Document:

Exhibit 10.4

 

EXECUTION VERSION

 

SECURITY AGREEMENT

 

This
SECURITY
AGREEMENT (this “Agreement”), is entered into as of
January 23, 2004, is executed and delivered 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 “Grantor” and
collectively, jointly and severally, the “Grantors”) in favor of Wells
Fargo Bank, National Association, as the collateral agent (in such capacity,
together with its successors and assigns, if any, in such capacity, the “Collateral
Agent”) for the benefit of the Secured Parties (as defined below), in light
of 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, the Note
Issuer, GNL and GNLV, as 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”), have entered into that certain Loan and Security
Agreement dated as of  January  23,
2004 (as amended, amended and restated, supplemented, renewed or otherwise
modified from time to time, the “Loan
Agreement”);

 

WHEREAS, each Grantor,
Wells Fargo Foothill, Inc., as the agent for the Lenders, and the Collateral
Agent are parties to a certain Intercreditor Agreement, dated as of
January  23, 2004 (as amended, amended and restated, modified,
supplemented, renewed or otherwise modified from time to time, the “Intercreditor
Agreement”);

 

WHEREAS, the Note Issuer, GNL, GNLV, GNE, and the
Collateral Agent are, contemporaneously herewith, entering into that certain
Stock Pledge Agreement (as amended, amended and restated, supplemented, renewed
or otherwise modified from time to time, the “Stock Pledge Agreement”);

 

WHEREAS, each Grantor
desires to secure its obligations under the Noteholder Documents (as defined
herein) to which it is party by granting to the Collateral Agent, for the
benefit of the Secured Parties (as defined below), security interests in the
Collateral (as defined herein) as set forth herein;

 

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 , the Note
Issuer, GNLV, GNL and the Collateral Agent are, contemporaneously herewith,
entering into that certain Copyright Security Agreement (as amended, amended
and restated, supplemented, renewed or otherwise modified from time to time,
the “Copyright  Security Agreement”);

 

 

WHEREAS , the Note
Issuer, GNLV, GNL and the Collateral Agent are, contemporaneously herewith,
entering into that certain Trademark Security Agreement (as amended, amended
and restated, supplemented, renewed or otherwise modified from time to time,
the “Trademark  Security
Agreement”); and

 

WHEREAS, each Grantor
is a subsidiary of the Note Issuer, and will benefit by virtue of the financial
accommodations from the Secured Parties to the Note Issuer.

 

NOW, THEREFORE, in
consideration of the premises set forth above, the terms and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and each intending to be bound
hereby, the Collateral Agent and each Grantor agree as follows:

 

1.             DEFINITIONS AND CONSTRUCTION.

 

1.1           Definitions.  All capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Indenture.  As used in this Agreement,
the following terms shall have the following definitions:

 

(a) Terms used herein without definition that are
defined in the Code have the meanings given to them in the Code, including the
following terms (which are capitalized herein):

 

“Account Debtor”

“Certificated Security”

“Chattel Paper”

“Commercial Tort Claim”

“Commodity Account”

“Commodity Intermediary”

“Deposit Account”

“Documents”

“Entitlement Holder”

“Entitlement Order”

“Financial Asset”

“Goods”

“Instruments”

“Letter-of-Credit Right”

“Securities Account”

“Securities Intermediary”

“Security”

“Security Entitlement”

 

(b) 
The following terms shall have the following meanings:

 

“Account” means any “account” (as that term is defined in the
Code), and any and all supporting obligations in respect thereof.

 

“Agreement”
means this Security Agreement and any extensions, riders, supplements, notes,
amendments, or modifications to or in connection with this Security Agreement.

 

2

 

“Approved
Securities Intermediary” means a Securities Intermediary or Commodity
Intermediary selected or approved by the Collateral Agent and with respect to
which a Grantor has delivered to the Collateral Agent an executed Control
Account Agreement.

 

“Bankruptcy
Code” means the United States Bankruptcy Code (11 U.S.C. § 101 et
seq.), as amended, and any successor statute.

 

“Books”
means each Grantor’s now owned or hereafter acquired books and records
(including all of its Records indicating, summarizing, or evidencing its assets
(including the Collateral) or liabilities, all of its Records relating to its
business operations or financial condition, and all of its goods or General
Intangibles related to such information).

 

“Cash
Equivalents” means (a) securities issued or fully guaranteed or
insured by the United States government or any agency thereof,
(b) certificates of deposit, eurodollar time deposits, overnight bank
deposits and bankers’ acceptances of any commercial bank organized under the
laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations) that, at the time of acquisition, are rated at least “A-1” by
S&P or “P-1” by Moody’s, (c) commercial paper of an issuer rated at
least “A-1” by S&P or “P-1” by Moody’s and (d) shares of any money
market fund that (i) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (a), (b) and (c) above, (ii) has net
assets of not less than $500,000,000 and (iii) is rated at least “A-1” by
S&P or “P-1” by Moody’s; provided, however, that the
maturities of all obligations of the type specified in clauses (a), (b)
and (c)
above shall not exceed 180 days.

 

“Casino
Bankroll” means only the amount of cash or Cash Equivalents required by the
provisions of Section 6.150 of the Regulations of the NGC to satisfy the
Casino minimum bankroll requirements, mandatory game security reserves,
allowances for redemption of casino chips and tokens, or payment of winning
wagers to gaming patrons, or as otherwise may be required by the Gaming Laws or
a directive of the Chairman of the NGCB.

 

“CFC”
means a controlled foreign corporation (as such term is defined in the IRC).

 

“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 Secured
Parties’ security interest in any 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 or
priority and for purposes of definitions related to such provisions..

 

“Collateral”
means, with respect to each Grantor, all of each Grantor’s now owned or
hereafter acquired right, title, and interest in and to each of the
following:  all of its Accounts; all of
its Books; all of its Commercial Tort Claims; all of its Deposit Accounts; all
of its Equipment; all of its General Intangibles; all of its Inventory; all of
its Investment Property (including all Securities and Securities Accounts); all
of its Negotiable Collateral; any money, or other assets of each Grantor which
now or hereafter come into the possession, custody or control of the Collateral
Agent; all other Goods and personal property of such Grantor, whether tangible
or intangible and wherever located, and the proceeds and products, whether
tangible or intangible, of any of the foregoing, including proceeds of
insurance covering any or all of the foregoing, all Vehicles, Real Property,
money, or other tangible or intangible property resulting from the sale,
exchange, collection, or other disposition of any of the foregoing, or any

 

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portion thereof or interest therein, and the proceeds thereof;
excluding in each case the Excluded Property.

 

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

 

“Collateral
Agent’s Liens” means the Liens granted by each Grantor to the Collateral
Agent under this Agreement or the other Noteholder Documents to which such
Grantor is a party.

 

“Collateral
Documents” means this Agreement, the Intercreditor Agreement, the Stock
Pledge Agreement, the Deposit Account Control Agreement, the Trademark Security
Agreement, the Copyright Security Agreement, the Mortgages, the Guarantee under
the Indenture and any document or instrument executed and delivered pursuant to
any Noteholder Document at any time or otherwise pursuant to which a Lien is
granted by a Grantor 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, restated, renewed, extended, supplemented or modified from time to
time.

 

“Collections”
means all cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, proceeds of cash sales, rental proceeds, and tax
refunds).

 

“Control
Account” means a Securities Account or Commodity Account that is subject of
an effective Control Account Agreement and that is maintained by any Grantor
with an Approved Securities Intermediary. 
Control Account includes all Financial Assets held in a Securities
Account or a Commodity Account and all certificates and instruments, if any,
representing or evidencing the Financial Assets contained therein.

 

“Control
Account Agreement” means a letter agreement, substantially in the form of Annex
2(Form  of Control Account Agreement)
(with such changes as may be agreed to by the Collateral Agent), executed by
the relevant Grantor, the Collateral Agent and the relevant Approved Securities
Intermediary.

 

 “Copyright
Licenses” means any written
agreement naming any Grantor as licensor or licensee granting any right under
any Copyright, including the grant of any right to copy, publicly perform,
create derivative works, manufacture, distribute, exploit or sell materials
derived from any Copyright.

 

“Copyrights” means (a) all copyrights arising under
the laws of the United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether published or
unpublished, all registrations and recordings thereof and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office or in any foreign counterparts thereof,
and (b) the right to obtain all renewals thereof.

 

“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.

 

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

 

4

 

“Deposit
Account Bank” means a financial institution selected or approved by the
Collateral Agent and with respect to which a Grantor has delivered to the
Collateral Agent an executed Deposit Account Control Agreement.

 

“Deposit
Account Control Agreement” means a letter agreement, substantially in the
form of Annex 1
(Form of Deposit Account Control Agreement) (with such changes as
may be agreed to by the Collateral Agent), executed by the Grantor, the
Collateral Agent and the relevant Deposit Account Bank.

 

“Equipment”
means “equipment” (as that term is defined in the Code), and includes
machinery, machine tools, motors, furniture, furnishings, fixtures, Vehicles
(including motor vehicles), computer, hardware, tools, parts, goods (other than
consumer goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.

 

“Excluded
Property” means, collectively,
(i) Casino Bankroll, (ii) the “participation” slot machines listed on Schedule 8
(Excluded Property), (iii) the
Stock of the Note Issuer’s Subsidiaries that are licensed or registered under
the Gaming Laws and are “Pledged Collateral” pursuant to the Stock Pledge
Agreement , (iv) the Government Treasury Strips, (v) any Investment Property of
the Grantors constituting Stock of such Grantors’ Subsidiaries that are CFCs,
solely to the extent that such Investment Property is in excess of 65% of the
voting power of Stock of such CFC, and (vi)  any agreements
(including that certain Starbucks Corporation Master Licensing Agreement, dated
as of January 21, 2004, between Starbucks Corporation and Parent) and the
joinders thereto by GNL and GNLV dated as of January 21, 2004, permits or
licenses (including Gaming Licenses) solely in the event and to the extent that
a grant of a Lien on such license, contract, or agreement is prohibited by law
or results in a breach or termination of the terms of, or constitutes a default
under, or termination of any such license, contract, or agreement (other than
to the extent that any such term would be rendered ineffective pursuant to
Section 9-406, 9-407, or 9-408 or 9-409 of the Code (or any successor
provision or provisions) of any relevant jurisdiction) and, in any event,
immediately upon the ineffectiveness, lapse or termination of any such terms or
default under such license, contract or agreement, the Excluded Property shall
not include, and the applicable Grantor shall be deemed to have granted a security
interest in, all such licenses, contracts, or agreements as if such terms or
defaults had never been in effect; provided,
however, that Excluded Property
shall not include (and, accordingly, Collateral shall include) any and all
proceeds of any of such assets; provided,
further, that, any agreement, permit, license, or the like qualifying as an
Excluded Property under clauses (ii) and (vi) above no longer shall
constitute an Excluded Property (and instead shall constitute Collateral) from
and after such time as the lessor, licensor, or other party to such agreement,
permit, license, or the like consents to the grant of a Lien in favor of
Collateral Agent in such agreement, permit, license, or the like or the
prohibition against granting a Lien therein in favor of Collateral Agent shall
cease to be effective.

 

“General
Intangibles” means “general intangibles” (as that term is defined in the
Code), (including payment intangibles, contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, trade secrets, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer
lists, monies due or recoverable from pension funds, route lists, rights to payment
and other rights under any royalty or licensing agreements, infringement
claims, computer programs, information contained on computer disks or tapes,
software, literature, reports, catalogs, insurance premium rebates, tax
refunds, and tax refund claims), and any and all supporting obligations in
respect thereof, and any other personal property other than Accounts, Deposit
Accounts, Goods, Investment Property, and Negotiable Collateral.

 

5

 

“Government Treasury Strips” means those certain United States Treasury securities in an amount not
to exceed $3,089,752 maintained by Mirage Resorts, Incorporated in a restricted
account for the benefit of GNLV as a reserve in accordance with Nevada Gaming
Commission Regulation 5.115, pursuant to the order of the NGC dated
August 27, 1993, and to be maintained after
January      , 2004 in a restricted account of
GNLV as a reserve pursuant to Gaming Laws, securing periodic payments due to a
progressive slot machine jackpot winner at GNLV, which jackpot totaled
$3,089,752 payable in 20 equal annual installments of $154,488, without
interest, commencing September 24, 1988 and ending September 24,
2007.

 

“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.

 

“Intellectual
Property” means, collectively, all rights, priorities and privileges of any
Grantor relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, trade
secrets and Internet domain names, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

 

“Inventory”
means “inventory” (as that term is defined in the Code).

 

“Investment
Property” means “investment property” (as that term is defined in the
Code), and any and all supporting obligations in respect thereof.

 

“IRC”
means the Internal Revenue Code of 1986, as in effect from time to time and any
successor statute.

 

“Lien” means
any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, lien (statutory or other), security interest or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever intended to assure payment of any Indebtedness
(as such term is defined in the Indenture) or the performance of any other
obligation, including any conditional sale or other title retention agreement,
the interest of a lessor under a Capital Lease (as such term is defined in the
Indenture) and any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Code or comparable law of any jurisdiction naming the owner of the asset to
which such Lien relates as debtor.

 

“Material
Adverse Change” means a material adverse change in (a) any of the
condition (financial or otherwise), business, performance, prospects,
operations or properties of the Note Issuer and its Subsidiaries taken as a
whole, (b) any Grantor’s ability to perform its obligations under any of
the Noteholder Documents to which it is a party or the Collateral Agent’s
ability to enforce the Obligations or realize upon the Collateral or
(c) the enforceability or priority of the Liens granted pursuant to the
Collateral Documents.

 

“Material
Adverse Effect” means an effect that results in or causes, or could
reasonably be expected to result in or cause, a Material Adverse Change.

 

“Material
Intellectual Property” means Intellectual Property owned by or licensed to
a Grantor and material to the conduct of any Grantor’s business.

 

6

 

“Negotiable
Collateral” means letters of credit, letter of credit rights, Instruments,
promissory notes, drafts, Documents, and Chattel Paper (including electronic
Chattel Paper and tangible Chattel Paper), and any and all supporting
obligations in respect thereof.

 

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

 

“NGC” means the
Nevada Gaming Commission.

 

“NGCB” means the
Nevada State Gaming Control Board.

 

“Note
Issuer” shall have the respective meaning set forth in the recitals to this
Agreement.

 

“Noteholder
Documents” means the Indenture, the Senior Secured Notes, the other
Collateral Documents, and such other agreements, instruments and certificates
executed and delivered pursuant to any Noteholder Document at any time or
otherwise evidencing any Secured Obligations, as the same may be amended, amended
and restated, renewed, extended, supplemented or modified from time to time.

 

“Patents”
means (a) all letters patent of the United States, any other country or
any political subdivision thereof and all reissues and extensions thereof,
(b) all applications for letters patent of the United States or any other
country and all divisionals, continuations and continuations-in-part thereof
and (c) all rights to obtain any reissues or extensions of the foregoing.

 

“Patent
License” means all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, have manufactured, use,
import, sell or offer for sale any invention covered in whole or in part by a
Patent.

 

“Person”
means an individual, partnership, corporation (including a business trust),
joint stock company, estate, trust, limited liability company, unincorporated
association, joint venture or other entity, or a Governmental Authority.

 

“Pledged
Collateral” means “Pledged Collateral” as such term is defined in the Stock
Pledge Agreement.

 

“Pledged
Debt Instruments” means all right, title and interest of any Grantor in
Instruments evidencing any Indebtedness owed to such Grantor, including all
Indebtedness described on Annex 3 (Form of Pledge Amendment), issued
by the obligors named therein.

 

“Qualified
Cash” means, as of any date of determination, the amount of unrestricted
cash and Cash Equivalents of the Grantors that is in Deposit Accounts or in
Securities Accounts, or any combination thereof, and which such Deposit Account
or Securities Account is the subject of a Control Agreement and is maintained
by a branch office of the Deposit Account Bank or Approved Securities
Intermediary located within the United States.

 

“Quarterly”
means each of the three month period ending on March 31, June 30,
September 30 and December 31.

 

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

 

7

 

“Record”
means information that is inscribed on a tangible medium or which is stored in
an electronic or other medium and is retrievable in perceivable form.

 

“Requirement
of Law” means, with respect to any Person, the common law and all federal,
state, local and foreign laws, rules and regulations, orders, judgments,
decrees and other determinations of any Governmental Authority or arbitrator,
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Secured
Obligations” shall mean, with respect to each Grantor, all liabilities,
obligations, or undertakings owing by such Grantor to the Secured Parties of
any kind or description arising out of or outstanding under, advanced or issued
pursuant to, or evidenced by the Indenture, this Agreement, or any of the other
Noteholder Documents, as amended, amended and restated, modified, renewed,
refunded, replaced, or refinanced in whole in part from time to time, 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, premium, 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 the Bankruptcy Law, would have accrued irrespective of whether a
claim thereof is allowed) and any and all other amounts which each Grantor is
required to pay pursuant to any of the foregoing, by law, or otherwise.

 

“Secured
Parties” means the Senior Noteholders, the Collateral Agent, the Indenture
Trustee and the Pledge Agent (solely in respect of fees and expenses (including
attorneys fees) arising under or in connection with the Pledge Agreement),
together with their transferees, assigns or successors.

 

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

 

“Stock”
means “Stock” as such term is defined in the Stock Pledge Agreement.

 

“Trademark
License” means any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark.

 

“Trademarks”
means (a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and, in each case, all goodwill
associated therewith, whether now existing or hereafter adopted or acquired,
all registrations and recordings thereof and all applications in connection
therewith, in each case whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, and (b) the right to
obtain all renewals thereof.

 

“Vehicles”
means all vehicles covered by a certificate of title law of any state.

 

“Voidable
Transfer” has the meaning set forth in Section 11.9 to this Agreement.

 

1.2           Construction.  Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references
to the singular include the plural, 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 similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. 
Section,  subsection, clause,
schedule, and exhibit references are to this

 

8

 

Agreement unless otherwise specified.  Any reference in this Agreement or in any of
the other Noteholder Document to this Agreement or any of the other Noteholder
Document  shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, and supplements, thereto and thereof, as applicable.  In the event of a direct conflict between
the terms and provisions of this Agreement and the Indenture, it is the intention
of the parties hereto that both such documents shall be read together and
construed, to the fullest extent possible, to be in concert with each
other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of the Indenture shall control and govern; provided, however,
that the inclusion herein of additional obligations on the part of each Grantor
and supplemental rights and remedies in favor of the Collateral Agent, in each
case in respect of the Collateral, shall not be deemed a conflict with the
Indenture.

 

1.3           Schedules
and Exhibits.  All of the
schedules and exhibits attached to this Agreement shall be deemed incorporated
herein by reference.

 

2.             CREATION OF
SECURITY INTEREST.

 

2.1           Grant of
Security Interest. 
Each Grantor 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 Grantor’s right, title, and interest
in all currently existing and hereafter acquired 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 Noteholder
Documents, and in order to secure prompt performance by each Grantor of each such
Grantor’s covenants and duties under each Noteholder Document to which such
Grantor is a party.  Anything contained
in this Agreement or any other Noteholder Document to the contrary
notwithstanding, except for Asset Sales permitted in the Indenture, no Grantor
has any authority, express or implied, to dispose of any item or portion of the
Collateral.

 

2.2           Negotiable
Collateral.  In the
event that any Collateral, including proceeds, is evidenced by or consists of
Negotiable Collateral, and if and to the extent that perfection or priority of
the Collateral Agent’s security interest is dependent on or enhanced by
possession, each Grantor, promptly upon the request of the Collateral Agent,
shall endorse and assign such Negotiable Collateral to the Collateral Agent and
deliver physical possession of such Negotiable Collateral to the Collateral
Agent.

 

2.3           Collection
of Accounts, General Intangibles, Negotiable Collateral.  At any time after the occurrence and during
the continuation of an Event of Default, the Collateral Agent or the Collateral
Agent’s designee may (a) notify Account Debtors of each Grantor that the
Accounts, Chattel Paper, or General Intangibles have been assigned to the
Collateral Agent or that the Collateral Agent has a security interest therein,
or (b) collect the Accounts, Chattel Paper, or General Intangibles directly and
charge the reasonable collection costs and expenses to the Account.  Each Grantor agrees that it will hold in
trust for the Collateral Agent, as the Collateral Agent’s trustee, any
Collections that it receives and promptly will deliver said Collections to the
Collateral Agent or a Deposit Account Bank in their original form as received
by each Grantor.

 

2.4           Delivery of
Additional Documentation Required.  Subject to the terms of the Intercreditor Agreement:

 

Each
Grantor authorizes the Collateral Agent to file any financing statement
necessary or desirable to effectuate the transactions contemplated by this
Agreement and any other Noteholder

 

9

 

Documents,
and any continuation statement or amendment with respect thereto, in any
appropriate filing office without the signature of each Grantor where permitted
by applicable law and describing the 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 whether now owned or
hereafter acquired.”  Each Grantor
hereby ratifies the filing of any financing statement filed without the
signature of each Grantor prior to the date hereof.

 

At
any time upon the request of the Collateral Agent, each Grantor shall execute
and deliver to the Collateral Agent, any and all financing statements, original
financing statements in lieu of continuation statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, and all other documents (the “Additional Documents”) that the Collateral
Agent may request in its sole discretion, in form and substance reasonably
satisfactory to the Collateral Agent, to perfect and continue perfected or
better perfect the Collateral Agent’s Liens in the Collateral (whether now
owned or hereafter arising or acquired), and in order to fully consummate all
of the transactions contemplated hereby and under the other Noteholder
Documents.  In addition, on such
periodic basis as the Collateral Agent shall reasonably require, each Grantor
shall (a) provide the Collateral Agent with a report of all new material
patentable, copyrightable, or trademarkable materials acquired or generated by
each Grantor during the prior period, (b) cause all material Patents and
Trademarks acquired or generated by each Grantor that are necessary in the
conduct of each Grantor’s business and that are not already the subject of a
registration with the appropriate filing office (or an application therefor
diligently prosecuted) to be registered with such appropriate filing office in
a manner sufficient to impart constructive notice of each Grantor’s ownership
thereof, (c) solely at the reasonable request of the Collateral Agent (but not
otherwise), cause all material Copyrights acquired or generated by each Grantor
that are necessary in the conduct of each Grantor’s business and that are not
already the subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such
appropriate filing office in a manner sufficient to impart constructive notice
of each Grantor’s ownership thereof, and (d) cause to be prepared, executed,
and delivered to the Collateral Agent supplemental schedules to the applicable
Noteholder Document to identify such material Patents and Copyrights to the
extent registered after the date hereof, and such material Trademarks as being
subject to the security interests created hereunder.

 

2.5           Power of
Attorney.  Subject to
Gaming Laws, each Grantor hereby irrevocably appoints the Collateral Agent (and
any of the Collateral Agent’s officers, employees, or agents designated by the
Collateral Agent) as such Grantor’s attorney-in-fact, with power to:  (a) if each Grantor refuses to, or fails
timely to execute and deliver any of the documents described in Section 2.4,
sign the name of each Grantor on any of the documents described in Section 2.4;
(b) at any time that an Event of Default has occurred and is continuing, sign
each Grantor’s name on any invoice or bill of lading relating to the
Collateral, drafts against Account Debtors, or notices to Account Debtors; (c)
send requests for verification of Accounts; (d) endorse each Grantor’s name on
any Collection item that may come into the Collateral Agent’s possession; (e)
at any time that an Event of Default has occurred and is continuing, make,
settle, and adjust all claims under each Grantor’s policies of insurance and
make all determinations and decisions with respect to such policies of
insurance (other than workers’ compensation); and (f) at any time that an Event
of Default has occurred and is continuing, settle and adjust disputes and
claims respecting the Accounts, Chattel Paper, or General Intangibles directly
with Account Debtors, for amounts and upon terms which the Collateral Agent
determines to be reasonable, and the Collateral Agent may cause to be executed
and delivered any documents and releases which the Collateral Agent determines
to be necessary.  The appointment of the
Collateral Agent as each Grantor’s attorney, and each and every one of the
Collateral Agent’s rights and powers, being coupled with an interest, is
irrevocable until, and shall terminate when, all of

 

10

 

the Secured Obligations have been fully and
finally repaid and performed.  In
accordance with Section 9-207(a) of the Code, the Collateral Agent shall
use reasonable care in the custody and preservation of the Collateral in its
possession.

 

2.6           Right to
Inspect.  The
Collateral Agent (through any of its respective officers, employees, or agents)
shall have the right, from time to time
hereafter to inspect during regular business hours the Books and to check,
test, and appraise the Collateral in order to verify each Grantor’s financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral.

 

2.7           Control
Agreement.  Each
Grantor agrees that it will not transfer assets out of any Securities Account
or Deposit Account other than as permitted hereunder.  No arrangement contemplated hereby or by any Control Agreement in
respect of any Securities Account, Deposit Account, or other Investment
Property shall be modified by each Grantor without the prior written consent of
the Collateral Agent.  Upon the
occurrence and during the continuance of a Default or Event of Default, the
Collateral Agent may notify any Deposit Account Bank or Approved Securities
Intermediary to liquidate the applicable Deposit Account or Securities Account
or any related Investment Property maintained or held thereby and remit the
proceeds thereof to any of the Collateral Agent’s bank accounts.

 

2.8           Release of
Security Interest. 
Subject to the terms of the Intercreditor Agreement and upon the payment
in full of all Secured Obligations or the cancellation or termination of the
commitments and any other contingent obligation included in the Secured
Obligations, the security interest granted hereby shall terminate hereunder and
all rights to the Collateral shall revert and be deemed reassigned to each
Grantor.  Upon any such termination, the
Collateral Agent shall, at each Grantor’s request and expense, execute and
deliver to each Grantor such documents as each Grantor shall reasonably request
to evidence such termination and/or reassignment, without recourse, representation
or warranty of any kind.

 

3.             REPRESENTATIONS
AND WARRANTIES

 

Each
Grantor hereby represents and warrants each of the following to the Collateral
Agent and the Secured Parties:

 

3.1           Title; No Other Liens

 

Except
for the Lien granted to the Collateral Agent pursuant to this Agreement and the
other Liens permitted to exist on the Collateral under the Indenture, such
Grantor (a) is the record and beneficial owner of the Negotiable Collateral
pledged by it hereunder constituting Instruments, (b) is the Entitlement Holder
of any Collateral constituting Investment Property held in a Securities Account
and (c) has rights in or the power to transfer each other item of Collateral in
which a Lien is granted by it hereunder, free and clear of any other Lien.

 

3.2           Perfection and Priority

 

Subject
to the terms of the Intercreditor Agreement, the security interest granted
pursuant to this Agreement shall constitute a valid and continuing perfected
second priority (subordinate solely in respect of the security interest granted
to the Agent and subject to the terms of the Intercreditor Agreement) security
interest in favor of the Collateral Agent in the Collateral for which
perfection is governed by the Code or filing with the United States Patent and
Trademarks Office or the United States

 

11

 

Copyright Office, as applicable upon (i) in the case of all
Collateral in which a security interest may be perfected by filing a financing
statement under the Code the completion of the filings specified on Schedule 3
(Filings)  (which, in the
case of all filings and other documents referred to on such schedule, have been
delivered to the Collateral Agent in completed and duly executed form),
(ii) the delivery to the Collateral Agent of all Collateral consisting of
Instruments, in each case properly endorsed for transfer to the Collateral
Agent or in blank, (iii) the execution of Control Account Agreements with
respect to Collateral consisting of 
Investment Property not in certificated form, (iv) the execution of
Deposit Account Control Agreements with respect to all Deposit Accounts of a
Grantor and (v) all appropriate filings having been made with the United
States Patent and Trademark Office or the United States Copyright Office as
applicable.  Upon taking of all the
foregoing actions, such security interest shall be prior to all other Liens on
the Collateral except for Liens having priority over the Collateral Agent’s
Lien by operation of law or Liens granted in favor of the Agent as permitted by
the Indenture and subject to the Intercreditor Agreement.

 

3.3           Jurisdiction of Organization; Chief Executive Office

 

Such
Grantor’s jurisdiction of organization, legal name, organizational
identification number, if any, and the location of such Grantor’s chief
executive office or sole place of business, in each case as of the date hereof,
is specified on Schedule 1 (Jurisdiction of Organization; Principal Executive
Office) and such Schedule 1 (Jurisdiction of Organization;
Principal Executive Office) also lists all jurisdictions of
incorporation, legal names and locations of such Grantor’s chief executive
office or sole place of business for the five years preceding the date hereof.

 

3.4           Inventory and Equipment

 

On
the date hereof, such Grantor’s Inventory and Equipment (other than mobile
goods and Inventory or Equipment in transit) are kept at the locations listed
on Schedule 4
(Location of Inventory and Equipment) and such Schedule 4 (Location of Inventory
and Equipment) also list the locations of such Inventory and
Equipment for the five years preceding the date hereof.

 

3.5           Accounts

 

No
amount payable to such Grantor under or in connection with any Account is
evidenced by any Instrument or Chattel Paper that has not been delivered to the
Collateral Agent, properly endorsed for transfer, to the extent such delivery
is required by Section 2.2 (Negotiable Collateral)

 

3.6           Negotiable Collateral

 

Schedule 2 (Negotiable Collateral) lists all
Negotiable Collateral required to be pledged by each Grantor under this
Agreement.

 

3.7           Intellectual Property

 

(a)           Schedule 5
(Intellectual Property)  lists
all Intellectual Property that is registered Intellectual Property or for which
any application for registration has been filed with the United States Patent
and Trademarks Office and the United States Copyright Office and which is owned
or exclusively licensed to or by such Grantor on the date hereof.  Such Intellectual Property set forth on Schedule 5
(Intellectual Property) for such Grantor includes all Material
Intellectual Property that is registered Intellectual Property or for which any
application for registration has been filed with the United States

 

12

 

Patent and Trademarks Office and the United States Copyright Office and
which is owned or exclusively licensed to or by such Grantor on the date
hereof, and that is necessary to the conduct of such Grantor’s business.

 

(b)           All Material Intellectual Property owned by such
Grantor is valid, subsisting, unexpired and enforceable, has not been adjudged
invalid and has not been abandoned and the use thereof in the business of such
Grantor does not, to the knowledge of such Grantor, infringe, misappropriate,
dilute or violate the intellectual property rights of any other Person.

 

(c)           Except as set forth in Schedule 5 (Intellectual Property),
none of the Material Intellectual Property owned by such Grantor is the subject
of any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor.

 

(d)           No holding, decision or judgment has been rendered
by any Governmental Authority against a Grantor that would limit, cancel or
question the validity of, or such Grantor’s rights in, any Material
Intellectual Property.

 

(e)           No action or proceeding seeking to limit, cancel or
question the validity of any Material Intellectual Property owned by such
Grantor or such Grantor’s ownership interest therein is pending or, to the
knowledge of such Grantor, threatened. 
There are no claims, judgments or settlements to be paid by such Grantor
relating to the Material Intellectual Property.

 

3.8           Deposit Accounts; Securities Accounts

 

The
only Deposit Accounts or Securities Accounts maintained by any Grantor on the
date hereof are those listed on Schedule 6 (Bank Accounts) which sets
forth such information separately for each Grantor.

 

3.9           Commercial Tort Claims

 

The
only Commercial Tort Claims of any Grantor existing on the date hereof
(regardless of whether the amount, defendant or other material facts can be determined
and regardless of whether such Commercial Tort Claim has been asserted,
threatened or has otherwise been made known to the obligee thereof or whether
litigation has been commenced for such claims) are those listed on Schedule 7
(Commercial Tort Claims), which sets forth such information
separately for each Grantor.

 

4.             COVENANTS

 

Each
Grantor agrees with the Collateral Agent to the following, as long as any
Secured Obligation remains outstanding and, in each case, unless the Collateral
Agent otherwise consent in writing:

 

4.1           Generally

 

Such
Grantor shall (a) except for the security interest created by this
Agreement, not create or suffer to exist any Lien upon or with respect to any
Collateral, except Liens permitted under the Indenture, (b) not use or
permit any Collateral to be used unlawfully or in violation of any provision of
this Agreement, any other Noteholder Document, any Requirement of Law or any
policy of insurance covering the Collateral, (c) not sell, transfer or
assign (by operation of law or otherwise) any Collateral except as permitted
under the Indenture, (d) not enter into any agreement or undertaking
restricting the

 

13

 

right or ability of such Grantor or the Collateral Agent to sell,
assign or transfer any Collateral if such restriction would have a Material
Adverse Effect and (e) promptly notify the Collateral Agent of its entry
into any agreement or assumption of undertaking that restricts the ability to
sell, assign or transfer any Collateral regardless of whether or not it has a
Material Adverse Effect.

 

4.2           Maintenance of Perfected Security Interest; Further
Documentation

 

(a)           Such Grantor shall maintain
the security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 3.2 (Perfection and Priority) and
Section 2.2
(Negotiable Collateral) and, subject to the terms of the
Intercreditor Agreement, shall defend such security interest and such priority
against the claims and demands of all Persons.

 

(b)           Such Grantor shall furnish
to the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail and in form and substance satisfactory to the Collateral
Agent.

 

(c)           At any time and from time to
time, upon the written request of the Collateral Agent, and at the sole expense
of such Grantor, such Grantor shall promptly and duly execute and deliver, and
have recorded, such further instruments and documents and take such further
action as the Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including the filing of any financing or
continuation statement under the Code (or other similar laws) in effect in any
jurisdiction with respect to the security interest created hereby and the
execution and delivery of Deposit Account Control Agreements and Control
Account Agreements.

 

4.3           Changes in Locations, Name, Etc.

 

(a)           Except upon 15 days’ prior
written notice to the Collateral Agent and delivery to the Collateral Agent of
(i) all additional financing statements and other documents reasonably
requested by the Collateral Agent to maintain the validity, perfection and
priority of the security interests provided for herein and (ii) if
applicable, a written supplement to Schedule 4 (Location of Inventory and Equipment)
showing (A) any additional locations at which Inventory or Equipment shall
be kept or (B) any changes in any location where Inventory or Equipment
shall be kept that would require the Collateral Agent to take any action to
maintain a perfected security interest in such Collateral, such Grantor shall
not do any of the following:

 

(i)            permit any Inventory or
Equipment to be kept at a location other than those listed on Schedule 4
(Location of Inventory and Equipment), except for Inventory or
Equipment in transit;

 

(ii)           change its jurisdiction of
organization or its location, in each case from that referred to in
Section 3.3 (Jurisdiction of Organization; Chief Executive office);
or

 

(iii)          change its legal name or any
trade name used to identify it in the conduct of its business or ownership of
its properties or organizational identification number, if any, or corporation,
limited liability company or other organizational structure to such an extent
that any financing statement filed in connection with this Agreement would
become misleading.

 

14

 

(b)           Such Grantor shall keep and
maintain at its own cost and expense satisfactory and complete records of the
Collateral, including a record of all payments received and all credits granted
with respect to the Collateral and all other dealings with the Collateral.  If requested by the Collateral Agent, the
security interest of the Collateral Agent shall be noted on the certificate of
title of each Vehicle.

 

4.4           Negotiable Collateral

 

Subject
to the terms of the Intercreditor Agreement, such Grantor shall, subject to
Section 2.2 herein (i) deliver to the Collateral Agent any Collateral
representing or evidencing any Negotiable Collateral whether now existing or
hereafter acquired, in suitable form for transfer by delivery or, as
applicable, accompanied by such Grantor’s endorsement, where necessary, or duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent.

 

4.5           Accounts

 

(i)            Such Grantor shall not,
other than in the ordinary course of business consistent with its past
practice, (i) grant any extension of the time of payment of any Account,
(ii) compromise or settle any Account for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Account, (iv) allow any credit or discount on any Account
or (v) amend, supplement or modify any Account in any manner that could
adversely affect the value thereof.

 

(ii)           The Collateral Agent shall
have the right to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and such Grantor
shall furnish all such assistance and information as the Collateral Agent may
reasonably require in connection therewith. 
At any time and from time to time, upon the Collateral Agent’s request
and at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Collateral Agent to furnish to
the Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts; provided, however,
that unless a Default or Event of Default shall be continuing, the Collateral
Agent shall request no more than four such reports during any calendar year.

 

4.6           Investment
Property

 

(a)           Such Grantor shall
(i) maintain all Collateral constituting Investment Property in a Control
Account, subject to the proviso to Section 4.7.

 

(b)           Such Grantor shall not grant
control over any Collateral constituting Investment Property to any Person
other than the Collateral Agent, subject to the terms of the Intercreditor
Agreement.

 

4.7           Control
Accounts; Approved Deposit Accounts

 

Such
Grantor shall (i) deposit in an Approved Deposit Account all cash received
by such Grantor, (ii) not establish or maintain any Securities Account
that is not a Control Account and (iii) not establish or maintain any
Deposit Account other than with a Deposit Account Bank, provided, however,
that any Grantor may maintain other accounts not subject to a Deposit
Account Control Agreement or a Control Agreement so long as the aggregate
balance in all such accounts does not exceed $500,000.

 

15

 

4.8           Intellectual Property

 

(a)           Such Grantor (either itself or through licensees)
shall (i) continue to use each Trademark that is Material Intellectual
Property in order to maintain such Trademark in full force and effect with respect
to each class of goods for which such Trademark is currently used, free from
any claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such Trademark, (iii) use
such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any mark that is confusingly similar or a colorable imitation of
such Trademark unless the Collateral Agent shall obtain a perfected security
interest in such mark pursuant to this Agreement and (v) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby any registered Trademark (or any goodwill associated
therewith) that is Material Intellectual Property may become destroyed,
invalidated, impaired or harmed in any way.

 

(b)           Such Grantor (either itself or through licensees)
shall not do any act, or omit to do any act, whereby any Patent that is
Material Intellectual Property may become forfeited, abandoned or dedicated to
the public.

 

(c)           Such Grantor (either itself or through licensees)
(i) shall not (and shall not permit any licensee or sublicensee thereof
to) do any act or omit to do any act whereby the registered Copyrights that are
Material Intellectual Property may become invalidated or otherwise impaired and
(ii) shall not (either itself or through licensees) do any act whereby the
Copyrights that are Material Intellectual Property may fall into the public
domain.

 

(d)           Such Grantor (either itself or through licensees)
shall not do any act, or omit to do any act, whereby any trade secret that is
Material Intellectual Property may become publicly available or otherwise
unprotectable.

 

(e)           Such Grantor (either itself or through licensees)
shall not do any act that knowingly uses any Material Intellectual Property to
infringe, misappropriate, or violate the intellectual property rights of any
other Person.

 

(f)            Such Grantor shall promptly notify the Collateral
Agent if it knows, that any application or registration relating to any
Material Intellectual Property may become forfeited, abandoned or dedicated to
the public, or of any adverse determination (including the institution of, or
any such determination in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal
in any country) regarding such Grantor’s ownership of, right to use, interest
in, or the validity of, any Material Intellectual Property or such Grantor’s
right to register the same or to own and maintain the same.

 

(g)           Whenever such Grantor, either by itself or through
any agent, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
within or outside the United States or register any Internet domain name, such
Grantor shall report such filing to the Collateral Agent within five Business
Days after the last day of the fiscal quarter in which such filing occurs.  Upon request of the Collateral Agent, such
Grantor shall execute and deliver, and have recorded, all agreements,
Instruments, Documents and papers as the Collateral Agent may reasonably
request to evidence the Collateral Agent’s security interest in any
registration or application for Copyright, Patent, Trademark or internet domain
name and the goodwill and General Intangibles of such Grantor relating thereto
or represented thereby.

 

16

 

(h)           Such Grantor shall take all reasonable actions
necessary whether or not  requested by
the Collateral Agent, including in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency and any Internet domain name registrar, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of any Copyright, Trademark, Patent or Internet domain name that
is Material Intellectual Property, including filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition and
interference and cancellation proceedings.

 

(i)            In the event that any Material Intellectual Property
is or has been infringed upon or misappropriated or diluted by a third party,
such Grantor shall notify the Collateral Agent promptly after such Grantor
learns thereof.  Such Grantor shall take
appropriate action in response to such infringement, misappropriation of
dilution, including as appropriate, promptly bringing suit for infringement,
misappropriation or dilution and to recover all damages for such infringement,
misappropriation of dilution, and shall take such other actions as may be appropriate
in its reasonable judgment under the circumstances to protect such Material
Intellectual Property.

 

(j)            Unless otherwise agreed to by the Collateral Agent,
such Grantor shall execute and deliver to the Collateral Agent for filing as
applicable, (i) in the United States Copyright Office a short-form
copyright security agreement in the form attached hereto as Annex 5
(Form of Short Form Intellectual Property Security Agreement),
(ii) in the United States Patent and Trademark Office a short form patent
security agreement in the form attached hereto as Annex 5 (Form of Short Form
Intellectual Property Security Agreement), and (iii) in the
United States Patent and Trademark Office a short-form trademark security
agreement in form attached hereto as Annex 5 (Form of Short Form Intellectual Property
Security Agreement).

 

4.9           Vehicles

 

Upon
the request of the Collateral Agent, within 30 days after the date of such
request and, with respect to any Vehicle acquired by such Grantor subsequent to
the date of any such request, within 30 days after the date of acquisition
thereof, such Grantor shall file all applications for certificates of title or
ownership indicating the Collateral Agent’s security interest in the Vehicle
covered by such certificate and any other necessary documentation, in each
office in each jurisdiction that the Collateral Agent shall deem advisable to
perfect its security interests in the Vehicles.

 

4.10         Payment of Obligations

 

Such
Grantor shall pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the Collateral or in respect of
income or profits therefrom, as well as all claims of any kind (including claims
for labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings, reserves in
conformity with GAAP with respect thereto have been provided on the books of
such Grantor and such proceedings could not reasonably be expected to result in
the sale, forfeiture or loss of any material portion of the Collateral or any
interest therein.

 

4.11         Insurance

 

Such
Grantor shall (i) maintain, and cause to be maintained for each of its
Subsidiaries, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar

 

17

 

properties in the same general areas in which such Grantor or such
Subsidiary (as defined in the Indenture) operates, and such other insurance as
may be reasonably requested by the Collateral Agent, and, in any event, all
insurance required by any Collateral Documents and (ii) cause all such
insurance to name the Collateral Agent on behalf of the Secured Parties as
additional insured or loss payee, as appropriate, and to provide that no
cancellation shall be effective until after 30 days’ written notice thereof to
the Collateral Agent.

 

4.12         Notice of Commercial Tort Claims 

 

Such
Grantor agrees that, if it shall acquire any interest in any Commercial Tort
Claim (whether from another Person or because such Commercial Tort Claim shall
have come into existence), (i) such Grantor shall, immediately upon such
acquisition, deliver to the Collateral Agent, in each case in form and
substance satisfactory to the Collateral Agent, a notice of the existence and
nature of such Commercial Tort Claim and deliver a supplement to Schedule 7
(Commercial Tort Claims) containing a specific description of such
Commercial Tort Claim, (ii) the provision of Section 2 (Grant of Security
Interests) shall apply to such Commercial Tort Claim and
(iii) such Grantor shall execute and deliver to the Collateral Agent, in
each case in form and substance satisfactory to the Collateral Agent, any
certificate, agreement and other document, and take all other action, deemed by
the Collateral Agent to be reasonably necessary or appropriate for the
Collateral Agent to obtain, on behalf of the Noteholders, a, perfected security
interest in all such Commercial Tort Claims. 
Any supplement to Schedule 7 (Commercial Tort Claims)  delivered pursuant to this
Section 4.12 (Notice of Commercial Tort Claims) shall, after
the receipt thereof by the Collateral Agent, become part of Schedule 7(Commercial
Tort Claims) for all purposes hereunder other than in respect of
representations and warranties made prior to the date of such receipt.

 

4.13         Collateral Reporting

 

Provide
Collateral Agent (and if so requested by the Collateral Agent) with the
following documents at the following times in form  reasonably satisfactory to the Collateral Agent:

 

	
  Within 5 Business Days of any issuance or filing

  	
   

  	
  copies of
  each report in respect of the Grantors’, and their respective Subsidiaries’
  businesses issued by a Nevada Gaming Authority or made by any Grantor or any
  of their Subsidiaries, to a Nevada Gaming Authority,

  
	
   

  	
   

  	
   

  
	
  Monthly (not later than the 10th day of each month)

  	
   

  	
  a summary
  aging, by vendor, of Grantors’ and their Subsidiaries’ accounts payable  and any book overdraft,

  
	
   

  	
   

  	
  a
  detailed report regarding Grantors’ and their Subsidiaries’ cash and Cash
  Equivalents including an indication of which amounts constitute Qualified
  Cash,

  
	
   

  	
   

  	
   

  
	
  Quarterly

  	
   

  	
  a
  report regarding Grantors’ and their Subsidiaries’ accrued, but unpaid, ad
  valorem taxes.

  

 

5.             COLLATERAL AGENT’S RIGHTS AND REMEDIES.

 

18

 

5.1           Rights and
Remedies.

 

Subject
to the terms of the Intercreditor Agreement and the Gaming Laws, upon the
occurrence and during the continuance of an Event of Default, the security
hereby constituted shall become enforceable and, in addition to all other
rights and remedies available to the Collateral Agent as provided hereafter,
the Collateral Agent may, at its election, without notice of its election and
without demand, do any one or more of the following, all of which are
authorized by each Grantor:

 

(a)           Proceed directly and at once, without notice,
against each Grantor to collect and recover the full amount or any portion of
the Secured Obligations, without first proceeding against the Note Issuer, or
against any security or collateral for the Secured Obligations;

 

(b)           Without notice to each Grantor and regardless of the
acceptance of any security or collateral for the payment hereof, appropriate
and apply toward the payment of the Secured Obligations (i) any indebtedness
due or to become due from the Collateral Agent to each Grantor and (ii) any
moneys, credits or other property belonging to each Grantor at any time held by
or coming into the possession of the Collateral Agent;

 

(c)           Exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies available to it at law (including those of a
secured party under the Code) or in equity;

 

(d)           Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which the Collateral Agent considers
advisable, and in such cases,

 

(e)           Without notice or demand upon each Grantor, make
such payments and do such acts as the Collateral Agent considers necessary or
reasonable to protect its security interest in the Collateral.  Each Grantor agrees to assemble the
Collateral if the Collateral Agent so requires, and to make the Collateral
available to the Collateral Agent as the Collateral Agent may designate.  Each Grantor authorizes the Collateral Agent
to enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in the Collateral Agent’s
determination appears to be prior or superior to its security interest and to
pay all expenses incurred in connection therewith.  With respect to any of each Grantor’ owned premises, each Grantor
hereby grants the Collateral Agent a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of
the Collateral Agent’s rights or remedies provided herein, at law, in equity,
or otherwise;

 

(f)            Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral.  Each
Grantor hereby grants to the Collateral Agent a license or other right to use,
without charge, each Grantor’s labels, Patents, Copyrights, rights of use of
any name, trade secrets, trade names, Trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in advertising for sale or selling any Collateral, and each
Grantor’s rights under all licenses and all franchise agreements shall inure to
the Collateral Agent’s benefit.  Solely
to the extent necessary to avoid the invalidation of any Grantors’ material
rights and interests in any Trademarks that have material economic value and solely
in connection with the Collateral Agent’s advertising or sale of goods on which
such Trademarks are affixed, the Collateral Agent agrees to maintain quality
control standards with respect to such goods reasonably similar to those in
effect immediately prior to the exercise of remedies with respect to such
goods;

 

(g)           Sell all or any part of the Collateral at either a
public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places

 

19

 

(including each Grantor’s premises) as the Collateral Agent determines
is commercially reasonable.  It is not
necessary that the Collateral be present at any such sale;

 

(h)           The Collateral Agent shall
give notice of the disposition of the Collateral as follows:

 

(i)            The Collateral Agent shall give each Grantor a
notice in writing of the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public sale is to be made
of the Collateral, then the time on or after which the private sale or other
disposition is to be made; and

 

(ii)           The notice shall be personally delivered or mailed,
postage prepaid, to each Grantor, at least ten (10) days before the earliest
time of disposition set forth in the notice; no notice needs to be given prior
to the disposition of any portion of the Collateral that is perishable or
threatens to decline speedily in value or that is of a type customarily sold on
a recognized market;

 

(i)            The Collateral Agent may
credit bid and purchase at any public sale;

 

(j)            The Collateral Agent may
seek the appointment of a receiver or keeper to take possession of all or any
portion of the Collateral or to operate same and, to the maximum extent permitted
by law, may seek the appointment of such a receiver or keeper without the
requirement of prior notice or a hearing;

 

(k)           The Collateral Agent, on
behalf of the Secured Parties, shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document; and

 

(l)            Any deficiency that exists
after disposition of the Collateral as provided above will be paid immediately
by each Grantor.  Any excess will be
returned, without interest and subject to the rights of third Persons, by the
Collateral Agent to each Grantor.

 

5.2           Remedies
Cumulative.  The
Collateral Agent’s rights and remedies under this Agreement, the other
Noteholder Documents, and all other agreements shall be cumulative.  The Collateral Agent shall have all other
rights and remedies not inconsistent herewith as provided under the Code, by
law, or in equity.  No exercise by the
Collateral Agent of one right or remedy shall be deemed an election, and no
waiver by any member of the Secured Parties of any Event of Default on each
Grantor’s part shall be deemed a continuing waiver. No delay by any member of
the Secured Parties shall constitute a waiver, election, or acquiescence by it.

 

6.             TAXES AND EXPENSES REGARDING THE COLLATERAL.  If each Grantor fails to pay any monies (whether
taxes, rents, assessments, insurance premiums, or, in the case of leased
properties or assets, rents or other amounts payable under such leases) due to
third Persons by the end of any applicable grace period, or fails to make any
deposits or furnish any required proof of payment or deposit, all as required
under the terms of this Agreement, then, the Collateral Agent, in its sole
discretion and without prior notice to each Grantor, may do any or all of the
following: (a) make payment of the same or any part thereof; (b) set up such
reserves as the Collateral Agent deems necessary to protect the Secured Parties
from the exposure created by such failure; or (c) obtain and maintain insurance
policies insuring each Grantor’s ownership and use of the Collateral, and take
any action with respect to such policies as the Collateral Agent deems prudent,
in accordance with the terms of the Indenture. 
Any amounts paid or deposited by the Collateral Agent shall constitute
Secured Parties’ expenses, shall immediately become additional Secured
Obligations, shall bear interest at the applicable rate of the Senior Secured
Notes, and

 

20

 

shall be secured by the Collateral. 
Any payments made by the Collateral Agent shall not constitute an
agreement by the Collateral Agent or the Secured Parties, to make similar
payments in the future or a waiver by the Secured Parties, or the Collateral
Agent on behalf thereof, of any Event of Default under this Agreement.  The Collateral Agent need not inquire as to,
or contest the validity of, any such expense, tax, security interest,
encumbrance, or lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing; provided, however, if each Grantor is contesting a tax
claim in good faith with appropriate provision therefor on its financing
statements, the Collateral Agent shall not cause such claim to be paid or
interfere with such contest.  The Collateral
Agent shall use its best efforts to provide prompt notice to each Grantor of
any action taken by it under this Section 6.

 

7.             WAIVERS; INDEMNIFICATION.

 

7.1           Demand;
Protest; etc. 
Except as otherwise specifically and explicitly set forth in this Agreement,
the Indenture or the other Noteholder Documents, and to the extent permitted by
law, each Grantor waives demand, protest, notice of protest, notice of default
or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of Accounts, Documents, Instruments, Chattel Paper, and guarantees at any time
held by the Secured Parties, or the Collateral Agent on behalf thereof, on
which each Grantor may in any way be liable.

 

7.2           Secured
Parties’ Liability for Collateral.  So long as the Collateral Agent complies with its obligations
under the Code and no willful misconduct or gross negligence occurs, the
Collateral Agent shall not in any way or manner be liable or responsible
for:  (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner
or fashion from any cause; (c) any diminution in the value thereof; or (d) any
act or default of any carrier, warehouseman, bailee, forwarding agency, or
other Person.  All risk of loss, damage,
or destruction of the Collateral shall be borne by each Grantor.

 

7.3           Indemnification.  The Note Issuer agrees to defend, indemnify,
save, and hold the Collateral Agent and the Secured Parties, and each of their
respective officers, employees, and agents (each an “Indemnified Person”)
harmless (to the fullest extent permitted by law) against:  (a) all obligations, demands, claims, and
liabilities claimed or asserted by any other Person, and (b) all losses
(including reasonable attorneys fees and disbursements) in any way suffered,
incurred, or paid by the Collateral Agent, the Secured Parties as a result of
or in any way arising out of, following, or consequential to transactions with
any Grantor, whether under this Agreement, the other Noteholder Documents or
otherwise (all of the foregoing, collectively, the “Indemnified Liabilities”).  Notwithstanding the foregoing, the Note
Issuer shall not have any obligation under this Section 7.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. 
This provision shall survive the termination of this Agreement.

 

8.             THE APPOINTMENT OF THE COLLATERAL AGENT:

 

8.1           Appointment   The Indenture Trustee hereby designates and
appoints Wells Fargo Bank National Association, as Collateral Agent to act as
specified herein and in the Stock Pledge Agreement.  The Indenture Trustee hereby irrevocably authorizes the
Collateral Agent to take such action on its behalf under the provisions of this
Agreement and the Stock Pledge Agreement and any other instruments and
agreements referred to herein or therein and to exercise all powers set forth
herein and therein, for the benefit of the Secured Parties to the extent set
forth in this Agreement and

 

21

 

the Stock Pledge Agreement, including without limitation the right to
foreclose or otherwise realize upon the Collateral or the Pledged Collateral
and to initiate, prosecute and defend any and all legal proceedings against the
Grantors or any other party which is or may become party to this Agreement and
to the Stock Pledge Agreement and to perform such duties hereunder and
thereunder as are specifically delegated to or permitted or required of the
Collateral Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto (it being understood that all the rights and
remedies of the Collateral Agent under this Section 8 solely in respect of
the Stock Pledge Agreement shall be subject to the Gaming Laws) .

 

The Collateral Agent accepts its appointment as
Collateral Agent and agrees to execute its duties and obligations hereby created
upon the terms and conditions set forth herein and in other Noteholder
Documents.

 

8.2           Specific
Duties Of The Collateral Agent    Subject to the terms of the Intercreditor Agreement, the Collateral
Agent shall:

 

(a)           upon the receipt by it of
written instructions of the Indenture Trustee, execute and deliver on behalf of
the Secured Parties such documents or instruments as described in the written
instruction of the Indenture Trustee as shall be necessary or appropriate from
time to time to maintain the perfection of any lien in, to or upon the
Collateral, Pledged Collateral or any portion thereof, which liens have been,
are or will be granted pursuant to this Agreement and the Stock Pledge
Agreement;

 

(b)           accept, on behalf of the
Secured Parties, any part of the Collateral or the Pledged Collateral delivered
to it, including without limitation any certificated Notes, licenses,
instruments and documents, and accept, on behalf of the Secured Parties, any
new Collateral or Pledged Collateral given as security for the obligations
secured by this Agreement or the Stock Pledge Agreement, which Collateral and
Pledged Collateral may be delivered for safekeeping to third-party custodians
and, upon the receipt of written instructions of the Indenture Trustee, execute
and deliver, on behalf of the Secured Parties, such documents or instruments
evidencing the creation of any lien with respect thereto and perfecting such
lien as shall be set forth in such instructions;

 

(c)           release the Collateral, the
Pledged Collateral or any portion thereof from any liens thereon which were
created pursuant to this Agreement and the Stock Pledge Agreement if such
release is in compliance with the terms of this Agreement, the Indenture or the
Intercreditor Agreement or otherwise at the direction of the Indenture Trustee;

 

(d)           furnish the Indenture
Trustee, promptly upon request, duplicates of all reports, notices, requests,
demands, certificates and other documents received by the Collateral Agent
under this Agreement, the Intercreditor Agreement, the Stock Pledge Agreement
or any instrument or document entered into pursuant thereto unless any such
document shall state thereon that it has previously been (or is being)
furnished directly to the Indenture Trustee;

 

(e)           upon receipt by it of
written instructions from the Indenture Trustee, take such action as set forth
in the instructions to protect and preserve the Collateral and the Pledged
Collateral and realize on and foreclose upon the Collateral and the Pledged
Collateral, including without limitation exercising any powers or any of the
remedies or making any determinations of fact described in this Agreement and
in the Stock Pledge Agreement;

 

22

 

(f)            provide notice required by
this Agreement, the Stock Pledge Agreement, the Intercreditor Agreement or by
law to the Grantors or any other party entitled thereto, in order to take any
actions required or authorized to be taken under this Agreement, the Stock
Pledge Agreement or the Intercreditor Agreement;

 

(g)           take, or refrain from
taking, such other actions (but only such actions that are set forth in this
Agreement) as the Indenture Trustee shall from time to time direct by written
instruction to the Collateral Agent;

 

8.3           Duties Limited   (a)  Except
as expressly provided herein, in this Agreement or in written instructions of
the Indenture Trustee, the
Collateral Agent shall not have any duty or obligation, express or implied, to:

 

(i)            manage, control, use,
maintain, sell, dispose of, purchase, bid for or otherwise deal with the
Collateral, the Pledged Collateral or any portion thereof, or to otherwise take
or refrain from taking any action under, or in connection with this Agreement,
the Stock Pledge Agreement or the Intercreditor Agreement, except to the extent
required by law;

 

(ii)           take any action which
relates to, materially affects or impairs the amounts which the Secured Parties
may recover from disposition of the Collateral and the Pledged Collateral,
including without limitation any election or waiver of remedies available under
this Agreement or the Stock Pledge Agreement or with respect to the Collateral
and the Pledged Collateral or the manner of foreclosure upon the same; any
determination of the order and timing of foreclosure upon any portion of the
Collateral and the Pledged Collateral or of the amount of any credit bid to be
entered at any public or private, judicial or nonjudicial sale of the
Collateral and the Pledged Collateral; the pursuit of any remedies against the
Grantors following the completion of foreclosure upon the Collateral and the
Pledged Collateral; the compromise or settlement of any claims against the
Grantors including the conduct of any negotiations relating to the same or with
a view toward the termination of any pending foreclosure proceedings;

 

(iii)          obtain or maintain insurance
on the Collateral or the Pledged Collateral, as applicable, or any other
insurance;

 

(iv)          pay or discharge any tax,
assessment or other governmental charge or any lien or encumbrance of any kind
owing with respect to, or assessed or levied against, any part of the
Collateral or the Pledged Collateral;

 

(v)           advance any moneys related
to the Collateral or the Pledged Collateral or for the benefit of the Secured
Parties for any purpose;

 

(vi)          take any action or omit to
take any action not expressly provided for in this Agreement, the Stock Pledge
Agreement or the Intercreditor Agreement and documents related thereto and
executed in connection therewith; or

 

(vii)         take any action or omit to
take any action to perfect or insure priority for the security interest granted
by this Agreement unless instructed in writing by the Indenture Trustee.

 

23

 

(b)           In addition to the
provisions of Section 8.3(a) herein, under no circumstances shall the
Collateral Agent have any duty or obligation to take any actions hereunder,
even if instructed to do so by the Indenture Trustee, if the Collateral Agent
determines, in its reasonable discretion, that such actions would subject it to
liability or expense for which satisfactory indemnity has not been provided
hereunder or otherwise.

 

8.4           Written Instructions  In the event
that the Collateral Agent receives written instructions from the Indenture
Trustee which the Collateral Agent determines, in its discretion, to be
ambiguous, inconsistent, in conflict with this Agreement, the Stock Pledge
Agreement or the Intercreditor Agreement or otherwise insufficient to direct
the actions of the Collateral Agent, then the Collateral Agent shall have no
obligation whatsoever to take or refrain from taking any action pursuant to
such written instructions, but shall instead do one or more of the following:

 

(a)           seek additional written
instructions satisfactory to it from the Indenture Trustee; or

 

(b)           resign as Collateral Agent
in accordance with this Agreement; or

 

(c)           at the expense of the
Secured Parties, which fees and expenses shall be paid in advance, commence an
action in a court of appropriate jurisdiction requiring the Secured
Parties  to interplead and settle among
themselves their rights in and to the Collateral and any proceeds thereof then
held by the Collateral Agent.

 

8.5           Reliance.  In acting with respect to this Agreement, the Stock Pledge
Agreement and the Intercreditor Agreement, the Collateral Agent shall be
entitled to:

 

(a)           rely on any communication
believed by it to be genuine and to have been made, sent or signed by the
person, firm or institution by whom it purports to have been made, sent or
signed;

 

(b)           rely as to any matters of
fact which might reasonably be expected to be within the knowledge of the
Indenture Trustee or any Grantor upon a certificate signed by or on behalf of
any such party;

 

(c)           rely on the representations
made by the Indenture Trustee in their respective instructions regarding its
respective authority to provide the instructions; and

 

(d)           rely on the advice or
services of any persons, firms or professionals employed by it and rely upon
the opinions and statements of any professional advisor so employed.

 

8.6           No
Responsibility  The Collateral Agent does
not assume any responsibility for:

 

(a)           any failure or delay in
performance or breach by the Grantors or by any Secured Party of any
obligations under this Agreement, the Stock Pledge Agreement or the
Intercreditor Agreement; or

 

(b)           the truth or accuracy of any
representation or warranty or statement given or made in connection with this
Agreement; or

 

(c)           the legality, validity,
effectiveness, adequacy or enforceability of this Agreement, the Stock Pledge
Agreement or the liens on the Collateral and Pledged Collateral; or

 

24

 

(d)           the validity, enforceability
or sufficiency of any agreement or instrument or any depreciation or diminution
in the value of any Collateral including the Pledge Collateral or the income
thereon.

 

(e)           the Collateral Agent shall not be liable for any
action taken, suffered or omitted or for any error of judgment made by it in
good faith in the performance of its duties under this Agreement, the Stock
Pledge Agreement, the Intercreditor Agreement or any Collateral Document except
to the extent that such liability arises from the Collateral Agent’s gross
negligence or willful misconduct.

 

8.7           Reliance
By Collateral Agent  The Collateral Agent may rely
upon any certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond or paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.  The Collateral Agent may consult with
independent counsel, and a written opinion of such counsel shall constitute
full and complete protection in respect of any action taken, suffered or
omitted by it under this Agreement, the Intercreditor Agreement, the Stock
Pledge Agreement or any other Collateral Document in good faith and in
accordance with such opinion of counsel. 
The Collateral Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or through agents or attorneys (it being
understood that the Collateral Agent shall not be liable for any claims,
damages, or losses arising out of the Collateral Agent’s actions under this
Section 8.7) and the Collateral Agent shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.  

 

8.8           Moneys to be Held in Trust  Subject to the terms of the Intercreidtor Agreement, all moneys received by the Collateral
Agent hereunder and under this Agreement, including but not limited to moneys
in the Deposit Account or the Securities 
Account, shall be held by the Collateral Agent in trust and applied for
the purposes of this Agreement, and segregated from other funds of the
Collateral Agent.

 

8.9           Application of Sale Proceeds  All moneys collected by the Collateral Agent upon any
sale of the Collateral and the Pledged Collateral, together with any other
moneys received by the Collateral Agent under this Agreement and the Stock
Pledge Agreement, shall be applied as set forth in this Agreement, the Stock
Pledge Agreement, subject to the terms of the Intercreditor Agreement.

 

8.10         Expenses; Indemnification  The
Collateral Agent shall be entitled to payment or reimbursement by the Grantors
of its reasonable expenses and disbursements (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) hereunder.  In addition, the Collateral Agent shall be indemnified by the
Grantors for, and held harmless by it against, any and all damages, losses,
liability, costs, charges, expenses and judgments incurred without gross
negligence or willful misconduct on its or its officers’, directors’,
employees’ or agents’ part, arising out of or in connection with the acceptance
or administration of the agency hereunder, including the costs and expenses
(including reasonable costs and expenses of its attorneys and agents) of
defending itself against any claims, suits or causes of action.  

 

8.11         Resignation or Removal  The
Collateral Agent may resign on not less than 30 days’ written notice to the
Grantors and the Indenture Trustee, but such resignation shall not take effect
until a successor has been appointed by the Indenture Trustee and accepted its
duties in accordance with this Section 8 herein.  If no successor Collateral Agent shall have been appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Collateral Agent may, on behalf of the Secured
Parties, appoint a successor Collateral Agent which shall be a

 

25

 

financial institution with an office in New York, New York having a
combined capital and surplus of at least $500,000,000.  The Collateral Agent may be removed at any
time, with or without cause, by written notice from the Indenture Trustee
delivered to the Collateral Agent and the Grantors, but such removal shall not
take effect until a successor has been appointed and accepted its duties in accordance
with Section 8 herein.

 

8.12         Successor Collateral Agent  Any
corporation or association which succeeds to the business of the Collateral
Agent as a whole or substantially as a whole, whether by sale, merger,
consolidation or otherwise, shall thereby become vested with all the property,
rights and powers of the Collateral Agent hereunder and shall be deemed to have
assumed all of the obligations of the Collateral Agent hereunder, without any
further act or conveyance.  In the event
of the resignation or removal of the Collateral Agent or a vacancy from any
other cause, a successor may be appointed by the Indenture Trustee.  Any successor Collateral Agent under this
Section 8 shall be a financial institution, having a combined capital and
surplus of not less than $500,000,000. 
Any such successor Collateral Agent shall become vested with all the
property rights and powers of the Collateral Agent hereunder, without any
further act or conveyance.  Any
predecessor Collateral Agent shall from time to time execute, deliver and
record such instruments as the Collateral Agent may reasonably require to
confirm any succession hereunder.

 

9.             NOTICES. All notices and other communications hereunder to
the Collateral Agent shall be in writing and shall be mailed, sent or delivered
in accordance with the Indenture and all notices and other communications
hereunder to each Grantor shall be in writing and shall be mailed, sent or
delivered in care of Note Issuer in accordance with the Indenture.

 

10.           CHOICE OF LAW AND VENUE.  JURY TRIAL WAIVER.  GRANTORS AND COLLATERAL AGENT AGREE THAT THE PROVISIONS IN THE
INDENTURE WITH RESPECT TO CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER ARE
APPLICABLE TO THIS AGREEMENT AS IF FULLY SET FORTH HEREIN.

 

11.           GENERAL PROVISIONS.

 

11.1         Effectiveness.  This Agreement shall be binding and deemed
effective when executed by each Grantor and accepted and executed by the
Collateral Agent.

 

11.2         Successors
and Assigns.  This
Agreement shall bind and inure to the benefit of the respective successors and
assigns of each of the parties; provided, however, that each
Grantor may not assign this Agreement or any rights or duties hereunder without
the Collateral Agent’s prior written consent and any prohibited assignment
shall be absolutely void.  No consent to
an assignment by the Collateral Agent shall release each Grantor from its
Secured Obligations.  The Collateral
Agent may assign this Agreement and its rights and duties hereunder and no
consent or approval by each Grantor is required in connection with any such
assignment.

 

11.3         Section Headings.  Headings and numbers have been set forth
herein for convenience only.  Unless the
contrary is compelled by the context, everything contained in each
section applies equally to this entire Agreement.

 

11.4         Interpretation.  Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any member of the
Secured Party or any Grantor, whether under any rule of construction or
otherwise.  On the contrary, this
Agreement has been reviewed by all parties

 

26

 

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 all parties hereto.

 

11.5         Severability
of Provisions.  Each
provision of this Agreement shall be severable from every other provision of
this Agreement for the purpose of determining the legal enforceability of any
specific provision.

 

11.6         Amendments
in Writing.  Subject to
the terms of the Intercreditor Agreement, this Agreement can only be amended by
a writing signed by the Collateral Agent and each Grantor (to the extent such
amendment affects any obligation or right of such Grantor).

 

11.7         Counterparts;
Telefacsimile Execution.  This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but 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, and binding effect of this Agreement.

 

11.8         Additional
Grantors  If, pursuant to Section 4.19 (Additional
Guarantees) of the Indenture, the Note Issuer shall be required to
cause any Subsidiary (as defined in the Indenture) that is not a Grantor to
become a Grantor hereunder, such Subsidiary shall execute and deliver to the
Collateral Agent a Joinder Agreement substantially in the form of Annex 4
(Form of Joinder Agreement) and shall thereafter for all purposes be
a party hereto and have the same rights, benefits and obligations as a Grantor
party hereto on the Closing Date.

 

11.9         Revival and
Reinstatement of Obligations.  If the incurrence or payment of the Secured Obligations by each
Grantor or the transfer by each Grantor to the Collateral Agent of any property
of each Grantor should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, and other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable Transfer”), and if the Collateral
Agent is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then,
as to any such Voidable Transfer, or the amount thereof that the Collateral
Agent is required or elects to repay or restore, and as to all reasonable
costs, expenses, and attorneys’ fees of the Collateral Agent related thereto,
the liability of each Grantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.

 

11.10       Continuing
Security Interest.  This Agreement shall create a
continuing security interest in the 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 Grantor
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 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 Intercredidtor Agreement, the security interests granted
herein shall automatically terminate and all rights to the Collateral shall

 

27

 

revert and be deemed re-assigned to each Grantor.  Upon any such termination, the Collateral
Agent will, at Grantors’ expense, execute and deliver to the applicable
Grantors such documents as Grantors 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 Grantors 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
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 11.10.

 

11.11       Conflicting Provisions

 

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

 

11.12       Governing Law

 

This
agreement and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York.

 

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

 

[signature page follows]

 

28

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

 

	
   

  	
  GRANTORS:

  
	
   

  	
   

  
	
   

  	
  POSTER FINANCIAL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Title:

  	
  VP & General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNL, CORP.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Title:

  	
  VP & General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNLV, CORP.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Title:

  	
  VP & General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDEN NUGGET EXPERIENCE, LLC,

  
	
   

  	
  By: GNLV, Corp.

  
	
   

  	
     as sole
  member

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Title:

  	
  VP & General Counsel

  	
   

  
						

 

 

[SIGNATURE PAGE TO SECURITY 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

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED

  
	
  as of the date first above written:

  
	
   

  
	
  HSBC BANK USA

  
	
  as Indenture Trustee

  
	
   

  
	
  By:

  	
  /s/ Deirdra N. Ross

  	
   

  
	
   

  	
  Name: Deirdra N. Ross

  
	
   

  	
  Title: Assistant Vice President

  

 

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]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

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