in writing. Written revocation of this Guaranty will apply only
to advances or new Indebtedness created after actual receipt by Lender of
Guarantor’s written revocation. For this purpose and without limitation, the
term “new Indebtedness” does not include the Indebtedness which at the time of
notice of revocation is contingent, unliquidated, undetermined or not due and
which later becomes absolute, liquidated, determined or due. This Guaranty will
continue to bind Guarantor for all the Indebtedness incurred by Borrower or
committed by Lender prior to receipt of Guarantor’s written notice of
revocation, including any extensions, renewals, substitutions or modifications
of the Indebtedness. All renewals, extensions, substitutions, and modifications
of the Indebtedness granted after Guarantor’s revocation, are contemplated
under this Guaranty and, specifically will not be considered to be new Indebtedness.
This Guaranty shall bind Guarantor’s estate as to the Indebtedness created both
before and after Guarantor’s death or incapacity, regardless of Lender’s actual
notice of Guarantor’s death. Subject to the foregoing, Guarantor’s executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the
aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor
specifically acknowledges and agrees that reductions in the amount of the
Indebtedness, even to zero dollars ($0.00), prior to Guarantor’s written
revocation of this Guaranty shall not constitute a termination of this
Guaranty. This Guaranty is binding upon Guarantor and Guarantor’s heirs,
successors and assigns so long as any of the Indebtedness remains unpaid and
even though the Indebtedness may from time to time be zero dollars ($0.00).

 

GUARANTOR’S
AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without notice or demand
and without lessening Guarantor’s liability under this Guaranty, from time to
time: (A) prior to revocation as set forth above, to make one
or more additional secured or unsecured loans to Borrower, to lease equipment
or other goods to Borrower, or otherwise to extend additional credit to
Borrower; (B) to alter, compromise, renew, extend, accelerate, or
otherwise change one or more times the time for payment or other terms of the
Indebtedness or any part of the Indebtedness, including increases and decreases
of the rate of interest on the Indebtedness; extensions may be repeated and may
be for longer than the original loan term; (C) to take and hold security
for the payment of this Guaranty or the Indebtedness, and exchange, enforce,
waive, subordinate, fail or decide not to perfect, and release any such
security, with or without the substitution of new collateral; (D) to release,
substitute, agree not to sue, or deal with any one or more of Borrower’s
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (E) to determine how, when and what application of payments
and credits shall be made on the Indebtedness; (F) to apply such security
and direct the order or manner of sale thereof, including without limitation,
any nonjudicial sale permitted by the terms of the controlling security
agreement or deed of trust, as Lender in its discretion may determine; (G) to
sell, transfer, assign or grant participations in all or any part of the
Indebtedness; and (H) to assign or transfer this Guaranty in whole or in
part.

 

GUARANTOR’S
REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the terms
of this Guaranty; (B) this Guaranty is executed at Borrower’s request and
not at the request of Lender; (C) Guarantor has full power, right and
authority to enter into this Guaranty; (D) the provisions of this Guaranty
do not conflict with or result in a default under any agreement or other
instrument binding upon Guarantor and do not result in a violation of any law,
regulation, court decree or order applicable to Guarantor; (E) Guarantor
has not and will not, without the prior written consent of Lender, sell, lease,
assign, encumber, hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor’s assets, or any interest therein; (F) upon
Lender’s request, Guarantor will provide to Lender financial and credit
information in form acceptable to Lender, and all such financial information
which currently has been, and all future financial information which will be
provided to Lender is and will be true and correct in all material respects and
fairly present Guarantor’s financial condition as of the dates the financial
information is provided; (G) no material adverse change has occurred in
Guarantor’s financial condition since the date of the most recent financial
statements provided to Lender and no event has occurred which may materially
adversely affect Guarantor’s financial condition; (H) no litigation,
claim, investigation, administrative proceeding or similar action (including
those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender
has made no representation to Guarantor as to the creditworthiness of Borrower;
and (J) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower’s financial condition.
Guarantor agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Guarantor’s risks under
this

 

 

Guaranty, and Guarantor
further agrees that, absent a request for information, Lender shall have no
obligation to disclose to Guarantor any information or documents acquired by
Lender in the course of its relationship with Borrower.

 

GUARANTOR’S
FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with
the following:

 

Annual
Statements. As soon as available, but in no event later than
sixty (60) days after the end of each fiscal year, Guarantor’s balance sheet
and income statement for the year ended, prepared by Guarantor.

 

Tax
Returns.  As soon as
available, but in no event later than thirty (30) days after the applicable
filing date for the tax reporting period ended, Federal and other governmental
tax returns, prepared by a tax professional satisfactory to Lender.

 

All financial reports
required to be provided under this Guaranty shall be prepared in accordance
with GAAP, applied on a consistent basis, and certified by Guarantor as being
true and correct.

 

GUARANTOR’S
WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (A) to continue lending money or to
extend other credit to Borrower; (B) to make any presentment, protest,
demand, or notice of any kind, including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice of any
action or nonaction on the part of Borrower, Lender, any surety, endorser, or
other guarantor in connection with the Indebtedness or in connection with the
creation of new or additional loans or obligations; (C) to resort for
payment or to proceed directly or at once against any person, including
Borrower or any other guarantor; (D) to proceed directly against or
exhaust any collateral held by Lender from Borrower, any other guarantor, or
any other person; (E) to give notice of the terms, time, and place of any
public or private sale of personal property security held by Lender from
Borrower or to comply with any other applicable provisions of the Uniform
Commercial Code; (F) to pursue any other remedy within Lender’s power; or (G) to
commit any act or omission of any kind, or at any time, with respect to any
matter whatsoever.

 

Guarantor also waives any
and all rights or defenses based on suretyship or impairment of collateral
including, but not limited to, any rights or defenses arising by reason of (A) any
“one action” or “anti-deficiency” law or any other law which may prevent Lender
from bringing any action, including a claim for deficiency, against Guarantor,
before or after Lender’s commencement or completion of any foreclosure action,
either judicially or by exercise of a power of sale; (B) any election of
remedies by Lender which destroys or otherwise adversely affects Guarantor’s
subrogation rights or Guarantor’s rights to proceed against Borrower for
reimbursement, including without limitation, any loss of rights Guarantor may
suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (C) any disability or other defense of Borrower, of any
other guarantor, or of any other person, or by reason of the cessation of
Borrower’s liability from any cause whatsoever, other than payment in full in
legal tender, of the Indebtedness; (D) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any collateral for the
Indebtedness; (E) any statute of limitations, if at any time any action or
suit brought by Lender against Guarantor is commenced, there is outstanding
Indebtedness which is not barred by any applicable statute of limitations; or (F) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the Indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower’s
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of the enforcement of this Guaranty.

 

Guarantor further waives
and agrees not to assert or claim at any time any deductions to the amount
guaranteed under this Guaranty for any claim of setoff, counterclaim, counter
demand, recoupment or similar right, whether such claim, demand or right may be
asserted by the Borrower, the Guarantor, or both.

 

GUARANTOR’S
UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor’s full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by law
or public policy.

 

SUBORDINATION
OF BORROWER’S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness, whether now existing or hereafter created, shall be superior to
any claim that Guarantor may now have or hereafter acquire against Borrower,
whether or not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon any account
whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets
of Borrower, through bankruptcy, by an assignment for the benefit of creditors,
by voluntary liquidation, or otherwise, the assets of Borrower applicable to
the payment of the claims of both Lender and Guarantor shall be paid to Lender
and shall be first applied by Lender to the Indebtedness. Guarantor does hereby
assign to Lender all claims which it may have or acquire against Borrower or
against any assignee or trustee in bankruptcy of Borrower; provided however,
that such assignment shall be effective only for the purpose of assuring to
Lender full payment in legal tender of the Indebtedness. If Lender so requests,
any notes or credit agreements now or hereafter evidencing any debts or
obligations of Borrower to Guarantor shall be marked with a legend that the
same are subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor, from time to
time to file financing statements and continuation statements and to execute
documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.

 

MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part
of this Guaranty:

 

Amendments.
This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Guaranty. No alteration of or amendment to this
Guaranty shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.

 

Attorneys’
Fees; Expenses. Guarantor agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this Guaranty.
Lender may hire or pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender’s attorneys’ fees and legal expenses whether or not
there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Guarantor also shall pay all court costs and such additional fees as may be
directed by the court.

 

Caption
Headings. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Guaranty.

 

Governing
Law. This Guaranty will be governed by federal law applicable to Lender and, to
the extent not preempted by federal law, the laws of the State of Nevada
without regard to its conflicts of law provisions.

 

Integration.
Guarantor further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the opportunity to be
advised by Guarantor’s attorney with respect to this Guaranty; the Guaranty
fully reflects Guarantor’s intentions and parol evidence is not required to
interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds
Lender harmless from all losses, claims, damages, and costs (including Lender’s
attorneys’ fees) suffered or incurred by Lender as a result of any breach by
Guarantor of the warranties, representations and agreements of this paragraph.

 

Interpretation.
In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be deemed
to have been used in the plural  where
the context and construction so require; and where there is more than one
Borrower named in this Guaranty or when this Guaranty is executed by more than
one Guarantor, the words “Borrower” and “Guarantor” respectively shall mean all
and any one or more of them. The words “Guarantor,” “Borrower,” and “Lender”
include the heirs, successors, assigns, and transferees of each of them. If a
court finds that any provision of this Guaranty is not valid or should not be
enforced, that fact by itself will not mean that the rest of this Guaranty will
not be valid or enforced. Therefore, a court will enforce the rest of the
provisions of  this Guaranty even
if a provision of this Guaranty may be found to be invalid or unenforceable. If
any one or more of Borrower or Guarantor are corporations, partnerships,
limited liability companies, or similar entities, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, managers, or other agents acting or purporting to act on
their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.

 

Notices.
Any notice required to be given under this Guaranty shall be
given in writing, and, except for revocation notices by Guarantor, shall be
effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Guaranty. All revocation notices by
Guarantor shall be in writing and shall be effective upon delivery to Lender as
provided in the section of this Guaranty entitled “DURATION OF GUARANTY.” Any
party may change its address for notices under this Guaranty by giving formal
written notice to the other parties, specifying that the purpose of the notice
is to change the party’s address. For notice purposes, Guarantor agrees to keep
Lender informed at all times of Guarantor’s current address. Unless otherwise
provided or required by law, if there is more than one Guarantor, any notice
given by Lender

 

2

 

to any Guarantor is
deemed to be notice given to all Guarantors.

 

No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part
of Lender in exercising any right shall operate as a waiver of such right or
any other right. A waiver by Lender
of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s
right otherwise to demand strict compliance with that provision or any
other provision of this Guaranty. No prior waiver by Lender, nor any course of
dealing between Lender and Guarantor, shall constitute a waiver of any of
Lender’s rights or of any of Guarantor’s obligations as to any future
transactions. Whenever the consent of Lender
is required under this Guaranty, the granting of such consent by Lender in any
instance shall not constitute continuing
consent to subsequent instances where such consent is required and in all cases
such consent may be granted or withheld in the sole discretion of Lender.

 

Successors and Assigns. Subject to any limitations stated in this
Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding
upon and inure to the benefit of the parties, their successors and assigns.

 

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Guaranty. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money
of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall
include the singular, as the context may require. Words and terms not otherwise
defined in this Guaranty shall have the meanings attributed to such
terms in the Uniform Commercial Code:

 

Borrower. The
word “Borrower” means AWI GAMING, INC. and includes all co-signers and
co-makers signing the Note and all their successors and assigns.

 

GAAP. The
word “GAAP” means generally accepted accounting principles.

 

Guarantor. The word “Guarantor” means everyone signing this Guaranty, including
without limitation AMERICAN WAGERING, INC., and in each case, any signer’s
successors and assigns.

 

Guaranty.
The word “Guaranty” means this guaranty from Guarantor to
Lender.

 

Indebtedness.
The word “Indebtedness” means Borrower’s indebtedness to
Lender as more particularly described in this Guaranty.

 

Lender. The
word “Lender” means GREAT BASIN BANK OF NEVADA, its successors and assigns.

 

Note. The
word “Note” means and includes without limitation all of Borrower’s promissory
notes and/or credit agreements evidencing Borrower’s loan obligations in favor
of Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for promissory
notes or credit agreements.

 

Related
Documents. The words “Related Documents” mean all promissory
notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Indebtedness.

 

EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”. NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS
GUARANTY IS DATED FEBRUARY 4, 2008.

 

	
  GUARANTOR:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AMERICAN WAGERING, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Victor J. Salerno

  	
   

  
	
   

  	
   

  	
  VICTOR J. SALERNO, President of AMERICAN
  WAGERING, INC.

  	
   

  

 

CORPORATE ACKNOWLEDGMENT

 

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STATE OF

  	
  NEVADA

  	
   

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  )ss

  	
   

  	
   

  
	
  COUNTY OF

  	
  CLARK

  	
   

  	
  )

  	
   

  	
   

  

 

This instrument was
acknowledged before me on February 5, 2008 by VICTOR J SALERNO, President of AMERICAN WAGERING, INC., as
designated agent of AMERICAN WAGERING, INC..

 

	
  [SEAL]

  	
   

  	
  /s/ David Lichterman

  
	
   

  	
   

  	
  (Signature
  of notarial officer)

  
	
   

  	
   

  	
   

  
	
  (Seal,
  if any)

  	
   

  	
  Notary Public in and for State of Nevada

  

 

3Exhibit 10.20

 

REVOLVING CREDIT
AGREEMENT

 

This Revolving Credit Agreement (the “Agreement”) is
made and entered into by and between the undersigned borrower (the “Borrower”)
and the undersigned bank (the “Bank”) as of the date set forth on the last page of
this Agreement.

 

ARTICLE
I.  LOANS

 

1.1.                              Revolving Credit Loans. 
From time to time prior to December 31, 2008 (the “Maturity Date”)
or the earlier termination hereof, the Borrower may borrow from the Bank for
working capital purposes up to the aggregate principal amount outstanding at
any one time of the lesser of (i) $ 500,000.00 (the “Loan Amount”), less
letters of credit issued by the Bank, or (ii) if applicable, the Borrowing
Base (defined below).  All revolving
loans hereunder will be evidenced by a single promissory note of the Borrower
payable to the order of the Bank in the principal amount of the Loan Amount
(the “Note”).  Although the Note will be
expressed to be payable in the full Loan Amount, the Borrower will be obligated
to pay only the amounts actually disbursed hereunder, together with accrued interest
on the outstanding balance at the rates and on the dates specified therein and
such other charges provided for herein, in the event that the principal amount
outstanding under the Note exceeds the Borrowing Base at anytime, the Borrower
will immediately, without request, prepay an amount sufficient to eliminate
such excess.

 

1.2.                              Borrowing Base.  The
Borrowing Base, if any, will be as set forth in an addendum to this Agreement.

 

1.3.                              Advances After Maturity or In Excess of Maximum Loan Amount.  The Bank shall have no obligation whatsoever,
and the Bank has no present Intention, to make any advance after the Maturity
Date or which would cause the principal amount outstanding under this Agreement
to exceed the maximum loan amount or any other limitations on advances stated
In this Agreement.  Notwithstanding the
foregoing, the Bank may from time to time.  In its sole and absolute discretion, agree to
make an advance after the Maturity Date or which would cause the principal
amount of advances outstanding under this Agreement to exceed the maximum loan
amount or any of the other limitations on advances.  The Borrower is and shall be and remain
unconditionally liable to the Bank for the amount of all advances, including,
without limitation, advances in excess of the maximum loan amount or any other limitation
on advances and advances made after the Maturity Date.  Immediately upon the Banks demand, the
Borrower shall pay to the Bank the amount of any advances made after the
Maturity Date or in excess of the maximum loan amount or any other limitation
on advances contained in this Agreement, together with interest on the
principal amount of such excess advances, for so long as such advances are
outstanding, at the highest interest rate from time to time in effect for such
advances.  Any such advances shall not be
deemed an extension of this Agreement nor an increase in the maximum loan
amount available for borrowing under this Agreement.

 

1.4.                              Advances and Paying Procedure.  The Bank is authorized and directed to credit
any of the Borrower’s accounts with the Bank (or to the account the Borrower
designates in writing) for all loans made hereunder, and the Bank is authorized
to debit such account or any other account of the Borrower with the Bank for
the amount of any principal, interest or expenses due under the Note or other
amount due hereunder on the due date with respect thereto.  

 

 

If, upon any request by the Borrower to the Bank to issue a wire transfer,
there is an inconsistency between the name of the recipient of the wire and its
identification number as specified by the Borrower, the Bank may, without
liability, transmit the payment via wire based solely upon the identification
number.

 

1.5.                              Closing Fee.  The
Borrower will pay the Bank a one-time closing fee of $5,000.00
contemporaneously with execution of this Agreement.  This fee is in addition to all other fees,
expenses and other amounts due hereunder.

 

1.6.                              Loan Facility Fee. 
The Borrower will pay a loan facility fee equal to:

 

o                                    $
n/a per annum, payable annually in advance; (or)

 

o                                    n/a%
per annum of the Loan Amount, payable annually in advance; (or)

 

o                                    n/a%
per annum of the difference between the Loan Amount and the actual daily unpaid
principal amount of the Note outstanding from time to time, payable quarterly,
in arrears, on the last business day of each third calendar month, and at
maturity; (or)

 

o                                    n/a%
per annum of the actual daily unpaid principal amount of the Note outstanding
from time to time, payable quarterly, in arrears, on the last business day of
each third calendar month, and at maturity.

 

The loan facility fee is payable for the entire period
that this Agreement is in effect, regardless of whether any amounts are
outstanding hereunder at any given time.

 

1.7.                              Expenses and Attorneys’ Fees.  Upon demand, the Borrower will immediately
reimburse the Bank and any participant in the Obligations (defined below) (“Participant”)
for all attorneys’ fees and all other costs, fees and out-of-pocket
disbursements incurred by the Bank or any Participant in connection with the
preparation, execution, delivery, administration, defense, and enforcement of
this Agreement or any of the other Loan Documents (defined below), including
attorneys’ fees and all other costs and fees (a) incurred before or after
commencement of litigation or at trial, on appeal or in any other proceeding, (b) incurred
in any bankruptcy proceeding and (o) related to any waivers or amendments
with respect thereto (examples of costs and fees include but are not limited to
fees and costs for:  filing, perfecting
or confirming the priority of the Banks lien, title searches or insurance,
appraisals, environmental audits and other reviews related to the Borrower, any
collateral or the loans, if requested by the Bank).  The Borrower will also reimburse the Bank and
any Participant for all costs of collection, including all attorneys’ fees,
before and after judgment, and the costs of preservation and/or liquidation of
any collateral.

 

1.8.                              Compensating Balances. 
The Borrower will maintain on deposit with the Bank in non-interest
bearing accounts average daily collected balances, in excess of that required
to support account activity and other credit facilities extended to the Borrower
by the Bank, an amount at least equal to the sum of (i) $ n/a and (ii) n/a
% of the Loan Amount as computed on a monthly basis.  If the Borrower fails to keep and maintain
such balances, it will pay a deficiency fee, payable within five days after receipt
of a statement therefor calculated on the amount by which the Borrower’s
average daily balances are less than the requirements set forth above, computed
at a rate equal to the rate set forth in the Note.

 

2

 

1.9.                              Conditions to Borrowing. 
The Bank will not be obligated to make (or continue to make) advances
hereunder unless (i) the Bank has received executed originals of the Note
and all other documents or agreements applicable to the loans described herein,
including but not limited to the documents specified in Article III
(collectively with this Agreement the Loan Documents), in form and content
satisfactory to the Bank; (ii) if the loan is secured, the Bank has
received confirmation satisfactory to it that the Bank has a properly perfected
security interest, mortgage or lien, with the proper priority; (iii) the
Bank has received certified copies of the Borrower’s governance documents and
certification of entity status satisfactory to the Bank and all other relevant
documents; (iv) the Bank has received a certified copy of a resolution or
authorization in form and content satisfactory to the Bank authorizing the loan
and all acts contemplated by this Agreement and all related documents, and
confirmation of proper authorization of all guaranties and other acts of third
parties contemplated hereunder; (v) if required by the Bank, the Bank has
been provided with an Opinion of the Borrower’s counsel in form and content
satisfactory to the Bank confirming the matters outlined in Section 2.2
and such other matters as the Bank requests; (vi) no default exists under
this Agreement or under any other Loan Documents, or under any other agreements
by and between the Borrower and the Bank; and (vii) all proceedings taken
in connection with the transactions contemplated by this Agreement (including
any required environmental assessments), and all instruments, authorizations
and other documents applicable thereto, are satisfactory to the Bank and its
counsel.

 

ARTICLE
II.  WARRANTIES AND COVENANTS

 

While any part of the credit granted to the Borrower
under this Agreement or the other Loan Documents is available or any
obligations under any of the Loan Documents are unpaid or outstanding, the
Borrower continuously warrants and agrees as follows:

 

2.1.                              Accuracy of Information.  All information, certificates or statements
given to the Bank pursuant to this Agreement and the other Loan Documents will
be true and complete when given.

 

2.2.                              Organization and Authority; Litigation.  This Agreement and the other Loan Documents
are the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their terms.  The execution, delivery and performance of
this Agreement and all other Loan Documents to which the Borrower is a party (i) are
within the borrower’s power; (ii) have been duly authorized by all
appropriate entity action; (iii) do not require the approval of any
governmental agency; and (iv) will not violate any law, agreement or restriction
by which the Borrower is bound.  If the
Borrower is not an individual, the Borrower is validly existing and in good
standing under the laws of its state of organization, has all requisite power
and authority and possesses all licenses necessary to conduct its business and
own its properties.  There is no
litigation or administrative proceeding threatened or pending against the
Borrower which would, if adversely determined, have a material adverse effect
on the Borrower’s financial condition or its property.

 

2.3.                              Existence; Business Activities; Assets; Change of Control.  The Borrower will (i) preserve its
existence, rights and franchises; (ii) not make any material change in the
nature or manner of its business activities; (iii) not liquidate, dissolve,
acquire another entity or merge or consolidate with or into another entity or
change its form of organization; (iv) not amend its 

 

3

 

organizational documents in any manner that may conflict with any term
or condition of the Loan Documents; and (v) not sell, lease, transfer or
otherwise dispose of all or substantially all of its assets.  Other than the transfer to a trust
beneficially controlled by the transferor, no event shall occur which causes or
results in a transfer of majority ownership of the Borrower while any
Obligations are outstanding or while the Bank has any obligation to provide
funding to the Borrower.

 

2.4.                              Use of Proceeds; Margin Stock; Speculation.  Advances by the Bank hereunder will be used
exclusively by the Borrower for working capital and other regular and valid
purposes.  The Borrower will not, without
the prior written consent of the Bank, redeem, purchase, or retire any of the
capital stock or declare or pay any dividends, or make any other payments or
distributions of a similar type or nature including withdrawal
distributions.  The Borrower will not use
any of the loan proceeds to purchase or carry “margin” stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve System).  No part of any of the proceeds will be used
for speculative investment purposes, including, without limitation, speculating
or hedging in the commodities and/or futures market.

 

2.5.                              Environmental Matters. 
Except as disclosed in a written schedule attached to this Agreement (if
no schedule is attached, there are no exceptions), there exists no uncorrected
violation by the Borrower of any federal, state or local laws (including
statutes, regulations, ordinances or other governmental restrictions and
requirements) relating to the discharge of air pollutants, water pollutants or
process waste water or otherwise relating to the environment or Hazardous
Substances as hereinafter defined, whether such laws currently exist or are
enacted in the future (collectively “Environmental Laws’).  The term “Hazardous Substances” will mean any
hazardous or toxic wastes, chemicals or other substances, the generation,
possession or existence of which is prohibited or governed by any Environmental
Laws.  The Borrower is not subject to any
judgment, decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceeding, which asserts that the Borrower (i) has
violated any Environmental Laws; (ii) is required to clean up, remove or
take remedial or other action with respect to any Hazardous Substances
(collectively “Remedial Action”); or (iii) is required to pay all or a
portion of the cost of any Remedial Action, as a potentially responsible
party.  Except as disclosed on the
Borrower’s environmental questionnaire provided to the Bank, there are not now,
nor to the Borrower’s knowledge after reasonable investigation have there ever
been, any Hazardous Substances (or tanks or other facilities for the storage of
Hazardous Substances) stored, deposited, recycled or disposed of on, under or
at any real estate owned or occupied by the Borrower during the periods that
the Borrower owned or occupied such real estate, which if present on the real
estate or in soils or ground water, could require Remedial Action.  To the Borrower’s knowledge, there are no
proposed or pending changes in Environmental Laws which would adversely affect
the Borrower or its business, and there are no conditions existing currently or
likely to exist while the Loan Documents are in effect which would subject the
Borrower to Remedial Action or other liability. 
The Borrower currently complies with and will continue to timely comply
with all applicable Environmental Laws; and will provide the Bank, immediately
upon receipt, copies of any correspondence, notice, complaint, order or other
document from any source asserting or alleging any circumstance or condition
which requires or may require a financial contribution by the Borrower or
Remedial Action or other response by or on the part of the Borrower under
Environmental Laws, or which seeks damages or civil, criminal or punitive
penalties from the Borrower for an alleged violation of Environmental Laws.

 

4

 

2.6.                              Compliance with Laws. 
The Borrower has complied with all laws applicable to its business and its
properties, and has all permits, licenses and approvals required by such laws,
copies of which have been provided to the Bank.

 

2.7.                              Restriction on Indebtedness. 
The Borrower will not create, incur, assume or have outstanding any
indebtedness for borrowed money (including capitalized leases) except (i) any
indebtedness owing to the Bank and its affiliates, and (ii) any other
indebtedness outstanding on the date hereof, and shown on the Borrower’s
financial statements delivered to the Bank prior to the date hereof, provided
that such other indebtedness will not be increased.

 

2.8.                              Restriction on Liens. 
The Borrower will not create, incur, assume or permit to exist any
mortgage, pledge, encumbrance or other lien or levy upon or security interest
in any of the Borrower’s property now owned or hereafter acquired, except (i) taxes
and assessments which are either not delinquent or which are being contested in
good faith with adequate reserves provided; (ii) easements, restrictions
and minor title irregularities which do not, as a practical matter, have an
adverse effect upon the ownership and use of the affected property; (iii) liens
in favor of the Bank and its affiliates; and (iv) other liens disclosed in
writing to the Bank prior to the date hereof.

 

2.9.                              Restriction on Contingent Liabilities.  The Borrower will not guarantee or become a
surety or otherwise contingently liable for any obligations of others, except
pursuant to the deposit and collection of checks and similar matters in the
ordinary course of business.

 

2.10.                        Insurance.  The
Borrower will maintain insurance to such extent, covering such risks and with
such insurers as is usual and customary for businesses operating similar
properties, and as is satisfactory to the Bank, including insurance for fire
and other risks insured against by extended coverage, public liability
insurance and workers’ compensation insurance; and will designate the Bank as
loss payee with a “Lender’s Loss Payable” endorsement on any casualty policies
and take such other action as the Bank may reasonably request to ensure that
the Bank will receive (subject to no other interests) the insurance proceeds on
the Bank’s collateral.

 

2.11.                        Taxes and Other Liabilities. 
The Borrower will pay and discharge, when due, all of its taxes,
assessments and other liabilities, except when the payment thereof is being
contested in good faith by appropriate procedures which will avoid foreclosure
of liens securing such items, and with adequate reserves provided therefor.

 

2.12.                        Financial Statements and Reporting.  The financial statements and other
information previously provided to the Bank or provided to the Bank in the
future are or will be complete and accurate and prepared in accordance with
generally accepted accounting principles. 
There has been no material adverse change in the Borrower’s financial
condition since such information was provided to the Bank.  The Borrower will (i) maintain accounting
records in accordance with generally recognized and accepted principles of
accounting consistently applied throughout the accounting periods involved; (ii) provide
the Bank with such information concerning its business affairs and financial
condition (including insurance coverage) as the Bank may request; and (iii) without
request, provide the Bank with such specific financial statements,
certifications and/or information as may be set forth in an addendum to this
Agreement.

 

5

 

2.13.                        Inspection of Properties and Records; Fiscal Year.  The Borrower will permit representatives of
the Bank to visit and inspect any of the properties and examine any of the
books and records of the Borrower at any reasonable time and as often as the
Bank may reasonably desire.  The Borrower
will not change its fiscal year.

 

2.14.                        Financial Status. 
Financial Covenants, if any, will be as set forth in an addendum to this
Agreement.

 

2.15.                        Paid-In-Full Period.  o
If checked here, all revolving loans under this Agreement and the Note must be
paid in full for a period of at least n/a consecutive days during each
fiscal year.

 

ARTICLE
III.  COLLATERAL AND GUARANTIES

 

3.1.                              Collateral.  This
Agreement and the Note are secured by any and all security interests, pledges,
mortgages/deeds of trust (except any mortgage/deed of trust expressly limited
by its terms to a specific obligation of Borrower to Bank) or liens now or
hereafter in existence granted to the Bank to secure indebtedness of the
Borrower to the Bank, including without limitation as described in the
following documents:

 

o                                    Real
Estate Mortgage(s)/Deed(s) of Trust dated                                                 
covering real estate located at                                                                                                         .

 

o                                    Security
Agreement(s) dated                                                                                 .

 

o                                    Possessory
Collateral Pledge Agreement(s) dated                                               .

 

o                                    Other
                                                                                                                  .

 

3.2.                              Guaranties.  This
Agreement and the Note are guarantied by each and every guaranty now or hereafter
in existence guarantying the indebtedness of the Borrower to the Bank (except
for any guaranty expressly limited by its terms to a specific separate
obligation of Borrower to the Bank) including, without limitation, the
following:  Victor J. Salerno, Terina M.
Salerno.

 

3.3.                              Credit Balances; Setoff. 
As additional security for the payment of the obligations described in
the Loan Documents and any other obligations of the Borrower to the Bank of any
nature whatsoever (collectively the “Obligations”), the Borrower hereby grants
to the Bank a security interest in, a lien on and an express contractual right
to set off against all depository account balances, cash and any other property
of the Borrower now or hereafter in the possession of the Bank and the right to
refuse to allow withdrawals from any account (collectively “Setoff”).  The Bank may, at any time upon the occurrence
of a default hereunder (notwithstanding any notice requirements or grace/cure
periods under this or other agreements between the Borrower and the Bank)
Setoff against the Obligations whether or not the Obligations (including future
installments) are then due or have been accelerated, all without any advance or
contemporaneous notice or demand of any kind to the Borrower, such notice and
demand being expressly waived.

 

6

 

The omission of any reference to an agreement in
Sections 3.1 and 3.2 above will not affect the validity or enforceability
thereof.  The rights and remedies of the
Bank outlined in this Agreement and the documents identified above are intended
to be cumulative.

 

ARTICLE
IV.  DEFAULTS

 

4.1.                              Defaults. 
Notwithstanding any cure periods described below, the Borrower will
immediately notify the Bank in writing when the Borrower obtains knowledge of
the occurrence of any default specified below. 
Regardless of whether the Borrower has given the required notice, the
occurrence of one or more of the following will constitute a default:

 

(a)                                  Nonpayment.  The
Borrower shall fail to pay (i) any interest due on the Note or any fees,
charges, costs or expenses under the Loan Documents by 5 clays after the same
becomes due; or (ii) any principal amount of the Note when due.

 

(b)                                 Nonperformance.  The
Borrower or any guarantor of Borrower’s Obligations to the Bank (“Guarantor”)
shall fail to perform or observe any agreement, term, provision, condition, or
covenant (other than a default occurring under (a), (c), (d), (a), (t) or (g) of
this Section 4.1) required to be performed or observed by the Borrower or
any Guarantor hereunder or under any other Loan Document or other agreement
with or in favor of the Bank.

 

(c)                                  Misrepresentation. 
Any financial information, statement, certificate, representation or
warranty given to the Bank by the Borrower or any Guarantor (or any of their representatives)
in connection with entering into this Agreement or the other Loan Documents
and/or any borrowing thereunder, or required to be furnished under the terms
thereof, shall prove untrue or misleading in any material respect (as
determined by the Bank in the exercise of its judgment) as of the time when
given.

 

(d)                                 Default on Other Obligations.  The Borrower or any Guarantor shall be in
default under the terms of any loan agreement, promissory note, lease, conditional
sale contract or other agreement, document or instrument evidencing, governing
or securing any indebtedness owing by the Borrower or any Guarantor to the Bank
or any indebtedness in excess of $10,000 owing by the Borrower to any third
party, and the period of grace, if any, to cure said default shall have passed.

 

(e)                                  Judgments.  Any
judgment shall be obtained against the Borrower or any Guarantor which,
together with all other outstanding unsatisfied judgments against the Borrower
(or such Guarantor), shall exceed the sum of $10,000 and shall remain
unvacated, unbonded or unstayed for a period of 30 days following the date of
entry thereof.

 

(f)                                    Inability to Perform; Bankruptcy/Insolvency.  (i) The Borrower or any Guarantor shall
die or cease to exist; or (ii) any Guarantor shall attempt to revoke any
guaranty of the Obligations described herein, or any guaranty becomes
unenforceable in whole or in part for any reason; or (iii) any bankruptcy,
insolvency or receivership proceedings, or an assignment for the benefit of
creditors, shall be commenced under any Federal or state law by or against the
Borrower or any Guarantor; or (iv) the Borrower or any Guarantor shall
become the subject of any out-of-court settlement with its creditors; or (v) the
Borrower or any Guarantor is unable or admits in writing its inability to pay
its debts as they mature; or (vi) if the Borrower is a limited 

 

7

 

liability company, any member thereof shall withdraw or otherwise
become disassociated from the Borrower.

 

(g)                                 Adverse Change; Insecurity. 
(i) There is a material adverse change in the business, properties,
financial condition or affairs of the Borrower or any Guarantor, or in any
collateral securing the Obligations; or (ii) the Bank in good faith deems
itself insecure.

 

4.2.                              Termination of Loans; Additional Bank Rights.  Upon the Maturity Date or the occurrence of
any of the events identified in Section 4.1, the Bank may at any time
(notwithstanding any notice requirements or grace/cure periods under this or
other agreements between the Borrower and the Bank) (i) immediately
terminate its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;
and/or (iii) take such other steps to protect or preserve the Bank’s
interest in any collateral, including without limitation, notifying account
debtors to make payments directly to the Bank, advancing funds to protect any
collateral and insuring collateral at the Borrower’s expense; all without
demand or notice of any kind, all of which are hereby waived.

 

4.3.                              Acceleration of Obligations.  Upon the Maturity Date or the occurrence of
any of the events identified in Sections 4.1(a) through 4.1(e) and
4.1(g), and the passage of any applicable cure periods, the Bank may at any
time thereafter, by written notice to the Borrower, declare the unpaid
principal balance of any Obligations, together with the interest accrued
thereon and other amounts accrued hereunder and under the other Loan Documents,
to be immediately due and payable; and the unpaid balance will thereupon be due
sort payable, all without presentation, demand, protest or further notice of
any kind, all of which are hereby waived, and notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents.  Upon the occurrence of any event under Section 4.1(f),
the unpaid principal balance of any Obligations, together with all interest
accrued thereon and other amounts accrued hereunder and under the other Loan
Documents, will thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which are hereby
waived, and notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents.  Nothing
contained in Section 4.1, Section 4.2 or this section will limit the
Bank’s right to Setoff as provided in Section 3.3 or otherwise in this
Agreement.

 

4.4.                              Other Remedies. 
Nothing in this Article IV is intended to restrict the Bank’s
rights under any of the Loan Documents or at law, and the Bank may exercise all
such rights and remedies as and when they are available.

 

ARTICLE
V.  OTHER TERMS

 

5.1.                              Additional Terms; Addendum/Supplements.  The warranties, covenants, conditions and
other terms described in this Section and/or in the Addendum and/or other
attached document(s) referenced in this Section are incorporated into
this Agreement:

 

ARTICLE
VI.  MISCELLANEOUS

 

6.1.                              Delay; Cumulative Remedies.  No delay on the part of the Bank in exercising
any right, power or privilege hereunder or under any of the other Loan
Documents will operate as a waiver thereof, nor will any single or partial
exercise of any right, power or privilege hereunder preclude other or further
exercise thereof or the exercise of any other right, power or 

 

8

 

privilege.  The rights and
remedies herein specified are cumulative and are not exclusive of any rights or
remedies which the Bank would otherwise have.

 

6.2.                              Relationship to Other Documents.  The warranties, covenants and other
obligations of the Borrower (and the rights and remedies of the Bank) that are
outlined in this Agreement and the other Loan Documents are intended to
supplement each other.  In the event of
any inconsistencies in any of the terms in the Loan Documents, all terms will
be cumulative so as to give the Bank the most favorable rights set forth in the
conflicting documents, except that if there is a direct conflict between any
preprinted terms and specifically negotiated terms (whether included in an
addendum or otherwise), the specifically negotiated terms will control.

 

6.3.                              Successors.  The
rights, options, powers and remedies granted in this Agreement and the other
Loan Documents shall be binding upon the Borrower and the Bank and their
respective successors and assigns, and shall inure to the benefit of the
Borrower and the Bank and the successors and assigns of the Bank, including
without limitation any purchaser of any or all of the rights and obligations of
the Bank under the Note and the other Loan Documents.  The Borrower may not assign its rights or
obligations under this Agreement or any other Loan Documents without the prior
written consent of the Bank.

 

6.4.                              Disclosure.  The Bank
may, in connection with any sate or potential sale of all or any interest in
the Note and other Loan Documents, disclose any financial information the Bank
may have concerning the Borrower to any purchaser or potential purchaser.  From time to time, the Bank may, in its
discretion and without obligation to the Borrower, any Guarantor or any other
third party, disclose information about the Borrower and this loan to any
Guarantor, surety or other accommodation party. 
This provision does not obligate the Bank to supply any information or
release the Borrower from its obligation to provide such information, and the
Borrower agrees to keep all Guarantors, sureties or other accommodation parties
advised of its financial condition and other matters which may be relevant to
their obligations to the Bank.

 

6.5.                              Indemnification.  Except for harm arising from the Bank’s
willful misconduct, the Borrower hereby indemnifies and agrees to defend and
hold the Bank harmless from any and all losses, costs, damages, claims and
expenses of any kind suffered by or asserted against the Bank relating to
claims by third parties arising out of the financing provided under the Loan
Documents or related to any collateral (including, without limitation, the
Borrower’s failure to perform its obligations relating to Environmental Matters
described in Section 2.5 above). 
This indemnification and hold harmless provision will survive the
termination of the Loan Documents and the satisfaction of the Obligations due
the Bank.

 

6.6.                              Notice of Claims Against Bank; Limitation of Certain Damages.  In order to allow the Bank to mitigate any
damages to the Borrower from the Bank’s alleged breach of its duties under the
Loan Documents or any other duty, if any, to the Borrower, the Borrower agrees
to give the Bank immediate written notice of any claim or defense it has
against the Bank, whether in tort or contract, relating to any action or
inaction by the Bank under the Loan Documents, or the transactions related
thereto, or of any defense to payment of the Obligations for any reason.  The requirement of providing timely notice to
the Bank represents the parties’ agreed-to standard of performance regarding
claims against the Bank.  Notwithstanding
any claim that the Borrower may have against the Bank, and regardless of any
notice the Borrower may have given the Bank, the Bank will not be liable to the
Borrower for consequential and/or 

 

9

 

special damages arising therefrom, except those damages arising from
the Bank’s willful misconduct.

 

6.7.                              Notices.  Notice of
any record shall be deemed delivered when the record has been (a) deposited
in the United States Mail, postage pre-paid, (b) received by overnight
delivery service, (c) received by telex, (d) received by telecopy, (e) received
through the Internet, or (f) when personally delivered.

 

6.8.                              Payments.  Payments
due under the Note and other Loan Documents will be made in lawful money of the
United States.  All payments may be
applied by the Bank to principal, interest and other amounts due under the Loan
Documents in any order which the Bank elects.

 

6.9.                              Applicable Law and Jurisdiction; Interpretation; Joint Liability;
Severability.  This Agreement
and all other Loan Documents will be governed by and interpreted in accordance
with the internal Jaws of the State of Nevada, except to the extent superseded
by Federal law.  THE BORROWER HEREBY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED
IN THE COUNTY OR FEDERAL JURISDICTION OF THE BANKS BRANCH WHERE THE LOAN WAS ORIGINATED,
AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY
ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE,
THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM,
OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING.  Nothing herein will affect the Bank’s rights
to serve process in any manner permitted by law, or limit the Bank’s right to
bring proceedings against the Borrower in the competent courts of any other
jurisdiction or jurisdictions.  This
Agreement, the other Loan Documents and any amendments hereto (regardless of
when executed) will be deemed effective and accepted only upon the Bank’s
receipt of the executed originals thereof. 
If there is more than one Borrower, the liability of the Borrowers will
be joint and several, and the reference to Borrower will be deemed to refer to
all Borrowers.  Invalidity of any
provision of this Agreement shall not affect the validity of any other
provision.

 

6.10.                        Copies; Entire Agreement; Modification.  The Borrower hereby acknowledges the receipt
of a copy of this Agreement and all other Loan Documents.  This Agreement is a “transferable record” as
defined in applicable law relating to electronic transactions.  Therefore, the holder of this Agreement may,
on behalf of Borrower, create a microfilm or optical disk or other electronic
image of this Agreement that is an authoritative copy as defined in such
law.  The holder of this Agreement may
store the authoritative copy of such Agreement in its electronic form and then
destroy the paper original as part of the holder’s normal business
practices.  The holder, on its own
behalf, may control and transfer such authoritative copy as permitted by such
law.

 

IMPORTANT READ BEFORE SIGNING.  THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND
SIGNED BY THE PARTIES ARE ENFORCEABLE. 
NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ENFORCED.  THE TERMS OF THIS
AGREEMENT 

 

10

 

MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT.  THIS NOTICE SHALL ALSO BE EFFECTIVE WITH
RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE
BANK.  A MODIFICATION OF ANY OTHER CREDIT
AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER
RECEIPT BY BORROWER OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN
INSTRUMENT.  ORAL OR IMPLIED
MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE
RELIED UPON.

 

6.11.                        Waiver of Jury Trial.  TO THE EXTENT PERMITTED BY LAW, THE BORROWER
AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY
TRANSACTION ARISING THEREFROM OR CONNECTED THERETO.  THE BORROWER AND THE BANK EACH REPRESENTS TO
THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

 

6.12.                        Attachments.  All
documents attached hereto, including any appendices, schedules, riders, and
exhibits to this Agreement, are hereby expressly incorporated by reference.

 

IN WITNESS WHEREOF, the undersigned have executed this
REVOLVING CREDIT AGREEMENT as of April 17, 2008.

 

	
  (Individual Borrower)

  	
   

  	
  American
  Wagering, Inc.

  a Nevada Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
  n/a

  	
   

  	
  By:

  	
    /s/ Victor
  J. Salerno

  
	
   

  	
   

  	
  Name:

  	
  Victor J. Salerno

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S. Bank N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Karal
  A.Presley

  
	
  Borrower Name

  	
  n/a

  	
   

  	
  Name:

  	
  Karal A.Presley

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

Borrower Address:  675 Grier Drive, Las Vegas, NV 89119

Borrower Telephone No.:

 

11

 

	
   

  	
  For Bank Use Only

  	
  Reviewed by

  
	
   

  	
  Due December 31,
  2008

  Customer # 1842832664   Loan #

  

 

REVOLVING CREDIT NOTE

 

	
  $500,000.00

  	
  April 17,
  2008

  

 

FOR VALUE RECEIVED, the undersigned borrower (the “Borrower”),
promises to pay to the order of U.S. BANK N.A. (the “Bank”), the principal sum
of FIVE HUNDRED THOUSAND AND NO/100 Dollars ($500,000.00), payable December 31,
2008 (the “Maturity Date”).

 

Interest.  The unpaid principal balance will bear
Interest at an annual rate equal to the prime rate announced by the Bank.  The interest rate hereunder will be adjusted
each time that the prime rate changes.

 

Payment Schedule.  Interest is payable beginning May 1,
2008, and on the same date of each consecutive month thereafter (except that if
a given month does not have such a date, the last day of such month), plus a
final interest payment with the final payment of principal.

 

Interest will be computed for the actual number of
days principal is unpaid, using a daily factor obtained by dividing the stated
interest rate by 360.

 

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

 

In no event will the interest rate hereunder exceed
that permitted by applicable law.  If any
interest or other charge is finally determined by a court of competent
jurisdiction to exceed the maximum amount permitted by law, the interest or
charge shall be reduced to the maximum permitted by law, and the Bank may
credit any excess amount previously collected against the balance due or refund
the amount to the Borrower.

 

Subject to applicable law, if any payment is not made
on or before its duo date, the Bank may collect a delinquency charge of 5.00%
of the unpaid amount.  Collection of the
late payment fee shall not be deemed to be a waiver of the Bank’s right to
declare a default hereunder.

 

Without affecting the liability of any Borrower,
endorser, surety or guarantor, the Bank may, without notice, renew or extend
the time for payment, accept partial payments, release or 

 

 

impair any collateral security for the payment of this Note, or agree
not to sue any party liable on it.

 

This Revolving Credit Note constitutes the Note issued
under a Revolving Credit Agreement dated as of the date hereof between the
Borrower and the Bank, to which Agreement reference is hereby made for a
statement of the terms and conditions under which loans evidenced hereby were
or may be made and a description of the terms and conditions upon which the
maturity of this Note may be accelerated, and for a description of the
collateral securing this Note.

 

This Note is a “transferable record” as defined in
applicable law relating to electronic transactions.  Therefore, the holder of this Note may, on
behalf of Borrower, create a microfilm or optical disk or other electronic image
of this Note that is an authoritative copy as defined in such law.  The holder of this Note may store the
authoritative copy of such Note in its electronic form and then destroy the
paper original as part of the holder’s normal business practices.  The holder, on its own behalf, may control
and transfer such authoritative copy as permitted by such law.

 

All documents attached hereto, including any
appendices, schedules, riders, and exhibits to this Revolving Credit Note, are
hereby expressly incorporated by reference.

 

The Borrower hereby acknowledges the receipt of a copy
of this Note.

 

	
  (Individual Borrower)

  	
   

  	
  American
  Wagering, Inc.

  a Nevada Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
    n/a

  	
   

  	
  By:

  	
    /s/ Victor
  J. Salerno

  
	
   

  	
   

  	
   

  	
  Name and Title:

  	
  Victor J. Salerno,

  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Borrower Name

  	
    n/a

  	
   

  	
  Name and Title:

  	
   

  
						

 

2

 

ADDENDUM TO REVOLVING
CREDIT AGREEMENT AND NOTE

 

This Addendum is made part of the Revolving Credit
Agreement and Note (the “Agreement”) made and entered into by and between the
undersigned borrower (the “Borrower”) and the undersigned bank (the “Bank”) as
of the date identified below.  The
warranties, covenants and other terms described below are hereby added to the
Agreement.

 

Financial Information and Reporting.  This provision replaces in its entirety the
provision of the Agreement titled “Financial Information and Reporting”.  Financial terms used herein which are not
specifically defined herein shall have the meanings ascribed to them under
generally accepted accounting principles. 
For any Borrower who does not have a separate fiscal year end for tax
reporting purposes, the fiscal year will be deemed to be the calendar
year.  The financial statements and other
information previously provided to Bank or provided to Bank in the future are
or will be complete and accurate and prepared in accordance with generally
accepted accounting principles.  There
has been no material adverse change in Borrower’s financial condition since
such information was provided to Bank.  Borrower will (i) maintain accounting records
in accordance with generally recognized and accepted principles of accounting consistently
applied throughout the accounting periods involved; (ii) provide Bank with
such information concerning its business affairs and financial condition
(including insurance coverage) as Bank may request; and (iii) without
request, provide to Bank the following financial information, in form and
content acceptable to Bank, pertaining to Borrower:

 

Annual Financial Statements:  Not later than 180 days after the end of each
fiscal year, annual financial statements, audited by a certified public
accounting firm acceptable to Bank.

 

Interim Financial Statements:  Not later than 120 days after the end of each
fiscal quarter, interim financial statements, prepared by Borrower.

 

Dated as of April 17,
2008

 

	
  (Individual)

  	
   

  	
  (Non-Individual)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  American Wagering, Inc.

  a Nevada Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
    n/a

  	
   

  	
  By:

  	
    /s/ Victor
  J. Salerno

  
	
   

  	
   

  	
   

  	
  Name and Title:

  	
  Victor J. Salerno,

  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
    n/a

  	
   

  	
   

  
						

 

 

	
   

  	
  Agreed to:

  
	
   

  	
   

  
	
   

  	
  U.S. BANK N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karal A. Presley

  
	
   

  	
  Name and Title:

  	
  Karal A. Presley, Vice

  President

  
				

 

2

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