AMENDMENT TO LOAN AGREEMENT AND NOTE

EXHIBIT 10.2

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

AMENDMENT TO LOAN AGREEMENT AND NOTE

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

RECITALS

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

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

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

TERMS OF AGREEMENT

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

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

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

o  Change in Multiple Advance Termination Date.  If checked here, all references to “N/A” as the termination date for multiple advances are hereby deleted and replaced with “N/A”.

Change in Financial Covenant(s).

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

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

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

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

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

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

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

o   Change in Payment Schedule.  If checked here, effective upon the date of this Amendment, any payment terms are amended as follows.

o  Change in Late Payment Fee.  If checked here, subject to applicable law, if any payment is not made on or before its due date, the Bank may collect a delinquency charge of                                       % 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.

Default Interest Rate.  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.

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

Preconditions to Effectiveness.  This Amendment shall only become effective upon execution by the Borrower and the Bank, and approval by any other third party required by the bank.

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

Counterparts.  This Amendment may be signed in any number of counterparts, each of which shall be considered an original, but when taken together shall constitute one document.

Authorization.  The Borrower represents and warrants that the execution, delivery and performance of this Amendment and the documents referenced herein are within the authority of the Borrower and have been duly authorized by all necessary action.

Attachments.  All documents attached hereto, including any appendices, scheduled, riders and exhibits to this Amendment, are hereby expressly incorporated herein by reference.

Dated as of : MAY 3, 2002

					PDS GAMING CORPORATION
(Individual Borrower)					Borrower Name (Organization)
					a		MINNESOTA Corporation
Borrower Name		N/A			By :		/s/ Xxxxxx Xxxxx
					Name and Title :				XXXXXX XXXXX, CFO
					By :
Borrower Name		N/A			Name and Title :
						SEE ATTACHED SIGNATURE ADDENDUM FOR  CO-BORROWER SIGNATURE(S)
Agreed to :
U.S. BANK N.A.,
(Bank)
By :		/s/ Xxxxx Xxxxx
		XXXXX XXXXX
Name and Title :		VICE PRESIDENT

FOR ADDITIONAL TERMS.  SEE ATTACHED ADDENDUM

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