EXHIBIT
      10.17

    


    WHEREVER
      CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH DELETIONS ARE DENOTED BY AN
      ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE
      SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
      TREATMENT 

    


    JANUARY
      2006 SECURITY AGREEMENT

     

    This
      January 2006 Security Agreement (A1/06
      SA@)
      is made
      as of January 19, 2006 (the AEffective
      Date@),
      by and
      between Nevada
      Gold & Casinos, Inc.,
      a
      Nevada corporation (ANGC@)
      (as
      Maker), and its wholly-owned subsidiary, Black
      Hawk Gold, Ltd.,
      a
      Colorado corporation (ABHG@)
      (as
      Guarantor), both with their principal places of business at 3040 Post Oak Blvd.,
      Suite 675, Houston, Texas, 77056-6588; and of *
      [name
      changed to the defined term “Lender” throughout this Agreement*].

    


    I. Recitals

    


    A.    To
      induce
      Lender to loan to NGC under a credit facility dated June 29, 2004, and amended
      on January 19, 2006 (collectively referred to as the ACredit
      Facility@),
      and
      under any Promissory Notes executed pursuant to the Credit Facility, up to
      a
      maximum aggregate principal amount of $55 million, NGC and BHG have agreed
      to
      grant a security interest in and to pledge certain collateral described below
      as
      security for the repayment of the loans and for performance of all of the terms
      and conditions of the Credit Facility and Notes executed under it. The parties
      agree that this 1/06 SA is intended to completely modify the preexisting Amended
      and Restated Security Agreement dated June 29, 2004, as of the effective date
      of
      this 1/06 SA.

    


    B.    BHG
      is a
      wholly-owned subsidiary of NGC. BHG, by and through the action of its board
      of
      directors, determined in 2004 that it could reasonably expect to benefit,
      directly or indirectly, from granting a lien upon the collateral described
      below
      in order to secure the loans made by Lender to NGC pursuant to the Credit
      Facility, and BHG reconfirms that determination in this 1/06 SA. BHG
      acknowledges that it is a Debtor and Guarantor of the terms, provisions, and
      obligations under the Credit Facility, and Notes issued under it, and under
      this
      1/06 SA.

    


    II. Agreements

    


    In
      consideration of the above items and for other good and valuable consideration,
      the receipt and sufficiency of which are acknowledged, the parties agree to
      the
      following terms and conditions:

    


    A.    Defined
      Terms.
      Attached
      to this 1/06 SA is Appendix I, which contains definitions of some of the
      specific capitalized terms used in this 1/06 SA as well as in the Credit
      Facility (and any Notes or Security Instruments executed pursuant to the Credit
      Facility). Appendix I is incorporated by reference into this 1/06 SA for all
      purposes. The definitions in Appendix I shall control unless the context of
      the
      usage of a term requires a different definition. Terms not defined in this
      1/06
      SA (including Appendix I) or in the Credit Facility (and in any Notes or
      Security Instruments executed pursuant to the Credit Facility) that are defined
      in the Texas
      Uniform Commercial Code,
      as
      amended and effective as of January 1, 2006 (the AUCC@),
      have
      the meanings specified in the UCC, and the definitions specified in Article
      9 of
      the UCC control in the case of any conflicting definitions in the UCC. The
      singular number includes the plural and vice
      versa.
      Captions of sections in this 1/06 SA do not limit the terms of those
      sections.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    B.    Security
      Interest.
      To
      secure the payment and performance of the Obligations (as that term is defined
      in Appendix I) by NGC and BHG under this 1/06 SA, (1) the Credit Facility (and
      any Notes or Security Instruments issued pursuant to it), (2) the multiple
      Collateral Assignments of Notes, Security Interests, and Membership Interests
      (the ACollateral
      Assignments@),
      (3)
      the multiple Commercial Pledge Agreements, and (4) BHG=s
      Guaranty (all of which are incorporated by reference into this 1/06 SA for
      all
      purposes), NGC and BHG grant to Lender a security interest (the ASecurity
      Interest@)
      in
ALL
      ASSETS of NGC and BHG,
      including but
      not limited to
      the
      items of collateral described in the Schedule of Collateral, Notes, Security
      Interests, and Ownership Interests (the ASchedule@)
      that is
      attached to and incorporated in this 1/06 SA. This Security Interest is intended
      to extend to all products, accessions to, and cash and other proceeds of all
      of
      the assets of NGC and BHG, including but not limited to those items specifically
      described in the Schedule, all of which are collectively referred to in this
      1/06 SA as the ACollateral.@
      The
      Schedule may be executed in counterparts and shall bind NGC, BHG, and each
      and
      every Debtor that has executed any copy of the Schedule.

    


    Notwithstanding
      the provisions of this Section or Section III(C), if NGC invests in a new
      subsidiary or acquires assets and the investment or acquisition is financed
      in
      whole or in part by a third party lender (and no proceeds of the Credit Facility
      are used by NGC to finance the investment or acquisition), then the ACollateral@
      as
      defined above shall not include NGC=s
      ownership interest in the new subsidiary or the acquired assets. Lender agrees
      to file a UCC-3 terminating any security interest Lender would otherwise have
      in
      NGC=s
      ownership interest in the new subsidiary or the acquired assets and shall
      provide, upon the reasonable request of NGC or its third party lender, written
      confirmation that the Collateral for the Credit Facility does not include
      NGC=s
      ownership interest in the new subsidiary or the acquired assets.

    


    The
      security granted under this 1/06 SA and under the terms of any and all
      Commercial Pledge Agreements, Collateral Assignments of Notes, Collateral
      Assignments of Membership Interests, or other security instruments executed
      and
      delivered at any time, now or in the future, pursuant to the terms of the Credit
      Facility shall secure the obligations and indebtedness described in the Credit
      Facility and this 1/06 SA and any and all future advances under them, whether
      arising by agreement between NGC and Lender or by operation of the provisions
      of
      any of the documents executed pursuant to the Credit Facility. All makers,
      borrowers, debtors, and assignors under any of the various Security Agreements,
      Commercial Pledge Agreements, Collateral Assignments of Notes, Collateral
      Assignments of Membership Interests, or other security instruments executed
      and
      delivered at any time, now or in the future, pursuant to the terms of the Credit
      Facility, waive any notice of any proposed or implemented future advance of
      credit by Lender to NGC or BHG and they agree that a security interest shall
      attach in the properties pledged pursuant to any of these instruments
      immediately upon the delivery or occurrence of any future advance under the
      Credit Facility without their express knowledge or consent.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    C.    Perfection
      by Possession.
      In
      addition to any Financing Statements that are required to be filed by Lender
      or
      that may at her option be filed, Lender or her designee shall have the right
      to
      maintain possession of the Collateral and any and all powers of attorney
      necessary to enforce her Security Interest in any or all of the Collateral
      until
      any and all amounts due under the Credit Facility and/or any other instrument
      or
      agreement between the Parties are paid in full and the instruments are all
      terminated.

    


    III.
      Representations
      and Covenants

    


    A.    Representations.
      NGC and
      BHG represent to Lender as follows:

    


    1.    NGC
      (or
      its wholly or partially-owned subsidiaries) and BHG are the respective legal
      and
      beneficial owners of the Collateral, and BHG is the legal and beneficial owner
      of the IC-BH interest;

    


    2.    to
      the
      best of NGC=s
      and
      BHG=s
      knowledge, no dispute, setoff, or counterclaim exists with respect to any part
      of the Collateral;

    


    3.    the
      Collateral is owned by NGC and BHG, respectively, free and clear of any pledge,
      mortgage, hypothecation, lien, charge, encumbrance, or security interest except
      as previously held by Lender or as created or permitted in this 1/06 SA, and
      except for any second lien or subordinated security interest on certain of
      the
      Collateral given in favor of *, which NGC and BHG both warrant and represent
      is
      secondary and subordinated to Lender=
      lien on
      the Collateral;

    


    4.    the
      BHG
      Interest, as defined in Appendix I and as described in the Schedule, constitutes
      the entire ownership interest of NGC in BHG, and no other shares of capital
      stock in BHG have ever been issued to NGC or to any other person or entity
      since
      December 23, 1999;

    


    5.    the
      IC-BH
      Interest, as defined in Appendix I and as described in the Schedule, constitutes
      the entire ownership interest of BHG in IC-BH, and no other Units in IC-BH
      have
      ever been issued to BHG, NGC, or to any other person or entity since December
      23, 1999;

    


    6.    there
      are
      no restrictions upon the transfer of any of the Collateral other than as set
      forth in the entities=
      respective Bylaws or Operating Agreement or as may appear on the face of any
      ownership certificates and as clearly disclosed by NGC to Lender in the
      Schedule;

    


    7.    NGC
      and
      BHG have the full power, authority, and legal right to transfer their respective
      items of Collateral free of any encumbrances and without obtaining the consent
      of any other person or entity that has not already been obtained (except as
      provided in the Schedule);

     

    
      
        HTW_________
          LHR_________ 

      

      
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    8.    except
      as
      provided in the Schedule, the execution and delivery of this 1/06 SA, the
      Schedule, the Collateral Assignments, the Credit Facility (and any Notes or
      Security Instruments executed pursuant to it), and the performance of their
      terms will not result in any violation of any provision of any applicable Bylaws
      or Operating Agreement or violate or constitute a default under the terms of
      any
      material agreement, material indenture or other instrument, license, judgment,
      decree, order, law, statute, ordinance, or other governmental rule or regulation
      applicable to NGC or to BHG or any of their respective property;

    


    9.    this
      1/06
      SA and the Collateral Assignments are valid assignments of and create a valid
      first lien upon and security interest in the Collateral and the proceeds of
      the
      Collateral;

    


    10.    NGC
      is
      organized under the laws of Nevada and its exact legal name is set forth in
      the
      opening paragraph of this 1/06 SA, and BHG is organized under the laws of
      Colorado and its exact legal name is set forth in the opening paragraph of
      this
      1/06 SA;

    


    11.    NGC
      does
      not conduct business under any other name (although it does have several
      wholly-owned subsidiaries that conduct business under their own names), and
      BHG
      does not conduct business under any other name; and

    


    12.    BHG
      shall
      not vote any of its units in IC-BH or amend the Operating Agreement in any
      manner that would cause the IC-BH Interest or any part of it to be governed
      under Article 8 of the Colorado UCC, nor shall it vote any right, take any
      action, make any agreement, or suffer an other event that would diminish or
      impair the Security Interest granted to Lender under this 1/06 SA.

    


    The
      representations set forth in items 1 through 12 of this Section shall be deemed
      given again whenever NGC and/or BHG deliver additional Collateral that may
      be
      required by this 1/06 SA.

    


    B.    Covenants.
      NGC and
      BHG covenant to do the following:

    


    1.    deliver
      to Lender and/or her designated agent any certificates or instruments that
      represent NGC=s
      interest in BHG and BHG’s interest in IC-BH or the Collateral, to notify any
      entity represented within the Collateral that a security interest has been
      granted to Lender, to obtain consent from IC-BH that a security interest in
      the
      IC-BH Interest has been granted to Lender, and to comply with any additional
      notice, consent, acknowledgement, waiver, or agreement requirements that may
      be
      set forth in the Schedule;

    


    2.    deliver
      to Lender and/or her designated agent any certificates or instruments that
      represent NGC=s
      and/or
      its subsidiaries=
      interest
      in the ownership interests provided as Collateral, to notify any entity
      represented within the Collateral that a security interest has been granted
      to
      Lender, to obtain consent from each entity requiring consent that a security
      interest has been granted to Lender, and to comply with any additional notice,
      consent, acknowledgement, waiver, or agreement requirements that may be set
      forth in the Schedule or in the respective entity=s
      governing documents;

     

    
      
        HTW_________
          LHR_________ 

      

      
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    3.    from
      time
      to time promptly execute and deliver to Lender all other assignments,
      certificates, proxies, entitlement orders, supplemental writings, and financing
      statements, and do all other acts and things that Lender may reasonably request
      in order to evidence the assignment and perfect and enforce the Security
      Interest granted in this 1/06 SA;

    


    4.    promptly
      furnish to Lender or her attorney or agent with any and all information or
      writings that Lender or her attorney or agent may reasonably request concerning
      the Collateral;

    


    5.    promptly
      notify Lender and her attorney of any claim, action, or proceeding affecting
      the
      Collateral or any part of the Collateral, and at the request of Lender, appear
      in and defend, at their own expense, the action or proceeding;

    


    6.    notify
      Lender and her attorney immediately if either of them becomes aware of the
      occurrence of any event, fact, or condition that could become an Event of
      Default under this 1/06 SA or under the Credit Facility (or any Note issued
      pursuant to the Credit Facility);

    


    7.    if
      an
      event of default occurs, then NGC and BHG, jointly and severally, shall promptly
      pay to Lender the amount of all court costs, actual attorneys’ fees, and
      expenses of litigation incurred by Lender in enforcing this 1/06 SA and the
      Credit Facility (or any Note or Security Instrument issued pursuant to the
      Credit Facility) and/or of BHG=s
      guaranty;

    


    8.    if
      an
      Event of Default occurs and continues, promptly deliver all proceeds
      constituting part of the Collateral to Lender as and when first received by
      BHG
      or NGC;

    


    9.    without
      the prior written consent of Lender, not agree to the release, termination,
      compromise, amendment, or adjustment of the membership interest of BHG in IC-BH,
      any distribution percentages with respect to its membership interest in IC-BH,
      the Collateral, or the Operating Agreement in any manner that is materially
      adverse to Lender; and

    


    10.    not
      attempt to or actually sell, assign, or transfer the Collateral (other than
      the
      sale of furniture, fixtures, and equipment in the ordinary course of business)
      or the lien created by this 1/06 SA, nor create any other lien or security
      interest in, or otherwise encumber the BHG Interest or the IC-BH Interest or
      any
      of the Collateral, nor permit any of the Collateral to be or become subject
      to
      any financing statement, lien, attachment, execution, sequestration, or other
      legal or equitable process, nor any lien or encumbrance of any kind other than
      as permitted by this 1/06 SA.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    C.    Additional
      Liens.
      All
      references in this Section to ANGC@
      expressly include BHG, and BHG may not grant a second or any other lien on
      any
      of the Collateral without complying with the provisions of this Section. Before
      NGC may place a second or any other lien on any or all of the Collateral in
      favor of anyone other than *, NGC must give Lender, through her counsel (*)
      and
      her financial advisor (*), formal written notice of the name of the proposed
      second or other lienholder (if known) and of the specific terms and conditions
      of the proposed loan transaction for which the second or other lien would be
      granted (including but not limited to the closing date, interest rate, principal
      amount, and maturity date), and Lender shall have seven business days from
      the
      date on which the notice is received by her to notify NGC of her desire to
      make
      the loan herself. NGC agrees to promptly provide Lender, through her counsel
      (*)
      and her financial advisor (*), with any documentation she requests related
      to
      the proposed transaction with the third party in order to assist her in making
      her decision. If Lender does not respond within seven business days, Lender
      shall be presumed to have declined to make the loan herself. NGC shall give
      Lender, through her counsel (*) and her financial advisor (*), informal notice
      of its intent or desire to obtain additional financing and grant a second or
      other lien on the Collateral as far in advance as is practicable, which is
      presumed to be approximately thirty days before the contemplated closing date
      of
      the transaction. NGC is not required to resubmit to Lender any financing
      resulting in a second or other lien if the closing date, interest rate,
      principal amount, and/or maturity date on the final loan transaction are equal
      or less favorable to Lender than the original terms proposed by
      NGC.

    


    In
      the
      event NGC complies with this notice provision and is allowed to grant a second
      or other lien on the Collateral, NGC agrees that it must comply with all of
      the
      following provisions before it may grant an effective second or other lien
      on
      the Collateral:

    


    1.    Any
      second or other lien given on the Collateral must
      be made
      expressly subordinate to Lender=s
      lien.
      NGC shall ensure that the paperwork documenting the transaction with the second
      or other lienholder properly notifies the second and/or other lienholder of
      the
      existence of Lender=s
      first
      lien and that the second and any other lienholder clearly acknowledges
      Lender=s
      existence and status as first lienholder on all of the Collateral and that
      the
      subsequent lienholder=s
      debt
      and security interest is subordinated to Lender.

    


    2.    NGC
      shall
      ensure that the paperwork documenting the transaction with the second and any
      other lienholder clearly instructs the second and any other lienholder that
      it
      may not even attempt to collect or execute on the Collateral without first
      ensuring that the entire first lien balance is paid in full and all loan or
      credit transactions between NGC and Lender are completely terminated and are
      no
      longer in effect. The second and any other lienholder must be required to give
      notice of any default by NGC to NGC and Lender concurrently before the second
      or
      any other lienholder may exercise any collection efforts against the
      Collateral.

    


    3.    NGC
      shall
      defend, at its own expense, against any claims by any lienholders other than
      Lender against the Collateral.

    


    4.    NGC
      shall
      keep Lender=s
      counsel
      informed of the status of any second and any other lien and of any default
      or
      alleged default by NGC on the transaction secured in whole or in part by the
      second and/or other lien, and shall reimburse Lender for any and all
      attorney=s
      fees,
      court costs, and expenses incurred by Lender that Lender or her counsel deemed
      necessary to protect the Collateral within thirty days after the submission
      of
      an invoice for the fees or expenses to NGC by Lender=s
      counsel.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    5.    NGC
      shall
      provide Lender=s
      counsel
      with fully-executed copies of all documents related to any transaction giving
      any third party a second or other lien on any or all of the Collateral within
      three business days of the last signature date on the transaction or the date
      the transaction is funded, whichever is earlier.

    


    6.    NGC
      has
      provided to Lender=s
      counsel
      copies of the fully-executed documents related to the transaction giving *
      a
      second lien and shall require him and his counsel to provide counsel for Lender
      (as set forth below) with copies of any and all notices, including but not
      limited to notice of default, that arise from or relate to any of his agreements
      with NGC that relate in any way to the second lien. NGC warrants and agrees
      that
      is has ensured that * agreement expressly and clearly states that his lien
      on
      the Collateral is subordinate to Lender=s
      lien
      and Security Interest.

    


    D.    Perfection;
      Protection of Collateral; Indemnification.
      NGC
      shall cause the execution of any instrument reasonably necessary to carry out
      the terms of and its Obligations under this 1/06 SA or under the Credit Facility
      and any accompanying or related Promissory Note and/or Security Instrument.
      NGC
      shall cause any entity in which it has the right or power to produce an
      affirmative and effective act to execute guarantees, notes, and security
      instruments as reasonably necessary to carry out this 1/06 SA or the Credit
      Facility and to ensure the broadest and most effective security for Lender
      for
      all funds advanced under this 1/06 SA or under the Credit Facility. NGC shall
      bear the cost of perfection of all Security Interests granted under this 1/06
      SA
      in any applicable or desirous jurisdiction as necessary to protect Lender,
      and,
      in addition, as may be directed by Lender or her attorney in her sole and
      exclusive discretion. NGC shall be the guarantor of the perfection of Security
      Interests under this 1/06 SA and no failure on the part of Lender to perfect
      shall inure to the benefit of NGC or any assignee, holder, or trustee in
      bankruptcy as any failure of this type shall be deemed the fault and to the
      prejudice of NGC and its estate. NGC shall execute any and all documents
      reasonably necessary to carry out the provisions of all of this 1/06 SA, the
      Credit Facility, and/or any Note or Security Instrument executed pursuant to
      the
      Credit Facility. NGC shall pay all costs and all actual attorneys=
      fees
      incurred by Lender in connection with this 1/06 SA or the Credit Facility,
      the
      execution of any documents under it, and the perfection of any Security
      Interests under it within ten days of presentation to it of these charges.
      NGC
      also agrees that it will use its best efforts to protect the Collateral; to
      prevent any loss, theft, substantial damage, destruction, sale, or encumbrance
      to or of any of the Collateral; and to defend against any actual or attempted
      levy, seizure, or attachment of or on any of the Collateral.

    


    In
      the
      event Lender finds it necessary to take action to protect the Collateral against
      the actions of third parties or against any wrongful conduct of NGC, or in
      the
      event that Lender finds any failure by NGC to use its best efforts to protect
      the Collateral, NGC agrees that it shall indemnify Lender for any and all
      attorney=s
      fees,
      court costs, and any and all other expenses incurred in her efforts to protect
      the Collateral. NGC understands and agrees that it shall promptly pay Lender
      for
      any and all of these expenses and shall do so, from time to time, as reasonably
      necessary to fund and maintain the litigation so that Lender shall not be
      required to expend her own funds on this litigation while pending, In no event
      shall these attorney=s
      fees
      and expenses be paid later than thirty days after the date on which they are
      submitted to NGC.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    IV. Effects
      of and Remedies for an Event of Default

    


    A.    Notice
      of Default.
      Lender
      is not required to provide NGC with any notice whatsoever of any Default by
      NGC
      or any failure of NGC to timely make any principal payment when due, save and
      except that Lender must give notice of a late interest payment before that
      late
      payment is deemed a Default as described in the Credit Facility or in any other
      applicable loan document. However, failure by Lender to give notice of any
      late
      interest payment to NGC does not relieve NGC of its obligation to make the
      payment or of the application of the default interest rate upon the failure
      to
      timely make the interest payment as provided in the Credit
      Facility.

    


    B.    Adjustments
      and Distributions.
      If an
      Event of Default has occurred and continues, all payments and distributions
      of
      any nature pertaining to the Collateral shall be delivered to Lender to be
      applied toward payment of the Obligations. If any of the Collateral is converted
      into another type of property or if any money or other proceeds are paid or
      delivered to or for credit to the account of NGC or BHG as a result of either
      of
      their rights in the Collateral, all of that property, money, and other proceeds
      are part of the Collateral. After an Event of Default, NGC and BHG will
      immediately pay and deliver all property, money, and other proceeds of
      Collateral that either of them has or has received to Lender, and NGC and BHG
      shall take all other steps necessary to ensure Lender has control over the
      Collateral. In this event, and if Lender so requests, NGC and BHG will promptly
      endorse or assign all other property and proceeds to Lender and deliver to
      Lender all proceeds that require perfection by possession under the UCC and
      that
      Lender does not already have. If any of this property requires any additional
      security agreement, financing statement, or other writing to create or perfect
      a
      security interest in favor of Lender, NGC and BHG shall promptly execute and
      deliver or cause to be executed and delivered to Lender any document or
      instrument Lender deems is reasonably necessary or proper for those purposes.
      Lender shall not be liable for any error, omission, or delay occurring in the
      settlement, collection, or payment related to the IC-BH Interest or the
      Collateral or of any property or instrument received pursuant to this 1/06
      SA.

    


    C.    Remedies.
      If an
      Event of Default occurs and continues, in addition to any other rights and
      remedies that Lender may have under this 1/06 SA, under the UCC, or otherwise,
      Lender may, to the extent permitted by applicable law and at her discretion,
      and
      without notice to NGC or BHG except as specifically provided, take any one
      or
      more of the following actions without liability except to account for property
      actually received by her, and NGC and BHG agree that it is commercially
      reasonable for Lender, in her sole discretion, to do any of the
      following:

    


    1.    cease
      making any further advances or loans to NGC or any of its related entities
      under
      the Credit Facility or any other instrument, and any obligation of Lender to
      make any further advances or loans to NGC shall terminate;

     

    
      
        HTW_________
          LHR_________ 

      

      
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    2.    receive
      the income, property, and other distributions related to the Collateral and
      hold
      them or apply them to the Obligations in any order selected by
      Lender;

    


    3.    exchange
      any of the Collateral for other property upon a reorganization, dissolution,
      or
      other readjustment and, in connection with the exchange, deposit any of the
      Collateral with any committee or depository upon any terms that Lender may
      determine;

    


    4.    in
      her
      name, or in the name of NGC and/or BHG, demand, sue for, collect, or receive
      any
      money or property at any time payable with respect to any of the Collateral
      and,
      in connection with these efforts, endorse notes, checks, drafts, money orders,
      and other instruments in the name of NGC or BHG, as applicable;

    


    5.    apply
      any
      cash held as Collateral to the Obligations and reduce her claim to judgment
      or
      foreclose or otherwise enforce the Security Interest, in whole or in part,
      by
      any available procedure;

    


    6.    make
      any
      compromise or settlement deemed advisable with respect to any of the
      Collateral;

    


    7.    renew,
      extend, or otherwise change the terms and conditions of any of the Collateral
      or
      the Obligations;

    


    8.    take
      or
      release any other collateral as security for any of the Collateral or the
      Obligations;

    


    9.    add
      or
      release any guarantor, endorser, surety, or other party to any of the Collateral
      or the Obligations;

    


    10.    without
      demanding performance or making any other demand, advertisement, or notice
      of
      any kind (except the notice specified in the Credit Facility for the late
      payment of interest, and the notice specified below of public sale or private
      sale if required under the UCC) to or upon NGC and/or BHG (as applicable),
      or
      upon any other person (all of which are, to the extent permitted by law,
      expressly waived), immediately convert the Collateral or any part of it into
      cash, and sell or otherwise dispose of or, if appropriate, issue entitlement
      orders with respect to, or deliver the Collateral or any part of it or interest
      in it in one or more parcels at public or private sale or sales at Lender’s
      office or elsewhere, at any price and on any terms (including, without
      limitation, a requirement that any purchaser of any of the Collateral purchase
      the Collateral for investment without any intention to make any distribution
      of
      it) that she deems best, for cash or on credit, or for future delivery without
      assumption of any credit risk, with any purchaser to purchase the Collateral
      at
      any sale free from any right of equity of redemption in NGC or BHG (as
      applicable), and this right or equity is expressly waived and released by NGC
      and BHG;

     

    
      
        HTW_________
          LHR_________ 

      

      
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    11.    request
      an
      appropriate court to appoint a receiver for the Collateral, or any part of
      it,
      and NGC and BHG, by their execution of this 1/06 SA, both consent to the
      appointment of a receiver; and

    


    12.    exercise
      any other rights she may have under this 1/06 SA, under the UCC, or
      otherwise.

    


    D.    Notification
      of Sale.
      Reasonable notification of the time and place of any public or private sale
      or
      disposition of the Collateral shall be sent to NGC and/or BHG (as applicable)
      and to any other person or entity entitled under law to notice; provided that
      if
      any of the Collateral threatens to decline speedily in value or is of the type
      customarily sold on a recognized market, Lender may sell, issue entitlement
      orders, or otherwise dispose of the Collateral without notification,
      advertisement, or other notice of any kind. NGC and BHG both agree that notice
      sent or given not less than seven calendar days prior to the taking of the
      action to which the notice relates is reasonable notice for purposes of this
      Section. The sale of any part of the Collateral shall not exhaust Lender’s power
      of disposition of any of the remaining Collateral. Lender is under no duty
      to
      exercise or withhold the exercise of any of the rights, powers, privileges,
      or
      options expressly or implicitly granted to Lender in this 1/06 SA, and Lender
      is
      not responsible for any failure to do so or delay in so doing.

    


    E.    Enforcement
      of Rights.
      NGC and
      BHG agree that it is commercially reasonable for Lender to exercise her rights
      related to the Collateral in any manner and in any order Lender may determine.
      Nothing contained in this 1/06 SA requires Lender to sell all or any part of
      the
      Collateral or to collect, or attempt to collect, any sum payable by reason
      of
      the Collateral before Lender may assert liability and collect the Obligations,
      nor is Lender obligated to attempt to collect the Obligations before selling
      all
      or any part of the Collateral. Lender may, without foreclosing on the
      Collateral, collect and otherwise enforce on the Collateral or any proceeds
      of
      any Collateral all amounts owing under the Credit Facility (and/or under any
      Note or Security Instrument issued pursuant to the Credit Facility) or otherwise
      enforce all of NGC=s,
      BHG’s,
      or Lender’ rights under the Credit Facility or in any of the Collateral and
      apply those collections as provided in this 1/06 SA, or she may foreclose on
      the
      Collateral. Lender may hold funds as additional Collateral or may, at her
      discretion, apply them to the Obligations. Lender may attempt to collect from
      any person liable to NGC and/or BHG to deliver any proceeds related to the
      Collateral, by suit or otherwise, any sums due and to otherwise to enforce
      NGC
      and/or BHG’s rights regarding those proceeds.

    


    F.    Power
      of Attorney.

    


    1.    NGC
      appoints Lender (and her successors and assigns) as NGC’s attorney-in-fact
      (without requiring her to act in that capacity), with full power of
      substitution, to do any act that NGC is obligated to do by this 1/06 SA,
      including but not limited to the power to do the following: (a) endorse the
      name
      of NGC on all checks, drafts, money orders, or other instruments for the payment
      of monies that are payable to NGC and constitute collections of the Collateral;
      (b) execute in the name of NGC any schedules, assignments, instruments,
      documents, financing statements, applications for registration, and other papers
      to perfect, preserve, or enforce the Security Interest; (c) exercise all rights
      of NGC in the Collateral, save and except NGC=s
      voting
      rights, which pass to Lender only
      after an
      Event of Default has occurred and has not been timely cured by NGC; (d) make
      collections and execute all papers and instruments and do all other things
      it
      deems appropriate to preserve and protect the Collateral and to protect Lender’
interest in the Collateral; (e) release any party liable on the Collateral
      and
      to give receipts and acquittances and compromise disputes related to the
      Collateral; (f) release security for any Collateral; (g) make withdrawals from
      deposit accounts and other accounts with any financial institution, wherever
      located, into which proceeds from the Collateral may have been deposited and
      to
      apply those funds to the payment of the Obligations; and (h) do all acts and
      things and execute all documents in the name of NGC or otherwise, that Lender
      reasonably deems are necessary, proper, and convenient in connection with the
      preservation, perfection, and enforcement of her rights under this 1/06 SA.
      Lender is required to execute this Power of Attorney only for purposes proper
      under this 1/06 SA, the Credit Facility, and any Notes executed pursuant to
      this
      1/06 SA for her benefit and she shall owe no other duty as agent when exercising
      these powers.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    2.    BHG
      appoints Lender (and her successors and assigns) as BHG’s attorney-in-fact
      (without requiring her to act in that capacity), with full power of
      substitution, to do any act that BHG is obligated to do by this 1/06 SA,
      including but not limited to the power to do the following: (a) endorse the
      name
      of BHG on all checks, drafts, money orders, or other instruments for the payment
      of monies that are payable to BHG and constitute collections of the Collateral;
      (b) execute in the name of BHG any schedules, assignments, instruments,
      documents, financing statements, applications for registration, and other papers
      to perfect, preserve, or enforce the Security Interest; (c) exercise all rights
      of BHG in the Collateral, save and except BHG=s
      voting
      rights, which pass to Lender only
      after an
      Event of Default has occurred and continues; (d) make collections and execute
      all papers and instruments and do all other things it deems appropriate to
      preserve and protect the Collateral and to protect Lender’ interest in the
      Collateral; (e) release any party liable on the Collateral and to give receipts
      and acquittances and compromise disputes related to the Collateral; (f) release
      security for any Collateral; (g) make withdrawals from deposit accounts and
      other accounts with any financial institution, wherever located, into which
      proceeds from the Collateral may have been deposited and to apply those funds
      to
      the payment of the Obligations; and (h) do all acts and things and execute
      all
      documents in the name of BHG or otherwise, that Lender reasonably deems are
      necessary, proper, and convenient in connection with the preservation,
      perfection, and enforcement of her rights under this 1/06 SA. Lender is required
      to execute this Power of Attorney only for purposes proper under this 1/06
      SA,
      the Credit Facility, and any Notes executed pursuant to this 1/06 SA for her
      benefit and she shall owe no other duty as agent when exercising these
      powers.

    


    All
      persons dealing with Lender shall be fully protected in treating the powers
      and
      authorities conferred by this Section as continuing in full force and effect
      until advised by Lender that all Obligations are finally paid. The powers and
      authority granted pursuant to this 1/06 SA are made for valuable consideration,
      are coupled with an interest, are irrevocable and non-terminable so long as
      any
      part of the Obligations is unpaid, and until NGC and BHG have fully and finally
      complied with all of the Obligations. These Powers of Attorney are durable
      and
      they shall not be affected by any act of NGC or BHG or any other person or
      by
      operation of law, including, without limitation, the dissolution, death,
      disability, or incompetency of any person. Lender agrees she will not exercise
      her powers as attorney-in-fact until an Event of Default.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    V. Default

    


    A.    NGC
      and/or BHG will be in default of this 1/06 SA, the Credit Facility, and of
      each
      and every Note and Security Instrument executed pursuant to the Credit Facility
      if NGC fails in its performance of any duty imposed on it in the Credit
      Facility, or if any of the following happens (ADefault@
      or
AEvent
      of
      Default@):

    


    1.    NGC
      fails
      to timely make any principal payment at maturity;

    


    2.    on
      any
      funds obtained by NGC under the Credit Facility and then loaned by NGC to any
      third party or to any fully or partially-owned subsidiary of NGC (collectively,
      a Athird
      party@),
      if NGC
      is repaid any principal by a third party and NGC fails to repay to Lender the
      corresponding amount of principal it obtained under the Credit Facility within
      five business days of its receipt of the third party principal repayment, then
      NGC shall be in Default;

    


    3.    Lender
      does not receive an interest payment on or before the fifth day after Lender
      gives notice to NGC of the late payment;

    


    4.    NGC
      defaults under any loan, extension of credit, security agreement, purchase
      or
      sales agreement, contractual obligation, or any agreement in favor of any
      creditor or person (as Adefault@
      is
      defined in that instrument and after giving effect to all applicable cure
      periods) and that default results in NGC owing, through default and/or
      acceleration, an amount in excess of $3 million;

    


    5.    NGC
      defaults on its agreement and/or subordinated loan agreement with * dated on
      or
      about June 29, 2004;

    


    6.    NGC
      fails
      to timely comply with the Obligations (other than those Obligations specifically
      identified in this Section);

    


    7.    NGC
      breaches any covenant, representation, or warranty in this 1/06 SA, the Credit
      Facility, or in any other Note or Security Instrument executed pursuant to
      the
      Credit Facility, and NGC does not cure that breach within thirty days after
      the
      breach, and NGC agrees to give Lender prompt notice of the breach;

    


    8.    NGC
      makes
      an assignment for the benefit of creditors, files for bankruptcy protection,
      is
      adjudicated insolvent, a receiver is appointed for any wholly or partially
      owned
      entity in which NGC is a member, partner, shareholder, or equitable holder
      of
      any type, or any involuntary proceeding is commenced against NGC under any
      bankruptcy or insolvency laws and that involuntary proceeding is not dismissed
      within sixty days after it is filed;

     

    
      
        HTW_________
          LHR_________ 

      

      
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    9.    NGC
      grants or attempts to grant to any third party a lien on the Collateral without
      complying with the procedure and provisions in Section II(L) of the Credit
      Facility; and/or

    


    10.    a
      final,
      non-appealable judgment in litigation or arbitration is entered against NGC
      where the total amount of the judgment, including actual damages, pre- and
      post-judgment interest, attorney=s
      fees,
      court costs, and/or punitive damage, exceeds $3 million.

    


    B.    If
      an
      Event or Default occurs, then Lender shall have all of the rights and remedies
      available to her under the law as well as all of those set forth in the Credit
      Facility and in this 1/06 SA.

    


    VI. Miscellaneous
      Provisions

    


    A.    Notices.
      Any
      notice required or permitted by this 1/06 SA shall be effective if given in
      accordance with the provisions set forth in the Credit Facility.

    


    B.    Duties
      of Lender.
      Lender’s
      duty regarding the Collateral at any time prior to full and final payment of
      all
      of the Obligations is solely to use reasonable care in the custody and
      preservation of the Collateral. Lender is deemed to have exercised reasonable
      care in the custody and preservation of the Collateral if the Collateral is
      accorded treatment substantially equal to that which Lender accords her own
      property. Lender has no responsibility for ascertaining or taking action with
      respect to fixing or preserving rights against prior parties to the Collateral,
      calls, conversions, exchanges, maturities, tenders, or other matters relative
      to
      any Collateral or for informing NGC or BHG of these matters regardless of
      whether Lender has or is deemed to have any knowledge of these matters. Lender
      is not required to take any steps necessary to preserve any rights in the
      Collateral against prior parties or to protect, perfect, preserve, or maintain
      any Security Interest given to secure the Collateral. Lender is not liable
      for
      her failure to use due diligence in the collection of the Obligations, or for
      her failure to give notice to NGC or BHG of default in the payment of the
      Obligations, or in the payment of or upon any security, whether pledged under
      this 1/06 SA or otherwise, nor for a decline in the market value of the
      Collateral.

    


    C.    Indemnification.
      NGC and
      BHG both agree to indemnify and to hold Lender harmless, in the absence of
      Lender’s gross negligence or willful misconduct, from and against any loss,
      claim, demand, or expense (including attorneys’ fees) by reason, or in any
      manner related to, the Collateral or the foreclosure, sale, or other disposition
      and subsequent ownership of any part of the Collateral, including but not
      limited to (1) any claim that may arise because of any alleged breach of
      warranty concerning the Collateral; and (2) any claims that any transferee
      of an
      interest in IC-BH has any liability for existing or future obligations of IC-BH
      in excess of the transferee=s
      interest in IC-BH (a) through the terms of the Operating Agreement, (b) through
      the failure of NGC, BHG, or IC-BH to comply with the Operating Agreement, (c)
      through the failure of NGC, BHG, or IC-BH to comply with any state or federal
      statute, rule, regulation, order, or decree, or (d) due to Lender’s efforts to
      enforce payment of the Obligations or the Collateral, including expenses
      incurred in satisfying any applicable securities and banking laws.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    D.    Expenses.
      If an
      Event of Default under this 1/06 SA, the Credit Facility, or any Note or
      Security Instrument issued pursuant to the Credit Facility occurs, NGC and
      BHG,
      jointly and severally, shall promptly pay, upon demand, any and all actual
      attorney=s
      fees
      and out-of-pocket expenses incurred by Lender related to the Event of Default
      to
      the extent permitted by applicable law, but in no event shall these
      attorney=s
      fees
      and expenses be paid later than thirty days after the date on which they are
      submitted to NGC and/or BHG. Additionally, NGC and BHG, jointly and severally,
      shall promptly pay all costs, expenses, taxes, assessments, insurance premiums,
      court costs, actual attorneys’ fees, expenses of litigation, expenses of sales,
      and other similar and related expenses incurred by Lender to enforce her rights
      and remedies under this 1/06 SA, regardless of whether they are incurred before
      or after the occurrence of an Event of Default or incurred in connection with
      the perfection, preservation, or defense of the Security Interest, or the
      custody, protection, collection, repossession, enforcement, or sale of the
      Collateral. All of these expenses shall become part of the Obligations and
      shall
      bear interest at the Default Rate (as defined in the Credit Facility) from
      the
      date paid or incurred by Lender or her attorney until paid by NGC or
      BHG.

    


    E.    Financing
      Statement.
      NGC and
      BHG both authorize Lender to file financing statements (and, if necessary or
      appropriate, sign NGC=s
      and
      BHG’s names, respectively, on financing statements to authenticate them)
      describing the Collateral. Lender shall be entitled, but not required, to file
      financing statements describing the assets as AALL
      ASSETS, including but not limited to the assets listed on the attached
>Schedule
      of Collateral, Notes, Security Interests, and Ownership Interests,=@
      or
      similar language, and to attach a copy of the Schedule to the financing
      statement. A carbon, photographic, or other reproduction of this 1/06 SA or
      a
      financing statement describing the Collateral with the attached Schedule shall
      be sufficient as a financing statement to the full extent permitted by
      applicable law.

    


    F.    Further
      Assurances.
      NGC and
      BHG both agree to execute all other documents and instruments reasonably
      requested by Lender or her attorney to effectuate the intent of this 1/06 SA
      upon written request by Lender or her attorney after the date of this 1/06
      SA.

    


    G.    Amendment
      and Written Waiver.
      No
      waiver, modification, or alteration of any provision of this 1/06 SA, nor
      consent to any departure from the terms of it or from the terms of any other
      document, shall be effective unless it is in writing and signed by NGC, BHG,
      and
      Lender, and any executed waiver shall be effective only for the specific purpose
      and in the specific instance set forth in that document. Any document purporting
      to amend or modify this 1/06 SA shall be of no force or effect unless the
      document expressly states that it is intended to amend or modify the 1/06 SA
      and
      it is signed by all parties to this 1/06 SA. No waiver by Lender of any Event
      of
      Default shall be deemed to be a waiver of any other or subsequent Event of
      Default nor shall the waiver be deemed to be a continuing waiver.

    


    H.    Benefit.
      This
      1/06 SA is binding upon and inures to the benefit of NGC, BHG, and Lender and
      their respective heirs, legal representatives, successors, and assigns, provided
      that neither NGC nor BHG may assign any rights, powers, duties, or obligations
      under this 1/06 SA without the prior written consent of Lender.

    


    I.    Remedies
      Cumulative.
      All
      rights and remedies of Lender under this 1/06 SA are cumulative of each other
      and of every other right or remedy that Lender may otherwise have at law or
      in
      equity or under any other document for the enforcement of the Security Interest
      or the enforcement of any duties of NGC, BHG, or any other party liable in
      respect to the Obligations. The exercise by Lender of one or more rights or
      remedies shall not in any way affect her right to exercise any of her other
      rights or remedies, or to subsequently exercise the same rights or remedies
      in
      the future.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    J.    Course
      of Dealing.
      No
      course of dealing between NGC, BHG, and Lender, nor any failure or delay by
      Lender in exercising any of her rights, powers, or privileges under this 1/06
      SA
      or under the Credit Facility shall operate as a waiver of any of
      Lender=s
      rights,
      powers, or privileges; nor shall any single or partial exercise of any right,
      power, or privilege under this 1/06 SA or the Credit Facility preclude any
      other
      or further exercise of that right, power, or privilege or the exercise of any
      other right, power or privilege.

    


    K.    Severability.
      The
      invalidity of any one or more phrases, sentences, clauses, paragraphs, or
      sections of this 1/06 SA shall not affect the remaining portions of this 1/06
      SA. If any one or more of the phrases, sentences, clauses, paragraphs, or
      sections contained in this 1/06 SA are invalid, or operate to render this 1/06
      SA invalid, then this 1/06 SA shall be construed as if the invalid phrase or
      phrases, sentence or sentences, clause or clauses, paragraph or paragraphs,
      or
      section or sections had not been inserted.

    


    L.    Satisfaction
      of Obligations.
      Upon the
      full and final satisfaction of all of the Obligations, as determined by Lender,
      this 1/06 SA shall terminate, and Lender shall deliver to NGC and to BHG, at
      their expense, the Collateral remaining in her possession that has not been
      sold
      or otherwise applied pursuant to this 1/06 SA, and Lender shall provide any
      other termination statements reasonably required by NGC and/or BHG, also at
      their expense.

    


    M.    Governing
      Law.
      The
      substantive laws of the State of Texas govern the validity, construction,
      enforcement, and interpretation of this 1/06 SA unless the laws of the State
      of
      Texas require the application of the laws of another state. This 1/06 SA is
      performable in Montgomery County, Texas.

    


    N.    Controlling
      Document.
      To the
      extent that this 1/06 SA conflicts with or is in any way incompatible with
      any
      other loan document concerning the Obligations that involves any loan of funds
      by Lender to NGC and/or BHG, this 1/06 SA shall control over any other document,
      and if this 1/06 SA does not address an issue, then each other loan document
      executed by Lender shall control to the extent that it deals most specifically
      with an issue.

    


    O.    Incorporation
      of Other Documents.
      The
      Parties agree that (1) the Amended and Restated Credit Facility dated January
      19, 2006, any Notes or Security Instruments issued pursuant to it; (2) the
      Schedule of Collateral, Notes, Security Interests, and Ownership Interests
      attached to the January 2006 Security Agreement; (3) the multiple Commercial
      Pledge Agreements; (4) the multiple Guarantees; and (5) the multiple Collateral
      Assignments of Notes, Security Interests, and Membership Interests dated January
      19, 2006, are all incorporated by reference in this 1/06 SA for all purposes
      as
      if fully set forth at length, and that these documents are collectively referred
      to as the ACredit
      Facility Documents.@
      The
      Credit Facility Documents are the final integration of the complete agreement
      between the Parties regarding the grant of a Credit Facility by Lender to NGC.
      All prior agreements, representations, negotiations, and offers are merged
      into
      the terms of the Credit Facility Documents, although no preexisting rights
      or
      remedies of Lender, including but not limited to perfection of security
      interests in any Collateral, under the June 29, 2004, Credit Facility and
      Amended and Restated Security Agreement are intended to be extinguished by
      the
      merger of the Credit Facility Documents. The Credit Facility Documents
      completely express the entirety of the agreement between the
      Parties.

     

    
      
        HTW_________
          LHR_________ 

      

      
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    The
      parties have executed this instrument to be effective as of January 19,
      2006.

     

    
      
        	Maker:	 	Guarantor:
	 	 	 	 	 
	Nevada
                Gold & Casinos, Inc.	 	Black
                Hawk Gold, Ltd.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	
                /s/
                  H. Thomas Winn

              	 	By:	
                /s/
                  H. Thomas Winn

              
	 	
                H.
                  Thomas Winn,
                  Chief Executive Officer

              	 	 	
                H.
                  Thomas Winn,
                  President

              
	 	
                3040
                  Post Oak Blvd., Suite 675

              	 	 	
                3040
                  Post Oak Blvd., Suite 675

              
	 	
                Houston,
                  Texas 77056-6588

              	 	 	
                Houston,
                  Texas 77056-6588

              


      

Secured
      Party:

    


    /s/
      Lender

      
        

      

    

    


    
      
        HTW_________
          LHR_________ 

      

      
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    APPENDIX
      I

    TO
      THE JANUARY 2006 SECURITY AGREEMENT

    


    Between
      Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd.,

    and
      Lender, dated January 19, 2006

    


    Definitions

    


    


    The ABHG
      Interest@
      means
      all of NGC’s ownership interest in BHG, which is represented by certificate no.
      1 in the amount of 1,000 shares of common stock in BHG, dated May 15, 1997,
      and
      issued to NGC, and which constitute all of the shares of capital stock issued
      to
      any person or entity by BHG.

    


    AIC-BH@
      means
      Isle of Capri Black Hawk, L.L.C., a Colorado limited liability
      company.

    


    The AIC-BH
      Interest@
      means
      all of BHG’s ownership interest in IC-BH, and all of NGC=s
      ownership interest in BHG, and represented by the following certificates
      representing Units and shares of common stock as follows:

    


    IC-BH
      Certificate No. 8 for 360 Units dated February 16, 1998, issued to
      BHG;

    IC-BH
      Certificate No. 10 for 40 Units dated February 16, 1998, issued to
      BHG;

    IC-BH
      Certificate No. 11 for 30 Units dated August 17, 1998, issued to BHG;
      and

    BHG
      Certificate No. 1 for 1,000 shares of common stock dated May 15, 1997, issued
      to
      NGC.

    


    The
      IC-BH
      Units issued to BHG and described above constitute all of the Units issued
      by
      IC-BH to BHG.

    


    AObligations@ means
      any
      and all of the duties, responsibilities, and obligations of NGC and BHG under
      the Credit Facility, the Collateral Assignment, and this 1/06 SA, and to repay
      all amounts advanced by Lender pursuant to the Credit Facility and this 1/06
      SA,
      and to pay the expenses described in Sections III(C)(4), III(D), and VI(D)
      of
      the 1/06 SA, and the obligations of NGC and/or BHG:

    


    (a) to
      pay
      the principal of, interest on, and any other indebtedness arising from the
      Credit Facility in accordance with its terms, and all valid renewals,
      extensions, modifications, and amendments of the Credit Facility or any part
      of
      it, and any future advances made pursuant to the Credit Facility;

    


    (b) to
      repay
      to Lender all amounts advanced by Lender under the Credit Facility to or on
      behalf of NGC;

    


    (c) to
      comply
      with and to perform fully all of the terms and provisions of this 1/06 SA,
      the
      Collateral Assignment, and the Credit Facility;

     

    (d) to
      reimburse Lender for all of Lender’s actual expenses and costs that NGC and BHG
      are obligated to pay, jointly and severally, pursuant to the terms of this
      1/06
      SA or the Credit Facility, excluding interest and principal payment obligations,
      within the time provided for payment; and

    


    (e) to
      provide to Lender the security and Collateral described in the Collateral
      Assignment, the Credit Facility, and this 1/06 SA.

    


    AOperating
      Agreement@
      means
      the Isle of Capri Black Hawk, L.L.C. Amended and Restated Operating Agreement
      and any and all amendments to it.