AMENDED SECURITY AGREEMENT
AMENDED
SECURITY AGREEMENT
This
Security Agreement (this “Agreement”), amends
the original Security Agreement dated September 2, 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 Amended Agreement to grant
the security interests described herein;
NOW,
THEREFORE, in consideration of a $52,081.62 shortfall in the final closing
statement which results in a reduction of the purchase price in the Asset
Purchase Agreement, the Grantor hereby agrees with the Lender as
follows:
AGREEMENT
SECTION
1. Grant of Security
Interest. To secure the prompt, punctual, and faithful
performance of this possible purchase price adjustment, 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) 32
used slot machines
All terms
used in this Section 1 and not otherwise defined in this Amended Agreement shall
have the meanings given to them in the Nevada Uniform Commercial
Code. It is intended that the Collateral include all of the slot
machine assets of the Grantor.
SECTION
2. Security
Agreement. The security interest in the Collateral granted
pursuant to this Amended Agreement is granted in conjunction with and to secure
the liabilities, indebtedness and/or other obligations (collectively, the “Liabilities”) owing
by the Grantor to the Lender pursuant to or in connection with Asset Purchase
Agreement, including, without limitation, any loans or advances made by the
Lender to the Grantor in connection therewith.
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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.
(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. Repayment and Accrued
Interest. Grantor agrees to repay the principal amount
of $52,081.62 plus accrued interest at a rate of 5% simple interest per annum on
demand.
SECTION
5. Authority. Grantor
has the requisite power and authority to execute and deliver this Amended
Agreement and the other agreements provided for herein, and consummate the
transactions contemplated by this Amended Agreement. The execution
and delivery of this Amended Agreement have been duly authorized by all
necessary action on the part of the Grantor. Grantor has duly
executed and delivered this Amended Agreement and, assuming due authorization,
execution and delivery of this Amended Agreement by Lender, this Amended
Agreement constitutes Grantor’s legal, valid and binding obligation, enforceable
against Grantor in accordance with its terms.
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SECTION
6. Representation and
Warranties. Grantor warrants that there are no other liens or
encumbrances on any collateral listed in this Amended Agreement and Lender shall
be named as first secured party.
SECTION
7. 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 Amended 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
8. Successors and
Assigns. This Amended 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 Amended 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
9. Severability. Any
determination that any provision of this Amended 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 Amended Agreement.
SECTION
10. Nevada
Law. This Amended 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
11. Counterparts. This
Amended 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 Amended 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 Amended Agreement.
[signature
page follows]
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IN
WITNESS WHEREOF, Grantor has caused this Amended 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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