EXHIBIT 10.9.4  SECOND AMENDED AND RESTATED
SECURITY AGREEMENT  This SECOND  AMENDED AND RESTATED SECURITY AGREEMENT
(this Agreement) is dated as of
March 5, 2002 and entered into by and between CIRCUS
AND ELDORADO JOINT VENTURE, a Nevada general partnership (Grantor), and BANK OF AMERICA, N.A. (Administrative Agent) as agent for
and representative of (in such capacity herein called Secured Party) the financial institutions
(Lenders) party to the Credit
Agreement (as hereinafter defined) (Secured
Party).  PRELIMINARY
STATEMENTS  A.            Grantor, the lenders
named therein, Administrative Agent (under its former name, Bank of America
National Trust and Savings Association), and the co-agents and managing agents
therein named have previously entered into an Amended and Restated Credit
Agreement dated as of November 24, 1997 (the Existing Credit Agreement).  B.            Grantor, the lenders
named therein and Administrative Agent, have entered into a Second Amended and
Restated Credit Agreement dated as of even date herewith (said Second Amended
and Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the Credit Agreement) to amend
and restate the Existing Credit Agreement as set forth therein.  C.            This Agreement
amends and restates the Amended and Restated Security Agreement referred to in
the Existing Credit Agreement in its entirety (the Existing Agreement).  D.            It is a condition
precedent to extensions of credit by Lenders under the Credit Agreement that
Grantor shall have executed this Agreement to so amend and restate such
Existing Agreement, and that Grantor shall have granted the security interests
and undertaken the obligations contemplated by this Agreement.  NOW, THEREFORE, in consideration of the
premises and in order to induce Lenders to make Loans and other extensions of
credit under the Credit Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby amends and restates the Existing Agreement  
   executed in connection with the Existing Credit Agreement, and agrees
with Secured Party as follows:  SECTION 1. Grant of Security.Grantor hereby grants to Secured Party a
security interest in all of Grantors right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the Collateral):  (a)           all present and
future chattels, furniture, furnishings, goods, equipment, fixtures and all
other tangible personal property, of whatever kind and nature, including,
without limitation, any building or structure that is now or that may hereafter
be erected on the Premises, and including any of the foregoing owned by Grantor
and placed or located in the Skyways, further including, but not limited to,
machinery, materials, goods and equipment now or hereafter used in the
construction or operation of the Hotel (including, without limitation, air conditioning,
heating, electrical, lighting, fire fighting and fire prevention, food and
beverage service, laundry, plumbing, refrigeration, security, sound, signaling,
telephone, television, window washing and other equipment and fixtures, of
whatever kind or nature, including generators, transformers, switching gear,
boilers, burners, furnaces, piping, sprinklers, sinks, tubs, valves,
compressors, motors, carts, dumb waiters, elevators and other lifts, floor
coverings, hardware, keys, locks, organs, pianos, planters, railings, scales,
shelving, signs, tools, machinery, molds, dies, drills, presses, planers, saws,
furniture, business fixtures, trade fixtures, electric, gas and other motor
vehicles, uniforms, vacuum cleaners, hotel furniture, furnishings and equipment,
bathroom furniture and furnishings (including towels, bathmats, hamperettes,
shower curtains and other bath linens), beds and bedding (including mattresses,
springs, pillows, bed pads, sheets, blankets, comforters, spreads and other bed
linens and furnishings), bricabrac, chairs, chests, vanities,
secretaries, bureaus, chiffonniers, love seats, benches, costumers, smoking
stands, sand jars, desks, dressers, hangings, paintings, pictures, frames,
sculptures, lamps, light bulbs, mirrors, night stands, ornaments, radios,
stereo equipment, sofas, statuary, tables, telephones, televisions, vases,
window coverings, foodstuffs, beverages (including beer, wine, liquor and other
alcoholic beverages), and other consumables (including soap, shampoo, cleaning
supplies and paper goods), cutlery, cooking, baking and other kitchen utensils
and apparatus (including crockery, fryers, grills, kettles, mixers, pots, pans,
pails, racks, steamers and toasters), china and other dishes, flatware,
glassware, hollowware, serving pieces, trays, table linens, washers, dryers,
irons, ironing boards and other ironing equipment, cables, outlets, plugs,
wiring and related apparatus and fixtures, card readers, cash registers, adding
machines, calculators, computers, keyboards, monitors, printers, printing
equipment, envelopes, stationary, posting machines, blank forms, typewriters,  2 
   typewriter stands, other office and accounting equipment and supplies,
time stamps, time recorders, bookkeeping machines, checking machines, payroll
machines, computer reservations systems, equipment used in the operation of
casinos on the Premises (including but not limited to, gaming devices and
associated equipment (as defined in Nevada Revised Statutes Chapter 463),
including but not limited to, slot machines, cards, poker chips and gaming
tables) and all other goods, equipment, furnishings, apparatus and fixtures
that are now or may hereafter be located at or used at or in connection with
the Premises and all other tangible personal property used or to be used at or
in connection with, or placed or to be placed in, rooms, halls, lounges,
offices, lobbies, lavatories, basements, cellars, vaults or other portions of
the Hotel or of any other building or buildings hereafter constructed or
erected thereon, whether herein enumerated or not, and whether or not contained
in any such building, and which are used or to be used or useful in the
operation and maintenance thereof, or in any bar, casino, hotel, restaurant,
store, health spa, salon or other business conducted thereon, together with all
replacements and substitutions for any and all personal property in which
Grantor has an interest, including without limitation such goods and equipment
as shall from time to time be located, placed, installed or used in or upon, or
procured for use, or to be used or useful in connection with the operation of
the whole, or any part of, the Hotel and all parts thereof and all accessions
thereto (any and all such equipment, replacements, substitutions, parts and
accessions being the Equipment);  (b)           all present and
future inventory and merchandise in all of its forms including, but not limited
to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing
or production of such inventory or otherwise used or consumed in Grantors
business, (iii) all goods in which Grantor has an interest in mass or a
joint or other interest or right of any kind, (iv) all goods that are
returned to or repossessed by Grantor, and (v) all packing materials,
supplies and containers relating to or used in connection with any of the
foregoing, and all accessions thereto and products thereof (all such inventory,
accessions and products being the Inventory)
and all negotiable documents of title: 
(including without limitation warehouse receipts, dock receipts and
bills of lading) issued by any person covering any of the foregoing (any such
negotiable document of title being a Negotiable
Document of Title);  (c)           all present and
future accounts, accounts receivable, rentals, revenues, receipts, payments,
and income of any nature whatsoever, including, without limitation, those
derived from or received with respect to hotel rooms, banquet  3 
   facilities, convention facilities, retail premises, bars, restaurants,
casinos and any other facilities on the Premises and any facilities in the
Skyways leased by Grantor, agreements, contracts, leases, contract rights,
payment intangibles, rights to payment, instruments, documents, chattel paper
(whether tangible or electronic), security agreements, guaranties,
undertakings, surety bonds, insurance policies, condemnation deposits and
awards, notes and drafts, securities, certificates of deposit and the right to
receive all payments thereon or in respect thereof (whether principal,
interest, fees or otherwise), contract rights (other than rights under
contracts or governmental permits that may not be transferred by law),
including, without limitation, rights to all deposits from tenants and other
users of the Hotel or facilities in the Skyways leased by Grantor, rights under
all contracts relating to the construction, renovation or restoration of any of
the improvements now or hereafter located on the Premises or the financing
thereof and all rights under payment or performance bonds, warranties, and
guaranties, and all rights to payment from any credit/charge card organization
or entity such as or similar to, and including, without limitation, the
organizations or entities that sponsor and administer, respectively, the
American Express Card, the Carte Blanche Card, the Diners Club Card, the
Discover Card, the MasterCard and the Visa Card, books of account, and
principal, interest and payments due on account of goods sold, services
rendered, loans made or credit extended, on or in connection with the Hotel and
all forms of obligations owing to and rights of Grantor or in which Grantor may
have any interest, however created or arising (any and all such accounts,
contract rights, payment intangibles, chattel paper, documents, instruments,
general intangibles and other obligations being the Accounts, and any and all such security agreements, leases
and other contracts being the Related
Contracts);  (d)           the agreements
listed in Schedule I annexed hereto, as each such agreement may be
amended, supplemented or otherwise modified from time to time (said agreements,
as so amended, supplemented or otherwise modified, being referred to herein
individually as an Assigned Agreement
and collectively as the Assigned Agreements),
including without limitation (i) all rights of Grantor to receive moneys
due or to become due under or pursuant to the Assigned Agreements,
(ii) all rights of Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements,
(iii) all claims of Grantor for damages arising out of any breach of or
default under the Assigned Agreements, and (iv) all rights of Grantor to
terminate, amend, supplement, modify or exercise rights or options under the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder;  (e)           all present and
future right, title and interest of Grantor in and to all leases, subleases,
licenses, concessions, franchises and other use or occupancy  4 
   agreements (collectively, Leases)
(except, however, agreements made by Grantor in the ordinary course of business
for short-term use by members of the public of guest rooms and public rooms,
including banquet and meeting facilities, located in the Improvements), and any
amendments, modifications, extensions or renewals thereof, whether or not
specifically herein described, and all amendments to the same, including, but
not limited to, the following: 
(i) all payments due and to become due under such Leases, whether
as rent, damages, insurance payments, condemnation awards, or otherwise;
(ii) all claims, rights, powers, privileges and remedies under such
Leases; and (iii) all rights of the Grantor under such Leases to exercise
any election or option, or to give or receive any notice, consent, waiver or
approval, or to accept any surrender of the premises or any part thereof,
together with full power and authority in the name of the Grantor, or
otherwise, to demand and receive, enforce, collect, and receipt for any or all
of the foregoing, to endorse or execute any checks or any instruments or
orders, to file any claims, and to take any other action that Secured Party may
deem necessary or advisable in connection therewith;  (f)            all present and
future deposit accounts of Grantor, including, without limitation, the Circus
and Eldorado Joint Venture Account maintained at the office of Secured Party,
any demand, time, savings, passbook or like account maintained by Grantor with
any bank, savings and loan association, credit union or like organization. and
all money, cash and cash equivalents of Grantor, whether or not deposited in
any such deposit account;  (g)           all shares of, and
all securities convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct Subsidiary of
Grantor (the Pledged Shares),
the certificates or other instruments representing such shares, securities,
warrants, options or other rights and any interest of Grantor in the entries on
the books of any financial intermediary pertaining to such shares, and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, securities, warrants, options or
other rights;  (h)           all indebtedness from
time to time owed to Grantor by any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, an Affiliate or a direct or
indirect Subsidiary of Grantor, and all interest, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such indebtedness
(the Pledged Debt);  5 
   (i)            all present and
future general intangibles (including but not limited to all governmental
permits relating to construction or other activities on the premises), all tax
refunds of every kind and nature to which Grantor now or hereafter may become
entitled, however arising, all other refunds, and all deposits, goodwill,
chooses in action, rights to payment or performance, gambling debts or gaining
debts owed to Grantor by Grantors patrons (whether or not evidenced by a
note), judgments taken on any rights or claims included in the Collateral,
trade secrets, computer programs, software, customer lists, business names,
trademarks, trade names and service marks (including, but not limited to:
Silver Legacy Hotel Casino and any derivation thereof, including any and all
state and federal applications and registrations thereof), patents, patent
applications, licenses, copyrights, technology, processes, proprietary
information and insurance proceeds;  (j)            all present and
future books and records, including, without limitation, books of account and
ledgers of every kind and nature, ledger cards, computer programs, tapes, disks
and other information storage devices, all related data processing software,
and all electronically recorded data relating to Grantor or its business or the
Hotel, all receptacles and containers for such records, and all files and
correspondence;  (k)           all present and
future maps, plans, specifications, surveys, studies, reports, data and
drawings (including, without limitation architectural, structural, mechanical
and engineering plans and specifications, studies, data and drawings) prepared
for or relating to the development of the Hotel or the construction, renovation
or restoration of any improvements on the Premises and the Skyways or the
extraction of minerals, sand, gravel or other valuable substances from the
Premises, together with all amendments and modifications thereto;  (l)            all present and
future licenses, permits, variances, special permits, franchises, certificates,
rulings, certifications, validations, exemptions, filings, registrations,
authorizations, consents, approvals, waivers, orders, rights and agreements
(including options, option rights and contract rights), other than those
(including non-transferrable gaming permits) that may not be transferred by
law, now or hereafter obtained by Grantor from any governmental authority
having or claiming jurisdiction over the Hotel, the Premises or the Skyways or
any other element of the Collateral or providing access thereto, or the
operation of any business on, at, or from the Hotel or the Skyways;  6 
   (m)          all present and
future goods, including, without limitation, all consumer goods, inventory,
equipment, and other supplies, of whatever kind or nature, and any and all
other goods, wherever located, used or to be used in connection with or in the
conduct of Grantors business;  (n)           all present and
future investment property, stocks, bonds, debentures, securities, subscription
rights, options, warrants, puts, calls, certificates, partnership interests,
joint venture interests, investments, brokerage accounts and all rights,
preferences, privileges, dividends, distributions, redemption payments and
liquidation payments received or receivable with respect thereto;  (o)           all present and
future accessions, appurtenances, components, repairs, repair parts, spare
parts, replacements, substitutions, additions, issue and improvements to or of
or with respect to any of the foregoing;  (p)           all other fixtures
and storage and office facilities, and all accessions thereto and products
thereof and all water stock relating to the Premises;  (q)           all other tangible
and intangible personal property of Grantor;  (r)            all rights,
remedies, powers and privileges of Grantor with respect to any of the
foregoing; and  (s)           any and all
proceeds, products, rents, income and profits of any of the foregoing,
including, without limitation, all money, accounts, payment intangibles,
general intangibles, deposit accounts, documents, instruments, chattel paper,
investment property, letter of credit rights, goods, insurance proceeds
(whether or not the Secured Party is the loss payee), and any other tangible or
intangible property received upon the sale or disposition of any of the
foregoing (it being agreed, for purposes hereof, that the term proceeds includes whatever is receivable
or received when any of the Collateral is sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary).  Notwithstanding anything to the contrary contained herein, Secured
Party acknowledges that it has no security interest in (i) any Equipment
pledged to secure Indebtedness permitted to be incurred under Section 7.1(iii)
of the Credit Agreement, (ii) any cash of Grantor described in clauses
(f), (i) and (n) above, to the extent such a security interest is prohibited by
any Gaming Laws or (iii) in any deposit account described in clause (f)
above to the extent such a security interest is prohibited by applicable law.  7 
   SECTION 2.  Security
for Obligations. This Agreement secures, and the Collateral is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)), of all obligations and liabilities of
every nature of Grantor now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and all
extensions or renewals thereof, including, without limitation, any obligation
incurred by Grantor with respect to the execution of any Assigned Agreement
executed as provided hereunder and of each and every obligation of Grantor with
respect to interest rate swap agreements, interest rate swaps, caps and/or
collar agreements entered into with any Lender which is a party to the Credit
Agreement (each such agreement being referred to herein as an Interest Rate
Agreement), each covenant, promise and agreement contained in any Interest
Rate Agreement, and the costs and expenses of enforcement against Grantor of
any Interest Rate Agreements, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Grantor, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the Underlying
Debt), and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor,
together with the Underlying Debt, being the Secured
Obligations).  SECTION 3.  Grantor
Remains Liable.  Anything
contained herein to the contrary notwithstanding, (a) Grantor shall remain
liable under any contracts and agreements included in the Collateral, to the
extent set forth therein, to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by Secured Party of any of its rights hereunder shall not
release Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (c) Secured Party shall not
have any obligation or liability under any contracts and agreements included in
the Collateral by reason of this Agreement or otherwise, nor shall Secured
Party be obligated to perform any of the  8 
   obligations or duties of Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.  SECTION 4.  Representations
and Warranties.  Grantor represents
and warrants as follows:  (a)           Ownership of
Collateral.  Except for the security
interest created by this Agreement and any Liens permitted pursuant to the
Credit Agreement, Grantor owns the Collateral free and clear of any Lien.  Except such as may have been filed in favor
of Secured Party relating to this Agreement, no effective financing statement
or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office.  (b)           Location of
Equipment and Inventory.  All of the
Equipment and Inventory is, as of the date hereof, located at the places
specified in Schedule II annexed hereto.  (c)           Office
Locations:  Other Names.  The chief place of business, the chief
executive office and the office where Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts is, and
has been for the four month period preceding the date hereof, located at
430 North Virginia Street, Reno, Nevada. 
Grantor has not in the past done, and does not now do, business under
any other name (including any trade-name or fictitious business name) except
Silver Legacy Hotel & Casino.  (d)           Governmental
Authorizations.  No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by
Grantor of the security interest granted hereby, (ii) the execution,
delivery or performance of this Agreement by Grantor, or (iii) the perfection
of or the exercise by Secured Party of its rights and remedies hereunder
(except (i) authorization from any Gaming Boards for the exercise by
Secured Party of certain of its rights and remedies hereunder; (ii) the
filing of Uniform Commercial Code financing statements with the office of the
Secretary of State of the State of Nevada and (iii) as has been previously
taken by or at the direction of Grantor).  (e)           Perfection.  This Agreement, together with the filing of
a UCC-1 financing statement describing the Collateral with the Secretary of
State of Nevada and the Deed of Trust with the Washoe County Recorder which
have been made, create a valid, perfected, enforceable and first priority
security interest in the Collateral, to the fullest extent that such security
interest may be perfected by the filing of such financing statement under the
Uniform Commercial Code in effect in the State of  9 
   Nevada, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect such
security interest have been duly made or taken provided  that it
is acknowledged that continuation statements must be filed in a timely manner
in order to continue the perfection of such security interest and additional
filings may have to be made in the event Grantor changes its name, principal
place of business, chief executive officer or form of organization.  (f)            Other
Information.  All information
heretofore, herein or hereafter supplied to Secured Party by or on behalf of
Grantor with respect to the Collateral is accurate and complete in all material
respects.  SECTION 5.  Further
Assurances.  (a)           Grantor agrees that
from time to time, at the expense of Grantor, Grantor will promptly execute and
deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that Secured Party reasonably may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.  Without limiting the generality of the
foregoing, Grantor will: (i) at the request of Secured Party mark
conspicuously each item of chattel paper included in the Accounts, each Related
Contract and, at the request of Secured Party, each of its records pertaining
to the Collateral, with a legend, in form and substance satisfactory to Secured
Party, indicating that such Collateral is subject to the security interest
granted hereby, (ii) at the request of Secured Party, deliver and pledge
to Secured Party hereunder all promissory notes and other instruments
(including checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured
Party, (iii) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may request, in order to perfect
and preserve the security interests granted or purported to be granted hereby,
(iv) at any reasonable time, upon request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (v) at Secured Partys request,
appear in and defend any action or proceeding that may affect Grantors title
to or Secured Partys security interest in all or any significant part of the
Collateral.  (b)           Grantor hereby
authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of Grantor. 
Grantor agrees that a carbon,  10 
   photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and
may be filed as a financing statement in any and all jurisdictions.  (c)           Grantor will furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail.  (d)           Grantor agrees,
after the occurrence and during the continuation of an Event of Default, in the
event that Secured Party shall apply for or appoint an agent to apply for a
gaming or liquor license with any Gaming Board or any Governmental Authority or
seek to obtain consent from any Gaming Board to foreclose on the Collateral
(including all gaming permits) and operate the Premises or otherwise seek to
enforce its rights hereunder, Grantor shall provide such cooperation as is
necessary in order for Secured Party to obtain the full benefits of this
Agreement.  Without limiting the
generality of the foregoing, if any Gaming Board or any Governmental Authority
shall require any amendments to the Collateral Documents or require Grantor to
execute such other documents as a condition to or as a part of such approval
process, Grantor shall consent to such amendments and/or execute such documents
promptly.  SECTION 6.  Certain
Covenants of Grantor. 
Grantor shall:  (a)           not use or permit
any Collateral to be used unlawfully or in violation of any provision of this
Agreement or any applicable statute, regulation or ordinance or any policy of
insurance covering the Collateral;  (b)           notify Secured Party
of any change in Grantors name, identity or general partnership structure
within 15 days of such change;  (c)           give Secured Party
30 days prior written notice of any change in Grantors chief place of
business, chief executive office or residence or the office where Grantor keeps
its records regarding the Accounts and all originals of all chattel paper that
evidence Accounts;  (d)           if Secured Party
gives value to enable Grantor to acquire rights in or the use of any
Collateral, use such value for such purposes; and  (e)           pay promptly when
due all property and other taxes, assessments and governmental charges or
levies imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Collateral, except to the extent the validity  11 
   thereof
is being contested in good faith and for which adequate reserves have been
established; provided that Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior to the
date of any proposed sale under any judgement, writ or warrant of attachment
entered or filed against Grantor or any of the Collateral as a result of the
failure to make such payment.  SECTION 7.  Special
Covenants With Respect to Equipment and Inventory.  Grantor shall:  (a)           keep the Equipment
and Inventory at the places therefor specified on Schedule II
annexed hereto or, upon 30 days prior written notice to Secured Party, at
such other places in jurisdictions where all action that may be necessary or
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment and Inventory shall have been taken;  (b)           cause the Equipment
to be maintained and preserved in the same condition, repair and working order
as when new, ordinary wear and tear excepted, and shall forthwith, or, in the
case of any loss or damage to any of the Equipment when subsection (c) of
Section 8 is not applicable, as quickly as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable to
such end.  Grantor shall promptly
furnish to Secured Party a statement respecting any material loss or damage to
any of the Equipment (the requirements under this subsection 7(b) being
supplemental to and not exclusive of the requirements under Section 6.4 of
the Credit Agreement relating to maintenance of property);  (c)           provide prompt
written notice to Secured Party of any material breach or default by any party
to any Assigned Agreement;  (d)           notify Secured Party
of the establishment after the date hereof of any deposit accounts in which
Secured Party may take a security interest pursuant to applicable law and take
such steps as may be requested by Secured Party to perfect Secured Partys lien
therein;  (e)           perform all acts that
are necessary or desirable to cause all licenses, permits, variances, special
permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights, and agreements in which a security interest has been  12 
   conveyed to Secured Party pursuant to subsection 1(h) to remain in full
force and effect;  (f)            keep correct and
accurate records of the Inventory, itemizing and describing the kind, type and
quantity of Inventory, Grantors cost therefor and (where applicable) the
current list prices for the Inventory substantially consistent with the
practice of other gaming institutions in connection with their gaming operations
in the State of Nevada;  (g)           upon the occurrence
of an Event of Default, if any Inventory is in possession or control of any of
Grantors agents or processors, instruct such agent or processor to hold all
such Inventory for the account of Secured Party and subject to the instructions
of Secured Party; and  (h)           promptly upon the
issuance and delivery to Grantor of any Negotiable Document of Title, deliver
such Negotiable Document of Title to Secured Party.  SECTION 8.  Insurance.  (a)           Grantor shall, at
its own expense, maintain insurance with respect to the Equipment and Inventory
in accordance with the terms of the Credit Agreement, this Section 8 and
the Deed of Trust.  Such insurance shall
include, without limitation, property damage insurance and liability
insurance.  Each policy for property
damage insurance shall provide for all losses to be paid directly to Secured
Party as provided in clause (c)(ii) below.  Each policy shall in addition name Grantor and Secured Party as
insured parties thereunder (without any representation or warranty by or
obligation upon Secured Party) as their interests may appear and have attached
thereto a loss payable clause acceptable to Secured Party that shall
(i) contain an agreement by the insurer that any loss thereunder shall be
payable to Secured Party notwithstanding any action, inaction or breach of
representation or warranty by Grantor, (ii) provide that there shall be no
recourse against Secured Party for payment of premiums or other amounts with
respect thereto, and (iii) provide that at least 30 days prior written
notice of cancellation, material amendment, reduction in scope or limits of
coverage or of lapse shall be given to Secured Party by the insurer.  Grantor shall, if so requested by Secured
Party, deliver to Secured Party original or duplicate policies of such
insurance and, as often as Secured Party may reasonably request, a report of a
reputable insurance broker with respect to such insurance.  Further, Grantor shall, at the request of
Secured Party, duly execute and deliver instruments of assignment of such
insurance policies to comply with the requirements of subsection 5(a) and cause
the respective  13 
   insurers to acknowledge notice of such assignment.  The requirements under this
subsection 8(a) shall be supplemental to and not exclusive of the
requirements under Section 6.4 of the Credit Agreement relating to
insurance.  (b)           Reimbursement under
any liability insurance maintained by Grantor pursuant to this Section 8 may be
paid directly to the Person who shall have incurred liability covered by such
insurance.  In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section 8
is not applicable, Grantor shall make or cause to be made the necessary repairs
to or replacements of such Equipment or Inventory, and any proceeds of
insurance maintained by Grantor pursuant to this Section 8 shall be paid to
Grantor as reimbursement for the costs of such repairs or replacements.  (c)           Upon (i) the
occurrence and during the continuation of any Event of Default or (ii) the
actual or constructive loss (in excess of $1,000,000 per occurrence) of any
Equipment or Inventory, all insurance payments in respect of such Equipment or
Inventory shall be paid to and applied by Secured Party as specified in
Section 19.  SECTION 9.  Special
Covenants With Respect to Accounts and Related Contracts.  (a)           Grantor shall keep
its chief place of business and chief executive office and the office where it
keeps its records concerning the Accounts and Related Contracts, and all
originals of all chattel paper that evidence Accounts, at the location therefor
specified in Section 4 or, upon 30 days prior written notice to
Secured Party, at such other location in a jurisdiction where all action that
may be necessary or desirable, or that Secured Party may request, in order to
perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken.  Grantor will hold and
preserve such records and chattel paper and will permit representatives of Secured
Party at any time during normal business hours to inspect and make abstracts
from such records and chattel paper, and Grantor agrees to render to Secured
Party, at Grantors cost and expense, such clerical and other assistance as may
be reasonably requested with regard thereto. 
Promptly upon the request of Secured Party, Grantor shall deliver to
Secured Party complete and correct copies of each Related Contract.  (b)           Grantor shall, for
not less than 5 years from the date on which such Account arose, maintain
(i) complete records of each Account, including records  14 
   of all payments received, credits granted and merchandise returned, and
(ii) all documentation relating thereto.  (c)           Except as otherwise
provided in this subsection (c), Grantor shall continue to collect, at its own
expense, all amounts due or to become due to Grantor under the Accounts (but,
other than with respect to security deposits, in no event more than one month
in advance) and Related Contracts.  In
connection with such collections, Grantor may take (and, at Secured Partys
direction, shall take) such action as Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the
right at any time, upon the occurrence and during the continuation of an Event
of Default and upon written notice to Grantor of its intention to do so, to
notify the account debtors or obligors under any Accounts of the assignment of
such Accounts to Secured Party and to direct such account debtors or obligors
to make payment of all amounts due or to become due to Grantor thereunder
directly to Secured Party, to notify each Person maintaining a lockbox or
similar arrangement to which account debtors or obligors under any Accounts
have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Secured Party and,
upon such notification and at the expense of Grantor, to enforce collection of
any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as Grantor might have done.  After receipt by Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including checks and other instruments)
received by Grantor in respect of the Accounts and the Related Contracts shall
be received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section
19, and (ii) Grantor shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon (other than
settlements in the ordinary course of business and substantially consistent
with the practice at other gaming institutions in connection with their gaming
operations in the State of Nevada with payors of such Accounts reached to
facilitate collection from such payors of such Accounts).  15 
   SECTION 10.  Special
Provisions With Respect to the Assigned Agreements.  (a)           Grantor shall at its
expense:  (i)            perform and observe
all terms and provisions of the Assigned Agreements, as permitted to be amended
or otherwise modified pursuant to clause (b)(ii) below, to be performed or
observed by it, maintain the Assigned Agreements in full force and effect,
enforce the Assigned Agreements in accordance with their terms, and take all
such action to such end as may be from time to time requested by Secured Party
except to the extent failure to take any such action, either individually or in
aggregate, would not result in a Material Adverse Effect; and  (ii)           furnish to Secured
Party, promptly upon receipt thereof, copies of all notices of default received
by Grantor under or pursuant to the Assigned Agreements, and from time to time
(A) furnish to Secured Party such information and reports regarding the
Assigned Agreements as Secured Party may reasonably request and (B) upon
request of Secured Party make to the appropriate counterparty to an Assigned
Agreement such demands and requests for information and reports or for action
as Grantor is entitled to make under the Assigned Agreements.  (b)           Grantor shall not:  (i)            cancel or terminate
any of the Assigned Agreements or consent to or accept any cancellation or
termination thereof in any case with respect to the General Contractors
Contract and, with respect to the other Assigned Agreements, if such
cancellation or termination, together with all other such cancellations or
terminations, could reasonably be expected to result in a Material Adverse
Effect;  (ii)           amend or otherwise
modify the Assigned Agreements or give any consent, waiver or approval
thereunder if the effect of such amendment or modification, together with all
other amendments, modifications, consents, waivers or approvals made or
consents, waivers or approvals given, is to increase materially the obligations
of Partnership thereunder or to confer any additional rights on the
counterparties to such Assigned Agreements which could reasonably be expected
to be materially adverse to Partnership or Lenders;  (iii)          waive any default
under or breach of the Assigned Agreements if such waiver, together with all
other such waivers could reasonably be expected to result in a Material Adverse
Effect;  (iv)          consent to or permit
or accept any prepayment of amounts to become due under or in connection with
the Assigned Agreements, except as expressly provided therein; or  16 
   (v)           take any other
action in connection with the Assigned Agreements that would impair the value
of the interest or rights of Grantor thereunder or that would impair the
interest or rights of Secured Party in any case with respect to the General
Contractors Contract and, with respect to the other Assigned Agreements if
such impairment could reasonably be expected, to result in a Material Adverse
Effect.  SECTION 11.  Voting
Rights; Dividends; Etc.  (a)           So long as no Event
of Default shall have occurred and be continuing:  (i)            Grantor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Shares or Pledged Debt or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided, however, that
Grantor shall not exercise or refrain from exercising any such right if Secured
Party shall have notified Grantor that, in Secured Partys judgment, such
action would have a material adverse effect on the value of the Pledged Shares
or Pledged Debt or any part thereof; and provided, further, that Grantor
shall give Secured Party at least five Business Days prior written notice of
the manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right.  It is
understood, however, that neither (A) the voting by Grantor of any Pledged
Shares for or Grantors consent to the election of directors at a regularly
scheduled annual or other meeting of stockholders or with respect to incidental
matters at any such meeting nor (B) Grantors consent to or approval of
any action otherwise permitted under this Agreement shall be deemed
inconsistent with the terms of this Agreement within the meaning of this
subsection 11(a)(i), and no notice of any such voting or consent need be
given to Secured Party.  (ii)           Grantor shall be
entitled to receive and retain and to utilize free and clear of the lien of
this Agreement, any and all dividends and interest paid in respect of the
Pledged Shares or Pledged Debt; provided, however, that any and all (A)          dividends and
interest paid or payable other than in cash in respect of, and instruments and
other property received, receivable or otherwise distributed in respect of, or
in exchange for, any Pledged Shares or Pledged Debt,  (B)           dividends and other
distributions paid or payable in cash in respect of any Pledged Shares or
Pledged Debt in connection with a  17 
   partial or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus, and  (C)           cash paid, payable
or otherwise distributed in respect of principal or in redemption of or in
exchange for any Pledged Shares or Pledged Debt,  shall be, and shall forthwith be delivered to Secured Party to hold as,
Collateral and shall, if received by Grantor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of
Grantor and be forthwith delivered to Secured Party as Pledged Shares or
Pledged Debt, as the case may be, in the same form as so received (with all
necessary endorsements).  (iii)          Secured Party shall
promptly execute and deliver (or cause to be executed and delivered) to Grantor
all such proxies, dividend payment orders and other instruments as Grantor may
from time to time reasonably request for the purpose of enabling Grantor to
exercise the voting and other consensual rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends, principal or
interest payments which it is authorized to receive and retain pursuant to
paragraph (ii) above.  (b)           Upon the occurrence
and during the continuation of an Event of Default:  (i)            Upon written notice
from Secured Party to Grantor, all rights of Grantor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to subsection 11(a)(i) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right to
exercise such voting and other consensual rights.  (ii)           All rights of
Grantor to receive the dividends and interest payments which it would otherwise
be authorized to receive and retain pursuant to subsection 11(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in
Secured Party who shall thereupon have the sole right to receive and hold as
Collateral such dividends and interest payments.  (iii)          All dividends,
principal and interest payments which are received by Grantor contrary to the
provisions of paragraph (ii) of this subsection 11(b) shall be
received in trust for the benefit of Secured Party, shall be segregated from
other funds of Grantor and shall forthwith be paid over to Secured Party as
Collateral in the same form as so received (with any necessary endorsements).  18 
   (c)           In order to permit
Secured Party to exercise the voting and other consensual rights which it may
be entitled to exercise pursuant to subsection 11(b)(i) and to receive all
dividends and other distributions which it may be entitled to receive under
subsection 11(a)(ii) or subsection 11(b)(ii), (i) Grantor shall
promptly execute and deliver (or cause to be executed and delivered) to Secured
Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request and (ii) without
limiting the effect of the immediately preceding clause (i), Grantor
hereby grants to Secured Party an irrevocable proxy to vote the Pledged Shares
and to exercise all other rights, powers, privileges and remedies to which a
holder of the Pledged Shares would be entitled (including, without limitation,
giving or withholding written consents of shareholders, calling special
meetings of shareholders and voting at such meetings), which proxy shall be
effective, automatically and without the necessity of any action (including any
transfer of any Pledged Shares on the record books of the issuer thereof) by
any other Person (including the issuer of the Pledged Shares or any officer or
agent thereof), upon the occurrence and during the continuance of an Event of
Default and which proxy shall only terminate upon the payment in full of the
Secured Obligations.  SECTION 12.  Deposit
Accounts.  Upon the
occurrence and during the continuation of an Event of Default, Secured Party
and each Lender may exercise dominion and control over, and refuse to permit
further withdrawals (whether of money, securities, instruments or other
property) from any deposit accounts maintained with Secured Party or such
Lender constituting part of the Collateral.  SECTION 13.  License
of Patents, Trademarks, Copyrights, etc.Grantor hereby assigns, transfers and
conveys to Secured Party, effective upon the occurrence and during the
continuance of any Event of Default, the nonexclusive right and license to use
all trademarks, tradenames, copyrights, customers lists, patents or technical processes
owned or used by Grantor that relate to the Collateral and any other collateral
granted by Grantor as security for the Secured Obligations, together with any
goodwill associated therewith, all to the extent necessary to enable Secured
Party to use, possess and realize on the Collateral and to enable any successor
or assign to enjoy the benefits of the Collateral.  This right and license shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors, assigns
and transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise.  Such right and license is granted free of
charge, without requirement that any monetary payment whatsoever be made to
Grantor.  19 
   SECTION 14.  Transfers
and Other Liens.Grantor
shall not:  (a)           sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral,
except as permitted by the Credit Agreement; or  (b)           except for the
security interest created by this Agreement or as permitted by the Credit
Agreement, create or suffer to exist any Lien upon or with respect to any of
the Collateral to secure the indebtedness or other obligations of any Person.  SECTION 15.  Secured
Party Appointed Attorney-in-Fact.Grantor hereby irrevocably appoints Secured Party as Grantors
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Partys discretion, to do all acts and things and to execute any instrument
which Secured Party may deem necessary or advisable to perfect and continue
perfected the security interests created by this Agreement and upon the
occurrence and during the continuance of an Event of Default, to take any other
action not prohibited by the Credit Agreement and to execute any instrument
that Secured Party may deem necessary or advisable to accomplish the purposes
of this Agreement, including without limitation:  (a)           to obtain and adjust
insurance required to be maintained by Grantor or paid to Secured Party
pursuant to Section 8;  (b)           to ask for, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in respect of any of the Collateral;  (c)           to receive, endorse
and collect any drafts or other instruments, documents and chattel paper in
connection with clauses (a) and (b) above;  (d)           to file any claims
or take any action or institute any proceedings (including, without limitation,
any proceeding before any Gaming Board) that Secured Party may deem necessary
or desirable for the collection of any of the Collateral or otherwise to
enforce the rights of Secured Party with respect to any of the Collateral;  (e)           to pay or discharge
taxes or Liens (other than Liens permitted under this Agreement or the Credit
Agreement) levied or placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to discharge the same to
be determined by Secured Party in its sole discretion, any such  20 
   payments made by Secured Party to become obligations of Grantor to
Secured Party, due and payable immediately without demand;  (f)            to sign and endorse
any invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications and notices in
connection with Accounts and other documents relating to the Collateral; and  (g)           generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Partys option
and Grantors expense, at any time or from time to time, all acts and things
that Secured Party deems necessary to protect, preserve or realize upon the
Collateral and Secured Partys security interest therein in order to effect the
intent of this Agreement, all as fully and effectively as Grantor might do.  SECTION 16.  Secured
Party May Perform.  If
Grantor fails to perform any agreement contained herein, Secured Party may
itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Grantor
under Section 20.  SECTION 17.  Standard
of Care.  The powers
conferred on Secured Party hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such
powers.  Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.  Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Secured Party accords its own property.  SECTION 18.  Remedies.  (a)           Notwithstanding any
other provision hereof, if Secured Party elects, upon any Event of Default, to
sell real property and any of the Collateral together under the Deed of Trust
and applicable law, then the terms of the Deed of Trust shall, with respect to
such sale and Collateral, control and supersede any terms in this Agreement with
respect to such sale and Collateral; provided that Secured Partys
election to exercise remedies under the Deed of Trust shall have no effect on
the terms  21 
   contained in this Agreement with respect to any Collateral as to which
Secured Party has not so elected.  (b)           If any Event of
Default shall have occurred and be continuing Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party on default under the Uniform Commercial Code as in effect in
any relevant jurisdiction (the Code)
(whether or not the Code applies to the affected Collateral), and also may
(i) require Grantor to, and Grantor hereby agrees that it will at its
expense and upon request of Secured Party forthwith, assemble all or part of
the Collateral as directed by Secured Party and make it available to Secured
Party at a place to be designated by Secured Party that is reasonably
convenient to both parties, (ii) enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process, (iii) prior to the disposition of the Collateral, store, process,
repair or recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Secured Party deems appropriate,
(iv) take possession of Grantors premises or place custodians in
exclusive control thereof, remain on such premises and use the same and any of
Grantors equipment for the purpose of completing any work in process, taking
any actions described in the preceding clause (iii) and collecting any
Secured Obligation, and (v) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any of Secured Partys offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable.  Secured Party or any Lender may be the
purchaser of any or all of the Collateral at any such sale and Secured Party,
as agent for and representative of Lenders (but not any Lender or Lenders in
its or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Secured Party at such sale.  Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantor, and Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted.  Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days notice to
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.  Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.  Secured Party may adjourn any public  22 
   or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. 
Grantor hereby waives any claims against Secured Party arising by reason
of the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Collateral to more than one offeree. 
If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the reasonable fees of any attorneys employed by Secured
Party to collect such deficiency.  Notwithstanding anything to the contrary contained herein, if, upon an
Event of Default hereunder or under the Credit Agreement and foreclosure upon
any gaming permits pledged and assigned herein, Secured Party is not qualified
under the Gaming Laws to hold such gaming permits, then Secured Party shall
designate an appropriately qualified third party to which an assignment of such
gaming permits can be made in compliance with the Gaming Laws.  SECTION 19.  Application
of Proceeds.Except as
expressly provided elsewhere in this Agreement, all proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of Secured Party,
be held by Secured Party as Collateral for, and/or then, or at any other time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:  FIRST:  To the payment of all
reasonable costs and expenses of such sale, collection or other realization,
including costs and expenses of Secured Party and its agents and counsel, and
all other expenses, liabilities and advances made or incurred by Secured Party
in connection therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder for
the account of Grantor, and to the payment of all costs and expenses paid or
incurred by Secured Party in connection with the exercise of any right or
remedy hereunder, all in accordance with Section 20;  SECOND:  To the payment of all
other Secured Obligations (for the ratable benefit of the holders thereof) in
such order as Secured Party shall elect; and  23 
   THIRD:  To the payment to or
upon the order of Grantor, or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.  SECTION 20.  Indemnity
and Expenses.  (a)           Grantor agrees to indemnify
Secured Party and each Lender from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Partys or such Lenders gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.  (b)           Grantor shall pay to
Secured Party upon demand the amount of any and all costs and expenses,
including the reasonable fees and expenses of its counsel and of any experts
and agents, that Secured Party may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights
of Secured Party hereunder, or (iv) the failure by Grantor to perform or
observe any of the provisions hereof.  SECTION 21.  Continuing
Security Interest: Transfer of Loans.  This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the
indefeasible payment in full of the Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, (b) be binding upon Grantor, its successors
and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 10.1 of the
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or
otherwise.  Upon the indefeasible
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters
of Credit, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Grantor. 
Upon any such termination Secured Party will, at Grantors expense,
execute and deliver to Grantor such documents as Grantor shall reasonably
request to evidence such termination.  24 
   SECTION 22.  Secured
Party as Agent.  (a)           Secured Party has
been appointed to act as Secured Party hereunder by Lenders.  Secured Party shall be obligated, and shall
have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of
Collateral), solely in accordance with this Agreement and the Credit Agreement.  (b)           Secured Party shall
at all times be the same Person that is Agent under the Credit
Agreement.  Written notice of
resignation by Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute notice of resignation as Secured Party under this
Agreement; removal of Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Agent pursuant to subsection 9.5 of the
Credit Agreement shall also constitute appointment of a successor Secured Party
under this Agreement.  Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring, or removed Secured Party shall be
discharged from its duties and obligations under this Agreement.  After any retiring or removed Agents
resignation or removal hereunder as Secured Party, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Secured Party hereunder.  SECTION 23.  Amendments;
Etc.  No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party and Grantor, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.  25 
   SECTION 24.  Notices.  Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex prior to 5:00 p.m.
on a Business Day, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided that
notices to Secured Party shall only be effective upon receipt.  For the purposes hereof, the address of each
party hereto shall be as set forth under such partys name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.  SECTION 25.  Failure
or Indulgence Not Waiver; Remedies Cumulative.  No failure or delay on the part of Secured
Party in the exercise of any power, right or privilege hereunder shall impair
such power, right or privilege or be construed to he a waiver of any default or
acquiescence therein. nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further exercise thereof or of
any other power, right or privilege. 
All rights and remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available.  SECTION 26.  Severability.  In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.  SECTION 27.  Headings.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.  SECTION 28.  GOVERNING
LAW; TERMS.  THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A  26 
   JURISDICTION OTHER THAN THE STATE OF NEVADA.Capitalized terms defined in the Credit
Agreement and not otherwise defined herein shall have the meanings set forth in
the Credit Agreement.  Capitalized terms
defined in Articles 8 and 9 of the Uniform Commercial Code as enacted in the
State of Nevada and not defined herein or in the Credit Agreement shall have
the meanings set forth in Articles 8 and 9 of the Uniform Commercial Code
as enacted in the State of Nevada.  SECTION 29.  Consent
to Jurisdiction and Service of Process.  ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEVADA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.  Grantor hereby agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Grantor at its address provided in
Section 24, such service being hereby acknowledged by Grantor to be sufficient
for personal jurisdiction in any action against Grantor in any such court and
to be otherwise effective and binding service in every respect.  Nothing herein shall affect the right to
serve process in any other manner permitted by law.  SECTION 30.  Waiver
of Jury Trial.  GRANTOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. 
The scope of this waiver is intended to be all-encompassing of any and
all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.  Grantor and Secured Party each acknowledge
that this waiver is a material inducement for Grantor and Secured Party to
enter into a business relationship, that Grantor and Secured Party have already
relied on this waiver in entering into this Agreement and that each will continue
to rely on this waiver in their related future dealings.  Grantor and Secured Party further warrant
and represent that each has reviewed this waiver with its legal counsel, and
that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel.  THIS WAIVER  27 
   IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.  SECTION 31.Financing Statement Property
Description.  To perfect
the security interests granted under this Agreement, Grantor expressly
authorizes Secured Party to file financing statements naming Grantor as debtor
with the Collateral Description all assets of the debtor, all personal
property of the debtor or words to that effect.  SECTION 32.Release.  Upon any sale, lease, transfer or other
disposition of any item of Collateral provided such transaction is not
prohibited under the terms of the Credit Agreement, Secured Party will, at
Grantors expense, execute and deliver to Grantor such documents as Grantor may
reasonably request to release such item of Collateral from the security
interest granted hereby provided (i) at the time of such request an
Event of Default shall not have occurred and be continuing, (ii) Grantor shall
have provided Administrative Agent at least ten Business Days prior to the
proposed release date a written request for release describing the item of
Collateral and the material terms of sale together with a form of release and a
certificate of an officer of Grantor certifying such transaction is in
accordance with and is permitted under the Credit Agreement and (iii) the
proceeds of any such transaction shall be applied in accordance with the
provisions of the Loan Documents.  SECTION 33.Intercreditor Agreement.  In the event of any conflict or
inconsistency between this Agreement and the Intercreditor Agreement, the
provisions of the Intercreditor Agreement shall govern.  SECTION 34.  Counterparts.  This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate counterparts
and attached to a single counterpart so that all signature pages are physically
attached to the same document.  [Remainder of this Page Left Blank]  28 
   IN WITNESS WHEREOF, Grantor and Secured Party
have caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.  CIRCUS AND ELDORADO JOINT VENTURE,a
  Nevada general partnershipBy:
  /s/
  Gary CaranoGary
  CaranoChief
  Executive OfficerNotice
  Address:
  Silver
  Legacy Resort Casino407
  North Virginia StreetReno,
  Nevada 89501With
  copies to:
  Yvette
  Landau, EsquireVice
  President, General Counseland
  SecretaryMandalay
  Resort Group3950
  Las Vegas Boulevard SouthLas
  Vegas, Nevada 89119Telephone:
  (702)
  632-6720Fax:
  (702)
  632-6723And:
  John
  Frankovich, EsquireMcDonald
  Carano Law Firm241
  Ridge Street, 4th FloorReno,
  Nevada 89501Telephone:
  (775)
  788-2000Fax:
  (775)
  788-2020  S-1 
   BANK OF AMERICA N.A.,as
  AgentBy:
  /s/
  Janice HammondTitle:
  Vice PresidentNotice
  Address:
  555
  South Flower Street, 17th FloorLos
  Angeles, California  90071Attention:  Janice Hammond  S-2 
   SCHEDULE I TO SECURITY AGREEMENT  Assigned Agreements  1Contract for
Construction, dated as of February 7, 1994, by and between Perini Building
Company and Circus and Eldorado Joint Venture as amended by Change Order
Nos. 110, as amended, supplemented or otherwise modified from time
to time.  2Agreement
Between Owner and Architect, dated as of February 1994, by and between Mitchell
Cohen Architects, Inc. and Circus and Eldorado Joint Venture, as assigned to
Urban Design Group, P.C. pursuant to that undated Assignment by and among
Circus and Eldorado Joint Venture, Mitchell Cohan Architects, Inc.. UDG, Inc.
d/b/a Urban Design Group, Inc. and Urban Design Group, P.C. as it may be
amended, supplemented or otherwise modified from time to time.  3Letter
agreement, dated November 18, 1993, by and between Smith-Casino Advisory
and Circus and Eldorado Joint Venture as amended by Addendum One to Letter
Agreement for Project C dated as of January 24, 1995, as amended by
Addendum Two to Letter Agreement for Silver Legacy dated as of March 10,
1995, as it may be amended, supplemented or otherwise modified from time to
time.  
   SCHEDULE II TO SECURITY AGREEMENT  Locations of Equipment:  407 North Virginia Street, Reno, Nevada 89501  1975 Timber Way, Reno, Nevada 89512  55 East 4th Street, Reno, Nevada 89501  Locations of Inventory:  407 North Virginia Street, Reno, Nevada 89501  1975 Timber Way, Reno, Nevada 89512  55 East 4th Street, Reno, Nevada 89501