SECURITY AGREEMENT
This
Security Agreement (this “Agreement”), is dated
as of November 5, 2009, made by LAS VEGAS GAMING, INC., a Nevada corporation
(the “Grantor”), in favor
of Gaming Arts, LLC, a Nevada limited liability company (the “Lender”).
W
I T N E S S E T H
WHEREAS,
the Grantor is party to a certain Asset Purchase Agreement dated August 19, 2009
between the Grantor and the Lender, pursuant to which the Lender bought certain
assets from the Grantor.
WHEREAS,
the Grantor has agreed to execute and deliver this Agreement to grant the
security interests described herein;
NOW,
THEREFORE, in consideration of a $50,000 deposit for the licensing of PV2,
Grantor hereby agrees with the Lender as follows:
AGREEMENT
SECTION
1. Grant of Security
Interest. To secure the prompt, punctual, and faithful deposit
for a license fee, the Grantor hereby grants to the Lender, for the benefit of
the Lender and any affiliate of the Lender, a continuing security interest in
and to, and assigns to the Lender the following, and each item thereof, whether
now owned or now due, or in which the Grantor has an interest, or hereafter
acquired, arising, or to become due, or in which the Grantor obtains an
interest, and all products, proceeds, substitutions, and accessions of or to any
of the following (all of which, together with any other property in which the
Lender may in the future be granted a security interest, is referred to herein
as the “Collateral”):
(a) All
Keno receivables.
All terms
used in this Section 1 and not otherwise defined in this Agreement shall have
the meanings given to them in the Nevada Uniform Commercial Code. It
is intended that the Collateral include all Keno receivables.
SECTION
2. Security
Agreement. The security interest in the Collateral granted
pursuant to this Agreement is granted in conjunction with the deposit for a
license fee owing by the Grantor to the Lender.
SECTION
3. Perfection of Security
Interests.
(a) The
Grantor irrevocably and unconditionally authorizes the Lender to file at any
time and from time to time such financing statements with respect to the
Collateral naming the Lender or its designee as the secured party and the
Grantor as debtor, as the Lender may require, and including any other
information with respect to the Grantor or otherwise required by part 5 of
Article 9 of the Uniform Commercial Code of such jurisdiction as the Lender may
determine, together with any amendment and continuations with respect thereto,
which authorization shall apply to all financing statements filed on, prior to
or after the date hereof. The Grantor hereby ratifies and approves
all financing statements naming the Lender or its designee as secured party and
the Grantor as debtor with respect to the Collateral (and any amendments with
respect to such financing statements) filed by or on behalf of the Lender prior
to the date hereof and ratifies and confirms the authorization of the Lender to
file such financing statements (and amendments, if any). The Grantor
hereby authorizes the Lender to adopt on behalf of the Grantor any symbol
required for authenticating any electronic filing. In no event shall
the Grantor at any time file, or permit or cause to be filed, any correction
statement or termination statement with respect to any financing statement (or
amendment or continuation with respect thereto) naming the Lender or its
designee as secured party and the Grantor as debtor.
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(b) The
Grantor shall take any other actions reasonably requested by the Lender from
time to time to cause the attachment, perfection and first priority of, and the
ability of the Lender to enforce, the security interest of the Lender in any and
all of the Collateral, including, without limitation, (i) executing, delivering
and, where appropriate, filing financing statements and amendments relating
thereto under the UCC or other applicable law, to the extent, if any, that the
Grantor’s signature thereon is required therefor, (ii) causing the Lender’s name
to be noted as secured party on any certificate of title for a titled good if
such notation is a condition to attachment, perfection or priority of, or
ability of the Lender to enforce, the security interest of the Lender in such
Collateral, (iii) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Lender to enforce, the security interest of the Lender in such Collateral,
(iv) obtaining the consents and approvals of any governmental authority or third
party, including, without limitation, any consent of any licensor, lessor or
other person obligated on Collateral, and taking all actions required by any
earlier versions of the UCC or by other law, as applicable in any relevant
jurisdiction.
SECTION
4. Remedies. Upon
the occurrence of any bankruptcy or other similar proceeding involving the
Grantor, all Liabilities shall be immediately due and payable. Upon
the occurrence of any other default by the Grantor under or in connection with
the Advance Term Sheet (including the failure to repay any of the advances or
loans made thereunder when due and payable) or this Agreement, the Lender may
declare all Liabilities to be immediately due and payable and may exercise all
other rights and remedies afforded to the Lender under applicable law as the
Lender from time to time thereafter determines as appropriate.
SECTION
5. Successors and
Assigns. This Agreement shall be binding upon the Grantor and
its respective representatives, successors, and assigns and shall inure to the
benefit of the Lender and its successors and assigns, provided, however, the
Grantor may not assign this Agreement, in whole or in part, at any time, nor
delegate any of its duties hereunder (with any such attempted assignment or
delegation being void), and provided further, no trustee or other fiduciary
appointed with respect to the Grantor shall have any rights
hereunder.
SECTION
6. Severability. Any
determination that any provision of this Agreement or any application thereof is
invalid, illegal, or unenforceable in any respect in any instance shall not
affect the validity, legality, or enforceability of such provision in any other
instance, or the validity, legality, or enforceability of any other provision of
this Agreement.
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SECTION
7. Nevada
Law. This Agreement and all rights and obligations hereunder,
including matters of construction, validity, and performance, shall be governed
by the internal laws of the State of Nevada.
SECTION
8. Counterparts. This
Agreement may be executed in any number of counterparts, all of which shall
constitute one and the same instrument, and any party hereto may execute this
Agreement by signing and delivering one or more
counterparts. Delivery of an executed counterpart by facsimile or
other electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement.
[signature
page follows]
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IN
WITNESS WHEREOF, Grantor has caused this Agreement to be executed and delivered
by its duly authorized officer as of the date first set forth
above.
LAS VEGAS
GAMING, INC.
By:
/s/ Xxxxx X.
Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
Chief Financial Officer
ACCEPTED
AND AGREED:
Gaming
Arts, LLC
By:
/s/ Xxxxx X.
Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Manager
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