exv10w6



 







Exhibit 10.6




EXHIBIT B




REGISTRATION RIGHTS AGREEMENT




          This Registration Rights Agreement (this “Agreement”) is made and entered into as of
March 31, 2006, between Las Vegas Gaming, Inc., a Nevada corporation (the “Company”), and
the purchaser signatory hereto (the “Purchaser”).




          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof among the Company and the Purchaser (the “Purchase Agreement”).




          The Company and the Purchaser hereby agree as follows:




     1. Definitions



          Capitalized terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:





          “Advice” shall have the meaning set forth in Section 6(d).




          “Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed hereunder, the 180th calendar day following the date hereof
and, with respect to any additional Registration Statements which may be required pursuant
to Section 3(c), the 180th calendar day following the date on which the Company
first knows, or reasonably should have known, that such additional Registration Statement
is required hereunder; provided, however, in the event the Company is
notified by the Commission that one of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the Effectiveness Date as
to such Registration Statement shall be the fifth Trading Day following the date on which
the Company is so notified if such date precedes the dates required above.




          “Effectiveness Period” shall have the meaning set forth in Section 2(a).




          “Event” shall have the meaning set forth in Section 2(b).




          “Event Date” shall have the meaning set forth in Section 2(b).




          “Filing Date” means, with respect to the initial Registration Statement
required hereunder, the 120th calendar day following the date hereof and, with
respect to any additional Registration Statements which may be required pursuant to Section
3(c), the 120th day following the date on which the Company first knows, or
reasonably should have known that such additional Registration Statement is required
hereunder.




          “Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.




          “Indemnified Party” shall have the meaning set forth in Section 5(c).




          “Indemnifying Party” shall have the meaning set forth in Section 5(c).



1









 






          “Losses” shall have the meaning set forth in Section 5(a).




          “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened.




          “Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such Prospectus.




          “Registrable Securities” means (i) all of the shares of Common Stock issuable
upon conversion of the Notes assuming all of the Notes are converted, (ii) all shares
issuable as amortization payments on the Notes assuming all permissible amortization
payments are made in shares of Common Stock and the Notes are held until maturity, (iii)
all Warrant Shares, (iv) any securities issued or issuable upon any stock split, dividend
or other distribution recapitalization or similar event with respect to the foregoing and
(v) any additional shares issuable in connection with any anti-dilution provisions in the
Notes or the Warrants.




          “Registration Statement” means the registration statements required to be
filed hereunder and any additional registration statements contemplated by Section 3(c),
including (in each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.




          “Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.




          “Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.



     2. Registration



          (a) The Company shall prepare and file with the Commission a Registration Statement covering
the resale of 125% of the Registrable Securities for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form SB-2 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form SB-2, in which case
such registration shall be on another appropriate form in accordance herewith) and shall contain
(unless otherwise directed by the Holders) substantially the “Plan of Distribution” attached hereto
as Annex A. Subject to the terms of this Agreement, the Company shall use its best efforts
to cause the Registration Statement to be declared effective under the





2









 







Securities Act as promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act until all Registrable Securities covered by such
Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion letter to such
effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness Period”). The Company shall immediately notify the Holders via facsimile of
the effectiveness of the Registration Statement on the same day that the Company receives
notification of the effectiveness from the Commission. Failure to so notify the Holder within 1
Trading Day of such notification shall be deemed an Event under Section 2(b).




          (b) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the
Company files a Registration Statement without affording the Holders the opportunity to review and
comment on the same as required by Section 3(a), the Company shall not be deemed to have satisfied
this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration
in accordance with Rule 461 promulgated under the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is earlier) by the Commission
that a Registration Statement will not be “reviewed,” or not subject to further review; or (iii)
prior to its Effectiveness Date, the Company fails to file a pre-effective amendment and otherwise
respond in writing to comments made by the Commission in respect of such Registration Statement
within 30 calendar days after the receipt of comments by or notice from the Commission that such
amendment is required in order for a Registration Statement to be declared effective; or (iv) a
Registration Statement filed or required to be filed hereunder is not declared effective by the
Commission by its Effectiveness Date; or (v) after the Effectiveness Date, a Registration Statement
ceases for any reason to remain continuously effective as to all Registrable Securities for which
it is required to be effective, or the Holders are not permitted to utilize the Prospectus therein
to resell such Registrable Securities for 10 consecutive calendar days but no more than an
aggregate of 15 calendar days during any 12-month period (which need not be consecutive Trading
Days) as a result of actions of the Company (any such failure or breach being referred to as an
“Event”, and for purposes of clause (ii) or (iv) the date on which such Event occurs, or
for purposes of clause (ii) the date on which such five Trading Day period is exceeded, or for
purposes of clause (iii) the date which such 10 calendar day period is exceeded, or for purposes of
clause (v) the date on which such 10 or 15 calendar day period, as applicable, is exceeded being
referred to as “Event Date”), then in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial
liquidated damages and not as a penalty, equal to 1.5% of the outstanding principal of the Notes
for any Registrable Securities then held by such Holder for the first 30 days (or part thereof)
after the 120th or 180th day, as the case may be, and an additional 1.5% for
any subsequent 30-day period (or part thereof), thereafter. If the Company fails to pay any
partial liquidated damages pursuant to this Section in full within seven days after the date
payable, the Company will pay interest thereon at a rate of 20% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date
such partial liquidated damages are due until such amounts, plus all such interest thereon, are
paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event.




3









 








     3. Registration Procedures



          In connection with the Company’s registration obligations hereunder, the Company shall:




          (a) Not less than five Trading Days prior to the filing of each Registration Statement or any
related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall, (i) furnish to
each Holder copies of all such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to conduct a reasonable investigation within the meaning of the Securities Act.
The Company shall not file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable Securities shall
reasonably object in good faith, provided that, the Company is notified of such objection in
writing no later than 5 Trading Days after the Holders have been so furnished copies of such
documents. Each Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Holder Questionnaire”) not less than two
Trading Days prior to the Filing Date or by the end of the fourth Trading Day following the date on
which such Holder receives draft materials in accordance with this Section. In the event that any
Holder provides an objection which effectively delays any filing of the Registration Statement or
amendment to the Registration Statement, then all time periods related effectiveness and filing
contained herein shall be extended for such time period as such objection remains unresolved and
creating a delay in the filing process.




          (b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep a Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to a Registration Statement or any amendment
thereto and as promptly as reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to a Registration Statement; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange Act with respect
to the disposition of all Registrable Securities covered by a Registration Statement during the
applicable period in accordance (subject to the terms of this Agreement) with the intended methods
of disposition by the Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.




          (c) If during the Effectiveness Period, the number of Registrable Securities at any time
exceeds 90% of the number of shares of Common Stock then registered in a Registration Statement,
then the Company shall file as soon as reasonably practicable but in any case prior to the
applicable Filing Date, an additional Registration Statement covering the resale by the Holders of
not less than 125% of the number of such Registrable Securities.




          (d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to
clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend the use





4









 







of the Prospectus until the requisite changes have been made) as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than five Trading Days prior to such filing)
and (if requested by any such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment
to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement (the Company shall provide true and complete
copies thereof and all written responses thereto to each of the Holders); and (C) with respect to a
Registration Statement or any post-effective amendment, when the same has become effective; (ii) of
any request by the Commission or any other Federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration Statement ineligible
for inclusion therein or any statement made in a Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to a Registration Statement, Prospectus or other documents
so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and (vi) the occurrence or existence of any pending corporate
development with respect to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company to allow continued
availability of the Registration Statement or Prospectus; provided that any and all of such
information shall remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
notwithstanding each Holder’s agreement to keep such information confidential, the Holders make no
acknowledgement that any such information is material, non-public information.




          (e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i)
any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.




          (f) Furnish to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial statements and schedules,
all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of such documents with
the Commission.




          (g) Promptly deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such
Persons may reasonably request in connection with resales by the Holder of Registrable Securities.
Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the





5









 







selling Holders in connection with the offering and sale of the Registrable Securities covered
by such Prospectus and any amendment or supplement thereto, except after the giving on any notice
pursuant to Section 3(d).




          (h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable
efforts to register or qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the Registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified, subject the Company to any material tax in any such jurisdiction where it
is not then so subject or file a general consent to service of process in any such jurisdiction.




          (i) If requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be delivered to a
transferee pursuant to a Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such Holders may
request.




          (j) Upon the occurrence of any event contemplated by this Section 3, as promptly as reasonably
possible under the circumstances taking into account the Company’s good faith assessment of any
adverse consequences to the Company and its stockholders of the premature disclosure of such event,
prepare a supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required document so that, as thereafter
delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading.
If the Company notifies the Holders in accordance with clauses (ii) through (v) of Section 3(d)
above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been
made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a
Registration Statement and Prospectus, subject to the payment of partial liquidated damages
pursuant to Section 2(b), for a period not to exceed 60 days (which need not be consecutive days)
in any 12 month period.




          (k) Comply with all applicable rules and regulations of the Commission.




          (l) The Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such Holder and, if
required by the Commission, the person thereof that has voting and dispositive control over the
Shares. During any periods that the Company is unable to meet its obligations hereunder with
respect to the registration of the Registrable Securities solely because any Holder fails to
furnish such information within three Trading Days of the Company’s request, any liquidated damages
that are accruing at such time as to such Holder only shall be tolled and any






6









 







Event that may otherwise occur solely because of such delay shall be suspended as to such
Holder only, until such information is delivered to the Company.




     4. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required
to be made with the Trading Market on which the Common Stock is then listed for trading, if any and
(B) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the
Company in writing (including, without limitation, fees and disbursements of counsel for the
Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as requested by the Holders), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority
of the Registrable Securities included in a Registration Statement), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder. In no event shall the Company be responsible for any broker or
similar commissions or, except to the extent provided for in the Transaction Documents, any legal
fees or other costs of the Holders.



     5. Indemnification



          (a) Indemnification by the Company. The Company shall, notwithstanding any termination
of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents,
brokers (including brokers who offer and sell Registrable Securities as principal as a result of a
pledge or any failure to perform under a margin call of Common Stock), investment advisors and
employees of each of them, each Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs (including, without limitation,
reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent, but only to the
extent, that (i) such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in a Registration Statement, such Prospectus or such





7









 







form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder
has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of
the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The
Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this Agreement of which the
Company is aware.




          (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based solely upon: (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any form of prospectus,
or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in such Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such Holder expressly for
use therein, or to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it being understood that
the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an
event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section
6(d). In no event shall the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.




          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
“Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that it shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.




          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party






8









 







has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall reasonably believe that a material conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and the reasonable fees and expenses of one
separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.




          Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified
Party (including reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written
notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such
actions for which such Indemnified Party is not entitled to indemnification hereunder, determined
based upon the relative faults of the parties.




          (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees
or expenses incurred by such party in connection with any Proceeding to the extent such party would
have been indemnified for such fees or expenses if the indemnification provided for in this Section
was available to such party in accordance with its terms.




          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required






9









 







to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except
in the case of fraud by such Holder.




          The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.




     6. Miscellaneous



          (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.




          (b) No Piggyback on Registrations. Except as set forth on Schedule 6(i), neither the
Company nor any of its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other than the Registrable
Securities. Each Purchaser acknowledges and agrees that the Company may, in its sole discretion,
file one registration statement to fulfill its obligations to the Purchaser hereunder. The Company
shall not file any other registration statements until the initial Registration Statement required
hereunder is declared effective by the Commission, provided that this Section 6(b) shall not
prohibit the Company from filing amendments to registration statements already filed or in the
process of being filed as disclosed by the Company.




          (c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.




          (d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(d), such Holder will forthwith discontinue disposition of
such Registrable Securities under a Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement, or until it is advised
in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company will use its best efforts to ensure that the use of the Prospectus may be
resumed as promptly as it practicable. The Company agrees and acknowledges that any periods during
which the Holder is required to discontinue the disposition of the Registrable Securities hereunder
shall be subject to the provisions of Section 2(b).




          (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is
not an effective Registration Statement covering all of the Registrable Securities and the Company
shall determine to prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in






10









 







connection with any acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the Company shall send to
each Holder a written notice of such determination and, if within fifteen days after the date of
such notice, any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such holder requests to be
registered; provided, that, the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144(k)
promulgated under the Securities Act or that are the subject of a then effective Registration
Statement.




          (f) Amendments and Waivers. The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each Holder of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all of the Registrable
Securities to which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.




          (g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.




          (h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of all of the Holders of the then-outstanding Registrable Securities. Each
Holder may assign their respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.




          (i) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has
entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its securities, that would have
the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor
any of its subsidiaries has previously entered into any agreement granting any registration rights
with respect to any of its securities to any Person that have not been satisfied in full.




          (j) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.




          (k) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be determined with the provisions of the Purchase
Agreement.




11









 








          (l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law.




          (m) Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.




          (n) Headings. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.




          (o) Independent Nature of Holders’ Obligations and Rights. The obligations of each
Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and
no Holder shall be responsible in any way for the performance of the obligations of any other
Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled
to protect and enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.




********************




12









 








          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.





LAS VEGAS GAMING, INC.




/s/ Russell R. Roth

Russell R. Roth, CEO



[SIGNATURE PAGE OF HOLDERS FOLLOWS]







13









 








[SIGNATURE PAGE OF HOLDERS TO LAS VEGAS GAMING RRA]




Name of Investing Entity: CAMOFI MASTER LDC

Signature of Authorized Signatory of Investing Entity: /s/ Jeffrey M. Haas

Name of Authorized Signatory: Jeffrey M. Haas

Title of Authorized Signatory: Authorized Signatory




[SIGNATURE PAGES CONTINUE]






14









 








Plan of Distribution




          Each Selling Stockholder (the “Selling Stockholders”) of the common stock (“Common
Stock”) of Las Vegas Gaming, Inc., a Nevada corporation (the “Company”) and any of
their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of
their shares of Common Stock on the Trading Market or any other stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the following methods when
selling shares:





	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer
solicits Purchaser;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	settlement of short sales entered into after the date of this prospectus;
	 
	 	•	 	broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
	 
	 	•	 	a combination of any such methods of sale;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; or
	 
	 	•	 	any other method permitted pursuant to applicable law.





          The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus.




          Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. Each Selling Stockholder does not expect these commissions
and discounts relating to its sales of shares to exceed what is customary in the types of
transactions involved.




          In connection with the sale of our common stock or interests therein, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The Selling Stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the





15









 







common stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with broker-dealers or other
financial institutions or the creation of one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of shares offered by this prospectus,
which shares such broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).




          The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it
does not have any agreement or understanding, directly or indirectly, with any person to distribute
the Common Stock.




          The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.




          Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144
under the Securities Act may be sold under Rule 144 rather than under this prospectus. Each
Selling Stockholder has advised us that they have not entered into any agreements, understandings
or arrangements with any underwriter or broker-dealer regarding the sale of the resale shares.
There is no underwriter or coordinating broker acting in connection with the proposed sale of the
resale shares by the Selling Stockholders.




          We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and without regard to any
volume limitations by reason of Rule 144(e) under the Securities Act or any other rule of similar
effect or (ii) all of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.




          Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to our common stock for a period of two business days prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit
the timing of purchases and sales of shares of our common stock by the Selling Stockholders or any
other person. We will make copies of this prospectus available to the Selling Stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale.




16









 








Annex B




Las Vegas Gaming, Inc.




Selling Securityholder Notice and Questionnaire




          The undersigned beneficial owner of common stock, par value $0.001 (the “Common
Stock”), of Las Vegas Gaming, Inc., a Nevada corporation (the “Company”), (the
“Registrable Securities”) understands that the Company has filed or intends to file with
the Securities and Exchange Commission (the “Commission”) a registration statement on Form
SB-2 (the “Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities,
in accordance with the terms of the Registration Rights Agreement, dated as of March 31, 2006 (the
“Registration Rights Agreement”), among the Company and the Purchaser named therein. A
copy of the Registration Rights Agreement is available from the Company upon request at the address
set forth below. All capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.




          Certain legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.




NOTICE




          The undersigned beneficial owner (the “Selling Securityholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it and listed below in Item
3 (unless otherwise specified under such Item 3) in the Registration Statement.




          The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:




QUESTIONNAIRE




	 	 	 	 	 
	1.	 	Name.
	 

	 	 	 	 
	 

	 	(a)
	 	Full Legal Name of Selling Securityholder
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	(b)
	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
	 

	 	 	 	 
	 

	 	 	 	 





17









 






	 	 	 	 	 
	 

	 	(c)
	 	Full Legal Name of Natural Control Person (which means a natural person who
directly you indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
	 

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	2. Address for Notices to Selling Securityholder:
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	Telephone: 	 	 	 
	 

	 	 
	Fax:
	 

	Contact Person:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	3. Beneficial Ownership of Registrable Securities:
	 
	 	 	 	 
	 

	 	(a)
	 	Type and Principal Amount of Registrable Securities beneficially owned:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	4. Broker-Dealer Status:
	 
	 	 	 	 
	 

	 	(a)
	 	Are you a broker-dealer?
	 
	 	 	 	 
	 

	 	 	 	Yes          No
	 
	 	 	 	 
	 

	 	Note:
	 	If yes, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.
	 
	 	 	 	 
	 

	 	(b)
	 	Are you an affiliate of a broker-dealer?
	 
	 	 	 	 
	 

	 	 	 	Yes          No
	 
	 	 	 	 
	 

	 	(c)
	 	If you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?
	 
	 	 	 	 
	 

	 	 	 	Yes          No
	 
	 	 	 	 
	 

	 	Note:
	 	If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.






18









 






	 	 	 	 	 
	5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder.
	 
	 	 	 	 
	 	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.
	 
	 	 	 	 
	 

	 	(a)
	 	Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	6. Relationships with the Company:
	 
	 	 	 	 
	 	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the past three years.
	 
	 	 	 	 
	 	 	State any exceptions here:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 





          The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective.




          By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectus. The undersigned understands that such
information will be relied upon by the Company in connection with the preparation or amendment of
the Registration Statement and the related prospectus.




          IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	Beneficial Owner:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 	 	 





PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:





19