Document:

Security Agreement dated May 3, 2004

  
 EXHIBIT 10.4

  
 SECURITY AGREEMENT 
  
 THIS SECURITY AGREEMENT, dated as of May 3, 2004, is made by and between (1)
The Sands Regent, a Nevada corporation (“Sands”), Last Chance, Inc., a Nevada corporation (“Last Chance”) and Zante, Inc., a Nevada corporation (“Zante” and, together with Last Chance and Sands,
each a “Grantor” and collectively, “Grantors”), and (2) WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders referenced below (in such capacity, “Administrative Agent”).

  
 RECITALS 
  
 A Pursuant to that certain Credit Agreement, dated as of April 2, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Grantors, the lenders from time to time party thereto (the “Lenders”) and Administrative Agent, the Lenders have agreed to
extend loans and other financial accommodations to the Grantors upon the terms and subject to the conditions set forth therein. 
  
 B. The Lenders’ obligations to extend loans and other financial accommodations to the Grantors under the Credit Agreement are subject, among other
conditions, to receipt by the Administrative Agent of this Security Agreement duly executed by each of the Grantors. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, each Grantor hereby agrees with Administrative Agent as
follows: 
  
 SECTION 1. Definitions and
Interpretation. Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall have the respective meanings given to those terms in the Credit Agreement, and all terms defined in the UCC (as
hereinafter defined) shall have the respective meanings given to those terms in the UCC. The rules of construction set forth in Article I of the Credit Agreement shall, to the extent not inconsistent with the terms of this Security Agreement, apply
to this Security Agreement and are hereby incorporated by reference. When used in this Security Agreement, the following terms shall have the following respective meanings: 
  
 “Account” means any “account,” as such term is defined in Section 9102(b) of the UCC (or any
other then applicable provision of the UCC) and, in any event, shall include, without limitation, all accounts receivable, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, Documents or
Instruments) now owned or hereafter received or acquired by or belonging or owing to a Grantor (including, without limitation, under any trade name, style or division thereof) whether arising out of goods sold or services rendered by a Grantor or
from any other transaction, whether or not the same involves the sale of goods or services by a Grantor (including, without limitation, any such obligation which may be characterized as an account or contract right under the UCC) and all of
Grantors’ rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of Grantors’ rights to any goods represented by any of the foregoing (including, without 

  

 
limitation, unpaid seller’s rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods),
and all monies due or to become due to a Grantor under all purchase orders and contracts for the sale of goods or the performance of services or both by a Grantor (whether or not yet earned by performance on the part of a Grantor or in connection
with any other transaction), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any Person
with respect to any of the foregoing. 
  
 “Account
Debtor” means any “account debtor,” as such term is defined in Section 9102(c) of the UCC (or any other then applicable provision of the UCC). 
  
 “Act” means the Nevada Gaming Control Act, Chapter 463 of the Nevada Revised Statutes, as the same from
time to time hereafter may be amended, modified or supplemented. 
  
 “Chattel Paper” means any “chattel paper,” as such term is defined in Section 9102(k) of the UCC (or any other then applicable provision of the UCC), including, without limitation, electronic chattel paper and
tangible chattel paper. 
  
 “Collateral” shall
have the meaning assigned to such term in Section 2 of this Security Agreement. 
  
 “Commercial Tort Claim” means any “commercial tort claim,” as such term is defined in Section 9102(m) of the UCC (or any other then applicable provision of the UCC) which is set forth on
Schedule II hereto. 
  
 “Contracts” means all
contracts, undertakings, franchise agreements or other agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under which a Grantor may now or hereafter have any right, title or interest, including, without
limitation, with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof. 
  
 “Deposit Account” means any “deposit account” as such term is defined in Section 9102(cc) of the UCC (or any other then
applicable provision of the UCC), and should include, without limitation, any demand, time, savings passbook or like account, now or hereafter maintained by or for the benefit of a Grantor, or in which a Grantor now holds or hereafter acquires any
interest, with a bank, savings and loan association, credit union or like organization (including Administrative Agent or any Lender) and all funds and amounts therein, whether or not restricted or designated for a particular purpose. 
  
 “Documents” means any “documents,” as such term is
defined in Section 9102(dd) of the UCC (or any other then applicable provision of the UCC). 
  
 “Equipment” means any “equipment,” as such term is defined in Section 9102(gg) of the UCC (or any other then applicable provision of the UCC) (including any Gaming Equipment), now or
hereafter owned or acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest and, in any event, shall include, without limitation, all machinery, equipment, fixtures, furniture, furnishings, trade fixtures, vehicles,
trucks, mainframe, personal 

  

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and other computers, terminals and printers and related components and accessories, all copiers, telephonic, video, electronic data-processing, data storage
equipment and other equipment of any nature whatsoever, and any and all additions, substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto. 
  
 “Gaming
Equipment” means all equipment and supplies used in the operation of a Gaming Facility, including, without limitation, slot machines, gaming tables, cards, dice, gaming chips, player tracking systems and all other gaming devices (as defined
in NRS 463.0155), cashless wagering systems (as defined in NRS 463.014) and associated equipment (as defined in NRS 463.0136). 
  
 “General Intangibles” means any “general intangibles,” as such term is defined in Section 9102(pp) of the UCC (or any other
then applicable provision of the UCC) and, in any event, shall include, without limitation, all right, title and interest which a Grantor may now or hereafter have in or under any Contract, all customer lists, all proprietary or confidential
information, inventions (whether or not patented or patentable), interests in partnerships, joint ventures and other business associations, permits, books and records, goodwill, claims in or under insurance policies, including unearned premiums,
Payment Intangibles, Software, uncertificated securities, cash and other forms of money or currency, rights to receive tax refunds and other payments and rights of indemnification; provided, however, that General Intangibles shall not
include any Gaming Licenses (to the extent prohibited by applicable Gaming Laws (as defined in the Credit Agreement)). 
  
 “Instruments” means any “instrument,” as such term is defined in Section 9102(uu) of the UCC (or any other then applicable
provision of the UCC) including, without limitation, all notes, certificated securities and all other evidences of indebtedness, other than instruments that constitute, or are a part of a group of writings that constitute, Chattel Paper. 

 
 “Inventory” means any “inventory,” as such term
is defined in Section 9102(vv) of the UCC (or any other then applicable provision of the UCC), wherever located, now or hereafter owned or acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest, and, in any event,
shall include, without limitation, all inventory, goods and other personal property which are held by or on behalf of a Grantor for sale or lease or are furnished or are to be furnished under a contract of service or which constitute raw materials,
work in process or materials used or consumed or to be used or consumed in a Grantor’s business, or the processing, packaging, promotion, delivery or shipping of the same, and all finished goods whether or not such inventory is listed on any
schedules, assignments or reports furnished to Administrative Agent from time to time and whether or not the same is in transit or in the constructive, actual or exclusive occupancy or possession of a Grantor or is held by a Grantor or by others for
a Grantor’s account, including, without limitation, all goods covered by purchase orders and contracts with suppliers and all goods billed and held by suppliers and all inventory of a Grantor which may be located on the premises of a Grantor or
of any carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or other persons. 
  
 “Investment Property” means any “investment property,” as such term is defined in Section 9102(ww) of the UCC (or any other
then applicable provision of the UCC) and shall 

  

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include, without limitation, all certificated securities, uncertificated securities, security entitlements, security accounts, commodity contracts and
commodity accounts as each such term is defined in the UCC. 
  
 “Letter-of-Credit Right” means “letter-of-credit right,” as such term is defined in Section 9102(yy) of the UCC (or any other then applicable provision of the UCC). 
  
 “NRS” means Nevada Revised Statutes. 
  
 “Payment Intangible” means “payment intangible,”
as such term is defined in Section 9102(iii) of the UCC (or any other then applicable provision of the UCC). 
  
 “Proceeds” means “proceeds,” as such term is defined in Section 9102(lll) of the UCC (or any other then applicable provision of
the UCC), and, in any event, shall include, to the extent not in violation of the Act or the Regulations, (a) any and all Accounts, Chattel Paper, Instruments, cash or other forms of money or currency or other proceeds payable to a Grantor from time
to time in respect of the Collateral, (b) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to a Grantor from time to time with respect to any of the Collateral, (c) any and all payments (in any form whatsoever) made or
due and payable to a Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental
authority), (d) all certificates, dividends, cash, Instruments and other property received or distributed in respect of or in exchange for any Investment Property, and (e) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral. 
  
 “Regulations” means the Regulations of the Nevada Gaming Commission and State Gaming Control Board, as the same from time to time hereafter may be amended, modified or supplemented. 
  
 “Securities Account” means “securities account,”
as such term is defined in Section 8501(1) of the UCC (or any other then applicable provision of the UCC). 
  
 “Secured Obligations” shall mean and include (a) the Obligations, (b) all liabilities and obligations, howsoever arising, owed by a
Grantor to Administrative Agent or the Lenders or any one or more of them of every kind and description (whether evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising pursuant to the terms of this Security Agreement and (c) the obligations of any Grantor under any Lender Rate Contracts; provided, however, that the obligations in this paragraph (c) shall rank as
follows (i) on a pari passu basis with all other Secured Obligations to the extent of the associated Termination Value of such Lender Rate Contract (after giving effect to any legally enforceable netting agreement), and (ii) to the extent of any
excess, on a basis which is in all respects subordinated to all other Secured Obligations. 
  
 “Security Agreement” means this Security Agreement and all exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated. 
  

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 “Software” means “software,” as such term is defined in Section 9102(www) of
the UCC (or any other then applicable provision of the UCC). 
  
 “Supporting Obligation” means “supporting obligation,” as such term is defined in Section 9102(yyy) of the UCC (or any other then applicable provision of the UCC). 
  
 “UCC” means the Uniform Commercial Code as the same may,
from time to time, be in effect in the State of Nevada; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of Administrative Agent’s security
interest in any collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Nevada, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. 
  
 SECTION 2. Grant of Security Interest. As security for the Secured Obligations, and in order to induce Administrative Agent and the
Lenders to enter into the Credit Agreement and to make the Loans and Letters of Credit available to and for the benefit of any Grantor upon the terms and subject to the conditions thereof, each Grantor hereby grants, assigns, conveys, mortgages,
pledges, hypothecates and transfers to Administrative Agent on behalf of the Lenders a security interest in and to all of such Grantor’s right, title and interest in, to and under each of the following, whether now owned or hereafter acquired
or in which such Grantor now holds or hereafter acquires any interest (all of which being hereinafter collectively called the “Collateral”): 
  

(a) All Accounts; 
  
 (b) All Chattel Paper; 
  
 (c) All Commercial Tort Claims; 
  
 (d) All Contracts; 
  
 (e) All Deposit Accounts; 
  
 (f) All Documents; 
  
 (g) All Equipment; 
  
 (h) All General Intangibles (including Payment Intangibles); 
  
 (i) All Instruments; 
  
 (j) All Inventory; 
  
 (k) All Investment Property; 
  
 (l) All Letter-of-Credit Rights; 
  
 (m) All Securities Accounts; 
  

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 (n) All Supporting Obligations; 
  
 (o) All property of a Grantor held by Administrative
Agent or any Lender, including, without limitation, all property of every description now or hereafter in the possession or custody of or in transit to Administrative Agent or any Lender for any purpose, including, without limitation, safekeeping,
collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power; 
  
 (p) All other goods and personal property of a Grantor whether tangible or intangible and whether now or hereafter owned or
existing, leased, consigned by or to, or acquired by such Grantor and wherever located; and 
  
 (q) To the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of the foregoing. 
  
 Notwithstanding the foregoing, the pledge of Investment Property in Subparagraph (k) above shall be limited, with respect to the stock of any foreign Subsidiary of a Grantor (whether now owned or hereafter acquired),
to: (a) 65% (or, if less, the full percentage owned by such Grantor) of the issued and outstanding shares of each class of capital stock or other ownership interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
(“Voting Stock”) of such Subsidiary and (b) 100% (or, if less, the full percentage owned by such Grantor) of the issued and outstanding shares of each class of capital stock or other ownership interests not entitled to vote (within
the meaning of Treas. Reg. Section l.956-2(c)(2)) (“Non-Voting Stock”) of such Subsidiary. 
  

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 SECTION 3. Rights of Administrative Agent; Collection of Accounts. 
  
 (a) Notwithstanding anything contained in this
Security Agreement to the contrary, each Grantor expressly agrees that it shall not default under any of its material Contracts, it shall observe and perform all the conditions and obligations to be observed and performed by it thereunder and that
it shall perform all of its duties and obligations thereunder, all in accordance with and pursuant to the terms and provisions of each such material Contract; provided, however, that each Grantor may suspend performance of its
obligations under any material Contract in the event of a material breach of such material Contract by a third party. Neither Administrative Agent nor any Lender shall not have any obligation or liability under any Contract by reason of or arising
out of this Security Agreement or the granting to Administrative Agent of a security interest therein or the receipt by Administrative Agent or any Lender of any payment relating to any Contract pursuant hereto, nor shall Administrative Agent nor
any Lender be required or obligated in any manner to perform or fulfill any of the obligations of such Grantor under or pursuant to any Contract, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment
received by it or the sufficiency of any performance by any party under any Contract, or to present or file any claim, or to take any action to collect or enforce any performance or the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times. 
  
 (b) Administrative Agent hereby authorizes each Grantor to collect its Accounts, provided, that Administrative Agent may, upon the occurrence and during the continuation of any Event of Default and without notice, limit or
terminate said authority at any time. If required by Administrative Agent at any time during the continuation of any Event of Default, any Proceeds, when first collected by such Grantor, received in payment of such Account or in payment for any of
its Inventory or on account of any of its Contracts shall be promptly deposited by such Grantor in precisely the form received (with all necessary endorsements) in a special bank account maintained by Administrative Agent subject to withdrawal by
Administrative Agent only, as hereinafter provided, and until so turned over shall be deemed to be held in trust by such Grantor for and as Administrative Agent’s property, and shall not be commingled with such Grantor’s other funds or
properties. Such Proceeds, when deposited, shall continue to be collateral security for all of the Secured Obligations and shall not constitute payment thereof until applied as hereinafter provided. Upon the occurrence and during the continuation of
any Event of Default, Administrative Agent may, in its sole discretion, apply all or a part of the funds on deposit in said special account to the principal of or interest on or both in respect of any of the Secured Obligations in accordance with
the provisions of Section 7.1(g), below, and any part of such funds which Administrative Agent elects not to so apply and deems not required as collateral security for the Secured Obligations shall be paid over from time to time by
Administrative Agent to such Grantor. If an Event of Default has occurred and is continuing, at the request of Administrative Agent, each Grantor shall deliver to Administrative Agent all original and other documents evidencing, and relating to, the
sale and delivery of such Inventory and such Grantor shall deliver all original and other documents evidencing and relating to, the performance of labor or service which created such Accounts, including, without limitation, all original orders,
invoices and shipping receipts. 
  
 (c)
Administrative Agent may at any time, upon the occurrence and during the continuation of any Event of Default, after first notifying each Grantor of its intention 

  

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to do so, notify Account Debtors of such Grantor, parties to the Contracts of such Grantor, obligors in respect of Instruments of such Grantor and obligors
in respect of Chattel Paper of such Grantor that the Accounts and the right, title and interest of such Grantor in and under such Contracts, Instruments, and Chattel Paper have been assigned to Administrative Agent, and that payments shall be made
directly to Administrative Agent. Upon the request of Administrative Agent, each Grantor shall so notify its Account Debtors, parties to such Contracts, obligors in respect of such Instruments and obligors in respect of such Chattel Paper. Upon the
occurrence and during the continuation of an Event of Default, Administrative Agent may, in its name or in the name of others, communicate with such Account Debtors, parties to such Contracts, obligors in respect of such Instruments and obligors in
respect of such Chattel Paper to verify with such parties, to Administrative Agent’s satisfaction, the existence, amount and terms of any such Accounts, Contracts, Instruments or Chattel Paper. 
  
 SECTION 4. Representations and Warranties. 

 
 4.1 Each Grantor hereby represents and warrants to
Administrative Agent that: 
  
 (a) Such
Grantor is the sole legal and equitable owner of each item of the Collateral in which it purports to grant a security interest hereunder, having good and merchantable title or rights thereto free and clear of any and all Liens, except for the
Permitted Liens. 
  
 (b) No effective
security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral exists, except such as may have been filed by such Grantor in favor of Administrative Agent pursuant
to this Security Agreement or such as relate to other Permitted Liens. 
  
 (c) This Security Agreement creates a legal and valid security interest on and in all of the Collateral in which each Grantor now has rights, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken. Accordingly, Administrative Agent has a perfected first priority security interest in all of the Collateral in which such Grantor now has rights, subject only to the Permitted Liens. This
Security Agreement will create a legal and valid and perfected first priority security interest in the Collateral in which each Grantor later acquires rights, when such Grantor acquires those rights, subject only to the Permitted Liens. 

 
 (d) Each Grantor’s exact legal name is set
forth on the signature page hereto above its signature. Each Grantor was formed and is presently organized as a corporation under the laws of the State of Nevada. Each Grantor’s chief executive office, principal place of business, and the place
where such Grantor maintains records concerning the Collateral are presently located at The Sands Regency, 345 North Arlington Ave., Reno, Nevada 89501. 
  
 (e) All Gaming Investment Property (as defined herein) of the Grantors, including, without limitation, certificated securities and
the equity interest in California Prospectors, Ltd., is set forth on Schedule I. All action necessary to protect and perfect such security interest in each item set forth on Schedule I, including, without limitation, the delivery 

  

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of all originals of such Collateral together with any necessary assignment in blank of certificated securities to Administrative Agent, has been duly taken,
or shall have been taken as of the Closing Date. All Letter-of-Credit Rights and Commercial Torts Claims of each Grantor are set forth on Schedule II. The security interest of Administrative Agent in the Collateral is prior in right and interest to
all other Liens, and is enforceable as such against creditors of and purchasers from each Grantor. Each Grantor shall amend Schedule II from time to time within twenty (20) Business Days after obtaining any additional Letter-of-Credit Rights or
Commercial Tort Claims. 
  
 (f) The amount
represented by each Grantor to Administrative Agent from time to time as owing by each Account Debtor or by all Account Debtors in respect of the Accounts of such Grantor shall at such time be the correct amount actually and unconditionally owing by
such Account Debtors thereunder. 
  
 (g)
The names and addresses of all financial institutions at which each Grantor maintains its Deposit Accounts and the account numbers and account names of such Deposit Accounts are listed on Schedule III. Each Grantor shall amend Schedule III from
time to time within twenty (20) Business Days after opening any additional Deposit Account or closing or changing the account number or account name on any existing Deposit Account. 
  
 (h) The names and addresses of all institutions at which each Grantor maintains its Securities
Accounts and the account numbers and account names of such Securities Accounts are listed on Schedule IV. Each Grantor shall amend Schedule IV from time to time within twenty (20) Business Days after opening any additional Securities Account or
closing or changing the account number or account name on any existing Securities Account. 
  
 (i) Each Grantor is the sole holder of record and the sole beneficial owner of all certificated securities and uncertificated
securities pledged to Administrative Agent by such Grantor under Section 2 of this Security Agreement, free and clear of any adverse claim, as defined in Section 8102(a)(1) of the UCC (or any other then applicable provision of the UCC),
except for the lien created in favor of Administrative Agent by this Security Agreement and the other Credit Documents. 
  
 4.2 Special Representations with Respect to Pledged Investment Property 
  
 (a) Except as required by the Act and the
Regulations, no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required for the exercise by the Administrative Agent of the voting or other rights provided for in this
Security Agreement, except in connection with a disposition of the Investment Property as may be required by laws affecting the offering and sale of securities generally. 
  
 (b) Each Grantor has delivered to Administrative Agent, together with all necessary stock powers,
endorsements, assignments and other necessary instruments of transfer, the originals of all stock certificates, instruments, notes, other certificated securities, other Collateral and all certificates, instruments and other writings evidencing the
same. 
  
 (c) All shares of the pledged
Investment Property set forth on Schedule I and Schedule IV are duly authorized and validly issued, fully paid, and 

  

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non-assessable, and constitute all of the issued and outstanding shares of capital stock of each issuer. Set forth in Schedule I and Schedule IV hereto is a
true, complete and accurate list of all shares of stock issued by each Grantor’s direct Subsidiaries and all other securities owned by Grantors. 
  
 SECTION 5. Covenants. Each Grantor covenants and agrees with Administrative Agent that from and after the date of this Security
Agreement and until the Secured Obligations have been completely and finally paid in full, to the extent not in violation of the Act or the Regulations: 
  
 5.1 Further Assurances; Pledge of Instruments. At any time and from time to time, upon the written request of
Administrative Agent, and at the sole expense of each Grantor, such Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Administrative Agent may reasonably deem
desirable to obtain the full benefits of this Security Agreement and of the rights and powers herein granted, including, without limitation, (a) using its commercially reasonable efforts to secure all consents and approvals necessary or appropriate
for the grant of a security interest to Administrative Agent in any Contract or license held by such Grantor or in which such Grantor has any rights not heretofore assigned, (b) filing any financing statements, amendments or continuation statements
under the UCC with respect to the security interests granted hereby, (c) filing or cooperating with Administrative Agent in filing any forms or other documents required to be filed with the United States Patent and Trademark Office, United States
Copyright Office, or any filings in any foreign jurisdiction or under any international treaty, required to secure or protect Administrative Agent’s interest in the Collateral, (d) transferring Collateral to Administrative Agent’s
possession (if a security interest in such Collateral can be perfected and free from an adverse claim only by possession), (e) filing financing statements as consignor pursuant to Sections 9505(a) and 9324(b) of the UCC (or any other then applicable
provision of the UCC) in such jurisdictions as such Grantor maintains Inventory on consignment, (f) if requested by Administrative Agent, placing the interest of Administrative Agent as lienholder on the certificate of title (or other evidence of
ownership) of any vehicle owned by such Grantor or in or with respect to which such Grantor holds a beneficial interest, (g) obtaining waivers of Liens from landlords and mortgagees as required pursuant to the Credit Agreement, (h) obtaining written
acknowledgements from consignees, warehouse and other bailees of the prior lien of Administrative Agent in and to the Collateral and that such third party is holding possession of the Collateral for the benefit of Administrative Agent, and (i) using
its commercially reasonable efforts to assist Administrative Agent in obtaining control under the UCC with respect to any Collateral consisting of Deposit Accounts (to the extent requested by Administrative Agent), Securities Accounts (to the extent
requested by Administrative Agent), Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper. Each Grantor also hereby authorizes Administrative Agent, to the extent permitted by applicable law, to file any such financing statement,
amendment or continuation statement (including consignment filings) without the signatures of such Grantor. If any amount payable under or in connection with any of the Collateral is or shall become evidenced by any Instrument, such Instrument,
other than checks and notes received in the ordinary course of such Grantor’s business, shall be duly endorsed in a manner satisfactory to Administrative Agent and delivered to Administrative Agent promptly upon such Grantor’s receipt
thereof. Each Grantor agrees to promptly deliver all certificated securities to Administrative Agent in suitable form for transfer, together with all duly executed instruments of transfer or assignments in blank. 
  

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 5.2 Continuous Pledge of Investment Property. Each Grantor will, at
all times, keep pledged to Administrative Agent pursuant hereto all Investment Property constituting Collateral, all dividends and distributions with respect thereto, and all other Collateral and other Securities, Instruments, Proceeds and rights
from time to time received by or distributable to such Grantor in respect of any Collateral. 
  
 5.3 Maintenance of Records. Each Grantor shall keep and maintain at such Grantor’s own cost and expense
satisfactory and complete records of the Collateral, including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and all other dealings with the Collateral. If requested by Administrative
Agent, all Chattel Paper shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest of Wells Fargo Bank, National Association, as Administrative Agent, created
by that certain Security Agreement, dated as of [                    ], 2004, as the same may thereafter from time to time be amended,
modified, supplemented or restated.” 
  
 5.4 Limitation on Liens on Collateral. No Grantor shall create, permit or suffer to exist, and each Grantor shall defend the Collateral against and take such other action as is necessary to remove, any Lien on the
Collateral, except the Permitted Liens. Each Grantor shall further defend the right, title and interest of Administrative Agent in and to any of such Grantor’s rights under the Chattel Paper, Contracts, Documents, General Intangibles,
Instruments and Investment Property and to the Equipment and Inventory and in and to the Proceeds thereof against the claims and demands of all Persons whomsoever. 
  
 5.5 Limitations on Modifications of Accounts, Etc. Upon the occurrence and during the
continuation of any Event of Default, no Grantor shall, without Administrative Agent’s prior written consent, grant any extension of the time of payment of any of the Accounts, Chattel Paper, Instruments or amounts due under any Contract or
Document, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for the payment thereof, or allow any credit or discount whatsoever thereon other than trade discounts and rebates
granted in the ordinary course of such Grantor’s business. 
  
 5.6 Further Identification of Collateral. Each Grantor shall, if so requested by Administrative Agent, furnish to Administrative Agent, as often as Administrative Agent shall reasonably request,
statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Administrative Agent may reasonably request, all in reasonable detail. 
  
 5.7 Notices. Each Grantor shall advise
Administrative Agent promptly, in reasonable detail, of (a) any material Lien, other than Permitted Liens, attaching to or asserted against any of the Collateral, (b) any material change in the composition of the Collateral and (c) the occurrence of
any other event which might have or result in a Material Adverse Effect with respect to the Collateral or on the security interest created hereunder. 
  
 5.8 Continuous Perfection. No Grantor shall change its name, identity or corporate structure in any manner which
might make any financing or continuation statement 

  

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filed in connection herewith seriously misleading within the meaning of Section 9506 of the UCC (or any other then applicable provision of the UCC) unless
such Grantor shall have given Administrative Agent at least thirty (30) days’ prior written notice thereof and shall have taken all action (or made arrangements to take such action substantially simultaneously with such change if it is
impossible to take such action in advance) necessary or reasonably requested by Administrative Agent to amend such financing statement or continuation statement so that it is not seriously misleading. No Grantor shall change such chief executive
office or principal place of business or remove or cause to be removed, except in the ordinary course of such Grantor’s business, the Collateral or the records concerning the Collateral from those premises except as permitted by the Credit
Agreement. 
  
 5.9 Authorizations
with Respect to Financing Statements, etc. Each Grantor hereby irrevocably authorizes Administrative Agent at any time and from time to time to file in any filing office in any UCC jurisdiction any initial financing statements and
amendments thereto that (i) indicate the Collateral (A) as “all assets” of such Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of
such jurisdiction, or (B) as being of an equal or lesser scope or with greater detail, and (ii) contain any other information required by Part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or
amendment, including (A) whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or indicating any
Collateral as as-extracted collateral or timber to be cut, a sufficient description of the real property to which such Collateral relates. Each Grantor agrees to furnish any such information to Administrative Agent promptly upon request. Each
Grantor also ratifies its authorization for Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. 
  
 5.10 No Reincorporation. No
Grantor shall reincorporate or reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is incorporated or organized as of the date hereof except as permitted in the Credit Agreement. 
  
 5.11 Terminations and Amendments Not
Authorized. Each Grantor acknowledges that it is not authorized to file any amendment or termination statement with respect to any financing statement relating to any security interest granted hereunder without the prior written
consent of Administrative Agent and agrees that it will not do so without the prior written consent of Administrative Agent, subject to such Grantor’s rights under Section 9509(3)(b) of the UCC. 
  
 SECTION 6. Administrative Agent’s Appointment
as Attorney-in-Fact. 
  
 (a)
Subject to any approval or licensing required by the Act and the Regulations, from and after the occurrence of an Event of Default, each Grantor hereby irrevocably constitutes and appoints Administrative Agent, and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, from time to time at Administrative
Agent’s discretion, for the purpose of carrying out the 

  

 12 

 
terms of this Security Agreement, to take any and all appropriate action and to execute and deliver any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Security Agreement and, without limiting the generality of the foregoing, hereby gives Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do the following: 
  
 (i) to
ask, demand, collect, receive and give acquittances and receipts for any and all monies due or to become due under any Collateral and, in the name of such Grantor, in its own name or otherwise to take possession of, endorse and collect any checks,
drafts, note, acceptances or other Instruments for the payment of monies due under any Collateral and to file any claim or to take or commence any other action or proceeding in any court of law or equity or otherwise deemed appropriate by
Administrative Agent for the purpose of collecting any and all such monies due under any Collateral whenever payable; 
  
 (ii) to pay or discharge any Liens, including, without limitation, any tax lien, levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for by the terms of this Security Agreement and to pay all or any part of the premiums therefor and the costs thereof, which actions shall be for the benefit of Administrative Agent and the
Lenders and not such Grantor; and 
  
 (iii)
to (1) direct any person liable for any payment under or in respect of any of the Collateral to make payment of any and all monies due or to become due thereunder directly to Administrative Agent or as Administrative Agent shall direct, (2)
receive payment of any and all monies, claims and other amounts due or to become due at any time arising out of or in respect of any Collateral, (3) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications and notices in connection with Accounts and other Instruments and Documents constituting or relating to the Collateral, (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce any other right in respect of any Collateral, (5) defend any suit, action or proceeding brought against such Grantor with respect to any
Collateral, (6) settle, compromise or adjust any suit, action or proceeding described above and, in connection therewith, give such discharges or releases as Administrative Agent may deem appropriate, (7) sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and completely as though Administrative Agent were the absolute owner thereof for all purposes, and to do, at Administrative Agent’s option and such Grantor’s expense,
at any time, or from time to time, all acts and things which Administrative Agent may reasonably deem necessary to protect, preserve or realize upon the Collateral and Administrative Agent’s security interest therein in order to effect the
intent of this Security Agreement, all as fully and effectively as such Grantor might do. 
  
 (b) Each Grantor hereby authorizes and ratifies, to the extent permitted by law, all that Administrative Agent as said attorney in
fact shall lawfully do or cause to be done by virtue hereof. The power of attorney granted pursuant to this Section 6 is a power coupled with an interest and shall be irrevocable until the Secured Obligations are completely and indefeasibly
paid and performed in full. 
  

 13 

 (c) The powers conferred on Administrative Agent and the Lenders hereunder are
solely to protect Administrative Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty upon Administrative Agent or the Lenders to exercise any such powers. Administrative Agent shall have no duty as to any
Collateral, including any responsibility for (a) taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral or (b) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Investment Property, whether or not Administrative Agent has or is deemed to have knowledge of such matters. Administrative Agent shall be accountable only for amounts that it actually receives as
a result of the exercise of such powers and neither it nor any of its officers, directors, employees, agents or representatives shall be responsible to Grantors for any act or failure to act, except for its own gross negligence or willful
misconduct. 
  
 (d) Each Grantor also
authorizes Administrative Agent, at any time and from time to time upon the occurrence and during the continuation of any Event of Default, to (i) communicate in its own name with any party to any Contract with regard to the assignment of the right,
title and interest of such Grantor in and under the Contracts hereunder and other matters relating thereto and (ii) execute, in connection with the sale of Collateral provided for in Section 7, below, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral. 
  
 (e) If any Grantor fails to perform or comply with any of its agreements contained herein and Administrative Agent, as provided for by the terms of this Security Agreement, shall perform or comply, or otherwise
cause performance or compliance, with such agreement, the reasonable expenses, including reasonable attorneys’ fees and costs, of Administrative Agent incurred in connection with such performance or compliance, together with interest thereon at
a rate of interest equal to the per annum rate of interest charged on the Base Rate Loans, shall be payable by such Grantor to Administrative Agent within five (5) Business Days of demand and shall constitute Secured Obligations secured hereby.

  
 SECTION 7. Rights and Remedies Upon
Default. 
  
 7.1
Generally. If any Event of Default shall occur and be continuing and to the extent not in violation of any applicable provisions of the Act and the Regulations (including, without limitation, obtaining any required affirmative
approvals of the Nevada Gaming Commission or the State Gaming Control Board): 
  
 (a) Administrative Agent may exercise, in addition to all other rights and remedies granted to it under this Security Agreement, the Credit Agreement, the other Credit Documents and under any other instrument
or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the UCC. Without limiting the generality of the foregoing, each Grantor expressly agrees that in any such event Administrative
Agent, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon such Grantor or any other person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent permitted by the UCC and other applicable law), may (i) reclaim, take possession, recover, store, maintain, finish, repair, prepare 

  

 14 

 
for sale or lease, ship, advertise for sale or lease and sell or lease (in the manner provided for herein) the Collateral, and in connection with liquidation
of the Collateral and collection of the accounts receivable pledged as Collateral, use any trademark, trade name, trade style, copyright, or process used or owned by such Grantor; and (ii) forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, assign, give an option or options to purchase or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at public
or private sale or sales, at any exchange or broker’s board or at any of Administrative Agent’s offices or elsewhere at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.
Each Grantor authorizes Administrative Agent, on the terms set forth in this Section 7, to enter the premises where the Collateral is located, to take possession of the Collateral, or any part of it, and to pay, purchase, contest, or
compromise any encumbrance, charge, or lien which, in the opinion of Administrative Agent, appears to be prior or superior to its security interest. Administrative Agent shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or any part of said Collateral so sold, free of any right or equity of redemption, which equity of redemption such Grantor hereby releases. Administrative Agent may sell
the Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranties of title, which procedures shall not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Each
Grantor further agrees, at Administrative Agent’s request, to assemble the Collateral and make it available to Administrative Agent at places which Administrative Agent shall reasonably select, whether at such Grantor’s premises or
elsewhere. Administrative Agent shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale as provided in Section 7.1(g), below, and only after so paying over such net proceeds and after the
payment by Administrative Agent of any other amount required by any provision of law, including Section 9608(1)(a)(3) of the UCC (or any other then applicable provision of the UCC), need Administrative Agent account for the surplus, if any, to such
Grantor. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against Administrative Agent arising out of the repossession, retention or sale of the Collateral except such as arise out of the gross
negligence or willful misconduct of Administrative Agent. Each Grantor agrees that Administrative Agent need not give more than ten (10) days’ prior written notice (which notification shall be deemed given in accordance with the Credit
Agreement) of the time and place of any public sale or of the time after which a private sale may take place and that such notice is reasonable notification of such matters; 
  
 (b) As to any Collateral constituting certificated securities or uncertificated securities, if, at
any time when Administrative Agent shall determine to exercise its right to sell the whole or any part of such Collateral hereunder, such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under
Securities Act of 1933, as amended (as so amended the “Act”), Administrative Agent may, in its discretion (subject only to applicable requirements of law), sell such Collateral or part thereof by private sale in such manner and
under such circumstances as Administrative Agent may deem necessary or advisable, but subject to the other requirements of this Section 7.1(b), and shall not be required to effect such registration or cause the same to be effected. Without
limiting the generality of the foregoing, in any such event Administrative Agent may, in its sole discretion, (i) in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the
purpose of registering such Collateral or part 

  

 15 

 
thereof could be or shall have been filed under the Act; (ii) approach and negotiate with a single possible purchaser to effect such sale; and (iii) restrict
such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In addition to a private sale as
provided above in this Section 7.1(b), if any of such Collateral shall not be freely distributable to the public without registration under the Act at the time of any proposed sale hereunder, then Administrative Agent shall not be required to
effect such registration or cause the same to be effected but may, in its sole discretion (subject only to applicable requirements of law), require that any sale hereunder (including a sale at auction) be conducted subject to such restrictions as
Administrative Agent may, in its sole discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of
creditors’ rights and the Act and all applicable state securities laws; 
  
 (c) Each Grantor agrees that in any sale of any of such Collateral, whether at a foreclosure sale or otherwise, Administrative Agent is hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the
distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any governmental authority, and each Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner, nor shall Administrative Agent be liable nor accountable to such Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance
with any such limitation or restriction; 
  
 (d) Each Grantor also agrees to pay all fees, costs and expenses of Administrative Agent, including, without limitation, attorneys’ fees and costs, incurred in connection with the enforcement of any of its rights and remedies
hereunder; 
  
 (e) Each Grantor hereby
waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral; 
  
 (f) Each Grantor agrees that a breach of any covenants contained in this Section 7 will cause
irreparable injury to Administrative Agent and the Lenders, that in such event Administrative Agent and the Lenders would have no adequate remedy at law in respect of such breach and, as a consequence, agrees that in such event each and every
covenant contained in this Section 7 shall be specifically enforceable against such Grantor, and each Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a
defense that the Secured Obligations are not then due and payable; and 
  
 (g) The proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be applied by Administrative Agent to the Secured Obligations 

  

 16 

 
in any manner whatsoever as Administrative Agent shall choose in its sole and absolute discretion. 
  
 7.2 Voting Rights; Dividends. Each
Grantor agrees that from and after the occurrence of an Event of Default, such Grantor’s receipt of written notice from Administrative Agent that all voting and Distribution rights of such Grantor with respect to the Collateral are terminated
and to the extent not in violation of any applicable provisions the Act and the Regulations (including, without limitation, obtaining any required affirmative approvals of the Nevada Gaming Commission or the State Gaming Control Board): 

 
 (a) Each Grantor shall deliver to the
Administrative Agent all dividends, distributions, Securities, Instruments, Proceeds and all other cash payments or other rights received by or distributable to such Grantor in respect of any Collateral; 
  
 (b) Administrative Agent may (but shall not be
obligated to) exclusively exercise the voting power and all other incidental rights of ownership with respect to any pledged Investment Property and each Grantor hereby grants Administrative Agent an irrevocable proxy, exercisable under such
circumstances to vote such pledged Collateral; and 
  
 (c) Each Grantor shall promptly deliver to Administrative Agent such additional proxies and other documents as may be necessary to allow Administrative Agent to exercise such voting power; and 
  
 (d) All dividends, distributions, Securities,
Instruments, Proceeds and all other cash payments or other rights which may be at any time or from time to time held by a Grantor in respect of any Collateral which such Grantor is obligated to deliver to Administrative Agent shall, until such
delivery to Administrative Agent, be held by such Grantor separate from its other property in trust for Administrative Agent. 
  
 Notwithstanding the foregoing, prior to the occurrence of an Event of Default and a Grantor’s receipt of the above referenced notice,
a Grantor may exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Collateral or any part thereof; provided, however, that no Grantor shall exercise or refrain from exercising any such rights where the
consequence of such action or inaction would be (i) to impair any Collateral, the Lien granted to Administrative Agent on behalf of the Lenders therein, the first priority of such Lien or Administrative Agent’s and the Lenders’ rights and
remedies hereunder with respect to any Collateral or (ii) otherwise inconsistent with the terms of this Security Agreement and the other Credit Documents. 
  
 SECTION 8. Limitation on Administrative Agent’s Duty in Respect of Collateral. Administrative Agent shall be deemed to have
acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under Section 9207 of the UCC (or any other then applicable provision of the UCC). 
  
 SECTION 9. Reinstatement. To the extent permitted by
law, this Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against a Grantor for liquidation or reorganization, should a Grantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or 

  

 17 

 
any significant part of a Grantor’s property and assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment
and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations
shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. 
  
 SECTION 10. Miscellaneous. 
  
 10.1 Notices. Except as otherwise specified herein, all notices, requests, demands, consents, instructions or other
communications to or upon a Grantor or Administrative Agent under this Security Agreement shall be given as provided in Section 8.01 of the Credit Agreement. 
  

10.2 Partial Invalidity. If at any time any provision of this Security Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Security Agreement nor the legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby. 
  
 10.3 Headings. The section headings and captions appearing in this Security Agreement are included solely for convenience of reference and are not intended to affect the interpretation of any
provision of this Security Agreement. 
  
 10.4
No Waiver; Cumulative Remedies. 
  
 (a) Administrative Agent shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder or under the Credit Agreement or the other Credit Documents, nor
shall any single or partial exercise of any right or remedy hereunder or thereunder on any one or more occasions preclude the further exercise thereof or the exercise of any other right or remedy under any of the Credit Documents. 
  
 (b) The rights and remedies hereunder provided or
provided under the Credit Agreement or the other Credit Documents are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by law or by any of the other Credit Documents. 
  
 (c) None of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by each Grantor and Administrative Agent (with the written approval of the Required Lenders or such other Person, if such approval is required
under the Credit Agreement). 
  
 10.5
Time is of the Essence. Time is of the essence for the performance of each of the terms and provisions of this Security Agreement. 
  

 18 

 10.6 Termination of this Security Agreement. Subject to Section
9, above, this Security Agreement shall terminate upon the full, complete and final payment of the Secured Obligations and the termination of the commitments under the Credit Agreement. 
  
 10.7 Successors and Assigns. This
Security Agreement and all obligations of Grantors hereunder shall be binding upon the successors and permitted assigns of Grantors, and shall, together with the rights and remedies of Administrative Agent on behalf of the Lenders hereunder, inure
to the benefit of Administrative Agent, the Lenders, any future holder of the Notes and their respective successors and assigns. Grantors may not assign or transfer its rights or obligations under this Security Agreement without the prior written
consent of Administrative Agent and each Lender. Any purported assignment or transfer in contravention of the foregoing shall be null and void. No sales of participations, other than sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Secured Obligations or any portion thereof or interest therein shall in any manner affect the security interest created herein and granted to Administrative Agent on behalf of the Lenders hereunder.

  
 10.8 Further
Indemnification. Each Grantor agrees to pay, and to save Administrative Agent and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes
which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Security Agreement. 
  
 10.9 Governing Law. This Security Agreement shall be governed by, construed and
enforced in accordance with, the internal law of the State of Nevada, including, but not limited to, the Nevada Gaming Control Act, Chapter 463 of the Nevada Revised Statutes and the regulations of the Nevada Gaming Commission and the State Gaming
Control Board, in their current form and as they may hereafter be amended from time to time, except to the extent that mandatory provisions of applicable law regarding perfection, the effect of perfection or nonperfection and the priority of
security interests require the application of the law of another jurisdiction. Each Grantor hereby consents to the application of Nevada civil law to the construction, interpretation and enforcement of this Security Agreement, and to the application
of Nevada civil law to the procedural aspects of any suit, action or proceeding relating thereto, including, but not limited to, legal process, execution of judgments and other legal remedies. 
  
 10.10 Application of Gaming Laws. This
Agreement is subject to applicable Gaming Laws. Without limiting the foregoing, each of the Administrative Agent and the Lenders acknowledges that (i) it is subject to being called forward by the Gaming Authorities, in their discretion, for a
finding of suitability or to file or provide other information, and (ii) all rights, remedies and powers in or under this Agreement, including with respect to the Collateral (including any pledged Investment Property) and the ownership and operation
of Gaming Facilities, may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of the Gaming Laws and only to the extent that any required approvals (including prior approvals) are obtained from the
requisite Governmental Authorities. 
  
 10.11
Counterparts. This Security Agreement may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes.
Transmission by telecopier of an 

  

 19 

 
executed counterpart of this Security Agreement shall be deemed to constitute due and sufficient delivery of such counterpart. 
  
 10.12 Gaming Approval. 
  
 (a) The pledge of Investment Property of any Loan
Party that operates a Gaming Facility which evidences an equity interest in another Loan Party (such Investment Property, “Gaming Investment Property”) contained herein shall not be effective until it is approved by the Nevada
Gaming Commission; 
  
 (b) Notwithstanding
approval by the Nevada Gaming Commission pursuant to subparagraph (a) above, other approvals may be required before certain transactions relating to this Agreement may occur, including, but not limited to, the following: 
  
 (i) Any re-registration or action similar to
re-registration of any pledged Gaming Investment Property must be approved in advance by the State Gaming Control Board in accordance with NRS 463.5 10 and Section 8A.040 of the Regulations; 
  
 (ii) Any foreclosure, sale, transfer, or other
disposition of any pledged Investment Property must be approved in advance by the Nevada Gaming Commission in accordance with NRS 463.5 10 and NGC Sections 8A.020 and 8A.030 of the Regulations, and shall not be effective unless so approved;

  
 (iii) Pursuant to Regulation 8A.040,
the payment or receipt of any money or other thing of value constituting any part of the consideration for the transfer or acquisition of any pledged Investment Property must be approved in advance by the Nevada Gaming Commission and the State
Gaming Control Board, except that such consideration may be placed in escrow pending the necessary approvals; and 
  
 (iv) The certificates representing any pledged Investment Property shall at all times remain physically within the State of Nevada
at a location designated to the State Gaming Control Board and must be made available for inspection by employees or agents of the State Gaming Control Board immediately upon request during normal business hours. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 20 

 IN WITNESS WHEREOF, each Grantor and Administrative Agent have caused this Security Agreement to be
executed as of the day and year first above written. 
  

			
	GRANTORS:
	
	 THE SANDS REGENT,
 a Nevada
corporation

		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

  

			
	 LAST CHANCE, INC.,
 a Nevada
corporation

		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

  

			
	 ZANTE, INC.,
 a Nevada
corporation

		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

  

 21 

			
	ADMINISTRATIVE AGENT:
	
	 WELLS FARGO BANK, NATIONAL
 ASSOCIATION

		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

	
	 Address for Notices:

  

 22 

 SCHEDULE I 
  
 GAMING INVESTMENT PROPERTY 
  

 SCHEDULE I 

 SCHEDULE II 
  
 LETTER-OF-CREDIT RIGHTS AND COMMERCIAL TORT CLAIMS 
  

 SCHEDULE II 

 SCHEDULE III 
  
 DEPOSIT ACCOUNTS 
  

 SCHEDULE III 

 SCHEDULE IV 
  
 SECURITIES ACCOUNTS 
  

 SCHEDULE IVPledge Agreement dated May 3, 2004

 EXHIBIT 10.5 
  
 PLEDGE AGREEMENT 
  
 THIS PLEDGE AGREEMENT, dated as of May 3, 2004, is executed by The Sands Regent, a Nevada corporation (“Sands”), in favor of Wells Fargo
Bank, National Association, a national banking association, as agent for itself and the below referenced Lenders (in such capacity, “Administrative Agent”). 
  
 RECITALS 
  
 A. Sands has entered into that certain Credit Agreement, dated as of April 2, 2004 (as the same from time to time hereafter may be amended, modified,
supplemented or restated, the “Credit Agreement”), by and among Sands, Last Chance, Inc., a Nevada corporation (“Last Chance”), Zante, Inc., a Nevada corporation (“Zante” and, together with
Last Chance and Sands, each a “Borrower” and collectively, the “Borrowers”), the financial institutions party thereto from time to time (collectively, the “Lenders”) and Wells Fargo Bank, National
Association, as L/C Issuer, Swing Line Lender and as Administrative Agent, pursuant to which the Lenders have agreed to extend loans and other financial accommodations to the Borrowers for the purposes, and on the terms and subject to the
conditions, set forth in the Credit Agreement (the “Credit Facility”). 
  
 B. Alliance Gaming Corporation, APT Games and Sands have entered into a Stock Purchase Agreement, dated as of December 5, 2003 (the “Stock Purchase Agreement”), pursuant to which Sands shall acquire
100% of the stock (the “Acquisition”) of Plantation Investments, Inc., a Nevada corporation, dba “Rail City” (“Rail City”). 
  
 C. The Lenders obligations to extend the credit facilities to the Borrowers under the Credit Agreement are subject, among
other conditions, to receipt by Administrative Agent of this Pledge Agreement, evidencing the pledge by Sands of all of its capital stock in each of its Subsidiaries (including, after the consummation of the Acquisition, Rail City). 
  
 D. This Pledge Agreement is governed by the laws of Nevada, including, but
not limited to, the Nevada Gaming Control Act, Chapter 463 of the Nevada Revised Statutes and the regulations of the Nevada Gaming Commission and the State Gaming Control Board, in their current form and as they may hereafter be amended from time to
time. 
  

 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Sands hereby agrees with Administrative Agent as follows: 
  
 1. Definitions and Interpretation. 
  
 (a) Definitions. When used in this Pledge Agreement, the following terms shall have the following respective meanings: 

 
 “Act” means the Nevada Gaming Control
Act, Chapter 463 of the Nevada Revised Statutes, as the same from time to time hereafter may be amended, modified or supplemented. 
  
 “Collateral” shall have the meaning given to that term in Paragraph 2 hereof. 
  
 “Obligations” shall mean and include all
obligations, howsoever arising, owed by Sands to Administrative Agent and the Lenders, or any one or more of them, of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct
or indirect, absolute or contingent, due or to become due, including those owed on a joint and several basis with the other Borrowers, now existing under, or hereafter arising pursuant to, the terms of (i) the Credit Agreement, (ii) this Pledge
Agreement or (iii) any of the other Credit Documents to which Sands is a party. 
  
 “Pledged Shares” shall have the meaning given to that term in Paragraph 2 hereof. 
  
 “Regulations” means the Regulations of the
Nevada Gaming Commission and State Gaming Control Board, as the same from time to time hereafter may be amended, modified or supplemented. 
  
 “UCC” shall mean the Uniform Commercial Code as in effect in the State of California from time to time. 
  
 Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to those terms in the Credit Agreement, and all terms defined in the UCC shall have the respective meanings given to those terms in the UCC. 
  
 (b) Other Interpretive Provisions. The rules of
construction set forth in Article I of the Credit Agreement shall, to the extent not inconsistent with the terms of this Pledge Agreement, apply to this Pledge Agreement and are hereby incorporated by reference. 
  

 2 

 2. Pledge. As security for the Obligations, Sands hereby pledges and assigns to
Administrative Agent on behalf of the Lenders and grants to Administrative Agent on behalf of the Lenders a security interest in all right, title and interest of Sands in and to the property described in Subparagraphs (a) - (e) below, whether
now owned or hereafter acquired (collectively and severally, the “Collateral”): 
  
 (a) All shares of stock issued by any corporation or other entity in which Sands currently has, or in the future may acquire an interest
(including the shares of stock of Rail City acquired on the Acquisition Date), including the shares of stock described in Attachment 1 hereto (all such shares, whether now owned or hereafter acquired, whether certificated or uncertificated
and whether or not described in Attachment 1, to be referred to herein collectively as the “Pledged Shares”); 
  
 (b) All other certificated and uncertificated securities and any other evidence of an equity interest; 
  
 (c) All obligations owed by any Subsidiary of Sands to
Sands, including those relating to or resulting from any Investments in such Subsidiary, together with any instruments, promissory notes or other documents evidencing such obligations; 
  
 (d) All dividends, cash, instruments, products, accessions, rents, profits, income, interest, earnings,
revenues, benefits, substitutions and replacements of and to, and other property from time to time received, receivable or otherwise distributed or distributable in respect of or in exchange for any of the property described in Subparagraphs (a),
(b) or (c) above; and 
  
 (e) All proceeds of
the foregoing. 
  
 3. Representations and
Warranties. Sands hereby represents and warrants to Administrative Agent and Lenders as follows: 
  
 (a) Sands is the record legal and beneficial owner of the Collateral (or, in the case of after-acquired Collateral, at the time Sands
acquires rights in the Collateral, will be the record legal and beneficial owner thereof). No other Person has (or, in the case of after-acquired Collateral, at the time Sands acquires rights therein, will have) any right, title, claim or interest
(by way of Lien, purchase option or otherwise) in, against or to the Collateral. 
  
 (b) Administrative Agent and the Lenders have (or in the case of after-acquired Collateral, at the time Sands acquires rights therein,
will have) a first priority perfected security interest in the Collateral. 
  
 (c) All Pledged Shares have been (or in the case of after-acquired Pledged Shares, at the time Sands acquires rights therein, will have been) duly authorized, validly issued and fully paid and are (or in the case of
after-acquired Pledged Shares, at the time Sands acquires rights therein, will be) non-assessable. 
  

 3 

 (d) Sands has delivered to Administrative Agent, together with all necessary stock
powers, endorsements, assignments and other necessary instruments of transfer, the originals of all stock certificates, instruments, notes, other certificated securities, other Collateral and all certificates, instruments and other writings
evidencing the same. 
  
 (e) Except as required
by the Act and the Regulations and except in connection with a disposition of the Investment Property as may be required by laws affecting the offering and sale of securities generally, no authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority or any other Person is required for the exercise by the Administrative Agent of the voting or other rights provided for in this Pledge Agreement. 
  
 (f) Set forth in Attachment 1 hereto is a true,
complete and accurate list of all shares of stock issued by Sands’ Subsidiaries (whether direct or indirect) and all other securities owned by Sands, and Sands is the owner of all such shares of stock of such Subsidiaries. 
  
 4. Covenants. Sands hereby agrees as follows: 
  
 (a) Sands, at Sands expense, shall promptly procure, execute
and deliver to Administrative Agent all documents, instruments and agreements and perform all acts which are necessary or desirable, or which Administrative Agent may request, to establish, maintain, preserve, protect and perfect the Collateral, the
Lien granted to Administrative Agent and the Lenders therein and the first priority of such Lien or to enable Administrative Agent on behalf of the Lenders to exercise and enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the preceding sentence, Sands shall (i) procure, execute and deliver to Administrative Agent all stock powers, endorsements, assignments, financing statements and other instruments of transfer requested by
Administrative Agent, (ii) deliver to Administrative Agent promptly upon receipt the originals of all Pledged Shares, other certificated securities, other Collateral and all certificates, instruments and other writings evidencing the same and (iii)
cause the Lien of Administrative Agent to be recorded or registered in the books of any financial intermediary or clearing corporation requested which are necessary or desirable, or which Administrative Agent may request, to establish, maintain,
preserve, protect and perfect the Collateral. 
  
 (b) Sands shall pay promptly when due all taxes and other governmental charges, all Liens and all other charges now or hereafter imposed upon, relating to or affecting any Collateral. 
  
 (c) Sands shall deposit, or cause to be deposited, all
remittances, checks and other funds (in whatever form) received with respect to Collateral to a deposit account in which Administrative Agent has a first priority perfected security interest. 
  
 (d) Sands shall appear in and defend any action or
proceeding which may affect its title to or Administrative Agents or the Lenders interest in the Collateral. 
  

 4 

 (e) Sands shall not surrender or lose possession of (other than to Administrative Agent),
sell, encumber, lease, rent, option, or otherwise dispose of or transfer any Collateral or right or interest therein except as permitted in the Credit Agreement, and, notwithstanding any provision of the Credit Agreement, Sands shall keep the
Collateral free of all Liens other than the Liens created hereunder. 
  
 5. Voting Rights and Dividends Prior to Default. (a) Prior to the occurrence of an Event of Default and receipt of the notice referenced in Paragraph 7 below, Sands may exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Pledged Shares or any part thereof; provided, however, that Sands shall not exercise or refrain from exercising any such rights where the consequence of such action or inaction would
be (i) to impair any Collateral, the Lien granted to Administrative Agent on behalf of the Lenders therein, the first priority of such Lien or Administrative Agents rights and remedies hereunder with respect to any Collateral or (ii) otherwise
inconsistent with the terms of this Pledge Agreement and the other Credit Documents. 
  
 (b) Sands may not receive or retain any Distributions or interest in respect of the Collateral at any time except, so long as no Event of
Default has occurred (under and as defined in the Credit Agreement), Sands may receive and retain Distributions expressly permitted to be paid by its Subsidiaries, if any, by the terms of the Credit Agreement. Sands shall promptly deliver to
Administrative Agent to hold as Collateral all Distributions and interest which Sands receives in contravention of the foregoing, in the same form as so received (with any necessary endorsement), and, until so delivered, shall hold such
Distributions and interest in trust for the benefit of Administrative Agent on behalf of the Lenders, segregated from the other property or funds of Sands. 
  
 6. Authorized Action by Administrative Agent. Subject to any approval or licensing required by the Act and the Regulations, including prior
approvals and licensings, Sands hereby irrevocably appoints Administrative Agent as its attorney-in-fact and agrees that Administrative Agent may perform (but Administrative Agent shall not be obligated to and shall incur no liability to Sands or
any third party for failure so to do) any act Sands is obligated by this Pledge Agreement to perform, and to exercise such rights and powers as Sands might exercise with respect to the Collateral, including, without limitation, the right to (a)
collect by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter payable on or on account of the Collateral; (b) enter into any extension,
reorganization, deposit, merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the Collateral; (c) insure, process, preserve and enforce the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect to the Collateral; (e) pay any Indebtedness of Sands relating to the Collateral; and (f) execute or file UCC financing statements and other documents, instruments and
agreements required hereunder; provided, however, that Administrative Agent may exercise such powers other than the filing of UCC financing statements only after the occurrence of an Event of Default and the acquisition of all
approvals and licenses required by the Act and the Regulations. Sands agrees to reimburse Administrative Agent upon demand for all costs and expenses, including attorneys fees, Administrative Agent may incur while acting as Sands attorney-in-fact
hereunder, all of which 

  

 5 

 
costs and expenses are included in the Obligations. Sands agrees that such care as Administrative Agent gives to the safekeeping of its own property of like
kind shall constitute reasonable care of the Collateral when in Administrative Agents possession; provided, however, that Administrative Agent shall not be required to make any presentment, demand or protest, or give any notice and
need not take any action to preserve any rights against any prior party or any other Person in connection with the Obligations or with respect to the Collateral. 
  
 7. Events of Default. 
  
 (a) Events of Default. An Event of Default hereunder shall mean (i) the occurrence of an Event of
Default under and as defined in the Credit Agreement or (ii) the breach by Sands of any of Sands’ Obligations under this Pledge Agreement. 
  
 (b) Remedies; General. Upon the occurrence of an Event of Default, compliance with the Act and the Regulations (including, without
limitation, obtaining any required affirmative approvals of the Nevada Gaming Commission or the State Gaming Control Board) Administrative Agent shall be entitled to exercise all of its rights and remedies provided for under this Pledge Agreement,
the Credit Agreement, any other Credit Documents to which Sands is a party, the UCC and other applicable Governmental Rules. Without limiting the generality of the foregoing, Sands expressly agrees that in any such event Administrative Agent,
without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Sands or any other person (all and each of which demands, advertisements
and notices are hereby expressly waived to the maximum extent permitted by the UCC and other applicable law), may (i) forthwith collect, receive, appropriate, foreclose upon and realize upon the Collateral, or any part thereof, and may forthwith
sell, lease, assign, give an option or options to purchase or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at public or private sale or sales, at any exchange or brokers
board or at any of Administrative Agent’s offices or elsewhere at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Sands authorizes Administrative Agent, on the terms set forth
in this Paragraph 7, to take possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which, in the opinion of Administrative Agent, appears to be prior or superior to its
security interest. Administrative Agent shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of said Collateral so sold, free of any
right or equity of redemption, which equity of redemption Sands hereby releases. Administrative Agent may sell the Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranties of title, which procedures
shall not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Administrative Agent shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale as provided in
Subparagraph 7(g), below, and only after so paying over such net proceeds and after the payment by Administrative Agent of any other amount required by any provision of law, including Section 9608(a)(1)(C) of the UCC (or any other then
applicable provision of the UCC), shall Administrative Agent account for the surplus, if any, to Sands. To the maximum 

  

 6 

 
extent permitted by applicable law, Sands waives all claims, damages, and demands against Administrative Agent arising out of the repossession, retention or
sale of the Collateral except such as arise out of the gross negligence or willful misconduct of Administrative Agent. Sands agrees that Administrative Agent need not give more than ten (10) days prior written notice (which notification shall be
deemed given in accordance with the Credit Agreement) of the time and place of any public sale or of the time after which a private sale may take place and that such notice is reasonable notification of such matters. 
  
 (c) Voting Rights. From and after the occurrence of
an Event of Default and receipt of notice by Sands that all voting and Distribution rights of Sands with respect to the Collateral are terminated, and upon full compliance with the Act and the Regulations (including, without limitation, obtaining
any required affirmative approval of the Nevada Gaming Commission or the State Gaming Control Board), all rights of Sands to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Subparagraph
5(a) hereof and to receive the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Subparagraph 5(a) hereof shall cease and all such rights shall thereupon become vested in
Administrative Agent which shall thereupon have the sole right, but not the obligation, to exercise such voting and other consensual rights and to receive and hold as Collateral such dividends and interest payments. 
  
 (d) Fees, Costs and Expenses. Sands agrees to pay all
fees, costs and expenses of Administrative Agent, including, without limitation, attorneys fees and costs, incurred in connection with the enforcement of any of its rights and remedies hereunder. 
  
 (e) Waiver of Presentment, Etc. Sands hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Pledge Agreement or any Collateral. 
  
 (f) Specific Performance. Sands agrees that a breach of any covenants contained in this Paragraph
7 will cause irreparable injury to Administrative Agent and the Lenders, that in such event Administrative Agent and the Lenders would have no adequate remedy at law in respect of such breach and, as a consequence, agrees that in such event,
Sands hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Obligations are not then due and payable. 
  
 (g) Application of Proceeds. The proceeds of any
sale, disposition or other realization upon all or any part of the Collateral shall be applied by Administrative Agent to the Obligations in any manner whatsoever as Administrative Agent shall choose in its sole and absolute discretion. 

 
 (h) Securities Laws. 
  
 (i) As to any Collateral constituting certificated
securities or uncertificated securities, if, at any time when Administrative Agent shall 

  

 7 

 
determine to exercise its right to sell the whole or any part of such Collateral hereunder, such Collateral or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under Securities Act of 1933, as amended (as so amended the “Act”), Administrative Agent may, in its discretion (subject only to applicable requirements of law), sell such Collateral or
part thereof by private sale in such manner and under such circumstances as Administrative Agent may deem necessary or advisable, but subject to the other requirements of this Subparagraph 7(h), and shall not be required to effect such
registration or cause the same to be effected. Without limiting the generality of the foregoing, in any such event Administrative Agent may, in its sole discretion, (i) in accordance with applicable securities laws, proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof could be or shall have been filed under the Act; (ii) approach and negotiate with a single possible purchaser to effect such sale; and (iii)
restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In addition to a private sale
as provided above in this Subparagraph 7(h), if any of such Collateral shall not be freely distributable to the public without registration under the Act at the time of any proposed sale hereunder, then Administrative Agent shall not be
required to effect such registration or cause the same to be effected but may, in its sole discretion (subject only to applicable requirements of law), require that any sale hereunder (including a sale at auction) be conducted subject to such
restrictions as Administrative Agent may, in its sole discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the
enforcement of creditors rights and the Act and all applicable state securities laws. 
  
 (ii) Sands agrees that in any sale of any of such Collateral, whether at a foreclosure sale or otherwise, Administrative Agent is hereby
authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including the Act and the Regulations and compliance with such
procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications and restrict such prospective bidders and purchasers to persons who will represent and
agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any governmental authority, and
Sands further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall Administrative Agent be liable nor accountable to Sands for any discount allowed
by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction. 
  
 (iii) Upon the occurrence of an Event of Default and at Administrative Agents request, Sands shall, and shall cause all issuers of
Collateral and all 

  

 8 

 
officers and directors thereof and all other necessary Persons to, execute and deliver all documents, instruments and agreements and perform all other acts
necessary or, in the opinion of Administrative Agent, advisable to sell the Collateral in any public or private sale, including any acts requested by Administrative Agent to (A) register any Collateral under the Act, (B) qualify any Collateral under
any state securities or “Blue Sky” laws or (C) otherwise permit any such sale to be made in full compliance with all applicable Governmental Rules. 
  
 8. Miscellaneous. 
  
 (a) Notices. Except as otherwise specified herein, all notices, requests, demands, consents, instructions or other communications
to or upon Sands or Administrative Agent under this Pledge Agreement shall be given to Sands and Administrative Agent at the addresses set forth below in the manner set forth in Section 8.01 of the Credit Agreement: 
  
 To Sands: 
  

			
	 	  	 Attention:
 Facsimile:

		
	 To Administrative Agent:
	  	 Wells Fargo Bank
 Wholesale Loan Services - Agency
Division
 201 Third Street, 8th floor
 San Francisco,
CA
 Fax no. (415) 512-7059

  
 (b)
Waivers; Amendments. No amendment, modification, supplement, extension, termination or waiver of any provision of this Pledge Agreement, no approval or consent hereunder, and no consent to any departure by Sands therefrom, may in any event be
effective unless in writing signed by Administrative Agent (with the written approval or upon the instructions of the Required Lenders or such other Persons whose signature may be required by the Credit Agreement), and then only in the specific
instance and for the specific purpose given and any such amendment, modification, supplement, extension, termination or waiver shall be binding upon Administrative Agent, the Lenders and Sands. In addition, this Pledge Agreement shall not be amended
without the prior administrative approval of the Chairman of the Nevada State Gaming Control Board. 
  
 (c) Successors and Assigns. This Pledge Agreement shall be binding upon Sands and shall inure to the benefit of Administrative
Agent and Lenders and their respective successors and assigns; provided, however, that Sands may not assign or transfer its rights or obligations under this Pledge Agreement without the prior written consent of Administrative Agent and
each Lender. Any attempted assignment or transfer 

  

 9 

 
in violation of this Subparagraph (c) shall be null and void. Administrative Agent may disclose this Pledge Agreement as permitted in the Credit
Agreement. 
  
 (d) Partial Invalidity. If
at any time any provision of this Pledge Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Pledge
Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby. 
  
 (e) Cumulative Rights, etc. The rights, powers and remedies of Administrative Agent under this Pledge
Agreement shall be in addition to all rights, powers and remedies given to Administrative Agent by virtue of any applicable Governmental Rule, the Credit Agreement, any other Credit Document or any other agreement, all of which rights, powers, and
remedies shall be cumulative and may be exercised successively or concurrently without impairing Administrative Agents rights hereunder. Sands waives any right to require Administrative Agent to proceed against any of its Subsidiaries, any other
Person or to exhaust any Collateral or to pursue any remedy in Administrative Agents power. 
  
 (f) Payments Free of Taxes, Etc. All payments made by Sands under this Pledge Agreement shall be made by Sands free and clear of
and without deduction for any and all present and future taxes, levies, charges, deductions and withholdings. In addition, Sands shall pay upon demand any stamp or other taxes, levies or charges of any jurisdiction with respect to the execution,
delivery, registration, performance and enforcement of this Pledge Agreement. Upon request by Administrative Agent, Sands shall furnish evidence reasonably satisfactory to Administrative Agent that all requisite authorizations and approvals by, and
notices to and filings with, governmental authorities and regulatory bodies have been obtained and made and that all requisite taxes, levies and charges have been paid. 
  
 (g) Governing Law. This Pledge Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada without reference to conflicts of law rules except to the extent that mandatory provisions of applicable law regarding perfection, the effect of perfection or nonperfection and the priority of security interests require
the application of the law of another jurisdiction. 
  
 (h) Jury Trial. SANDS, ADMINISTRATIVE AGENT AND THE LENDERS EACH, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER CREDIT DOCUMENT. 
  
 (i) Gaming Approval. 
  
 (A) This Pledge Agreement shall not be effective until it is approved by the Nevada Gaming Commission; 
  

 10 

 (B) Notwithstanding approval by the Nevada Gaming Commission pursuant to subparagraph (A)
above, other approvals may be required before certain transactions relating to this Pledge Agreement may occur, including, but not limited to, the following: 
  

(i) Any re-registration or action similar to re-registration of the Pledged Shares must be approved in advance by the State Gaming
Control Board in accordance with NRS 463.5 10 and Section 8A.040 of the Regulations; 
  
 (ii) Any foreclosure, sale, transfer, or other disposition of the Pledged Shares must be approved in advance by the Commission in
accordance with NRS 463.5 10 and NGC Sections 8A.020 and 8A.030 of the Regulations, and shall not be effective unless so approved; and 
  
 (iii) Pursuant to Regulation 8A.040, the payment or receipt of any money or other thing of value constituting any part of the
consideration for the transfer or acquisition of the Pledged Stock must be approved in advance by the Commission and the Board, except that such consideration may be placed in escrow pending the necessary approvals; and 
  
 (C) The certificates representing the Pledged Shares shall
at all times remain physically within the State of Nevada at a location designated to the State Gaming Control Board and must be made available for inspection by employees or agents of the State Gaming Control Board immediately upon request during
normal business hours. 
  
 (j) Entirety.
This Agreement supersedes any prior negotiations, discussions or communications between Sands and Administrative Agent and constitutes the entire agreement between Sands and Administrative Agent with respect to the matters covered hereby.

  

 11 

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

			
	 THE SANDS REGENT, a
 Nevada
corporation

		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

  

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent
		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

  

 12 

 ATTACHMENT 1 
 TO PLEDGE AGREEMENT 
  
 SHARES 
  

							
	 Issuer

	  	 Class
 of Stock

	  	 Outstanding
 Shares

	  	 Shares Owned
 Directly
 By Sands

	 Zante, Inc.
	  	 	  	 	  	 
	 Last Chance, Inc.
	  	 	  	 	  	 
	 California Prospectors, Ltd.
	  	 	  	 	  	 
	 Plantation Investments, Inc., dba “Rail City”

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