**Exhibit 10.8****EXHIBIT E****SECURITY AGREEMENT**     SECURITY AGREEMENT, dated as of March 31, 2006 (this “Agreement”), among Las VegasGaming, Inc., a Nevada corporation (the “Company”) and all of the Subsidiaries of the Company (suchsubsidiaries, the “Guarantors”) (the Company and Guarantors are collectively referred to asthe “Debtors”) and the holder or holders of the Company’s Senior Secured Notes due January1, 2008 in the original aggregate principal amount of $5,000,000 (the “Notes”), signatoryhereto, their endorsees, transferees and assigns (collectively referred to as, the “SecuredParties”).**W I T N E S S E T H:**     WHEREAS, pursuant to the Notes, the Secured Parties have severally agreed to extend the loansto the Company evidenced by the Notes;     WHEREAS, pursuant to a certain Subsidiary Guarantee dated as of the date hereof (the“Guaranty”), the Guarantors have jointly and severally agreed to guaranty and act as suretyfor payment of such loans; and     WHEREAS, in order to induce the Secured Parties to extend the loans evidenced by the Notes,each Debtor has agreed to execute and deliver to the Secured Parties this Agreement and to grantthe Secured Parties, *pari passu*with each other Secured Party, a perfected security interest incertain property of such Debtor to secure the prompt payment, performance and discharge in full ofall of the Company’s obligations under the Notes and the other Debtors’ obligations under theGuaranty.     NOW, THEREFORE, in consideration of the agreements herein contained and for other good andvaluable consideration, the receipt and sufficiency of which is hereby acknowledged, the partieshereto hereby agree as follows:     1. **Certain Definitions**. As used in this Agreement, the following terms shall have the meaningsset forth in this Section 1. Terms used but not otherwise defined in this Agreement that aredefined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial tort claim”,“deposit account”, “document”, “equipment”, “fixtures”, “general intangibles”, “goods”,“instruments”, “inventory”, “investment property”, “letter-of-credit rights”, “proceeds” and“supporting obligations”) shall have the respective meanings given such terms in Article 9 of theUCC.     (a) “Collateral” means the collateral in which the Secured Parties are granteda security interest by this Agreement and which shall include the following personalproperty of the Debtors, whether presently owned or existing or hereafter acquired or cominginto existence, wherever situated, and all additions and accessions thereto and allsubstitutions and replacements thereof, and all proceeds, products and accounts thereof,including, without limitation, all proceeds from the sale or transfer of the Collateral andof insurance covering the same and of any tort claims in connection therewith, and alldividends, interest, cash, notes, securities, equity interest or other property (other than,to the extent not legally permitted to be pledged, the jackpot amount) at any time and fromtime to time acquired, receivable or otherwise distributed in respect of, or in exchangefor, any or all of the Pledged Securities (as defined below):     (i) All goods, including, without limitations, (A) all machinery, equipment,computers, motor vehicles (except for the one car and one truck currently subject to
 

 
operating leases), trucks, tanks, boats, ships, appliances, furniture, specialand general tools, fixtures, test and quality control devices and other equipment ofevery kind and nature and wherever situated, together with all documents of titleand documents representing the same, all additions and accessions thereto,replacements therefor, all parts therefor, and all substitutes for any of theforegoing and all other items used and useful in connection with any Debtor’sbusinesses and all improvements thereto (other than, to the extent not legallypermitted to be pledged, the plasma televisions to the extent pledged to thesellers’ thereof); and (B) all inventory;     (ii) All contract rights and other general intangibles, including, withoutlimitation, all partnership interests, membership interests, stock or othersecurities, rights under any of the Organizational Documents, agreements related tothe Pledged Securities, licenses, distribution and other agreements, computersoftware (whether “off-the-shelf”, licensed from any third party or developed by anyDebtor), computer software development rights, leases, franchises, customer lists,quality control procedures, grants and rights, goodwill, trademarks, service marks,trade styles, trade names, patents, patent applications, copyrights, IntellectualProperty, and income tax refunds;     (iii) All accounts, together with all instruments, all documents of titlerepresenting any of the foregoing, all rights in any merchandising, goods,equipment, motor vehicles and trucks which any of the same may represent, and allright, title, security and guaranties with respect to each account, including anyright of stoppage in transit;     (iv) All documents, letter-of-credit rights, instruments and chattel paper;     (v) All commercial tort claims;     (vi) All deposit accounts and all cash (whether or not deposited in suchdeposit accounts), excluding that cash tied to jackpot requirements;     (vii) All investment property;     (viii) All supporting obligations;     (ix) All files, records, books of account, business papers, and computerprograms; and     (x) the products and proceeds of all of the foregoing Collateral set forth inclauses (i)-(ix) above.     Without limiting the generality of the foregoing, the “Collateral”shall include all investment property and general intangibles respecting ownershipand/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock and the other equity interests listed on Schedule Hhereto (as the same may be modified from time to time pursuant to the terms hereof),and any other shares of capital stock and/or other equity interests of any otherdirect or indirect subsidiary of any Debtor obtained in the future, and, in eachcase, all certificates representing such shares and/or equity interests and, in eachcase, all rights, options, warrants, stock, other securities and/or equity intereststhat may hereafter be received, receivable or distributed in respect of, or
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exchanged for, any of the foregoing (all of the foregoing being referred toherein as the “Pledged Securities”) and all rights arising under or inconnection with the Pledged Securities, including, but not limited to, alldividends, interest and cash.     Notwithstanding the foregoing, nothing herein shall be deemed to constitute anassignment of any asset which, in the event of an assignment, becomes void byoperation of applicable law or the assignment of which is otherwise prohibited byapplicable law (in each case to the extent that such applicable law is notoverridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similarapplicable law); provided, however, that to the extent permitted by applicable law,this Agreement shall create a valid security interest in such asset and, to theextent permitted by applicable law, this Agreement shall create a valid securityinterest in the proceeds of such asset.     (b) “Intellectual Property” means the collective reference to all rights,priorities and privileges relating to intellectual property, whether arising under UnitedStates, multinational or foreign laws or otherwise, including, without limitation, (i) allcopyrights arising under the laws of the United States, any other country or any politicalsubdivision thereof, whether registered or unregistered and whether published orunpublished, all registrations and recordings thereof, and all applications in connectiontherewith, including, without limitation, all registrations, recordings and applications inthe United States Copyright Office, (ii) all letters patent of the United States, any othercountry or any political subdivision thereof, all reissues and extensions thereof, and allapplications for letters patent of the United States or any other country and all divisions,continuations and continuations-in-part thereof, (iii) all trademarks, trade names,corporate names, company names, business names, fictitious business names, trade dress,service marks, logos, domain names and other source or business identifiers, and allgoodwill associated therewith, now existing or hereafter adopted or acquired, allregistrations and recordings thereof, and all applications in connection therewith, whetherin the United States Patent and Trademark Office or in any similar office or agency of theUnited States, any State thereof or any other country or any political subdivision thereof,or otherwise, and all common law rights related thereto, (iv) all trade secrets arisingunder the laws of the United States, any other country or any political subdivision thereof,(v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) alllicenses for any of the foregoing, and (vii) all causes of action for infringement of theforegoing.     (c) “Majority in Interest” shall mean, at any time of determination, themajority in interest (based on then-outstanding principal amounts of Notes at the time ofsuch determination) of the Secured Parties.     (d) “Necessary Endorsement” shall mean undated stock powers endorsed in blankor other proper instruments of assignment duly executed and such other instruments ordocuments as the Secured Parties may reasonably request.     (e) “Obligations” means all of the Debtors’ obligations under this Agreement,the Notes, the Guaranty, the Advisory Services Letter and any other instruments, agreementsor other documents executed and/or delivered in connection herewith or therewith, in eachcase, whether now or hereafter existing, 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, createdor incurred, and all or any portion of such obligations or liabilities that are paid, to theextent all or any part of such payment is avoided or recovered directly or indirectly fromany of the Secured Parties as a preference,
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fraudulent transfer or otherwise as such obligations may be amended, supplemented,converted, extended or modified from time to time. Without limiting the generality of theforegoing, the term “Obligations” shall include, without limitation: (i) principal of, andinterest on the Notes and the loans extended pursuant thereto; (ii) any and all other fees,indemnities, costs, obligations and liabilities of the Debtors from time to time under or inconnection with this Agreement, the Notes, the Guaranty, the Advisory Services Letter andany other instruments, agreements or other documents executed and/or delivered in connectionherewith or therewith; and (iii) all amounts (including but not limited to post-petitioninterest) in respect of the foregoing that would be payable but for the fact that theobligations to pay such amounts are unenforceable or not allowable due to the existence of abankruptcy, reorganization or similar proceeding involving any Debtor.     (f) “Organizational Documents” means with respect to any Debtor, the documentsby which such Debtor was organized (such as a certificate of incorporation, certificate oflimited partnership or articles of organization, and including, without limitation, anycertificates of designation for preferred stock or other forms of preferred equity) andwhich relate to the internal governance of such Debtor (such as bylaws, a partnershipagreement or an operating, limited liability or members agreement).     (g) “UCC” means the Uniform Commercial Code of the State of New York and or anyother applicable law of any state or states which has jurisdiction with respect to all, orany portion of, the Collateral or this Agreement, from time to time. It is the intent ofthe parties that defined terms in the UCC should be construed in their broadest sense sothat the term “Collateral” will be construed in its broadest sense. Accordingly if thereare, from time to time, changes to defined terms in the UCC that broaden the definitions,they are incorporated herein and if existing definitions in the UCC are broader than theamended definitions, the existing ones shall be controlling.     2. **Grant of Perfected Security Interest**. As an inducement for the Secured Parties to extendthe loans as evidenced by the Notes and to secure the complete and timely payment, performance anddischarge in full, as the case may be, of all of the Obligations, each Debtor herebyunconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties acontinuing and perfected security interest in and to, a lien upon and a right of set-off againstall of their respective right, title and interest of whatsoever kind and nature in and to, theCollateral (the “Security Interest”).     3. **Delivery of Certain Collateral**. Contemporaneously or prior to the execution of thisAgreement, each Debtor shall deliver or cause to be delivered to the Secured Parties (a) any andall certificates and other instruments representing or evidencing the Pledged Securities, and (b)any and all certificates and other instruments or documents representing any of the otherCollateral, in each case, together with all Necessary Endorsements. The Debtors are,contemporaneously with the execution hereof, delivering to the Secured Parties, or have previouslydelivered to the Secured Parties, a true and correct copy of each Organizational Document governingany of the Pledged Securities.     4. **Representations, Warranties, Covenants and Agreements of the Debtors**. Each Debtorrepresents and warrants to, and covenants and agrees with, the Secured Parties as follows:     (a) Each Debtor has the requisite corporate, partnership, limited liability companyor other power and authority to enter into this Agreement and otherwise to carry out itsobligations hereunder. The execution, delivery and performance by each Debtor of thisAgreement and the filings contemplated therein have been duly authorized by all necessaryaction on the part of such Debtor and no further action is required by such Debtor. ThisAgreement has been duly executed
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by each Debtor. This Agreement constitutes the legal, valid and binding obligation ofeach Debtor, enforceable against each Debtor in accordance with its terms except as suchenforceability may be limited by applicable bankruptcy, insolvency, reorganization andsimilar laws of general application relating to or affecting the rights and remedies ofcreditors and by general principles of equity.     (b) The Debtors have no place of business or offices where their respective books ofaccount and records are kept (other than temporarily at the offices of its attorneys oraccountants) or places where Collateral is stored or located, except as set forth onSchedule A attached hereto. Except as specifically set forth on Schedule A,each Debtor is the record owner of the real property where such Collateral is located, andthere exist no mortgages or other liens on any such real property except for Permitted Liens(as defined in the Notes). Except as disclosed on Schedule A, none of suchCollateral is in the possession of any consignee, bailee, warehouseman, agent or processor.     (c) Except as set forth on Schedule B attached hereto, the Debtors are the soleowner of the Collateral (except for non-exclusive licenses granted by any Debtor in theordinary course of business), free and clear of any liens, security interests, encumbrances,rights or claims, and are fully authorized to grant the Security Interest. There is not onfile in any governmental or regulatory authority, agency or recording office an effectivefinancing statement, security agreement, license or transfer or any notice of any of theforegoing (other than those that will be filed in favor of the Secured Parties pursuant tothis Agreement) covering or affecting any of the Collateral. So long as this Agreementshall be in effect, the Debtors shall not execute and shall not knowingly permit to be onfile in any such office or agency any such financing statement or other document orinstrument (except to the extent filed or recorded in favor of the Secured Parties pursuantto the terms of this Agreement).     (d) No written claim has been received that any Collateral or Debtor’s use of anyCollateral violates the rights of any third party. There has been no adverse decision to anyDebtor’s claim of ownership rights in or exclusive rights to use the Collateral in anyjurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force andeffect, and there is no proceeding involving said rights pending or, to the best knowledgeof any Debtor, threatened before any court, judicial body, administrative or regulatoryagency, arbitrator or other governmental authority.     (e) Each Debtor shall at all times maintain its books of account and records relatingto the Collateral at its principal place of business and its Collateral at the locations setforth on Schedule A attached hereto and may not relocate such books of account andrecords or tangible Collateral unless it delivers to the Secured Parties at least 30 daysprior to such relocation (i) written notice of such relocation and the new location thereof(which must be within the United States) and (ii) evidence that appropriate financingstatements under the UCC and other necessary documents have been filed and recorded andother steps have been taken to perfect the Security Interest to create in favor of theSecured Parties a valid, perfected and continuing perfected first priority lien in theCollateral.     (f) This Agreement creates in favor of the Secured Parties a valid, security interestin the Collateral, securing the payment and performance of the Obligations. Upon making thefilings described in the immediately following paragraph, all security interests createdhereunder in any Collateral which may be perfected by filing Uniform Commercial Codefinancing statements shall have been duly perfected. Except for the filing of the UniformCommercial Code financing statements referred to in the immediately following paragraph, therecordation of the
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Intellectual Property Security Agreement (as defined below) with respect to copyrightsand copyright applications in the United States Copyright Office referred to in paragraph(p), the execution and delivery of deposit account control agreements satisfying therequirements of Section 9-104(a)(2) of the UCC with respect to each deposit account of theDebtors, and the delivery of the certificates and other instruments provided in Section 3,no action is necessary to create, perfect or protect the security interests createdhereunder. Without limiting the generality of the foregoing, except for the filing of saidfinancing statements, the recordation of said Intellectual Property Security Agreement, andthe execution and delivery of said deposit account control agreements, no consent of anythird parties and no authorization, approval or other action by, and no notice to or filingwith, any governmental authority or regulatory body is required for (i) the execution,delivery and performance of this Agreement, (ii) the creation or perfection of the SecurityInterests created hereunder in the Collateral or (iii) the enforcement of the rights of theSecured Parties hereunder.     (g) Each Debtor hereby authorizes the Secured Parties, or any of them, to file one ormore financing statements under the UCC, with respect to the Security Interest with theproper filing and recording agencies in any jurisdiction deemed proper by them.     (h) The execution, delivery and performance of this Agreement by the Debtors does not(i) violate any of the provisions of any Organizational Documents of any Debtor or anyjudgment, decree, order or award of any court, governmental body or arbitrator or anyapplicable law, rule or regulation applicable to any Debtor or (ii) conflict with, orconstitute a default (or an event that with notice or lapse of time or both would become adefault) under, or give to others any rights of termination, amendment, acceleration orcancellation (with or without notice, lapse of time or both) of, any agreement, creditfacility, debt or other instrument (evidencing any Debtor’s debt or otherwise) or otherunderstanding to which any Debtor is a party or by which any property or asset of any Debtoris bound or affected. No consent (including, without limitation, from stockholders orcreditors of any Debtor) is required for any Debtor to enter into and perform itsobligations hereunder.     (i) The capital stock and other equity interests listed on Schedule H heretorepresent all of the capital stock and other equity interests of the Guarantors, andrepresent all capital stock and other equity interests owned, directly or indirectly, by theCompany. All of the Pledged Securities are validly issued, fully paid and nonassessable,and the Company is the legal and beneficial owner of the Pledged Securities, free and clearof any lien, security interest or other encumbrance except for the security interestscreated by this Agreement.     (j) The ownership and other equity interests in partnerships and limited liabilitycompanies (if any) included in the Collateral (the “Pledged Interests”) by theirexpress terms do not provide that they are securities governed by Article 8 of the UCC andare not held in a securities account or by any financial intermediary.     (k) Each Debtor shall at all times maintain the liens and Security Interest providedfor hereunder as valid and perfected first priority liens and security interests in theCollateral in favor of the Secured Parties until this Agreement and the Security Interesthereunder shall be terminated pursuant to Section 11 hereof. Each Debtor hereby agrees todefend the same against the claims of any and all persons and entities. Each Debtor shallsafeguard and protect all Collateral for the account of the Secured Parties. At therequest of the Secured Parties, each Debtor will sign and deliver to the Secured Parties atany time or from time to time one or more financing statements pursuant to the UCC in formreasonably satisfactory to the Secured Parties and will pay the cost of filing the same inall public offices wherever filing is, or is deemed by the
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Secured Parties to be, necessary or desirable to effect the rights and obligationsprovided for herein. Without limiting the generality of the foregoing, each Debtor shall payall fees, taxes and other amounts necessary to maintain the Collateral and the SecurityInterest hereunder, and each Debtor shall obtain and furnish to the Secured Parties fromtime to time, upon demand, such releases and/or subordinations of claims and liens which maybe required to maintain the priority of the Security Interest hereunder.     (l) No Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwisedispose of any of the Collateral (except for non-exclusive licenses granted by a Debtor inits ordinary course of business and sales of inventory by a Debtor in its ordinary course ofbusiness) without the prior written consent of a Majority in Interest.     (m) Each Debtor shall keep and preserve its equipment, inventory and other tangibleCollateral in good condition, repair and order and shall not operate or locate any suchCollateral (or cause to be operated or located) in any area excluded from insurancecoverage.     (n) Each Debtor shall maintain with financially sound and reputable insurers, insurancewith respect to the Collateral against loss or damage of the kinds and in the amountscustomarily insured against by entities of established reputation having similar propertiessimilarly situated and in such amounts as are customarily carried under similarcircumstances by other such entities and otherwise as is prudent for entities engaged insimilar businesses but in any event sufficient to cover the full replacement cost thereof.Each Debtor shall cause each insurance policy issued in connection herewith to provide, andthe insurer issuing such policy to certify to the Secured Parties that (a) the SecuredParties will be named as lender loss payee and additional insured under each such insurancepolicy; (b) if such insurance be proposed to be cancelled or materially changed for anyreason whatsoever, such insurer will promptly notify the Secured Parties and suchcancellation or change shall not be effective as to the Secured Parties for at least thirty(30) days after receipt by the Secured Parties of such notice, unless the effect of suchchange is to extend or increase coverage under the policy; and (c) the Secured Parties willhave the right (but no obligation) at its election to remedy any default in the payment ofpremiums within thirty (30) days of notice from the insurer of such default. If no Event ofDefault (as defined in the Note) exists and if the proceeds arising out of any claim orseries of related claims do not exceed $50,000, loss payments in each instance will beapplied by the applicable Debtor to the repair and/or replacement of property with respectto which the loss was incurred to the extent reasonably feasible, and any loss payments orthe balance thereof remaining, to the extent not so applied, shall be payable to theapplicable Debtor, provided, however, that payments received by any Debtor after an Event ofDefault occurs and is continuing or in excess of $50,000 for any occurrence or series ofrelated occurrences shall be paid to the Secured Parties and, if received by such Debtor,shall be held in trust for and immediately paid over to the Secured Parties unless otherwisedirected in writing by the Secured Parties. Copies of such policies or the relatedcertificates, in each case, naming the Secured Parties as lender loss payee and additionalinsured shall be delivered to the Secured Parties at least annually and at the time any newpolicy of insurance is issued.     (o) Each Debtor shall, within ten (10) days of obtaining knowledge thereof, advise theSecured Parties promptly, in sufficient detail, of any substantial change in the Collateral,and of the occurrence of any event which would have a material adverse effect on the valueof the Collateral or on the Secured Parties’ security interest therein.
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     (p) Each Debtor shall promptly execute and deliver to the Secured Parties such furtherdeeds, mortgages, assignments, security agreements, financing statements or otherinstruments, documents, certificates and assurances and take such further action as theSecured Parties may from time to time request and may in its sole discretion deem necessaryto perfect, protect or enforce its security interest in the Collateral including, withoutlimitation, if applicable, the execution and delivery of a separate security agreement withrespect to each Debtor’s Intellectual Property (“Intellectual Property SecurityAgreement”) in which the Secured Parties have been granted a security interesthereunder, substantially in a form acceptable to the Secured Parties, which IntellectualProperty Security Agreement, other than as stated therein, shall be subject to all of theterms and conditions hereof.     (q) Each Debtor shall permit the Secured Parties and their representatives and agentsto inspect the Collateral at any time, and to make copies of records pertaining to theCollateral as may be requested by a Secured Party from time to time.     (r) Each Debtor shall take all steps reasonably necessary to diligently pursue and seekto preserve, enforce and collect any rights, claims, causes of action and accountsreceivable in respect of the Collateral.     (s) Each Debtor shall promptly notify the Secured Parties in sufficient detail uponbecoming aware of any attachment, garnishment, execution or other legal process leviedagainst any Collateral and of any other information received by such Debtor that maymaterially affect the value of the Collateral, the Security Interest or the rights andremedies of the Secured Parties hereunder.     (t) All information heretofore, herein or hereafter supplied to the Secured Parties byor on behalf of any Debtor with respect to the Collateral is accurate and complete in allmaterial respects as of the date furnished.     (u) The Debtors shall at all times preserve and keep in full force and effect theirrespective valid existence and good standing and any rights and franchises material to itsbusiness.     (v) No Debtor will change its name, type of organization, jurisdiction of organization,organizational identification number (if it has one), legal or corporate structure, oridentity, or add any new fictitious name unless it provides at least 30 days prior writtennotice to the Secured Parties of such change and, at the time of such written notification,such Debtor provides any financing statements or fixture filings necessary to perfect andcontinue perfected the perfected security Interest granted and evidenced by this Agreement.     (w) No Debtor may consign any of its Inventory or sell any of its Inventory on bill andhold, sale or return, sale on approval, or other conditional terms of sale without theconsent of a Majority in Interest which shall not be unreasonably withheld, except to theextent such consignment or sale does not exceed 15% of the total value of all of theCompany’s finished goods in Inventory.     (x) No Debtor may relocate its chief executive office to a new location withoutproviding 30 days prior written notification thereof to the Secured Parties and so long as,at the time of such written notification, such Debtor provides any financing statements orfixture filings necessary to perfect and continue perfected the perfected security Interestgranted and evidenced by this Agreement.
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     (y) Each Debtor was organized and remains organized solely under the laws of the stateset forth next to such Debtor’s name in the first paragraph of this Agreement. ScheduleD attached hereto sets forth each Debtor’s organizational identification number or, ifany Debtor does not have one, states that one does not exist.     (z) (i) The actual name of each Debtor is the name set forth in the preamble above;(ii) no Debtor has any trade names except as set forth on Schedule E attachedhereto; (iii) no Debtor has used any name other than that stated in the preamble hereto oras set forth on Schedule E for the preceding five years; and (iv) no entity hasmerged into any Debtor or been acquired by any Debtor within the past five years except asset forth on Schedule E.     (aa) At any time and from time to time that any Collateral consists of instruments,certificated securities or other items that require or permit possession by the securedparty to perfect the security interest created hereby, the applicable Debtor shall deliversuch Collateral to the Secured Parties.     (bb) Each Debtor, in its capacity as issuer, hereby agrees to comply with any and allorders and instructions of the Secured Parties regarding the Pledged Interests consistentwith the terms of this Agreement without the further consent of any Debtor as contemplatedby Section 8-106 (or any successor section) of the UCC. Further, each Debtor agrees that itshall not enter into a similar agreement (or one that would confer “control” within themeaning of Article 8 of the UCC) with any other person or entity.     (cc) Each Debtor shall cause all tangible chattel paper constituting Collateral to bedelivered to the Secured Parties, or, if such delivery is not possible, then to cause suchtangible chattel paper to contain a legend noting that it is subject to the securityinterest created by this Agreement. To the extent that any Collateral consists ofelectronic chattel paper, the applicable Debtor shall cause the underlying chattel paper tobe “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).     (dd) If there is any investment property or deposit account included as Collateral thatcan be perfected by “control” through an account control agreement, the applicable Debtorshall cause such an account control agreement, in form and substance in each casesatisfactory to the Secured Parties, to be entered into and delivered to the SecuredParties.     (ee) To the extent that any Collateral consists of letter-of-credit rights, theapplicable Debtor shall cause the issuer of each underlying letter of credit to consent toan assignment of the proceeds thereof to the Secured Parties.     (ff) To the extent that any Collateral is in the possession of any third party, theapplicable Debtor shall join with the Secured Parties in notifying such third party of theSecured Parties’ security interest in such Collateral and shall use its best efforts toobtain an acknowledgement and agreement from such third party with respect to theCollateral, in form and substance satisfactory to the Secured Parties.     (gg) If any Debtor shall at any time hold or acquire a commercial tort claim, suchDebtor shall promptly notify the Secured Parties in a writing signed by such Debtor of theparticulars thereof and grant to the Secured Parties in such writing a security interesttherein and in the proceeds thereof, all upon the terms of this Agreement, with such writingto be in form and substance satisfactory to the Secured Parties.
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     (hh) Each Debtor shall immediately provide written notice to the Secured Parties of anyand all accounts which arise out of contracts with any governmental authority and, to theextent necessary to perfect or continue the perfected status of the Security Interest insuch accounts and proceeds thereof, shall execute and deliver to the Secured Parties anassignment of claims for such accounts and cooperate with the Secured Parties in taking anyother steps required, in their judgment, under the Federal Assignment of Claims Act or anysimilar federal, state or local statute or rule to perfect or continue the perfected statusof the Security Interest in such accounts and proceeds thereof.     (ii) Each Debtor shall cause each subsidiary of such Debtor to immediately become aparty hereto (an “Additional Debtor”), by executing and delivering an AdditionalDebtor Joinder in substantially the form of Annex A attached hereto and comply with theprovisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtorshall deliver replacement schedules for, or supplements to all other Schedules to (orreferred to in) this Agreement, as applicable, which replacement schedules shall supersede,or supplements shall modify, the Schedules then in effect. The Additional Debtor shall alsodeliver such opinions of counsel, authorizing resolutions, good standing certificates,incumbency certificates, organizational documents, financing statements and otherinformation and documentation as the Secured Parties may reasonably request. Upon deliveryof the foregoing to the Secured Parties, the Additional Debtor shall be and become a partyto this Agreement with the same rights and obligations as the Debtors, for all purposeshereof as fully and to the same extent as if it were an original signatory hereto and shallbe deemed to have made the representations, warranties and covenants set forth herein as ofthe date of execution and delivery of such Additional Debtor Joinder, and all referencesherein to the “Debtors” shall be deemed to include each Additional Debtor.     (jj) Each Debtor shall vote the Pledged Securities to comply with the covenants andagreements set forth herein and in the Notes.     (kk) Each Debtor shall register the pledge of the applicable Pledged Securities on thebooks of such Debtor. Each Debtor shall notify each issuer of Pledged Securities toregister the pledge of the applicable Pledged Securities in the name of the Secured Partieson the books of such issuer. Further, except with respect to certificated securitiesdelivered to the Secured Parties, the applicable Debtor shall deliver to the Secured Partiesan acknowledgement of pledge (which, where appropriate, shall comply with the requirementsof the relevant UCC with respect to perfection by registration) signed by the issuer of theapplicable Pledged Securities, which acknowledgement shall confirm that: (a) it hasregistered the pledge on its books and records; and (b) at any time directed by the SecuredParties during the continuation of an Event of Default, such issuer will transfer the recordownership of such Pledged Securities into the name of any designee of the Secured Parties,will take such steps as may be necessary to effect the transfer, and will comply with allother instructions of the Secured Parties regarding such Pledged Securities without thefurther consent of the applicable Debtor.     (ll) In the event that, upon an occurrence of an Event of Default, the Secured Partiesshall sell all or any of the Pledged Securities to another party or parties (herein calledthe “Transferee”) or shall purchase or retain all or any of the Pledged Securities,each Debtor shall, to the extent applicable: (i) deliver to the Secured Parties or theTransferee, as the case may be, the articles of incorporation, bylaws, minute books, stockcertificate books, corporate seals, deeds, leases, indentures, agreements, evidences ofindebtedness, books of account, financial records and all other Organizational Documents andrecords of the Debtors and their direct and indirect subsidiaries; (ii) use its best effortsto obtain resignations of the persons then serving as officers
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and directors of the Debtors and their direct and indirect subsidiaries, if sorequested; and (iii) use its best efforts to obtain any approvals that are required by anygovernmental or regulatory body in order to permit the sale of the Pledged Securities to theTransferee or the purchase or retention of the Pledged Securities by the Secured Parties andallow the Transferee or the Secured Parties to continue the business of the Debtors andtheir direct and indirect subsidiaries.     (mm) Without limiting the generality of the other obligations of the Debtors hereunder,each Debtor shall promptly (i) cause to be registered at the United States Copyright Officeall of its material copyrights, (ii) cause the security interest contemplated hereby withrespect to all Intellectual Property registered at the United States Copyright Office orUnited States Patent and Trademark Office to be duly recorded at the applicable office, and(iii) give the Secured Parties notice whenever it acquires (whether absolutely or bylicense) or creates any additional material Intellectual Property.     (nn) Each Debtor will from time to time, at the joint and several expense of theDebtors, promptly execute and deliver all such further instruments and documents, and takeall such further action as may be necessary or desirable, or as the Secured Parties mayreasonably request, in order to perfect and protect any security interest granted orpurported to be granted hereby or to enable the Secured Parties to exercise and enforcetheir rights and remedies hereunder and with respect to any Collateral or to otherwise carryout the purposes of this Agreement.     (oo) Schedule F attached hereto lists all of the patents, patent applications,trademarks, trademark applications, registered copyrights, and domain names owned by any ofthe Debtors as of the date hereof. Schedule F lists all material licenses in favorof any Debtor for the use of any patents, trademarks, copyrights and domain names as of thedate hereof. All material patents and trademarks of the Debtors have been duly recorded atthe United States Patent and Trademark Office and all material copyrights of the Debtorshave been duly recorded at the United States Copyright Office.     (pp) Except as set forth on Schedule G attached hereto, none of the accountdebtors or other persons or entities obligated on any of the Collateral is a governmentalauthority covered by the Federal Assignment of Claims Act or any similar federal, state orlocal statute or rule in respect of such Collateral.     5. **Effect of Pledge on Certain Rights**. If any of the Collateral subject to this Agreementconsists of nonvoting equity or ownership interests (regardless of class, designation, preferenceor rights) that may be converted into voting equity or ownership interests upon the occurrence ofcertain events (including, without limitation, upon the transfer of all or any of the other stockor assets of the issuer), it is agreed that the pledge of such equity or ownership interestspursuant to this Agreement or the enforcement of any of the Secured Parties’ rights hereunder shallnot be deemed to be the type of event which would trigger such conversion rights notwithstandingany provisions in the Organizational Documents or agreements to which any Debtor is subject or towhich any Debtor is party.     6. **Defaults**. The following events shall be “Events of Default”:     (a) The occurrence of an Event of Default (as defined in the Notes) under the Notes;     (b) Any representation or warranty of any Debtor in this Agreement shall prove tohave been incorrect in any material respect when made;
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     (c) The failure by any Debtor to observe or perform any of its obligations hereunderfor five (5) days after delivery to such Debtor of notice of such failure by or on behalf ofa Secured Party unless such default is capable of cure but cannot be cured within such timeframe and such Debtor is using best efforts to cure same in a timely fashion; or     (d) If any provision of this Agreement shall at any time for any reason be declaredto be null and void, or the validity or enforceability thereof shall be contested by anyDebtor, or a proceeding shall be commenced by any Debtor, or by any governmental authorityhaving jurisdiction over any Debtor, seeking to establish the invalidity or unenforceabilitythereof, or any Debtor shall deny that any Debtor has any liability or obligation purportedto be created under this Agreement.     7. **Duty To Hold In Trust**.     (a) Upon the occurrence of any Event of Default and at any time thereafter, each Debtorshall, upon receipt of any revenue, income, dividend, interest or other sums subject to theSecurity Interest, whether payable pursuant to the Notes or otherwise, or of any check,draft, note, trade acceptance or other instrument evidencing an obligation to pay any suchsum, hold the same in trust for the Secured Parties and shall forthwith endorse and transferany such sums or instruments, or both, to the Secured Parties, pro-rata in proportion totheir initial purchases of Notes for application to the satisfaction of the Obligations (andif any Debenture is not outstanding, pro-rata in proportion to the initial purchases of theremaining Notes).     (b) If any Debtor shall become entitled to receive or shall receive any securities orother property (including, without limitation, shares of Pledged Securities or instrumentsrepresenting Pledged Securities acquired after the date hereof, or any options, warrants,rights or other similar property or certificates representing a dividend, or anydistribution in connection with any recapitalization, reclassification or increase orreduction of capital, or issued in connection with any reorganization of such Debtor or anyof its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as anaddition to, in substitution of, or in exchange for, such Pledged Securities or otherwise),such Debtor agrees to (i) accept the same as the agent of the Secured Parties; (ii) hold thesame in trust on behalf of and for the benefit of the Secured Parties; and (iii) to deliverany and all certificates or instruments evidencing the same to the Secured Parties on orbefore the close of business on the fifth business day following the receipt thereof by suchDebtor, in the exact form received together with the Necessary Endorsements, to be held bythe Secured Parties subject to the terms of this Agreement as Collateral.     8. **Rights and Remedies Upon Default**.     (a) Upon the occurrence of any Event of Default and at any time thereafter, the SecuredParties, acting through any agent appointed by them for such purpose, shall have the rightto exercise all of the remedies conferred hereunder and under the Notes, and the SecuredParties shall have all the rights and remedies of a secured party under the UCC. Withoutlimitation, the Secured Parties shall have the following rights and powers:     (i) The Secured Parties shall have the right to take possession of theCollateral and, for that purpose, enter, with the aid and assistance of any person,any premises where the Collateral, or any part thereof, is or may be placed andremove the same, and each Debtor shall assemble the Collateral and make it availableto the Secured Parties at places which the Secured Parties shall reasonably select,whether at such Debtor’s premises or elsewhere, and make available to the SecuredParties, without rent, all of
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such Debtor’s respective premises and facilities for the purpose of the SecuredParties taking possession of, removing or putting the Collateral in saleable ordisposable form.     (ii) Upon notice to the Debtors by the Secured Parties, all rights of eachDebtor to exercise the voting and other consensual rights which it would otherwisebe entitled to exercise and all rights of each Debtor to receive the dividends andinterest which it would otherwise be authorized to receive and retain, shall cease.Upon such notice, the Secured Parties shall have the right to receive any interest,cash dividends or other payments on the Collateral and, at the option oft, toexercise in such the Secured Parties’ discretion all voting rights pertainingthereto. Without limiting the generality of the foregoing, the Secured Partiesshall have the right (but not the obligation) to exercise all rights with respect tothe Collateral as it were the sole and absolute owners thereof, including, withoutlimitation, to vote and/or to exchange, at its sole discretion, any or all of theCollateral in connection with a merger, reorganization, consolidation,recapitalization or other readjustment concerning or involving the Collateral or anyDebtor or any of its direct or indirect subsidiaries.     (iii) The Secured Parties shall have the right to operate the business ofeach Debtor using the Collateral and shall have the right to assign, sell, lease orotherwise dispose of and deliver all or any part of the Collateral, at public orprivate sale or otherwise, either with or without special conditions orstipulations, for cash or on credit or for future delivery, in such parcel orparcels and at such time or times and at such place or places, and upon such termsand conditions as the Secured Parties may deem commercially reasonable, all without(except as shall be required by applicable statute and cannot be waived)advertisement or demand upon or notice to any Debtor or right of redemption of aDebtor, which are hereby expressly waived. Upon each such sale, lease, assignmentor other transfer of Collateral, the Secured Parties may, unless prohibited byapplicable law which cannot be waived, purchase all or any part of the Collateralbeing sold, free from and discharged of all trusts, claims, right of redemption andequities of any Debtor, which are hereby waived and released.     (iv) The Secured Parties shall have the right (but not the obligation) tonotify any account debtors and any obligors under instruments or accounts to makepayments directly to the Secured Parties and to enforce the Debtors’ rights againstsuch account debtors and obligors.     (v) The Secured Parties may (but are not obligated to) direct any financialintermediary or any other person or entity holding any investment property totransfer the same to the Secured Parties or their designee.     (vi) The Secured Parties may (but are not obligated to) transfer any or allIntellectual Property registered in the name of any Debtor at the United StatesPatent and Trademark Office and/or Copyright Office into the name of the SecuredParties or any designee or any purchaser of any Collateral.     (b) The Secured Parties may comply with any applicable law in connection with adisposition of Collateral and such compliance will not be considered adversely to affect thecommercial reasonableness of any sale of the Collateral. The Secured Parties may sell theCollateral without giving any warranties and may specifically disclaim such warranties. Ifthe Secured Parties sells any of the Collateral on credit, the Debtors will only be creditedwith payments actually made by the purchaser. In addition, each Debtor waives any and allrights that
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it may have to a judicial hearing in advance of the enforcement of any of the SecuredParties’ rights and remedies hereunder, including, without limitation, its right followingan Event of Default to take immediate possession of the Collateral and to exercise itsrights and remedies with respect thereto.     (c) For the purpose of enabling the Secured Parties to further exercise rights andremedies under this Section 8 or elsewhere provided by agreement or applicable law, eachDebtor hereby grants to the Secured Parties an irrevocable, nonexclusive license(exercisable without payment of royalty or other compensation to such Debtor) to use,license or sublicense following an Event of Default, any Intellectual Property now owned orhereafter acquired by such Debtor, and wherever the same may be located, and including insuch license access to all media in which any of the licensed items may be recorded orstored and to all computer software and programs used for the compilation or printoutthereof.     9. **Applications of Proceeds**. The proceeds of any such sale, lease or other disposition of theCollateral hereunder shall be applied first, to the expenses of retaking, holding, storing,processing and preparing for sale, selling, and the like (including, without limitation, any taxes,fees and other costs incurred in connection therewith) of the Collateral, to the reasonableattorneys’ fees and expenses incurred by the Secured Parties in enforcing their rights hereunderand in connection with collecting, storing and disposing of the Collateral, and then tosatisfaction of the Obligations pro rata among the Secured Parties (based on then-outstandingprincipal amounts of Notes at the time of any such determination), and to the payment of any otheramounts required by applicable law, after which the Secured Parties shall pay to the applicableDebtor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, theproceeds thereof are insufficient to pay all amounts to which the Secured Parties are legallyentitled, the Debtors will be liable for the deficiency, together with interest thereon, at therate of 18% per annum or the lesser amount permitted by applicable law (the “Default Rate”), andthe reasonable fees of any attorneys employed by the Secured Parties to collect such deficiency.To the extent permitted by applicable law, each Debtor waives all claims, damages and demandsagainst the Secured Parties arising out of the repossession, removal, retention or sale of theCollateral, unless due solely to the gross negligence or willful misconduct of the Secured Partiesas determined by a final judgment (not subject to further appeal) of a court of competentjurisdiction.     10. **Securities Law Provision**. Each Debtor recognizes that the Secured Parties may be limitedin its ability to effect a sale to the public of all or part of the Pledged Securities by reason ofcertain prohibitions in the Securities Act of 1933, as amended, or other federal or statesecurities laws (collectively, the “Securities Laws”), and may be compelled to resort toone or more sales to a restricted group of purchasers who may be required to agree to acquire thePledged Securities for their own account, for investment and not with a view to the distribution orresale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorablethan if the Pledged Securities were sold to the public, and that the Secured Parties has noobligation to delay the sale of any Pledged Securities for the period of time necessary to registerthe Pledged Securities for sale to the public under the Securities Laws. Each Debtor shallcooperate with the Secured Parties in its attempt to satisfy any requirements under the SecuritiesLaws (including, without limitation, registration thereunder if requested by the Secured Parties)applicable to the sale of the Pledged Securities by the Secured Parties.     11. **Costs and Expenses**. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs andexpenses incurred in connection with any filing required hereunder, including without limitation,any financing statements pursuant to the UCC, continuation statements, partial releases and/ortermination statements related thereto or any expenses of any searches reasonably required by theSecured Parties. The Debtors shall also pay all other claims and charges which in the reasonableopinion of the Secured Parties might prejudice, imperil or otherwise affect the Collateral or theSecurity Interest therein. The
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Debtors will also, upon demand, pay to the Secured Parties the amount of any and all reasonableexpenses, including the reasonable fees and expenses of its counsel and of any experts and agents,which the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii)the custody or preservation of, or the sale of, collection from, or other realization upon, any ofthe Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Partiesunder the Notes. Until so paid, any fees payable hereunder shall be added to the principal amountof the Notes and shall bear interest at the Default Rate.     12. **Responsibility for Collateral**. The Debtors assume all liabilities and responsibility inconnection with all Collateral, and the Obligations shall in no way be affected or diminished byreason of the loss, destruction, damage or theft of any of the Collateral or its unavailability forany reason. Without limiting the generality of the foregoing, (a) no Secured Party (i) has anyduty (either before or after an Event of Default) to collect any amounts in respect of theCollateral or to preserve any rights relating to the Collateral, or (ii) has any obligation toclean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain obligatedand liable under each contract or agreement included in the Collateral to be observed or performedby such Debtor thereunder. No Secured Party shall have any obligation or liability under any suchcontract or agreement by reason of or arising out of this Agreement or the receipt by any SecuredParty of any payment relating to any of the Collateral, nor shall the any Secured Party beobligated in any manner to perform any of the obligations of any Debtor under or pursuant to anysuch contract or agreement, to make inquiry as to the nature or sufficiency of any payment receivedby any Secured Party in respect of the Collateral or as to the sufficiency of any performance byany party under any such contract or agreement, to present or file any claim, to take any action toenforce any performance or to collect the payment of any amounts which may have been assigned toany Secured Party may be entitled at any time or times.     13. **Security Interest Absolute**. All rights of the Secured Parties and all obligations of theDebtors hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validityor enforceability of this Agreement, the Notes or any agreement entered into in connection with theforegoing, or any portion hereof or thereof; (b) any change in the time, manner or place of paymentor performance of, or in any other term of, all or any of the Obligations, or any other amendmentor waiver of or any consent to any departure from the Notes or any other agreement entered into inconnection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral,or any release or amendment or waiver of or consent to departure from any other collateral for, orany guaranty, or any other security, for all or any of the Obligations; (d) any action by theSecured Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims ormatters made or arising in connection with the Collateral; or (e) any other circumstance whichmight otherwise constitute any legal or equitable defense available to a Debtor, or a discharge ofall or any part of the Security Interest granted hereby. Until the Obligations shall have beenpaid and performed in full, the rights of the Secured Parties shall continue even if theObligations are barred for any reason, including, without limitation, the running of the statute oflimitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of protest,demand, notice of nonpayment and demand for performance. In the event that at any time any transferof any Collateral or any payment received by the Secured Parties hereunder shall be deemed by finalorder of a court of competent jurisdiction to have been a voidable preference or fraudulentconveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to beotherwise due to any party other than the Secured Parties, then, in any such event, each Debtor’sobligations hereunder shall survive cancellation of this Agreement, and shall not be discharged orsatisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain avalid and binding obligation enforceable in accordance with the terms and provisions hereof. EachDebtor waives all right to require the Secured Parties to proceed against any other person orentity or to apply any Collateral which the Secured Parties may hold at any time, or to marshalassets, or to pursue any other
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remedy. Each Debtor waives any defense arising by reason of the application of the statute oflimitations to any obligation secured hereby.     14. **Term of Agreement**. This Agreement and the Security Interest shall terminate on the date onwhich all payments under the Notes have been indefeasibly paid in full and all other Obligationshave been paid or discharged; provided, however, that all indemnities of the Debtors contained inthis Agreement shall survive and remain operative and in full force and effect regardless of thetermination of this Agreement.     15. **Power of Attorney; Further Assurances**.     (a) Each Debtor authorizes the Secured Parties, and does hereby make, constitute andappoint the Secured Parties and their respective officers, agents, successors or assignswith full power of substitution, as such Debtor’s true and lawful attorney-in-fact, withpower, in the name of the various Secured Parties or such Debtor, to, after the occurrenceand during the continuance of an Event of Default, (i) endorse any note, checks, drafts,money orders or other instruments of payment (including payments payable under or in respectof any policy of insurance) in respect of the Collateral that may come into possession ofthe Secured Parties; (ii) to sign and endorse any financing statement pursuant to the UCC orany invoice, freight or express bill, bill of lading, storage or warehouse receipts, draftsagainst debtors, assignments, verifications and notices in connection with accounts, andother documents relating to the Collateral; (iii) to pay or discharge taxes, liens, securityinterests or other encumbrances at any time levied or placed on or threatened against theCollateral; (iv) to demand, collect, receipt for, compromise, settle and sue for monies duein respect of the Collateral; (v) to transfer any Intellectual Property or provide licensesrespecting any Intellectual Property; and (vi) generally, at the option of the SecuredParties, and at the expense of the Debtors, at any time, or from time to time, to executeand deliver any and all documents and instruments and to do all acts and things which theSecured Parties deem necessary to protect, preserve and realize upon the Collateral and theSecurity Interest granted therein in order to effect the intent of this Agreement and theNotes all as fully and effectually as the Debtors might or could do; and each Debtor herebyratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.This power of attorney is coupled with an interest and shall be irrevocable for the term ofthis Agreement and thereafter as long as any of the Obligations shall be outstanding. Thedesignation set forth herein shall be deemed to amend and supersede any inconsistentprovision in the Organizational Documents or other documents or agreements to which anyDebtor is subject or to which any Debtor is a party. Without limiting the generality of theforegoing, after the occurrence and during the continuance of an Event of Default, eachSecured Party is specifically authorized to execute and file any applications for orinstruments of transfer and assignment of any patents, trademarks, copyrights or otherIntellectual Property with the United States Patent and Trademark Office and the UnitedStates Copyright Office.     (b) On a continuing basis, each Debtor will make, execute, acknowledge, deliver, fileand record, as the case may be, with the proper filing and recording agencies in anyjurisdiction, including, without limitation, the jurisdictions indicated on ScheduleC attached hereto, all such instruments, and take all such action as may reasonably bedeemed necessary or advisable, or as reasonably requested by the Secured Parties, to perfectthe Security Interest granted hereunder and otherwise to carry out the intent and purposesof this Agreement, or for assuring and confirming to the Secured Parties the grant orperfection of a perfected security interest in all the Collateral under the UCC.
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     (c) Each Debtor hereby irrevocably appoints the Secured Parties as such Debtor’sattorney-in-fact, with full authority in the place and instead of such Debtor and in thename of such Debtor, from time to time in the Secured Parties’ discretion, to take anyaction and to execute any instrument which the Secured Parties may deem necessary oradvisable to accomplish the purposes of this Agreement, including the filing, in its solediscretion, of one or more financing or continuation statements and amendments thereto,relative to any of the Collateral without the signature of such Debtor where permitted bylaw, which financing statements may (but need not) describe the Collateral as “all assets”or “all personal property” or words of like import, and ratifies all such actions taken bythe Secured Parties. This power of attorney is coupled with an interest and shall beirrevocable for the term of this Agreement and thereafter as long as any of the Obligationsshall be outstanding.     16. **Notices**. All notices, requests, demands and other communications hereunder shall besubject to the notice provision of the Purchase Agreement (as such term is defined in the Notes).     17. **Other Security**. To the extent that the Obligations are now or hereafter secured byproperty other than the Collateral or by the guarantee, endorsement or property of any otherperson, firm, corporation or other entity, then the Secured Parties shall have the right, in itssole discretion, to pursue, relinquish, subordinate, modify or take any other action with respectthereto, without in any way modifying or affecting any of the Secured Parties’ rights and remedieshereunder.     18. **Intentionally Omitted**.     19. **Miscellaneous**.     (a) No course of dealing between the Debtors and the Secured Parties, nor any failureto exercise, nor any delay in exercising, on the part of the Secured Parties, any right,power or privilege hereunder or under the Notes shall operate as a waiver thereof; nor shallany single or partial exercise of any right, power or privilege hereunder or thereunderpreclude any other or further exercise thereof or the exercise of any other right, power orprivilege.     (b) All of the rights and remedies of the Secured Parties with respect to theCollateral, whether established hereby or by the Notes or by any other agreements,instruments or documents or by law shall be cumulative and may be exercised singly orconcurrently.     (c) This Agreement constitutes the entire agreement of the parties with respect to thesubject matter hereof and is intended to supersede all prior negotiations, understandingsand agreements with respect thereto. Except as specifically set forth in this Agreement, noprovision of this Agreement may be modified or amended except by a written agreementspecifically referring to this Agreement and signed by the parties hereto.     (d) In the event any provision of this Agreement is held to be invalid, prohibited orunenforceable in any jurisdiction for any reason, unless such provision is narrowed byjudicial construction, this Agreement shall, as to such jurisdiction, be construed as ifsuch invalid, prohibited or unenforceable provision had been more narrowly drawn so as notto be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, anyprovision of this Agreement is held to be invalid, prohibited or unenforceable in anyjurisdiction, such provision, as to such jurisdiction, shall be ineffective to the extent ofsuch invalidity, prohibition or unenforceability without invalidating the remaining portionof such provision or the other provisions of this Agreement and without affecting thevalidity or enforceability of such provision or the other provisions of this Agreement inany other jurisdiction.
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     (e) No waiver of any breach or default or any right under this Agreement shall beconsidered valid unless in writing and signed by the party giving such waiver, and no suchwaiver shall be deemed a waiver of any subsequent breach or default or right, whether of thesame or similar nature or otherwise.     (f) This Agreement shall be binding upon and inure to the benefit of each partyhereto and its successors and assigns.     (g) Each party shall take such further action and execute and deliver such furtherdocuments as may be necessary or appropriate in order to carry out the provisions andpurposes of this Agreement.     (h) All questions concerning the construction, validity, enforcement andinterpretation of this Agreement shall be governed by and construed and enforced inaccordance with the internal laws of the State of New York, without regard to the principlesof conflicts of law thereof. Each Debtor agrees that all proceedings concerning theinterpretations, enforcement and defense of the transactions contemplated by this Agreementand the Notes (whether brought against a party hereto or its respective affiliates,directors, officers, shareholders, partners, members, employees or agents) shall becommenced exclusively in the state and federal courts sitting in the City of New York,Borough of Manhattan. Each Debtor hereby irrevocably submits to the exclusive jurisdictionof the state and federal courts sitting in the City of New York, Borough of Manhattan forthe adjudication of any dispute hereunder or in connection herewith or with any transactioncontemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not toassert in any proceeding, any claim that it is not personally subject to the jurisdiction ofany such court, that such proceeding is improper. Each party hereto hereby irrevocablywaives personal service of process and consents to process being served in any suchproceeding by mailing a copy thereof via registered or certified mail or overnight delivery(with evidence of delivery) to such party at the address in effect for notices to it underthis Agreement and agrees that such service shall constitute good and sufficient service ofprocess and notice thereof. Nothing contained herein shall be deemed to limit in any way anyright to serve process in any manner permitted by law. Each party hereto hereby irrevocablywaives, to the fullest extent permitted by applicable law, any and all right to trial byjury in any legal proceeding arising out of or relating to this Agreement or thetransactions contemplated hereby. If any party shall commence a proceeding to enforce anyprovisions of this Agreement, then the prevailing party in such proceeding shall bereimbursed by the other party for its reasonable attorney’s fees and other costs andexpenses incurred with the investigation, preparation and prosecution of such proceeding.     (i) This Agreement may be executed in any number of counterparts, each of which when soexecuted shall be deemed to be an original and, all of which taken together shall constituteone and the same Agreement. In the event that any signature is delivered by facsimiletransmission, such signature shall create a valid binding obligation of the party executing(or on whose behalf such signature is executed) the same with the same force and effect asif such facsimile signature were the original thereof.     (j) All Debtors shall jointly and severally be liable for the obligations of eachDebtor to the Secured Parties hereunder.     (k) Each Debtor shall indemnify, reimburse and hold harmless the Secured Parties andtheir respective partners, members, shareholders, officers, directors, employees and agents
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(collectively, “Indemnitees”) from and against any and all losses, claims,liabilities, damages, penalties, suits, costs and expenses, of any kind or nature,(including fees relating to the cost of investigating and defending any of the foregoing)imposed on, incurred by or asserted against such Indemnitee in any way related to or arisingfrom or alleged to arise from this Agreement or the Collateral, except any such losses,claims, liabilities, damages, penalties, suits, costs and expenses which result from thegross negligence or willful misconduct of the Indemnitee as determined by a final,nonappealable decision of a court of competent jurisdiction. This indemnification provisionis in addition to, and not in limitation of, any other indemnification provision in theNotes, the Purchase Agreement (as such term is defined in the Notes) or any other agreement,instrument or other document executed or delivered in connection herewith or therewith.     (l) Nothing in this Agreement shall be construed to subject any Secured Party toliability as a partner in any Debtor or any if its direct or indirect subsidiaries that is apartnership or as a member in any Debtor or any of its direct or indirect subsidiaries thatis a limited liability company, nor any Secured Party be deemed to have assumed anyobligations under any partnership agreement or limited liability company agreement, asapplicable, of any such Debtor or any if its direct or indirect subsidiaries or otherwise,unless and until any such Secured Party exercises its right to be substituted for suchDebtor as a partner or member, as applicable, pursuant hereto.     (m) To the extent that the grant of the security interest in the Collateral and theenforcement of the terms hereof require the consent, approval or action of any partner ormember, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor orcompliance with any provisions of any of the Organizational Documents, the Debtors herebygrant such consent and approval and waive any such noncompliance with the terms of saiddocuments.[SIGNATURE PAGES FOLLOW]
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     IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executedon the day and year first above written.**LAS VEGAS GAMING, INC.**/s/ Russell R. Roth**IMAGINEERING GAMING INC.**/s/ Russell R. Roth**LAS VEGAS KENO, INC.**/s/ Russell R. Roth[SIGNATURE PAGE OF HOLDERS FOLLOWS]
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[SIGNATURE PAGE OF HOLDERS TO LAS VEGAS GAMING SA]Name ofInvesting Entity: CAMOFI Master LDC