exv10w9



 




Exhibit 10.9



EXHIBIT F




SUBSIDIARY GUARANTEE




     SUBSIDIARY GUARANTEE, dated as of March 31, 2006, made by each of the signatories hereto
(together with any other entity that may become a party hereto as provided herein, (the
“Guarantors”), in favor of the purchasers signatory (the “Purchasers”) to that
certain Securities Purchase Agreement, dated as of the date hereof, between Las Vegas Gaming, Inc.,
a Nevada corporation (the “Company”) and the Purchasers.



W I T N E S S E T H:




     Whereas, pursuant to that certain Securities Purchase Agreement, dated as of the date hereof,
by and between the Company and the Purchasers (the “Purchase Agreement”), the Company has
agreed to sell and issue to the Purchasers, and the Purchasers have agreed to purchase from the
Company the Company’s Senior Secured Convertible Notes, due January 1, 2008 (the “Notes”),
subject to the terms and conditions set forth therein; and



     Whereas, each Guarantor will directly benefit from the extension of credit to the Company
represented by the issuance of the Notes; and



   NOW, THEREFORE, in consideration of the premises and to induce the Purchasers to enter into
the Purchase Agreement and to carry out the transactions contemplated thereby, each Guarantor
hereby agrees with the Purchasers as follows:



     1. Definitions. Unless otherwise defined herein, terms defined in the Purchase
Agreement and used herein shall have the meanings given to them in the Purchase Agreement. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this
Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this
Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified.
The meanings given to terms defined herein shall be equally applicable to both the singular and
plural forms of such terms. The following terms shall have the following meanings:




     “Guarantee” means this Subsidiary Guarantee, as the same may be amended,
supplemented or otherwise modified from time to time.




     “Obligations” means the collective reference to all obligations and
undertakings of the Company of whatever nature, monetary or otherwise, under the Notes, the
Purchase Agreement, the Security Agreement, the Warrants, the Registration Rights
Agreement, the Advisory Services Agreement or any other future agreement or obligations
undertaken by the Company to the Purchasers, together with all reasonable attorneys’ fees,
disbursements and all other costs and expenses of collection incurred by Purchasers in
enforcing any of such Obligations and/or this Guarantee.



     2. Guarantee.




     (a) Guarantee.




	 	(i)	 	The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the
Purchasers and their respective successors, indorsees, transferees
and assigns, the prompt and





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	 	 	 	complete payment and performance by the Company when due (whether
at the stated maturity, by acceleration or otherwise) of the
Obligations.
	 
	 	(ii)	 	Anything herein or in any other Transaction
Document to the contrary notwithstanding, the maximum liability of
each Guarantor hereunder and under the other Transaction Documents
shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws, including laws
relating to the insolvency of debtors, fraudulent conveyance or
transfer or laws affecting the rights of creditors generally (after
giving effect to the right of contribution established in Section
2(b)).
	 
	 	(iii)	 	Each Guarantor agrees that the Obligations
may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of
the Purchasers hereunder.
	 
	 	(iv)	 	The guarantee contained in this Section 2
shall remain in full force and effect until all the Obligations and
the obligations of each Guarantor under the guarantee contained in
this Section 2 shall have been satisfied by payment in full.
	 
	 	(v)	 	No payment made by the Company, any of the
Guarantors, any other guarantor or any other Person or received or
collected by the Purchasers from the Company, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations
shall be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in
respect of the Obligations or any payment received or collected from
such Guarantor in respect of the Obligations), remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder
until the Obligations are paid in full.
	 
	 	(vi)	 	Notwithstanding anything to the contrary in
this Agreement, with respect to any defaulted non-monetary
Obligations the specific performance of which by the Guarantors is
not reasonably possible (e.g. the issuance of the Company’s Common
Stock), the Guarantors shall only be liable for making the Purchasers
whole on a monetary basis for the Company’s failure to perform such
Obligations in accordance with the Transaction Documents.






     (b) Right of Contribution. Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any payment made



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hereunder, such Guarantor shall be entitled to seek and receive contribution from and
against any other Guarantor hereunder which has not paid its proportionate share of such
payment. Each Guarantor’s right of contribution shall be subject to the terms and
conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect limit
the obligations and liabilities of any Guarantor to the Purchasers, and each Guarantor
shall remain liable to the Purchasers for the full amount guaranteed by such Guarantor
hereunder.




     (c) No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the Purchasers, no
Guarantor shall be entitled to be subrogated to any of the rights of the Purchasers against
the Company or any other Guarantor or any collateral security or guarantee or right of
offset held by the Purchasers for the payment of the Obligations, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing
to the Purchasers by the Company on account of the Obligations are paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Obligations shall not have been paid in full, such amount shall be held by
such Guarantor in trust for the Purchasers, segregated from other funds of such Guarantor,
and shall, forthwith upon receipt by such Guarantor, be turned over to the Purchasers in
the exact form received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Purchasers may determine.




     (d) Amendments, Etc. With Respect to the Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against
any Guarantor and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by the Purchasers may be rescinded by the Purchasers
and any of the Obligations continued, and the Obligations, or the liability of any other
Person upon or for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Purchasers, and the Purchase Agreement and the other Transaction Documents
and any other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Purchasers may deem
advisable from time to time, and any collateral security, guarantee or right of offset at
any time held by the Purchasers for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. The Purchasers shall have no obligation to protect,
secure, perfect or insure any Lien at any time held by them as security for the Obligations
or for the guarantee contained in this Section 2 or any property subject thereto.




     (e) Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance by the Purchasers upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Company and any of the Guarantors, on the one hand, and the
Purchasers, on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this



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Section 2. Each Guarantor waives to the extent permitted by law diligence,
presentment, protest, demand for payment and notice of default or nonpayment to or
upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Purchase Agreement or any other Transaction Document, any
of the Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the Purchasers, (b)
any defense, set-off or counterclaim (other than a defense of payment or performance or
fraud or misconduct by Purchasers) which may at any time be available to or be asserted by
the Company or any other Person against the Purchasers, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Company or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal discharge of the
Company for the Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the Purchasers
may, but shall be under no obligation to, make a similar demand on or otherwise pursue such
rights and remedies as they may have against the Company, any other Guarantor or any other
Person or against any collateral security or guarantee for the Obligations or any right of
offset with respect thereto, and any failure by the Purchasers to make any such demand, to
pursue such other rights or remedies or to collect any payments from the Company, any other
Guarantor or any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Company, any other Guarantor
or any other Person or any such collateral security, guarantee or right of offset, shall
not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a matter of law,
of the Purchasers against any Guarantor. For the purposes hereof, “demand” shall include
the commencement and continuance of any legal proceedings.




     (f) Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored or returned
by the Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any Guarantor, or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for, the Company
or any Guarantor or any substantial part of its property, or otherwise, all as though such
payments had not been made.




     (g) Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Purchasers without set-off or counterclaim in U.S. dollars at the address set
forth or referred to in the Purchase Agreement.



     3. Representations and Warranties. Each Guarantor hereby makes the following
representations and warranties to Purchasers as of the date hereof:




     (a) Organization and Qualification. The Guarantor is a corporation or limited
liability company, duly incorporated, validly existing and in good standing under the laws
of the applicable jurisdiction set forth on Schedule 1, with the requisite corporate power
and authority to own and use its properties and assets and to carry on its business as
currently conducted. The Guarantor has no subsidiaries other than those identified as



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such on the Disclosure Schedules to the Purchase Agreement. The Guarantor is duly
qualified to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned by it makes
such qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of any of this Guaranty in any material
respect, (y) have a material adverse effect on the results of operations, assets,
prospects, or financial condition of the Guarantor or (z) adversely impair in any material
respect the Guarantor’s ability to perform fully on a timely basis its obligations under
this Guaranty (a “Material Adverse Effect”).




     (b) Authorization; Enforcement. The Guarantor has the requisite corporate
power and authority to enter into and to consummate the transactions contemplated by this
Guaranty, and otherwise to carry out its obligations hereunder. The execution and delivery
of this Guaranty by the Guarantor and the consummation by it of the transactions
contemplated hereby have been duly authorized by all requisite corporate action on the part
of the Guarantor. This Guaranty has been duly executed and delivered by the Guarantor and
constitutes the valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and remedies or
by other equitable principles of general application.




     (c) No Conflicts. The execution, delivery and performance of this Guaranty by
the Guarantor and the consummation by the Guarantor of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of its Certificate
of Incorporation or By-laws or (ii) conflict with, constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which the Guarantor is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Guarantor is subject (including Federal and state
securities laws and regulations), or by which any material property or asset of the
Guarantor is bound or affected, except in the case of each of clauses (ii) and (iii), such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as could not, individually or in the aggregate, have or result in a Material Adverse
Effect. The business of the Guarantor is not being conducted in violation of any law,
ordinance or regulation of any governmental authority, except for violations which,
individually or in the aggregate, do not have a Material Adverse Effect.




     (d) Consents and Approvals. The Guarantor is not required to obtain any
consent, waiver, authorization or order of, or make any filing or registration with, any
court or other federal, state, local, foreign or other governmental authority or other
person in connection with the execution, delivery and performance by the Guarantor of this
Guaranty.




     (e) Purchase Agreement. The representations and warranties of the Company set
forth in the Purchase Agreement as they relate to such Guarantor, each of which is hereby
incorporated herein by reference, are true and correct as of each time such representations
are deemed to be made pursuant to such Purchase Agreement, and the Purchasers shall be
entitled to rely on each of them as if they were fully set forth



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herein, provided, that each reference in each such representation and warranty to the
Company’s knowledge shall, for the purposes of this Section 3, be deemed to be a reference
to such Guarantor’s knowledge.




     (f) Foreign Law. Each Guarantor has consulted with appropriate foreign legal
counsel with respect to any of the above representations for which non-U.S. law is
applicable. Such foreign counsel have advised each applicable Guarantor that such counsel
knows of no reason why any of the above representations would not be true and accurate.
Such foreign counsel were provided with copies of this Subsidiary Guarantee and the
Transaction Documents prior to rendering their advice.



     4. Covenants. Each Guarantor covenants and agrees with the Purchasers that, from and
after the date of this Guarantee until the Obligations shall have been paid in full, such Guarantor
shall take, and/or shall refrain from taking, as the case may be, each commercially reasonable
action that is necessary to be taken or not taken, as the case may be, so that no Event of Default
is caused by the failure to take such action or to refrain from taking such action by such
Guarantor. Each Guarantor also agrees to comply with the Covenants contained in Section 8 of the
Notes.



     5. Miscellaneous.




     (a) Amendments in Writing. None of the terms or provisions of this Guarantee
may be waived, amended, supplemented or otherwise modified except in writing by the
Purchasers.




     (b) Notices. All notices, requests and demands to or upon the Purchasers or
any Guarantor hereunder shall be effected in the manner provided for in the Purchase
Agreement; provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth on
Schedule 5(b).




     (c) No Waiver By Course Of Conduct; Cumulative Remedies. The Purchasers shall
not by any act (except by a written instrument pursuant to Section 5(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default under the Transaction Documents or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the Purchasers, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A waiver by the
Purchasers of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Purchasers would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided by law.



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     (d) Enforcement Expenses; Indemnification.




	 	(i)	 	Each Guarantor agrees to pay, or reimburse
the Purchasers for, all its costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Guarantee and
the other Transaction Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements
of counsel to the Purchasers.
	 
	 	(ii)	 	Each Guarantor agrees to pay, and to save
the Purchasers harmless from, any and all liabilities with respect
to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable
in connection with any of the transactions contemplated by this
Guarantee.
	 
	 	(iii)	 	Each Guarantor agrees to pay, and to save
the Purchasers harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and
administration of this Guarantee to the extent the Company would be
required to do so pursuant to the Purchase Agreement.
	 
	 	(iv)	 	The agreements in this Section shall
survive repayment of the Obligations and all other amounts payable
under the Purchase Agreement and the other Transaction Documents.






     (e) Successor and Assigns. This Guarantee shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the Purchasers and their
respective successors and assigns; provided that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guarantee without the prior written
consent of the Purchasers.




     (f) Set-Off. Each Guarantor hereby irrevocably authorizes the Purchasers at
any time and from time to time while an Event of Default under any of the Transaction
Documents shall have occurred and be continuing, without notice to such Guarantor or any
other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and
appropriate and apply any and all deposits, credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Purchasers to or for the credit or the account
of such Guarantor, or any part thereof in such amounts as the Purchasers may elect, against
and on account of the obligations and liabilities of such Guarantor to the Purchasers
hereunder and claims of every nature and description of the Purchasers against such
Guarantor, in any currency, whether arising hereunder, under the Purchase Agreement, any
other Transaction Document or otherwise, as the Purchasers may elect, whether or not the
Purchasers have made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Purchasers shall notify such Guarantor promptly
of any such set-off and the application made by the Purchasers of the proceeds thereof,
provided that the failure to give such notice shall not



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affect the validity of such set-off and application. The rights of the Purchasers
under this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Purchasers may have.




     (g) Counterparts. This Guarantee may be executed by one or more of the parties
to this Guarantee on any number of separate counterparts (including by telecopy), and all
of said counterparts taken together shall be deemed to constitute one and the same
instrument.




     (h) Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.




     (i) Section Headings. The Section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or be taken
into consideration in the interpretation hereof.




     (j) Integration. This Guarantee and the other Transaction Documents represent
the agreement of the Guarantors and the Purchasers with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Purchasers relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Transaction Documents.




     (k) Governing Law. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS.




     (l) Submission to Jurisdictional; Waiver. Each Guarantor hereby
irrevocably and unconditionally:




	 	(i)	 	submits for itself and its property in any
legal action or proceeding relating to this Guarantee and the other
Transaction Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of New York, located
in New York County, New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
	 
	 	(ii)	 	consents that any such action or proceeding
may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
	 
	 	(iii)	 	agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of
mail), postage





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	 	 	 	prepaid, to such Guarantor at its address referred to in the
Purchase Agreement or at such other address of which the
Purchasers shall have been notified pursuant thereto;
	 
	 	(iv)	 	agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction; and
	 
	 	(v)	 	waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any
legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.






     (m) Acknowledgements. Each Guarantor hereby acknowledges that:




	 	(i)	 	it has been advised by counsel in the
negotiation, execution and delivery of this Guarantee and the other
Transaction Documents to which it is a party;
	 
	 	(ii)	 	the Purchasers have no fiduciary
relationship with or duty to any Guarantor arising out of or in
connection with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors, on the one
hand, and the Purchasers, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
	 
	 	(iii)	 	no joint venture is created hereby or by
the other Transaction Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Guarantors and the
Purchasers.






     (n) Additional Guarantors. The Company shall cause each of its subsidiaries
formed or acquired on or subsequent to the date hereof to become a Guarantor for all
purposes of this Guarantee by executing and delivering an
Assumption Agreement in the form of Annex 1 hereto.




     (o) Release of Guarantors. Subject to Section 2(f), each Guarantor will be
released from all liability hereunder concurrently with the repayment in full of all
amounts owed under the Purchase Agreement, the Notes and the other Transaction Documents.




     (p) Seniority. The Obligations of each of the Guarantors hereunder rank senior
in priority to any other debt of such Guarantor.




     (q) Waiver of Jury Trial. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.



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     IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.



	 	 	 
	IMAGINEERING GAMING INC.
	 
	 	 
	By:

	 	/s/ Russell R. Roth
	Name:

	 	Russell R. Roth
	Title:

	 	CEO
	 
	 	 
	LAS VEGAS KENO, INC.
	 
	 	 
	By:

	 	/s/ Russell R. Roth
	Name:

	 	Russell R. Roth
	Title:

	 	CEO






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SCHEDULE 1




GUARANTORS




     The following are the names, notice addresses and jurisdiction of organization of each
Guarantor.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	JURISDICTION	 	 	COMPANY	 
	 	 	 	 	 	 	OF	 	 	OWNED BY	 
	NAME	 	ADDRESS	 	 	INCORPORATION	 	 	PERCENTAGE	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 





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Annex 1 to

SUBSIDIARY GUARANTEE




ASSUMPTION AGREEMENT, dated as of                      ___,                      made by      
                                                       , a
                                         corporation (the “Additional Guarantor”), in favor of the Purchasers
pursuant to the Purchase Agreement referred to below. All capitalized terms not defined herein
shall have the meaning ascribed to them in such Purchase Agreement.



W I T N E S S E T H :




     WHEREAS, Las Vegas Gaming, Inc., a Nevada corporation (the “Company”) and the
Purchasers have entered into a Securities Purchase Agreement, dated as of March 31, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”);



     WHEREAS, in connection with the Purchase Agreement, the Company and its Subsidiaries (other
than the Additional Guarantor) have entered into the Subsidiary Guarantee, dated as of March 31,
2006 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”) in
favor of the Purchasers;



     WHEREAS, the Purchase Agreement requires the Additional Guarantor to become a party to the
Guarantee; and



     WHEREAS, the Additional Guarantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee;



NOW, THEREFORE, IT IS AGREED:




     1. Guarantee. By executing and delivering this Assumption Agreement, the Additional
Guarantor, as provided in Section 5(n) of the Guarantee, hereby becomes a party to the Guarantee as
a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor
and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedule 1 to the Guarantee. The Additional Guarantor hereby
represents and warrants that each of the representations and warranties contained in Section 3 of
the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after
giving effect to this Assumption Agreement) as if made on and as of such date.



     2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.



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     IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.


[ADDITIONALGUARANTOR]



By:                                                             

Name:

Title:





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