Exhibit
10.5


 


EXECUTION
VERSION


 


STOCK PLEDGE AGREEMENT


 


This STOCK PLEDGE
AGREEMENT (as amended, restated, supplemented, renewed or otherwise
modified from time to time, this “Agreement”), dated as of
January 23, 2004, is entered into by and among Poster Financial Group,
Inc., a Nevada corporation (the “Note Issuer”), GNL, CORP., a Nevada
corporation (“GNL”), GNLV, CORP., a Nevada corporation (“GNLV”),
Golden Nugget Experience, LLC, a Nevada limited liability company (“GNE”,
and together with the Note Issuer, GNL and GNLV each, a  “Pledgor”, and individually and
collectively, jointly and severally, the “Pledgors”) and Wells Fargo
Bank, National Association, as the collateral agent for the Secured Parties (as
defined below) (in such capacity, together with its successors, if any, in such
capacity, the “Collateral Agent”), with reference to the following:


 


WHEREAS, the Note Issuer has entered into an
Indenture, dated as of December 3, 2003 (as such Indenture may be amended,
amended and restated, supplemented or otherwise modified from time to time
pursuant to the terms thereof, the “Indenture”) between the Note Issuer
and HSBC Bank USA, as the indenture trustee (the “Indenture Trustee”)
pursuant to which the Note Issuer has issued the 8 3⁄4 % Senior Secured Notes due
2011 (“Senior Secured Notes”);


 


WHEREAS, GNL, GNLV
and GNE are contemporaneously entering herewith into the Indenture;


 


WHEREAS, the Note
Issuer, GNL, and GNLV (collectively, the “Borrowers”), Wells Fargo
Foothill, Inc., as the arranger, administrative agent and documentation agent
(the “Agent”) for certain financial institutions from time to time
parties thereto, (the “Lenders”), are contemporaneously entering
herewith into that certain Loan and Security Agreement of even date herewith
(as amended, restated, supplemented, renewed or otherwise modified from time to
time, the “Loan Agreement”);


 


WHEREAS, each
Pledgor and the Collateral Agent are contemporaneously entering herewith into
that certain Security Agreement of even date herewith (as amended, restated,
supplemented, renewed or otherwise modified from time to time, the “Security
Agreement”);


 


WHEREAS, the
Pledgors, the Collateral Agent and the Agent, are parties to a certain
Intercreditor Agreement, dated as of even date herewith (as amended, restated,
supplemented, renewed or otherwise modified from time to time, the “Intercreditor
Agreement”);


 


WHEREAS , the Note Issuer, the Indenture Trustee and
HSBC USA, as agent and as securities intermediary (the “Pledge Agent”)
have entered into that certain Pledge Agreement dated as of December 3,
2003 (as amended, amended and restated, supplemented, modified, renewed or
otherwise modified from time to time, the “Pledge Agreement”);


 


WHEREAS, each
Pledgor legally and beneficially owns the specified Equity Interests (as
defined below) identified as Pledged Interests in the Persons identified as
Issuers listed under the name of such Pledgor on Schedule A
attached hereto (or any addendum thereto); and


 


WHEREAS, each
Pledgor desires to pledge, grant, transfer, and assign to the Collateral Agent,
for the benefit of the Secured Parties, a security interest in the Pledged
Collateral (as hereinafter defined) to secure the Secured Obligations (as
hereinafter defined), as provided herein.


 

















 


NOW, THEREFORE, in
consideration of the mutual promises, covenants, representations, and
warranties set forth herein and for other good and valuable consideration, the
parties hereto agree as follows:


 


1.             Definitions And
Construction.


 


(a)           Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Indenture and, to the extent not so ascribed therein, the Intercreditor
Agreement.  The following terms, as used
in this Agreement, shall have the following meanings:


 


“Agent” has
the meaning set forth in the recitals to this Agreement, together with its
successors or assigns.


 


“Agreement”
has the meaning set forth in the preamble to this Agreement.


 


“Chief
Executive Office” means, with respect to each Pledgor, the address of such
Pledgor set forth on Schedule B to this Agreement.


 


“Code”
means the Uniform Commercial Code as from time to time in effect in the State
of New York; provided, however, that, in the event that, by
reason of mandatory provisions of law, any of the attachment, perfection or
priority of the Collateral Agent’s and the Senior Noteholders’ security
interest in any Pledged Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term “Code”
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection,
the effect thereof or priority and for purposes of definitions related to such
provisions.


 


“Collateral
Agent” has the meaning set forth in the preamble to this Agreement,
together with its successors or assigns.


 


“Collateral
Documents” means (i) this Agreement; (ii) the Security Agreement; (iii) the
Guarantee under the Indenture; (iv) the Intercreditor Agreement; (v) the
Deposit Account Control Agreement; (vi) the Trademark Security Agreement; (vii)
the Copyright Security Agreement; (viii) the Mortgages, and (ix) any document
or instrument executed and delivered pursuant to the Indenture or any Collateral
Document at any time or otherwise pursuant to which a Lien is granted by a
Pledgor to secure the Secured Obligations or under which rights or remedies
with respect to any such Lien are governed, as the same may be amended,
renewed, extended, supplemented or modified from time to time..


 


“Constituent
Documents” means, with respect to any Person, (a) the articles
of incorporation, certificate of incorporation or certificate of formation (or
the equivalent organizational documents) of such Person, (b) the by-laws,
operating agreement (or the equivalent governing documents) of such Person and
(c) any document setting forth the manner of election and duties of the
directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series
of such Person’s Stock.


 


“Domestic
Subsidiary” has the meaning specified in the Indenture.


 


“Equity
Interests” means (i) all shares, units, options, rights, warrants,
interests, participations, or other equivalents (regardless of how designated)
of or in a corporation, partnership, limited liability company, or equivalent
entity, whether voting or nonvoting, including general partner partnership
interests, limited partner partnership interests, common stock, preferred
stock, or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations


 


2

















 


promulgated by the SEC under the Exchange Act), including no more than
65% of the Stock of any Foreign Subsidiary, and (ii) all Proceeds, including,
without limitation, all proceeds received or receivable by the Pledgor, in
cash, Stock or otherwise, from any recapitalization, reclassification, merger,
dissolution, liquidation or other termination of the existence of the Issuers.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and any successor
statute.


 


“Foreign
Subsidiary” has the meaning specified in the Indenture.


 


“Future Rights”
means:  (a) all Equity Interests (other
than Pledged Interests) and all securities convertible or exchangeable into,
and all warrants, options, or other rights to purchase, Equity Interests; (i)
to the extent of a Pledgor’s interest therein, all shares of, all securities convertible
or exchangeable into, and all warrants, options, or other rights to purchase
Equity Interests of any Person in which a Pledgor, after the date of this
Agreement, acquires a direct equity interest, irrespective of whether such
Person is or becomes a Subsidiary of such Pledgor; and (ii) the certificates or
instruments representing such additional Equity Interests, convertible or
exchangeable securities, warrants, and other rights and all dividends, cash,
options, 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 Equity Interests.


 


“Gaming Laws”
means all applicable federal, state and local laws, rules and regulations
pursuant to which the Nevada Gaming Authorities possess regulatory, licensing
or permit authority over the ownership or operation of gaming facilities within
the State of Nevada, including, without limitation, the Nevada Gaming Control
Act, as codified in Chapter 463 of the Nevada Revised Statutes, as amended from
time to time, and the regulations of the NGC promulgated thereunder.


 


“GNE” has
the meaning specified in the preamble to this Agreement.


 


“GNL” has
the meaning set forth in the preamble to this Agreement.


 


“GNLV” has
the meaning set forth in the preamble to this Agreement.


 


“Governmental
Authority” means any nation, sovereign or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, including any central bank.


 


“Guarantors”
has the meaning specified in the Indenture.


 


“Holder”
and “Holders” have the meanings set forth in Section 3 (c)
of this Agreement.


 


“Indenture”
has the meaning set forth in the recitals to this Agreement.


 


“Indenture
Trustee” has the meaning set forth in the recitals to this Agreement.


 


“Intercreditor
Agreement” has the meanings set fort in the recitals to this Agreement.


 


“Issuers”
means each of the Persons identified as an Issuer on Schedule A
attached hereto (or any addendum thereto), any successors thereto, whether by
merger or otherwise and any other Restricted Subsidiary of Pledgor required to
become a Guarantor pursuant to the Transaction Documents, and which pledge to
the Collateral Agent hereunder has been approved by applicable Gaming
Authorities.  To the extent that any
Restricted Subsidiary of Pledgor is required to be designated an Issuer,
Schedule A shall be hereafter amended, supplemented or modified.


 


3

















 


“Lien”
means any interest in an asset securing an obligation owed to, or a claim by,
any Person other than the owner of the asset, irrespective of whether
(a) such interest is based on the common law, statute, or contract,
(b) such interest is recorded or perfected, and (c) such interest is
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances. 
Without limiting the generality of the foregoing, the term “Lien”
includes the lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, security
agreement or other preferential arrangement whatsoever, including, without
limitation, any right of setoff, any conditional sale or trust receipt, or from
a lease or any financing lease having substantially the same economic effect as
any of the foregoing, consignment, or bailment for security purposes and also includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Real Property.


 


“Loan Agreement”
has the meaning set forth in the recitals to this Agreement.


 


“Nevada Gaming
Authorities” means the NGC and the NGCB.


 


“NGC” means
the Nevada Gaming Commission.


 


“NGCB”
means the Nevada State Gaming Control Board.


 


“Person”
means any natural person, corporation, limited liability company, limited
partnership, general partnership, limited liability partnership, joint venture,
trust, land trust, business trust, or other organization, irrespective of
whether it is a legal entity, and shall include a government and any agency or
political subdivision thereof.


 


“Pledged
Collateral” means the Pledged Interests, the Future Rights, and the
Proceeds, collectively.


 


“Pledged
Interests” means all of the Equity Interests identified as Pledged
Interests on Schedule A attached hereto (or any addendum thereto)
(it being understood that GNE’s membership interest in The Fremont Street
Experience Limited Liability Company shall not be pledged to the Collateral
Agent and will not constitute Pledged Interests).


 


“Pledgor”
and “Pledgors” have the respective meanings set forth in the preamble to
this Agreement.


 


“Proceeds”
means all proceeds as such term is defined in Section 9-102(a)(64) of the
Uniform Commercial Code in effect in the State of New York on the date hereof
(including proceeds of proceeds) of the Pledged Interests and Future Rights
including all: (a) rights, benefits, distributions, premiums, profits,
dividends, interest, cash, instruments, documents of title, accounts, contract
rights, inventory, equipment, general intangibles, deposit accounts, chattel
paper, and other property from time to time received, receivable, or otherwise
distributed in respect of or in exchange for, or as a replacement of or a
substitution for, any of the Pledged Interests, Future Rights, or proceeds
thereof (including any cash, Equity Interests, or other securities or
instruments issued after any recapitalization, readjustment, reclassification,
merger or consolidation with respect to the Issuers and any security
entitlements, as defined in the Code, with respect thereto); (b) ”proceeds,”
as such term is defined in the Code; (c) proceeds of any insurance,
indemnity, warranty, or guaranty (including guaranties of delivery) payable
from time to time with respect to any of the Pledged Interests, Future Rights,
or proceeds thereof; (d) payments (in any form whatsoever) made or due and
payable to a Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Pledged


 


4

















 


Interests, Future Rights, or proceeds thereof; and (e) other
amounts from time to time paid or payable under or in connection with any of
the Pledged Interests, Future Rights, or proceeds thereof.


 


“Real Property” means any estates or interests in real property
now owned or hereafter acquired by any Pledgor or a Subsidiary of any Pledgor
and the improvements thereto.


 


“Restricted Subsidiary” has the meaning specified in the
Indenture.


 


“SEC” means
the United States Securities and Exchange Commission and any successor thereto.


 


“Secured
Obligations” means, with respect to each Pledgor, all liabilities,
obligations (including the Obligations relating to the Senior Secured Notes and
the Guarantees), or undertakings owing by such Pledgor to the Secured Parties
of any kind or description arising out of or outstanding under, advanced or
issued pursuant to, or evidenced by the Senior Secured Notes, the Guarantees
under the Indenture, this Agreement or any of the other Collateral Documents,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest, premiums and any
and all costs, fees (including attorneys fees), and expenses in addition to all fees and expenses
(including attorney fees) arising under or in connection with the Pledge
Agreement (including interest, costs, fees, and expenses that, but for
the provisions of Bankruptcy Law, would have accrued irrespective of whether a
claim thereof is allowed) which such Pledgor is required to pay pursuant to any
of the foregoing, by law, or otherwise, and any and all renewals,
modifications, amendments, extensions for any period, supplements or
restatements of any of the foregoing.


 


“Secured
Parties” means the Senior Noteholders, the Collateral Agent, the Indenture
Trustee and the Pledge
Agent, together with their transferees, assigns or successors.


 


“Securities Act”
has the meaning set forth in Section 9(d) of this Agreement.


 


“Security
Agreement” has the meaning set forth in the recitals to this Agreement.


 


“Senior
Noteholders” means
the holders from time to time of the Senior Secured Notes.


 


“Senior Secured Notes” has the meaning specified in the recitals
to this Agreement.


 


“Stock”
means shares of capital stock (whether denominated as common stock or preferred
stock), beneficial, partnership or membership interests, participations or
other equivalents (regardless of how designated) of or in a corporation,
partnership, limited liability company or equivalent entity, whether voting or
non-voting.


 


“Transaction
Documents” means collectively the Indenture, the Senior Secured Notes and
the Collateral Documents.


 


(b)           Construction.


 


(i)            Unless the context of
this Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, the part includes the whole,
the term “including” is not limiting, and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase
“and/or.”  The words “hereof,” “herein,”
“hereby,” “hereunder,” and other similar terms in this Agreement refer to this
Agreement as a whole and not exclusively to any particular provision of this
Agreement.  Article, section, subsection,
exhibit, and


 


5

















 


schedule references are to this Agreement unless otherwise
specified.  All of the exhibits or
schedules attached to this Agreement shall be deemed incorporated herein by
reference.  Any reference to any of the
following documents includes any and all permitted alterations, amendments,
restatements, extensions, modifications, renewals, or supplements thereto or
thereof, as applicable: this Agreement, the Indenture, or any of the other
Collateral Documents.


 


(ii)           Neither this Agreement
nor any uncertainty or ambiguity herein shall be construed or resolved against
the Collateral Agent or a Pledgor, whether under any rule of construction or
otherwise.  On the contrary, this Agreement
has been reviewed by each of the parties signatory hereto and their respective
counsel and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and
intentions of the parties hereto.


 


(iii)          In the event of any
direct conflict between the express terms and provisions of this Agreement and
of the Indenture, the terms and provisions of the Indenture shall control; provided,
however, that the inclusion herein of additional obligations on the part
of any Pledgor and supplemental rights and remedies in favor of the Collateral
Agent, in each case in respect of the Pledged Collateral, shall not be deemed a
conflict with the Intercreditor Agreement.


 


2.             Pledge.    Each Pledgor hereby pledges, grants,
transfers, and assigns to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in, and a continuing Lien on, all of such
Pledgor’s right, title, and interest in and to the Pledged Collateral in order
to secure prompt and complete payment and performance of any and all of the
Secured Obligations in accordance with the terms and conditions of the
Transaction Documents to which such Pledgor is a party, and in order to secure
prompt performance by each Pledgor of each such Pledgor’s covenants and duties
under each Transaction Document to which such Pledgor is a party.  Anything contained in this Agreement or any
other Transaction Document to the contrary notwithstanding, except for Asset Sales
as permitted under the Indenture and subject to the Intercreditor Agreement, no
Pledgor has any authority, express or implied, to dispose of any item or
portion of the Pledged Collateral.


 


3.             Delivery and
Registration of Pledged Collateral. Subject to the terms of the
Intercreditor Agreement and the Gaming Laws:


 


(a)           All certificates or
instruments representing or evidencing the Pledged Collateral shall be promptly
delivered by Pledgors to the Collateral Agent or the Collateral Agent’s
designee pursuant hereto at a location designated by the Collateral Agent and
shall be held by or on behalf of the Collateral Agent pursuant hereto, and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Collateral Agent, together, in respect of Future
Rights, with a Pledge Amendment, duly executed by the Pledgor, in substantially
the form of Schedule C (Form of Pledge Amendment) or such other
document acceptable to the Collateral Agent.


 


(b)           Upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent shall have
the right, at any time in its sole discretion and without notice to a Pledgor,
to transfer to or to register on the books of the Issuers (or of any other
Person maintaining records with respect to the Pledged Collateral) in the name
of the Collateral Agent or any of its nominees any or all of the Pledged
Collateral.  In addition, the Collateral
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments
of smaller or larger denominations.


 


(c)           If, at any time and
from time to time, any Pledged Collateral (including any certificate or instrument
representing or evidencing any Pledged Collateral) is in the possession of a
Person other than the Collateral Agent or the applicable Pledgor (a “Holder”),
then such Pledgor shall


 


6

















 


promptly, at the Collateral Agent’s option, either cause such Pledged
Collateral to be delivered into the Collateral Agent’s possession, or execute
and deliver to such Holder a written notification/instruction, and take all
other steps necessary to perfect the security interest of the Collateral Agent
in such Pledged Collateral, including obtaining from such Holder a written
acknowledgment that such Holder holds such Pledged Collateral for the
Collateral Agent, all pursuant to the Code or other applicable law governing the
perfection of the Collateral Agent’s security interest in the Pledged
Collateral in the possession of such Holder. 
Each such notification/instruction and acknowledgment shall be in form
and substance reasonably satisfactory to the Collateral Agent.


 


(d)           Any and all Pledged
Collateral (including dividends, interest, and other cash distributions) at any
time received or held by a Pledgor shall be so received or held in trust for
the Collateral Agent, shall be segregated from other funds and property of the
applicable Pledgor and shall be forthwith delivered to the Collateral Agent in
the same form as so received or held, with any necessary endorsements to be
held by the Collateral Agent as Pledged Collateral; provided that cash
dividends or distributions received by a Pledgor, if and to the extent they are
not prohibited by the Transaction Documents, may be retained by the applicable
Pledgor in accordance with Section 4 or distributed to its owner(s)
to the extent permitted by the Indenture and the Loan Agreement.


 


(e)           If at any time and from
time to time any Pledged Collateral consists of an uncertificated security or a
security in book entry form, then the applicable Pledgor shall promptly cause
such Pledged Collateral to be registered or entered, as the case may be, in the
name of the Collateral Agent, for the benefit of the Secured Parties, or
otherwise cause the security interest held by the Collateral Agent, for the
benefit of the Secured Parties, to be perfected in accordance with applicable
law.


 


4.             Voting Rights and
Dividends. Subject to the terms of the Intercreditor Agreement and the
Gaming Laws:


 


(a)           With respect to any
Pledgor, so long as (i) no Event of Default shall have occurred and be
continuing, or (ii) if an Event of Default has occurred and is continuing, such
Pledgor shall not have received the written notice from the Collateral Agent
described below in Section 4(b), such Pledgor shall be entitled to
exercise or refrain from exercising any and all voting and other consensual
rights pertaining to the Pledged Collateral applicable to it or any part
thereof for any purpose not inconsistent with the terms of the Transaction
Documents; provided,
however, that no vote shall be cast, consent given or right
exercised or other action taken by such Pledgor that would impair the Pledged
Collateral, be inconsistent with or result in any violation of any provision of
the Transaction Documents, or that would, without the prior consent of the
Collateral Agent, enable or permit any Issuer of the Pledged Collateral to
issue any Stock or to issue any other securities convertible into or granting
the right to purchase or exchange for any Stock of any Issuer of Pledged
Collateral other than as permitted by the Transaction Documents and the Loan
Agreement.  Any sums paid upon or in
respect of any Pledged Collateral upon the liquidation or dissolution of any
Issuer of any Pledged Collateral, any distribution of capital made on or in
respect of any Pledged Collateral or any property distributed upon or with
respect to any Pledged Collateral pursuant to the recapitalization or
reclassification of the capital of any Issuer of Pledged Collateral or pursuant
to the reorganization thereof shall, unless otherwise subject to a perfected
security interest in favor of the Collateral Agent, be delivered to the
Collateral Agent to be held by it hereunder as additional collateral security
for the Secured Obligations.  If any sum
of money or property so paid or distributed in respect of any Pledged
Collateral shall be received by such Pledgor, such Pledgor shall, until such
money or property is paid or delivered to the Collateral Agent, hold such money
or property in trust for the Collateral Agent, segregated from other funds of
such Pledgor, as additional security for the Secured Obligations.


 


(b)           Upon the occurrence and
during the continuance of an Event of Default, at the election of the
Collateral Agent in its sole discretion, upon the receipt by the applicable
Pledgor of written


 


7

















 


notice of such election by the Collateral Agent, all rights of such
Pledgor to exercise the voting and other consensual rights or receive and
retain cash dividends or distributions that it would otherwise be entitled to
exercise or receive and retain, as applicable pursuant to Section 4(a),
shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, who shall thereupon have the sole right to exercise such
voting or other consensual rights and to receive and retain such cash dividends
and distributions.  Upon the receipt of
such written notice, such Pledgor shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent all such proxies and other
instruments as the Collateral Agent may reasonably request for the purpose of
enabling the Collateral Agent to exercise the voting and other rights which it
is entitled to exercise and to receive the dividends and distributions that it
is entitled to receive and retain pursuant to the preceding sentence.


 


5.             Representations
and Warranties. In order to induce the Secured Parties to accept this
Agreement, each Pledgor represents, warrants, and covenants (which
representations and warranties will survive the creation and payment of the
Secured Obligations) as follows:


 


(a)           Such Pledgor has taken
all steps it deems necessary or appropriate to be informed on a continuing
basis of changes or potential changes affecting the Pledged Collateral
(including rights of conversion and exchange, rights to subscribe, payment of
dividends, reorganizations or recapitalizations, tender offers and voting
rights), and each Pledgor agrees that no Secured Party shall have any
responsibility or liability for informing any Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto;


 


(b)           All information herein
or hereafter supplied to the Collateral Agent or any other Secured Party by or
on behalf of such Pledgor in writing with respect to the Pledged Collateral is
accurate and complete in all material respects;


 


(c)           Such Pledgor is the
sole legal and beneficial owner of the Pledged Collateral free and clear of any
adverse claim, Lien, or other right, title, or interest of any party, other
than the Liens held by the Collateral Agent for the benefit of the Secured
Parties and Permitted Liens; and such Pledgor has full right, power and
authority to pledge, assign and grant a security interest in the Pledged
Collateral to the Collateral Agent for the benefit of the Secured Parties;


 


(d)           As of the date hereof,
there are no existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Collateral;


 


(e)           Except for such
authorizations, consents and other actions as shall have been obtained and
shall be in effect, no authorization, consent, approval or other action by, and
no notice to or registration, recordation or filing with, any Governmental
Authority is required for (i) the due execution, delivery and performance by
each Pledgor of this Agreement, (ii) the grant by each Pledgor of the security
interest granted by this Agreement, (iii) the perfection of such security
interest (except for the filing of any appropriate financing statements) or
(iv) the exercise by the Collateral Agent for the benefit of the Secured
Parties, of its rights and remedies under this Agreement, in each case under
clauses (i) through (iv) above, except as may be required by applicable Gaming
Laws or except as may be required in connection with the disposition of the
Pledged Collateral by federal and state securities laws or antitrust laws and
the Hart-Scott-Rodino Antitrust Improvements Act of 1976.  None of the Pledgors has performed or will
perform any acts which might prevent the Collateral Agent for the benefit of
the Secured Parties in any such enforcement. 
None of the Pledged Collateral has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject.


 


(f)            This Agreement
together with the delivery to the Collateral Agent of the Pledged Interests
representing Pledged Collateral (or the delivery to all Holders of the Pledged
Interests


 


8

















 


representing Pledged Collateral of the notification/instruction
referred to in Section 3 of this Agreement), creates a valid,
perfected security interest in one hundred percent (100%) of the Pledged
Interests which are in certificated form and which constitute “securities” (as
such term is defined in the Code) in favor of the Collateral Agent securing
payment of the Secured Obligations, and all actions necessary on the part of
the Pledgors to achieve such perfection have been duly taken;


 


(g)           This Agreement, together with the filing of financing statements with
the appropriate filing office of the jurisdiction of organization for each
Pledgor, creates a valid, perfected security interest in one hundred percent
(100%) of the Pledged Interests which are uncertificated in favor of the
Collateral Agent securing payment of the Secured Obligations, and all actions
on the part of each Pledgor necessary to achieve such perfection have been duly
taken;


 


(h)           Schedule A
to this Agreement is true, correct and complete in all material respects as of
the date hereof; without limiting the generality of the foregoing, as of the
date hereof: (i) except as set forth in Schedule A, all the Pledged
Interests are in certificated form and, except to the extent registered in the
name of the Collateral Agent or its nominee pursuant to the provisions of this
Agreement, are registered in the name of the applicable Pledgor; and (ii) the
Pledged Interests as to each of the Issuers constitute at least the percentage
of all the fully diluted issued and outstanding Equity Interests of such Issuer
as set forth in Schedule A to this Agreement;


 


(i)            All of the Pledged
Collateral, as applicable, consisting of “certificated securities” (as such
term is defined in the Code) has been delivered to the Collateral Agent in
accordance with Section 3 hereof;


 


(j)            Except as listed on Schedule A,
there is no Pledged Collateral including any Pledged Collateral consisting of
Financial Assets (as defined in the Code) held in a Control Account (as defined
in the Security Agreement);


 


(k)           Except for GNLV’s
Pledged Interests in GNE, the Pledged Interests that are interests in general
partnerships, limited partnerships or limited liability companies (i) are not
dealt in or traded on securities exchanges or in securities markets, (ii) do
not have terms expressly providing that they are securities governed by
Article 8 of the Code, and (iii) are not investment company securities,
and are not, therefore, “securities” governed by Article 8 of the Code;


 


(l)            There are no presently
existing Future Rights or Proceeds owned by any Pledgor as of the date hereof;


 


(m)          The Pledged Interests
have been duly authorized and validly issued and are fully paid and
nonassessable; and


 


(n)           The pledge of the
Pledged Collateral does not violate the Securities Act of 1933, the Trust
Indenture Act of 1939 or Regulation T, U or X of the Board of Governors of the
Federal Reserve System.


 


6.             Further Assurances.
Subject to the Intercreditor Agreement:


 


(a)           Each Pledgor agrees
that from time to time, at the expense of such Pledgor, it will promptly
execute and deliver all further instruments and documents, and take all further
actions that may be necessary or reasonably desirable, or that the Collateral
Agent, on behalf of the Secured Parties, may request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Collateral Agent, on behalf of the Secured Parties, to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.  Without limiting the
generality of the


 


9

















 


foregoing, each Pledgor will: (i) at the request of the Collateral
Agent, mark conspicuously each of its records pertaining to the Pledged
Collateral with a legend, in form and substance reasonably satisfactory to the
Collateral Agent, indicating that such Pledged Collateral is subject to the
security interest granted hereby; (ii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or reasonably desirable, or as the Collateral
Agent may request, in order to perfect and preserve the security interests
granted or purported to be granted hereby; and (iii) appear in and defend any action
or proceeding that may affect such Pledgor’s title to or the Collateral Agent’s
security interest in the Pledged Collateral.


 


(b)           Each Pledgor hereby
authorizes the Collateral Agent, on behalf of the Secured Parties, and at the
sole expense of such Pledgor to file one or more financing statements,
including any continuation, amendment or termination thereto, relative to all
or any part of the Pledged Collateral without the signature of such Pledgor
where permitted by law and describing the Pledged Collateral in the same manner
as described herein or in any other manner as the Collateral Agent may
determine is necessary, advisable or prudent, including, without limitation,
describing such property as “all assets” or “all personal property now owned or
hereafter acquired”.  A carbon,
photographic, or other reproduction of this Agreement or any financing
statement covering the Pledged Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.


 


(c)           Each Pledgor will furnish
to the Collateral Agent, upon the request of the Collateral Agent: (i) a
certificate executed by an authorized officer of such Pledgor, and dated as of
the date of delivery to the Collateral Agent, itemizing in such detail as the
Collateral Agent may reasonable request, the Pledged Collateral which, as of
the date of such certificate, has been delivered to the Collateral Agent by
such Pledgor pursuant to the provisions of this Agreement; and (ii) such
statements and schedules further identifying and describing the Pledged
Collateral and such other reports in connection with the Pledged Collateral as
the Collateral Agent may reasonably request.


 


7.             Covenants of Each
Pledgor. Each Pledgor will at all times comply with the covenants and
agreements contained in this Section 7 from the date hereof and for so
long as any part of the Secured Obligations is outstanding:


 


(a)           Perform each and every
covenant in the Transaction Documents applicable to such Pledgor;


 


(b)           At all times keep at
least one complete and accurate set of its records concerning all of the
Pledged Collateral (including  Proceeds)
at its Chief Executive Office as set forth in Schedule B hereto,
and not change the location of its Chief Executive Office or such records
without giving the Collateral Agent at least thirty (30) days prior written
notice thereof;


 


(c)           To the extent it may
lawfully do so, use its best efforts to prevent the Issuers from issuing Future
Rights or Proceeds, except for cash dividends and other distributions, if any,
that are not prohibited by the terms of the Transaction Documents to be paid by
any Issuer to such Pledgor;


 


(d)           Upon receipt by such
Pledgor of any material notice, report, or other communication from any of the
Issuers or any Holder relating to all or any part of the Pledged Collateral,
deliver such notice, report or other communication to the Collateral Agent
promptly, but in no event later than five (5) business days following the
receipt thereof by such Pledgor;


 


(e)           To the extent it may
lawfully do so, not permit any of the Issuers to:  (i) authorize the amendment of or amend the Constituent Documents
of such Issuer that is a general partnership, limited partnership or limited
liability company to provide that the Stock of such Issuer is governed by
Article 8 of the Code, or (ii) authorize the issuance of or issue
certificates evidencing the Stock of such


 


10

















 


Issuer that is a general partnership, limited partnership or limited
liability company; unless in each case the certificates to be so issued
representing securities governed by Article 8 of the Code are pledged and
delivered to the Collateral Agent pursuant to the terms of this Agreement and
as permitted by the Indenture, and


 


(f)            The Pledged Collateral
that are “certificated securities” (as such term is defined under the Code)
shall at all times be in the possession of Wells Fargo Bank, National
Association in the State of Nevada.


 


8.             The Collateral
Agent as Each Pledgor’s Attorney-in-Fact.


 


(a)           Each Pledgor hereby
irrevocably appoints the Collateral Agent, on behalf of the Secured Parties, as
such Pledgor’s attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor, the Collateral Agent or
otherwise, from time to time at the Collateral Agent’s sole discretion, and at
such Pledgor’s cost and expense, to take any action and to execute any
instrument that the Collateral Agent, on behalf of the Secured Parties, may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement without notice to or assent by such Pledgor, including: (i) upon the
occurrence and during the continuance of an Event of Default, to receive,
endorse, and collect all instruments made payable to such Pledgor representing
any dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof to the extent permitted hereunder and to give
full discharge for the same and to execute and file governmental notifications
and reporting forms; (ii) to issue any notifications/instructions the
Collateral Agent deems necessary pursuant to Section 3 of this
Agreement; or (iii) to the extent permitted hereunder, to arrange for the
transfer of the Pledged Collateral on the books of any of the Issuers or any
other Person to the name of the Collateral Agent or to the name of the
Collateral Agent’s nominee.


 


(b)           In addition to the
designation of the Collateral Agent as each Pledgor’s attorney-in-fact in subsection (a),
each Pledgor hereby irrevocably appoints the Collateral Agent, on behalf of the
Secured Parties as such Pledgor’s agent and attorney-in-fact to make, execute
and deliver any and all documents and writings that may be necessary or
appropriate for approval of, or be required by, any regulatory authority
located in any city, county, state or country where such Pledgor or any of the
Issuers engage in business, in order to transfer or to more effectively
transfer any of the Pledged Interests or otherwise enforce the rights granted
hereunder to the Collateral Agent, for the benefit of Secured Parties, for the
benefit thereof.


 


9.             Remedies upon
Default.  Subject to the terms of
the Intercreditor Agreement and the Gaming Laws, upon the occurrence and during
the continuance of an Event of Default:


 


(a)           The Collateral Agent,
on behalf of the Secured Parties, may exercise in respect of the Pledged
Collateral, in addition to 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 Code (irrespective of whether the Code applies to the affected items
of Pledged Collateral), and the Collateral Agent, on behalf of the Secured
Parties, may also without notice (except as specified below) sell the Pledged
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker’s board or at any of the Collateral Agent’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 the
Collateral Agent may deem commercially reasonable, irrespective of the impact
of any such sales on the market price of the Pledged Collateral.  To the maximum extent permitted by
applicable law, the Collateral Agent may be the purchaser of any or all of the
Pledged Collateral at any such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Pledged Collateral sold at any such public sale, to use and
apply all or any part of the Secured Obligations as a credit on account of the
purchase price of any Pledged Collateral payable at such sale.  Each purchaser at any such sale shall hold


 


11

















 


the property sold absolutely free from any claim or right on the part
of the applicable Pledgor, and each Pledgor hereby waives (to the extent
permitted by law) all rights of equity or rights of redemption, stay, or
appraisal which such Pledgor now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.  Each Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten (10) calendar days notice
to such Pledgor of the time and place of any public sale or the time after
which a private sale is to be made shall constitute reasonable
notification.  The Collateral Agent
shall not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given.  The
Collateral Agent may adjourn any public 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.  The Collateral Agent shall
be under no obligation to delay a sale of any Pledged Collateral for the period
of time necessary to permit an Issuer thereof to register such securities for
public sale under the Securities Act, or under applicable state securities
laws, even if such Issuer would agree to do so.  To the maximum extent permitted by law, each Pledgor hereby
waives any claims against the Collateral Agent arising because the price at
which any Pledged Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.


 


(b)           Each Pledgor hereby
agrees that any sale or other disposition of the Pledged Collateral conducted
in conformity with reasonable commercial practices of banks, insurance
companies, or other financial institutions in the State of Nevada in disposing
of property similar to the Pledged Collateral shall be deemed to be
commercially reasonable.


 


(c)           In the event any sale
or transfer hereunder is not completed or is defective in the opinion of the
Collateral Agent, such sale or transfer shall not exhaust the rights of the
Collateral Agent and Secured Parties hereunder, and the Collateral Agent shall
have the right to cause one or more subsequent sales or transfers to be made
hereunder.  If only part of the Pledged
Collateral is sold or transferred such that the Secured Obligations remain
outstanding (in whole or in part), the Collateral Agent and the Secured
Parties’ rights and remedies hereunder shall not be exhausted, waived or
modified, and the Collateral Agent is specifically empowered to make one or
more successive sales or transfers until all the Pledged Collateral shall be
sold or transferred and all the Secured Obligations are paid.  In the event that the Collateral Agent
elects not to sell the Pledged Collateral, the Collateral Agent retains its
rights to dispose of or utilize the Pledged Collateral or any part or parts
thereof in any manner authorized or permitted by law or in equity, and to apply
the proceeds of the same towards payment of the Secured Obligations.


 


(d)           Each Pledgor hereby
acknowledges that the sale by the Collateral Agent of any Pledged Collateral
pursuant to the terms hereof in compliance with the Securities Act of 1933 as
now in effect or as hereafter amended, or any similar statute hereafter adopted
with similar purpose or effect (the “Securities Act”), as well as
applicable “Blue Sky” or other state securities laws may require strict
limitations as to the manner in which the Collateral Agent or any subsequent
transferee of the Pledged Collateral may dispose thereof.  Each Pledgor acknowledges and agrees that in
order to protect the Collateral Agent’s interest it may be necessary to sell
the Pledged Collateral at a price less than the maximum price attainable if a
sale were delayed or were made in another manner, such as a public offering
under the Securities Act.  Each Pledgor
has no objection to sale in such a manner and agrees that the Collateral Agent
shall have no obligation to obtain the maximum possible price for the Pledged
Collateral.  Without limiting the
generality of the foregoing, each Pledgor agrees that, upon the occurrence and
during the continuation of an Event of Default, the Collateral Agent may,
subject to applicable law, from time to time attempt to sell all or any part of
the Pledged Collateral by a private placement, restricting the bidders and
prospective purchasers to those who will represent and agree, among other
things that they are purchasing for investment only and not for
distribution.  In so doing, the
Collateral Agent may solicit offers to buy the Pledged Collateral or any part
thereof for cash, from a


 


12

















 


limited number of investors deemed by the Collateral Agent, in its
reasonable judgment, to be institutional investors or other responsible parties
who might be interested in purchasing the Pledged Collateral.  If the Collateral Agent shall solicit such
offers, then the acceptance by the Collateral Agent of one of the offers shall
be deemed to be a commercially reasonable method of disposition of the Pledged
Collateral.


 


(e)           If the Collateral Agent
shall determine to exercise its right to sell all or any portion of the Pledged
Collateral pursuant to this Section, each Pledgor agrees that, upon request of
the Collateral Agent, such Pledgor will, at its own expense:


 


(i)            use its best efforts
to execute and deliver, and cause the Issuers and the directors and officers
thereof to execute and deliver, all such instruments and documents, and to do
or cause to be done all such other acts and things, as may be necessary or, in
the opinion of the Collateral Agent, advisable to register such Pledged Collateral
under the provisions of the Securities Act, and to cause the registration
statement relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectuses which, in
the opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the SEC applicable thereto;


 


(ii)           use its best efforts to
qualify the Pledged Collateral under the state securities laws or “Blue Sky”
laws and to obtain all necessary governmental approvals for the sale of the
Pledged Collateral, as requested by the Collateral Agent;


 


(iii)          cause the Issuers to
make available to their respective security holders, as soon as practicable, an
earnings statement which will satisfy the provisions of Section 11(a) of
the Securities Act;


 


(iv)          execute and deliver, or
cause the officers and directors of the Issuers to execute and deliver, to any
Person, entity or governmental authority as the Collateral Agent may choose,
any and all documents and writings which, in the Collateral Agent’s reasonable
judgment, may be necessary or appropriate for approval, or be required by, any
regulatory authority located in any city, county, state or country where such
Pledgor or the Issuers engage in business, in order to transfer or to more
effectively transfer the Pledged Interests or otherwise enforce the Collateral
Agent’s rights hereunder; and


 


(v)           do or cause to be done
all such other acts and things as may be necessary to make such sale of the
Pledged Collateral or any part thereof valid and binding and in compliance with
applicable law.


 


Each Pledgor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section and that such
failure would not be adequately compensable in damages, and therefore agrees
that its agreements contained in this Section may be specifically
enforced.


 


(f)            EACH PLEDGOR EXPRESSLY
WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i) ANY CONSTITUTIONAL OR OTHER
RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME THE COLLATERAL AGENT DISPOSES OF
ALL OR ANY PART OF THE PLEDGED COLLATERAL AS PROVIDED IN THIS SECTION; (ii) ALL
RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR MAY AT ANY TIME IN
THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING OR HEREAFTER
ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS
SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.


 


13

















 


10.           Application of
Proceeds.  Subject to the terms of
the Intercreditor Agreement, upon the occurrence and during the continuance of
an Event of Default, any cash held by the Collateral Agent as Pledged
Collateral and all cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Pledged Collateral pursuant to the exercise by the Collateral Agent of its
remedies as a secured creditor as provided in Section 9 herein
shall be applied from time to time by the Collateral Agent as provided in the
Indneture.


 


11.           Deficiency


 


Each Pledgor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Pledged Collateral are insufficient to pay the Secured
Obligations and the fees and disbursements of any attorney employed by the
Collateral Agent, Indenture Trustee or any Senior Noteholder to collect such
deficiency.


 


12.           Duties of the
Collateral Agent.  The powers conferred on the Collateral Agent
hereunder are solely to protect its interests in the Pledged Collateral and
shall not impose on it any duty to exercise such powers.  Except as provided in Section 9-207 of
the Code, the Collateral Agent shall have no duty with respect to the Pledged
Collateral or any responsibility for taking any necessary steps to preserve
rights against any Persons with respect to any Pledged Collateral.


 


13.           Choice of Law and
Venue.  THE VALIDITY OF THIS
AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF
THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, SECTIONS
104.1105(2) AND 104.9301 THROUGH 104.9307 OF THE NEVADA UNIFORM COMMERCIAL CODE
SHALL GOVERN THE PERFECTION, THE EFFECT OF PERFECTION AND PRIORITY IN THE
PLEDGED INTERESTS AND FUTURE RIGHTS. 
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF  NEW YORK OR, AT THE SOLE OPTION OF THE COLLATERAL AGENT, IN ANY
OTHER COURT IN WHICH THE COLLATERAL AGENT SHALL INITIATE LEGAL OR EQUITABLE
PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN
CONTROVERSY.  EACH PLEDGOR AND
COLLATERAL AGENT WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.


 


14.           Amendments; Etc.  Subject to the terms of the Intercreditor
Agreement, no amendment or waiver of any provision of this Agreement nor consent
to any departure by any party thereto herefrom shall in any event be effective
unless the same shall be in writing and signed by the Collateral Agent and each
Pledgor directly affected thereby, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.  No failure on the part of the
Collateral Agent to exercise, and no delay in exercising any right under this
Agreement, any other Transaction Document, or otherwise with respect to any of
the Secured Obligations, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under this Agreement, any other
Transaction Document, or otherwise with respect to any of the Secured
Obligations preclude any other or further exercise thereof or the exercise of
any other right.  The remedies provided
for in this Agreement or otherwise with respect to any of the Secured
Obligations are cumulative and not exclusive of any remedies provided by law.


 


14

















 


15.           Notices.  Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and shall be delivered in the manner set forth in the
Indenture and the Intercreditor Agreement.


 


16.           Continuing Security
Interest.  This Agreement shall
create a continuing security interest in the Pledged Collateral and shall: (i)
remain in full force and effect until the payment in full in cash of the
Secured Obligations, including the full and final termination of any commitment
to extend any financial accommodations under the Indenture; (ii) be binding
upon each Pledgor and its successors and assigns; and (iii) inure to the
benefit of the Collateral Agent and the Secured Parties and their respective
successors, transferees, and assigns. 
Upon the payment in full in cash of the Secured Obligations, or the satisfaction and discharge of the
Secured Obligations in accordance with Article 12 of the Indenture or the
release of all of the Pledged Collateral otherwise in accordance with the terms
of the Indenture and the full and final termination of any commitment to
extend any financial accommodations under the Indenture, subject to the terms
of the Intercreditor Agreement, the security interests granted herein shall
automatically terminate and all rights to the Pledged Collateral shall revert
and be deemed re-assigned to each Pledgor. 
Upon any such termination, the Collateral Agent will, at Pledgors’
expense, execute and deliver to the applicable Pledgor such documents as
Pledgors shall reasonably request to evidence such termination without recourse
against or representation or warranty of any kind made by, the Collateral
Agent.  Such documents shall be prepared
by Pledgors and shall be in form and substance reasonably satisfactory to the
Collateral Agent. Notwithstanding the foregoing, to the extent that any
payments on the Secured Obligations or Proceeds of the Pledged  Collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, debtor in possession, receiver or other Person under any
Bankruptcy Law, common law or equitable cause, then to such extent the Secured
Obligations so satisfied shall be revived and continue as if such payment or
Proceeds had not been received by the Collateral Agent for the benefit of the
Secured Parties, and the Collateral Agent’s security interests, rights, powers
and remedies hereunder shall continue in full force and effect.  In such event, this Agreement shall be
automatically reinstated if it shall theretofore have been terminated pursuant
to this Section 16.


 


17.           Security Interest
Absolute.  To the maximum extent
permitted by law, all rights of the Collateral Agent, all security interests
hereunder, and all obligations of Pledgors hereunder, shall be absolute and
unconditional irrespective of:


 


(a)           any lack of validity or
enforceability of any of the Secured Obligations or any other agreement or
instrument relating thereto, including any of the Transaction Documents;


 


(b)           any change in the time,
manner, or place of payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver of or any consent to any
departure from any of the Transaction Documents, or any other agreement or
instrument relating thereto;


 


(c)           any exchange, release,
or non-perfection of any other collateral, or any release or amendment or
waiver of or consent to departure from any guaranty for all or any of the
Secured Obligations; or


 


(d)           any other circumstances
that might otherwise constitute a defense available to, or a discharge of, a
Pledgor.


 


To the maximum extent permitted by law, each Pledgor hereby waives any
right to require the Collateral Agent to: (A) proceed against or exhaust any
security held from such Pledgor; or (B) pursue any other remedy in the
Collateral Agent’s power whatsoever.


 


15

















 


18.           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 or be given any substantive effect.


 


19.           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.


 


20.           Counterparts;
Telefacsimile Execution.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
Agreement.  Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart
of this Agreement by telefacsimile also shall deliver an original executed counterpart
of this Agreement, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, or binding effect hereof.


 


21.           Waiver of Marshaling.
Each Pledgor and the Collateral Agent acknowledge and agree that in exercising
any rights under or with respect to the Pledged Collateral,: the Collateral
Agent (i) is under no obligation to marshal any Pledged Collateral; (ii) may,
in its absolute discretion, realize upon the Pledged Collateral in any order
and in any manner it so elects; and (iii) may, in its absolute discretion,
apply the proceeds of any or all of the Pledged Collateral to the Secured
Obligations in any order and in any manner it so elects.  Each Pledgor and the Collateral Agent waive
any right to require the marshaling of any of the Pledged Collateral.


 


22.           Waiver of Jury Trial.  EACH PLEDGOR AND COLLATERAL AGENT HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PLEDGOR AND THE COLLATERAL AGENT REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


23.           Interpretation of
Agreement.  To the extent a term or
provision of this Agreement conflicts with the Intercreditor Agreement, the
Intercreditor Agreement shall control with respect to the subject matter of
such term or provision.


 


24.           Entire Agreement.  This Agreement together with the other
Transaction Documents represents the entire agreement of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof.


 


25.           Compliance with
Gaming Laws.  Notwithstanding
anything to the contrary contained herein or in any other Transaction Document,
the Collateral Agent expressly acknowledges and agrees that the exercise of its
rights and remedies under this Agreement is subject to the mandatory provisions
of the Gaming Laws.  Specifically, the
Collateral Agent acknowledges and agrees that:


 


(a)           The pledge of the
Pledged Interests by each Pledgor, and any restrictions on the transfer of and
agreements not to encumber the Pledged Interests or other equity securities of
any Issuer contained in this Agreement or in any other Transaction Document,
are not effective without the prior


 


16

















 


approval of the NGC upon the recommendation of the NGCB.  The certificates or instruments representing
or evidencing the Pledged Interests may not be delivered to the Collateral
Agent until such approval has been obtained. 
The approval of the pledge of the Pledged Interests may require
amendment of this Agreement to include additional references to regulatory
requirements under the Gaming Laws.  In
addition, no amendment of this Agreement shall be effective until applicable
approvals of the Nevada Gaming Authorities have been obtained.


 


(b)           In the event that the
Collateral Agent exercises one or more of the remedies set forth in this
Agreement with respect to any Pledged Interests, including without limitation,
foreclosure or transfer of any interest in the Pledged Interests (except back
to the applicable Pledgor), the exercise of voting and consensual rights, and
any other resort to or enforcement of the security interest in the Pledged
Interests, such action shall require the separate and prior approval of the
Nevada Gaming Authorities and the licensing of the Collateral Agent, unless
such licensing requirement is waived by the Nevada Gaming Authorities.


 


(c)           The Collateral Agent
and any custodial agent of the Collateral Agent in the State of Nevada shall be
required to comply with the conditions, if any, imposed by the Nevada Gaming
Authorities in connection with its approval of the pledge granted hereunder by
each Pledgor, including, without limitation, the requirement that the
Collateral Agent or its agent maintain the certificates evidencing the Pledged
Interests at a location in Nevada designated to the NGCB, and that the
Collateral Agent or its agent permit agents or employees of the NGCB to inspect
such certificates immediately upon request during normal business hours.


 


(d)           Neither the Collateral
Agent nor any agent of the Collateral Agent shall surrender possession of any
Pledged Interests to any Person other than the applicable Pledgor without the
prior approval of the Nevada Gaming Authorities or as otherwise permitted by
the Gaming Laws.


 


(e)           The approval by the
Nevada Gaming Authorities of this Agreement, or any amendment hereto, is not,
and shall not be construed as, the approval, either express or implied, of the
Collateral Agent to take any actions provided for in this Agreement for which
approval by the Nevada Gaming Authorities is required, without first obtaining
such prior and separate approval, to the extent required by the Gaming Laws.


 


[Signature page to follow.]


 


17

















 


IN WITNESS
WHEREOF, each Pledgor and the Collateral Agent have caused this Agreement to be
duly executed and delivered as of the date first written above.


 


 


	
   

  	
  POSTER FINANCIAL GROUP, INC.

  as
  Pledgor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne M. Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne M. Beckett

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNL, CORP.,

  
	
   

  	
  as  Pledgor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne M. Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne M. Beckett

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNLV, CORP.,

  
	
   

  	
  as  Pledgor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Joanne M. Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne M. Beckett

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDEN NUGGET EXPERIENCE, LLC,

  
	
   

  	
  as  Pledgor

  
	
   

  	
  By: GNLV, CORP.,

  
	
   

  	
         as sole
  member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Joanne M. Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne M. Beckett

  
	
   

  	
  Title:

  	
  Vice President

  



 


 


 


[SIGNATURE PAGE TO
PLEDGE AGREEMENT]


 

















 


	
  ACCEPTED AND AGREED

  as of the date first above written:

  
	
   

  
	
  WELLS FARGO BANK,
  NATIONAL ASSOCIATION

  as
  Collateral Agent

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Jane Y. Schweiger

  	
   

  
	
   

  	
  Name: Jane Y. Schweiger

  
	
   

  	
  Title: Vice President

  



 

















 


SCHEDULE A


 


TO


 


STOCK PLEDGE
AGREEMENT


 


Pledgor:


 


Pledged Interests


 


 


	
  Pledgor

  	
   

  	
  Issuer

  	
   

  	
  Number

  of Pledged

  Interests

  	
   

  	
  Class

  	
   

  	
  Certificate

  Number(s)

  	
   

  	
  Former

  Name,

  if any, in

  which

  Certificate

  Issued

  	
   

  	
  Pledgor’s

  Percentage

  Ownership

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Certificated/

  Uncertificated

  
	
  Poster
  Financial Group, Inc.

  	
   

  	
  GNL,
  Corp

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  #3

  	
   

  	
  None

  	
   

  	
  100%

  	
   

  	
  Nevada

  	
   

  	
  Certificated

  
	
  Poster
  Financial Group, Inc.

  	
   

  	
  GNLV,
  CORP

  	
   

  	
  25,000

  	
   

  	
  Common

  	
   

  	
  #4

  	
   

  	
  None

  	
   

  	
  100%

  	
   

  	
  Nevada

  	
   

  	
  Certificated

  
	
  GNLV,
  CORP.

  	
   

  	
  Golden
  Nugget Experience, LLC

  	
   

  	
  100% member's interest

  	
   

  	
  N.A.

  	
   

  	
  #2

  	
   

  	
  None

  	
   

  	
  100%

  	
   

  	
  Nevada

  	
   

  	
  Certificated

  
	
  Golden
  Nugget Experience, LLC

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  



 

















 


SCHEDULE B


 


TO


 


STOCK PLEDGE
AGREEMENT


 


Pledgor's Address
of Chief Executive Office


 


Poster Financial Group,
Inc.


129 East Fremont Street,
Las Vegas, Nevada 89101


 


GNL, Corp.


2300 South Casino Drive,
Laughlin, Nevada 89029


 


GNLV, CORP.


129 East Fremont Street,
Las Vegas, Nevada 89101


 


Golden Nugget Experience,
LLC


129 East Fremont Street,
Las Vegas, Nevada 89101


 

















 


SCHEDULE C


 


PLEDGE AMENDMENT 


 


This PLEDGE
AMENDMENT, dated as of                     
    , 20    , is
delivered pursuant to Section 3  (Delivery and Registration of Pledged
Collateral) of the Pledge Agreement, dated as of January 23, 2004,
by [        ](the “Pledgor”),
the [undersigned Pledgor and the other ] subsidiaries of the Pledgor from time
to time party thereto as Pledgors in favor of Wells Fargo Bank, National
Association, as Collateral Agent for the Secured Parties referred to therein
(the “Pledge
Agreement”) and the undersigned hereby agrees that this Pledge
Amendment may be attached to the Pledge Agreement, subject to the receipt of
any required approvals of the Nevada Gaming Authorities, and that the Pledged
Collateral listed on this Pledge Amendment shall be and become part of the
Pledged Collateral referred to in the Pledge Agreement and shall secure all
Secured Obligations of the undersigned. 
Capitalized terms used herein but not defined herein are used herein
with the meaning given them in the Pledge Agreement.


 


	
   

  	
  [PLEDGOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


Pledged
Stock


 


	
  ISSUER

  	
   

  	
  CLASS

  	
   

  	
  CERTIFICATE

  NO(S).

  	
   

  	
  PAR VALUE

  	
   

  	
  NUMBER

  OF

  SHARES,

  UNITS OR

  INTERESTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-2

















 


	
  ACKNOWLEDGED AND
  AGREED

  as of the date first above written:

  
	
  WELLS FARGO
  BANK, NATIONAL ASSOCIATION,

  as
  Collateral Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 


 


B-3