Document:

Exhibit
10.12

 

SECURITY
AGREEMENT

(GUARANTOR)

 

This SECURITY AGREEMENT (as
amended, restated, modified, supplemented, renewed or extended from time to
time, this “Agreement”), is entered into as of January 23, 2004, is
executed and delivered by and among GOLDEN
NUGGET EXPERIENCE, LLC, a Nevada limited liability company (the “Debtor”),
in favor of WELLS FARGO FOOTHILL, INC., a California corporation, as the
arranger, administrative agent and documentation agent for the below-referenced
Lender Group (in such capacity, together with its successors and assigns, if
any, “Agent”), in light of the following:

 

WHEREAS, Poster Financial Group, Inc. (“Parent”)
and each of Parent’s Subsidiaries identified on the signature pages thereto
(such Subsidiaries, together with Parent, are referred to hereinafter each
individually as a “Borrower”, and individually and collectively, jointly
and severally, as the “Borrowers”), the below-defined Lenders (such
Lenders, together with Agent, individually and collectively, jointly and severally,
the “Lender Group”), and Agent are, contemporaneously herewith, entering
into that certain Loan and Security Agreement of even date herewith (as
amended, restated, modified, supplemented, refinanced, renewed or extended from
time to time, the “Loan Agreement”);

 

WHEREAS, the Debtor has executed that certain
General Continuing Guaranty, of even date herewith (as amended, restated,
modified, supplemented, renewed or extended from time to time, the “Guaranty”),
in favor of Agent for the benefit of the Lender Group and the Bank Product
Providers respecting the obligations of Borrowers owing to the Lender Group and
the Bank Product Providers under the Loan Agreement;

 

WHEREAS, the Debtor desires to secure its
obligations under the Loan Documents to which it is party (including the
Guaranty) by granting to Agent, for the benefit of the Lender Group and the
Bank Product Providers, security interests in the Collateral as set forth
herein; and

 

WHEREAS, the Debtor is a Subsidiary of a
Borrower, and will benefit by virtue of the financial accommodations from the
Lender Group to Borrowers.

 

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, Agent and the Debtor 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 Loan Agreement.  As used in this Agreement, the following
terms shall have the following definitions:

 

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

 

 

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

 

“Agent’s Liens” means the Liens granted by the Debtor to Agent
under this Agreement or the other Loan Documents to which the Debtor is a
party.

 

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

 

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

 

“Books” means the Debtor’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).

 

“Borrower” and “Borrowers” shall have the respective
meanings set forth in the recitals to this Agreement.

 

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

 

“Code” means the California Uniform Commercial Code as in effect
from time to time.

 

“Collateral” means, with respect to the Debtor, all of the
Debtor’s now owned or hereafter acquired right, title, and interest in and to
each of the following:  all of its
Accounts; 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 the Debtor which now or hereafter come into the possession, custody,
or control of Agent; all other goods and personal property of such
Debtor, 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, and any and all Accounts,
Books, Deposit Accounts, Equipment, General Intangibles, Inventory, Investment
Property, Negotiable Collateral, 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 portion thereof or interest
therein, and the proceeds thereof; excluding, in each case, the Guarantor
Excluded Assets.

 

“Control Agreement” means a control agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by the
Debtor, Agent, and the applicable securities intermediary with respect to a
Securities Account or bank with respect to a Deposit Account.

 

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

 

“Deposit Account” means any “deposit account” (as that term is
defined in the Code).

 

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“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.

 

“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.

 

“Guarantor Excluded Assets” 
means (a) any Investment Property of the Debtor constituting Stock of
such Debtor’s Subsidiaries that are CFCs, solely to the extent that such
Investment Property is in excess of 65% of the voting power of the Stock of
such CFC, and (b) any agreements, permits, or 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
Guarantor Excluded Assets shall not include, and the Debtor 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 the Guarantor Excluded
Assets shall not include (and, accordingly, the Collateral shall include) any
and all proceeds of any of such assets.

 

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

 

“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.

 

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

 

“Lenders” means, individually and collectively, each of the
lenders identified on the signature pages of the Loan Agreement, and any other
person made a party thereto in accordance with the provisions of Section 14
thereof (together with their respective successors and assigns).

 

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

 

“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.

 

“Secured Obligations” shall mean, with respect to the Debtor,
all liabilities, obligations, or undertakings owing by the Debtor to the Lender
Group of any kind or description arising out of or outstanding under, advanced
or issued pursuant to, or evidenced by the Guaranty, the Loan Agreement, this
Agreement, or any of the other Loan 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, costs, fees (including attorneys fees),
and expenses (including interest, costs, fees, and expenses that, but for the
provisions of the Bankruptcy Code, would have accrued irrespective of whether a
claim thereof is allowed) and any and all other amounts which the Debtor is
required to pay pursuant to any of the foregoing, by law, or otherwise.

 

“Voidable Transfer” has the meaning set forth in Section 11.8 to
this Agreement.

 

1.2                               Code. 
Any terms used in this Agreement which are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein.

 

1.3                               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 Agreement unless otherwise specified.  Any reference in this Agreement or in any of
the other Loan Documents to this Agreement or any of the other Loan Documents
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 Loan
Agreement, 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 Loan Agreement shall control and govern; provided,
however, that the inclusion herein of additional obligations on the part
of the Debtor and supplemental rights and remedies in favor of Agent, in each
case in respect of the Collateral, shall not be deemed a conflict with the Loan
Agreement.

 

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

 

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2.                                      CREATION OF SECURITY INTEREST.

 

2.1                               Grant of Security Interest.  The Debtor hereby pledges, grants, transfers
and assigns to Agent, for the benefit of the Lender Group and the Bank Product
Providers, a security interest in, and a continuing Lien on, all of its right,
title, and interest in all currently existing and hereafter acquired or arising
Collateral in order to secure prompt repayment of any and all of the Secured
Obligations in accordance with the terms and conditions of the Loan Documents
and in order to secure prompt performance by the Debtor of the Debtor’s
covenants and duties under the Loan Documents. 
Agent’s Liens in and to the Collateral shall attach to all Collateral
without further act on the part of Agent or the Debtor.  Anything contained in this Agreement or any
other Loan Document to the contrary notwithstanding, except for Permitted
Dispositions, the Debtor has no 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 Agent’s security interest is
dependent on or enhanced by possession, the Debtor, promptly upon the request
of Agent, shall endorse and assign such Negotiable Collateral to Agent and
deliver physical possession of such Negotiable Collateral to 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, Agent or Agent’s designee may (a) notify Account Debtors of the
Debtor that the Accounts, chattel paper, or General Intangibles have been
assigned to Agent or that 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 Loan Account.  The Debtor agrees that it will hold in trust
for Agent, as Agent’s trustee, any Collections that it receives and promptly
will deliver said Collections to Agent or a Cash Management Bank in their
original form as received by the Debtor.

 

2.4                               Delivery of Additional Documentation Required.

 

(a)                                  The
Debtor authorizes Agent to file any financing statement necessary or desirable
to effectuate the transactions contemplated by the Loan Documents, and any
continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of the Debtor where permitted by applicable
law and describing the Collateral in the same manner as described herein or in
any other manner as 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.”  The Debtor hereby ratifies the filing of any financing statement
filed without the signature of the Debtor prior to the date hereof.

 

(b)                                 At
any time upon the request of Agent, the Debtor shall execute and deliver to
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 Agent may request in its Permitted Discretion, in form and
substance reasonably satisfactory to

 

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Agent, to perfect and
continue perfected or better perfect the 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 Loan
Documents.  In addition, on such
periodic basis as Agent shall reasonably require, the Debtor shall (a) provide
Agent with a report of all new material patentable, copyrightable, or
trademarkable materials acquired or generated by the Debtor during the prior
period, (b) cause all material patents and trademarks acquired or generated by
the Debtor that are necessary in the conduct of the Debtor’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 the Debtor’s ownership thereof, (c) solely at the reasonable request
of Agent (but not otherwise), cause all material copyrights acquired or
generated by the Debtor that are necessary in the conduct of the Debtor’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 the Debtor’s ownership thereof, and (d) cause to
be prepared, executed, and delivered to Agent supplemental schedules to the
applicable Loan Documents 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.  The Debtor hereby irrevocably appoints Agent
(and any of Agent’s officers, employees, or agents designated by Agent) as the
Debtor’s attorney-in-fact, with power to: 
(a) if the Debtor refuses to, or fails timely to execute and deliver any
of the documents described in Section 2.4, sign the name of the Debtor
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 the Debtor’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 the Debtor’s name on any Collection item
that may come into Agent’s possession; (e) at any time that an Event of Default
has occurred and is continuing, make, settle, and adjust all claims under the
Debtor’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 Agent determines to be reasonable, and Agent may cause to be executed and
delivered any documents and releases which Agent determines to be
necessary.  The appointment of Agent as
the Debtor’s attorney, and each and every one of Agent’s rights and powers,
being coupled with an interest, is irrevocable until, and shall terminate when,
all of the Secured Obligations have been fully and finally repaid and performed
and Agent’s obligation to extend credit under the Loan Agreement is
terminated.  In accordance with Section
9-207(a) of the Code, Agent shall use reasonable care in the custody and preservation
of the Collateral in its possession.

 

2.6                               Right to Inspect.  Agent and each Lender (through any of their
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 the Debtor’s financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral.

 

6

 

2.7                               Control Agreement.  The Debtor agrees that it will not transfer
assets out of any Securities Account or Deposit Account other than as permitted
under Section 4.7 of the Loan Agreement.  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 the Debtor without the prior written consent of
Agent.  Upon the occurrence and during
the continuance of a Default or Event of Default, Agent may notify any bank or
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 the Agent’s Account.

 

2.8                               Release of Security Interest.  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 the Debtor.  Upon any such termination, the Agent shall,
at the Debtor’s request and expense, execute and deliver to the Debtor such
documents as the Debtor shall reasonably request to evidence such termination
and/or reassignment, without recourse, representation or warranty of any kind.

 

3.                                      REPRESENTATIONS AND WARRANTIES.

 

The Debtor makes the representations and warranties which are set forth
in Section 5 of the Loan Agreement as if the Debtor were a party
thereto.

 

4.                                      AFFIRMATIVE COVENANTS.

 

The Debtor shall comply with each of the affirmative covenants which
are set forth in Section 6 of the Loan Agreement as if the Debtor were a
party thereto.

 

5.                                      NEGATIVE COVENANTS.

 

The Debtor shall comply with each of the negative covenants which are
set forth in Section 7 of the Loan Agreement as if the Debtor were
a party thereto.

 

6.                                      AGENT’S RIGHTS AND REMEDIES.

 

6.1                               Rights and Remedies.  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 Agent as provided hereafter, 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 the Debtor:

 

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

 

7

 

(b)                                 Without
notice to the Debtor 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 Agent to
the Debtor and (ii) any moneys, credits or other property belonging to the
Debtor at any time held by or coming into the possession of Agent;

 

(c)                                  Exercise
in respect of the Collateral, in addition to other rights and remedies provided
for herein and in the Guaranty 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 Agent considers advisable, and in such cases, Agent will
credit the Loan Account with only the net amounts received by Agent in payment
of such disputed Accounts after deducting all Lender Group Expenses incurred or
expended in connection therewith;

 

(e)                                  [intentionally
omitted]

 

(f)                                    Without
notice or demand upon the Debtor, make such payments and do such acts as Agent
considers necessary or reasonable to protect its security interest in the
Collateral.  The Debtor agrees to
assemble the Collateral if Agent so requires, and to make the Collateral
available to Agent as Agent may designate. 
The Debtor authorizes 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 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 the
Debtor’ owned premises, the Debtor hereby grants Agent a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of Agent’s rights or remedies provided herein, at law, in equity,
or otherwise;

 

(g)                                 Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell (in the manner provided for herein) the Collateral.  Debtor hereby grants to Agent a license or
other right to use, without charge, the Debtor’s labels, patents, copyrights,
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 the Debtor’s rights under
all licenses and all franchise agreements shall inure to the Lender Group’s
benefit.  Solely to the extent necessary
to avoid the invalidation of the Debtor’s material rights and interests in any
trademarks that have material economic value and solely in connection with the
Agent’s advertising or sale of goods on which such trademarks are affixed,
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;

 

(h)                                 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

 

8

 

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

 

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

 

(i)                                         Agent
shall give the Debtor 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 the Debtor
as provided in Section 9, 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;

 

(j)                                     Agent
may credit bid and purchase at any public sale;

 

(k)                                  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;

 

(l)                                     Agent,
on behalf of the Lender Group and the Bank Product Providers, shall have all
other rights and remedies available at law or in equity or pursuant to any
other Loan Document; and

 

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

 

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

 

7.                                      TAXES AND EXPENSES REGARDING THE COLLATERAL.  If the Debtor 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,

 

9

 

then, Agent, in its sole
discretion and without prior notice to the Debtor, may do any or all of the
following: (a) make payment of the same or any part thereof; (b) set up such reserves
in the Loan Account as Agent deems necessary to protect the Lender Group from
the exposure created by such failure; or (c) in the case of the failure to
comply with Section 6.8 of the Loan Agreement, obtain and maintain
insurance policies insuring the Debtor’s ownership and use of the Collateral,
and take any action with respect to such policies as Agent deems prudent.  Any amounts paid or deposited by Agent shall
constitute Lender Group Expenses, shall immediately become additional Secured
Obligations, shall bear interest at the applicable rate described in the Loan
Agreement, and shall be secured by the Collateral.  Any payments made by Agent shall not constitute an agreement by
Agent, or any member of the Lender Group, to make similar payments in the
future or a waiver by the Lender Group, or Agent on behalf thereof, of any
Event of Default under this Agreement. 
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 the
Debtor is contesting a tax claim in good faith with appropriate provision
therefor on its financing statements, agent shall not cause such claim to be
paid or interfere with such contest. 
Agent shall use its best efforts to provide prompt notice to the Debtor
of any action taken by it under this Section 7.

 

8.                                      WAIVERS; INDEMNIFICATION.

 

8.1                               Demand; Protest; etc.  Except as otherwise specifically and
explicitly set forth in this Agreement, the Loan Agreement, or the other Loan
Documents, and to the extent permitted by law, the Debtor 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 Lender
Group, or Agent on behalf thereof, on which the Debtor may in any way be
liable.

 

8.2                               Lender Group’s Liability for Collateral.  So long as the Lender Group complies with
its obligations under the Code and no willful misconduct or gross negligence
occurs, 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 the Debtor.

 

8.3                               Indemnification.  The Debtor agrees to defend, indemnify,
save, and hold the Agent-Related Persons, the Lender-Related Persons with
respect to each Lender, each Participant, 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 any member of the Lender Group as a result of or
in any way arising out of, following, or consequential to transactions with
Borrowers or the Debtor, whether under this Agreement, the other Loan Documents
or otherwise (all of the foregoing, collectively, the “Indemnified
Liabilities”).  Notwithstanding the
foregoing, the Debtor shall not have any obligation under this

 

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Section 8.3
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.

 

9.                                      NOTICES.  All
notices and other communications hereunder to Agent shall be in writing and
shall be mailed, sent or delivered in accordance with the Loan Agreement and
all notices and other communications hereunder to the Debtor shall be in
writing and shall be mailed, sent or delivered in care of Borrowers in
accordance with the Loan Agreement.

 

10.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.  DEBTOR AND AGENT AGREE THAT THE PROVISIONS
IN THE LOAN AGREEMENT 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
the Debtor and accepted and executed by 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 the Debtor may not assign this Agreement or any rights or duties hereunder
without Agent’s prior written consent and any prohibited assignment shall be
absolutely void.  No consent to an
assignment by Agent shall release the Debtor from its Secured Obligations.  Agent may assign this Agreement and its
rights and duties hereunder and no consent or approval by the Debtor is
required in connection with any such assignment.  Each member of the Lender Group reserves the right to sell,
assign, transfer, negotiate, or grant participations in all or any part of, or
any interest in the applicable member’s rights and benefits hereunder.  In connection therewith, the Lender Group,
or Agent on behalf thereof, may disclose all documents and information which
Agent now or hereafter may have relating to the Debtor or the Debtor’s
business.  To the extent that any member
of the Lender Group assigns its rights and obligations to a third Person, the
applicable member of the Lender Group thereafter shall be released from such
assigned obligations to the Debtor and such assignment shall effect a novation
between the Debtor and such third Person.

 

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 Lender Group or the Debtor,
whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties
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

 

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. 
This Agreement can only be amended by a writing signed by Agent and the
Debtor.

 

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                        Revival and Reinstatement of Obligations.  If the incurrence or payment of the Secured
Obligations by the Debtor or the transfer by the Debtor to Agent of any
property of the Debtor 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 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 Agent is required or elects
to repay or restore, and as to all reasonable costs, expenses, and attorneys’
fees of Agent related thereto, the liability of the Debtor automatically shall
be revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.

 

11.9                        Integration.  This Agreement, together with the other Loan Documents, reflects
the entire understanding of the parties with respect to the subject matter
contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, before the date hereof.

 

[signature page follows]

 

12

 

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

 

	
   

  	
  GOLDEN
  NUGGET EXPERIENCE, LLC,

  
	
   

  	
  a Nevada limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  
	
   

  	
  Name:

  	
  Joanne Beckett

  
	
   

  	
  Title:

  	
  VP and General Counsel

  
					

 

 

[SIGNATURE PAGE TO
GUARANTOR SECURITY AGREEMENT]

 

S-1

 

	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  
	
   

  	
  a California corporation, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rhonda Noell

  
	
   

  	
  Name:

  	
  Rhonda Noell

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

[SIGNATURE PAGE TO
GUARANTOR SECURITY AGREEMENT]

 

S-2Exhibit 10.13

 

STOCK PLEDGE AGREEMENT

(GUARANTOR)

 

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 GOLDEN
NUGGET EXPERIENCE, LLC, a
Nevada limited liability company (“Pledgor”) and WELLS FARGO
FOOTHILL, INC., a California corporation, as the arranger,
administrative agent and documentation agent for the below-defined Lenders (in
such capacity, together with its successors, if any, “Agent”), with
reference to the following:

 

WHEREAS, Poster Financial Group, Inc. (“Parent”),
GNL, Corp. (“GNL”), and GNLV, CORP. (“GNLV” and together with
Parent and GNL, collectively, the “Borrowers”), the below-defined
Lenders (such Lenders, together with Agent, individually and collectively,
jointly and severally, the “Lender Group”), and Agent, are
contemporaneously herewith, entering into that certain Loan and Security
Agreement of even date herewith (as amended, restated, supplemented, refinanced, renewed or otherwise
modified from time to time, the “Loan Agreement”);

 

WHEREAS, contemporaneously herewith, the Pledgor has
executed and delivered that certain Guaranty (as amended, restated, supplemented, renewed
or otherwise modified from time to time, the “Guaranty”)
in favor of Agent respecting certain obligations of the Borrowers to the Lender
Group and the Bank Product Providers in connection with the Loan Agreement;

 

WHEREAS, Parent, as issuer,
and HSBC Bank USA, as the indenture trustee, are contemporaneously herewith,
entering into that certain Indenture of even date herewith (as amended, restated,
supplemented, renewed or otherwise modified from time to time, the “Indenture”);

 

WHEREAS, the Borrowers,
Wells Fargo Bank, National Association, as collateral agent, and Agent are
parties to a certain Intercreditor Agreement, dated as of January 23, 2004 (as amended, restated,
supplemented, renewed or otherwise modified from time to time, the “Intercreditor Agreement”);

 

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

 

WHEREAS, to induce the Lender Group to make the
financial accommodations provided to the Borrowers pursuant to the Loan
Agreement, the Pledgor desires to pledge, grant, transfer, and assign to Agent,
for the benefit of the Lender Group and the Bank Product Providers (as defined
in the Loan Agreement), 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 Loan
Agreement 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 preamble to this Agreement, together with its
successors or assigns.

 

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

 

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

 

“Chief
Executive Office” means the address of the Pledgor set forth on Schedule
B to this Agreement.

 

“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 promulgated by the SEC under the Exchange
Act) 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.

 

“Future Rights”
means:  (i) 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; (ii)
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 the Pledgor; and (iii) 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.

 

2

 

“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” means
Golden Nugget Experience, LLC, a Nevada limited liability company.

 

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

 

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

 

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

 

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

 

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

 

“Intercreditor
Agreement” has the meaning set forth 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), and any successors thereto, whether by merger
or otherwise.

 

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

 

“Lenders”
means, individually and collectively, each of the financial institutions
identified on the signature pages of the Loan Agreement, and any other person
made a party thereto in accordance with the provisions of Section 14
thereof (together with their respective successors and assigns).

 

“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.

 

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

 

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

 

3

 

“Pledged
Interests” means all of the Equity Interests identified as Pledged
Interests on Schedule A attached hereto (or any addendum thereto).

 

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

 

“Proceeds”
means all proceeds (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
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.

 

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

 

“Secured
Obligations” means, with respect to the Pledgor, all liabilities,
obligations, or undertakings owing by the Pledgor to the Lender Group of any
kind or description arising out of or outstanding under, advanced or issued
pursuant to, or evidenced by the Guaranty, this Agreement, or any of the other
Loan 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 and any and all costs, fees (including attorneys fees), and expenses
(including interest, costs, fees, and expenses that, but for the provisions of
the Bankruptcy Code, would have accrued irrespective of whether a claim thereof
is allowed) which the Pledgor is required to pay pursuant to any of the
foregoing, by law, or otherwise.

 

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

 

(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

 

4

 

“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 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 Loan Agreement, or any
of the other Loan Documents.

 

(ii)                                  Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against 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 Loan Agreement, the terms and provisions of the Loan
Agreement shall control; provided, however, that the inclusion
herein of additional obligations on the part of the Pledgor and supplemental
rights and remedies in favor of Agent, in each case in respect of the Pledged
Collateral, shall not be deemed a conflict with the Loan Agreement.

 

2.                                       Pledge.  The Pledgor hereby pledges, grants,
transfers and assigns to Agent, for the benefit of the Lender Group and the
Bank Product Providers, a security interest in, and a continuing Lien on, all
of the Pledgor’s right, title, and interest in and to the Pledged Collateral in
order to secure prompt repayment of any and all of the Secured Obligations in
accordance with the terms and conditions of the Loan Documents to which the
Pledgor is a party, and in order to secure prompt performance by the Pledgor of
such Pledgor’s covenants and duties under each Loan Document to which such
Pledgor is a party.  Anything contained
in this Agreement or any other Loan Document to the contrary notwithstanding,
except for Permitted Dispositions 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
Intercreditor Agreement:

 

(a)                                  And
subject to the provisions of Section 23 of this Agreement, all
certificates or instruments representing or evidencing the Pledged Collateral
shall be promptly delivered by Pledgors to Agent or Agent’s designee pursuant
hereto at a location designated by Agent and shall be held by or on behalf of
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 Agent.

 

(b)                                 And
subject to the provisions of Section 23 of this Agreement, upon the
occurrence and during the continuance of an Event of Default, Agent shall have
the right, at any

 

5

 

time in its 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 Agent or any of its nominees any or all of
the Pledged Collateral.  In addition,
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 Agent or the Pledgor (a “Holder”),
then the Pledgor shall promptly, at Agent’s option, either cause such Pledged
Collateral to be delivered into 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 Agent in such Pledged Collateral,
including obtaining from such Holder a written acknowledgment that such Holder
holds such Pledged Collateral for Agent, all pursuant to the Code or other
applicable law governing the perfection of 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 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 Agent, shall be segregated from other funds and property
of the Pledgor and shall be forthwith delivered to Agent in the same form as so
received or held, with any necessary endorsements to be held by the 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 Loan
Agreement, may be retained by the Pledgor in accordance with Section 4
or distributed to its owner(s) as permitted by 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 Pledgor
shall promptly cause such Pledged Collateral to be registered or entered, as
the case may be, in the name of Agent, for the benefit of the Lender Group, or
otherwise cause the security interest held by Agent, for the benefit of the
Lender Group, to be perfected in accordance with applicable law.

 

4.                                       Voting
Rights and Dividends.

 

Subject to the
Intercreditor Agreement:

 

(a)                                  With
respect to the 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, the Pledgor shall not have received the written notice from Agent
described below in Section 4(b), the 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 Loan Documents; provided,
however, that no vote shall be
cast, consent given or right exercised or other action taken by the Pledgor
that would impair the Pledged Collateral, be inconsistent with or result in any
violation of any provision of the Loan Documents, or that would, without the
prior written consent of the Agent, enable or

 

6

 

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
Loan Documents.  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 Agent, be delivered to the 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 the Pledgor, the Pledgor shall, until such money or property is
paid or delivered to the Agent, hold such money or property in trust for the
Agent, segregated from other funds of the Pledgor, as additional security for
the Secured Obligations.

 

(b)                                 And
subject to the provisions of Section 23 of this Agreement, upon the
occurrence and during the continuance of an Event of Default, at the election
of Agent in its Permitted Discretion, upon the receipt by the Pledgor of
written notice of such election by Agent, all rights of the 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 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, the
Pledgor shall execute and deliver (or cause to be executed and delivered) to
Agent all such proxies and other instruments as Agent may reasonably request
for the purpose of enabling 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. The Pledgor represents, warrants, and covenants 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 recapitalization, tender offers and
voting rights), and the Pledgor agrees that no member of the Lender Group or
any Bank Product Provider shall have any responsibility or liability for
informing the 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 Agent or any other member of the
Lender Group by or on behalf of the 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 Agent for the benefit of the Lender Group
and the Bank Product

 

7

 

Providers and other
Permitted Liens (as defined in the Loan Agreement); and the Pledgor has full right, power and
authority to pledge, assign and grant a security interest in the Pledged
Collateral to the Agent for the benefit of the Lender Group and the Bank
Product Providers, subject to any restrictions, if any, on the assignment of
the membership interests set forth in Section 12.3 of the Second Amended and
Restated Operating Agreement of The Fremont Street Experience Limited Liability
Company;

 

(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 those described in Section 23 hereof and 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 the Pledgor of this Agreement, (ii) the grant by the 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 Lender Group and the Bank Product
Providers of their 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.  The Pledgor has not performed or will
perform any acts which might prevent the Lender Group and the Bank Product
Providers in any such enforcement.  None
of the Pledged Collateral have 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 Agent of the Pledged Interests
representing Pledged Collateral (or the delivery to all Holders of the Pledged
Interests representing Pledged Collateral of the notification/instruction
referred to in Section 3 of this Agreement), creates a valid, perfected,
and first priority security interest in one hundred percent (100%) of the
Pledged Interests which are in certificated form and which constitute
“securities” as defined in the Code in favor of Agent securing payment of the
Secured Obligations, and all actions on the part of the Pledgor necessary 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 Pledgor,
creates a valid, perfected, and first priority security interest in one hundred
percent (100%) of the Pledged Interests which are uncertificated in favor of
Agent securing payment of the Secured Obligations, and all actions on the part
of Pledgor necessary to achieve such perfection have been duly taken;

 

(h)                                 Schedule
A to this Agreement is true and 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 Agent or its nominee pursuant to the provisions of
this Agreement, are registered in the name of the Pledgor; and (ii) the Pledged

 

8

 

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)                                     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;

 

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

 

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

 

(l)                                     Neither
the pledge of the Pledged Collateral pursuant to this Agreement nor the
extensions of credit represented by the Secured Obligations violates Regulation
T, U or X of the Board of Governors of the Federal Reserve System.

 

6.                                       Further
Assurances.

 

Subject to the
Intercreditor Agreement:

 

(a)                                  The
Pledgor agrees that from time to time, at the expense of the Pledgor, it will
promptly execute and deliver all further instruments and documents, and take
all further action that may be necessary or reasonably desirable, or that
Agent, on behalf of the Lender Group and the Bank Product Providers, may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent, on behalf of the Lender
Group and the Bank Product Providers, to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.  Without limiting the generality of the
foregoing, the Pledgor will: (i) at the request of Agent, mark conspicuously
each of its records pertaining to the Pledged Collateral with a legend, in form
and substance reasonably satisfactory to 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 Agent may reasonably 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 the Pledgor’s title to or
Agent’s security interest in the Pledged Collateral.

 

(b)                                 The
Pledgor hereby authorizes Agent, on behalf of the Lender Group and the Bank
Product Providers, to file one or more financing statements, including any
amendments, continuations or terminations thereto, relative to all or any part
of the Pledged Collateral without the signature of the Pledgor where permitted
by law and describes the Pledged Collateral in the same manner described herein
or in any other manner as 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

 

9

 

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)                                  The
Pledgor will furnish to Agent, upon the request of Agent: (i) a certificate
executed by an authorized officer of the Pledgor, and dated as of the date of
delivery to Agent, itemizing in such detail as Agent may reasonably request,
the Pledged Collateral which, as of the date of such certificate, has been
delivered to Agent by the 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 Agent may reasonably request.

 

7.                                       Covenants
of The Pledgor. The Pledgor shall:

 

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

 

(b)                                 At
all times keep at least one complete set of its records concerning
substantially all of the Pledged Collateral 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 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 Loan
Agreement to be paid by any Issuer to the Pledgor;

 

(d)                                 Upon
receipt by the 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 Agent
promptly, but in no event later than five (5) business days following the
receipt thereof by the 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
Governing 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 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 Agent as permitted by
the Loan Agreement and pursuant to the terms of this Agreement; and

 

(f)                                    The
Pledged Collateral that is in certificated form shall at all times be in the
possession of Wells Fargo Bank Nevada, N.A., the Agent’s designee in the State
of Nevada.

 

8.                                       Agent
as Pledgor’s Attorney-in-Fact.

 

(a)                                  The
Pledgor hereby irrevocably appoints Agent, on behalf of the Lender Group and
the Bank Product Providers, as such Pledgor’s attorney-in-fact, with full
authority in

 

10

 

the place and stead of
the Pledgor and in the name of such Pledgor, Agent or otherwise, from time to
time at Agent’s Permitted Discretion, and at such Pledgor’s cost and expense,
to take any action and to execute any instrument that Agent, on behalf of the
Lender Group and the Bank Product Providers, may reasonably deem necessary or
advisable to accomplish the purposes of this Agreement, 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 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 Agent or to the name of Agent’s nominee.

 

(b)                                 In
addition to the designation of Agent as the Pledgor’s attorney-in-fact in subsection
(a), the Pledgor hereby irrevocably appoints Agent, on behalf of the Lender
Group and the Bank Product Providers, 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 Lender Group, the Bank
Product Providers or Agent for the benefit thereof.

 

9.                                       Remedies
upon Default.  Subject to the terms
of the Intercreditor Agreement and Section 23 of this Agreement, upon
the occurrence and during the continuance of an Event of Default:

 

(a)                                  Agent,
on behalf of the Lender Group and the Bank Product Providers, 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 Agent, on behalf of
the Lender Group, 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 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 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, 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
the property sold absolutely free from any claim or right on the part of the
Pledgor, and the Pledgor hereby waives (to the extent permitted by law) 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.  The Pledgor agrees that, to
the extent notice of sale shall be required by law,

 

11

 

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.  Agent shall
not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given.  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 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, the Pledgor hereby waives any claims against 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 Agent accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.

 

(b)                                 The
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
California in disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable.

 

(c)                                  The
Pledgor hereby acknowledges that the sale by 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 Agent or any subsequent transferee of the
Pledged Collateral may dispose thereof. 
The Pledgor acknowledges and agrees that in order to protect 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.  The Pledgor has no objection to sale in such
a manner and agrees that Agent shall have no obligation to obtain the maximum
possible price for the Pledged Collateral. 
Without limiting the generality of the foregoing, the Pledgor agrees
that, upon the occurrence and during the continuation of an Event of Default,
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, Agent may
solicit offers to buy the Pledged Collateral or any part thereof for cash, from
a limited number of investors deemed by Agent, in its reasonable judgment, to
be institutional investors or other responsible parties who might be interested
in purchasing the Pledged Collateral. 
If Agent shall solicit such offers, then the acceptance by Agent of one
of the offers shall be deemed to be a commercially reasonable method of
disposition of the Pledged Collateral.

 

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

 

12

 

(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 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 Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission 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 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 Agent may choose,
any and all documents and writings which, in 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 the Pledgor or
the Issuers engage in business, in order to transfer or to more effectively
transfer the Pledged Interests or otherwise enforce 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.

 

The 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.

 

(e)                                  THE
PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i) ANY
CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME 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 Intercreditor
Agreement and upon the occurrence and during the continuance of an Event of
Default, any cash held by Agent as Pledged Collateral and all cash proceeds
received by 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 Agent of its remedies as a secured creditor as provided in Section
9 herein shall be applied from time to time by Agent as provided in the
Intercreditor Agreement.

 

11.                                 Deficiency.  The 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 Agent or any Lender to collect such
deficiency.

 

12.                                 Duties
of Agent.  The powers conferred on
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, 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 CALIFORNIA; 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 LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF AGENT, IN ANY OTHER
COURT IN WHICH AGENT SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH
HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  THE PLEDGOR AND AGENT WAIVES, 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 and Section 23 of this Agreement, no amendment or
waiver of any provision of this Agreement nor consent to any departure by any
party hereto herefrom shall in any event be effective unless the same shall be
in writing and signed by Agent and the Pledgor, 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 Agent to exercise, and no delay in exercising any right under this
Agreement, any other Loan 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 Loan Document, or
otherwise with respect to any of the Secured

 

14

 

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.

 

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
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 cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of credit,
and the full and final termination of any commitment to extend any financial
accommodations under the Loan Agreement; (ii) be binding upon the Pledgor and
its successors and assigns; and (iii) inure to the benefit of Agent and its
successors, transferees, and assigns. 
Upon the payment in full in cash of the Secured Obligations, including
the cash collateralization, expiration, or cancellation of all Secured
Obligations, if any, consisting of letters of credit, and the full and final
termination of any commitment to extend any financial accommodations under the
Loan Agreement, the security interests granted herein shall automatically
terminate and all rights to the Pledged Collateral shall revert and be deemed
re-assigned to the Pledgor.  Upon any
such termination, Agent will, at the Pledgor’s expense, execute and deliver to
the Pledgor such documents as the Pledgor shall reasonably request to evidence
such termination without recourse against, representation, or warranty of any
kind made by, the Agent.  Such documents
shall be prepared by the Pledgor and shall be in form and substance reasonably
satisfactory to 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 be received by
the Agent for the benefit of the Lender Group and the Bank Product Providers,
and the 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 Agent, all security interests hereunder,
and all obligations of the Pledgor 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 Loan
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 Loan Documents, or any other
agreement or instrument relating thereto;

 

15

 

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

 

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. The Pledgor and Agent acknowledges and agrees that in
exercising any rights under or with respect to the Pledged 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. 
The Pledgor and Agent waive any right to require the marshaling of any
of the Pledged Collateral.

 

22.                                 Waiver
of Jury Trial.  THE PLEDGOR AND
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.  THE PLEDGOR AND AGENT REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN

 

16

 

THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

23.                                 Compliance
with Gaming Laws.  Notwithstanding
anything to the contrary contained herein or in any other Loan Documents, 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, Agent acknowledges
and agrees that:

 

(a)                                  The
pledge of the Pledged Interests by the 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
Loan Document, are not effective without the prior 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 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 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 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 Agent, unless such licensing requirement is
waived by the Nevada Gaming Authorities.

 

(c)                                  Agent
and any custodial agent of 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 the Pledgor,
including, without limitation, the requirement that Agent or its agent maintain
the certificates evidencing the Pledged Interests at a location in Nevada
designated to the NGCB, and that Agent or its agent permit agents or employees
of the NGCB to inspect such certificates immediately upon request during normal
business hours.

 

(d)                                 Neither
Agent nor any agent of Agent shall surrender possession of any Pledged
Interests to any Person other than the 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 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.

 

24.                                 Interpretation of Agreement.  To
the extent a term or provision of this Agreement conflicts with the
Intercreditor Agreement solely with respect to the respective rights

 

17

 

of the Agent and the
Collateral Agent (as defined in the Intercreditor Agreement) with respect to
the priority of their respective security interests in and liens on the Pledged
Collateral, the
Intercreditor Agreement shall control.

 

25.                                 Integration.  This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
subject matter contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.

 

[Signature page to
follow.]

 

18

 

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

 

	
   

  	
  GOLDEN NUGGET EXPERIENCE, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GNLV, CORP., as Sole Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Title:

  	
  Vice President & General Counsel

  	
   

  
							

 

 

	
   

  	
  WELLS
  FARGO FOOTHILL, INC.,

  
	
   

  	
  a California corporation, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rhonda Noell

  	
   

  
	
   

  	
  Name:

  	
  Rhonda Noell

  	
   

  
	
   

  	
  Title:

  	
  Senior VP

  	
   

  
						

 

 

SCHEDULE
A

 

TO

 

STOCK
PLEDGE AGREEMENT

 

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

  	
   

  
	
  Golden Nugget Experience,
  LLC

  	
   

  	
  The Fremont Street
  Experience Limited Liability Company

  	
   

  	
  300 Voting Units and 180
  Non-Voting Units

  	
   

  	
  N.A

  	
   

  	
  N.A

  	
   

  	
  N.A

  	
   

  	
  17.5% Voting and 50%
  Non-Voting Interest

  	
   

  	
  Nevada

  	
   

  	
  Uncertificated

  	
   

  

 

 

SCHEDULE
B

 

TO

 

STOCK
PLEDGE AGREEMENT

 

	
   

  	
  Pledgor:

  	
  Golden Nugget Experience, LLC

  
	
   

  	
  129 East Fremont Street,
  Las Vegas, Nevada 89101

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}]]