Document:

Exhibit
10.19 (A)

EMPLOYMENT AGREEMENT

This Employment
Agreement is made and entered into this 6th day of August, 2007, by and between Melody Sullivan (“Executive”) and American Wagering, Inc. (“AWI” or “Employer”)
(individually each is a “party” or collectively, the “parties”).

Employer and
Executive have determined to enter into an agreement concerning Executive’s
employment as Chief Financial Officer (“CFO”);

For good and
valuable consideration and in consideration of the mutual promises and mutual
covenants contained herein, Employer and Executive agree as follows:

1.     EMPLOYMENT
TERM.  This is a two (2) year Agreement as of the 6th day of August, 2007 (the “Hire Date”) and
continuing for two (2) years until the 6th day of August,
2009, unless earlier terminated as hereinafter provided in Section 5.  This Agreement shall not be renewed without a
written, signed Agreement executed by the 

Employer and the
Executive; however, the parties agree to review this Agreement six (6) months
prior to the expiration date.

2.     DUTIES.

a.     During the term of this Agreement,
Executive shall render full-time professional services to Employer consistent
with the position of CFO.  Executive
agrees to perform these duties in a competent and faithful manner and in
accordance with Employer’s rules, practices, policies, and regulations, as
generally in effect from time to time for all employees of Employer.  Executive shall observe and adhere to all
applicable professional and ethical standards of her profession.  Executive shall be expected to work the
reasonable hours and days necessary to meet the needs of Employer.  Executive will report directly to Employer’s
Audit Committee (“Audit Committee”) of the Board of Directors (the “Board”)
with secondary reporting to Employer’s Chief Executive Officer (“CEO”).

b.     Executive shall have hiring and firing
authority over accounting/financing staff, with reasonable and comparable
market salaries up to $50,000 per year. 
Should Executive desire to hire or fire an accounting/financing staff person
with a reasonable and comparable market salary in excess of $50,000 per year,
Executive shall seek prior approval from the Audit Committee and the CEO.

c.     Executive shall be included on any decision
to maintain, or in the selection of new representation of, Employer’s
independent auditors and/or SEC counsel.

d.     Executive shall be appointed Treasurer of
Employer and all wholly-owned subsidiaries.

3.     OTHER SERVICES AND ACTIVITIES.

a.     During the term of this Agreement,
Executive shall devote substantially all of her professional work efforts to
Employer’s practice.  Executive shall not
engage in any other employment or remunerative activities unless such
activities are first approved in writing by the Employer’s Chairman of the
Audit Committee and the CEO. 
Notwithstanding the foregoing, nothing contained herein shall preclude
the Executive from: (a) serving on the boards of directors of other companies
or organizations with the approval of the Board (not to be unreasonably
withheld) or serving on the boards of directors of not-for-profit companies or
organizations without the approval of the Board; (b) investing in and managing
passive investments; or (c) pursuing her
personal, financial and legal affairs provided that such activity does not
materially interfere with the performance of the Executive’s obligations under
this Agreement.

4.     COMPENSATION
AND BENEFITS.

a.     Basic Salary.  Executive will be paid an annual salary of
One Hundred Eighty Thousand Dollars ($180,000) payable by-weekly in twenty-six
(26) equal installments (“Basic Salary”), less deductions or amounts as
required to be deducted or withheld applicable law or regulation .  Basic Salary shall be prorated for the month
in which employment commences or terminates, or in which employment is less
than twelve (12) months in duration.

b.     Bonus.  Employer
shall pay the Executive, in addition to the Basic Salary, a performance bonus
equal to one percent (1%) of the Consolidated Pre-Tax Earnings of Employer for
each fiscal year during the term of this Agreement (“Bonus”).  Consolidated Pre-Tax Earnings shall be equal
to Consolidated Income Before Income Taxes as disclosed on the Consolidated
Financial Statements of Employer. 
Consolidated Income Before Income Taxes shall be determined in
accordance with generally accepted accounting principles and shall exclude
extraordinary, unusual and nonrecurring expenses as defined by generally
accepted accounting principles.  Such
Bonus shall be paid at the same time other employees are paid similar bonuses.
Employer may, in its sole and absolute discretion, pay the Executive, in
addition to the Basic Salary, a bonus at such times and in such amount as it
may deem appropriate.

c.     401
(k).  Executive shall be
entitled to participate in, with the same benefits as other employees pursuant
to, Employer’s company sponsored 401 (k) plan with Employer making matching
contributions at the annual rate of no less than four percent (4%) of the Basic
Salary up to any limit imposed by federal law (“4% contribution”).  In the event Employer cannot obtain a waiver
of the one (1) year waiting period for Executive to participate in Employer’s
401 (k) plan, at the same time Employer pays Executive the Bonus set forth in
Subsection (b) above, Employer also shall pay Executive a one-time-only bonus
of the 4% contribution would have made had Executive been allowed to
participate.

d.     Paid Time Off.     During the term of this
Agreement, Executive shall be entitled to maximum allowable paid time off (“PTO”)
granted to employees of Employer, 20 days, and usable (and payable) in
accordance with Employer’s Employee Handbook.

e.     Medical and Dental
Insurance.   Employer shall
provide for payment of Executive’s and dependents’ medical and dental insurance
pursuant to Employer’s company sponsored plan(s).

f.      Reimbursement
for Expenses.  Employer shall pay or reimburse Executive for
all reasonable expenses actually incurred or paid by her during employment in
the performance of the duties under this Agreement pursuant to Employer’s
policy within a reasonable time of presentation of such bills, expenses
statements, vouchers or such other supporting information as CEO and/or the
Audit Committee may reasonably require. 
Such expenses include, but are not 

limited to, seminars and training necessary to complete
mandatory continuing professional education (“CPEs”) to maintain Certified
Management Accountant credential.  In the
event Employer requires Executive to travel on business during the term,
Executive shall be reimbursed for any travel expenses in accordance with
Employer’s policy. Employer accepts financial responsibility for all fees,
costs and expenses due to gaming related investigations and licensing.

g.     Stock
Options.     Executive shall be entitled to
receive 30,000 non-qualified stock options (“Stock Options”) in AWI, to be
granted on the Hire Date at the closing market price of the common stock (“BETM”).
These stock options shall be vested 10,000 non-qualified shares per year over
three years, at the annual anniversaries following the Hire Date. These stock
options will be granted under the Employer’s Stock Option Plan and are subject
to that plan’s conditions.

5.     TERMINATION OF EXECUTIVE. 
Rights and Duties. If Executive’s employment is
terminated, she shall be
entitled to the amounts or benefits set forth in this Section 5, beyond which
Employer and Executive shall have no further obligations to each other, except
Executive’s confidentiality and other obligations under Section 6, the parties’
mutual arbitration obligations under Section 8, or as set forth in any written
agreement the parties subsequently enter into.

a.     TERMINATION
FOR CAUSE.  Employer may
terminate Executive’s employment under this Agreement and all of its
obligations hereunder at any time for cause, as defined below.  Depending on the severity of the alleged
wrong-doing and prior to terminating Executive’s employment, (i) Employer’s
Audit Committee, shall conduct a good faith, internal investigation into
allegations of wrong-doing made against Executive.  During this internal investigation, the Audit
Committee may place Executive on paid leave of absence.  The Audit Committee shall take reasonable
precautions to maintain the confidentiality of the internal investigation but
cannot guaranty absolute confidentiality. 
Upon completion of the internal investigation, the Audit Committee shall
provide Executive with written notice setting forth the Audit Committee’s good
faith belief that it has cause to terminate the Agreement, and (ii) within
thirty (30) days of receiving the Audit Committee’s written notice, provide
Executive with an opportunity to be heard, with counsel present, by the full
Board of Directors.  Within three (3)
days of the meeting with Executive, Employer shall either reinstate Executive’s
employment or terminate Executive’s employment with written notice to Executive
or Executive’s counsel, if obtained, subject to arbitration, in accordance with
Section 8.  Upon termination of Executive’s employment and this Agreement for Cause,
Employer shall pay Executive that portion of accrued, but unpaid Basic Salary
and Reimbursement for Expenses (x) properly 

incurred before the termination date, (y) supported by
vouchers or receipts, and (z) provided to Employer within thirty-three (33)
days of Executive’s termination for Cause. 
Executive shall forfeit (i) all unvested Stock Options issued or
issuable, (pursuant to the Employer’s Stock Option Plan), (ii) any unpaid
Bonus, and (iii) any accrued but unused PTO. 
Except as set forth in the preceding
two (2) sentences and as otherwise required by law (such as COBRA benefits or
401 (k) Plan rights) , all of Executive’s rights to compensation hereunder
shall be terminated, in the event of termination for Cause, as of the
termination date.  “Cause” shall
mean, without limitation, any of the following events: (a) Executive’s
material failure or refusal to comply with this Agreement; (b) Executive’s
gross negligence or willful misperformance of her Duties; (c) Executive is
convicted or pleas nolo contender
of a felony or any other crime involving moral turpitude or dishonesty which,
in the good faith opinion of Employer, would impair Executive’s ability to
perform her duties or be detrimental to Employer’s business reputation;
(d) Executive’s failure or refusal to comply with (i) Employer’s policies,
practices, standards or regulations, (ii) any governmental or regulatory agency’s
laws, rules, regulations, policies, or codes to which Employer is subject, or
(ii) reasonable and lawful directives of the Audit Committee or CEO (other than
by reason of physical or mental illness, injury, or condition);
(e) Executive’s unauthorized disclosure of Employer’s trade secrets and
other confidential business information; (f) Executive’s unsatisfactory
job performance including, but not limited to, Executive’s failure to devote
substantial time and attention to the performance of his/her duties for
Employer; (g) Executive’s breach of her duty of loyalty;
(h) Executive’s act of fraud, misrepresentation, theft or embezzlement or
the misappropriation of Employer assets; and/or Executive becoming barred or
prohibited by the U.S. Securities and Exchange Commission from holding her
position with Employer.

b.     TERMINATION
FOR ILLNESS OR DISABILITY OF EXECUTIVE.  If Executive is unable to perform her Duties
for Employer for a period of more than sixty (60) consecutive days or one
hundred twenty (120) for at least calendar days, whether or not consecutive, in
any 365 calendar day period due to a “disability” as defined by 42 U.S.C.A. § 12101  et seq.,
Americans with Disabilities Act of 1990 (the “ADA”), and as except as
prohibited by applicable law, Employer may terminate this Agreement upon not
less than thirty (30) days written notice to the Executive.  Duties are defined set forth in Section 2.  Upon
termination of this Agreement, Employer shall pay Executive for the remaining
months of Basic Salary payable under this Agreement as if it had not terminated
(“Pay-Out Basic Salary”), Reimbursement for Expenses, and any accrued but
unused PTO. In exchange for Executive’s execution of a separation
agreement, approved by the Executive and mutual general release, in a form
supplied by

Employer, within three (3) days after the termination
and Executive does not subsequently properly revoke the release, Employer shall
continue to pay Executive six (6) months of additional Basic Salary, plus her
vested Stock Options pursuant to the Employer’s Stock Option Plan.

c.     DEATH
OF EXECUTIVE.  This
Agreement will terminate immediately upon the death of the Executive.  If Executive dies during the term of this
Agreement, Employer shall pay Executive
Pay-Out Basic Salary, Reimbursement for Expenses, and any accrued but unused
PTO, through date of death.  In
exchange for Executive’s estate’s execution of a general and mutual release, in
a form supplied by Employer, within three (3) weeks after the termination and
Executive’s estate does not subsequently properly revoke the release, Employer
shall continue to pay Executive’s estate six (6) months of additional Basic
Salary plus her vested Stock Options pursuant to the Employer’s Stock Option
Plan.

d.     TERMINATION
WITHOUT CAUSE.  Employer may terminate Executive’s employment
at anytime for any reason, and without advance notice.  If Executive is discharged by Employer for a
reason other than for “Cause” or for “death” or “Disability,” she will receive
Pay-Out Basic Salary, Reimbursement for Expenses, any accrued but unused PTO.
In addition, Executive will receive the following special benefits provided she
signs a separation agreement and general release, both  in a form mutually agreed to by the parties,
within three (3) days after her employment ends and does not subsequently
properly revoke the release: (i) A lump sum payment of six (6) months Basic Salary;
(ii) any Bonuses awarded but not paid, (iii) continuation of medical and dental
insurance at the Company’s expense for six (6) months, and (iv) all Stock
Options to become immediately vested and exercisable in accordance with
Employer’s Stock Option Plan.

e.     RESIGNATION
WITH GOOD REASON.  If Executive resigns for Good Reason, her
employment will end on her last date of work and she will receive Pay-Out Basic
Salary, Reimbursement for Expenses, any accrued but unused PTO. In addition,
Executive will receive the following special benefits provided she signs a
separation agreement and general release, both 
in a form mutually agreed to by the parties, within three (3) days after
her employment ends and does not subsequently properly revoke the release: (i)
A lump sum payment of twelve (12) months Basic Salary; (ii) any Bonuses awarded
but not paid, (iii) continuation of medical and dental insurance at the Company’s
expense for twelve (12) months, and (iv) all Stock Options to become
immediately vested and exercisable in accordance with Employer’s Stock Option
Plan.:

i)      Demotion. Except for a paid leave
of absence during an internal investigation as described in Section

5(a), Executive’s duties or responsibilities are
substantially and adversely diminished from those in effect immediately before
such event other than merely as a result of Employer ceasing to be a public
company.

ii)     Failure to Disclose.  Employer fails to disclose material financial
or related information to Executive.

iii)    Breach of Promise. Employer
materially breaches this Agreement or fails to pay Executive any compensation
within ten (10) days after it is due, for any reason other than Employer’s
failure was due to incidents beyond Employer’s control—which may include, but
are in no way limited to: (i) Computer or network problems with Employer’s or a
vendor’s payroll software program; (ii) destruction of Employer’s corporate
office or business interruption due to fire, flood, natural disaster, riot,
other incidents of calamity, terrorism, or acts of war; and/or (iii) acts of God.

iv)   Failure to Maintain Adequate D&O
Liability Insurance.  Employer fails
to obtain and/or maintain adequate amounts of coverage of directors’ and
officers’ liability insurance as recommended or directed by the Audit
Committee.

v)    Change of Control.  Executive and Employer agree that
Executive may resign for Good Reason due to change of control, receiving the
greater of  (i) the balance due as set
forth in the remainder of the full term of this Agreement regarding: any and
all unpaid Basic
Salary, Reimbursement for Expenses, any accrued but unused PTO, vested and
unvested Stock Options, and a pro rata share of Bonus, or (ii) twelve (12)
months of Basic Salary, Reimbursement for Expenses, any accrued but unused PTO,
vested and unvested Stock Options, and a pro rata share of Bonus; whichever is
greater. Payments of either (i) or (ii) above are to be paid within 30 days of
Executive’s resignation for Good Reason due to Change of Control. Change of
Control is defined below.

(1)   A “Change of Control,” means the occurrence
of any of the following:

(a)   Any transaction involving Employer as a
direct party, whether voluntarily or involuntarily, that results in the
acquisition by a group, (as such term is used in Section 13(d)(3) of the
Exchange Act ) excluding the current majority shareholders of record owning at
least 500,000 shares common stock of Employer (as of the Hire Date of this
Agreement), of beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) of more than 51% of the aggregate outstanding voting power of
capital stock of Employer (in respect of the general power to elect directors),
as a result of  a merger, acquisition,
consolidation, dissolution, whether or not by operation of law, or any other manner
requiring approval and/or licensure by the Nevada Gaming Authorities prior to
the completion of the anticipated transaction including, but limited to, a
transaction between Employer and a third Person that

results in a merely a transfer of Employer’s
securities on one hand or a transfer of all or substantially all of Employer’s
assets.  A Change of Control does not
constitute a “going private transaction” in which current majority shareholders
of record owning at least 500,000 shares common stock of Employer (as of the
Hire Date of this Agreement) retain control of the newly private entity (“newco”);
this Agreement is assigned to newco; and Executive’s job duties with newco
remain substantially the same as set forth in this Agreement.

vi)   Notice of Prospective Action.
Executive is officially notified (or it is officially announced) that Employer
will take any of the actions listed above during the term of this
Agreement.  However, an event that is or
would constitute Good Reason shall cease to be Good Reason if: (i) Executive
does not terminate employment within thirty (30) days after the event occurs
with knowledge of Executive (except for a Change of Control); or (ii) Employer
reverses   the action or cures the
default that constitutes Good Reason within thirty (30) days after Executive
notifies Employer in writing that Good Reason exists before Executive
terminates employment. If Executive has Good Reason to terminate employment,
she may do so even if she is on a leave of absence due to physical or mental
illness or any other reason, but she must do so before her actual or
constructive Disability termination as defined herein.

vii)  Disputes Under This Section. All
disputes relating to this Agreement, including disputes relating to this
Section 5, shall be resolved by final and binding arbitration under Section 8.

f.      VOLUNTARY RESIGNATION.  Employer may accept Executive’s
voluntarily termination her employment and this Agreement effective on (i) the
date set forth in Executive’s ninety (90) days written notice, (ii) any earlier
date, or (iii) the filing date of Employer’s Annual Report on Form 10-KSB if
Employer is preparing for or in the process of closing the year end books.   Upon
Executive’s voluntary resignation, Employer shall pay Executive that portion of
accrued, but unpaid Basic Salary through termination date and Reimbursement for
Expenses (x) properly incurred before the termination date, (y) supported by
vouchers or receipts, and (z) provided to Employer within five (5) days of
Employer accepting Executive’s written notice to voluntarily resign, and (z)
any accrued but unused PTO.  Executive
shall forfeit (i) all unvested Stock Options issued or issuable, pursuant to
the Employer’s Stock Option Plan and (ii) any unpaid Bonus.  Except
as set forth in the preceding two (2) sentences and as otherwise required by
law, such a 401(k) Plan benefits and Cobra benefits, all of Executive’s rights
to compensation hereunder shall be terminated, in the event of  Voluntary Resignation, as of the termination
date.

6.     CONFIDENTIALITY AND NON-COMPETITION.

a.     Definitions:

i)      The term “confidential information” refers
to Employer’s ideas, creations, works of authorship, works of visual art,
business documents, contracts, licenses, business and non-business
relationships, correspondence, operations, manuals, performance manuals,
operating data, projections, bulletins, supplier and customer lists and data,
sales data, cost data, profit data, strategic planning data, financial planning
data, designs, proposed logos, proposed motifs, proposed trademarks or service
marks, test results, product or service literature, product or service
concepts, manufacturing or sales techniques, process data, specification data,
know how, show how, software, data bases, research and development information
and data that is marked “confidential” or “proprietary” or should be reasonably
understood to be confidential.

ii)     The term “trade secrets” means unpublished
inventions or works of authorship as well as all information possessed by
and/or developed by and/or for Employer, including a formula, pattern,
compilation, program device, method, technique, or process to which all of the
following apply: (i) the information derives independent economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; (ii) the information is the subject of efforts to
maintain its secrecy that are reasonable under the circumstances; and/or (iii)
the information is reasonably the subject of trade secret protection under
relevant and applicable state statutes (including, without limitation, the
Uniform Trade Secrets Act as enacted in Nevada).

iii)    The term “work of authorship” means any
computer program, code or system as well as any literary, pictorial,
sculptural, graphic or audio visual work, whether published or unpublished, and
whether copyrightable or not, in whatever form and jointly with others that (i)
relates to any of Employer’s existing or potential products, practices,
processes, formulations, manufacturing, engineering, research, equipment,
applications or other business or technical activities or investigations;
and/or  (ii) relates to ideas, work or
investigations conceived or carried on by Employer, or Executive in connection
with or because of performing services for Employer.

iv)   Executive shall not be under any obligation
to maintain in confidence, any information (or portion thereof) disclosed to
her by Employer to the extent that such information: (a) is in the public
domain at the time of disclosure; (b) following disclosure, becomes generally
known or available through no action or omission on the part of Executive in
violation of this Agreement; (c) is furnished to others by Employer without
restriction on disclosure; or (d) is known, or becomes known, to Executive from
a source other than Employer or its

representatives, provided that disclosure by such
source is not in breach of a confidentiality agreement with Employer of which
Executive, or (e) is aware; or is independently developed by Executive without
violating any of its confidentiality obligations under this Agreement.

b.     Confidentiality:

i)      Executive agrees that she will not
directly or indirectly use or disclose any of Employer’s confidential
information, trade secrets, and/or works of authorship whether in written,
verbal, or model form, at any time or in any manner, except as required in the
conduct of Employer’s business or as expressly authorized by CEO in
writing.  The obligations of this
Agreement are continuing and survive the termination of Executive’s employment
with Employer.  Executive agrees to take
all reasonable precautions within her control to protect against the
unauthorized disclosure of inventions, works of authorship, trade secrets,
and/or confidential information possessed by and/or developed by and/or for
Employer.   Executive acknowledges and
agrees that such confidential information, trade secrets, and/or works of
authorship constitute Employer’s sole and exclusive property.

ii)     Executive shall not remove from Employer
any confidential information, trade secrets, works of authorship, and/or any
other documents pertaining to Employer’s business, unless expressly authorized
by CEO in writing.  Upon termination of
her employment, Executive shall turn over to Employer the originals, plus all
copies, of any and all papers, documents and things, including information
stored for use in or with computers and software (regardless of whether information
is stored on such computers or software is/are personal or Employer supplied)
all files, Rolodex cards, phone books, notes, price lists, bids, notebooks,
books, memoranda, drawings, tools, or other documents: (1) made, compiled
by, or delivered to Executive concerning any customer served by Employer, or
personnel of Employer, or any product, equipment, software, or process
manufactured, used, developed, designed, computer code written, or investigated
by Employer; (2) containing any confidential information and/or trade
secrets; or (3) otherwise relating to Executive’s performance of duties
under this Agreement.  Executive further
acknowledges and agrees that all such documents are Employer’s sole and
exclusive property.

c.     Non-Competition:

i)      Executive agrees that during her
employment and for a period of six (6) months immediately following the
expiration or termination of employment for any reason, Executive shall not be
employed by or perform independent contract services in the State of Nevada for
any entity engaged in the race and sports business,

including but not limited to, offering financial
services or project management services to an entity that desires to exploit
Executive’s knowledge of the race and sports business—gained as a direct result
of Executive’s employment with Employer. 
For example, Executive may take an employment position with or perform
consulting services for (i) a hotel/casino entity that operates a race and
sports book and/or (ii) vendors of race and sports book hardware and/or
software so long as Executive’s job description does not permit Executive to
use or exploit her knowledge of the race and sports book industry, including
but not limited to confidential information and/ trade secrets of Employer or
any of its subsidiaries, in the performance of her duties.  Further, Executive expressly covenants and
agrees that during the term of her employment and for a period of six (6)
months immediately following the expiration or termination of such employment
for any reasons, she will not: (i) induce, attempt to induce, or
encourage, or cooperate in, cause, or permit any person or entity to induce or
encourage, any employees or agents of the Employer to terminate or materially
alter any relationship with the Employer; (ii) take any action to disturb
the existing business and/or customer relationships of the Employer and/or
solicit business or referral sources from Employer’s customers or vendors; or
(iii) induce, attempt to induce, or encourage, or cooperate in, cause, or permit
any person or entity to induce or encourage any of Employer’s customer’s or
vendor’s to terminate or materially alter any relationship with the Employer.

ii)     The parties agree that the restrictions and
limitations contained in this Section 6 are reasonable as to scope and duration
and are necessary to protect Employer’s interests and to preserve for Employer
the competitive advantage derived from maintaining its business practices,
unconsolidated financials, information, trade secrets, and business relationships
as confidential.  In the event that any
of the restrictions and limitations contained in this Section are deemed to
exceed the time or geographic limitations permitted by Nevada law, then such
provisions of this Section shall be reformed to the maximum time and geographic
limitations permitted by Nevada law.

7.     BREACH OF
CONFIDENTIALITY AND NON-COMPETITION DUTIES.

a.     Upon a breach of the duties and obligations
set forth in Section 6 above, Employer may immediately apply for injunctive
relief from any court with jurisdiction over the breach of this Agreement, and
Employer will be entitled to recover its reasonable costs and attorney’s fees,
if it prevails.

i)      In addition, the parties agree that the
damages to Employer that would result from Executive’s breach of her duties
contained herein may be extremely difficult or impossible to ascertain, and
that if that is the case, Employer will be entitled to recover for each breach
of the Executive’s obligations under this Agreement, liquidated

damages from Executive in the amount of three (3)
months’ worth of Executive’s salary at termination of employment.  The parties expressly agree that this
liquidated damages provision is reasonable under the provisions of Nevada law
and is not intended as a penalty.  In
addition, the parties agree that this clause does not limit Employer’s right to
obtain any other relief and/or damages due to Executive’s breach of his/her
obligations under this Agreement, and is instead meant only to provide for
damages to Employer should it be unable to prove actual damages from Executive’s
breach.

ii)     The remedies set
forth above shall be cumulative and nonexclusive and shall be in addition to
any other remedy to which Employer may be entitled.  Upon any breach of Section 6 by Executive,
Employer may seek to recover damages under any and all potential causes of
action.  Should Employer have to initiate
litigation for monetary or injunctive relief, it shall be entitled to recover
from Executive its reasonable costs and attorney’s fees, if it prevails.

8.     ARBITRATION.

i)      Except for a claim by Employer to enforce the provisions of Section 7
and/or a claim for injunctive relief, any dispute or difference of opinion
between Executive and Employer involving the meaning, interpretation, and application
of any provision of this Agreement shall be adjusted exclusively through
binding arbitration in Las Vegas, Nevada. 
The parties agree to first attempt to mutually select an arbitrator, and
further agree that if no agreement can be reached, they shall request a panel
of arbitrators according to National Rules for the Resolution of Employment
Disputes of the American Arbitration Association.  In the event an arbitrator panel is
requested, the panel shall consist of members of the Employment Dispute Resolution
Roster residing in either Southern California or Southern Nevada.  The award of the arbitrator shall be final
and binding on the parties.  The
arbitrator shall have the authority to determine whether the Employer and/or
grievant has proven her or its case by a preponderance of the evidence and
shall have no authority, jurisdiction, or power to amend, modify, nullify, or
add to the provisions of this Agreement. 
Costs and fees shall be borne by each party with the exception of
proceedings by the Employer to enforce the rights and duties contained in
Section 7 supra.  No request to
arbitrate will be entertained or processed unless it is received in writing by
either party to this Agreement within one hundred and twenty (120) calendar
days following the occurrence of the event giving rise to the dispute.

ii)     With respect to
arbitration of any violation of Section 7 above, the arbitrator shall have only
the

authority to determine whether Employer has proven a
breach by a preponderance of the evidence. 
If so, Employer is automatically entitled to the liquidated damages and
reasonable attorney’s fees as set forth in Section 7.

iii)    To the extent that the National Rules for the Resolution of Employment
Disputes conflict with this Section, this Section shall govern.

9.     NOTICES.

a.     Any notice required or desired to be given
under this Agreement, by either party to the other shall be in writing and may
be affected by personal delivery or by registered or certified mail at the
addresses listed below or at such other addresses as either party may notify
the other:

	
  

  	
  i) if to Employer, to:

  	
  Victor Salerno

  
	
   

  	
   

  	
  American
  Wagering, Inc.

  
	
   

  	
   

  	
  675 Grier Drive

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89119

  
	
   

  	
   

  	
   

  
	
   

  	
  ii) if to
  Executive, to:

  	
  Melody Sullivan

  
	
   

  	
   

  	
  188 Ultra Drive

  
	
   

  	
   

  	
  Henderson, NV
  89074

  

 

b.     Notices personally delivered will be deemed
effective upon receipt.  Notices sent by
registered or certified mail will be deemed effective three (3) days after
mailing.

10.  CONSTRUCTION OF
AGREEMENT.

a.     Enforcement:        This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Nevada.  In case any one or more
provisions contained in this Agreement shall, for any reason, be held invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unforceability, shall not affect any other provision of this Agreement, and
this Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.  If, moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to time, duration, geographical scope, activity or
subject, it shall be construed, by limiting or reducing it, so as to be enforceable
to the maximum extent compatible with the applicable law as it shall then
appear.

b.     Amendments:        This Agreement may be amended or
modified only by a writing executed and agreed upon by both parties.

c.     Waiver:  Waiver by either party of any term or
condition of this Agreement or any breach thereof will not operate or be
construed as a waiver of any other term of condition or subsequent breach.  No waiver shall be binding unless executed in
writing by the party making the waiver.

d.     Merger:  This Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements, arrangements,
negotiations, and communications between the parties, whether oral or written.

e.     Headings:  The headings of the Paragraphs of this
Agreement are for convenience only and shall not affect the construction or
interpretation of any of its provisions.

11.  ASSIGNMENT.

a.     Executive acknowledges
that her services are unique and personal and, accordingly, that Executive may
not assign her rights or delegate any of her duties and obligations under this
Agreement.  Employer’s rights and
obligations under this Agreement will inure to the benefit of, and be binding
upon, Employer’s successors and assigns.

12.  REVIEW/UNDERSTANDING
OF AGREEMENT.

Each party to this
Agreement has had the opportunity to review the Agreement with legal counsel of
his/her or its choice and has had the opportunity to modify or eliminate any
ambiguous provisions.  Therefore, it is
agreed that each party hereto is considered a drafter of this Agreement and
that the contract interpretation rule which holds that ambiguities are to be
interpreted against the drafting parties is expressly waived by the parties.

13.  COUNTERPARTS.

This Agreement may
be executed in any number of counterparts conformed by facsimile signatures
transmitted by telephone, PDF, or electronic signatures, all of which shall be
deemed a duplicate original.

	
  EMPLOYER 

  	
   

  	
  EXECUTIVE 

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Victor Salerno  

  	
  By:

  	
  /s/ Melody Sullivan

  
	
   

  	
  American Wagering, Inc.

  Name: Victor Salerno

  Its: Member of Board of Directors, CEO

  Date signed: 08-06-2007

  	
   

  	
  Name: Melody Sullivan

  Position accepted : Chief Financial Officer

  Date signed: 08-06-2007

  

 

	
  EMPLOYER

  
	
   

  	
   

  
	
  By:

  	
  /s/Judith
  Zimbelmann

  	
   

  
	
   

  	
  American
  Wagering, Inc.

  Name: Judith Zimbelmann

  Its: Member of the Board of Directors

  Date signed: 08-06-2007

  
	
   

  	
   

  
	
  EMPLOYER

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert
  Barengo

  	
   

  
	
   

  	
  American
  Wagering, Inc.

  Name: Robert Barengo

  Its: Member of the Board of Directors

  Date signed: 08-06-2007

  
	
   

  	
   

  
	
  EMPLOYER

  
	
   

  	
   

  
	
  By:

  	
  /s/ W. Larry
  Swecker

  	
   

  
	
   

  	
  American
  Wagering, Inc.

  Name: W. Larry Swecker

  Its: Member of the Board of Directors

  Date signed: 08-06-2007

  
	
   

  	
   

  
	
  EMPLOYER

  
	
   

  	
   

  
	
  By:

  	
  /s/ Bruce Dewing

  	
   

  
	
   

  	
  American
  Wagering, Inc.

  Name: Bruce Dewing

  Its: Member of the Board of Directors

  Date signed: 08-06-2007Exhibit
10.1

AMENDMENT 4 TO

WAIVER AND STANDBY PURCHASE
AGREEMENT

This AMENDMENT 4, dated
as of August 3, 2007, amends that certain Waiver and Standby Purchase Agreement
(the “Waiver Agreement”) dated as of March 21, 2006 and subsequently
amended as of August 8, 2006, November 6, 2006 and as of March 2, 2007, by and
among Hallmark Cards, Incorporated, a Missouri corporation (“Hallmark”), HC Crown Corp., a Delaware
corporation, Hallmark Entertainment Holdings, Inc., a Delaware corporation (“collectively,
together with Hallmark the “Hallmark Lenders”) and Crown Media Holdings,
Inc., a Delaware corporation (“Crown Holdings”), Crown Media United States,
LLC, a Delaware limited liability company, and the subsidiaries of Crown
Holdings listed as Guarantors on the Credit Facility, as amended from time to
time (collectively, the “Borrowers”).

WHEREAS, the
Borrowers have requested that the Hallmark Lenders extend the automatic Waiver
Termination Date; and

WHEREAS, the
Hallmark Lenders are willing to extend the automatic Waiver Termination Date
subject to receiving a security interest in the personal property of the
Borrowers and on the terms and subject to the conditions further set forth in
this Amendment 4;

NOW, THEREFORE, in
consideration for the foregoing premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

1.             Exhibit A.  Exhibit A, Subject Obligations shall hereby
be amended by adding the following:

“6. 
The Promissory Note, dated as of July 27, 2007 of Crown Holdings in the
original principal amount of $33,082,019 (the “Tax Note”).”

2.             Definitions.  The following definitions shall be replaced
as set forth below:

““Notes” means the 2001 Note, the
10.25% Note, the 2005 Note, the 2006 Note and the Tax Note.

“Tax Note” has the meaning set forth
in Exhibit A.

“Tax Sharing Agreement” means the
Federal Income Tax Sharing Agreement between Hallmark and Crown Holdings dated
as of March 11, 2003.”

3.             Section
2(b)(v).  Section 2(b)
shall be amended by adding subsection (v) as set forth below:

 

“(v) 
the Hallmark Lenders shall be entitled to offset any Estimated Crown Tax
Benefit (as the term is defined in the Tax Sharing Agreement) against the
interest or principal of the Tax Note, in accordance with the terms of the Tax
Note.”

4.             Section
2(c).  Section 2(c) – Waiver Termination Date shall be amended by
replacing the first sentence with the following:

This Waiver shall terminate
automatically on August 15, 2008, unless terminated earlier as set forth herein
and such date of actual termination shall be the “Waiver
Termination Date.”

5.             Security
Interest.  Borrowers
hereby agree to grant to the Hallmark Lenders a security interest in all of
Borrower’s right, title and interest in and to all personal property
substantially as set forth in the Security and Pledge Agreement attached hereto
as Exhibit B and in the Copyright Security Agreement attached hereto as Exhibit
C.

6.             Representations
and Warranties.  Each
Borrower hereby jointly and severally represents and warrants to each Hallmark
Lender that after giving effect to this Amendment 4 that all the
representations and warranties contained in the Waiver Agreement are true and
correct as of the date hereof in all material respects as if such
representations and warranties had been made on and as of the date hereof
(except to the extent that any such representation or warranty specifically
relates to an earlier date.)

7.             Release
of Claims and Waiver. 
Each Borrower hereby releases, remits, acquits and forever discharges
each Hallmark Lender and each Hallmark Lender’s employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the “Released Parties”),
from any and all actions and causes of action, judgments, executions, suits,
debts, claims, demands, liabilities, obligations, damages and expenses of any
and every character, known or unknown, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, whether heretofore or hereafter arising,
for or because of any manner or things done, which were omitted or suffered to
be done by any of the Released Parties prior to and including the date of
execution hereof, and which also in any way directly or indirectly arise out of
or were in any way connected to the Released Parties’ capacity as the
beneficiary of an obligation of one or more of the Borrowers under this
Agreement, the Subject Obligations and/or any other Loan Document heretofore
executed, including claims relating to ‘lender liability’ (all of the foregoing
hereinafter called the “Released Matters”).  The Borrowers acknowledge that the Hallmark
Lenders’ agreement to waive contained in Section 2 of the Waiver Agreement, the
Hallmark Lenders’ agreement to extend the automatic Waiver Termination Date
pursuant to Amendments 1, 2, 3, and this Amendment 4, and Hallmark’s agreement
to purchase the outstanding Indebtedness and the Bank Lenders’ other interests
under the Credit Facility contained in Section 3 of the Waiver Agreement are intended
to be in full satisfaction of all or any alleged injuries or damages arising in
connection with the Released Matters. 
Each Borrower represents and warrants to each Hallmark Lender that it
has not purported to transfer, assign or otherwise convey any right, title or
interest of such Borrower in any Released Matter to any other Person and that
the foregoing constitutes a full and complete release of all Released Matters.

 2
 

 

8.             Full
Force and Effect.  Except
to the extent amended herein, the Waiver Agreement shall continue in full force
and effect.

9.             Governing
Law.  This Amendment 4
shall be governed by and construed in accordance with the internal substantive
laws of the State of New York, without regard to the choice of law principles
of such State.

10.           Counterparts;
Faxed Signatures.  This
Amendment 4 may be executed in any number of counterparts and by different
parties to this Agreement on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. 
Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment 4 as of
the day and year first above written.

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles L. Stanford

  	
   

  
	
   

  	
   

  	
  Name: Charles L. Stanford

  
	
   

  	
   

  	
  Title: Executive Vice President

  

 

 3
 

 

 

	
  

  	
  CROWN MEDIA UNITED STATES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles L. Stanford

  	
   

  
	
   

  	
   

  	
  Name: Charles L. Stanford

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  CM INTERMEDIARY, LLC

  
	
   

  	
  CITI TEEVEE, LLC

  
	
   

  	
  DOONE CITY PICTURES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles L. Stanford

  	
   

  
	
   

  	
   

  	
  Name: Charles L. Stanford

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HALLMARK LENDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HALLMARK CARDS, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  	
   

  
	
   

  	
   

  	
  Name: Brian E. Gardner

  
	
   

  	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HC CROWN CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  	
   

  
	
   

  	
  Name: Brian E. Gardner

  
	
   

  	
   

  	
  Title: Vice President

  
						

 

 4
 

 

 

	
  

  	
  HALLMARK ENTERTAINMENT HOLDINGS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  	
   

  
	
   

  	
  Name: Brian E. Gardner

  
	
   

  	
   

  	
  Title: Vice President

  

 

 5

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